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The best way to ensure your company’s success is to make the people responsible for it happier. Here’s how.Chris Knorr / Design Pics/Getty Images

Professor Alex Edmans of The Wharton School of the University of Pennsylvania discovered that businesses with high levels of employee satisfaction perform better than those without. Research from the University of Warwick says happiness makes people 12 per cent more productive.

And yet a report from Gallup demonstrates that 63 per cent of employees today are 'not engaged' (24 per cent are 'actively disengaged') in their jobs. This essentially means that 87 per cent of employees have no passion for their work, lack motivation to get the job done and are unhappy. This has an impact on the bottom line, too – according to Tower Perrin, companies with a low level of employee engagement have a 33 per cent annual decline in operating income and an 11 per cent annual decline in growth.

Considering that three out of four startups fail already, the people in charge need to unearth ways to skyrocket and maintain employee happiness and satisfaction. Your startup's success might depend on it.

What makes employees happy?

Many factors together contribute to employee satisfaction and happiness. To understand this, The Energy Project teamed up with Harvard Business Review to conduct a survey of 12,115 workers. Ninety-four per cent of these workers were in white-collar jobs. The rest (six per cent), were in blue-collar jobs.

According to the survey, employees are most satisfied and productive when their four core needs are met. These are physical, emotional, mental and spiritual needs.

The good news is that satisfying just one need of the four can improve performance. These steps can kick-start a culture that induces employee satisfaction and happiness, which in turn will boost productivity and performance. Just remember everyone's ideas on happiness will vary greatly, so communicating with your current employees and incorporating their wants and needs in the work culture will result in a positively functioning startup.

How should you get new employees to adapt to your work culture?

Wondering how to get potential hires to adapt to your work culture? You're on the wrong track.

Tony Hsieh, Founder and CEO of Zappos, takes work culture so seriously that his company performs two sets of interviews. The hiring manager and his or her team conducts the first set to determine whether the candidate has relevant experience, technical ability, and is a good fit. The HR team conducts the second to ensure that the potential employee would be a good culture fit. Employees have to pass both interviews in order to get hired.

Zappos turns down many talented people who just don't fit into their culture. For Zappos, the long-term benefits are more important than the short-term benefits. So instead of looking for methods to get new employees to adapt, look for employees who will directly fit into your culture.

You can take it one step further and mandate an employee probationary period like Buffer does. They have a 45-day trial period with an employee called Buffer Bootcamp. During this phase, Buffer assesses the new employee to see if they would fit in with the company. The decision to stay together or part ways depends on how both parties feel at the end of 45 days. Usually 70 per cent of new hires stay on.

Buffer also takes effective pre-employment steps. They're well-known for their transparency about their culture, salary packages and everything else offered to make it easy to attract people who fit in.

The secret: motivating employees to work because it makes them happy

On average, people spend 8.7 hours each day working (as compared to 2.6 on leisure and sports). This represents an enormous section of their lives. Businesses need to prioritize bringing fulfillment and happiness to employees. The obvious choice might seem like paying them more, but that does not directly correlate with long-term happiness. Money is a reward that aids as a fuel for a temporary period. Once it's exhausted, employees lose interest.

Motivate your employees to work because it makes them happy. Then stand back and watch productivity and overall company performance improve.

Eric Siu is the CEO of San Francisco-based digital marketing agency Single Grain. He also interviews entrepreneurs on his podcast, Growth Everywhere.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

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