Overview: Benefits of Humor in Business

Let's start with the research results: Humor boosts employee well-being,1 creativity,2 job satisfaction, and work performance.3 On an individual basis, humor mutes negative emotions and helps us tolerate pain.4 It also buffers us from stress.5 Within teams, humor enhances group communication, effectiveness and cohesion while reducing group conflict.6 And within cultures, humor fosters creativity and innovation7 and helps organizations bounce back from setbacks8– staving off employee job burnout, stress, and work withdrawal.9

In other words, the research suggests humor isn’t just the best medicine, it is also a powerful tool for achieving business success.

Further, using humor increases individual’s success within an organization. It raises perceptions of status10 and improves a job candidate’s chances of getting hired. A 1986 Hodge-Cronin and Associates study of 737 CEOs showed that 98 percent of CEOs prefer job candidates with a sense of humor. Humor is also a non-trivial factor in career advancement. The same survey showed that 84 percent of top executives perceived that employees with a sense of humor were better at their jobs than their less-humorous counterparts.11

Executives get rewarded for using humor too. In performance evaluations, subordinates rate funny bosses higher on other (non-humor related) qualities. Subordinates of bosses who use humor also report higher job satisfaction for themselves. 12 , 13

This matters because job satisfaction is critical for business. Consider these sobering Gallup statistics: Only 30 percent of U.S. employees are engaged at work, and 51 percent are looking for new jobs or watching for new openings. Of the 73 million millennials in the United States, only 29 percent are engaged at work.14 Given this context, businesses need to use every means at their disposal, including humor, to keep good talent engaged. This is not a simple task, so how do you use humor in the workforce and why? We offer one framework and two ways to think about humor – using it as a tool to increase power (the “ladder”) and to build bonds (the “bridge”).

Humor is a tool for gaining power. Research by Brad Bitterly, Alison Wood Brooks, and Maurice Schweitzer (2016)15 found that humor is favorably linked to status and perceived confidence and competence. Even laughing in a certain way conveys status. Researchers found that those who exhibit dominant laughter (uninhibited, higher in pitch, louder, and more variable in pitch) were attributed 20 percent higher status by observers (Oveis et al. 2016).16

These effects translates into bottom-line results. A study by O’Quinn and Aronoff (1981)17 found that negotiators who followed up the phrase “My final offer is...” with “..and I'll throw in my pet frog,” yielded 18 percent higher concessions, proving either that humor is a powerful tool in negotiations or that the participants were all ten-year-old boys with terrariums.

These benefits are particularly important in high stakes environments, and appear to be driven by the way in which the individual frames stressful contexts. Nick Kuiper and Rod Martin, psychology professors at the University of Western Ontario, found that people with higher humor scores (based on a situational humor questionnaire used around the globe)18 perceived potentially stressful events as more of a challenge. By contrast, those with lower humor scores saw those events as more of a threat.19

Further, humor improves memory. Researchers at California's Loma Linda University ran a study where they broke 20 older adults into two groups – one that watched funny videos and one that sat silently for 20 minutes. Before and after the session, both groups took a short-term memory test. The individuals in the humor conditions showed significantly more improvement on the test: 43.6 percent compared to 20 percent in the non-humor group. (Bains et al. 2014).20

Why is humor linked with improved memory? One hypothesis is that jokes prompt “expectation failures” – memorable instances of cognitive dissonance that force us to grapple with what’s just been said, thereby aiding retention (see Fast Company article). In other words, the heightened emotion that humor evokes doesn’t just make it easier for us to hit upon an insight we otherwise wouldn’t have - it also helps us remember the insight.

Humor also cultivates connections and can improve relationships21 – even helping strangers or colleagues feel closer.22

One reason is because laughter releases oxytocin, which facilitates social bonding and increases trust and generosity. Robin Dunbar, an evolutionary psychologist at Oxford University, said in a 2011 interview with the New York Times that laughter was an early mechanism to bond social groups, and it may have been favored by evolution because it helped bring human groups together.

Laughter also quickens self-disclosure. One study (Gray, et al.2015) 23found that people self-disclose more after being shown a humorous movie clip than a serious movie clip. Observers rate these interactions as 30 percent more intimate than after a neutral clip. This suggests the act of laughing temporarily influences willingness to disclose personal information, which facilitates intimacy generation.

Further, humor increases resilience to stress in individuals and teams, and insulates them from negativity. In fact, in a 2008 paper, Dacher Keltner and George Bonanno24 showed that individuals who had lost a spouse and reminisced about funny stories felt better faster and showed reduced stress, increased excitement about life, and improved relationships.

Why? Dunbar and his Oxford colleagues ran studies that tested the pain threshold of participants by wrapping their arms in a tightening blood pressure cuff and then tightening the cuff until participants said they couldn’t take it anymore. Then they showed these participants video clips. Half saw something funny and the other half saw a documentary. The results, published in 2011, showed that pain tolerance increased by 10 percent for the funny video clip viewers. The physical action of laughing triggers activation of the endorphin system, elevating endorphin titres, which generates positive affect and elevates reports of well being. The Mayo Clinic explains it this way:

The benefits of humor and laughter build on themselves over time. Recalling moments of shared laughter makes people feel more satisfied with their relationships. A study found that couples who recalled times when they laughed together were more satisfied than those who recalled shared positive memories. It would follow that colleagues would feel similarly more satisfied with their coworker relationships upon recalling such memories – highlighting the importance of creating such memories together in the first place (Bazzini et al. 2007).26

With this framework in mind, we interviewed four business leaders and advanced practitioners of humor in the workplace to discover how they do it – with a focus on the use of humor as a ladder and as a bridge – as they built companies, created cultures, bonded with customers, used humor in board meetings, and tackled tough conversations. Please enjoy humor with:

Leading with Humor

Humor as a Tool to Increase Power: "The Ladder"

Humor as a Tool to Build Bonds: “The Bridge”