Margot Carmichael Lester loves making good-natured jokes at work. As owner of The Word Factory, a Carrboro, N.C., content-creation company, she looks for employees with a sense of humor. "I only want to work with people who can take a joke."
Sometimes, though, her jokes fall flat. Last month, at a meeting with insurance-industry clients, she poked fun—gently—at how people often view their insurers: "I mean, who really expects to hear, 'I'm calling from your insurance company and I'm here to help?' " The joke died amid a few titters, she says. While she recovered and completed the client project successfully, the memory lingers. "If you are funny and putting yourself out there, making yourself vulnerable, and people don't respond? That hurts."
Employers like to hire people with a sense of humor, research shows. And mixing laughter and fun into a company culture can attract skilled workers, according to a study last year in the journal Human Relations. A 2011 study at Pennsylvania State University found that a good laugh activates the same regions of the brain that light up over a fat bonus check.
But the office can be a comedic minefield. Making colleagues laugh takes timing, self-confidence—and the ability to rebound from a blooper.
"People will like you better if they find you funny. They will also think you are smarter," says Scott Adams, creator of the popular syndicated cartoon "Dilbert." But "if you've never been funny before, trying to start in the workplace—the most important place you'll ever be in your life"—is a terrible idea, says Mr. Adams, author of a new book, "How to Fail at Almost Everything and Still Win Big."
Fred Kilbourne says his knack for funny banter has helped his career as an actuary, making him a sought-after speaker and participant in professional groups. "Actuarial work can be pretty dull and deadly, and I'm always looking for a way to make it a little lighter," says Mr. Kilbourne, of San Diego. "People say, 'I can't tell when you're kidding.' My usual answer is, 'If my lips are moving, I'm kidding.' "
Not that he hasn't had a few missteps. He once cracked a joke in the middle of a serious discussion by a committee on auto-insurance risk, prompting a fellow participant to say, " 'You know, we're trying to get something serious done here, and this is not helpful,' " recalls Mr. Kilbourne. "He was right," he says. "I was a serious contributor for the rest of the meeting."
Office jokesters must be ready with a funny comeback if they drop a clunker, making sure to deliver it in a warm, non-sarcastic tone, says Michael Kerr, a Calgary, Alberta, speaker, author and consultant on humor at work. Turn the joke on yourself. For example: "It takes a special human being to do what I just did," or, "This is great. I was feeling a little under-stressed today," Mr. Kerr says.
It is also important to read the nuances of co-workers' moods and attitudes and pick the right context for jokes, says Andrew Tarvin, a New York City humor coach. Mr. Adams says he watches listeners' body language. If they tense up, or they avert their gaze or narrow their eyes, it isn't a good time to crack wise.
Most people know the taboos: Divisive racist, ethnic or sexist jokes, are out. Beyond those boundaries, a jokester should consider the ramifications if a joke showed up on Twitter or Facebook.
One way to keep humor positive is to apply the "yes–and" technique used in improvisational comedy, says Zach Ward, managing director of ImprovBoston, a Cambridge, Mass., theater and humor-training school. (Many students come there, he says, to build interpersonal skills they can use in the workplace.) A co-worker who hears a joke might "actively add to what you have you have said," he says. If the sound system crashes during a presentation, for example, the speaker might say, "Was it something I said?" while other employees might play off and extend the witticism with, "It must have been your electrifying humor," or "Whose turn was it to pay the electrical bill?"
The best office humor brings people together, often through shared pranks or inside jokes, Mr. Tarvin says. For nearly three years, employees at Silver Lining Ltd. held monthly "corporate jargon days" when they tried to use as much vague, bureaucratic language as possible, says Carissa Reiniger, founder and chief executive of the New York City-based small-business management consulting firm.
The goal: to goad the group to break the buzzword habit. Before going to lunch, she says, "we'd joke about having a three-hour strategy session to do a SWAT analysis of the strengths and weaknesses of Subway vs. McDonald's, considering how we could all get into alignment and move forward together as a team." After the lesson was absorbed, they dropped the ritual.
Teasing or kidding co-workers can allow people to disagree or deliver criticism in a playful way, without arousing anger or defensiveness, says Kevin Cruthirds, an assistant professor of management at the University of Texas at Brownsville and co-author of a 2006 study on workplace humor. A boss might joke with an employee about spending $80 on a hotel minibar during a business trip, making a point while also getting a laugh, he says. (This approach shouldn't be used in more serious situations that might affect someone's performance record or compensation.)
A study published earlier this year in the Leadership & Organization Development Journal says executives and managers who use self-deprecating humor appear more approachable and human to subordinates.
Paul Spiegelman, co-founder of BerylHealth, a Bedford, Texas, medical call-center company, stars in annual office videos. One year, he was shown applying for jobs as a short-order cook and a theater projectionist because he didn't "feel valued any more at the company." Another year, in a parody of "Dancing with the Stars," he donned in-line skates and a matador costume and danced with his chief operating officer.
Humor "breaks down silos and flattens the organization," fostering employee loyalty and productivity, says Mr. Spiegelman, who recently sold the company to SteriCycle Inc., where he is chief culture officer.
Any employee, however, can use "self-enhancing" humor to make light of failures, polish her image or rise above stress, Dr. Cruthirds says. One study cited a team of co-workers who kidded each other almost constantly. In a meeting where one employee delivered a document with a mistake in it, a laughing co-worker accused him of failing his word-processing training. The perp's comeback drew another laugh: "I find it really hard to be perfect at everything."
Beth Slazak's part-time job in a physician's office requires taking calls about medical records from people who are often tense and rushed. To lighten things up, Ms. Slazak, of Cowlesville, N.Y., answers the phone with fictitious job titles. Her first one, "This is Beth, Office Ray of Sunshine," made a co-worker sitting nearby spit out her coffee, Ms. Slazak says. Others include Dragon Slayer, Narnia Tour Guide, Zombie Defender and Hope for All Mankind.
Her boss and co-workers in the small office approve, she says, since they're not the only ones who laugh: Callers almost always do, too. "If you can get somebody who sounds uptight to giggle, it's totally a win," says Ms. Slazak.