work | May 14, 2013

Elizabeth Dunn: Want Happier Employees? Give Them More Time Off

The majority of us probably wish we got paid more. We fantasize about what we'd do with a big raise or a bonus—assuming that a higher paycheck leads to a happier working experience. Work speaker and Happy Money co-author Elizabeth Dunn disagrees. In fact, she has new research to suggest that there isn't a direct correlation between higher salaries and happier employees. "Rather than simply paying people as much as a company possibly could," Dunn says in an interview with First Business, "a better approach can be to think about providing employees with a reward of time." Intel, for example, provides their employees with sabbaticals. They allow their staff to take time off from work to pursue an experience that is meaningful to them. "Employees report returning to work refreshed and being able to contribute more to the company afterward."

Dunn says a lot of tech companies do an excellent job of spending company funds in the right way to increase employee happiness. It's important to think about allocating money toward purchases that will help the staff get through their workday in happier ways. In Happy Money, Dunn draws from in-depth research to determine what purchases increase happiness, and purchases that simply decrease the amount of money in our bank accounts. Money can buy you happiness, she argues, but only if you spend it right. And, there are some purchases we think will gives us joy that actually do not. "One of the most surprising findings is that buying a home turns out not to provide all that much in the way of happiness," Dunn explains in the interview. Neither does buying a car. While these things are considered to be important—and often necessary—purchases, they are actually fairly "hollow" in terms of how they make you feel. While you would expect a pricier home and a nicer car would put pep in your step, Dunn's research shows there was little evidence to confirm that assumption.

Dunn is an associate professor in the Department of Psychology at the University of British Columbia. In her book, and the talks she gives based on it, she explores five principles that can help you spend smarter. And, how you can turn your money into "happy money." She shows us how to rethink our purchases and invest in things that will bring us long term joy instead of a temporary mood boost. No matter how little or how much money you have, Dunn can show you how to turn it into the best money you ever spent.