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There was no such increase in production for a group of matched supervisors who were not trained.
10One of the foundations of emotional competence, accurate selfassessment, was found to be associated with superior performance among several hundred managers from 12 different organizations.
11Another emotional competence, the ability to handle stress, was linked to success as a store manager in a retail chain. The most successful store managers were those best able to handle stress. Success was based on net profits, sales per square foot, sales per employee, and per dollar inventory investment.
12Optimism is another emotional competence that leads to increased productivity. New salesmen at Met Life who scored high on a test of ‘learned optimism’ sold 37 per cent more life insurance in their first two years than pessimists.
13A study of 130 executives found that how well people handled their own emotions determined how much people around them preferred to deal with them.
14For sales representatives at a computer company, those hired on the basis of their emotional competence were 90 per cent more likely to finish their training than those hired on other criteria.
15For 515 senior executives analysed by the search firm Egon Zehnder International, those who were primarily strong in emotional intelligence were more likely to succeed than those who were strongest in either relevant previous experience or IQ. In other words, emotional intelligence was a better predictor of success than either relevant previous experience or high IQ. More specifically, the executive was high in emotional intelligence in 74 per cent of the successes and only in 24 per cent of the failures. The study included executives in Latin America, Germany and Japan, and the results were almost identical in all three cultures.
It should be noted that a few researchers have claimed that EI is a personality construct that is yet to be fully evaluated and validated, and may yet prove to be another ‘fad du jour’ (for example, Caudron, 2002; Gibson and Tesone, 2001). However, while further verification is needed, there appears to be sufficient evidence to indicate that EI can be an important component of leadership and, according to its many exponents, one that can be enhanced and improved throughout life.
Appendix 2 The benefits of health and wellness programmes
If you are already the leader of an organization, or expect to be one in the future, you may want to consider introducing some stress reduction strategies for your employees, in the form of Health and Wellness programmes. These can be described as any activities that an organization engages in that are designed to identify and/or assist in correcting specific health problems, health hazards, negative health habits or occupational stress problems amongst employees in the workplace. These programmes consist of three principal elements:
•The provision of fitness facilities on-site or subsidized access to these off-site.
•Health screening, which can cover anything from basic medical check-ups to psychological counselling and information on diet and nutrition.
•Education and advice on the effects of sedentary lifestyles and the effects of smoking, or alcohol or other drugs.
The uptake of such programmes by increasing numbers of organizations in the USA in the 1980s and in Europe in the 1990s suggests that they are more than a management ‘fad’, and they have come to play an important role in organizational health management strategies in many US companies. One reason is that, historically, health care costs in the USA have been high when compared to countries with publicly funded health care systems. As a result, employers in the USA, as part of employees’ remuneration packages, often pay for their health care. A second reason was the dawning realization that stress and ill health had the potential to cost companies a great deal of money. For example, General Motors spent more money on employee health care than it did on purchasing steel from its major suppliers in 1978. This added $US175 to the cost of every automobile produced in 1979 (cited by Roberts, 1989). Back in the mid1980s, it was estimated that American businesses lost some 52 million working days a year because of heart disease alone. The escalating medical cost of stress-related illness was a major driving force behind the introduction of Wellness programmes in the USA at that time.
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Examples of organizations successfully implementing wellness programmes in the USA, at this time, are numerous. One early example is AT&T (Holt and Paul 1995). In the early 1980s, the company employed around 280 000 people and was already one of the leading network service providers in the world with operations in the USA and eight other countries. At that time, the company was spending two to three million US dollars on employee health care every day. AT&T introduced a pilot Wellness programme for its employees in 1983 at seven work sites. The initiative was called the ‘Total Life Concept (TLC) Programme’. The programme was expected to reduce expenses incurred by the company from employee medical compensation claims. From its inception, the TLC programme enjoyed the full backing of a forward-thinking senior management team. The programme addressed employee health, nutrition and personal stress management. Training was provided to improve stress-coping behaviours and to increase levels of employee fitness and general health. The motto of TLC was simple: ‘A healthy workplace makes good business sense’. Twenty-four hundred employees took part in the first phase of the programme. By 1989, there were about 80 000 enrolled in the programme, and the company was spending about 80 dollars a year per employee participating in the programme.
Participants were required to attend an orientation programme in which the Wellness philosophy was described. This was followed by free cholesterol and blood pressure tests. The results of these tests were given to employees before they completed a Health Risk Appraisal (HRA) questionnaire. They then attended a Wellness planning session. The programme offered several modular courses. These addressed topics such as blood pressure, cholesterol, nutrition, stress management, cancer, healthy posture, interpersonal communication, smoking cessation and weight control. On completion of the planning session, the employees could choose modules that suited their individual needs. Some full-time staff members were selected and given training to manage the TLC programme and to facilitate running some of the modules. An evaluation study of the TLC programme showed that there were substantial improvements in the health and morale of the employees who participated in the programme. On average, employees reduced their cholesterol levels by 10 per cent, while 50 per cent of employees who joined a smoking cessation course remained nonsmokers after 12 months. The then director of the TLC programme at AT&T remarked, ‘People’s attitudes changed. We sent a message to the employees that said, “We care about your health and well-being”. They got the message.’ The study also revealed that most employees reported improvements on their health measure indices. Ninety per cent of employees who participated in the TLC programme reported
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that they had made a change in at least one lifestyle area since they joined the programme; 52 per cent of participants reported that they had changed in at least four lifestyle areas. After five years, TLC participants reported improved health-related behaviour, an enhanced sense of general well-being and improved perceptions of their own health, when compared to employees who were not involved in the programme (Holt and Paul 1995).
The study results indicated that the TLC programme had a positive effect on health-related attitudes. Such a programme may also have given the company a competitive edge when it came to retaining and recruiting workers. AT&T saved more than $US3 million in employee downtime, health care and retraining costs a year after the introduction of the programme. Improved health may also be a very good thing for employees: 97 per cent of those who participated in the TLC programme kept their jobs during the recession of the late 1980s. The company estimated that, for every dollar spent on their Employee Assistance Programs, four dollars were saved. In short, the Total Life Concept programme of AT&T Corporation proved to be a successful employee Wellness initiative (Holt and Paul, 1995).
Other American companies, such as Steelcase and Chevron, provide spacious fitness centres that include basketball courts and swimming pools on-site. Employees are encouraged to use them as needed during working hours. Pharmaceutical giant Eli Lilly runs on-site clinics that offer personal medical services as well as occupational medical advice. Texas Instruments distributes a self-care handbook and provides onsite preventive screenings and flu vaccines. Union Pacific calls highrisk employees at home to advise them on diet and exercise. The idea of these programmes is to encourage employees to pay more attention to their personal physical and mental health. Companies merely play the role of facilitators in this process, but do derive substantial benefits as a result of the increased well-being of their employees, reduced absenteeism and staff turnover, while also reporting improvements in employee performance and productivity (Ziegler, 1995).
Wellness programmes have proved extremely cost-effective for US companies (Sorrensen, 1998; Pelletier and Lutz, 1996; Wilson et al., 1996). For example, a ‘Quit Smoking’ programme run by the Metropolitan Life Insurance Company in the 1980s reported that their programme cost less than $US200 for each successful quitter, while a smoking employee was estimated to cost $646 a year in increased absenteeism and health costs (Brennan, 1985). A study, commissioned by the MEDSTAT Group, concluded that employers can lower their direct employee health and disability costs by as much as 31 per cent
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by focusing just on the health of their employees (Gemignani, 1998). They have also shown the potential to improve employee well-being, morale and motivation. For example, One Valley Bank’s Wellness programme, introduced in the early 1990s, generated a 48 per cent improvement in the morale of employees, a 93 per cent decrease in staff turnover and a 24 per cent increase in productivity. They also improved morale and motivation, and reduced health costs and absenteeism (Dugdill and Springett, 1994). A study by Aldana (1998) of 93 health intervention programmes in the USA concluded by saying that their evidence ‘supported the hypothesis that health promotion programs are cost beneficial based upon savings in reduced medical care expenditure and reduced absenteeism’. Other documented benefits include increased employee motivation, creativity, performance and well-being and reduced labour turnover. Similar results have been reported for Health and Wellness programmes introduced into UK companies in the 1990s (for example, Daley, 1996; Evans, 1995) and in Australia (Forster and Still, 2002).
There is a range of strategies that organizations can employ in order to help their employees cope with the demands of increasingly fast-paced and stressful work environments. Whether the focus is on work redesign, cultural change, limiting working hours, introducing more flexible working arrangements for those with families or introducing customized Health and Wellness programmes that address the behaviours and attitudes of individual employees, there are a number of areas in which both organizations and individual employees can make informed choices about the way they work in the future. Organizations that can find ways of getting the best out of their people, without driving them continually into states of distress, are already the employers of choice for the best talent amongst younger generations of employees. Generation ‘X’ are becoming much more concerned about the impact of work on their personal and family lives. The emerging Generation ‘Y’ will simply not tolerate old-style autocratic management styles, antiquated attitudes towards younger women and minorities amongst older managers, exploitative senior managers and long working hours. This is already leading to a serious problem of ‘brightsizing’ in many companies who cannot retain the commitment and loyalty of younger knowledge workers in the global marketplace that now exists for this organizational talent (Turnbull, 1996).
It was noted in Chapter 3 that many ‘Best Company’ surveys in Fortune magazine over the last three years have shown consistently that the most popular (and often the most profitable) companies to work for in the USA are those that put the well-being and performance of their employees at the forefront of their strategic thinking, not merely as an
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HR afterthought or ‘luxury’. Many of these organizations are members of the Fortune 500 list of leading US companies. These companies also have greater inbuilt competitive edge because they are able to get the most out of their employees’ motivation, creativity and talents. This is essential for any organization that hopes to succeed in a knowledge and innovation driven world economy. (Abridged from Forster and Still, 2002: 46–8).
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