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24 January 2012

The link between worker happiness and productivity

Managers encouraging employees to be more proactive and flexible do make gains in performance and productivity.

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Managers encouraging employees to be more proactive and flexible do make gains in performance and productivity. But this is at the expense of employee job satisfaction, according to the latest research in the Journal Human Relations, owned by The Tavistock Institute of Human Relations and published by SAGE. Increased expectations from their employers may lead employees to perceive a less secure and more demanding work environment.

Researchers led by Stephen Wood, from the University of Leicester, set out to test a widely held assumption - that direct employee involvement methods can lead to high levels of worker job satisfaction, which in turn lead to a better performing organisation. Armed with data from the UK's Workplace Employment Relations Survey 2004 survey, the researchers used statistical methods to look at the effects of two distinct management models: enriched job design and high involvement management (HIM).

Statistical analysis of data from 14,127 employees and 1,177 workplaces shows that HIM is directly and positively related to labour productivity, financial performance, and quality, but not to absenteeism. The researchers also found a direct relationship between HIM and job satisfaction and anxiety – but surprisingly, it was a negative: HIM may be a source of dissatisfaction with the job and of anxiety. In fact, the negative effect of HIM on job satisfaction depresses its overall positive effects on organisational performance.

The enriched job design approach to management also had a positive relationship with labour productivity, financial performance and quality but this was positively related to job satisfaction, though not workplace anxiety. Moreover, the job satisfaction explains how the enriched job design affects performance.

 The new job design approach

The enriched job design approach offers employees discretion, variety and high levels of responsibility; while the HIM model encourages wider organisational involvement such as team working, idea-capturing schemes or functional flexibility (the ability to take on aspects of others' roles). Enriched job design concentrates on the employee's core job, while HIM is about organisational involvement, which entails workers participating in decision-making beyond the narrow confines of the job.

HIM originated in the 1990s, and a lot of research has followed on how this approach improves performance. However, to date most of this research has focused on the outcomes for organisations, with little attention paid to the effect on employees' satisfaction and well-being.

According to the authors, HIM entails a qualitative change in demands, not a simple quantitative change in effort levels. It may be that management's approach toward encouraging employees to be proactive and flexible creates anxieties and dissatisfaction. Increased expectations associated with involvement may actually make employees more stressed. In enriched job design, individuals have greater responsibility and autonomy, possibly offering more choices and pleasurable experiences that contrast with feelings evoked by a pressured environment.

"Treating enriched job design and HIM as discreet has certainly been vindicated by our findings, as has taking a multi-dimensional approach to well-being," Wood says. "The study offers further grounds for encouraging policy makers and managers to put job quality high on their agendas."

Workplace data were collected by face-to-face interview with a manager in each workplace, and through a survey of employees.

(EurekAlert, January 2012)

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