The issue of employee health and wellbeing is increasingly a focus of attention from both Government and employers, with a growing recognition of the importance of this in terms of social, economic and employment policy objectives and the need for robust workplace programmes that seek to raise awareness and understanding, and provide effective management interventions. The new Health and Work Assessment and Advisory Service, which is being introduced by the Government to help employers in managing longer-term sickness absence, is one example of an initiative in this area. However, employers are facing a growing number of challenges when looking at this issue. Deborah Moon, HR Consultant, considers some of the key findings from two new reports and the implications for managing employee health and wellbeing within a public sector context.

Changing workforce demographics and the UK’s ageing population are giving rise to an increasingly diverse and complex range of health and wellbeing concerns and considerations, with staff groups ranging in age from late teens/early twenties to those who continue working beyond the traditional point of retirement. In addition, there are a growing number of employees within the so-called “sandwich generation”, struggling to cope with the demands of caring for both children and elderly parents or other relatives. Both work and non-work pressures can have a serious and detrimental impact on employees’ mental health and wellbeing, with reported increases in stress-related and similar problems.

There are also concerns that the unhealthy lifestyles of many people within the UK are also creating problems in the workplace, for example, from alcohol and drug use, smoking, obesity and a general lack of fitness. Not only can these give rise to health conditions resulting in staff absences, but they can also affect employee performance and productivity. At the same time, there are concerns about the rise in “presenteeism”, ie people coming into work when they are unwell, and the detrimental impact this can have, both on the employee and their health condition and on performance in the workplace.

Two recent reports have considered the subject of employee health and wellbeing, providing a number of useful insights for employers from different perspectives:

  • A recent paper from the Department for Business Innovation and Skills (DBIS), Does Worker Wellbeing Affect Workplace Performance? considered the particular issue of employees’ “subjective wellbeing” (SWB) and the evidence regarding the links between this and workplace performance;

  • The CIPD’s Absence Management Annual Survey Report 2014, which considers, and provides an analysis of, absence management trends, policies and practices.

Does Worker Wellbeing Affect Workplace Performance?


This DBIS paper considers what is meant by “subjective wellbeing”, referring to the Organisation for Economic Co-operation and Development (OECD) definition, ie “all of the various evaluations, positive and negative, that people make of their lives, and the affective reactions of people to their experiences”. It is a term that is used to cover a number of different aspects of a person’s subjective mental state. The paper reflects that, for many years, policy makers have focused on GDP growth as the best means of securing a better quality of life for citizens but that attention has recently turned to other measures, including SWB. One of the reasons underlying this shift in thinking is that citizens in developed countries have not necessarily become “happier” as a result of increased prosperity — an observation that has also been commented on within HR and other media.

The study covered by this paper therefore sought to address the following four questions.

  • How is wellbeing in the workplace measured and defined?

  • What employee and job characteristics influence wellbeing in the workplace?

  • What employer practices have the greatest positive impact on wellbeing in the workplace?

  • Is there any evidence to link employee wellbeing and business performance?

The paper explains the stages of, and methodology adopted by, the study, including consideration of the factors that affect employees’ levels of SWB at the workplace, the potential ways in which employees’ SWB might affect job performance, and the likelihood that such effects might form a causal link between SWB and overall organisational performance. The study incorporated a review of relevant research literature and an analysis of outcomes from the 2011 Workplace Employment Relations Survey (WERS) related to this issue.

The paper summarises, and then describes in more detail, the key findings from the study and resulting policy implications.

The influence of employee and job characteristics and employer practices on SWB in the workplace

The paper reflects that, although an individual’s SWB at work is influenced by both their own characteristics and those of their particular job and workplace, it is the features of the job and workplace that are of most interest, as these are typically more amenable to policy and employer influence. However, it is still important to understand the relationship between individual characteristics and SWB, as these will also contribute to shaping employees’ experiences of work. An employee would be expected to have high SWB at work if their job and workplace had features that were generally desirable and their own characteristics and mental processes also encouraged high SWB.

The paper provides an illustrative figure of both individual and job characteristics that can affect SWB, for example:

  • personality, age, gender, values and preferences of the individual, their family and social circumstances

  • the level and nature of job demands, control, role clarity, security, pay and equity, as well as the workplace environment, fellow employees and HR practices.

It identifies the characteristics of jobs that influence SWB at work and the circumstances in which SWB tends to be higher, including:

  • autonomy over how the particular job is undertaken and a measure of control in relation to the broader organisation, eg participation in decision-making

  • variety in the work

  • clarity over what is expected and feedback on performance

  • opportunities to use and develop skills

  • supportive supervision and positive inter-personal contact, including with customers/clients as well as managers and co-workers

  • perception of fairness in the workplace, both for the employee themselves and their fellow workers

  • higher pay, although not solely the absolute level of pay but also how this compares to other workers (internal equity)

  • physical security, including safe working practices and a pleasant work environment

  • job security and career prospects

  • perception of “significance”, both for the worker themselves and the value of their job to society (an aspect which is, perhaps, often referred to in relation to work within the public sector and how the opportunity to “make a contribution/difference” to their local communities is often a highly rated feature).

The paper indicates that SWB tends to be lower where job demands are particularly high, not only from the work itself (amount and type) but also from any incompatibility with outside pressures.

The above list will probably not come as any surprise to HR professionals, as they are factors that are fairly well-established in relation to employment practices, but the list does highlight those areas in which employers have an opportunity to influence SWB through their approach to organisational and job design and through the employment practices they adopt.

However, as the paper acknowledges, this is not a straightforward issue, and other factors will come into play. These include the value that individual employees place upon the particular characteristics of their job and the differing expectations they may have in relation to their work, eg whether an individual has low or high expectations of it. This means that, when considering any changes/interventions that seek to increase SWB at work, employers need to take into account the likely differing effect on different employees and how individual traits, as well as job and workplace characteristics, will influence and shape potential outcomes.

The influence of HR practices

The paper also considers the relationship between an employer’s HR practices and employees’ SWB, reflecting that this is not always “clear-cut”. Practices may affect different aspects of an employee’s job in different ways, and may also have different effects on different employees. For example:

  • practices that aim to provide greater employee involvement may provide greater autonomy but may also lead to increased demands on individuals

  • practices that focus on the needs of a particular group of employees may give rise to feelings of unfairness amongst others.

Practices are also likely to be affected by workplace characteristics, eg the size of organisation and how well suited the nature of the arrangements are to that particular context.

The paper reflects that the evidence in terms of the impact of HR practice on SWB is “inconclusive” and that there is a case for more robust studies in this area. It indicates that evidence points to a “positive correlation” between HR practices and the job-related anxiety measure of SWB, but also a “positive, or at least neutral” impact on the job satisfaction measure.

The impact of SWB on workplace performance

The paper reflects that there is a considerable amount of evidence to indicate a positive association between SWB and individual job performance, with some evidence that higher levels of SWB may lead to (cause) higher levels of performance in some circumstances. It identifies three “causal mechanisms” which can give rise to this:

  • by affecting employees’ cognitive abilities and processes, enabling them to think more creatively and be more effective at problem-solving

  • by affecting attitudes to work, raising the propensity for co-operation and collaboration

  • by improving physiology and general health and immunity, enabling speedier recovery from illnesses and securing greater levels of energy and effort.

Again, the paper indicates that this issue is not necessarily straightforward and that many other factors are likely to influence the links between SWB and employee performance, including the particular work context, nature of the role and level/type of interaction with colleagues and customers.

The relationship between SWB and job performance may also not necessarily be reflected at workplace level. For example, low levels of SWB amongst a small group of workers may have a wider negative impact across the organisation. Similarly, the level of contribution made by different workers may not have the same impact in terms of overall workplace output, meaning that who has high or low SWB may be the crucial issue.

Findings from the 2011 Workplace Employment Relations Survey

As indicated previously, the study also involved an analysis of the 2011 WERS to explore the relationship between SWB and performance at workplace level. This was considered using the two most studied aspects of SWB, ie job satisfaction (pay, sense of achievement, training receipt, job autonomy, skill development opportunities, job security, scope for initiative, involvement in decision-making and satisfaction with the work itself) and job-related affective feelings (the frequency with which employees felt tense, depressed, worried, gloomy, uneasy and miserable). Workplace performance was measured by reference to financial performance, labour productivity, and the quality of output/service.

The paper refers to a “clear, positive, statistically significant relationship between the average level of job satisfaction among employees at the workplace and workplace performance.” Workplaces experiencing an improvement in job satisfaction also experienced an improvement in performance. However, there was no association found between job-related affect and workplace performance.

The paper summarises the more detailed findings from this analysis, including that:

  • workplaces with “very satisfied” employees had higher labour productivity, higher quality of output, and higher overall performance. Workplaces with “very dissatisfied” employees had lower financial performance and lower overall performance

  • non-pecuniary aspects of job satisfaction correlated with overall workplace performance, the quality of output (and, less robustly, with labour productivity), whereas pay satisfaction was positively associated with workplace financial performance but not with other performance measures

  • increasing overall average employee job satisfaction was associated with increases across all workplace performance measures

  • increasing average non-pecuniary job satisfaction was positively associated with changes across all workplace performance measures but increasing pay satisfaction showed varied associations with performance measures

  • workplaces with rising job dissatisfaction experienced deterioration in all performance measures, whereas workplaces with an increase in “very satisfied” employees experienced rising quality of output/service, but not financial performance or labour productivity.

The paper reflects that the study’s findings are consistent with the proposition that employers who are able to raise employees’ job satisfaction may see improvements in workplace performance in terms of financial performance, labour productivity and quality of output/service.

The implications for policy makers and employers

The paper considers the implications of the study’s findings, referring to the prima facie case for employers to consider investing in the wellbeing of their employees on the basis of likely performance benefits. If employers are able to raise their employees’ SWB, the theory and evidence suggests that they are likely to see improvements in workplace performance. However, it also notes that evidence of a causal link between the job-related affect measure of SWB and workplace performance is limited, and that the analysis of the WERS found no such association. This suggests that investing in that dimension of employee wellbeing is less clear.

The paper also highlights the broader benefits that can result from promoting employee SWB , beyond those specific to employers, eg the “spillovers” into employees’ family life, participation in social activities and use of Government services, such as health, welfare and social care services (an aspect of particular relevance to public service providers). This reinforces the arguments for moving from a purely economic view when measuring national performance and progress, and considering other broader indicators.

The paper reflects that it is not yet fully understood what it is about jobs and the working environment that change employees’ SWB, although there are some things about which quite a lot is known. For example, it refers to the relationship between higher pay and higher job satisfaction, pointing out that it is not only pay levels that are important but also pay relativities. This would appear to align with the view that it is important for employers to ensure there is both procedural and distributive fairness when applying pay and performance measures and outcomes.

HR commentators often refer to the need for employers to avoid a “one size fits all” approach to developing their employment practices and the paper refers to the importance of taking account of the particular workplace context. While certain policies or practices may, on average, engender greater employee SWB, this will not necessarily be the case everywhere, nor will this necessarily translate into improved workplace performance. Different policies might work better for some employers than others and, therefore, there is a need to think carefully before deciding to adopt a particular approach, ensuring this is appropriate for the particular organisation, its style/culture, nature of work and work environment. And with an increasingly diverse workforce in terms of age and other characteristics, the needs and circumstances of different employees must also be taken into consideration, ensuring that wellbeing initiatives are appropriately aligned to employers’ workforce demographics, while, at the same time, taking account of any potential equalities implications.

CIPD Absence Management Annual Survey Report 2014

This report, produced by the CIPD in partnership with Simply Health, provides an annual survey of absence management trends, policy and practice. As well as providing benchmarking data on absence levels, the costs and causes of absence, it also includes a focus on employee wellbeing. It also provides a useful insight into the key health and wellbeing issues and concerns facing employers, highlighting the impact of caring responsibilities on absence levels and considering the extent to which organisations have policies in place to help and support employees in managing these.

Encouragingly, the report finds an overall decrease in absence levels from 2013 (from 7.6 to 6.6 days a year per employee), including in the public sector, although notes that this is still higher than in the private sector (7.9 days and 5.5 days respectively). Other positive trends include an increased focus on attendance strategies and development of line manager capability in managing absence.

The report reflects on the importance of considering this issue within the wider economic context, with many respondent organisations still reporting financial concerns, particularly within the public sector. As the report identifies, the resulting pressures arising from this continuing difficult economic and employment context illustrate the importance of employers ensuring sufficient attention is given to health and wellbeing issues and the costs and other negative effects that can occur if this is ignored. Indeed, it is probably even more important to maintain (and even increase) a focus on and investment in this issue during such times. The report finds that more could be done by employers in this area.

Minor illness remains the most common cause of short-term absence, followed by musculoskeletal injuries, back pain and stress. The most common causes of long-term absence are acute medical conditions, stress, musculoskeletal injuries, mental ill health, and back pain. Not surprisingly, the public sector is more likely to rank stress and musculoskeletal injuries among the top five causes of both short- and long-term absence. Organisations that had made redundancies in the previous six months were most likely to include stress among their most common causes of short- and long-term absence.

The report draws attention to the number of organisations reporting an increase in stress-related absence, particularly within the public sector and larger organisations, considers the reasons for this, for example, workload, non-work relationships/family, and actions being taken to address this.

The report also notes the increase in reported mental health problems, eg anxiety and depression, and the initiatives adopted by organisations to support employees experiencing these types of problems, eg counselling, employee-assistance programmes and flexible working options.

The impact of socio-economic factors, eg the ageing population and growing number of employees with caring responsibilities, is a feature of the report, noting that this is a trend that is only likely to grow. As noted above, such responsibilities are identified as one of the underlying causes of the increase in stress and mental health problems experienced by employees. Again, the report looks at what is being done by employers to support those with caring responsibilities, including flexible working and different types of leave, either paid or unpaid.

The rise in “presenteeism” is another aspect of the report, with a third of organisations reporting an increase in people coming to work ill in the last 12 months, and an even greater number in organisations where redundancies are anticipated. Organisations that experienced a rise in “presenteeism” were also more likely to report an increase in stress-related absence and mental health problems. As the report notes, presenteeism can be more detrimental to businesses than absence, so it is concerning that half of those who experienced a rise in this area had not taken steps to discourage it.

The report considers the incidence of organisations with a wellbeing strategy, finding these are more common in the public sector (traditionally found to be more proactive in this area) and larger organisations, and looks at the type of such benefits that are offered, eg counselling, employee-assistance programmes and health promotion initiatives. As the report identifies, the continuing uncertain economic and employment context being experienced in this sector, with the ongoing deficit reduction programme, organisational change, restructuring and redundancies, means that it is particularly important to maintain and develop support and provision in this area, seeking to safeguard employee health and wellbeing during such difficult times. With the reported improvements in the broader economy and employment market, a workplace culture that recognises and reflects the importance of employee wellbeing is more likely to both attract and retain staff. By seeking to build a caring and supportive environment in which employees feel they are able to make a valued contribution, employers are more likely to develop and maintain staff commitment and engagement.

Maintaining and developing employee health and wellbeing

Both of the above reports are further evidence of the importance of developing and maintaining employee health and wellbeing, not just from an employment/business case perspective, but also for the wider socio-economic benefits that can accrue. Some of the main issues for consideration would appear to be the following.

  • Ensuring there is a good understanding of the key health and wellbeing issues affecting the particular workforce and of the resulting costs from both absenteeism and presenteeism, to support the business case for resources and enable approaches and interventions to be appropriately targeted. Good quality information and the analysis and utilisation of workforce data are key to this.

  • Taking an integrated and holistic approach to this issue; many employers already have in place a range of workplace support measures and employment benefits, but they are often not drawn together in a way that ensures they are effectively utilised. Connecting all these different components can assist from both a cost and employment-relations perspective.

  • Having a broad perspective that takes account of the range of different health and wellbeing concerns and considerations, both physical and mental, and provides both proactive and reactive interventions.

  • Monitoring and evaluating the effectiveness of these.

  • Developing line managers’ skills and capabilities in managing employee health and wellbeing, ensuring they are aware of the importance of this to the business/service and helping them to look for signs, either physiological and/or behavioural, that may indicate problems are occurring.

  • Communicating the range of support and benefits available, and how to access them, in order to develop employee understanding and encourage early reporting/identification of work and/or non-work related problems that may be having a detrimental impact on health and wellbeing.

  • Identifying and addressing workplace cultures and practices that cause, contribute to, or exacerbate poor health and wellbeing conditions and concerns. Taking proper account of those organisational and job design features and management/supervision arrangements that are most likely to give rise to a sense of employee wellbeing.

  • Promoting healthy habits and lifestyles and encouraging and supporting employees to take personal responsibility for this.


Does Worker Wellbeing Affect Workplace Performance? DBIS, available on the GOV.UK website.

Absence Management Annual Survey Report 2014, CIPD available on the CIPD website


Deborah Moon is a Consultant in Human Resources and is a regular contributor to Croner-i HR for Local Government. Croner-i HR for Local Government is an online employment law and practice reference source designed specifically for HR Managers and their teams in local government.

Last reviewed 4 December 2014