How to Keep Employees Happy: 4 Free & Effective Ways

This article is an excerpt from the Shortform book guide to "Anything You Want" by Derek Sivers. Shortform has the world's best summaries and analyses of books you should be reading.

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Wondering how to keep employees happy? Which methods are free, yet most effective?

Author and entrepreneur Derek Sivers wrote Anything You Want to show business owners how to pursue their dreams successfully while maintaining humanity and empowering their employees. In his book, he explains how to keep employees happy using four management methods that create lasting results.

Read on to learn how to keep employees happy, according to Sivers’s advice.

Keeping Your Employees Happy

In Anything You Want, CD Baby founder Derek Sivers shares 40 lessons he learned from being an accidental entrepreneur whose hobby turned into a $22 million business. Sivers’s non-traditional approach to business ownership—centering on honesty, creativity, and humanity—is a model for burgeoning entrepreneurs who want to stay true to themselves and do right by others while building their dream. In this article, we’ll examine Sivers’s recommendations for how to keep employees happy by managing them in a way that not only makes them happier but also makes you happy, and allows your business to function as effectively as possible.

#1: Mind the Boss-Employee Power Dynamic

In keeping your employees happy, Sivers says that when you’re the boss, you should always be mindful of the power dynamic that’s built into your interactions with employees because it impacts the weight of your words as well as their work. If an employee asks your thoughts on an idea they’ve come up with or a project they’re working on, be aware that your opinion carries more weight than that of a peer and that they may perceive your feedback as a directive rather than a suggestion or collaboration.

Sivers recommends that, in general, you respond positively to employees who ask your opinion about their ideas and projects, so long as doing so won’t make or break your company. This will encourage them, increase their investment in your company’s work, and will also boost staff morale.

(Shortform note: In Radical Candor, Kim Scott builds on the idea of positive employer-employee communication. She argues that one of the most important things you can do as a leader to improve your work culture is regularly to ask your employees for honest feedback about your impact on the business. After listening and considering what they say, show that you value their opinion by making adjustments accordingly.)

#2: Empower Employees to Run Your Business Independently

In addition to positively engaging your employees, to keep them happy, Sivers recommends you empower them with clear information and the ability to make decisions independently. Doing this will allow you to free yourself from the daily minutia of running your business and focus on big-picture items and the tasks you love.

Sivers suggests that you develop standardized operating procedures and protocols for your business and train staff on how to implement them in your absence.

Lesson illustrated: Sivers says that by making himself dispensable in his own company, he empowered his employees to grow CD Baby from $1 million to $20 million in just four years. Because they were running the day-to-day operations, he had the time to focus on long-range goals and growing the business.

(Shortform note: While empowering employees to run your business can free you up to pursue what you love, some people say that it’s also important to focus on your employees’ needs and interests to inspire and help them grow. To keep employees happy, you can deepen your support of your employees by encouraging them to follow their individual passions, having open conversations about factors that are causing burnout or holding them back at work, and modeling and advocating for them to engage in self-care.)

#3: Delegate With Care

Although Sivers suggests you empower your employees as much as possible, he cautions against turning over all control of your business to others. With this in mind, he says you should balance trust and oversight when delegating responsibility. Two incidents taught him to give employees the independence they need to run things but also check in on them:

Sivers trusted an employee to execute a goal that was crucial to his business. He discovered months later that the employee had failed to complete the task, and Sivers had to fire him. Sivers learned the importance of following up with staff to make sure they’re doing what they said they would.
After empowering his 85-person staff to run his business in his absence, Sivers learned that they’d opted into a profit-sharing program that funneled all of his company’s profits to them. Sivers says that when he subsequently canceled the program, employees were furious, and the damage to their relationship was so bad that they never recovered from it. Sivers says this taught him that while it’s good to empower your employees, you should never hand over full control of your business.

Efforts to Keep Employees Happy & Their Results

In an analysis done by Harvard Business Review, empowering employees was shown to have positive, neutral, and negative effects.

– Positive: Leaders who delegate responsibilities and make decisions collaboratively with their employees are viewed as more trustworthy, and employees demonstrate better cooperation and higher levels of creativity.

– Neutral: In routine day-to-day tasks, there was no sign of improved performance post-empowerment.

– Negative: It was shown that some employees feel burdened by the responsibility of participating in decision-making and don’t want the extra delegated work. They would prefer instead to stick with what is in their job description.

The key takeaway is that leaders should consider all personality types when seeking to empower their employees.

#4: Manage Bad Customer Energy

Keeping employees happy also means knowing how to manage difficult customers so that your staff is less likely to experience burnout. First, we’ll discuss tips for handling a difficult customer, then we’ll explain ways to help your employees recover from difficult customer interactions.

Sivers argues that you should appease difficult customers but doesn’t offer specific suggestions for how to do this. You can manage challenging customers using the following strategies:

Stay calm and lower your voice to bring down the temperature.
Listen to understand the problem. Don’t argue.
Convey that you understand their frustration.
Don’t personalize their problem.
Follow up on promises you make.
Summarize the next steps so everyone’s clear about how to proceed.

As important as it is to thoughtfully address difficult customers’ needs, it’s also smart to ensure that employees working with them engage in self-care to prevent burnout. Toward that end, you should encourage your staff to:

Take five- to 10-minute breaks every hour to collect and recenter themselves.
Ask for help when they need it.
Use breathing, relaxation, and mindfulness techniques to destress.
Keep a calm, uncluttered workspace.
Celebrate their successes when they get positive feedback from customers.

Finally, research suggests that there’s good reason to abide by Sivers’s recommendation to let the undesirable behavior of a few “bad apple” customers roll off your back: You can boost your profits by tolerating some bad behavior if there’s a net benefit for your business.

For example, if a customer tries to return a sweater she bought from your store six months after the designated return period, you might object to her violating your policy and even find the behavior unethical. However, if you permit the return and the customer then buys three jackets and a pair of pants from your store, has the customer actually done anything to harm your business? Researchers say that staying flexible in your thinking and tolerating some bad behavior can help your bottom line.

How to Keep Employees Happy: 4 Free & Effective Ways