Is it better to get your staff to like you, or be tough and inspire respect and hard work? Most people still assume the latter, but “tough” managers don’t necessarily improve performance – they increase stress. And stress brings high health care and turnover costs. New data shows that nice bosses can be successful, if they use the right strategies to prevent others from taking advantage of them. Acts of altruism increase someone’s status in a group, and employees feel greater trust with someone who is kind. One study shows that when leaders are fair to their team members, the team members display more citizenship behavior and are more productive. Positive social interactions at work boost employee health, and employees even prefer happiness to higher pay. Collectively, the research shows that creating a leadership model of trust and mutual cooperation may help create a culture that is happier, in which employees help each other, and (as a consequence) become more productive in the long run.

There’s an age-old question out there: Is it better to be a “nice” leader to get your staff to like you? Or to be tough as nails to inspire respect and hard work? Despite the recent enthusiasm for wellness initiatives like mindfulness and meditation at the office, and despite the movement toward more horizontal organizational charts, most people still assume the latter is best.

The traditional paradigm just seems safer: be firm and a little distant from your employees. The people who work for you should respect you, but not feel so familiar with you that they might forget who’s in charge. A little dog-eat-dog, tough-it-out, sink-or-swim culture seems to yield time-tested results and keep people hungry and on their toes. After all, if you’re a leader who seems like you care a little too much about your employees, won’t that make you look “soft”? Won’t that mean you will be less respected? That employees will work less hard?

New developments in organizational research are providing some surprising answers to these questions.

“Tough” managers often mistakenly think that putting pressure on employees will increase performance. What it does increase is stress—and research has shown that high levels of stress carry a number of costs to employers and employees alike.

Stress brings high health care and turnover costs. In a study of employees from various organizations, health care expenditures for employees with high levels of stress were 46 percent greater than at similar organizations without high levels of stress. In particular, workplace stress has been linked to coronary heart disease in both retrospective (observing past patterns) and prospective (predicting future patterns) studies. Then there’s the impact on turnover: research shows that workplace stress can lead them to look for a new job, decline a promotion, or leave a job.

Is it any better with “nice” managers? Do their employees fare better — and do kind bosses get ahead?

Contrary to what many believe, Adam Grant’s data shows that nice guys (and gals!) can actually finish first, as long as they use the right strategies that prevent others from taking advantage of them.In fact, other research has shown that acts of altruism actually increase someone’s status within a group.

Harvard Business School’s Amy Cuddy and her research partners have also shown that leaders who project warmth – even before establishing their competence – are more effective than those who lead with their toughness and skill. Why? One reason is trust. Employees feel greater trust with someone who is kind.

And an interesting study shows that when leaders are fair to the members of their team, the team members display more citizenship behavior and are more productive, both individually and as a team. Jonathan Haidt at New York University Stern School of Business shows in his research that when leaders are self-sacrificing, their employees experience being moved and inspired. As a consequence, the employees feel more loyal and committed and are more likely to go out of their way to be helpful and friendly to other employees. Research on “paying it forward” shows that when you work with people who help you, in turn you will be more likely to help others (and not necessarily just those who helped you).

Such a culture can even help mitigate stress. While our brains are attuned to threats (whether the threat is a raging lion or a raging boss), our brain’s stress reactivity is significantly reduced when we observe kind behavior. As brain-imaging studies show, when our social relationships with others feel safe, our brain’s stress response is attenuated. There’s also a physical effect. Whereas a lack of bonding within the workplace has been shown to increase psychological distress, positive social interactions at work have been shown to boost employee health—for example, by lowering heart rate and blood pressure, and by strengthening the immune system. In fact, a study out of the Karolinska Institute conducted on over 3,000 employees found that a leader’s qualities were associated with incidence of heart disease in their employees. A good boss may literally be good for the heart.

In fact, what may come as a surprise to many HR directors, employees prefer happiness to high pay, as Gallup’s 2013 Workplace Poll shows. In turn, happier employees make not only for a more congenial workplace, but also for improved collegiality and customer service. A large healthcare study showed that a kind culture at work not only improved employee well-being and productivity but also improved client health outcomes and satisfaction.

Taken together, this body of research shows that creating a leadership model of trust and mutual cooperation may help create a culture that is happier, in which employees help each other, and (as a consequence) become more productive in the long run. No wonder their nice bosses get promoted.

But what constitutes a compassionate leadership style and workplace exactly? That is a trickier question. Many companies try to offer well-being “perks” such as the ability to work from home or receive extra benefits. A Gallup poll showed that, even when the workplace offered benefits such as flextime and work-from-home opportunities, engagement predicted well-being above and beyond anything else. And most of the research suggests that a compassionate workplace fosters engagement not so much through material goods as through the qualities of the organizations’ leaders, such as a sincere commitment to values and ethics, genuine interpersonal kindness, and self-sacrifice.

What is clear is that we’re going to have to start valuing kindness at work more. One depressing study out of Notre Dame suggests that for men, the more agreeable they are, the lower their pay rate. Because agreeableness does not impact women’s salary, the researchers theorize that when we don’t conform to gender norms, we’re punished. The answer is not for men to be cruel, but for us all to help change the norms. With a little skill, there are ways to be agreeable while not being a pushover or a softy. And then maybe we’ll all be a little bit happier at work.