May 12, 2003

Companies slow to adopt work-life options

By Myra Thomas

For many employees today, juggling work and family obligations has become an act to rival the best P.T. Barnum could offer. Conventional wisdom holds that corporations offering initiatives to help deal with this juggling act—on-site daycare, flex time, referrals to elder- and childcare—benefit by having less stressed and, in turn, more productive workers.

But according to Jill Perry-Smith, assistant professor of organization and management in the Goizueta Business School, most companies still refrain from offering a more effective, though complex, array of interrelated human resource (HR) efforts to address work and family balance. With the economy still on the downswing and growing health-insurance premiums eating into company budgets, work-life HR efforts often get the short shrift.

In a paper titled “Work-Family Human Resource Bundles and Perceived Organizational Performance,” Perry-Smith and co-author Terry Blum, dean and professor at Georgia Tech’s DuPree College of Management, explore the link between “bundles of human resource work-family policies and organizational outcomes.” They define a “bundle” as a complementary or highly related set of HR initiatives such as those described above.

While others have asserted a link between individual work-life family policies and firm performance, Perry-Smith and Blum empirically analyzed the relationship between HR bundles and the bottom line. The authors’ survey of 527 U.S. firms suggests “that organizations with more extensive work-family policies have higher perceived firm-level performance.” In addition, increased market performance and profit-sales growth were noted for these businesses. The data studied emanated from the National Organizations Survey published in 2000, a national poll of U.S. work establishments conducted by the Survey Research Laboratory of the University of Illinois.

Perry-Smith and Blum considered a number of variables, such as firm size, competitive pressure, percentage of female employees, firm age and industry type, to get an accurate picture of the impact of employers’ work-life efforts in a wide array of circumstances. According to their research, older companies experienced greater company performance at a slightly higher level than newer firms.

While Perry-Smith concedes that programs such as on-site daycare may be too costly for a startup company, other initiatives need not be as pricey—and may in fact pay for themselves over time in the way of improved employee performance.

The researchers also noted that companies with a large percentage of female staffers were more likely to experience better performance, but only in some cases. Businesses with more women workers experienced a positive effect only in terms of increased company profits/sales, not necessarily for market and organizational performance.

Overall, the symbolic value of HR bundles went far to promote a higher degree of loyalty and satisfaction among employees. “In a work context with these discretionary employee-centered values, employees are likely to respond favorably,” the authors wrote. “They will reciprocate by contributing extra effort, by developing a concern for the overall success of the organization, and by embracing its goals.”

Due to the conservative approach of most companies, creative HR approaches remain rare. Perry-Smith and Blum point out that “management’s belief systems and attitudes about managing employees may restrict the adoption of multiple work-family policies.” The fear of “attracting workers on the ‘family track,’” and the assumption that these staffers are somehow less stable or less committed employees, continues to hamper the corporate shift to a more integrated approach on work-life company initiatives.

“Firms that offer an integrated or bundled approach are certainly more rare,” Perry-Smith said. However, she cited Fannie Mae and the SAS Institute as companies in the forefront of the HR bundling approach. Fannie Mae, for example, offers employees a wide array of work-life programs, including flexible working arrangements, an emergency child care center, adoption expense reimbursement, and child- and eldercare resources and referrals, among other efforts. The SAS Institute boasts a similar range of services.

Unfortunately, Perry-Smith said, employers like these are few and far between, with most company managers maintaining “a rather myopic and conservative approach to work-life initiatives.” However, this bundling approach can act as a strong competitive tool in attracting and retaining the best and the brightest employees.

Companies that are savvy about employing an integrated set of HR bundles may also enjoy an advantage over their competitors, as a strong set of offerings may be difficult to copy.

“An HR bundle that gives employees the flexibility, the information, the convenience and the financial assistance to better manage their non-work lives can be considered strategic,” the authors wrote, “and should be added to the list of the ‘best practices’ of strategic human resource management.”

This article first appeared in Knowledge@Emory and is reprinted with permission.