Why Happiness is Critical for Individual Performance?

Positive psychology is one of the recent developments of psychology. Instead of focusing on illness, positive psychology focuses on the positive human functioning. The field has been receiving greater contribution from Martin Seligman, Mihaly Csikszentmihalyi, Barbara Lee Fredrickson and Ed Diener since early 1980s. Happiness is one of the major focuses in this field. Ever since its inception, research scholars have studied happiness in organisational contexts, keeping it both as input and output variable. This paper is an attempt to find answers to the research question ‘why happiness is critical for individual performance’ by doing a literature review. The key findings are that happiness provides physiological, psychological and social resources (as discussed by the broad and build theory) for performing the job and thereby satisfies the individuals’ three innate needs (as discussed by self-determination theory), and it also counters the job demand (as discussed by the job demandjob resources model). As an outcome, propositions and a model are derived. The limitations of the available literature and future direction of research has been outlined.