Iceland - the Happiest Country?

As with any happiness or life satisfaction league table, who comes top depends on exactly what's being measured and how. In this article by The Observer journalist John Carlin, Iceland is referred to as the happiest country in the world. How can this be? We all know that it's Denmark!


Carlin's conclusion is based on Iceland's ranking in the Human Development Index (HDI), one of the four United Nations assessments of human potential - it measures three basic dimensions - a long and healthy life, education and a decent standard of living.

1. Health is measured by life expectancy at birth,
2. Education is measured by a combination of the adult literacy rate and the combined gross enrolment ratio in primary, secondary, and tertiary education,
3. Standard of living is measured by Purchasing Power Parity (PPP US$).

So the HDI isn't actually quantifying either happiness or life satisfaction, and it's questionable (in Positive Psychology terms) whether health, wealth and education significantly contribute to happiness anyway.

In fact there are some elements of Icelandic society which would contradict the conclusion that it's one of the best countries in the world to live in, for example, the highest divorce rate in Europe. However, this doesn't mean they have unhappy families - in fact writes Carlin', "The kids will be just fine, because the family will rally round them, and likely as not, the parents will continue to have a civilised relationship, based on the usually automatic understanding that custody of the children will be shared".

The article provides further insights into those character traits which might explain why Icelanders are generally happy people (if not the happiest), for example, optimism, resilience, self-confidence and a can-do attitude. That said, if we follow Lyubomirsky's "Happiness Pie" model, after genes (50%), what we chose to do with our time is the largest contributor (40%) to our happiness - do we have any readers who could comment on how the average happy Icelander spends his/her time?


Whether or not it's the happiest country, Iceland takes first place in the 2007/08 HDI, followed by Norway, Australia, Canada and Ireland. The USA is in 12th position, Denmark 14th and the UK 16th. At the bottom , not surprisingly are the West African countries of Guinea (175th), Burkina Faso (176th) and Sierra Leone (177th). For the full list, see here.


Image: Gúnna

Employee Well-Being

How does your business define employee well-being? Perhaps you think of it in terms of physical health, providing healthy menus in your staff restaurant, health screening or private health insurance. Or maybe you help employees manage stress or give up smoking? These types of support are common in many larger organisations, and for many HR and OD managers, this is what employee well-being is all about.

But what about the importance of psychological well-being or mental health in the work-place? In their recently published Change Agenda - What's happening with well-being at work?, the CIPD's examples of mental health at work are: work-life balance targets, conflict resolution training and relaxation techniques (p7). I think this is really missing the point.

The CIPD's definition of well-being is 'creating an environment to promote a state of contentment which allows an employee to flourish and achieve their full potential for the benefit of themselves and their organisation'. The question we need to answer is whether work-life balance targets, conflict resolution training or relaxation techniques really achieve this.

I would suggest that they are only half the story. Research shows that psychological well-being can be enabled through developing traits like resilience, optimism and self-awareness in employees, focussing on strengths and through fostering meaning at work, for example by building new organisational communities through volunteering programmes. What is essential for employees to flourish is an organisational culture which actively and positively promotes it.

I think it would be beneficial for organisations to view employee well-being in terms of an integrated model, which not only takes into account physical, psychological and spiritual well-being, but which places specific emphasis on developing the positives. I'll be returning to this integrated model and the importance of a positive focus in later posts.

Well-being vs well-doing

Maybe it’s the traditional British reserve but whenever I mention that I’m interested in the subject of happiness, people tend to raise their eyebrows and look a little bemused. Very often they say ‘that’s simple, if I had more money I’d be happy’, or at this time of year in particular, ‘if I lost a little weight/stopped smoking I’d be happy’. Happiness is worth a closer look because, actually, it’s not that simple; research has shown that health and wealth might bring happiness to a point or temporarily, but that it doesn’t last…

Happiness is becoming big business now. If you type ‘happiness’ into Amazon, you get over 5000 books on the subject. There are TV programmes about it and websites devoted to it. But why does it matter to organizations what makes people happy?

In his article ‘Happiness is a serious business’ quoted in People Management, Nic Marks, head of the Centre for Wellbeing at the New Economics Foundation, refers to the CIPD employee attitude survey 2006, part of which looked at the relationship between positive and negative emotions and several key performance indicators (KPIs): job satisfaction, meaningfulness of work, absorption in work, commitment to complete work, loyalty and performance.

What the survey found was that, with the exception of job satisfaction, positive emotions seem to have more than twice the impact on these KPIs as negative emotions do. In the case of job satisfaction, says Marks, “people’s satisfaction ratings and assessments of others are more clouded by their negative feelings than their own experience and behaviour”. He concludes that organizations could therefore have more impact and improve individual, team and organizational performance “by promoting a climate that fosters positive emotions at work”.

In short, there is a very serious point to ensuring that people are happy at work. In the past, we have thought that feeling happy was a result of good functioning i.e. ‘life is going well, therefore I feel good’. However there is a growing body of research (e.g. by the psychologist Dr Barbara Fredrickson, a world expert in the field of positive emotions) which suggests that feeling happy is also a cause of good functioning. So happiness is important to organizations because feeling happy actually helps promote creativity, resilience and resourcefulness; all qualities that we need to improve our performance and succeed at work.