Forward-Thinking Companies Turn Well-Being into Workplace Wins using New Ways of Goal Setting and Prioritization for Job Satisfaction and Work Performance

Forward-thinking companies have discovered a competitive edge hiding in plain sight: the science of human well-being. Stressed-out employees and 2020-21 pandemic-driven burnout forced leadership to rethink how they set goals and motivate teams.

The result? A surge of interest in positive psychology principles like Self-Determination Theory (SDT) and PERMA framework– not just in theory, but in daily business practice. And it’s not just feel-good fluff: 81% of workers now say they’ll look for workplaces that support mental health when choosing jobs. Companies such as Google, Microsoft, and Patagonia are paying attention.

They’re applying new research (think SDT 2.0 and PERMA 2.0) to goal setting and prioritization and they’re seeing real benefits in engagement, innovation, and the bottom line.

Positive psychology focuses on what helps people thrive. Two foundational ideas in this field are Deci and Ryan’s Self-Determination Theory (SDT) and Seligman’s PERMA well-being framework. SDT says humans have three core psychological needs – autonomy (a sense of control and agency), competence (mastery and growth), and relatedness (connection and belonging). If these needs are supported, people are more motivated, productive, and happy​. If they are thwarted, our natural drive withers. PERMA, on the other hand, outlines five elements of well-being: Positive Emotion, Engagement, Relationships, Meaning, and Accomplishment. It gave organizations a handy checklist for fostering a thriving workplace culture.

What’s new since 2020? Researchers have doubled down on these ideas, extending them in ways that directly impact how we set goals at work. For example, Kennon Sheldon and Julia Schüler’s (2021) work on “self-concordant goals” builds on SDT by looking at goal quality – not just what you aim for, but why​. A self-concordant goal is one you pursue because it aligns with your intrinsic interests and values, not just external pressure. Studies show that when people choose goals that truly resonate with their core selves, they experience more positive emotions and satisfaction during the pursuit, put in more effort, and are more likely to achieve those goals​. In short, a goal that “feeds the soul” tends to succeed – a powerful insight for companies tackling engagement and performance issues.

At the same time, Edward Deci and Richard Ryan have continued to evolve SDT. In a 2019 update, they emphasize that basic needs like autonomy, competence, and relatedness don’t automatically flourish at work – leaders must actively support them​. An employee might have great personal drive, but if their workplace stifles independence or provides no sense of belonging, that drive withers. This has huge implications for managers: it shifts the focus from carrot-and-stick incentives to creating a need-supportive environment.

Martin Seligman – often called the father of positive psychology – has also revisited his signature PERMA model in what some call “PERMA 2.0.” By 2018, Seligman and colleagues recognized that while PERMA’s five pillars were robust, we can broaden the framework for modern workplaces​. He clarified that PERMA was meant as a framework for well-being, not a rigid theory, and he encouraged expanding it​. Recent research responded by adding four new factors — physical health, mindset, environment, and economic security — to form a “PERMA+4” model for work settings​. 

Imagine PERMA’s pillars with extra support beams for things like a healthy body, a growth mindset, a positive workspace, and financial stability. These additions recognize that a thriving employee also needs to feel physically well, safe and supported in their surroundings, and secure enough to focus on meaningful work.

Why does this all matter right now? Because as we navigate a post-pandemic world, employee well-being isn’t a “nice to have” – it’s a business imperative. High turnover, talent shortages, and remote work challenges have pushed companies to find new ways to keep people motivated, connected, and fulfilled. Positive psychology offers a timely toolkit. Its latest developments give leaders a research-backed blueprint to answer questions like: How do we set goals that inspire, not exhaust? How do we prioritize what truly matters, for both the company and our people? In the next section, we’ll see how some of the world’s most admired companies are using these insights to do exactly that.

Leading organizations have taken these theories off the page and into real life. Let’s look at how Google, Microsoft, and Patagonia are weaving SDT and PERMA principles into how they set goals, prioritize projects, and create a winning culture:

Google long ago learned that giving employees autonomy can unlock incredible innovation. One famous example is Google’s policy of allowing engineers to spend 20% of their time on passion projects. This isn’t just about new products – it’s about trust. By giving people freedom to explore ideas, Google creates a sense of ownership and psychological safety. “This autonomy fosters a culture where employees feel safe to explore uncharted territories and think outside the box,” one leadership expert noted​. In SDT terms, Google satisfies the need for autonomy in a big way, and employees respond with creativity.

Google also applies positive psychology to teamwork. A few years back, Google’s internal “Project Aristotle” studied hundreds of teams to find what made the best ones click. The top factor was psychological safety, a climate where people feel safe to speak up and take risks without fear of punishment. Google found that teams with high psychological safety had higher retention, more innovation, and better results. In fact, individuals on those teams were less likely to leave Google and more likely to harness diverse ideas, they even brought in more revenue​.  This insight echoes the “Relationships” and “Positive Emotions” in PERMA: when you trust your team and feel respected, you’re more engaged and productive. Today, Google managers explicitly focus on creating supportive team norms (for example, by starting meetings with everyone sharing input) to sustain that safety.

When it comes to goal setting, Google popularized the OKR (Objectives and Key Results) system. Objectives are meant to be ambitious “stretch goals” that align with a broader mission. Here we see Meaning and Accomplishment from PERMA at play. Googlers are encouraged to set objectives that matter,  big, bold goals that contribute to the company’s mission of organizing the world’s information.

They’re also encouraged to make those goals challenging (reaching, but not impossible), which keeps work interesting and engaging. An employee who feels “I’m working on something important and I have the freedom to figure out how” is likely to find more intrinsic motivation than one with a mundane, dictated task.

Google’s approach shows how a company can blend autonomy support (SDT) with purposeful, values-driven goals (PERMA) to energize its workforce.

When CEO Satya Nadella took over Microsoft, he championed a “growth mindset” culture – the belief that learning and development are key, and that mistakes are opportunities to grow. This philosophy aligns closely with SDT’s competence element (people crave chances to improve and excel) and with Engagement in PERMA (being deeply involved in challenging, growth-oriented work). Microsoft encourages employees to set learning goals, not just performance targets, and to share their learnings (even failures) openly. This has helped transform Microsoft into a more adaptive, innovative company in recent years.

Microsoft is also investing heavily in employee well-being tools. A great example is the Microsoft Viva platform, introduced to support employees in the hybrid work era. Viva Insights, one module of the platform, essentially helps workers (and managers) apply positive psychology to their work habits. How? For one, it protects focus and downtime. At Microsoft, many teams now have “twice weekly focus time blocks” when no meetings are scheduled, plus Meeting-Free Fridays to let people catch up and recharge​. Leadership explicitly backs this practice, signaling that it’s okay to unplug from constant emails or meetings to do deep work or simply breathe. This addresses the autonomy need (employees gain more control over their schedules) and prevents burnout, contributing to positive emotion and health (one of the “+4” factors in PERMA+4).

Microsoft Viva Insights also nudges employees toward recognition and positive interactions. For example, it might remind someone to send praise to a colleague. Small action? Yes, but powerful. When team members make a habit of recognizing each other’s contributions, it builds a sense of “value, contribution, and recognition” across the team​. In PERMA terms, that is boosting Relationships and Positive Emotion (who doesn’t like a kudos from a peer?). It also feeds into Meaning and Accomplishment, people see that their work matters to others. Microsoft’s HR team reports that these practices, supported by data and gentle tech reminders, are improving both well-being and productivity. It’s SDT and PERMA in action through software: helping people feel more connected and in control of their work day. And importantly, Microsoft is treating well-being as an ongoing priority, not a one-time program​. The company’s message is clear – taking care of employees is strategic. As one internal slogan put it, “We want our employees to thrive”​, because that drives sustainable performance.

Patagonia, the iconic outdoor apparel company, might as well be a case study in SDT and PERMA. Purpose and passion are built into everything Patagonia does. The company’s mission statement is famously, “We’re in business to save our home planet.” That kind of grand Meaning is not just a poster on the wall – it’s reflected in employees’ daily goals and priorities. Patagonia empowers its workers to engage in environmental activism, even to the point of supporting civil disobedience for causes aligned with its values. This level of authenticity creates a deep sense of meaning and alignment: employees feel that their personal ideals and their work responsibilities are one and the same. As Vincent Stanley (Patagonia’s long-time executive) shared, the company always ties its initiatives back to core values and storytelling, so people “connect personally” to the mission​.

From an SDT perspective, Patagonia excels at supporting autonomy and relatedness. Employees at corporate HQ famously have flexible schedules, they can go surfing when the waves are good or catch an afternoon run, as long as the work gets done. In his book Let My People Go Surfing, founder Yvon Chouinard argued that trusting employees with such freedom results in higher creativity, loyalty, and yes, productivity. Academic observers note that “Patagonia’s culture stands out because it merges work with personal values”​, and that management “promotes employees’ autonomy and sense of purpose, which aligns with Self-Determination Theory”. In other words, Patagonia meets those basic SDT needs, you feel respected as an independent person and connected to a larger purpose, and as a result, motivation soars. One analysis concluded that this approach leaves Patagonia’s staff “highly motivated and satisfied in their roles”​.

Patagonia also takes care of the “softer” side of well-being. They provide onsite childcare, so working parents feel supported (that ticks off relatedness and reduces stress). They design workspaces that encourage collaboration and friendship (fostering positive Relationships). And they celebrate accomplishments not just in terms of sales, but in environmental impact, reinforcing that Achievement in the PERMA sense isn’t only about profit, but living up to the company’s values. The result: Patagonia enjoys very high employee retention and engagement, proving that prioritizing people and purpose can indeed drive business success​.

These examples show a common theme: when companies ground their prioritization and goal-setting in intrinsic motivation and well-being culture, performance follows. Google unleashes autonomy and sees innovation blossom. Microsoft nurtures growth and empathy and watches engagement rise. Patagonia aligns work with deep purpose and earns intense employee loyalty. They are different organizations in different industries, but all recognize the power of SDT’s basic needs and PERMA’s pillars to bring out the best in their people.

You might be thinking, “This sounds great for Google or Microsoft, with their huge budgets and teams of Ph.D. consultants, but what about my business?” The good news is any organization, no matter how small, can start embracing these practices. You do not need a fancy program or expensive software to make a positive change. Here are some practical action steps for small and medium-sized enterprises (SMEs) to get started:

Let employees in on prioritization and goal-setting. Rather than top-down targets only, involve your team in setting their own goals and shared team goals. 

Encourage them to choose at least one goal that excites them or plays to their strengths. This creates self-concordant goals, people are far more driven when they feel personal ownership and interest in what they’re pursuing​. For example, a sales employee might set a goal to master a new client relationship software not just “because the boss said so,” but because they are personally interested in tech skills. An employee might set goals for operational efficiency, and yet another might like to work on quality improvement. Find that overlap between business needs and personal interests during your goal discussions.

Align work goals with a deeper purpose. Take a cue from Patagonia and clarify the “why” for your business and for each role. You do not need an environmental mission to inspire meaning, any company can articulate how it improves customers’ lives or contributes to the community. Make sure employees know how their work matters beyond the daily grind. Even setting a team motto or revisiting your company’s story can reinforce meaning. When people see significance in their tasks, mundane work becomes more engaging. Tip: in team meetings, share a quick story of how your product or service helped a customer, it reminds everyone that their efforts lead to real, positive outcomes.

Support autonomy in goal and priority setting (within boundaries). ”Micromanagement is the enemy of motivation.” Look for small ways to give employees more control and choice in their work. Can you allow more flexible hours or remote days? Could team members choose how to divide tasks among themselves? Maybe offer a “20% project” concept scaled down, e.g. an afternoon each month for employees to brainstorm or prototype ideas outside their normal duties. Showing trust in people’s independence fulfills a core psychological need and often leads to fresh solutions. As we saw with Google, a bit of freedom goes a long way in building a culture of innovation and accountability.

Foster goals reflecting connection and recognition. A positive workplace is one where people feel seen and appreciated by colleagues. As a leader, model the behavior: regularly acknowledge good work and effort (not just results). You can start meetings with shout-outs for a job well done, or implement a simple peer recognition system (even a Slack channel or whiteboard where anyone can post kudos). These gestures create positive emotion and stronger relationships – two PERMA pillars that boost morale. Research has shown that teams practicing gratitude and recognition report higher trust and performance​. It costs virtually nothing to say “thank you” or “great job on that project,” but it contributes hugely to an environment where employees feel valued.

Build in goals on work-life integration with well-being breaks and boundaries. In a small business, everyone wears multiple hats, which can easily lead to overload. To keep your team energized, encourage sensible breaks and work-life integration. You might not have Microsoft’s Viva tools, but you can decide, for instance, to make Wednesday afternoons “quiet time” with no meetings, or set a guideline that emails after 7pm can wait until morning. Such practices prevent burnout and signal that you care about employees’ holistic well-being. Consider a short group activity occasionally, a walking meeting outside, or a casual team lunch, to inject positive emotion and camaraderie into the week. Little changes like dedicated focus time or no-email weekends protect mental health (one of the new “PERMA+4” factors: physical and emotional wellness) and ultimately improve productivity.

As an SME leader and SME employee, you set the tone. Show genuine interest in your colleagues’ development. In one-on-ones, ask about their career aspirations and how you can help align their work to those goals. Provide mutual coaching, mentorship, and feedback, where possible. When mistakes happen, frame them as learning opportunities (remember Microsoft’s growth mindset). By creating a safe space to learn and voice ideas without fear, you tap into employees’ intrinsic motivation. Psychologically safe teams are more likely to experiment and share ideas, which can spark improvements in your business. Even if you can not offer big-company perks, being a SME employer and employee who cares about well-being and purpose is free. And it pays off in loyalty and effort.

The beauty of these steps is that they are simple but meaningful. You don’t need to overhaul everything at once. Pick one or two ideas and try them for a few months. Maybe you start by instituting a meeting-free Wednesday morning, or by reworking how you do quarterly goal planning to include personal development goals. The key is consistency and authenticity, employees will notice if you stick with it and truly believe in the changes.

This matters now more than ever. As the examples of Google, Microsoft, and Patagonia show, positive psychology isn’t just a “nice idea”,  it is shaping the future of work. Organizations that embrace these principles are seeing higher engagement, lower turnover, and better performance. Those who ignore them risk falling behind, as employees (especially younger generations) flock to places where they feel motivated and appreciated.

The bottom line: happy, purpose-driven people build more successful companies. By borrowing a page from positive psychology 2.0, even a small business can create a workplace where the employer and employees wake up excited to tackle their goals and set priorities, because those goals and priorities mean something to them personally. Start with small steps, listen to the team’s feedback, and iterate. Over time, the team will likely find that productivity and profit follow passion and positivity. In an uncertain, fast-changing world, investing in your people’s well-being and growth is one of the wisest, most future-proof strategies you can choose. And that’s a goal every business can get behind.