This seems intuitively obvious, and I say this as a former business owner. However, the causality is backwards (as I’d expect from economists).

If things are going well, it usually means you have a monopoly of some kind, which means high margins, which means that it’s easy and important to keep your people happy (including stimulating/challenging them with non-rote work).

It’s when things go south that it all starts to get ugly for everyone.

The causality likely goes the other direction: successful businesses can afford to create better employee environments. If your business sucks, you’ll likely run out of money if you try to first make employees happy and then let that happiness iterate you to success.