Employee Well-being, Productivity, and Firm Performance: Evidence and Case Studies

Christian  Krekel; George  Ward; Jan-Emmanuel  De Neve; and Council Members:  J. Harter, A. Blankson, A. Clark, C. Cooper, J. Lim, P. Litchfield, J. Moss; M. I. Norton; A.V.  Whillans; D. Cooperrider,  and D. Mendelwicz

Chapter | Global Happiness and Wellbeing Policy Report | 2019

Employee Well-being, Productivity, and Firm Performance: Evidence and Case Studies

by Christian Krekel, George Ward, Jan-Emmanuel De Neve, and Council Members: J. Harter, A. Blankson, A. Clark, C. Cooper, J. Lim, P. Litchfield, J. Moss, M. I. Norton, A.V. Whillans and D. Cooperrider, and D. Mendelwicz

Abstract

The well-being of employees is a good in itself. But an important question frequently arises as to whether there are any objective benefits to making the subjective well-being of workers a priority. Clearly, implementing policies that promote worker well-being can be resource-intensive. And in times of limited budgets and competing priorities, the issue often boils down to the question: is it worth it? Ultimately, businesses and policy-makers alike want to know: are there any objective returns to – or, more generally, is there a compelling business case for – spending scarce resources to ensure and enhance well-being in the workplace?

Keywords: wellbeing; Employees; Welfare or Wellbeing; Happiness; Policy; Performance Productivity;

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Krekel, Christian, George Ward, Jan-Emmanuel De Neve, and Council Members: J. Harter, A. Blankson, A. Clark, C. Cooper, J. Lim, P. Litchfield, J. Moss, M. I. Norton, A.V. Whillans, and D. Cooperrider, and D. Mendelwicz. "Employee Well-being, Productivity, and Firm Performance: Evidence and Case Studies." Chap. 5 in Global Happiness and Wellbeing Policy Report, by Global Council for Happiness and Wellbeing, 72–94. New York: Sustainable Development Solutions Network, 2019.

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Firms are increasingly giving consumers the vote. Eight studies demonstrate that when firms empower consumers to vote, consumers infer a series of implicit promises—even in the absence of explicit promises. We identify three implicit promises to which consumers react negatively when violated: representation (Experiments 1A–1C); consistency (Experiment 2), and non-suppression (Experiment 3). However, when firms honor these implicit promises, voting can mitigate the disappointment that arises from receiving an undesired outcome (Experiment 4). Finally, Experiment 5 identifies one instance when suppressing the vote outcome is condoned: when voters believe that the process of voting has resulted in an unacceptable outcome. More generally, we show that procedural justice plays a key mediating role in determining the relative success or failure of various empowerment initiatives—from soliciting feedback to voting. Taken together, we offer insight into how firms can realize the benefits of empowerment strategies while mitigating their risks.

Over the last two decades, global wealth has risen. Yet, material affluence has not translated into time affluence. Instead, most people today report feeling persistently “time poor”—like they have too many things to do and not enough time to do them. This is critical because time poverty is linked to lower well-being, physical health, and productivity. For example, in our analysis of 2.5 million Americans, subjective feelings of time poverty had a stronger negative effect on well-being than being unemployed. However, individuals, organisations, and policymakers often overlook the pernicious effects of time poverty. Billions of dollars are spent each year to alleviate material poverty, while time poverty is often ignored or exacerbated. In this Perspective, we discuss the organisational, institutional, and psychological factors that explain why time poverty is often under appreciated. We argue that scientists, policymakers, and organisational leaders need to devote more attention and resources toward understanding and reducing time poverty to promote psychological and economic well-being.

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Employee Well-being, Productivity, and Firm Performance: Evidence and Case Studies

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