Bryan Power

"One might think this is an obvious relationship -- that you don't need to do a study showing that if workers are happy, the company performs better. But actually, it's not that obvious," says Edmans. "Traditional management theory treats workers like any other input -- get as much out of them as possible and pay them as little as you can get away with." Those ideas came to dominate management thinking during the industrial age when economic expansion was based largely on industrial machinery. In that environment, workers were required to perform relatively simple tasks and they were easily replaceable. Companies motivated workers mainly with money, paying by the piece in order to reward employees who churned out the most products. In today's business world shaped by new technology, knowledge and creative thinking, the value of each employee is increasingly important, although hard to measure directly, Edmans says. - Bryan Power