In a nutshell, they found that if the employees at a fund company are unhappy, the company’s mutual funds are likely to produce poor investment results. And if the employees are happy, there’s a good chance the funds will perform really well.

“Mutual-fund managers that work for companies with higher employee satisfaction perform better,” they say.

Saffi tells me that the performance gap between funds at the happiest companies and those at the unhappiest works out at around 1.44 percentage points a year.

In investment terms, that is huge.

This is the result of a deep and detailed analysis. The pair looked at 437 mutual-fund companies managing a total of 3,266 funds. They studied them over a full 10 year period, from 2009 to 2019.

How did they measure employee satisfaction? They looked at all the reviews that staff posted at Glassdoor.com, a website where employees give job seekers the inside dope on what it’s actually like to work somewhere. They focused specifically on employees who had job titles relevant to mutual fund performance, typically meaning titles related to research, trading and fund management.

And then they looked at the performance of the companies’ funds against their benchmarks.

Just a 1-point increase on the 5-point scale of average employee satisfaction leads to 0.36 percentage points in “alpha” or higher investment performance, when adjusted for things like investment style and objectives.

This was only true when they measured the satisfaction of employees working on asset management jobs, and not for those in the rest of the company, they found.

Do the funds perform better because the employees are happier—or are the employees happier because the funds are performing better? Saffi tells me they can’t be sure, but they ran a clever test to see if they could find out. They looked at mutual funds where the company was taken over by a happier company. The result? The funds ended up doing better—much better.

It’s a heroic research study. And it’s intuitive. With apologies to Tolstoy, who once wrote that “every unhappy family is unhappy in its own way,” unhappy organizations tend to share a lot of similarities, including “busywork,” bad processes, and self-serving bosses who are deeply cunning morons. The employees work longer hours but achieve less. A lot of energy is wasted on internal conflict.

The question is why these organizations persist. As Ohneberg and Saffi show, they are bad for business as well as bad for everything else.

Personally, I blame management consultants. (I used to be one.) They help keep client firms alive that should be allowed to die.

Yet Gallup, after surveying 112,000 organizations in 96 countries worldwide, reports that 60% of people are emotionally detached at work and 19% are miserable. In the U.S. and Canada, 50% said they experienced “a lot” of stress during the workday and 41% a lot of worry. Just 33%, one in three, said they felt engaged.

Oh, and the U.S. came out on top of all the regions in the world. Just 14% of European workers felt engaged at work. A third of workers in India and adjacent countries felt a lot of anger during the workday.

Gallup estimates—guesses—that low employee engagement costs the world $7.8 trillion annually, lowering GDP by 11%. Well, maybe. But according to the new research, it costs money.

Ohneberg and Saffi don’t say which fund companies have the happiest employees. But before investing in a mutual fund, it might be worth checking the employee ratings at Glassdoor.