Review of the evidence

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Work-life balance, employee engagement and discretionary effort
A review of the evidence
March 2007

Literature review by Dr Mervyl McPherson of the EEO Trust.

Extracts from this publication may be copied and quoted with acknowledgement.
ISBN No: 0-9582233-4-3

Equal Employment Opportunities Trust

PO Box 12929



New Zealand

Phone: 64 9 525 3023

Fax: 64 9 525 7076

Table of Contents

Preface 4

Executive summary 5

1.0 Introduction 7

2.0 Definitions and evidence of relationships 7

2.1 Work-life balance 7

2.1.1Productivity 8

2.1.2Relationship between work-life balance and productivity 9

2.2 Workplace/work-life culture 12

2.2.1 Relationship between work-life balance and workplace culture 13

2.3 Discretionary effort and employee engagement: going the extra mile 17

2.3.1 Relationship between discretionary effort/employee engagement and productivity/profitability 21

2.3.2 Relationship between work-life balance and discretionary effort 22

2.3.3 Relationship between workplace culture and discretionary effort 24

2.4 Summary of inter-relationships of key factors 25

3.0 Changing a workplace culture 26

3.1 Case studies of culture change 28

4.0Conclusion 30

5.0 References 31

Employee engagement has been identified as critical to competitive advantage in a labour market where skilled, committed people are increasingly hard to find and keep. Many of the factors that impact on employee engagement have been identified, or at least speculated on. In this exploratory research, the EEO Trust investigates whether supporting work-life balance results in a more engaged workforce which gives greater discretionary effort at work.
We found that the answer is “yes, but….” The business benefits of increased employee engagement, including improved retention, more discretionary effort and greater productivity, will only accrue if work-life balance is genuinely valued and promoted throughout the workplace. The views and behaviour of senior managers, line managers and colleagues all impact on whether employees feel able to take advantage of workplace initiatives to achieve better balance in their working and personal lives. If the initiatives are there but the workplace culture does not support the use of them, their value is at best minimal, at worst negative, leading to cynicism and resentment.
Planned EEO Trust research in some of New Zealand’s foremost workplaces in supporting work-life balance will ask employees whether their employers’ support of work-life balance encourages them “to go the extra mile”.

Dr Philippa Reed

Chief Executive

EEO Trust

Executive summary

  • The concept of work-life balance has developed out of demographic and social changes that have resulted in a more diverse and declining workforce and different family/work models. Encouraging work-life balance is seen as a way of attracting and retaining the labour force needed to support economic well-being.

  • This review of research and literature in the areas or work-life balance, workplace culture, employee engagement, discretionary effort and productivity aims to demonstrate the links between these factors.

  • A body of research supports a positive relationship between work-life balance and productivity. This includes individual case studies, statistical research across a range of organisations and reviews of a number of studies. However, workplace culture is identified as an intermediary factor in whether work-life balance is related to increased productivity. A positive correlation is dependent on a workplace culture that supports using work-life initiatives.

  • Many studies, including surveys by New Zealand’s Department of Labour, have found a positive relationship between a workplace culture that is supportive of work-life balance and use of work-life provisions.

  • Key aspects of workplace culture that affect the link between work-life balance and productivity are managerial support, career consequences, gender differences in attitudes and use, attitudes and expectations of hours spent in the workplace, and perceptions of fairness in eligibility for work-life options.

  • “Discretionary effort” is the extent to which employees give extra effort to their work. It is one of the outcomes of employee engagement, which also involves a mental and emotional commitment to the job/organisation. Discretionary effort is given by an employee in exchange for some benefit and results in increased productivity.

  • Although little research has been done specifically linking support for work-life balance to discretionary effort and employee engagement, the evidence to date indicates that a positive relationship depends on workplace culture. It can be argued that workplaces can improve employee engagement, discretionary effort and productivity by supporting work-life balance by means of a people-centric culture that wholeheartedly supports work-life balance

  • Key factors identified in changing workplace cultures are: identifying the business case, finding a board level champion, changing organisational language and behaviour, monitoring/measurement, and integration of work-life/diversity policies into mainstream policies.

1.0 Introduction
The issue of work-life balance has developed out of demographic and social changes that have resulted in a more diverse and declining workforce and different family and work models. Supporting work-life balance is seen as a way of attracting and retaining the labour force needed to support economic well-being.
This review of research and literature in the areas or work-life balance, workplace culture, employee engagement, discretionary effort and productivity aims to demonstrate the links between these factors.
The material reviewed was obtained through searches of academic, business and sociological databases and the EEO Trust resource database. It contains a mixture of New Zealand and overseas material, generalisable research evidence and case study evidence. It includes academic journal articles and books, research reports and material oriented to the business community.
Section 2 provides definitions of work-life balance, work-life/workplace culture, discretionary effort and productivity. Each definition is followed by evidence of the relationship between that factor and other factors. This is followed in Section 3 by some information and case studies on changing workplace culture.
2.0 Definitions and evidence of relationships
2.1 Work-life balance1
Work-life balance is defined on the New Zealand Department of Labour work-life balance website2 as being about “effectively managing the juggling act between paid work and the other activities that are important to people”. The website notes that it is not about saying work is wrong or bad, but that “it shouldn’t crowd out the other things that matter to people, like time with family, participation in community activities, voluntary work, personal development, leisure and recreation”. It also points out that there is no “one size fits all solution”. The “right” balance is a very personal thing that differs for different people and at different stages of the life course. While for some the issue is having too much work, others do not have enough.
The concept of work-life balance also includes the priority that work takes over family, working long hours, and work intensification. Work intensification, defined by Burchell (2006, p.21) as “the increasing effort that employees put into the time that they are working” or the amount of work done in a day, the pace of work and its depletion of energy for activities outside of work, is also an issue affecting work-life balance. Public submissions to the Department of Labour (2004a) and the New Zealand Council of Trade Unions (2002) study identified increased intensification of work, partly due to reduced staffing as a major issue for work-life balance, along with long hours and working non-standard hours.
Work-life balance is an issue not just for individuals, but for employers, the market, the state and society as a whole. The future workforce and consumer market is dependent on women bearing, and parents raising, children. The move from a single male breadwinner family model to one where both parents participate in paid employment has made it increasingly difficult to raise children while the workplace continues to be modelled on male breadwinner workers.
Cross-country comparative research shows that those with the lowest fertility rates are not those with the highest female labour force participation, such as the Nordic countries. In fact, low fertility rates occur where there are low levels of male participation in household duties and childcare and low level of public policy support for families and women in paid work, such as in Japan, Spain and Italy (Jaumotte, 2003; Johnston, 2005). New Zealand research shows that men have a higher total paid plus unpaid work hours than women, due to their much longer paid work hours (Callister, 2005) so any move into sharing in the domestic sphere for men requires a reduction in their paid work hours or their situation would simply worsen.
“Work-family balance” evolved into “work-life balance” partly in response to workers without family responsibilities who felt that employees with children were getting benefits that they were not. The term “life” applies to any non-paid activities or commitments. While the term does not generally include “unpaid work” when referring to work, it could be extended to cover that.
Work-life balance issues appear to affect some groups of people more than others – those working long hours, those whose work spills over into the home as a result of modern technology, those in non-standard employment such as shift work, those on low incomes, those trying to juggle parenting and paid work, and those with cultural obligations beyond the family and paid work.

      1. Productivity

Labour productivity is defined as total output divided by labour inputs and is considered as a necessary, though not sufficient in itself, condition for long-term profitability and success (Guthrie, 2001).

The Department of Labour established a Workplace Productivity Working Group (WPWG) in February 2004 to determine ways to improve workplace productivity that will produce higher wages and a high value economy. The Group produced a report in August 2004 on how New Zealand compares with other countries, what practices have been successful or unsuccessful, the effect of policy settings on workplace productivity and possible future policy options for improving productivity (WPWG, 2004). Among the findings of this report were the need to create productive workplace cultures and measure workplace productivity and successful business practices. It also acknowledges the relationship between employee motivation and productivity.
People tend to be more motivated in the workplace if they feel appreciated and respected. Creating a positive work environment not only boosts morale but also productivity levels.” (WPWG, 2004:17)
High performing workplaces are founded on a strong workplace culture in which motivated and engaged employees are willing to ‘go the extra mile’.” (WPWG, 2004:18)
The WPWG report notes that barriers to introducing practices to improve productivity include the short-term costs of new practices and strategies in relation to short-term benefits, a lack of buy-in and a belief that such practices will lead to competitive disadvantage rather than competitive advantage.

      1. Relationship between work-life balance and productivity

A body of research supports a positive relationship between work-life balance and productivity. This includes individual case studies, research across a range of organisations and reviews of a number of studies.

Some studies do not support a positive relationship between work-life balance and productivity, for example Bloom et al’s (2003) study of 732 manufacturing organisations in the US, France , the UK and Germany found no direct relationship between work-life balance policies/initiatives and increased productivity. However, these studies can usually be analysed to find the confounding factor is workplace culture or management, or lack of implementation of work-life policies. For example, Bloom et al found management to be an intermediary factor, and they only measured having a work-life policy, not implementation or actual provisions.
In New Zealand, a Department of Labour (2006) survey of employees found a strong relationship between employees’ ratings of productivity practices in the workplace and their own work-life balance.3
Similarly, a UK survey of 597 working parents (Working Families, 2005) found a correlation between self-rated productivity, flexibility and satisfaction with work-life balance, and between satisfaction with work-life balance and enjoyment of one’s job (Figs 1&2 ). The authors conclude with a model that relates productivity to good management, flexible working, satisfaction with work-life balance and enjoyment of one’s job. While productivity comprises a combination of complex factors, flexible working options are perceived by working parents to be a key factor in their productivity.
Figure 1

Source: Working Families, 2005:p.13

Figure 2

Source: Working Families, 2005:p.13

A US survey of 151 managers and 1353 mainly professional employees in six major corporations found that 70% of managers believed that allowing staff to work flexibly resulted in increased productivity, 76% reported higher staff retention and 65% reported increased quality of work. The remainder mostly reported no change on these outcomes, with approximately 5% reporting negative effects on productivity (Boston College Center for Work and Family, 2000).
These studies have all relied on self-report by either employees or managers of perceived impacts on productivity. The following studies have used actual financial or statistical data.

    • In a US survey of 400 HR executives, 75% reported a positive or very positive bottom-line impact from work-life arrangements, with the remainder split between a negligible or negative impact (Hall and Parker, 1993:5). In this survey, organisations reporting a “very positive” bottom-line impact were those with the highest proportion of female employees and with cutting-edge philosophies. While larger companies were more likely to offer work-life balance options, smaller companies were more likely to report the greatest benefits.

    • Another case study in a US professional services top 100 company with 280 staff and 29 partners demonstrates net financial benefits from investment in childcare (Hayes, 2005).

    • Konrad and Mangel (2000) in a study of 195 private organisations in the US found a statistical relationship between work-life programmes and productivity, particularly for women and professionals.

    • The PNC Bank found a saving of $112,750 in turnover costs in seven months of having a flexibility programme, and IBM and Ernst & Young have seen higher revenues and stock prices connected to employee flexibility options (Working Families, 2006:17).

    • Hill et al (1998) in a mixed method quantitative and qualitative study of 157 teleworkers compared with 89 traditional office workers, found greater productivity from the teleworking group than the traditional group. Another review of telecommuting studies reported measurable productivity increases of between 10% and 30% (Pitt-Catsouphes and Marchetta,1991 cited in Hill et al, 1998).

Other studies have focused on factors or processes influencing productivity. A New Zealand Department of Labour review of international literature on business benefits of work-life balance (Yasbek, 2004) concluded that work-life balance can enhance productivity in various ways. One argument is that productivity gains occur as a result of a reduction in home to work spill over (but other evidence eg. O’Driscoll, shows that most spill over goes in the direction of work to home). Another argument is that productivity is improved through reducing long hours at work and fatigue. The third argument is that in exchange for the “gift” of work-life provisions, employees “offer the ‘gift’ of discretionary effort, thereby increasing productivity” (Konrad and Mangel, 2000). This relationship is discussed below.

Long hours, work-life balance and productivity

Long working hours is a factor in lack of work-life balance. International comparative research shows that New Zealanders work longer hours than people in any country but Japan, while having relatively low productivity. Countries like France and Germany work shorter hours and are more productive (Messenger, 2004; Skilling, 2006).

In both the UK and New Zealand, long hours workers are more likely to be in managerial and professional roles or to be plant and machine operators (McPherson, 2004; Kodz et al, 1998). There were differences between the two countries for other occupational groups, with trades workers and agriculture and fisheries workers also working long hours in New Zealand.
Research at case study/organisation level shows an inverse relationship between long working hours and productivity. A study of 12 leading British employers found a positive relationship between long hours4 and absenteeism and staff turnover, and an inverse relationship between long hours and staff morale and productivity (Kodz et al, 1998). While long hours may improve productivity in the short-term, this is not sustainable, and quality and productivity decrease in the longer term.
Workplace culture was a factor in long work hours in these case studies, and examples of successful interventions to reverse the negative consequences of long work hours involved changing company culture. This includes visibly changed top management behaviour and commitment and the introduction of flexible work patterns, job redesign and training in time management.
2.2 Workplace/work-life culture
Organisational culture is defined as the set of shared values and norms that characterise what is held to be important in the organisation (Working Families, 2006:13). It is more informally described as “the way we do things around here”.
Lewis (2001) cites a definition from Pemberton (1995) as “a deep level of shared beliefs and assumptions, which often operate unconsciously, are developed over time embedded in an organisation’s historical experiences”. Cultures that were initially functional may become dysfunctional as social circumstances change over time.
The “ideal worker” workplace culture that developed around male breadwinner female caregiver models of families is now in conflict with gender equality, female labour force participation and dual income families.
A supportive work-life culture is defined by Thompson et al (1999) as “the shared assumptions, beliefs and values regarding the extent to which organisations value and support the integration of work and family lives, for women and men”.
One example of how current workplace cultural assumptions are in conflict with new models of gender roles and family life is concepts of full-time and part-time work. Full-time work fits the ideal worker/male breadwinner culture of the past while part-time work is better suited to the new social reality of dual income families and a move towards greater gender equity in child-raising.
Another type of workplace culture that is in conflict with family life is the long hours culture discussed earlier. Two-thirds of respondents to a UK study of 150 employees in eight organisations said that long hours were part of their workplace culture and taken for granted (Kodz et al, 1998:29). The authors conclude that this suggests a link between workplace culture and working long hours. A long hours culture was defined by the employees as one in which long hours were valued, employees were praised for working long hours and working long hours was viewed as a sign of commitment. In one organisation in this study a long hours culture was described as “an expectation of employees to get the job done irrespective of the contracted working hours. Long hours were perceived as ‘part of the job’ and not doing this was seen as a sign the employee was not committed” (Kodz et al, 1998:31).
A long hours culture is set by senior managers working long hours and generating high workloads for those around them, according to Kodz et al (1998). Peer pressure also creates a culture of long hours, either through comments or competition. The third key driver of a long hours culture is that career progress is dependent on long hours and presenteeism. Other drivers of long hours cultures are customer expectations and service provision, staff shortages, new technology which enables 24/7 availability of employees, and the need to travel for work.
Only a minority of employees in this study, which included employees from a range of sectors, were driven to work long hours to improve pay as most are not paid overtime.

        2.2.1 Relationship between work-life balance and workplace culture

Many studies have found a relationship between work-life balance and workplace culture.

In New Zealand, the Department of Labour 2006 survey of employees found that an unsupportive workplace culture was associated with poor work-life balance. Almost 60% of employees said aspects of their workplace culture made work-life balance harder to achieve, particularly as expressed in the expectations and attitudes of managers, supervisors, colleagues and workmates.
An Australian study (de Cieri et al 2002) which involved surveys of 1500 employees at three periods (1997, 1998 and 2000) found that uptake of work-life balance initiatives varied from 20% to 80% of employees in an organisation. There was also a time-lag from introduction of initiatives to uptake. Key barriers to the implementation and on-going effectiveness of work-life balance strategies identified in the literature and borne out in the Australian study were:

    • An organisational culture which emphasises and rewards long hours and high organisational commitment (to the neglect of other life commitments).

    • An isolated, hostile and unsupportive working environment for employees with life commitments outside the organisation.

    • Attitudes and resistance of supervisors and middle management.

    • Preference of senior management involved in recruitment to dealing with people perceived as similar to themselves.

    • Lack of communication and education about work-life balance strategies.

The Australian research identified two key factors as barriers to work-life implementation and success: organisational inaction and organisational values. The most influential aspects of organisational inaction were lack of communication to staff, ineffective implementation, failure to evaluate/measure the impact of programmes, lack of middle management education and not getting line managers involved. These factors have all been identified in many studies on implementing diversity and work-life policies (Rutherford and Ollerearnshaw, 2002; Opportunity Now, 2004; Mulholland et al, 2006).

The most influential aspects of organisational values as barriers to positive work-life outcomes in the Australian study were focusing on the programmes rather than culture change and the way work is done, and increased work demands over-shadowing personal needs. The authors state that what is needed to improve utilisation of work-life balance programmes is improved implementation and communication to managers and employees, culture change and the development of a ‘track record’ of achievements to encourage future management commitment to this area” (de Cieri et al, 2002:p.7), ie. case study examples that demonstrate it works.
Thompson et al (1999) developed a measure of work-life culture based on their definition of work-life culture as “the shared assumptions, beliefs and values regarding the extent to which an organisation supports and values the integration of employees’ work and family lives”. They examined the relationship between work-life culture and use of work-family initiatives, organisational attachment and work-family conflict amongst 276 managers and professionals. Perceptions of a supportive work-family culture were statistically related to the use of work-family initiatives, reduced work-family conflict and positive organisational commitment. They identified three aspects of workplace culture that affected the use of work-family initiatives: managerial support, career consequences and organisational time expectations.
A later study of 3,504 workers (Thompson and Prottas, 2006) found that informal organisational support (work-family culture, supervisor support and co-worker support) had a more positive impact on work-life wellbeing than availability of family benefits and alternative schedules/flexi-working.
Kirby and Krone (2002) examined the effect of workplace conversations on the use of work-family initiatives. For example, co-workers complaining about “picking up the slack” for those using family leave will discourage use of such leave. The authors argue that the daily discourse can reinforce or undermine work-family initiatives. This daily discourse is part of the workplace culture referred to in “Step 3 – change organisational conversations” in the model for culture change (Working Families, 2006) described in Section 3.0 of this review.
Kirby and Krone found that workplace discussions around work-family policies revolved around perceived equity and preferential treatment. These findings have implications on how to best alter workplace culture dynamics; just adding work-family policies to an existing workplace culture may result in under-utilisation. Recommendations follow those found elsewhere: integrate policies into the whole organisation, generate senior management support, provide training for managers on the benefits of policies and how to implement them, communicate success stories of using the policies, and communicate the wider benefits beyond women or employees with children.
In New Zealand the EEO Trust 2006 Work-Life Survey found that the uptake of work-life initiatives related to actually putting work-life policies into practice rather than to the mere existence of a policy and a range of initiatives.
Another New Zealand study of four EEO Trust Employers Group members found that the greater the perceptions of family oriented workplace support by supervisors/managers, co-workers and the overall workplace, the lower the levels of work-family conflict reported by staff (McAulay, 1999). Informal workplace support (culture) was more important than the availability of family-friendly initiatives.
Given that the use of family-friendly initiatives was found to be significantly related to employees’ perceptions of family-oriented workplace support and men reported higher work-family conflict than women, it appears that men experience less workplace support to use family-friendly initiatives than women as explained in more detail on the following page.
McDonald, Brown and Bradley (2005) found that the gap between work-life policies and initiatives and their use, particularly by men and career-oriented employees, was due to five factors:

    • Lack of managerial support for work-life balance

    • Perceptions of negative career consequences

    • Organisational time expectations

    • Gendered nature of policy utilisation

    • Perceptions of unfairness by other employees (ie. those without family responsibilities)

Role of managers

Managers who are negative about work-life balance “may send signals indicating that the use of flexible benefits is a problem for them and the organisation as a whole” (McDonald et al, 2005: p.42). A more detailed presentation of how managers can affect the outcomes of work-life policies is in a conference paper by McPherson (2006) available from the EEO Trust.

Co-worker support

Many studies report a backlash by workers who do not have family commitments or are not eligible for flexible work options due to perceived inequity in the availability of work-life initiatives. The research literature shows conflicting findings about the extent of co-worker resentment depending on demographic factors and the availability of initiatives to workers without children. Younger people, minority ethnic groups and people who have used these policies are more supportive of others using them. Workplace cultures that are most supportive of work-life practices make them available to all employees.

Organisational time expectations

This refers to assumptions of long hours as a signal of organisational commitment and productivity. A culture supportive of using work-life initiatives requires a shift to an outcome-oriented evaluation of performance.

Gendered nature of use of initiatives

Because it is mainly women who use work-life initiatives, men are reluctant to use them as it is not seen as appropriate/normal for the male worker model. Use of work-life initiatives is also associated with lack of commitment and career focus. “Despite a commitment to the ideal of shared parenting, men tend to give work priority over family” (McDonald et al, 2005: p.45).

A study by Mindy Fried (1998) of how workplace culture influences the use of parental leave in a US organisation found that middle managers were the gatekeepers to use of parental leave. She also found an internalised pressure to return to work which could stem from workplace culture such as norms of commitment or feelings of or towards colleagues. This organisation also framed leave taking as something for women and most certainly as a threat to one’s career trajectory (p.134). Another factor was that a culture of overtime permeated this organisation (p.136).
This is an example of a workplace culture based on the assumption that a management job cannot be done in less than full-time hours despite research in the US which has disproved this (McPherson, 2005). In this organisation, a move to part-time work is therefore an automatic demotion from any managerial level position. Another gender issue emerging from this study is that women become primary caregivers while on parental leave and this continues once they return to work. One solution is more gender equity in parental leave.
Perceptions of career consequences

Research has shown that working part-time is incompatible with promotion and access to a range of higher status male-dominated occupations. For example, in a case study of engineers in a Fortune 100 company, Perlow (1995) use of work-life initiatives was found to hinder long-term career advancement. The engineers in this company “did everything they could to avoid using work-family policies because they feared the long-term career implications. The problem with work-family policies and programmes is that they create new ways of working without addressing the underlying assumptions that reward only the old ways of working. People who take advantage of these new ways tend to be negatively affected”.

Demonstrating commitment is rewarded with promotion, and commitment is measured by not taking time out, not using work-life policies, working long hours, face time etc.
Three barriers to the successful implementation of work-life policies were identified in this study: face time, long hours and making work one’s top priority. “Underlying these three barriers to the successful implementation of work/family policies and programs is the shared cultural assumption that presence at work is directly related to one’s contribution to the work …. And makes it difficult to create a balance in one’s life”.
The paradox of the assumptions underlying workplace cultures that are not supportive of work-life balance is demonstrated in the section below on discretionary effort which shows that discretionary effort increases productivity, and work-life balance is potentially one of the drivers of discretionary effort.
2.3 Discretionary effort and employee engagement: going the extra mile
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