Want to know how to make employees happy and productive? This review offers key takeaways from Annie McKee's new book, "How to Be Happy at Work."

Because of their size and typically close-knit organizational cultures, small and midsized businesses tend to be better at understanding how to make employees happy than larger enterprises are. That said, there's always room for improvement, as Annie McKee's excellent and accessible new book, How to Be Happy at Work, makes clear.

A senior fellow at the University of Pennsylvania who specializes in employee engagement and organizational change, McKee notes that two out of three employees across the entire US workforce are either "not engaged" or "actively disengaged" with work, citing annual survey results from Gallup.

McKee's thoroughly researched book describes the high costs of low engagement to organizations and employees alike and discusses how to make employees happy and productive by fostering work climates that support employee engagement.

The High Costs of Low Engagement

The costs of low engagement for small and midsized businesses are significant. When employees are not fully engaged in their work, when they lack enthusiasm and don't feel their work has any meaning beyond a paycheck, McKee says, they can never reach their full potential and neither can their organizations. Employees who aren't engaged may not deliver good customer service, pay attention to details or care enough to get things right each time. Their negative attitude tends to contaminate other employees and even the entire organization.

The result? Poor worker productivity and subpar business. Everyone loses, including customers.

Employee Engagement: A Shared Responsibility

McKee doesn't believe in blaming individual employees, companies or organizational cultures for engagement problems. She believes in shared responsibility, the idea that everyone can boost engagement. Business leaders, she says, should begin with themselves and examine whether they themselves are happy at work and what values they're modeling for employees. The stressed out, overworked, irritable business owner or manager needs to improve their own mood before they can improve employee engagement.

Employees, of course, also share responsibility for their own happiness at work, too often becoming "victims" of a negative manager or toxic workplace culture. McKee explains the various "happiness traps" that employees fall into, for example passively accepting a bad situation or job-hopping. McKee describes how employees can proactively improve their own workplace happiness by connecting with coworkers, emphasizing the positive, coping with the negative and developing a personal sense of mission. As McKee says, "Organizations are our tribes. Work is still where we express ourselves and make a difference."

What Business Owners Can Do: Define Values and Purpose

Getting employees to "buy into" your organization's stated values and purpose is a crucial driver of engagement, says McKee. If you don't have stated values and a clear mission, start defining them now. Once employees understand and align themselves with your values, and you've clarified each employee's role and goals, give them enough autonomy to be creative in the way they work. "If you give people space," McKee says, "they'll find the solutions themselves." When you can help employees connect with values and purpose, you'll instantly improve engagement.

The owner's goal, according to McKee, should be to create "a positive emotional climate as well as a shared purpose." That positive climate is marked by listening, respect, honest dialogue, caring for others and recognizing good work. While creating this climate might not be easy, it's a lot easier than dealing with disengaged employees who damage your bottom line.

Tags: People Management and Growth Employee Engagement and Productivity Leadership Learning and Development Large Business Midsize Business Small Business Research & Insights Articles HR