‘He’s making a list

He’s checking it twice;

He’s gonna find out who’s naughty or nice

Santa Claus is coming to town’

This morning, as I flicked through Twitter and opened number 12 on my advent calendar, I found an article with the headline, ‘If you want to be a better leader, try being nicer’. It was published on the World Economic Forum website on July 22 this year and had been written by Dr Travis Bradberry. It was retweeted today by that colossus on the landscape of occupational stress, as someone once described him to me, Professor Cary Cooper.

The article cited research showing that “boss inflicted stress” had a strong link to heart disease, added significantly to health care costs, caused poor performance, unwillingness to seek promotions and quitting.

It then went on to say that nice bosses don’t just prevent the health and motivational problems, but also create benefits that the ‘hard-nosed bosses can’t’. Self-sacrificing and helpful bosses brought out the best in their employees who were more helpful and committed to their teams.

Could the simple idea of nicer bosses have impact on our productivity problem? As I asked myself this question, I realised I was going to have to understand more about our productivity problem, so I went to my go to guy for all things economical, Ross Gittins. He wrote a blog on December 3 commenting on the Productivity Commission(PC)’s discussion paper on improving Australia’s productivity released at the end of November.

In his blog he said there is global anxiety about stalling productivity. In Australia our productivity has been stalled since 2004, but some are wondering whether our measurement tools are the problem. According to Gittins, “productivity is a measure of an economy’s (or a business’s) ability to convert inputs of resources into outputs of goods and services”.

The (PC) chooses to measure multi-factor productivity, that is it assesses the output per unit of capital inputs as well as the output per unit of labour inputs, rather than just measuring the output in relation to labour inputs. In doing so they measure productivity gains from technological advancement and increases in human capital.

According to Gittins this means that the PC (and others) have been wringing their hands for years about the slowdown in productivity, but can’t “put its finger on a causal factor we could do something about”.

Gittins goes on to refer to the work of John Quiggin who says that multi-factor productivity is a good measure of the production of goods, but not as good for the production of services.

Furthermore the primary engine for productivity in the modern economy is information, and much information is free and information can’t be used up. In other words, traditional economic theory was developed for the economies following the Industrial Revolution, not for the economies in the Information Age.

Putting the elasticity or non-elasticity of information aside (I can never remember which, it always makes me think of underwear) a greater focus on human capital in the measurement of productivity by the PC is something relevant to us.

This is illustrated well with the research report released by Safe Work Australia in November, authored by Harry Becher and Maureen Dollard, ‘Psychosocial Safety Climate and Better Productivity in Australian Workplaces’.

Nice bosses & the Psychosocial Safety Climate

The research (above) “explores the productivity decline problem in Australia and presents an analysis of human capital focussed solutions for improving productivity”. They did this by examining the Psychosocial Safety Climate, and engagement, and their association with absenteeism, and presenteeism.

Psychosocial Safety Climate was defined by them as “the shared perception of employees that senior management have prioritised their mental wellbeing by creating a psychologically healthy workplace”. Also known as, having nice bosses.

They pointed to other research that found for every dollar spent on “improving individual skills and resilience; supporting employees with mental health conditions, and improving workplace climate” a return of $2.30 can be expected.

Becher and Dollard analysed data from a representative sample of over 4,000 interviews in the third round of the Australian Workplace Barometer Project undertaken in 2014-15. They found that low Psychosocial Safety Climate of peoples’ work was associated with 42% higher sickness absence, 72% more performance loss (presenteeism) with a cost/employee/year of $1887.

The study looked at one “psychosocial hazard mitigatory”, engagement. It found that people who worked in places with low engagement had 12% more sick days than people in high engagement workplaces, and 46% more when compared to medium and high engagement workplaces.

The average cost of loss of performance associated with low engagement was $4,594/employee/year. The converse, what is the performance gain of having high engagement, was interesting. The researchers report “no detectable performance loss”.

So their research failed to find the nice boss effect, described by Bradberry, that went beyond the prevention of health and motivational problems and delivered a commitment and helpfulness of employees. For that to be in evidence a gain in performance, not just protection from a loss of performance would be seen.

We need to be able to tell employers, not only that they have a problem, but how to fix it. Otherwise we are open to Gittins’ criticism of the Productivity Commission, that we have been, “wringing (our) hands for years, … never once … able to put (our) finger on a causal factor we could do something about”.

Nevertheless at a time the PC admits it needs ‘new and novel ideas’, and that ‘more of the same is not likely to be helpful’, interventional research in worker health that builds on these findings will be gold dust.

Many of us are bosses: are you putting into practice what we now know about creating mentally healthy workplaces? This year, have you been naughty or nice?

First published in Thomson Reuters Inside OHS, 19/12/2016

Inside OHS Editor: Stephanie D’Souza; (02) 8587 7684; Stephanie.D’Souza@thomsonreuters.com