The national employee engagement rate currently hovers around 30 percent. In fact, according to a Dale Carnegie Training study, the Bureau of National Affairs reported that $11 billion is lost annually due to employee turnover.

Need for Humor

Being happy at work is important. Studies suggest that if you’re not happy at work, you’re less productive, a poor problem-solver, and more likely to take sick days. Still, some people maintain being happy at work isn’t important—that happiness is just one possible by-product of a good working environment and not worth being the goal in and of itself. I think, however, this comes from a fundamental misunderstanding of what happiness can mean.

Professor Sophie Scott from University College London says, "Laughter is a subconscious signal that we’re in a state of relaxation and safety."

Too often we feel that if we are laughing during work, people may think we are slacking off. However, could it mean that it is adding to our productivity?

A Wharton study found that laughter promotes creativity and greater analytical precision. So, not only are your employees inspired to perform, they perform better.

Studies show that humor in the workplace can boost employee productivity and even enhance performance. Laughter is also one of the best stress management tools. As the Mayo Clinic reports, more giggles are just what the doctor ordered because laughter increases the release of feel-good chemicals, reduces tension, and helps us connect with others.

How Humor Helps

We do have a way of combatting stress, disengagement, and turnover: It’s called humor.

• Humor Beats Stress: Chronic stress can cause muscle tension, high blood pressure, and decreased immunity. Humor can counteract these negative effects. Studies have shown that humor and laughter can relax muscles, decrease blood pressure, and improve our immune system.

• Humor Engages Employees: Disengaged employees cost companies billions of dollars in lost productivity through absenteeism, presenteeism, and ineffective results. Managers who use humor benefit from high levels of employee engagement and work performance, not just for their direct reports but for themselves as well.

• Humor Reduces Turnover: The estimated cost to replace an employee ranges from 20 to 150 percent of that person’s annual salary and affects the entire department involved. Employees who work in a humorous organization report higher workplace satisfaction scores and say they are less likely to leave their roles.

• Humor Connects Us With Others: Positive sounds such as laughter or a triumphant woo-hoo! can trigger a response in the listener’s brain. The response is automatic and helps us interact socially by priming us to smile or laugh and thereby connecting us with the other person.

• Humor Reduces Status Differentials: Humor can help to reduce the social distance between managers and employees.

• Humor Diffuses Conflict: Humor has long been the great equalizer—a means to facilitate conversation and bridge differences. As a matter of fact, humor has been identified as a key factor in peace-building and international mediation.

• Humor Builds Trust: Social benefits of humor include group cohesiveness, reduction of status differentials, diffusion of conflict, and team- and trust-building among diverse groups.

• Humor Encourages People to Work Together: A growing body of research shows that when you share a laugh with someone, you’re mirroring not only one another’s body language but also the hormonal and neuronal activity, prompting a mutual investment in each other’s well-being.

If you decide you want to add more laughter and smiles to your work environment, the next question is: How do you use humor without offending or getting in trouble? The answer is to keep your jokes within these humor rules:

• Stay away from religion and politics.

• Don't make sexual references.

• Don’t make fun of clients, competitors, or individuals.

• Don’t be malicious with your material.