Jeffrey Saltzman's Blog

Enhancing Organizational Performance

Desire to Work, Unemployment and Social Safety Nets

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Some of the research I have done over the last few years treats countries as nothing more than large organizations, with each country’s respective head of state filling the role of CEO. This approach has enabled me to apply the research techniques developed over the last few decades, such as linkage, on measuring organizational performance to entire countries. Not surprisingly, the results we would expect to find at an organizational level, say a public or private entity within a country, also applies when you sample a representative cross-section of citizenry and look at country-level performance indicators such as GDP growth or corporate bankruptcy rates. I developed an index a good number of years ago called Employee Confidence, and since June 2008 was measuring it quarterly on 16,000 people in the 12 largest global economies.

Within just the USA for one study, I treated each state as the organizational unit and made comparisons of citizenry attitudes to unemployment levels, and by looking at the change in attitudes over time, was able to get some indication of whether the citizenry attitudes were a leading indicator of what unemployment levels would be or a lagging indicator. The largest correlations between citizenry attitudes and unemployment came when linking together attitudes at time 1, with the following month’s unemployment level. In other words, the strongest relationships found were between attitudes now and what officially reported unemployment levels would be 1 month from now. This relationship was marginally stronger than the relationship between current attitudes compared to the previous month’s unemployment levels (postdictive – unemployment levels, the month preceding the measurement of the attitudes), current attitudes compared to current unemployment levels (concurrent points in time), and current attitudes compared to unemployment 2 months out. This would seem to give some indication that asking a cross section of citizenry about their levels of Employee Confidence might be a leading indicator of whether unemployment levels and potentially other economic metrics were heading upwards or downwards in the near term, and this leading indicator can be available before officially reported economic figures.

I recently co-authored with Scott Brooks, a book chapter, appearing in Going Global, for the Professional Practice Series, for the Society of Industrial and Organizational Psychology which documented some of the major findings from this body of research.

Now, given that the evidence suggests that certain citizenry attitudes at a country level can be used in a similar fashion to employee attitudes in predicting organizational performance we can begin to draw some conclusions not only about “people at work” which has been done countless times, but about “people as working or unemployed citizens”.

For instance, a good number of years ago I looked at the combination of workload and employee satisfaction or morale in the workplace. Here is an excerpt published in Executive Viewpoints on that work. “Employees who consider their workload to be “about right” tend to be the most satisfied with their jobs, while those who say they are underworked are even less happy than employees who complain of being overworked”.

“The study looked at the job satisfaction levels of more than 800,000 employees at 61 companies worldwide. Of the companies surveyed, 75% have operations in North America, 11% have operations in Europe, and 14% have operations in Asia. Employees participating in the survey were asked to rate their overall satisfaction with their jobs, as it relates to their workload, on a 100-point scale. Respondents who described their workload as “about right” rated their job satisfaction at an average of 73, while employees who said they had “too much work” rated their satisfaction level at 57. Those with “much too much work” had an average satisfaction rating of 42. By contrast, those who said they have “too little work” rated their job satisfaction at 49, and those who complained of having “much too little work” had the lowest average job satisfaction rating, of 32. The survey also identified variations in the way workers in different parts of the world felt about their workloads.

“Results showed that employees in Europe and Asia were about three times less likely as North American workers to say they were satisfied with having “much too little work.” Employees in North America who said they had “much too little work” had an average satisfaction rating of 36, whereas European workers in this category had a satisfaction rating of 12, and Asian employees a rating of 13. The study also showed that employees in Europe and Asia who claimed they have “much too much work” were somewhat less satisfied with their jobs than their counterparts in North America. While North American employees who said their workload was much too heavy had an average job satisfaction rating of 44, European and Asian employees with “much too much work” rated their job satisfaction at 34 and 25, respectively.”

Some conclusions that can be drawn looking across these studies include:

  • There is some generalizability possible between employee attitudes at work, and given a large enough and a representative sample, citizenry attitudes at a country level.
  • People tend to be more positive when working productively and on a whole would rather be working harder than not having enough to do. When they do not have enough to do, either at their employer or when unemployed, there is a tendency to feel that their contribution is not valued either by their employer or society.
  • The notion that creating societies with strong social safety nets, such as unemployment insurance, as has been done in some European countries to an even greater extent than in the USA, diminishes the desire to work does not bear out.

There is a tendency for humans to make decisions and draw conclusions representing their world-view based on heuristics, or rules of thumb. The down side of this evolutionary derived shortcut to speedier human information processing is that it can play into stereotypes and even bias and bigotry if one is not careful.

And there is a tendency on the part of organizations to also simplify their need to process information, which requires an expenditure of energy (i.e. resources) by creating rules which are broadly applied to those who reside within the organization. Unfortunately, these rules are often derived to control the outliers in the organizational distribution, the worst case scenario, rather than the vast majority who are in the “fat” part of the distribution.

Lets apply some evidence-based decision making to the notion that by extending unemployment insurance, we as a society, are creating benefits that are so generous that those who are unemployed will have less of a desire to work.

  • The evidence suggests that the vast majority of people are happiest when working, and in fact are happier when over-worked rather than underworked.
  • The evidence suggests that in societies with strong social safety-nets that there is no diminution of the happiness and satisfaction for the majority of workers that working and working hard brings.

It is possible to go into the general population and at the extremes of the behavioral distribution find individuals who fit the worst-case scenarios of people who do not want to work and would rather collect money from the in-place social safety nets, but they are nowhere near what the majority of us want and what makes most people feel good about themselves. Based on a review of multiple databases that include both the private and public sector, the evidence is clear, most people want to do a good job at work, want to feel that they are contributing in a meaningful fashion, would rather be overworked rather than underworked and their frustration levels and eventual withdrawal from the organization can be driven by their inability to do so.

© 2010 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.

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5 Responses

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  1. Some of those heuristics may change as more people work closely together, if often virtually – especially if they are part of self-organized project teams or startups where the individuals involved are responsible for choosing their team members and rules of engagement and are motivated to find comfortable, equitable and productive ways to work together, driven by a sweet spot of mutual benefit. In this increasingly bottom-up, complex and connected world this seems to be a growing trend.

    kare Anderson

    August 13, 2010 at 11:01 am

  2. […] an Employee-Economy Relationship August 13, 2010 | Posted by Kristen Frasch I came across this recent blog post I thought I’d share. Pretty interesting work being done by Jeffrey Saltzman, CEO at […]

  3. Jeff,

    Loved this post. Fascinating research, and I agreed with virtually all of your propositions. One challenge I might pose for you to consider is: what about the risk management perspective? Taleb’s focus on so-called “black swan” events has brought attention to low probability, cataclysmic occurrences. Perhaps we should exercise caution when we’re considering the risks associated with the outliers in any dataset, especially if these can be highly disruptive in an imaginable worst-case scenario (no matter how unlikely). What do you think is the right balance? Keep up the good work on this blog- it’s one of my favorites!


    Aaron Ziff

    Aaron Ziff

    August 13, 2010 at 1:27 pm

  4. […] say career counselors.  Time and again job satisfaction surveys indicate that people would rather be overworked and engaged than underworked and detached.  Over-extended […]

  5. […] say career counselors.  Time and again job satisfaction surveys indicate that people would rather be overworked and engaged than underworked and detached.  Over-extended […]

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