Too many companies bet on having a cut-throat, high-pressure, take-no-prisoners culture to drive their financial success, instead of seeing the productive benefits of positive work cultures.
But a large and growing body of research on positive organisational psychology demonstrates that not only is a cut-throat environment harmful to productivity over time, but that a positive environment will lead to dramatic benefits for employers, employees, and the bottom line.
Although there’s an assumption that stress and pressure push employees to perform more, better, and faster, what cutthroat organisations fail to recognize is the hidden costs incurred.
First, health care expenditures at high-pressure companies are nearly 50% greater than at other organisations. 60% to 80% of workplace accidents are attributed to stress, and it’s estimated that more than 80% of doctor visits are due to stress. Workplace stress has been linked to health problems ranging from metabolic syndrome to cardiovascular disease and mortality.
The stress of belonging to hierarchies itself is linked to disease and death. One study showed that, the lower someone’s rank in a hierarchy, the higher their chances of cardiovascular disease and death from heart attacks. In a large-scale study of over 3,000 employees conducted by Anna Nyberg at the Karolinska Institute, results showed a strong link between leadership behavior and heart disease in employees. Stress-producing bosses are literally bad for the heart.
Second is the cost of disengagement. While a cut-throat environment and a culture of fear can ensure engagement (and sometimes even excitement) for some time, research suggests that the inevitable stress it creates will likely lead to disengagement over the long term. Engagement in work — which is associated with feeling valued, secure, supported, and respected — is generally negatively associated with a high-stress, cut-throat culture.
And disengagement is costly. In studies by the Queens School of Business and by the Gallup Organisation, disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects. In organisations with low employee engagement scores, they experienced 18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time. Importantly, businesses with highly engaged employees enjoyed 100% more job applications.
Lack of loyalty is a third cost. Research shows that workplace stress leads to an increase of almost 50% in voluntary turnover. People go on the job market, decline promotions, or resign. And the turnover costs associated with recruiting, training, lowered productivity, lost expertise, and so forth, are significant.
For these reasons, many companies have established a wide variety of perks from working from home to office gyms. However, these companies still fail to take into account the research. Even when workplaces offered benefits such as flextime and work-from-home opportunities, engagement predicted wellbeing above and beyond anything else. Employees prefer workplace wellbeing to material benefits.
Wellbeing comes from one place, and one place only — a positive work cultures. As a boss, how can you foster principles of positive work cultures? The research points to four steps to try:
1. Foster Social Connections: a large number of empirical studies confirm that positive social connections at work produce highly desirable results. For example, people get sick less often, recover twice as fast from surgery, experience less depression, learn faster and remember longer, tolerate pain and discomfort better, display more mental acuity, and perform better on the job. Conversely, research by Sarah Pressman at the University of California, Irvine, found that the probability of dying early is 20% higher for obese people, 30% higher for excessive drinkers, 50% higher for smokers, but a whopping 70% higher for people with poor social relationships. Toxic, stress-filled workplaces affect social relationships and, consequently, life expectancy.
2. Show Empathy: as a boss, you have a huge impact on how your employees feel. A telling brain-imaging study found that, when employees recalled a boss that had been unkind or un-empathic, they showed increased activation in areas of the brain associated with avoidance and negative emotion while the opposite was true when they recalled an empathic boss. Moreover, Jane Dutton and her colleagues in the CompassionLab at the University of Michigan suggest that leaders who demonstrate compassion toward employees foster individual and collective resilience in challenging times.
3. Go Out of Your Way to Help: ever had a manager or mentor who took a lot of trouble to help you when he or she did not have to? Chances are you have remained loyal to that person to this day. Jonathan Haidt at New York University’s Stern School of Business shows in his research that when leaders are not just fair but self-sacrificing, their employees are actually moved and inspired to become more loyal. As a consequence, they are more likely to go out of their way to be helpful and friendly to other employees, thus creating a self-reinforcing cycle.
4. Encourage People to Share Problems: Not surprisingly, trusting that the leader has your best interests at heart improves employee performance. Employees feel safe rather than fearful and, as research by Amy Edmondson of Harvard demonstrates in her work on psychological safety, a culture of safety i.e. in which leaders are inclusive, humble, and encourage their staff to speak up or ask for help, leads to better learning and performance outcomes. Rather than creating a culture of fear of negative consequences, feeling safe in the workplace helps encourage the spirit of experimentation so critical for innovation.
In sum, a positive workplace is more successful over time because it increases positive emotions and well-being. This, in turn, improves people’s relationships with each other and amplifies their abilities and their creativity. It buffers against negative experiences such as stress, thus improving employees’ ability to bounce back from challenges and difficulties while bolstering their health. And, it attracts employees, making them more loyal to the leader and to the organisation as well as bringing out their best strengths. When organisations develop positive, virtuous cultures they achieve significantly higher levels of organizational effectiveness — including financial performance, customer satisfaction, productivity, and employee engagement.
Source: Harvard Business Review