Employers are recognizing that well-designed work/life programs -- including family care, flexible work arrangements, personal convenience services, and financial, wellness and career counseling -- are highly valued by employees and relatively low in cost. This has made work/life programs important tools for attracting and retaining top talent in all industries. While these programs often have been introduced as across-the-board entitlements, organizations now are using work/life programs as an important component of their rewards management strategy. Further, organizations are beginning to recognize that performance-based work/life programs can be quantitatively linked to improved employee satisfaction, productivity, customer satisfaction and profitability.

In March 1999, WorldatWork and The Segal Company jointly conducted an e-mail survey of WorldatWork members to examine the extent to which their work/life programs are being used to reward employee performance. The survey elicited responses from 1,256 organizations. WorldatWork members were asked how their employees currently are rewarded and whether work/life programs are used to reward performance in any way. They also were asked if work/life programs have been quantitatively linked to improvements in employee satisfaction, productivity, company profitability and customer satisfaction.

Key Findings

• Eighteen percent of survey respondents currently use some work/life programs to reward employee performance.
• Forty-three percent of organizations do not use work/life programs to reward employee performance but believe that some of these programs should be used as rewards for performance in the future. (In aggregate, 61 percent of respondents said that some work/life programs already are or should be used as rewards for employee performance.)
• Twenty-four percent of respondents quantitatively link work/life programs to improvements in employee satisfaction, but less than 5 percent attempt to link these programs to measures of employee performance such as improved employee productivity, company profitability or customer satisfaction.
• Of the more than 300 organizations that link work/life programs to improved employee satisfaction, 65 percent said they either are or should be linking some work/life programs to employee performance.
• The more than 300 organizations that have linked work/life programs to improved employee satisfaction are more than 30 times more likely to link work/life programs to improved customer satisfaction. These organizations are 14 times more likely to link these programs to increased productivity and 12 times more likely to link work/life programs to improvements in profitability.
• The work/life programs most likely to be linked with employee performance are nonfamily care programs. Flexible work arrangements most commonly are linked to performance (141 respondents). Tuition assistance (101 respondents) and paid time off (PTO) programs (40 respondents) are ranked second and third, respectively.
• Forty-eight percent of the respondents indicated that they currently use nonmonetary compensation as a reward for performance. Of this group, 63 percent are either already using work/life programs as a reward for performance (22 percent) or believe it should be linked in the future (41 percent).
  

Commentary

The results of the 1999 Survey of Performance-Based Work/Life Programs confirm anecdotal evidence that employers are beginning to use nonmonetary compensation -- particularly work/life programs -- as part of their total rewards management strategy. Eighteen percent of survey respondents currently reward employee performance with some work/life programs and an additional 43 percent believe that performance-based work/life programs should be implemented in the future. In many instances, tying work/life benefits to employee performance is replacing the practice of instituting these programs as across-the-board entitlements.

There appears to be great potential for employers to expand the use of such programs as convenience services, financial planning, legal assistance and other voluntary benefits -- which have broad-based appeal and are relatively low in cost -- to reward high-performing employees and to enhance efforts to attract and retain top talent. For example, convenience services currently are offered by 30 percent of the respondents, yet less than 1 percent use them as rewards for employee performance. Since convenience services are typically offered as time-savers for time-starved high performers, there is an excellent opportunity to offer these services as reward incentives.

The work/life programs that currently are most commonly used to reward employee performance -- particularly flexible work schedules and paid time off programs -- are programs that are geared toward rewarding high performers with additional time to conduct personal business. As employers seek continuously improved employee performance and strive for employer-of-choice status within their industries -- while always watching expenses -- low-cost work/life “add-ons” like convenience services are ideal avenues for rewarding high-level performers with forms of nonmonetary compensation that help them save time for personal chores. Graph 1 (below) illustrates the degree to which work/life programs are either being used to reward employee performance or are under consideration to be used as rewards.

Among survey respondents, the smaller organizations were more likely to be utilizing work/life programs in their compensation strategies to reward employee performance than larger companies. For example, organizations with between 1,000 and 5,000 employees (49 percent) are more commonly using work/life programs to reward performance than the largest organizations that responded to the survey (10 percent). Since smaller organizations often can be more flexible than larger ones and because they need to seek innovative ways to recruit and retain employees to compete with larger organizations for talent, they may be leading the way toward building more effective rewards management strategies. Graphs 2, 3 and 4 show the availability of work/life programs and the extent to which they are being tied to employee performance by industry, region and organizational size, respectively.

Graph 3: Organizations Linking Work/Life to Performance - By Region
(Data in this graph is based on a total of 227 respondents that link work/life programs with employee performance.)

Although employers clearly are beginning to reward employee performance through work/life programs, the survey revealed that less than five percent have attempted to quantify the impact of their work/life programs on improvements in employee productivity, company profitability or customer satisfaction. However, 24 percent of the respondents have begun to measure the impact of work/life programs on improved employee satisfaction. While survey participants were not asked how these measurements were taken, anecdotal evidence suggests that employee surveys primarily are used. Those organizations that are linking work/life programs to improved employee satisfaction are far more likely to measure the impact of their programs on improvements in customer satisfaction, profitability and productivity. (See “Key Findings” above.)

The overall lack of measurement of the impact of work/life programs on improved customer satisfaction, profitability and productivity may be explained by the relatively recent introduction of work/life programs and the inherent difficulty of measuring intangible factors illustrated in Graph 5 (above). It can be expected that as more organizations learn the value of linking work/life programs to their bottom line, measuring their impact will become far more widespread.

Conclusion

Work/life programs can offer a new opportunity to influence employee and organizational performance through innovative reward and recognition programs. By introducing nonmonetary compensation, including work/life programs, into reward systems, organizations can be better positioned to motivate, develop and retain the best and brightest employees.

Methodology and Participant Profile

For the 1999 Survey of Performance-Based Work/Life Programs, WorldatWork and The Segal Company sent questionnaires by e-mail to WorldatWork member organizations. More than 18 percent (1,256) of these organizations responded to the survey. All percentages reported are based on the total number of organizations that responded to the survey.

The participating organizations are from across the United States, represent every major industry and range in size from less than 1,000 employees to more than 10,000. The breakdown of participating organizations by industry, region and employer size is shown below.

Percent of Participating Organizations - By Industry

Accommodations and food services	1%
Agricultural	<1%
Arts, entertainment and recreation	1%
Construction	1%
Educational services	3%
Financial services	10%
Government	5%
Health care	9%
Manufacturing	27%
Nonprofit org., union, assn.	4%
Other	3%
Professional, scientific and technical	6%
Retail	7%
Technology	6%
Telecommunications	8%
Transportation and warehousing	3%
Utilities	6%

Percent of Participating Organizations - By Region

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Percent of Participating Organizations -
By Employer Size

Additional Information

For more information about the 1999 Survey of Performance-Based Work/Life Programs, please contact:
WorldatWork
(480) 922-2020

Richard Federico
Vice President and National Work/Life Practice Leader
The Segal Company
(212) 251-5175
rfederico@segalco.com

About WorldatWork

The WorldatWork is a not-for-profit organization of more than 25,000 members who are engaged in the design, implementation and management of employee compensation and benefits programs in their respective organizations. Founded in 1955, the WorldatWork is governed by a Board of Directors elected from the membership, and it is the premier organization dedicated to excellence in rewards management. The WorldatWork serves the worldwide needs of the compensation and benefits management profession by conducting education and certification programs, promoting and sponsoring research activities, producing a variety of educational and informational publications and providing technical information services and networking opportunities.

About The Segal Company

The Segal Company serves as consultants and actuaries for employee benefit, compensation and human resources programs in the United States, Canada and abroad. The Segal Company provides a complete range of services for the design, implementation, compliance and operation of programs such as executive/employee pay and total reward plans, health insurance plans, life, survivors’ income and disability insurance plans, retirement plans, health care cost management, strategic planning and administration, and technology consulting. Clients include corporations, nonprofit organizations, professional service firms, state and local governments, federal government entities and joint boards of trustees administering health and welfare and pension plans under the Taft-Hartley Act.