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I believe that both are equally true, depending on the type of employees. Most people 'work to live', meaning that they finish schoo (or not), take up the best job they can find to earn them money by which they can create a suitable life for themselves; these tend to fall in the first category you mentioned, being that they are productive when happiest - the more they are rewarded, the happier they are, and the more productive they become.
A second, and less frequently met group, are those who 'live to work', meaning that being able to work and produce is in itself a goal and not a means to an end. These will most definitely fall in the second category of being "happiest when productive". The more work they're given, the more responsibility they hold, and the better their output is, the more satisfied and fulfilled they will be.
Some may derive happiness from their productivity, and others may be indifferent to it. It depends on the employee's character and job related objectives & ambitions.
Some employees need "happiness" (whether in work or private life) more than others to perform well, or more productively. Other may be less sensitive to such a factor & quite consistent irrespective of factors, external to their job description or daily duties.
Generally, I think that work condition related happiness leads to more productivity. And more productivity leads to more confidence in one's professional ability and sense of self-fulfillment or recognition, resulting in overall happiness.
I think the happiest employees are productive.
happiest employees are more productive.
The most productive employees are the happiest is more right, because a man after he gets home he reviews what happened at the work.
And when he was lucky at work or rewarded from the authority or something like that, he becomes happy and spills the happiness on his family too.
And the day after that confidently and in high spirit he performs very well.
It is a positive spiral, but un-happy employees are less productive. So isee that it starts with "the happoest employees are productive", then productivity generates more happiness and so on.