Employee Wellbeing Positively Impacts Firm Performance

Employee Wellbeing Positively Impacts Firm Performance

In a day and age where scrutiny of financial performance is unrelenting, it is no surprise that many companies relegate “soft” issues such as “Employee Wellbeing” to the backburners. That is a costly mistake, made starker by the pandemic before us. Extensive research over the decades have demonstrated that robust workplace wellbeing programs lead to better employee engagement levels, retention rates and productivity levels, ultimately resulting in better firm performance. Recently, a study on the topic “Does higher employee wellbeing lead to higher productivity, and, ultimately, to tangible benefits to the bottom line of businesses” was conducted through a meta-analysis of 339 independent research studies. This included the wellbeing of 1,882,131 employees and the performance of 82,248 business units, originating from 230 independent organizations across 49 industries in the Gallup client database. The results showed a strong, positive correlation between employee satisfaction with their company and productivity and a strong negative correlation with staff turnover. Ultimately, higher wellbeing at work led to better business-unit level profitability.

Wellbeing Culture: Leadership Management and Employee Inclusion

Corporate culture is not expressly defined. Rather, it is often implied, developed and cultivated over time from the cumulative traits of the people in the organisation. It also refers to the beliefs and behaviours that determine how employees and management interact and handle both work and personal transactions. A Gallup study in 2019 showed that if employees had higher levels of wellbeing in year one, they would tend to show better engagement levels as well as increased positive change in wellbeing in year two. Conversely, if employees are struggling or suffering, this attitude negatively affects the overall workplace environment and the team. Managers highly influence organizational culture and thus, if managers actively promote a culture of wellbeing as the norm, then employees will be more involved in wellbeing activities. If managers are not engaged, then this cascade to employees cannot happen.

Accelerated by the pandemic, progressive, high-performing and well-managed companies have realized the importance of developing a “Culture of Wellbeing”, given its high correlation to the firm’s ultimate performance. No longer sufficient just as a slogan or afterthought, management teams are increasingly taking active steps to champion employee wellbeing and develop it as a central ethos.

Here are 4 tips to help you embark on building a culture of wellbeing

1. Be Compassionate and Flexible
Managers should always approach their engagements with employees with compassion and flexibility. Check in often with them about their emotional and mental wellbeing. Avoid a perform-at-all-costs or make-or-break mentality. Let them know that their emotional and mental health is a priority and always try to offer flexibility and leniency.

Compassion and flexibility are especially important during the pandemic, which has upended many previous norms and brought heightened levels of stress. Many employees are grappling with new working arrangements, supporting children in on-line classes, caring for elderly parents vulnerable to COVID-19 and even fighting quarantine loneliness. Just surviving these challenges is almost a herculean effort, let alone thriving in them.

2. Adopt a Growth, not Fixed Mindset
Fixed and static mindsets bring with them a connotation of inflexibility, be it in terms of ideas or working styles. Worse still, employees often feel they have no power to make things different. This approach can leave team members with feelings of inadequacy, inferiority and failure. Instead, managers should promote a Growth Mindset, emphasizing that employees can always take concrete, tangible action to improve, learn, and grow. Importantly, it also sends a message of inclusivity and openness to various ideas.

3. Ditch Numerical RankingsNumerical comparisons to other employees tend to be narrow and blunt assessment tools. They often cause employees to feel marginalized and often triggers a defensive reaction that makes them even less inclined to respond to feedback. Even worse, rigid rankings undermine growth mindsets by sending the message that talent is static and some employees simply possess greater fixed ability than others. Rankings often result in a culture of competitiveness of the unhealthy kind, rather than collaboration.

Instead, employers should adopt performance evaluation frameworks that do not rely solely on rankings but also incorporate diverse sources of data—from feedback of colleague, self-evaluations to objective-based metrics—and create narrative assessments that laud workers for what they do well and give specific action steps where team members have room to grow. These assessments should be flexible and tailored to each individual’s unique circumstances.

4. Check in Often
Frequent communication between managers and employees helps managers keep abreast of their employees’ progress and developments, both in their work and personal lives. By checking in often, a supervisor can more easily set clear expectations, coach employees toward higher day-to-day performance standards and adapt in real time to keep their finger on the pulse of their team. It also allows bosses to actively support their team members. Managers can ask employees about the challenges they’re facing; identify the resources they need to be successful and encourage them to reach out with questions or concerns. Above all, leaders should take the time to truly understand and respond to their team members’ needs and to recognize the reality that in these times especially, it’s “ok not to be ok”.

Wellbeing is an ethos and a commitment to creating a healthier, happier, and more productive workforce, community and world. It is up to the leaders within organizations to focus on empowering and creating the conditions for employees to thrive and be well personally, professionally, physically and financially.