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Do Corporate Wellness Programs Boost Worker Productivity?

Corporate America has come to embrace employee wellness programs, which provide health screenings and diet and fitness advice aimed at improving the well-being of workers. The programs clearly pay off in reduced absenteeism and lower health insurance costs, but can they make employees more productive?

They can, new research suggests. In a forthcoming paper, the University of California Riverside's Timothy Gubler, UCLA Anderson's Ian Larkin and Washington University's (St. Louis) Lamar Pierce indicate that productivity gains can result from a well-designed wellness program.

Corporate America has come to embrace employee wellness programs, which provide health screenings and diet and fitness advice aimed at improving the well-being of workers. The programs clearly pay off in reduced absenteeism and lower health insurance costs, but can they make employees more productive?

They can, new research suggests. In a forthcoming paper, the University of California Riverside's Timothy Gubler, UCLA Anderson's Ian Larkin and Washington University's (St. Louis) Lamar Pierce indicate that productivity gains can result from a well-designed wellness program.

The authors analyzed three years of health and efficiency data at an industrial laundry company and found an apparent 4 percent gain in the average worker's productivity — roughly one day of productive work a month per employee. Those whose health improved during the course of the study, whether they had pre-existing health problems or were already considered healthy, posted significant gains of 10 percent or more.

For their study, the authors started with health information about the program's participants, including their weight, blood pressure and the results of a comprehensive blood screening. This was combined with data from the company's IT system, which scored how efficiently each worker performed various tasks. Because one of the laundry's plants didn't offer a wellness program, this gave researchers something like a control group on which to test whether other factors, such as a change in company policies, influenced the productivity gains. A total of 111 employees — 69 in the program and 42 in the control group — were included in the study.

Almost two-thirds of program participants started out with some kind of health problem, whether high cholesterol, obesity, hypertension or chronic pain. While most saw no improvement (as assessed by an independent panel of physicians) several did get better, as did a handful of workers who were considered healthy during the first screening. Both groups showed significant gains in productivity.

The authors estimate that the wellness program had a 76 percent return on investment, a figure that they say could be much higher if more employees participated and if turnover could be reduced.

What explains the productivity gains? The study doesn't provide a definitive answer but it suggests two potential reasons. One, the programs can demonstrate a corporate commitment to employee well-being and can make workers who participate feel more motivated to work harder. Two, the programs can result in healthier workers whose productivity improves because they are actually better able to do their jobs. This explains how the largest productivity gains came from those, sick or healthy, who saw their health improve during the program.

The authors caution that the small size of the study means the gain in overall productivity is imprecise. It also limits their ability to say which health improvements result in the most productivity gains, though post-program surveys suggest diet and exercise were important factors. Still, the study shows that employer-sponsored wellness programs constitute a socially responsible practice that can pay off in the health of employees and their value to the company.

Gubler, T., Larkin I., & Pierce L. (in press). Doing well by making well: The impact of corporate wellness programs on employee productivity. Management Science. [Abstract]

Ian Larkin

Assistant Professor of Strategy

Ian Larkin’s research is focused on compensation, incentives, employee motivation and human resources. He is currently looking at the effects that workplace wellness programs have on employee motivation and productivity, as well as “gamification” in the workplace, which uses nonmonetary rewards to encourage improvements in employee behavior.

 

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