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EHM Is Only Part of the Solution

by Scott MacStravic

As much as I am convinced that employee health management (EHM) is an essential element of business strategy for employers, as well as a way to improve the American economy, it is only part of the solution. If the only factor that employers address in order to reduce their labor costs and improve their workforce productivity and performance (WPP) is EHM, they will be missing much, perhaps most of the boat. Health, after all, is only one factor in determining WPP.

At a minimum, WPP, along with virtually all examples of human behavior, is a function of three main factors: motivation, capability, and consciousness levels related to specific behaviors. In a previous work, I described these three as a counterpart to Einstein’s Theory of Relativity’s use of the same initials, MC2. [S. MacStravic and G. Montrose Managing Health Care Demand Aspen 1998] While both motivation and capability have been discussed by colleagues in the domain of human capital management and are frequently cited by others in regard to WPP, all three are both essential, and can be managed.

Investigations of the reasons that workers, themselves cite for performing at less than their best tend to reflect a wide range of personal and family problems. A survey of 1826 workers in a variety of jobs and industries found that “personal health problems” ranked only sixth out of seven productivity impairment factors found, with 25% reporting being affected thereby at least some of the time. “Low motivation” was first, affecting 47% of workers “sometimes”, “frequently” or “all the time” – followed by low morale among co-workers at 41%, “poor communications” at 40%, not enough training 30%, personal issues 26% and family issues 22%. [W. Lynch & H. Gardner “Employee Health Problems Are Not the Greatest Threat to Worker Productivity” Health as Human Capital Foundation May 20, 2007]

Among the strongest single measures that predict motivation levels is the size of bonus for which employees are eligible, compared to the size of their salary, followed by employees’ perception that workers are recognized and rewarded for good work. Economic factors are also key with respect to absence and disability. Employers can reduce both by sharing with their workers unspent sick leave or personal time off in the form of extra days’ pay. Since such days presumably add to the employers’ benefit, and more than what workers are paid, paying a days pay for a days more work makes economic sense.

Sharing responsibility for disability in the same ways that employers are increasingly sharing it relative to healthcare costs is another option. Studies have shown that paying employees at or near 100% of their wages for disability days taken increases both the frequency of claims, and the duration of disability absences. By reducing disability payments to under 75% of wages, significant reductions in disability absences can be expected, in addition to reduced payments for disability leave. [W. Lynch & H. Gardner “A Hierarchy of Aligned Incentives” Health as Human Capital Foundation 2006 (www.hhcf.org)]

Motivation is most typically increased, often dramatically so, along with performance, by paying employees based on the work that they produce, both quantity and quality. This was dramatically illustrated by the Safelite windshield repair case where workers could virtually double their wages by increasing both, and productivity increased by 44% in just one year. [E. Lazear “Performance Pay and Productivity” American Economic Review 190:5 Dec 2000 1346-1361]

But motivation can be increased by other means as well, including recognition and training, with the latter also increasing capabilities. As the well-known “law of the hammer” illustrates, once people add a new skill or capability, they tend to use it, whether or not they are rewarded for doing so, merely because of the self-esteem and sense of accomplishment benefits they gain. But paying them more is usually expected, and justified when the new skill increases their performance and value to the employer.

Education, training, and support such as updated equipment, just-in-time delivery of or access to supplies and information needed to enable timely performance also help. And timely delivery of supplies and information can equally serve to prompt action by reminding employees that it is time to perform. Other forms of reminders, from posters on walls in workstations or bathrooms, for example, can serve to remind workers of appropriate actions to take, relative to their job, but also relative to their health.

The Eastman Chemical Co. in Kingsport, Tennessee, for example, provides posters in all its worker restrooms, 1200 in all, at its four manufacturing plants, reminding workers of health actions they should take, or unhealthy behaviors they should avoid. These are changed monthly to keep them from becoming so familiar that they are ignored.

When airlines first switched to container loading of freight, for example, workers often failed to fill those containers to capacity. This meant that airplanes flew carrying significantly less than their full capacity, and delivering less than full revenue to the airlines. By simply painting lines almost at the top of the containers, with the admonition “Fill to Here”, the proportion of containers completely filled increased from 45% to 95% virtually overnight. [K. Patterson, et al. Influencers: The Power to Change Anything McGraw Hill 2008]

The best way to optimize EHM results is first to ensure that its strategic and program elements include appropriate and proven ways to improve workers’ motivation, capability and consciousness relative what, where, when, how and why to engage in health management efforts, with communications customized to individual “whos” whenever possible. This same mix of elements should also be part of a comprehensive and integrated strategy to improve workers motivation, capability and consciousness relative to their productivity, performance, and contributions to the employers’ business goals and overall performance.

But equally important is that both EHM and integrated WPP efforts should pay attention to what employees, themselves, gain through improving their health and WPP. While many may take pride in achieving better health, productivity and performance, per se, virtually all will expect and deserve to see and appreciate what they are gaining as well. Employers that make sure workers are aware of and appreciate their own gains, can increase worker motivation, retention, and perhaps even save money on extrinsic rewards.

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