Managers often mistakenly think that putting pressure on employees will increase performance. What it does increase is stress—and research has shown that high levels of stress carry a number of costs to employers and employees alike.

Stress brings high health care and turnover costs. In a study of employees from various organizations, health care expenditures for employees with high levels of stress were 46 percent greater than at similar organizations without high levels of stress. In particular, workplace stress has been linked to coronary heart disease in retrospective (observing past patterns) and prospective (predicting future patterns) studies. Then there’s the impact on turnover: 52 percent of employees report that workplace stress has led them to look for a new job, decline a promotion, or leave a job. 

But there’s a different way. A new field of research is suggesting that when organizations promote an ethic of compassion rather than a culture of stress, they may not only see a happier workplace but also an improved bottom line.

Consider the important—but often overlooked—issue of workplace culture. Whereas a lack of bonding within the workplace has been shown to increase psychological distress, positive social interactions at work have been shown to boost employee health—for example, by lowering heart rate and blood pressure, and by strengthening the immune system.

Happy employees also make for a more congenial workplace and improved customer service. Employees in positive moods are more willing to help peers and to provide customer service on their own accord. What’s more, compassionate, friendly, and supportive co-workers tend to build higher-quality relationships with others at work. In doing so, they boost coworkers’ productivity levels and increase coworkers’ feeling of social connection, as well as their commitment to the workplace and their levels of engagement with their job. Given the costs of health care, employee turnover, and poor customer service, we can understand how compassion might very well have a positive impact not only on employee health and well-being but also on the overall financial success of a workplace.

So why does compassion provide such a boost to employee well-being? One reason may be its impact on social connection. Research by Ed Diener and Martin Seligman suggests that connecting with others in a meaningful way helps us enjoy better mental and physical health and speeds up recovery from disease; research by Stephanie Brown at Stonybrook University has shown that it may even lengthen our life.

Despite this research, managers may shy away from compassion for fear of appearing weak. Yet history is filed with leaders who were highly compassionate and very powerful—Mother Teresa, Martin Luther King, and Desmond Tutu, to name a few. They were such strong and inspiring leaders that people would drop everything to follow them. Wouldn’t any manager wish for that kind of loyalty and commitment?

Support for this view comes from research by Jonathan Haidt at New York University. His research shows that seeing someone help another person creates a heightened state of well-being that he calls “elevation.” Not only do we feel elevation when we watch a compassionate act, but we are then more likely to act with compassion ourselves.

When Haidt and his colleagues applied his research to a business setting, he found that when leaders were fair and self-sacrificing, their employees would experience elevation. As a consequence, they felt more loyal and committed and were more likely to act in a helpful and friendly way with other employees for no particular reason. In other words, if a manager is service-oriented and ethical, he is more likely to make his employees follow suit and to increase their commitment to him or her.

Elevation may even be a driving force behind creating a culture of compassion and kindness, whether in a workplace or in society at large. Social scientists James Fowler of UC San Diego and Nicolas Christakis of Harvard have demonstrated that helping is contagious: Acts of generosity, compassion, and kindness beget more generosity in a chain reaction of goodness. This is how culture is formed. Isn’t that the kind of workplace culture you would want to work in or lead?

Research on compassion is setting a new tone for the workplace and management culture. But this field is still new. Scientists are exploring the most effective ways to foster compassion in the workplace, and to help these best practices spread across organizations.