How much is worker happiness costing firms? - Aussie Stock Forums

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  1. #1
    sydboy007's Avatar
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    Default How much is worker happiness costing firms?

    I find the below quite interesting. Certainly matches my experience in the trenches. Happy staff are far more productive.


    Controlling for other determinants of stock returns (market performance, industry performance, firm characteristics, and risk), I find that the best companies outperform by 2-3 per cent per year over a 26-year period from 1984–2009, which is highly statistically significant.

    The result has three main implications.

    First, employee satisfaction is beneficial for firm value, consistent with new human relations theories.
    Second, the market does not seem to recognise this link.
    A budget tells us what we can’t afford, but it doesn’t keep us from buying it.

  2. #2

    Default Re: How much is worker happiness costing firms?

    I'll give you an exact quote from a manager I once worked under. "I don't place much value on good will".

    Suffice to say that productivity fell in a heap, as measured it was roughly a two thirds drop - what used to take one day now took three days.

    As for the effects on staff, I call it the "three F's". Fight, Flight or Fraud. Some fought the whole management approach, mostly with limited success. Some simply retired early or otherwise left ASAP. And others became involved in various forms of fraud - not necessarily theft etc, but simply concealing information from management and fudging reports etc in order to stay "under the radar" and avoid yet another nasty confrontation.

    Micro-management and incompetent bosses ruin productivity, at least they sure do in a "blue collar" workplace and especially when the manager themselves is not competent to do the work they are obsessively managing every minute detail of. Been there, seen it first hand. Had I not seen it myself, I'd never have believed that one man could so seriously derail an entire organisation, but that's exactly what he achieved.

    Long term, a huge problem is that the best staff leave and only the duds who can't get a job anywhere else stay. It's reverse evolution at work.

    Thankfully no such problems where I currently work.

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