A Simple Policy to Greatly Improve Workplace Well-Being

Source: Gil Winch

In a recent survey, Union Pacific, a company with over 10,000 employees was voted as one of America’s worst companies to work for. Glassdoor reviews show that employees work long hours and overtime with low benefits. The staff lacks work-life balance and layoffs are common, all contributing to low employee well-being. Only 20% of employees would recommend working there to a friend and its CEO’s approval rating was a dismal 16%.

It should be noted, however, that despite widescale employee misery in the company, their CEO earned over $14 million in compensation in 2022.

In a recent Deloitte global survey, 80% of respondents reported that they were struggling to improve their well-being because of a heavy workload and a stressful job.

Workers with lower well-being negatively impact profits by increased costly employee attrition, lower engagement and productivity and higher absenteeism. In the U.S., unplanned absences due to poor mental health alone are estimated to cost the economy $47.6 billion annually in lost productivity.

Tie Employee Well-Being to C-Suite Compensation: Managers’ compensation is often tied to specific and measurable targets. Why shouldn’t employee well-being be one of them given it benefits both employees and the company’s bottom line?

All managers in a company from top to bottom will get targets relevant to the overall work well-being of the managers and employees below them. The targets should be relevant to the current status of the company’s overall work well-being. In the case of Union Pacific, a significant general improvement is in order, while in other places where employees’ well-being currently fares better, targets could be more modest or specific.

Measuring: There isn’t a current gold standard when it comes to measuring employee well-being but there are quite a few options out there with some regarded better than others. (For those interested, I suggest reading the latest review article on the subject.)

Compensation and Bonuses: All current corporate managerial bonuses at all levels should be contingent on the emotional well-being of the employees and managers bellow them, the people who enable the managers to achieve their business goals and hit targets. Hitting 100% of annual targets while 50% of employees are feeling ever more stressed and harassed should cause bonuses to be greatly reduced or omitted completely.

“Senior management will never go for it,” I hear you say… I disagree, and fortunately, C-suite managers do too, as most executives agree that they should be more accountable. Eighty-five percent percent state that they’ll become more responsible for workforce well-being over the next few years. Seventy-eight percent of senior executives think that their company’s leaders should resign if they can’t maintain an acceptable level of workforce well-being. And when it comes to actual compensation, 72 percent of C-suite leaders believe that executives’ bonuses should be tied to workforce well-being metrics.

Adopting top-down (monetary) accountability regarding employee well-being could improve the quality of life of everyone at the workplace, and it could enrich businesses and economies financially. It’s direly needed and widely agreed upon; it’s fair and we deserve it.