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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Workplace Economics – Fine Tuning and Requirements

1. Fine Tuning of workplace economics

In the initial years of employment, an employee is satisfied with monetary part of his compensation. Monetary incentives appeal to him. Fringe benefits like certain allowances –Annuity schemes, Medical facilities, Medical Insurance ,ESOPs  and such other benefits satisfy him .All these are tangible benefits ,most of which are taken care of by legislative measures. (Carey,1967).

As time passes on the employee realizes that there is something more that he needs to get some satisfaction out of his job apart from mere monetary gains. (Daft& Noe,2001)  He yearns for respect, identity, recognition, creativity and social context. While the tangible salary and other prerequisites and fringe benefits provide him financial security, his psychological yearnings require more than mere monetary benefits to satisfy him and motivate him. (Daft& Noe, 2001). The sole platform for providing fodder to this psychological yearning is workplace. We now examine what measures need to be taken for bettering the workforce environment (Daft& Noe, 2001).

                        2. Workplace Economics –Requirements

2.1. Attitudinal Change

The first prerequisite for bettering workplace environment is a change in the attitude of managerial personnel. They are hitherto accustomed to look down upon the workers as tools of  production which can be used as and when required and thrown out when not required. They profess once and again that they realized the importance of HR policies but faltered to deceive whenever the occasion arose.( Schultz & Schultz,2002) The merciless retrenchment of employees in software and manufacturing industries even on a small indication of a business drop exposed their true colors as opportunists. Such opportunistic behaviour doesn’t endear them to the workers and instill confidence. What is needed is a true change in their attitude towards the workers. (Spector,2000)

2.2. Recreational Facilities

           “All work and no play make Jack a dull boy” goes the saying. Employees should be provided proper recreational facilities by way of libraries, indoor games and outdoor games to refresh themselves. This provision not only enhances their productivity but also enriches the camaraderie among the workers which in turn contributes to team work. The recreational facilities also make them fitter physically to respond ably to the demands of physical work in the organization(Turner, 1933).

2.3. Communication

This is the most important contributor to workplace environment. One way communication hitherto prevalent in industry should be replaced by two-way communication in a way that it becomes a tool for understanding fully what is expected of them. (Turner, 1933).

 There should not be any ego or apprehension from any side in communication and this leads to transparency, which is a new virtue among the corporates. A lot has been discussed about communication in earlier paragraphs. Hence the same is not repeated here. (Whitehead,1938).

2.4. Treatment of women and sexual harassment

This is another very important aspect which should be taken care of for bettering the work place environment. As the industrial activity intensified all over the world, women became an integral part of our work force. Even though we shout hoarse that women and men do not really have equal chances of exhibiting their talents. However talented they are women are bound by family and children and lag behind men. Policies which enable women with family care responsibilities are lacking in work places. (Moorhead& Griffin, 2004) So many women however talented they are leaving their jobs for family and children. Facilities should be provided to retain such women(Moorhead& Griffin, 2004).

 Sexual harassment in workplaces is another malady plaguing the workplace. Measures should be taken to eradicate it and provide a congenial atmosphere for women to work.

2.5. Improving Soft Skills

Soft Skills refer to a group of personal qualities like communication ability, personal habits, language skills, friendliness and optimism that influences relations with other people. Soft Skills are the new requirements of the present day industry and business .Soft skills complement the hard skills like proficiency in work and make a person a successful and very useful employee for the organization(Wilson,1999).

While a very few people are born with soft skills, these skills are usually cultivable. Workplace economics has a very important place for soft skills like socializing, team work, participating in a team in cultural activities, decision making, problem-solving, active listening, interacting positively with others. Efforts should be made to inculcate these soft skills among employees so that workplace will be an enriching ground for them to extract mental and social happiness (Wilson, 1999).

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Aspects affecting workplace economics-part-4

8. Benefits of Effective Communication.

Poor communication among Managers makes their ideas ambiguous to workers and fails in optimizing their productivity. An effectively communicating Manager tries to be aggressive as a result of which the gap between him and the workers widens heading to low morale among the employees. Similarly ineffective communication from the employees fails them in conveying their problems and requirements to the Management as a result of which the desired improvement in working condition or performance cannot be achieved (Nelson & Quick, 2003).

9. Teamwork

 Another essential prerequisite for success in present day business environment is teamwork. It is not enough if one is skillful by herself, but he should also be a team man and carry his team along with him. He should also inculcate the same team spirit among his colleagues so that there will be more and more contribution for the team’s success rather than for an individual. The benefit of teamwork is that it not only makes the tasks easier but also instills camaraderie among the employees. (Newstrom& Davis, 2002)

10. Job Satisfaction

Normally a job is an instrument of earning livelihood. Earlier there was not much relationship between the job and a person except that it was a facilitator for earning income. But deriving satisfaction out of a job is a new dimension among the employees. (Robbins, 2003).

 Job is not only an income earner but also an instrument of psychological satisfaction of achievement. Workplace is the suitable platform to derive this satisfaction by an employee. So an amicable and proper environment at the work place is a must if the employee has to enjoy his job and optimize his productivity. (Robbins, 2003).

11. Manager’s Role

Managers hitherto are considered to be wielders of power and authority. There was lot of ego and display of power entrusted with managerial positions. But Manager’s role has now undergone a sea change. They are now considered as guides and facilitators. (Riggio, 2003)Their responsibility has grown to a position where they have not only to achieve organizational goals but also instill team spirit and organizational culture among employees to optimize their productivity. The above revelations made by Human Relations theorists as for the need for a good workplace environment changed the outlook of traditional Managers towards their subordinates. The employees were no longer looked down upon as factors of production but as partners of production, who deserved recognition and respect and whose contribution is inevitable in achieving the organizational goal. The importance of informal groups and their effect on productivity was also recognized by Hawthorne studies. (Carey,1967).

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Aspects affecting workplace economics-part-3

7. Communication Channels

            Communication channels are the life line of an organization. They should take into account economic aspects of the organization and the feelings of people working in it.

Communication is the most important aspect of workplace environment. It has the enormous power of making or marring the work place environment. One has to first understand the meaning of communication to understand its implication, relevance and impact in the work place. (Ivancevich & Matteson, 2002)

                Communication in the traditional sense means conveying your feeling in words to the listener or required person. But modern day developments changed its meaning and context completely. Communication now has varied meanings and contexts communication in the modern sense has widened its meaning “to convey what you mean to the targeted listener or audience in a way they understand what you mean correctly”.

              Communication at workplace has wider perspective, simply because the subjects and objects of communication process are more in number. (Ivancevich & Matteson, 2002).To be precise, there is Manager-Supervisor communication, Supervisor-Supervisor communication, Manager –Employee communication, Employee-Employee communication and the same in the reverse order up the ladder. No two communication processes are alike in the sense that for example Manager-Employee communication is different from Employee –Manager communication. With so many types of communication processes in fray, it is quite possible that things do not move smoothly unless the communication is effective.” An effective communication is one which is clear and precise by the communication and easily and unambiguously understood by the receiver”. (Ivancevich & Matteson, 2002)It should be  fear and apprehension-free and ego-free. Let us now see what ineffective communication or lack of communication does to an organization. The major effects of ineffective communication can be (1.)Misunderstandings,(2.)Adverse effect on employee’s performance, (3.) Bad effect on company’s  performance.

              Ineffective communication or poor communication leads to conflict and is frustrating to employees. Poor and effective communication from Managers makes them unable to express their thoughts and guidance to the workers clearly leading to worker’s ineffectiveness to perform well according to company’s objectives.( Muchinsky,2003).

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Aspects affecting workplace economics-part-2

4. Mutual Cooperation

               People depend on cooperation and help from others to complete their work. Their behaviour is determined by social context. ‘You do your work and get home’ is the principle of earlier years. Present day requirements of workplace have made sole performances almost extinct. Most of the tasks are almost to be done by teams and not individuals. For the team to work successfully, mutual dependence among the members of the team is essential.( Krumm, 2001).The social context nature of the organizational workplace makes it a similarity to the society where people freely exchange ideas and help each other. They cannot immediately leave this garb of social behaviour and put on organizational behaviour cloak and hence this similarity. ( Krumm, 2001).

 5. Informal Group

            Informal group moulds the attitude and performance of workers to a great extent. The requirements of the company impose a one-point program on the worker’s work. The work becomes monotonous and the job mechanical. After sometime, the worker reaches a stage where the worker works to make a living .Such work lacks in quality and creativity. But if the work place environment creates an atmosphere suitable for existence of informal groups, the worker looks forward everyday to go to the factory. (Luthans, 2002)The workplace becomes his first home. He develops and attitude of ‘living to work’ instead of ‘working for living’. He bristles with positive attitude and an enthusiasm for quality work. Such a worker is the imminent requirement of present day company and such a worker makes and invaluable human capital for the company.

6. Rules and Regulations

              Rules and Regulations moderate and modify while informal group moulds and models and impacts the behaviour of people strongly. Rules and regulations are in general viewed by workforce as restrictions on their actions. While they are usually the prescriptions for orderly management of an organization, workers have a feeling of suppression from them. They surrender to these rules and regulations with a feeling of resignation even though those rules are not very stringent. Informal groups on the other hand confer a feeling of freedom for the workers. ( Krumm, 2001).With no tangible effort on their part, the informal groups silently show their impact on moulding and modeling the behaviour. Such behaviour infused by informal groups is infact much more pleasant and acceptable than the one denied to be instilled by rules and regulations. (Luthans, 2002).

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Aspects affecting workplace economics-part-1

The Human Relations Movement’s objects became more extensive and gave birth to more intense study and research. (Human Relations Movement, 1998). The toil is found worth the trouble. The following aspects emerged from various studies.
1. Social system nature of organizations
            Organizations are not merely technical and economic systems but are social systems as well. The entities are not merely organizations which use technology for production and pay the workers for their work. They are much more than that. They are social systems in the sense that the workers establish many relations amongst them selves like those in any social group. (Greenberg& Baron 2003).
2. Need-based motivation of the people
               People are motivated by many needs. This stands in stark contrast to the traditional belief that monetary benefits like a hike in salary or a gift are enough to motivate a worker. Many a time a pat on the back for the good work done by a worker works more wonders than a monetary incentive or a gift . Many issues and areas were found where the needs of the workers cannot be met with to motivate them. (Jewell, 1998)
3. Nature of Behaviour of workers
             People are not always likely to behave in a logical or rational manner. The way of behaviour is let known to every employee at the entry point itself into the organization. The employees are expected to stick to this code of behaviour. But, as we have already discussed, the work place is like a social setup. People in such a setup do have all the feeling, frustrations, relations, hilarious moments, conflicts and reconciliations present in a social setup. These give rise to certain occurrences which are not always strictly in line with the code of behaviour. (Greenberg& Baron 2003).So any violation of code of behaviour, before being viewed seriously, should be analyzed from this angle also. People may sometimes even forget that they are in their workplace and their behaviour is to be controlled by a code. They give vent to their feelings and frustrations and the same may not be rational or logical. (Greenberg& Baron 2003).
              Some people are sociable and aggressive while some others are silent and submissive. Some are punctual and hardworking while some others are lazy and lack punctuality. Some are optimistic and assertive while some others pessimistic and reserved. (Greenberg& Baron 2003).
             These basic qualities of different people are complex and difficult to interpret and come out only on the demands of the situation. To complicate matters further, personality is a complex and indefinable concept. (Greenberg& Baron 2003). It has to be defined from different perspectives. The employee’s personality together with his attitude decides his behaviour and job performance in an organization. When the personality itself is so complex to analyze and define, it would be hasty and catastrophic, to expect the outcome to be logical and rational. Dealing with it should be objective but not subjective. (Greenberg& Baron 2003).


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Workplace and Need for Workplace Economics

 Workplace

Workplace in this context does not mean the traditional definition of factory or office. Workplace today is real as well as virtual. It is real as far as factory or office is concerned. But where one is outside these two on a company’s job, it is still a work place.

                         Need for Workplace Economics    

The first question that invades one’s mind before dwelving deep into subject is,”Is there so much need and concern for employee welfare?”. There are good number of arguments for an affirmative answer to this question.(Champoux, 2003).

Science and technology, no doubt, brought in economic progress and improvement in standard of living. But these improvements did not satisfy the employees .They still complained of monotony of job, lack of job satisfaction and indifferent, apathetic and egoistic attitude of supervisors. Even the best of the organizations, known for their human resources management skills became centers of attrition (Champoux, 2003). The phenomenon confounded the management experts and researches to find an ideal way of running an organization. Developments in the field of psychology redefining human needs, World War I and the resultant economic depression raised serious questions on some of the basic presumptions of Scientific System of Management. (Taylor, 1911)

The Hawthorne studies, the first of their kind to peep into the strategies of manpower management, revealed that the response of the workers to classical approach in motivation by economic rewards is not very encouraging. The requirements and aspirations of workers are found to be different. The workers wanted to be accepted by their group. (Brannigan & Zwerman,2001). The Hawthorne studies indicated to the Managers that they should understand the organization not merely as producers of goods and services but representatives of social systems. (Brannigan & Zwerman,2001).The Hawthorne studies, by their revolutionary revelations laid foundations for further research in manpower management triggering a Human relations movement.

Conventional Managers always believed that economic incentives could motivate the worker to put forth his best. The Conventional Manager could not be found fault with for this attitude because those were the times when only physical work was the only target to be extracted. But as time progressed, business became more complex and workers could no more be expected to be contributors of mere physical work. New ideas and philosophies like motivation, team work, creativity and soft skills made their entry into workplace dictionary. Mere economic incentives are not sufficient to motivate the workers to respond to new requirements. Something more of environmental, social, psychological and identity requirements are found needed to respond to the demands of the situation.

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