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Purpose Employee happiness is crucial in any organization as happy employees are said to be more committed in their work. However, COVID-19 stress in the current situation is a major problem for employees and it can negatively influence their happiness level. Therefore, it is critical to understand how the stressful nature of the current pandemic threatens workplace happiness. Based on conservation of resources theory (Hobfoll, 1989), this study aims to examine the resources to be protected (i.e. psychological capital) and resource investment (i.e. coping) to ensure the happiness of the employees amidst a bio-psycho-socioeconomic crisis like COVID-19 pandemic. The study explores the mediating role of psychological capital and the moderating effect of coping on the relationship between COVID-19 stress and employee happiness. Design/methodology/approach Data were collected from the Indian working population by means of purposive sampling (N = 336). Standardized instruments were used to measure the variables under study. Data analysis were done using Statistical Package for Social Sciences 20.0 and Analysis of Moment Structure 20.0 software tools and PROCESS macro was used for mediation and moderation analysis. Findings Structural equation modelling analysis showed that COVID-19 stress negatively influenced employee happiness; whereas psychological capital partially mediated the relationship between these two variables. Further, coping was found to buffer against the harmful implications of COVID-19 stress on employee happiness. Originality/value In an effort to respond timely to the present pandemic scenario, the current study provides an account of the harmful effects of COVID-19-related stress on the workplace happiness of the Indian service sector employees. The study also offers insights into the possible mediating and moderating mechanisms in this relationship.
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