Emotional Status and Productivity: Evidence from the Special Economic Zone in Laos

Abstract

Employee productivity is a well-studied area, which has been explained in various dimensions. However, there is insufficient research on how workers’ on-job emotional status relates to productivity. This study examined the relationship between workers’ emotional states and productivity by assessing on-job emotionality recorded using a specially designed wearable biometric device. The experiment was conducted at KP Beau Lao Co. Ltd., a Japanese plastic toys and cosmetic products company in Savannakhet province in Southwestern Laos. Participants were 15 plastic toy painters. Mental status, daily output, and other issues were recorded for three consecutive working days. Using random effects panel regression models, we examined how productivity, operationalized as the log of daily output, was related to workers’ emotional states, including the amount of time workers reported being happy, angry, relaxed, and sad. We controlled for conversation time, heart rate, and other demographic features. The results revealed that happiness, and no other emotional state, was significantly and positively related to productivity. Such findings suggested that workers’ emotional states must be addressed as part of an organization’s operational strategy to ensure higher productivity.