Positive Psychological Wellbeing for Optimal Performance: The Cost-Effective Approach.

A well-considered wellbeing programme that addresses employees’ basic physical and psychological health needs can substantially reduce the above associated costs of sickness absence and presenteeism. The reduction of ill-health is, however, only part of the story, as surveys repeatedly report that only 1/3 of British employees are ‘engaged’ in their work, whilst a further 1/3 are ‘disengaged’ (Rayton et al., 2012). The message is clear; over and above the more obvious costs and losses to ill-health, the vast majority of ‘healthy’ employees are also regularly performing sub-optimally. For any company and its employees, the productivity and cost implications of this can never be desirable, let alone in difficult economic times when the potential vicious cycle of resource / cost-cutting and employee ill-health / disengagement can become even more concerning.

The evidence from across large-scale and case-study research is conclusive; the promotion of wellbeing, and its by-product employee engagement, has the capability to address the above concerns, and to deliver substantial benefits to the bottom line performance of organisations across all sectors of the economy. Gaining a fuller understanding of employees’ status in relation to the more recent, broader conceptualisation of wellbeing, and then considering employees’ experiences of the workplace in relation to the identified drivers of wellbeing, therefore provides an opportunity to develop a company-specific wellbeing programme that significantly promotes performance, productivity and profitability.

 The outcome of large-scale wellbeing research assimilates studies employing various definitions of wellbeing and its implementation, whilst case-study research pertains, as is appropriate, to wellbeing programmes that were specifically designed to address the aspect of wellbeing most pertinent to the organisation. To progress the discussion further however, the focus below is on research that specifically reviews the least considered aspect of wellbeing, the optimisation of employee performance through the intervention in an organisation’s employee engagement practices. The research highlighted provides typical examples of outcome on key performance indicators as forwarded by Rayton et al., (2012) in their summary of research commissioned by the UK Government’s ‘Employee Engagement Task Force’. (Please see Rayton, et al., (2012) for further details).

  • Income and Growth: “Even in turbulent economic times engagement works. Research from organisations representing more than five million employees worldwide in the Aon Hewitt database showed that in 2010 organisations with engagement levels of 65% or greater outperformed the total stock market index and posted total shareholder returns that were 22% higher than average; companies with engagement levels of 45% or less had a total shareholder return that was 28% lower than the average return” (p. iii). 
  • Performance and Productivity: 

- “85% of the world’s most admired companies believe that efforts to engage employees have reduced employee performance problems (Hay, 2010)” (p. iii).

- “A Fortune 100 manufacturing company reported quality errors as significantly higher in poorly engaged teams (DDI, 2005). The RSA insurance company found that their units with higher levels of employee engagement had 35% less downtime between calls – in effect the equivalent of one ‘free of charge’ employee being added to every 8 engaged employees” (p. iv). 

  • Engagement and Customer / Client Satisfaction: “70% of the more engaged have a good understanding of customer needs against only 17% of the disengaged (PricewaterhouseCooper)” (p. iv).
  • Absence and wellbeing: The Confederation of British Industry (CBI) report that engaged employees take an average of 2.69 days sick a year; the disengaged take 6.19 days sick (p. iv).
  • Retention: “Replacing employees who leave can cost up to 150% of the departing employee’s salary. The Corporate Leadership Council reports that highly engaged organisations have the potential to reduce staff turnover by 87%; the disengaged are four times more likely to leave the organisation than the average employee (CLC, 2008)” (p. v).
  • Health & Safety: “The Olympic Delivery Authority by June 2011 had an Accident Frequency Rate of 0.17 per 100,000 hours worked, which was less than half the construction industry average, and attributed this to strategies known to improve employee engagement” (p. v).

Summary

“94% of the world’s most admired companies believe that their efforts to engage their employees have created a competitive advantage (Hay, 2010)”. (Rayton, 2012, p. v). The outcomes from employing a comprehensive and company-specific approach to positive wellbeing are therefore both varied and relevant across sectors, company size and economic climates.  

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