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Enhanced flexibility in the workplace linked to a reduced risk of cardiovascular disease

A recent study led by Harvard T.H. Chan School of Public Health and Penn State University suggests that increasing workplace flexibility might decrease the likelihood of cardiovascular disease among employees. This research found that in environments where measures were taken to minimize the clash between work demands and employees’ personal or family responsibilities, those employees who initially faced a higher risk of cardiometabolic issues, especially those of older age, witnessed a significant decrease in cardiovascular risk. This decrease was comparable to the reversal of five to ten years of age-related cardiometabolic deterioration.

Scheduled for publication on November 8 in The American Journal of Public Health, this study pioneers the evaluation of how modifications in workplace conditions can influence cardiometabolic health risks. Lisa Berkman, the Thomas D. Cabot Professor of Public Policy and Epidemiology at Harvard Chan School and director of the Harvard Center for Population and Development Studies, co-led the study. Berkman highlighted the significance of work conditions as crucial social determinants of health. She noted that alleviating work-related stress and work-family conflicts led to a noticeable decline in cardiovascular risk among the more susceptible workers without adversely affecting their productivity. This outcome holds significant implications for employees in low- and middle-income brackets who generally have lesser control over their work schedules and demands, facing more substantial health disparities.

The study was part of the Work, Family, and Health Network’s efforts. It introduced an intervention aimed at enhancing work-life balance. Supervisors received training on recognizing and supporting their employees’ personal and family needs alongside work performance. Additionally, supervisors and their teams participated in practical sessions to explore new ways to increase employees’ autonomy over their work schedules and tasks.

The intervention was tested within two companies: an IT firm with 555 employees and a long-term care provider with 973 workers. The former mainly comprised male and female employees in high and moderate-salaried technical roles, whereas the latter predominantly employed low-wage female caregivers. Control groups from other units/sites continued their usual routines without the intervention.

Researchers tracked various health indicators of these 1,528 employees, including systolic blood pressure, body mass index, glycated haemoglobin levels, smoking status, HDL cholesterol, and total cholesterol, at the start and again 12 months later. These metrics were used to compute each employee’s cardiometabolic risk score (CRS), predicting the risk of developing cardiovascular disease within ten years.

Although the intervention did not universally affect employees’ CRS, it notably benefited those with a higher initial CRS. Specifically, IT and long-term care employees with elevated baseline scores saw their CRS decrease by the equivalent of 5.5 and 10.3 years of age-related changes, respectively. Age also played a critical role, with employees over 45 with a higher baseline CRS more likely to experience reductions.

Orfeu Buxton, professor of biobehavioral health at Penn State and co-lead author of the study, explained that the intervention aimed to gradually transform the workplace culture to diminish the conflict between professional and personal life and thereby enhance employee health. The positive outcomes observed underscore the potential for such initiatives to be adopted more widely to improve workplace health conditions.

More information: Lisa F. Berkman et al, Employee Cardiometabolic Risk Following a Cluster-Randomized Workplace Intervention From the Work, Family and Health Network, 2009–2013, American Journal of Public Health. DOI: 10.2105/AJPH.2023.307413

Journal information: American Journal of Public Health Provided by Harvard T.H. Chan School of Public Health

Taking short breaks from tasks appears promising in enhancing wellbeing

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A synthesis of 22 previous studies indicates that taking brief pauses—stepping away from a task for durations of 10 minutes or fewer—is typically linked with a decrease in tiredness and an increase in energy. Patricia Albulescu from the West University of Timișoara, Romania, and her team unveiled these insights in the open-access journal PLOS ONE on August 31, 2022.

The issue of burdensome workloads and extended shifts that many workers are currently facing is becoming more prominent. An increasing volume of research is delving into various facets of how employees manage and recuperate their energy, with a significant emphasis on recovery following the conclusion of the workday. Yet, the impacts of recuperative processes during the workday are still ambiguous.

Albulescu and her team undertook a meta-analysis of 22 studies from 19 published papers over the past three decades to enhance understanding in this area. These studies investigated the possible advantages of brief interruptions from assigned tasks. The tasks within these studies varied, encompassing simulated work activities, actual work-related tasks, and cognitive tests unrelated to work. The nature of the breaks also differed, ranging from physical pauses to relaxing pursuits and even to more stimulating activities like watching videos.

The statistical examination of the results from these combined studies demonstrated a consistent link between short breaks and heightened energy and diminished fatigue among participants, suggesting that such breaks could enhance wellbeing.

No direct correlation was discovered between taking short breaks and improved task performance. However, a more detailed data analysis revealed that longer pauses correlate with improved performance, particularly in creative or administrative tasks, albeit to a lesser extent with tasks that demand higher cognitive effort.

These findings advocate for incorporating short breaks as a viable method for promoting well-being in the workplace. Nevertheless, longer breaks might be necessary for recuperating from tasks that are more mentally taxing. Future investigations could explore the benefits of extended breaks and seek to answer other outstanding queries, such as identifying the most beneficial activities to undertake during a brief hiatus.

The researchers concluded: “Our findings indicate that short breaks are effective in maintaining high energy levels and reducing fatigue.”

More information: Patricia Albulescu et al, “Give me a break!” A systematic review and meta-analysis on the efficacy of micro-breaks for increasing well-being and performance, PLoS ONE. DOI: 10.1371/journal.pone.0272460

Journal information: PLoS ONE Provided by PLOS

AI transforms the work of middle managers

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Incorporating artificial intelligence (AI) into the digital transformation landscape marks a pivotal shift, introducing challenges and modifications to managerial job roles. Research by the University of Eastern Finland illuminates how embedding AI systems within service teams elevates the demands placed on middle management, particularly in the financial services sector. This industry has witnessed a rapid deployment of AI, which can now undertake a substantial portion of tasks traditionally performed by humans. In this evolving workplace, professionals frequently find themselves in hybrid teams composed of human employees and AI systems, necessitating a recalibration of expectations surrounding interaction, human relationships, and leadership.

This detailed analysis, spearheaded by Jonna Koponen, Saara Julkunen, Anne Laajalahti, Marianna Turunen, and Brian Spitzberg, and funded by the Academy of Finland, was showcased in the esteemed Journal of Service Research. It delves into the experiences of middle management as they navigate the integration of AI systems into their workflows within the financial services domain.

The study engaged with 25 seasoned managers from a premier Scandinavian financial services entity, which has extensively integrated AI into its operations in recent years. The findings underscore the complexity of AI integration into service teams, highlighting the nuanced demands it places on middle managers. These managers find themselves performing a delicate balancing act, addressing novel challenges, while the introduction of AI allows for the offloading of routine tasks, thereby enhancing productivity. Despite the rapid pace of change and increasing job demands, the shift enables managers to allocate more time to developmental work and innovation. Yet, the advent of AI also introduces new routine tasks, particularly in monitoring and overseeing AI operations, as Assistant Professor Jonna Koponen pointed out.

A notable aspect of the study revolves around the evolving social dynamics within management, influenced by perceptions of AI as a technological tool or a team colleague. This distinction becomes particularly pronounced with integrating advanced AI forms, such as chatbots, which are often anthropomorphized and considered team members. Such developments prompt the reevaluation of team interpersonal relationships and raise concerns about job security among employees wary of new AI implementations.

The ethical implications of integrating AI into workplace practices also emerged as a significant concern for managers, who now invest more time pondering the fairness and impact of AI-driven decisions. The research underscores the necessity for middle managers to acquire diverse skills, encompassing technological proficiency, interpersonal communication, emotional intelligence, and adaptability to manage effectively in an AI-integrated environment.

Despite AI’s capability to automate various tasks, the study concludes that AI systems are yet to fully replicate the human aspects of management, such as motivating and inspiring team members. Therefore, Koponen advocates a greater emphasis on empathetic and interactive skills when recruiting new managerial personnel for roles that involve leading AI-integrated teams. This nuanced approach to leadership in the age of AI reflects a broader understanding of the complex interplay between technology and human management, underscoring the evolving nature of leadership roles in the modern workplace.

More information: Jonna Koponen, Saara Julkunen, Brian Spitzberg et al, Work Characteristics Needed by Middle Managers When Leading AI-Integrated Service Teams, Journal of Service Research. DOI: 10.1177/10946705231220462

Journal information: Journal of Service Research Provided by University of Eastern Finland

Employees often refrain from taking breaks even when experiencing significant stress

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Intense work demands heighten employees’ desire for breaks. Yet, recent findings suggest that such demands might paradoxically deter them from taking necessary pauses at work, even though this leads to heightened stress, exhaustion, and diminished performance.

The University of Waterloo’s investigation revealed that employees often continued working despite their wish to stop for a breather. A likely cause for this reluctance could be the perceived pressure to complete tasks promptly.

James Beck, a professor specialising in industrial and organisational psychology at Waterloo, stated, “Our study offers an in-depth examination of the decision-making process behind taking breaks and sheds light on how both employees and their managers can optimise break time to enhance overall well-being and job performance.”

In their research methodology, the team initially questioned 107 employees regarding their motivations for taking or skipping breaks. Subsequently, they monitored an additional 287 employees, enquiring about their sleep quality, tiredness, performance worries, workload, and break frequency twice daily over five days.

The findings also highlighted a notable contradiction: despite evidence from prior studies indicating the positive impact of breaks on employee well-being and productivity, employees might hesitate to take breaks if they perceive a lack of support for break-taking from their supervisors. Contrary to the belief that breaks are unproductive, Phan emphasised that many employees take breaks to remain focused and maintain high performance.

Dr Vincent Phan, the lead author of the study conducted as part of his doctoral research in industrial and organisational psychology at Waterloo, remarked, “We understand that it might not always be feasible for employees to take more breaks. However, by improving work conditions that contribute to job dissatisfaction, employers could potentially decrease the necessity for breaks.”

The team aspires that their findings will enhance employee well-being and encourage further research into the broader structural and situational factors affecting the frequency and duration of work breaks.

More information: Vincent Phan and James W. Beck. Why Do People (Not) Take Breaks? An Investigation of Individuals’ Reasons for Taking and for Not Taking Breaks at Work, Journal of Business and Psychology. DOI: 10.1007/s10869-022-09866-4

Journal information: Journal of Business and Psychology Provided by University of Waterloo

Equalising rewards for women to match those of men could narrow the wage disparity

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The challenge of bridging the gender gap in representation and remuneration within STEM fields, particularly computer science, extends beyond merely increasing the number of women in these sectors, suggests research from Cornell University. The findings, put forth by Sharon Sassler, a sociology professor, and her team highlight that achieving parity involves addressing the economic returns women receive for their contributions, which should be on par with their male counterparts, more than just ensuring their presence in the workforce.

In their exploration, detailed in two recent publications, the researchers focus on computer science (CS). This discipline encompasses roughly half of STEM employment yet observes a stark underrepresentation of women and a persistent wage gap compared to their male peers. Despite a general uptick in women participating in STEM over the years, computer science has not seen a proportionate increase in female involvement or a significant reduction in pay disparity.

Sassler, involved in the study titled “Factors Shaping the Gender Wage Gap Among College-Educated Computer Science Workers,” published in PLOS-ONE, emphasizes that the core issue lies in the unequal economic benefits afforded to women for the same qualifications and achievements as men, such as degree attainment. This discrepancy becomes evident when examining data over a decade, showing that women in CS roles earn approximately 86.6 cents to every dollar earned by men, a figure that, while above the broader labour market’s average, still falls short of equity.

The research further delves into the origins of this wage gap, indicating that a significant gap persists even when controlling for variables like age, education, occupation, and ethnicity. This disparity emerges early in women’s careers, well before many choose to start families, debunking the notion that family responsibilities predominantly drive wage inequalities.

Moreover, the type of roles women occupy within the computer science sector partly explains the wage gap, with women more frequently found in managerial or analytical positions and men in higher-paying roles such as software development or network architecture. However, occupational differences only account for a portion of the wage gap, with the more significant issue being the differential value placed on the intrinsic qualities of women as partners, parents, and professionals.

Another study led by Sassler, “Cohort Differences in Occupational Retention among Computer Science Degree Holders: Reassessing the Role of Family,” published in Sociological Perspectives, sheds light on the employment trajectories of women with computer science degrees. It suggests that factors like marriage or parenthood do not significantly impact women’s likelihood of remaining in computer science occupations, contrary to their male counterparts, particularly fathers, who are more likely to exit these roles.

These findings underline a broader issue within the field of computer science, which not only presents barriers to the entry and retention of women but also exacerbates these obstacles for new generations of female graduates. The research collectively points to a need for a systemic reevaluation of how women’s contributions are valued and compensated in the tech industry, suggesting that addressing these economic disparities is crucial for closing the gender gap in both representation and pay within STEM, especially computer science.

More information: Sharon Sassler et al, Factors shaping the gender wage gap among college-educated computer science workers, PLoS ONE. DOI: 10.1371/journal.pone.0293300

Journal information: PLoS ONE Provided by Cornell University

Flexible and secure employment enhances the mental well-being of workers

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A recent comprehensive study across the nation reveals that implementing workplace policies offering flexibility and stability significantly enhances employees’ well-being and encourages them to utilise health services as necessary. Employment plays a crucial role in determining one’s health, with various job aspects positively or negatively impacting mental health.

Specifically, the study, spearheaded by a researcher from the Boston University School of Public Health (BUSPH), highlights job flexibility and security as critical elements influencing mental health in the United States. The research, featured in the JAMA Network Open journal, uncovered that adults in employment who enjoyed higher levels of job flexibility and security reported lower instances of severe psychological distress or anxiety. Additionally, these job features were linked to a reduction in the days employees worked while sick.

This study is the first to offer a nationally representative analysis of how job characteristics such as stability and flexibility affect mental health, absenteeism, and mental healthcare utilisation. The findings advocate for workplace policies emphasising flexibility and security, fostering a stress-reducing, healthier work environment that enhances employee well-being.

Dr. Monica Wang, the lead author and an associate professor of community health sciences at BUSPH, emphasises the significance of this research, especially in the wake of the COVID-19 pandemic, which not only worsened mental health disparities but also jeopardised job security. Individuals in lower-wage jobs, frontline workers, and marginalised communities felt this impact most acutely. Understanding the influence of job design and work environments on mental health is crucial in this context as workplaces adapt to evolving work norms.

The study leveraged data from over 18,000 US adults participating in the 2021 National Health Interview Survey. It evaluated job flexibility based on the perceived ease of altering work schedules for personal or family needs and job security based on the likelihood of job loss. The results indicated that greater job flexibility and security significantly reduced the chances of experiencing severe psychological distress and daily anxiety.

Dr Wang explains that predictable work schedules and the ability to accommodate personal or family obligations can alleviate stress and anxiety, offering individuals more control over their lives. Similarly, job security provides psychological stability, reducing absenteeism through enhanced job satisfaction, reduced stress, and financial stability.

The research also explored how these job characteristics influence work absenteeism. It revealed that employees with more flexible and secure jobs reported fewer days worked while ill, suggesting comfort in taking necessary sick leave. However, the impact on overall workday absences presented a complex picture, potentially reflecting the diverse nature of job flexibility and security, individual priorities, and workplace cultures.

Amid calls for universal paid sick leave in the United States, the only high-income country without such provisions, the study points to alternative company policies that could promote a healthy work-life balance. These include flexible work schedules, hybrid and remote working options, enhanced sick leave policies, and initiatives for employee skill development and career progression. Companies are encouraged to explore flexibility initiatives to discover what best supports their employees’ health and well-being.

Dr Wang’s research advocates for a holistic approach to workplace policies, emphasising the importance of flexibility and security in job design to support mental health, reduce absenteeism, and encourage a healthier, more productive workforce.

More information: Monica L. Wang et al, Job Flexibility, Job Security, and Mental Health Among US Working Adults, JAMA Network Open. DOI: 10.1001/jamanetworkopen.2024.3439

Journal information: JAMA Network Open Provided by Boston University School of Public Health

Employing globally versatile, highly skilled employees after their company’s downfall can serve as a tactical decision, notwithstanding a decrease in legitimacy

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Recent findings published in the Global Strategy Journal highlight the strategic advantage of hiring workers with highly specialized skills who are globally mobile, especially those who have been laid off due to their previous employer’s failure. This perspective is novel because it considers the dual aspects of legitimacy and mobility that such workers bring, even after being part of a failed enterprise. The study reveals that individuals laid off under these circumstances often face a significant loss of legitimacy, mainly if they were part of a division or located in a region implicated in the company’s downfall. Despite their rare and sought-after skill sets, this association weakens their negotiating leverage with potential new employers.

The research conducted by Kristina Vaarst Andersen from the Technical University of Denmark, Mark Lorenzen of Copenhagen Business School, and Agnieszka Nowinska from Aalborg University Business School employed a case study methodology. It examined the aftermath of a bankruptcy in the global bunker industry (OW Bunker). Their work provides a theoretical lens through which to view the mobility of workers across multinational corporations.

This study was propelled by the abrupt and highly publicized bankruptcy of a large Danish firm with a global footprint, alongside findings from an Organization Science study detailing the adverse career impacts on displaced lawyers in Boston. The case of OW Bunker was particularly intriguing to Vaarst Andersen and her colleagues because, contrary to expectations based on existing literature, traders from the bankrupt firm were highly sought after in the industry. This discrepancy from previous research findings, which typically outlined negative career trajectories following organizational failure, sparked further investigation.

The research focused on the importance of specialized workers with crucial technical expertise, external knowledge, cultural experience, social relations, or other unique skills. Such individuals are integral to the performance of multinational corporations and are in high demand, creating a competitive hiring environment. This demand turns into a strategic opportunity when such workers are laid off from another multinational company.

By analyzing LinkedIn job data and conducting interviews, the research team could pinpoint that the loss of legitimacy was specifically significant among those traders who were part of organizational units or geographic locations blamed for the company’s bankruptcy.

The study outlines a strategic window for multinational corporations to hire these specialized, laid-off workers. The previous employer’s failure affects these job candidates’ legitimacy and negotiating power. Hiring a candidate with diminished industry legitimacy might initially impair their performance in roles requiring extensive trade, communication, or negotiation within the industry, and it also means these candidates may accept lower wages or fewer promotions than high-legitimacy candidates. Thus, while high-legitimacy candidates are likely to be hired first, managers have a unique opportunity to recruit valuable yet less-legitimate candidates at a reduced cost.

Vaarst Andersen advises managers not to be swayed solely by social evaluations during hiring. She emphasizes assessing candidates based on their merits rather than assumptions linked to their past associations with former employers, colleagues, or locations. This approach underscores the need for a merit-based evaluation system that can identify and leverage candidates’ unique skills and experiences, even those coming from failed organizations, as part of a strategic hiring strategy.

More information: Kristina Vaarst Andersen, Mark Lorenzen et al, Scarce resources or damaged goods? On the legitimacy of laid-off workers following MNC failure, Global Strategy Journal. DOI: 10.1002/gsj.1497

Journal information: Global Strategy Journal Provided by Strategic Management Society

How to discern if your manager is a ‘corporate psychopath’

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Research findings aimed at assisting the business community in pinpointing harmful ‘corporate psychopaths’ were showcased at the Chelmsford Science Festival.

Dr Clive Boddy from Anglia Ruskin University, a trailblazer in corporate psychopathy research, shared insights from his study published in the International Journal of Market Research. His work focuses on strategies the financial sector can employ to recognize, handle, and extricate such individuals from their organizations when needed.

It’s estimated that 1% of the adult population qualifies as psychopaths, characterized by a lack of conscience, shame, guilt, and the incapacity to love or empathize with others. Dr Boddy explained that these individuals might seem like capable leaders, detailing their ascent to power and actions upon securing leadership roles.

Corporate psychopaths are high-functioning psychopaths operating within business and political environments. Dr Boddy highlights the significant risk they pose to the stability of companies, industries, and, potentially, the global economy.

His research outlines red flags that financial industry researchers and investors, including pension funds and other sectors, should be aware of. Attributes to watch include an outward charm and intelligence, extreme rationality, deceitful nature, absence of regret, irresponsibility, and emotional superficiality.

As the Deputy Head of the School of Management at Anglia Ruskin University (ARU), Dr Boddy remarked, “Looking back, we can identify historical figures who have committed crimes or disrupted industries. Yet, it’s crucial for industries, especially those influential in the financial sector, to proactively recognize these individuals to protect our economy and society at large.

“Corporate psychopaths tend to climb to the top echelons of the corporate world, owing to their seemingly sociable personality traits. Nonetheless, their starkly self-interested actions could, in severe cases, lead to the downfall of entire sectors. Their relentless pursuit of money, power, and control makes corporate psychopaths a formidable force as they navigate their way to these ends with ruthlessness and efficiency.

“I intend to demystify these individuals’ motives and provide strategies for identifying them early to prevent significant harm. Recognizing these individuals is also crucial for making informed investment choices. Companies free of corporate psychopaths are more likely to remain stable, sustainable, and have a lower risk of failure.”

More information: Clive R. Boddy et al, Insights into the bernie madoff financial market scandal which identify new opportunities for business market researchers, International Journal of Market Research. DOI: 10.1177/14707853231173260

Journal information: International Journal of Market Research Provided by Anglia Ruskin University

Are we prepared to exchange remote work for lower pay?

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The COVID-19 pandemic has catalysed significant changes in the workforce dynamics, particularly in Australia, where nearly half of the workforce is open to reducing their annual income in favour of the ability to work from home.

Recent findings from the University of South Australia reveal that 45% of employees are ready to accept a lower salary to work remotely. This research, encompassing over 1100 Australian employees during 2020-21, highlighted that the typical employee who can perform their job effectively from home is inclined to forgo between $3000 and $6000 of their yearly salary (representing 4 to 8% of their income). Interestingly, a fifth of those surveyed were willing to sacrifice $12,000 to $24,000 annually (16 to 33% of their income).

Despite these findings, a majority (55%) of the respondents were not prepared to decrease their wages to work from home, citing no significant benefit to productivity or well-being, alongside various concerns regarding remote work.

Associate Professor Akshay Vij, the lead researcher, emphasised the need for further studies to fully grasp employee preferences towards remote and flexible working arrangements, considering the diverse attitudes and expectations. He noted that perspectives on the impact of remote work on personal relationships and interactions play a crucial role in these differing attitudes. Specifically, individuals less enthusiastic about remote work expressed concerns regarding their relationships with colleagues and supervisors and the potential missed opportunities for learning and career advancement.

The study also uncovered that experiences with remote work before the pandemic influenced attitudes, with those more accustomed to remote working expressing more reservations than their less experienced counterparts, who showed a more positive outlook towards working from home.

Differences were also seen across genders and age groups, with female employees and those in their 30s and 50s showing a higher appreciation for remote work than their male and younger counterparts. This variation is likely due to the younger demographic valuing in-person interactions for their career progression more highly.

Families, particularly those with children at home or those who had left home, were more inclined to reduce their salaries for the opportunity to work remotely than childless couples, single parents, or those living alone or with housemates.

The shift in working preferences is evident when comparing remote working statistics from Census data 2016, where only 2 to 8% of employees in major Australian cities worked remotely, to 2021, where this figure rose to 21%. This shift has prompted workplaces globally to adapt, creating the necessary protocols and processes to facilitate remote work.

While Associate Professor Vij believes it’s too soon to predict the long-term status of working from home, its prevalence will likely remain higher than pre-pandemic levels, albeit with significant variability among different demographic groups. The suitability of remote work varies from person to person, emphasising the importance of finding a balance that caters to employee and employer needs.

The COVID-19 experiment with remote work has had its share of pros and cons. On the downside, the potential for reduced interaction with colleagues and supervisors might impact motivation and productivity. Younger workers could find themselves with fewer mentoring opportunities, and being away from the office may hinder understanding of office dynamics, affecting career progression and salary increments. Additionally, working from home could lead to increased household expenses and necessitate investment in office equipment.

Conversely, the benefits of remote work are significant, including improved well-being, better work-life balance, and health advantages. Remote working enables employees to manage home-related emergencies more efficiently and enjoy meals with family. The flexibility and personal freedom, alongside savings on transport and daily expenses, are substantial positives of working from home.

More information: Akshay Vij et al, Employee preferences for working from home in Australia, Journal of Economic Behavior & Organization. DOI: 10.1016/j.jebo.2023.08.020

Journal information: Journal of Economic Behavior & Organization Provided by University of South Australia

A slight dip in health insurance provided by employers is connected to the increase in minimum wage

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An investigation spearheaded by a scholar from the Johns Hopkins Bloomberg School of Public Health has illuminated that a one-dollar elevation in minimum wages across the state and federal domains from 2002 to 2020 correlated with a modest dip in the share of employers providing health insurance.

This reduction, quantified at 0.92 percentage points in employer-sponsored insurance, predominantly emanated from smaller enterprises harbouring fewer than 50 workers and a substantial portion of low-wage earners. Further insights from the study revealed that a one-dollar surge in the minimum wage was also tied to a 1.83 percentage-point uptick in the frequency of insurance plans mandating a deductible, a trend observable across large and minuscule firms.

The research is positioned as a pioneering endeavour to dissect how variations in minimum wage legislation might elicit divergent reactions from employers, depending on the business scale or employee wage distribution.

Published in the Journal of Health Economics on October 27, the study also dispelled the notion that hikes in minimum wage adversely affect overall insurance coverage rates. This stability is attributed to the increased enrollment in Medicaid by employees, particularly pronounced following the enactment of the Affordable Care Act (ACA). The ACA, which took effect in 2010 and began regulating the small-group, employer-sponsored insurance market in 2014, magnified the impacts of minimum wage adjustments.

Mark Meiselbach, PhD, an assistant professor at the Bloomberg School’s Department of Health Policy and Management and lead author of the study, stressed the critical role of alternative insurance avenues for low-income workers amid discussions on raising minimum wage levels nationally. His research collaborates with Jean Abraham, PhD, a professor at the University of Minnesota School of Public Health, further emphasizing the significant reliance of millions of Americans on their employers for health insurance. With an estimated 178 million individuals covered under employer-offered plans in 2022, wage legislation and employer health benefits provision have substantial implications for the workforce.

The analysis, leveraging data from the Medical Expenditure Panel Survey-Insurance Component (MEPS-IC) from 2002 to 2020, also delves into how shifts in minimum wage laws influence aspects like employee eligibility, benefit design, and premium costs out-of-pocket. By integrating state minimum wage data from the University of Kentucky Center for Poverty Research National Welfare Data, the study enhances the understanding of employer behaviour in response to wage policy alterations.

Significantly, the findings echo prior studies suggesting that minimum wage increases could decrease enrollment in employer-sponsored insurance, primarily due to employer decisions on plan offerings rather than employee eligibility or enrollment choices. The most pronounced effects were observed among smaller businesses, underscoring their sensitivity to insurance offering costs. The study notes that while deductible requirements saw adjustments, minimum wage laws primarily affected other benefit design dimensions.

Exploring the varied impacts of different magnitudes of minimum wage increases, the research indicates that both modest and significant hikes are associated with reductions in employer health insurance offerings. These effects intensify over time, especially after the third year following a minimum wage increase.

Meiselbach emphasizes the importance of ensuring accessible, affordable insurance options outside employer-sponsored plans in light of the tight coupling between employment and health insurance in the U.S. The study calls for policymakers to closely monitor the decline in employer-sponsored insurance among small businesses, highlighting potential long-term implications.

In response to potential coverage gaps, employers have mechanisms such as Qualified Small Employer Health Reimbursement Arrangements and Individual Coverage Health Reimbursement Arrangements, introduced under the 2016 21st Century Cures Act. These alternatives, alongside the expansion of Medicaid and subsidies for individual market insurance purchases, are presented as viable solutions to mitigate the impacts of minimum wage increases on health insurance coverage.

More information: Mark K. Meiselbach and Jean M. Abraham, Do minimum wage laws affect employer-sponsored insurance provision? Journal of Health Economics. DOI: 10.1016/j.jhealeco.2023.102825

Journal information: Journal of Health Economics Provided by Johns Hopkins Bloomberg School of Public Health

Do companies need to sell expertise, components, or entire systems? This is the primary question that product managers and entrepreneurs must address

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A team of researchers from American University, University of Arizona, University of Texas-Arlington, and Texas Tech University have contributed a significant piece to the Journal of Marketing that delves into a critical aspect of business strategy, explicitly addressing the pivotal question of “what to sell” that confronts companies and investors before making decisions on “how to sell.”

The paper, which will appear in the Journal of Marketing, is titled “A Theory of Product-Form Strategy: When to Market Know-How, Components, or Systems?” and features work by Kellilynn M. Frias, Mrinal Ghosh, Narayan Janakiraman, Dale F. Duhan, and Robert F. Lusch. This research spotlights a relatively underexplored area of technology commercialization: deciding how an innovation should be sold in the market.

The narrative of Apple’s evolution from intending to sell circuit boards to launching the Apple I and II, effectively kickstarting the personal computer industry, exemplifies the strategic pivot from selling components to systems. This anecdote underscores the significance of deciding on the product’s form—a decision that has broad implications not just in tech but across sectors.

While plenty of studies have examined the new product development process and how to bring products to market, the optimal form to sell an innovation—know-how, components, or complete systems—has received less attention. A case in point is the current reevaluation within the electric vehicle industry regarding battery design and the potential benefits of modularization, as discussed in a recent Wired article. This rethinking aims at optimizing design to minimize waste and improve efficiency, illustrating the strategic considerations involved in product form decisions.

The Journal of Marketing article extends these discussions by exploring the strategic choice between selling know-how, components, or systems. This decision influences everything from venture funding pitches on shows like Shark Tank to the fundamental approach of established firms entering new markets. The product-form Strategy (PFS) is integral to a firm’s development and commercialization process, impacting revenue models, market positioning, and competitive dynamics.

For instance, a company selling sensor-embedded baseball bats has to consider whether its direct customers are players and clubs or if it should target bat manufacturers by selling the know-how or components. The PFS decision influences how a firm positions itself in the market and its survival, especially for new ventures.

The research findings, derived from interviews with entrepreneurs, investment proposal analyses, and experimental scenarios, highlight that the challenge of technology integration influences the choice of PFS, the ability to market the product to end-users, and the protection of intellectual property. The study reveals a preference for selling complete systems over components and components over know-how when integration and IP protection are concerns and marketing capabilities are vital.

This comprehensive study distinguishes itself by separating the “what to sell” decision from the “how to sell” question, arguing that the former is a foundational strategic choice that must precede considerations of market entry strategy. It advises product managers, entrepreneurs, and investors to carefully weigh the implications of each product form, considering both the costs and the strategic positioning relative to competitors and the broader market.

In sum, this research provides a nuanced understanding of the strategic decisions surrounding product forms, urging businesses to assess their capabilities, market position, and the competitive landscape. It emphasizes that choosing whether to sell know-how, components, or systems is not merely tactical but fundamental to a firm’s strategic orientation and long-term success.

More information: Kellilynn M. Frias, Mrinal Ghosh, Narayan Janakiraman, Dale F. Duhan, and Robert F. Lusch, A Theory of Product-Form Strategy: When to Market Know-how, Components, or Systems? Journal of Marketing. DOI: 10.1177/00222429221149437

Journal information: Journal of Marketing Provided by American Marketing Association

Variable compensation plans may lead to employee illness

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The rise in cases of employees being incapacitated due to mental health concerns such as fatigue, depression, sleep disturbances, and burnout has seen a significant uptick in recent years. This worrying trend, particularly pronounced within the corporate sector, has yet to escape the attention of Professor Sascha Alavi of the Sales Management Department (SMD). His critical observation of societal trends, particularly in corporate environments, led him to collaborate with Dr. Kim Linsenmayer, his former PhD student, and Professor Johannes Habel from the University of Houston. Their research, published in the Journal of Marketing, sheds light on the detrimental impacts of performance-based pay schemes on employees’ health, a finding reported by Rubin, the science magazine from RUB.

The trio conducted a field experiment in a medium-sized German company that operates in the consumer goods, tools, and services sector, catering to the construction and automotive industries. Over a year, they observed the company’s shift from a remuneration model dominated by variable pay (80%) to one primarily comprised of fixed income (80%), analyzing data from over 800 employees. Their time series analysis unveiled a direct correlation between heightened performance incentives and increased absenteeism due to sickness.

Dubbed the “J-effect,” this phenomenon outlines an initial boost in employee performance with the increase in variable pay, fueled by the motivating potential of sales commissions and bonuses. However, the data also revealed a subsequent rise in stress levels, leading to more sick leaves and diminished performance. Professor Alavi explains that when variable pay constitutes around 30% of the total remuneration, the pressure to perform spikes, inversely affecting performance. The research underlines the negative health consequences of variable pay schemes, highlighting their potential to foster stress and insecurity, thereby exerting undue pressure on employees.

Further investigations by Alavi and his team validated the J-effect and contributed to the broader understanding of stress theories. A survey encompassing 400 sales personnel from various companies and sectors indicated that a higher proportion of variable pay correlates with increased emotional exhaustion. Symptoms such as fatigue, feeling drained, burnout, frustration, or tiredness at the end of a workday or week were commonly reported when variable pay exceeded 30% of the total compensation.

The study also differentiates between employee groups, noting that the impact of performance incentives is not universally negative. Certain individuals showed greater resilience, particularly those with specific personal, mental, and social competencies or extensive experience. Alavi pointed out that employees who have consistently performed well or possess considerable work experience face less difficulty dealing with performance pressure. Furthermore, maintaining positive relationships with supervisors and team members can significantly mitigate the adverse effects of increased pressure.

In essence, the research not only elucidates the harmful health implications of performance-based remuneration schemes but also offers practical insights and recommendations for management. Understanding employee resilience factors and fostering supportive work environments can be crucial in mitigating the negative impacts of performance pressure.

More information: Sascha Alavi et al, Variable Compensation and Salesperson Health, Journal of Marketing. DOI: 10.1177/0022242921993195

Journal information: Journal of Marketing Provided by Ruhr University Bochum