Does it pay for firms to invest in their workers’ wellbeing?

Written on November 19th, 2014 in politics Comments Off

Published on VOXeu.org, by Alex Bryson, John Forth, Lucy Stokes, Nov 17, 2014.

It is generally agreed that firms can improve their employees’ wellbeing through improvements in job quality – but is it in their economic interests to do so? This column reports research showing that satisfied employees and higher productivity go together. Analysis of the British Workplace Employment Relations Survey finds that employee job satisfaction is positively associated with workplace financial performance, labour productivity, and the quality of output and service … //

… New evidence on employees’ wellbeing:

  • A review we recently conducted for Britain’s Department for Business Innovation and Skills (BIS) shows that employers can improve employees’ wellbeing through improvements in job quality (Bryson et al. 2014). Employees’ wellbeing will rise where they have control over the pace and content of work tasks; where demands placed on the worker are not excessive; where there is variety in their work; where there are opportunities for development; where supervisors are supportive; where pay and treatment is perceived as fair; and where the work environment is pleasant and safe.

Is improving employee wellbeing profitable? … //

… The link between wellbeing and performance:

  • There is empirical evidence linking employees’ wellbeing to their individual performance. For example, greater subjective wellbeing feeds through to individuals’ performance in the labour market (Judge et al. 2001, Lyubmirsky et al. 2005). There is also recent evidence of a causal link between increased wellbeing and improved worker productivity, at least in a laboratory experiment setting (Oswald et al. 2014). But the empirical evidence at the organisation level is extremely sparse.
  • Perhaps the most compelling evidence of a link comes from a survey of manufacturing in Finland, which found that mean workplace job satisfaction was independently associated with subsequent value-added per employee. A one point increase (on a six-point scale) in the average level of job satisfaction among workers at the plant increased the level of value-added per hour worked two years later by 3.6 percentage points, after controlling for other factors. This estimate rose to 9 percentage points in a two-stage estimation approach designed to account for unobserved establishment-level heterogeneity (Bockerman and Ilmakunnas 2012).
  • Our BIS report is the first study for Britain of the link between employee wellbeing and firm performance. Analysing the nationally representative 2011 Workplace Employment Relations Survey (WERS), we find that those workplaces with rising employee job satisfaction also experience improvements in workplace performance, while deteriorating employee job satisfaction is detrimental to workplace performance.
  • Employee job satisfaction is positively associated with workplace financial performance, labour productivity, the quality of output and service, and an additive scale combining all three aspects of performance. Workplaces experiencing an improvement in non-pecuniary job satisfaction – whether measured in terms of the average level of satisfaction in the workforce, or measured in terms of an increase in the proportion ‘very satisfied’ or a reduction in the proportion ‘very dissatisfied’ – also experience an improvement in performance.
  • These findings are consistent with the proposition that employers who are able to raise employees’ job satisfaction may see improvements in workplace profitability (financial performance), labour productivity, and the quality of output or service.
  • Although we cannot state definitively that the link between increasing job satisfaction and improved workplace performance is causal, the findings are robust to tests for reverse causation and persist within workplaces over time, so that we can discount the possibility that the results are driven by fixed unobservable differences between workplaces. There is therefore a prima facie case for employers to consider investing in the wellbeing of their employees on the basis of the likely performance benefits.
  • The link we find is between job satisfaction and workplace performance. It is not apparent for other aspects of employee subjective wellbeing such as job-related affect (measured in terms of the amount of time feeling tense, depressed, worried, gloomy, uneasy, and miserable). The analysis thus suggests that there is no clear case for employers investing in these other aspects of employee wellbeing – although equally we find no clear disadvantage to doing so.

Concluding remarks:

  • These are encouraging findings, but the scope of the analyses has not allowed us to explore the processes that could have been instrumental in forging the link between employee wellbeing and workplace performance. Further work is required to develop insights into how employers can facilitate the positive outcomes revealed in this study.

Rferences: … //

… (full text and related links).

Workforce and Human Wellbeing Related Links:

Human Wellbeing Related Websites:

Other Links:

Greek protesters clash with police near US embassy (PHOTOS, VIDEO), on Russia Today RT, Nov 18, 2014;

Reliance Mutual launches D2C online protection plans, on Money Market.co.uk, by Samuel Dale, Nov 17, 2014;

Redefining Imminent: How the U.S. Department of Justice Makes Murder Respectable, Kills the Innocent and Jails their Defenders, on Dissident Voice, by Brian Terrell, Nov 17, 2014;

Putin’s Reach: Merkel Concerned about Russian Influence in the Balkans, on Spiegel Online International, by Nikolaus Blome, Susanne Koelbl, Peter Müller, Ralf Neukirch, Matthias Schepp and Gerald Traufetter, Nov 17, 2014;

Suisse: Une nouvelle vie pour les pièces de 5 centimes, dans La Liberté, Nov 10, 2014; Les pièces déversées par les auteurs de l’initiative «Pour un revenu de base inconditionnel» seront utilisées dans une expo consacrée à l’argent …;

Switzerland: Sold! Four million coins to feature in exhibition, on Swissinfo.ch, Nov 10, 2014: In October 2013, eight million five-centime coins were dumped on Parliament Square during the campaign for a basic income initiative. A year later the organisers have finally found a buyer for half of them …;

The Latest 99% Invisible: Hundertwasser and His Fight Against the Godless Line, on Archi Daily, by Evan Rawn, Oct 12, 2014;
and Hundertwasser on Google Images-search … Krawina Haus on Google Images-search …
and on en.wikipedia: Friedensreich Regentag Dunkelbunt Hundertwasser (December 15, 1928 – February 19, 2000) was an Austrian artist and architect. Born Friedrich Stowasser in Vienna, he became one of the best-known contemporary Austrian artists by the end of the 20th century … and Hunderwasserhaus;

99 Percent Of Ocean Trash is Missing; Scientists Worry the Plastic Has Reached the Food Chain, on Weather.com, July 7, 2014;

THE 99%: These last few weeks have seen some exciting things happening in the heart of the American money machine – Wall Street, on Upper Space/Politika, not authored nor dated; /About; /Blog; Contact online;

… and this:

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