Hello, sandybeachca-ga!
Thank you for your patience while I compiled an answer for you. I must
confess that this research was much harder than I thought it would be!
I assumed that numerous case studies or articles would be conveniently
grouped under general search strategies for effective HR programs
related to employee productivity, but I had no such luck. The very
broad nature of this question forced me to go in numerous directions
to find sample Human Resource initiatives that have shown to enhance
employee productivity in the workplace.
I have tried to present you with a variety of programs that have
contributed to employee productivity without becoming too scattered.
Since this is a such an extensive topic, it was a bit hard to keep it
under the reins.
GENERAL OVERVIEW
=================
Little in-depth research has been done to date to adequately measure
the return on investment of HR programs, as pointed out in the first
article I have referenced below:
"Examining Worker Productivity," by Bill Snyder
http://www.gsb.stanford.edu/news/bmag/sbsm0411/feature_econometrics.shtml
"If you're a manager, you've heard it all before: Build teams, develop
trust, empower your workforce, be proactive, etc., etc., etc. There's
no shortage of management gurus and consultants to sell you expensive
advice about how to make your workforce more productive."
* "But how do managers know which of the many human resource practices
currently being heralded as innovative really work?...Hard evidence
that innovative HR practices boost employee productivity - much less
the bottom line - is hard to find."
"In a series of groundbreaking studies, economist Kathryn Shaw, the
Ernest C. Arbuckle Professor of Economics at the Business School,
identified quantifiable links between imaginative HR practices and
increased productivity. Characterized by deep analysis of individual
plants and data collection across an entire industry, her work sets a
new and higher standard for research in the developing subspecialty of
personnel economics."
Read entire article...
==
For a general overview of the success of various HR programs, read
"The Impact of Human Capital Management on Shareholder Value," by
Jerry Amernic. Drake Business Review.
http://www.drakeintl.com/dbr/article6.html
"Training and development generates the lowest return of all the major
human capital practices, while recruiting excellence generates the
highest return."
==
From a short summary of "HR?s Impact on Performance: Unlocking the
Black Box." HR Spectrum. March/April 2002.
http://www.ilr.cornell.edu/depts/cahrs/downloads/PDFs/hrSpectrum/HRSpec02-04.pdf
"Can HR practices increase an organization?s earnings and boost its
productivity? In a major new study, four Cornell researchers have
explored the impact of HR programs and practices on organizational
profitability and efficiency. Although the profession of HR has
developed around the assumption that HR practices directly impact
organizational performance, little empirical research supports this
link, according to Timothy Gardner, Lisa Moynihan, Hyeon Jeong Park
and Patrick Wright. Says Gardner, ILR Doctoral student, "Previous
research showed that HR matters with respectvto firm performance, and
better HR practices lead to better financial outcomes. We know it
works, but we?re not sure how." In a major new study, the researchers
explored the "black box" of HR practices and their impact on employee
attitudes and organizational outcomes like absenteeism and turnover.
Surveying more than 3,400 employees at one of the largest food and
food service distribution companies in the U.S., they pinpointed HR
practices and employee attitudes and observed their effect on employee
behavior and performance. Job satisfaction, organizational commitment,
absenteeism, voluntary turnover and human resource management
practices were just some of the variables measured..."
Read further..
EFFECT OF PERFORMANCE REVIEWS ON PRODUCTIVITY
================================================
"Performance and productivity boosted by regular reviews." HRM Guide.
October 16 2002 http://www.hrmguide.net/usa/performance/performance_reviews.htm
"Nearly 4 in 5 (79%) of businesses who use performance assessment say
that regular employee performance reviews benefit overall business
performance, and almost as many (76%) feel that they improve employee
productivity, according to a survey just released by The New York
Times Job Market. 250 hiring managers and 200 job seekers in the New
York metropolitan area were interviewed on the telephone by Beta
Research Corporation, on behalf of The New York Times Job Market."
"88% of the managers felt regular performance reviews were very
important with 75% believing them to be very accurate in assessing
employee performance. Intriguingly, 57% felt that regular performance
reviews had a significant effect on employee morale. Hiring managers
gave the following reasons why they thought it very important to
conduct performance reviews:
Read further...
(Another overview of the same study:)
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=NYT&script=461&layout=-6&item_id=345352
EMPLOYEE RECOGNITION PROGRAMS ARE IMPORTANT
============================================
From "The Business Case for Employee Recognition." Manager's HR Toolkit.
http://www.hrtoolkit.gov.bc.ca/recognition/awards_biz_case.htm
"Effective employee recognition enhances employee motivation and
satisfaction, increases employee productivity, and contributes to
improved organizational performance."
"According to "Measuring Engagement," published Thursday, August 28,
2003, by Paul Bernthal, Ph.D., Manager, Center for Applied Behavioral
Research, Development Dimensions International, Inc.: "The [U.S.
Department] of Labor conducted a comprehensive review of more than 100
studies and found that people practices have significant relationships
to improvements in productivity, satisfaction, and financial
performance. DDI?s own research has shown that when engagement scores
are high, employees are more satisfied, less likely to leave the
organization, and more productive."
=
"The 2002 report of the Office of the Auditor General of BC on
Building a Strong Work Environment in British Columbia?s Public
Service: A Key to Delivering Quality Service stated that: "Recognition
has been shown to motivate staff, increase morale, productivity, and
employee retention, and decrease stress and absenteeism." This report
concluded that "individual recognition" was one of the top three
factors for improving the levels of employee satisfaction and employee
engagement in the BC public service."
=
"According to a Gallup survey of more than 80,000 employees,
recognition is a key factor in employee satisfaction and retention..."
(See article for more examples..)
==
From "The Power of Incentive," by Donna Oldenburg. HR Magazine, Sept, 2003
http://www.findarticles.com/p/articles/mi_m3495/is_9_48/ai_108315181
"Incentive programs aimed at individuals increase performance an
average of 22 percent; team incentives can increase performance as
much as 44 percent, according to the "Incentives, Motivation and
Workplace Performance" study by the International Society of
Performance Improvement. The same study found that incentive programs
can increase employees" interest in work. For example, when incentive
programs are first offered for completing a task, a 15 percent
increase in performance occurs. When asked to persist toward a goal,
people increased their performance by 27 percent. When incentive
programs are used to encourage "thinking smarter," performance
increases by 26 percent. A Wyatt Watson Worldwide study shows
companies that have an effective way to recognize employees realized a
median total return to shareholders of 109 percent over a two-year
period, compared to 52 percent for employers that did not. In
addition, an Andersen Consulting survey revealed that programs to
retain and reward leading sales, marketing and customer service people
can give a $40 million lift to the bottom line of a $1 billion
business."
Read further...
EMPLOYEE INCENTIVES DO NOT HAVE TO BE FINANCIAL TO INCREASE PRODUCTIVITY
=========================================================================
From "Pros & Cons of Pay for Performance," by Scott Hays. Reprinted
from Workforce Online, February 1999.
http://hr.monster.com/articles/incentiveprograms/
"Are incentive programs good for the company or bad for morale? It
depends on whether the rewards help support corporate goals, such as
increased profit and customer loyalty, or if they merely engender
unhealthy competitiveness and back-stabbing among employees."
"Seven years ago, CEO and president Rob Rodin eliminated all
individual incentives for the 1,800 employees at Marshall Industries,
an El Monte, California-based distributor of electronic components. To
your average outsider, this may have seemed like a great way to
cripple an entire workforce -- take away the American Express
certificates and Alaskan cruises and motivation drops faster than a
helium balloon rises. After all, who wants to slog away at work if
there's no food in the dispenser?"
"Rodin analyzed the five-year earning potential of each employee,
concocted a formula, then went person-by-person and assigned salaries.
Profit-sharing potential was set at the same percentage figure for
each employee, regardless of salary, based on the company's overall
performance. "It wasn't as if we imposed communism," Rodin says, "but
our company was divided by internal promotions and contests. We
weren't working together with a common vision. Managers were fighting
over the cost of a new computer because no one wanted to put it on his
P&L, and departments were pushing costs from one quarter into the next
to make budget. Fundamentally, we eliminated these distractions. Now
we have collaboration and cooperation among sales people, and between
divisions and departments."
"And, he says, productivity per person has almost tripled."
"Last year in Portland, Oregon, president and CEO Mary Roberts
discontinued a bonus program for the 200 employees at Rejuvenation
Inc., a company that manufacturers decorative brass lighting fixtures.
The manufacturing managers, Roberts maintains, begged her to
discontinue the program because craftsmen were stealing parts from
other craftsmen to meet quotas, and workers were pacing the production
of fixtures to gobble up overtime, then working like maniacs to
achieve production bonuses."
"Incentive programs create competitiveness, and that's not necessarily
best for a company like ours that's growing," says Roberts. "I don't
think people are motivated by rewards and bonuses. I think they're
motivated because they're excited about their jobs or because they're
doing something that provides a service to the world."
Read further.....
FLEXIBLE WORK SCHEDULES CAN INCREASE EMPLOYEE PRODUCTIVITY
===========================================================
From "Chubb Workplace Flexibility Initiative Boosts Employee
Productivity." Chubb. 2005
http://www.chubb.com/corporate/chubb3897.html
"Flexible work hours can be more than an employee perk. They also can
be an effective tool to increase productivity," said John D. Finnegan,
chairman, president and CEO of The Chubb Corporation."
"We are very pleased with the results of the workplace flexibility
initiative at Chubb?s Western Claims Service Center in Phoenix," said
Mr. Finnegan. "Our pilot teams experienced significant increases in
productivity. As a result, we are rolling out the program to all the
employees at the service center and look forward to expanding the
initiative to other Chubb facilities."
"Three teams involving 17 employees participated in the 90-day pilot
program. Supported by representatives from BOLD, team members
developed flexible workplace arrangements with the objective of
meeting or exceeding business goals and baseline measures of
performance to assess the pilot project."
"The three teams exceeded or met their objectives. The casualty claims
adjuster team exceeded its performance goals, with an 18% increase in
the number of claim files handled and no degradation in quality. In
addition, 7% more customer telephone calls were routed to claims
representatives rather than to voicemail. The Operations Services
Division team processed 4% more claim payments within 24 hours and
closed 7% more claim files. The team also was able to take on
additional functions, including issuing to insureds 740 payments,
logging in 152 first-notice-of-loss faxes and providing call center
telephone coverage for an additional 44 hours."
"Overall, the initiative recorded a more than 50% reduction in
unscheduled paid time off and a 40% decrease in overtime hours."
EMPLOYEE TRAINING PROGRAMS CAN INCREASE WORKPLACE PRODUCTIVITY
===============================================================
The following case study utilized the Franklin Covey training programs:
From "Improving Employee Satisfaction and Patient Care in the Face of
Oncoming Competition."
http://www.franklincovey.com/about/investor/stories/memorial_cs.html
"With the help of FranklinCovey training in What Matters Most® (now
FOCUS: Achieving Your Highest Priorities) and The 7 Habits of Highly
Effective People®, Memorial Medical Center, Inc., in Las Cruces, New
Mexico has created a culture of cooperation, communication, and
achievement, resulting in high job satisfaction, low turnover, and
removed barriers to improved patient care. ** The hospital has
realized a 40-percent increase in employee productivity as a result of
time saved or gained each week, as well as a return of $1.74 for every
dollar invested in training."
"Specifically concerning The 7 Habits training at Memorial Medical
Center, the Jack Phillips research determined that the hospital
realized an ROI of $1.74 for every dollar invested in training. What's
more, the training was responsible for 40 percent of the time saved or
gained each week in increased productivity."
"According to BusinessWeek Online, the most important key to increased
earnings today is productivity. Getting workers and their managers
focused on the truly important things may be the biggest untapped
source of increased productivity and performance."
Read further....
==
From "Canadian Tire Retail rolls out IBM e-learning solution." IBM Case Studies.
http://www-306.ibm.com/software/success/cssdb.nsf/cs/gjon-699mey?opendocument
"Canadian Tire Retail (CTR) revamped its approach to training by
building an e-learning solution that allows employees to take
self-paced courses over the Internet in realtime with IBM On Demand
Business."
"With stores located from coast to coast, employees learned about
products and services through printed materials, on-the-job training
or by gathering at local facilities to participate in programs.
Product knowledge training through reading was ineffective, and
offsite, face-to-face approaches to education were expensive and
affected employee productivity because of time spent away from the
job."
"To be more responsive to its employees? training needs, CTR worked
with IBM Global Services to implement a centralized learning
management solution that delivers comprehensive, self-paced modules in
real time, over the Web. The learning solution leverages online
courseware, providing a rich educational experience in a
cost-effective, consistent format -- without hampering employee
productivity. Now, employees can update their work skills from the
store site or at home, without taking a day off from work."
Results - "The solution showed positive results within weeks of going
live. So far, more than 30,000 employees have taken at least one
lesson. "Our research shows that employees who take the online lessons
score higher on customer service measures than those who haven?t taken
the training yet," says Wismer. "In addition, they now have the
ability to up-sell. By being more knowledgeable about our products,
store personnel have the confidence to point customers toward
higher-end items that they?re interested in. And by delivering
training from a central location, CTR can distribute product training
updates quickly and efficiently, allowing it to respond with speed to
rapidly changing market conditions."
PROGRAMS THAT ENCOURAGE EMPLOYEE TEAMWORK CAN INCREASE PRODUCTIVITY
====================================================================
From "Empowered Employee Teams: The New Key to Improving Corporate
Success," by Natasha Calder and P C Douglas. Quality Digest. 1999
http://www.qualitydigest.com/mar99/html/body_teams.html
"For McGraw-Hill, the need to create teams grew out of the company's
situation--an increased workload without an increased work force.
"Managers could not keep tight controls and still meet the deadlines,"
recalls Mazza. "It seemed only logical to turn over some of that
control to those who actually did the work. Since they had more direct
familiarity with the processes, they could control production between
themselves better and quicker."
"The implementation of empowered teams at McGraw-Hill increased
productivity and reduced costs within the first two to three years.
Teams have nearly doubled the number of textbooks produced each year,
notes Mazza. "For the customized production of our company's product,
teams have been incredibly valuable and are a bottom line for
companies no matter how you look at it," she adds."
EMPLOYEE INVOLVEMENT IN COMPANY DECISIONS CAN INCREASE PRODUCTIVITY
=====================================================================
See "The Influence of Employee Involvement on Productivity: A Review
of Research, by Jacques Belanger, June 2000.
http://www11.hrsdc.gc.ca/en/cs/sp/hrsdc/arb/publications/research/2000-002584/r-00-4e.pdf
Abstract: "Major innovations in production management and work
organizations have occurred in recent decades, including a greater
involvement of employees in workplace decisions. Research indicates
that greater employee involvement has a positive impact on workplace
productivity and firm performance generally...."
HR PROGRAMS TO DECREASE EMPLOYEE STRESS CAN INCREASE WORKPLACE PRODUCTIVITY
============================================================================
From "Maximising employee performance while minimising employee
stress," by David Lee. Human Resources. March 2005
http://www.humanresourcesmagazine.com.au/articles/E9/0C02D3E9.asp?Type=60&Category=1223
"Many managers and business owners mistakenly fear that reducing
employee stress requires reducing productivity or creating a ?country
club? atmosphere, which in today?s marketplace could be fatal. Nothing
could be further from the truth. In fact, the opposite is true. When
organisations manage in ways that bring out the best in people, they
also reduce employee stress. That?s why most of Fortune magazine?s 100
best companies to work for are industry leaders and enjoy high
employee productivity. Employees in these companies are both happy and
extremely productive."
...
"How burnout affects the bottom line - "Employee burnout is generating
serious implications for Australian organisations, according to a
recent Hudson survey of more than 7,800 employers. It found that 32
per cent of managers are witnessing a growing amount of burnout among
their employees, while 37 per cent of these managers believe this is a
direct result of increasing numbers of valuable employees leaving the
organisation. The survey also found that workplace burnout will erode
the bottom line of Australian businesses, with 34 per cent of those
employers experiencing increased levels of burnout witnessing a
decline in productivity and 29 per cent reporting an increase in the
number of sick days being taken."
==
From "Cut the stress: with HR-provided training, employees can learn
how to avoid what makes them tense - Training & Development Agenda,"
by Kathryn Tyler. HR Magazine, May, 2003
http://www.findarticles.com/p/articles/mi_m3495/is_5_48/ai_101568997
"Stress can cause some health conditions and worsen others, experts
say. It can decrease an employee's productivity and increase
absenteeism. But it can be managed, particularly with the help of
employee training provided by HR, and there's credible evidence that
such training works."
"A study conducted by researchers from the Nevada Stress Center in
Reno showed that employees who participated in a stress management
program took fewer sick days than the employees who did not take part.
In addition, those who received stress management assistance visited
doctors 34 percent less often than did their nonparticipating
counterparts."
"The conclusion, according to the abstract of the article, published
in the March/April issue of Psychosomatic Medicine: "A work-site
program that focuses on stress, anxiety and coping measurement along
with small-group educational intervention can significantly reduce
illness and health care utilization."
...
According to John Mason, president of the Stress Education Center in
Cotati, Calif..."If people can be trained to use a 10-minute break for
stretching, breathing and relaxation, they can increase productivity."
Read further....
EFFECT OF EMPLOYEE SCREENING ON PRODUCTIVITY
==============================================
Screening employees for a "cultural fit" within the organization is
important to employee retention and productivity.
From "How to hire for cultural fit," by Bruce Watt. Human Resources.
March 22, 2005. http://www.humanresourcesmagazine.com.au/articles/E6/0C02DBE6.asp?Type=60&Category=880
"We?ve all been there. After an extensive and thorough search for a
line manager, one candidate stands out. They have the right
experience, solid qualifications, a relevant work history and have
performed impressively during the interview process. They said the
right things, put forward some great ideas and generally presented
very well. You hire them. Three months later, you begin to question
your decision. Your new hire?s team appears disgruntled, morale is low
and output and productivity is well behind the previous quarter?s
figures. After further investigation and speaking with a few key team
members you realise there?s a disconnect - a mismatch. While
impressive on paper and during the one-on-one interviewing stage,
their style, approach and behaviour on the job are simply inconsistent
with the values and expectations of your organisation. Their modus
operandi is foreign to their colleagues. Your new hire is not a good
cultural fit."
"Most HR professionals recognise the importance of cultural fit. A
recent DDI Australia survey of 223 hiring managers found that 90 per
cent believe that recruiting for culture fit is important. However,
only 36 per cent always assess for culture fit."
* "Assessing for cultural fit helps increase employee satisfaction,
which leads to better performance and productivity and a longer
tenure."
* "Poor hires impact negatively on staff morale, performance and productivity."
EFFECTIVE RECRUITMENT ENHANCES RODUCTIVITY
==============================================
The following article makes a case for effective recruiting strategies:
From "Bad hires come at a high price," by Craig Donaldson. Human
Resources. May 2005.
http://www.humanresourcesmagazine.com.au/articles/04/0C02FA04.asp?Type=59&Category=917
"One in five new employees turns out to be a bad hiring decision,
heaping significant costs on Australian organisations, according to
recent research. A global study into the hiring practices of almost
1,600 HR managers in 348 organisations found yearly turnover costs can
amount to more than $2.2 million in a firm with 5,000 employees."
...
"For those looking for a rationale for an increased investment into
hiring procedures, the survey showed organisations with high quality
hiring systems outperform the competition."
"Seventy per cent of organisations with a high quality hiring system
indicated that they outperform their competition financially, while 60
per cent indicated that they outperform their competition in relation
to quality, customer service, employee satisfaction and retention."
"Organisations that analyse and improve their selection systems are
able to reduce the cost of replacing employees and will hire better
quality employees who are more productive," Watt said. "The best
quality hiring systems are integrated with other talent management
programs such as performance management and training and development,
thus enabling HR professionals to place the right people in the right
position."
HEALTH AND WELLNESS PROGRAMS INCREASE EMPLOYEE PRODUCTIVITY
=============================================================
From "Health and Wellness." Issue Brief. Business for Social Responsibility.
http://www.bsr.org/CSRResources/IssueBriefDetail.cfm?DocumentID=50304
"As part of an ongoing effort to invest in the well-being of employees
and maximize their productivity, many businesses are developing and
expanding health and wellness programs."
"Effective workplace health and wellness programs range widely, from
building awareness about disease prevention and healthy lifestyles to
helping individuals cope with specific issues related to health and
well-being. Successful programs are well-integrated into the business
and are comprised of several components, including benefits, health
promotion, disability management, health screening, counseling,
employee advocacy, and other services that provide education and
assistance. These programs often yield quantifiable bottom-line
benefits to companies by boosting productivity, reducing absenteeism,
cutting healthcare and worker compensation costs, and improving
employee recruitment and retention."
Among other benefits:
"Many studies have linked health risks with reduced employee
productivity and found that healthier workers are more productive. For
instance, a study conducted by First Card Chicago NBD Corp. of 1,000
of its customer service representatives found that those workers with
fewer health risk factors such as smoking and obesity were more
productive."
** Scroll down to "Leadership Examples" to see wellness program
descriptions implemented by major U.S. companies.
===
From "Employers Battle Maladies That Drain Staff Productivity," By
Sarah Rubenstein. The Wall Street Journal Online.
http://www.careerjournal.com/myc/officelife/20050127-rubenstein.html
"Companies are analyzing the bottom-line effect of conditions such as
seasonal allergies, migraines and stomach troubles, particularly when
employees show up for work but operate at far less than 100%. That
lack of productivity has been dubbed by health professionals as
"presenteeism."
"Comerica Inc., Dow Chemical Co., Bank One Corp., a unit of J.P.
Morgan Chase & Co., and International Truck & Engine Corp. are among
companies that have put programs in place to help employees avoid or
treat some of these seemingly smaller health conditions, or at least
keep productive in spite of them."
"Comerica surveyed its employees and found that about 40% of
respondents said they suffered from irritable bowel syndrome, which
can involve abdominal discomfort, bloating or diarrhea. Extrapolating
from that, it is estimated that the problem cost the company at least
$8 million a year in lost productivity, Mr. Groves says. The surveys
were conducted through a third party to ensure employee privacy, Mr.
Groves says."
"At Bank One, one of the earlier companies to work on this issue, a
study of allergies at the company has led to educational programs
that, among other things, encouraged employees to take antihistamines
that are nonsedating, says Wayne Burton, a wellness and productivity
executive for J.P. Morgan Chase."
"Comerica now provides written materials for its employees about IBS
and has sponsored physician seminars to educate workers about how to
recognize and deal with it through their living habits, diet and
possible medications. The company has asked insurers to explore ways
to encourage employees to get medical care that could improve
productivity. One option would be to lower co-payments on drugs for a
condition a company is concerned about, Mr. Groves says."
EFFECT OF COMPENSATION PLANS ON PRODUCTIVITY
=============================================
Bonus and Recognition programs can spark managers to help develop
more engaged employees, leading to greater workplace productivity:
See "B&Q Boosts Employee Engagement -- and Profits," by Teresa Tritch.
Gallup Management Journal. May 8, 2003
http://gmj.gallup.com/content/default.asp?ci=1036
"B&Q has amassed statistically valid proof that engaged employees are
key to greater productivity and customer engagement, and, by
extension, higher profits."
"Since 2001, B&Q has based manager bonuses in part on their success in
raising employee engagement scores. And recently, the B&Q board
allocated £500,000 (U.S. $750,000) to reward exemplary employees --
checkout operators, greeters, and the like -- with £10,000 (U.S.
$15,000) toward a B&Q-sponsored home renovation."
"Four years ago, the Board would never have agreed to these bonus and
recognition schemes," says Human Resources Director Mike Cutt, who is
also a B&Q board member. "But Business Impact Analyses have proven and
reinforced the intuition that people -- and people policies -- make a
bottom-line difference to a company."
FINANCIAL EDUCATION FOR EMPLOYEES CAN LEAD TO GREATER WORKPLACE PRODUCTIVITY
=============================================================================
From "Mainstreaming Financial Education As an Employee Benefit," by
Jacqueline M. Quinn. Journal of Financial Planning. May 2000
http://www.fpanet.org/journal/articles/2000_Issues/jfp0500-art2.cfm
Excerpts:
"Savvy employers, interested in retaining quality personnel, are just
now on the verge of recognizing that comprehensive financial employee
education programs are instrumental in both recruitment and retention,
says Virginia Tech professor E. Thomas Garman, executive director of
the university?s National Institute for Personal Finance Employee
Education (NIPFEE), in Blacksburg, Virginia." "A company?s best
workers are typically those who are in control of their personal
finances, says Garman. Control in that aspect of their lives
translates into increased employee productivity, he says.
"A substantial portion of employees" (approximately 15 percent in any
given workplace), says Garman, "are spending time on personal money
matters on the job, negatively affecting productivity. They are also
less likely to participate in an employer?s 401(k) retirement plan."
"The decline in worker productivity can be measured, outlining the
extent of the cost to an employer. Garman uses the following example
to illustrate the point: Let?s say there?s a decline in worker
productivity by 20 percent (an employee misses four days of work in a
one-month time frame of 20 working days). The cost to an employer of
1,000 people is estimated at $900,000 annually. This is calculated
using an annual employee wage of $30,000 x 150 (15 percent of
employees are financially troubled) x 20 percent."
...
"A Virginia Tech study offers a closer look at financial education in
the workplace based on information gathered from employee participants
at a chemical plant in the Southeast under the fictitious name,
Southeastern Chemical Producer Inc. Two of the study?s primary goals:
(1) to judge the value of the educational workshops afforded the
employees and (2) to see "if there was a measurable increase in
productivity as a result of better financial behavior." No pre- and
post-test research procedures were used."
"Out of 300 surveys sent out in May of 1998, 181 responded, with 178
determined as usable for the study. Of the usable survey respondents,
56 percent attended at least one of the financial workshops. The
workshop most attended was "The EDSA Group, Money Basics."
"What were the results? According to the study, 75 percent of the
participants reported they felt they were making better financial
decisions, while 34 percent started contributing to the 401(k) plan,
and 45 percent increased the amount they were contributing to their
401(k). Fifty-six percent noted that their financial situation had
improved because of the education, while 70 percent reported changing
their investment strategy by diversifying."
Read entire article...
==
To see examples of some financial education programs offered by U.S.
companies, see the following exibit in this somewhat "dated" article:
http://inchargefoundation.com/_assets/research_reports_and_publications/59.pdfScroll
down to "Exhibit 1 - Examples of Financial Programs Offered by U.S.
Employers
From "EMPLOYER-SPONSORED EDUCATION PROGRAMS AND INCENTIVES TO IMPROVE
EMPLOYEES? FINANCIAL LIFESTYLESE,: by Thomas Garman. Employment
Relations Today. Winter 1999.
http://inchargefoundation.com/_assets/research_reports_and_publications/59.pdf
EMPLOYEE OWNERSHIP PROGRAMS AND PRODUCTIVITY
=============================================
From "Motivating Employee-Owners in ESOP Firms - Human Resource
Policies and Company Performance." Presented at panel on "Econometric
Case Studies of Human Resources and Firm Performance," Industrial
Relations Research Association, January 2003.
http://ownershipassociates.com/motivate_eo_2.shtm
Excerpts:
"By tying pay to firm performance, employee ownership can help improve
performance by reducing workplace principal-agent problems."
"Over 70 large-sample studies have been done on employee ownership in
the past two decades (Kruse 2002). Studies of both firm performance
and employee attitudes and behavior are split between neutral and
favorable findings for employee ownership, with very few negative
findings. Meta-analysis indicates that the average increase in
productivity associated with ESOP adoption is 4.5%. But the wide band
of outcomes around the average makes it clear that giving employees an
ownership stake does not, in itself, ensure superior employee or firm
performance."
"This study links employee reports on how ownership plans actually
affect their attitudes and behavior to objective company performance
measures. Such an approach is rare in productivity studies in part
because employee surveys lack the quantitative output data necessary
for a productivity analysis."
"This paper uses survey data from 13 ESOP companies to examine the
factors that affect the differential impact of employee ownership on
productivity and work behavior...."
Conclusion - "Economic theory suggests that by itself ownership is
unlikely to greatly affect worker effort and performance. Ownership
must be combined with employee involvement and other policies that
give workers the power to act on ownership incentives and the
disposition to resist the tendency to free ride. Our analysis of
worker-reported effort across eleven ESOP firms and of workers within
two ESOP firms supports these arguments. We find significant
differences in worker assessment of work effort across ESOP firms,
indicating that even in firms with substantial employee ownership,
other factors influence outcomes. Relating worker-reported outcomes to
their sense of ownership and an index of HR policies shows that
ownership and HR policies are both positively linked to employee
reports of workplace performance, which is itself related to company
performance."
"Our analysis of employee response to co-workers who perform poorly
shows that workers on employee involvement committees or who otherwise
report being involved in setting goals for their work group are more
likely to talk directly with non-performing workers and are less
likely to do nothing. Conceptually, an understanding of how employee
ownership works requires a three-pronged analysis of: (1) the
incentives that ownership gives; (2) the participative mechanisms
available to workers to act on those incentives; and (3)
incentives/corporate culture that counteracts tendencies to free ride.
All firms, whether employee-owned or not, have to combine these three
elements to motivate workers to perform as best they can. Employee
ownership provides a distinct solution to the incentive problem, but
must still deal with the participation and free-riding problems."
===
I hope these references provide a good starting point for your
research. If you have an interest, you might want to look at a very
specific question I answered recently regarding the effect of
workforce education programs on employees. You might be able to use a
few of the references.
http://www.answers.google.com/answers/threadview?id=533648
Sincerly,
umiat
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