Which boss do you think achieves better results—the one who inspires by kindness or by fear?

Despite the inroads made by science of happiness researchers in recent years, the general consensus in business culture still seems to be that the tougher the leader, the more productive the employees.

Many believe fear goes hand in hand with hard work and that “softer” leaders won’t earn the respect of their employees, rendering them less effective.

What does the research say? A recent Harvard Business Review article (“The Hard Data on Being a Nice Boss” by Emma Seppälä) reveals tougher bosses generate higher levels of stress, not performance.

According to Stanford Associate Director of the Center for Compassion and Altruism Research and Education Seppälä, these higher levels of stress “carry a number of costs to employers and employees alike.”

These costs include:

1) Healthcare

A stressed employees costs an organization 46 percent more than a healthy, happy employee, partly due to the link between stress and coronary heart disease.

2) Turnover

Stressed employees avoid the workplace through whatever means possible, whether by calling in sick, seeking a new position, or simply quitting, according to research by S. Bridger, A.J. Day, and K. Morton.

Why Be Nice?

On the other hand, nice leaders tend to have higher-performing, happier, and healthier employees.

Here are some of the reasons why:

1) Trust

Harvard Business School Associate Professor of Business Administration and social psychologist Amy Cuddy has demonstrated that managers who convey warmth get better results than harsh ones, even when the tough bosses are more competent. Employees are more likely to trust a person who practices compassion and understanding.

2) Altruism

Leaders who put others above themselves gain a higher status within the group, according to the article “Nice Guys Finish First: The Competitive Altruism Hypothesis.”

3) Fairness

When managers are perceived as being fair to everyone on their team, employees not only perform at higher levels but also become better citizens themselves.

4) Inspiration

According to research by New York University Thomas Cooley Professor of Ethical Leadership Jonathan Haidt, managers who demonstrate self-sacrificial behavior inspire employees to become more selfless, too. They are not only more helpful and kind to their coworkers but also more loyal to the company. Gretchen Gavett explores the contagious effects of paying it forward in an HBR article titled “The Paying-It-Forward Payoff.”

5) Stress Reduction

More than just a bumper sticker, random acts of kindness reduce stress, making people feel safer and therefore less stressed. Managers who foster a nurturing environment and encourage positive social interactions may actually boost employees’ immune systems and lower their incidences of heart disease. On the other hand, bosses who pit employees against one another and sow division cause stress levels to spike.

6) Engagement

Most of us already understand why employee engagement is crucial, and research connecting engagement to well-being only strengthens the argument for nice bosses since compassionate leadership, altruism, and integrity spark employee engagement.

7) Happiness

If you’re a follower of this blog, you also know happiness trumps high pay. As we discussed in our 5 Languages of Appreciation in the Workplace series (see part 1 and part 2), it is far more important for employees to feel recognized and appreciated. When a workplace exhibits a culture of friendliness, helpfulness, and warmth, improvements are seen in areas ranging from customer service to performance to health and wellness to client satisfaction.

It’s time to shift the consensus that naughty is better than nice when it comes to leadership. Let the holiday call to be good for goodness’ sake carry over into the workplace—throughout the year.