Sustainable Workplace Means Addressing Employee Well-being, Too, According to Stanford Business School Research

STANFORD, Calif.--(BUSINESS WIRE)--Corporate practices are affecting not just polar bears and wetlands, but also may be killing human beings, says Stanford Graduate School of Business faculty member Jeffrey Pfeffer. As reported in today’s Stanford Knowledgebase the concept of "sustainability" must be expanded to include consideration of whether workplaces are good not only for the environment but also for people.

“We have no mandatory vacation or sick day requirements, and we do have chronic layoffs, overwork, and stress. Working in many organizations is simply hazardous to your health.”

What Pfeffer calls toxic workplace environments, particularly in the United States, raise rates of disease and mortality. He urges business, government, and the media to pay attention to what has been a shockingly neglected topic. In the present distressed economy, he says, "the problem is only going to get worse."

"The lack of attention to employee needs helps explain why the United States spends more on health care than other countries but gets worse outcomes," says Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business. "We have no mandatory vacation or sick day requirements, and we do have chronic layoffs, overwork, and stress. Working in many organizations is simply hazardous to your health."

Specifically, he says, epidemiological studies show that holding a lower-level position where one does not have much control over job activities and decision making puts employees at a higher risk of having—or dying from—a heart attack. "There’s nothing more stressful than being in an environment in which you have a lot of pressure but relatively little power," Pfeffer says.

In addition, spotty or interrupted health care insurance—a typical consequence of layoffs and job changes—and the trend toward jobs that offer no health coverage at all, leads to a significant decrease in routine preventive medical screening procedures such as mammograms and cholesterol and blood pressure testing, and as a consequence, added risk to workers’ health.

Pfeffer cites research showing that overwork and job stress lead to increases in smoking, alcohol abuse, and high blood pressure, while layoffs contribute to depression, violence, and even lowered life expectancy. "There is evidence that people who experience a layoff live 1.5 years less than those who don’t," Pfeffer says.

The Stanford professor thus maintains that the concept of "sustainability" must be expanded to include not only whether corporations care for the environment and resource conservation, but also whether they are good for their employees.

As to why the serious question of worker well-being has been given scant attention by executives, regulators, and pundits, Pfeffer suggests it may have something to do with current mercenary cultural values. "There was a time when CEOs believed they had an obligation to all of their stakeholders, including employees," he says. "But over time, we've come to look at even the simplest things in financial terms. Childcare, for example, which used to be a matter between parents and children, is now a service to be traded on the New York Stock Exchange. This way of thinking is taking out the human factor."

The great irony, says Pfeffer, is that most workplace policies that are bad for employees are also bad for companies themselves. Organizations that are more "humane"––offering generous benefits, sick leave, vacation pay, health insurance, and so forth––are shown to be more profitable. Pfeffer points to companies such as Southwest Airlines, Kimberly-Clark in the Andean region, and kidney dialysis provider DaVita as exemplars. "I hope businesses will wake up to the fact that if they don't do well by their employees, chances are they’re not doing well, period," Pfeffer says.

In the current economic climate, he notes, more people will be laid off, work longer hours, become saddled with increasing work responsibilities, and operate without health insurance. The government, Pfeffer says, will almost certainly need to step in with regulation. If nothing else, with health care costs on the rise, government should be looking to the workplace as one culprit in the decline in the quality of workers' health.

(This story reports on research at the Stanford Graduate School of Business and appears in today’s Stanford Knowledgebase, the free monthly information source for thoughts, ideas and research at the Stanford Graduate School of Business. To dig deeper, visit: http://www.gsb.stanford.edu/news/research/pfeffer_toxic09.html?cmpid=kbpage.)