@Mansur that is really fascinating. If happy people are more productive, then it pays to adopt a management style that fosters it rather than ruling with fear, as Machiavelli recommended. 

@B. Krafte - I have wondered about that myself.  All we can do is continue the discussion and hope that more and more leaders will embrace this model.  In the new Enterprise 2.0 environment with amazing technology to engage and inspire all employees, organizations which engage and properly use the brains of all their employees will do far better than organizations which are run by the brains of a few.

@Ariella - yes genuine sincerity and gratitude is very important. One of my friends gave a talk about the neuroscience of happiness and how the chemical reactions that happiness brings allows people to perform at their peak capability.

@stotheco - thanks.  Yes I do agree with you that the principles apply in life as well. 

@Mitch - thanks for adding this valuable point that it is much cheaper to retain good employees than to replace them. 

I'm a strong proponent and evangelist of the employee-centric corporate model. What I've never been able to understand is, with the number of well-documented case studies - from Costco to Zappos - quantifying its value, why more companies don't embrace it?

Employers could win a great deal of loyalty at very little cost if they would only remember to show appreciation to their employees -- with verbal acknowledgement of a job well done. Though we place money very high on our list of priorities for a job, there are also other considerations, and feeling appreciated adds to the positives one weighs up. Of course, if the employee finds out that the employer is merely paying lip service to appreciation, that could backfire. Sincerity is a big part of it, as you say. And it certainly adds an extra bitter taste to have an employer let  the employee go after years of praise for excellence. 

Interesting and insightful post, Mansur. I agree that employees should be kept happy at the workplace. After all, they're the ones who help keep things moving. The points you covered don't merely apply to work. Life itself is a two-way street, and you can expert work to be the same thing.

Give, so you can receive. Be loyal and you will be rewarded by the same kind of loyalty. Work hard, and you will get both monetary and non-monetary rewards for your efforts. Unfortunately, not all firms have this mindset and operate with only profits in mind. I've worked in a firm with this kind of principle and suffice to say, most employees didn't last long because of the poor working conditions and bad experiences overall. No one wants to feel underappreciated.

Companies like CostPlus and SAS, knowing for treating employees well, find that it actually reduces costs, by reducing the need for recruitment and training. And, while employees need to be paid competitively, that's all that's necessary; employees who are well-treated to not require exorbitant salaries. 

Employees understand fairness. Compensation has to be fair. Loyalty is a two-way street. When organizations treat employees as disposable employees treat organizations the same way. Organizations do much better when everyone within the organizations shares the burden during hard times in an equitable manner. Example, though harder to implement, I have seen graduated furloughs, with top management and higher income people bearing a larger share of the costs, work much better than across the board layoffs and across the board furloughs. People are willing to do their share to help their organization through a crisis.  What irks people are unfair practices and top performance not being rewarded and recognized.