This paper provides the first evidence linking a panel of individual medical data from a corporate wellness program with objective productivity improvements in industrial workers. Almost 90% of companies use corporate wellness programs designed to improve employee health. Existing research has focused on measuring cost savings from reduced insurance rates and absenteeism. In contrast, our paper explains and empirically tests how wellness programs can improve employee productivity, and thereby firm performance. We argue that productivity improvement can arise from two sources. First, wellness programs can increase job motivation through improved satisfaction for all workers and gratitude or reciprocity from those who discover a previously-undiagnosed illness. Second, wellness programs increase employee capability by spurring them to take actions that improve health, well-being and ultimately productivity. We test these predictions using a wellness program implemented at multiple plants of an industrial laundry company. Using a three-year panel of individual productivity and medical data, we find program participation increased productivity by 5%, compared to non-participants, regardless of pre-existing health levels or post-program health changes, suggesting increased job satisfaction for participants. Moreover, many sick and healthy individuals improved their health, increasing productivity by 11%. Surveys indicate that many employees, regardless of pre-existing health levels, improved their diet and exercise from the program. Overall this study suggests that firms can increase operational productivity through socially responsible firm health policies that improve both workers' wellness and economic value.
This paper uses data from an attendance award program implemented at one of five industrial laundry plants to show the complex costs of corporate awards previously ignored in the literature. We show that although the attendance award had direct, positive effects on employees who previously had punctuality problems, it also led to strategic gaming behavior centered on the specific eligibility criteria for the award. The award program temporarily changed behavior in award-eligible workers but did not habituate improved attendance. Furthermore, we show that the extrinsic reward from the award program crowded out the internal motivation of those employees who had previously demonstrated excellent attendance, generating worse punctuality during periods of ineligibility. Most novelly, we show that the attendance award program also crowded out internal motivation and performance in tasks not included in the award program. Workers with above average pre-program attendance lost 8% efficiency in daily laundry tasks after the program’s introduction. We argue that these motivational spillovers result from the perceived inequity of internally motivated workers’ previously unrewarded superior attendance contributions. Our paper suggests that even purely symbolic awards can generate gaming and crowding out costs that may spill over to other important tasks.
While social capital has been found to play an important role in economic transactions when information is incomplete, it remains unclear how it interacts with human capital in transaction performance. This paper explores the complementarity between social affiliations and human capital in transaction performance, and how affiliations influence the match between qualified professionals and consumers. I argue that human capital is important to professional performance, but that social affiliations lead consumers to increasingly match with lower human capital professionals. Thus, while social and human capital function as complements in transaction performance, social capital can substitute for human capital in the selection process. I test my argument using a novel approach that pairs data from a primary real estate multiple listing service in Utah with hand-collected data on geographically assigned church congregation boundaries. This setting allows me to identify listings for which real estate agents and home sellers share a common church congregation, and to explore the impact of this affiliation, as well as human capital variables, on transaction outcomes. I find that agent performance improves when listing for affiliates, on average, and that gains increase with agent human capital. However, consistent with my theory, I find that sellers are more likely to use inexperienced and underqualified affiliated agents. Human capital deficiencies reduce benefits from social affiliations and lead to inferior transaction outcomes in extreme cases. This suggests a new underexplored dark side to social capital from human capital deficiencies, which is driven by the selection process under incomplete information.
Are poor physical and financial health driven by the same underlying psychological factors? We found that the decision to contribute to a 401(k) retirement plan predicted whether an individual acted to correct poor physical-health indicators revealed during an employer-sponsored health examination. Using this examination as a quasi-exogenous shock to employees' personal-health knowledge, we examined which employees were more likely to improve their health, controlling for differences in initial health, demographics, job type, and income. We found that existing retirement-contribution patterns and future health improvements were highly correlated. Employees who saved for the future by contributing to a 401(k) showed improvements in their abnormal blood-test results and health behaviors approximately 27% more often than noncontributors did. These findings are consistent with an underlying individual time-discounting trait that is both difficult to change and domain interdependent, and that predicts long-term individual behaviors in multiple dimensions.
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