The dogma that good work-life balance improves productivity is called into question by new research from leading academics.
The study by the Centre for Economic Performance at the London School of Economics indicates that the assumption that better work-life balance will automatically improve productivity is false. The authors say; “there is no relationship between productivity and work-life balance once good management is accounted for”.
Companies that are bigger more globalised and tend to provide a better work-life balance for their employees because they are better managed. Furthermore, tough product market competition improves management practices but without any detrimental impact on work-life balance. At the same time, the researchers find no evidence that firms with good practices on work-life balance – shorter hours, flexible working, family-friendly policies, and so forth. – have higher productivity.
What they do find is that:
- Well-managed firms do not work ‘harder’ but ‘smarter’ – employees in well-run firms typically have a better work-life balance.
- In particular, management practices associated with good ‘people management’ – such as fostering talent, rewarding and retaining well performing staff and consistent training opportunities – are likely to be found in conjunction with good work-life balance practices – family-friendly policies, flexible working, shorter hours, more holidays, childcare subsidies, etc.
- In well-managed firms, the hours worked by both managerial and non-managerial staff are not significantly higher than those in badly run firms. This again confirms the finding that working smarter not harder is the key determinant to successful management.
- The share of women in management relative to non-management is significantly higher in firms with better work-life balance. In other words, the ‘glass ceiling’ does not seem to exist nearly as strongly in firms that treat their employees well.
- The researchers describe two opposing views on the effects and efficacy of good practices on work-life balance – the pessimistic ‘Chirac’ view and the optimistic ‘win-win’ view:
- The view associated with the French president is that ‘Anglo-Saxon neo-liberalism’, typified by tougher product market competition and globalisation has a down side; these forces raise productivity, but they cause misery for workers through long hours, job insecurity and intense and unsatisfying work.
- The win-win view (espoused by the present UK government) argues that better work-life balance will improve productivity and employers are mistakenly failing to treat their workers as assets and implement better work-life balance practices.
This study finds evidence for a hybrid view between these two polar extremes:
- The evidence does not support the Chirac view: there is, in fact, a positive association between management and work-life balance. Similarly, the view that competition and globalisation are bad for work-life balance is not supported: there is no relationship between tougher competition and work-life balance. And larger firms – which are typically more globalised – also have better work-life balance practices.
- But the win-win view that better work-life balance will improve productivity is also rejected: there is no relationship between productivity and work-life balance once good management is accounted for.
Instead, well-managed firms can choose to introduce better work-life balance practices or not. If they do introduce them, this neither penalises them in terms of productivity nor does it significantly reward them.
Dr Nick Bloom, one of the authors, said previous work claiming that a good work-life balance increased productivity was a case of spurious correlation. “Well-managed firms provide a much better work-life balance for their employees. And, of course, well managed firms are also much more productive. So productive firms tend to have good work-life balance. But this simply occurs because they are well managed, not because work-life balance increases productivity.”
For more, go to: ESRC: Society Today