Clay, "a production manager, believes that some of his workers are unhappy with their job, so they are not working as hard as they could be. Which principle should Clay apply"

Ever since the Hawthorne experiments by Elton Mayo way back in the 1920´s it has been proved over and over again that happy and positive employees are more efficient, have lower staff turnover, are more creative, etc.. Simply they are better workers.

It is not always easy to achieve the goal of a happy working environment and there is no formula for doing so. Management knows the benefits (better recruitment, worker loyalty, higher job satisfaction, more job collaboration, better morale, less stress, better work performance, etc) but not everyone can make it happen.

Some ideas about how to make a positive work culture include:

Let every employee know the vision of the company and the values the company stands for.
Hire the right people.
Make employees feel part of the unique story of the organization.
The company must practice its values.
Create a work environment were employees can connect with each other not only for working reasons but also on informal levels.
And many more that can be unique for every company (i.e. Google is famous for offering its employee lots of perks)