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Friday 4 January 2013

Cost and Return on Workplace Economics


The antagonists of workplace environment betterment usually cite costs to companies due to creation of additional facilities. (Mayo, 1945) But if you look at the facilities that are required by workplace environment, they are intangibles. Attitudinal changes and communication betterment won’t cost you anything(Yorks & Whitsett, 1985).A few of the facilities like the recreational equipment and facilities for women may cost a bit, but it is not substantial. One problem with the workplace economics is that the investment is partly tangible but the return is totally intangible. Economics in traditional sense speaks of tangible investment and return. But economics at workplace cannot be discussed in traditional sense. When the employees’ morale is high due to better work place environment and results in increased productivity, people refuse to admit and recognize the correlation and try to ascribe extraneous contribution to increased productivity. But if you observe companies like Google, you can understand the contribution and importance of workplace environment for company’s growth. These companies provide all types of recreational facilities and even free food to their employees. These freebies do not cost much to the company ,but win a lot of loyalty and motivation from Employees .That is why, even during the times when other companies are reeling under the onslaught of attrition, companies like Google remain unaffected. (“Five realities of Google or any other Workplace Wonderland”,2008).

Economics is very important at workplace and has serious implications for the same. But it is not economics in the traditional sense where you invest something and reap some benefit. In traditional sense, your investments as well as returns are intangible. But economics of workplace is different. Here you invest in something which is not connected to your business. The result is intangible and is again not connected to business. The benefit from the return accrues in full to the business in a way that you don’t see it directly but only can feel it. (Roethlisberger, 1941).

An example similar to this can be drawn even from traditional economies. When your company maintains high quality in products and integrity in business, it builds up a reputation and over a period evolves into a brand value, which in modern times commands a huge value. It takes some pains to maintain quality in products and business integrity and it may involve some expenditure. But you don’t go back and make the investment. The result is a brand value which is intangible but commands a value. Investment in workplace environment improvement can be compared to an effort to build brand value.

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