Work-Life Balance (Encyclopedia of Management)
Helping employees balance work and non-work responsibilities has been a growing concern of corporations for more than twenty years. The interest in work-life balance issues began in the 1980s as more women entered the workplace and focused primarily on helping employees balance work and family responsibilities by offering family-friendly benefits. These practices are now aimed a work-life balance, which is a more encompassing term that reflects the desire of nearly every employee for more flexibility in their work in order to mange the competing demands of work and life outside of work.
While many employees enjoy the benefits of work-family balance practices, many were inspired by changes in the workforce over the last two decades. These changes include increases in the number of employed women, especially mothers, single-parent families, and dual-income families. Additionally, many employees are now responsible for caring for elderly parents and other relatives. Corporate interest in family-friendly practices has steadily escalated as companies have realized the advantages of providing work-life balance benefits.
THE CHANGING WORKFORCE AND GROWING CORPORATE INTEREST
A number of changes in workforce demographics have brought work-life balance issues to the attention of companies. The major change related to the need for family-friendly benefits is the number of women in the U.S. workforce, which has more than doubled since 1970. Additionally, more women are remaining in the workforce after marriage and after having children, increasing the number of dual-career households in America. Add to this a larger number of single women with children in the workforce in the past two decades, and there is increased demand for family-friendly work policies.
Although the trend toward work-life balance practices began with demands from mothers in the workforce, the push now is coming from all employees: fathers and mothers, single parents, and employees with responsibilities for caring for aged relatives, and even employees who just want more flexibility in their daily lives. Nine out of ten workers in America live in households with family members, and nearly half of all employees have care-giving responsibilities. Recognizing these changes, corporations are creating work environments that make it possible for employees to be both good workers and good caregivers. However, the corporate motive for work-life balance policies is more than altruism and a desire to help and support employees. Employers have realized that it makes good business sense to provide such benefits. It helps with recruitment and retention of employees by creating an atmosphere of loyalty to the corporation.
Programs and benefits that directly address work-life balance issues include:
- dependent care (child-care and elder-care programs)
- flexible or alternative work schedules (flex-time, compressed work weeks, telecommuting, job sharing, and part time employment)
- leaves (paid and unpaid family care leaves, maternity phase-back, and so on)
Corporate America's growing concern for family issues is evidenced by the number of business journals that identify and rank family-friendly corporations. Working Mother was the first periodical to write a lead story on family-friendly companies. This article has appeared annually since 1986 and is called "Best Companies for Working Mothers." It identifies the top 100 work-life sensitive companies, assessing compensation, opportunities for women, child-care benefits, flexibility in work, and other benefits such as paid maternity and paternity leave. Additionally, Business Week magazine ran its first major cover story on "Work & Family" in 1993 at the time the Family and Medical Leave Act was enacted., and in 1996Business Week launched in a major cover story issue a biannual ranking of the "Best Companies for Work and Family." Finally, the third major business periodical to rank companies was Fortune. Their "The 100 Best Companies to Work for in America" was first published in January 1998. Evidence from their study indicated that family-friendly polices help the bottom line.
TYPES OF WORK/LIFE BALANCE BENEFITS
CHILD AND DEPENDENT CARE PROGRAMS.
In the last decade, there has been an increase in the number of day-care centers in America, and only about 28 percent of families with children had a parent who stayed home full time. This has prompted many organizations to either provide or subsidize day care for employees. Additionally, some companies provide assistance for child care for older children before and after school. This is an important concern of employees with school-age children because elementary school students typically spend 1,032 hours a year in school whereas full-time employees spend 2,025 hours per year at work. This leaves a 1,000-hour discrepancy. Employee concern about care before and after school is increasingly recognized as a drain on productivity and morale. Employers who provide this benefit report increased retention of employees who take advantage of it. The positive relationship between the availability of child-care centers and employees' performance was identified by a study done at the University of Michigan. Attitudes, recruitment and retention, and performance were all more positive when child-care centers were available.
However, not all companies can provide on-site child-care or after-school programs. In these instances the company can provide information about referral services and tax-free salary withholding for flexible spending accounts. Companies can also support community programs that provide care. Similar programs can be set up for elder care needs. Hewitt Associates determined in a 2003 study that 94 percent of large employers surveyed allowed employees to put aside pre-tax earnings for child care into flexible spending accounts that 13 percent of large corporations surveyed offered on-site or near-site child care, and 13 percent offered "backup emergency childcare" for when regular child care was temporarily unavailable.
FLEXIBLE WORK PROGRAMS.
Flexible work programs accommodate employees by allowing variations on when and where they do their work. Flexible work programs consist of flextime, compressed work-weeks, telecommuting, job sharing, paid time off, and other leave programs.
In the past, employees arrived at work at 8 a.m. or 9 a.m. and left at 5 p.m. But now changes in employees' personal lives make flexibility in work arrangements an important benefit. Flextime allows employees to vary the start and end times of their work day, and employees are typically required to be present during certain core hours (e.g., 10 a.m. p.m.) but still working eight hours per day. This is one of the most frequently provided work/life balance benefit, and is well-liked by many different employees. Flextime allows all employees-those with children and those without-the ability to better manage their work and non-work lives. A 2003 poll of over 600 companies conducted by the Mellon Financial Corporation indicated that the number of employees who are allowed flexible work arrangements has doubled from 32 percent in 1996 to 71 percent in 2003.
The compressed workweek is a type of scheduling plan in which full-time hours are worked in fewer than five days. For instance, employees may work four 10-hour days and always have a three-day weekend. The compressed workweek is intended to allow employees more flexibility by having more days away from work; however the longer hours worked each day may actually detract from productivity and from work/life balance.
Telecommuting, or working out of one's home and communicating with the workplace through technology, is on the rise for a number of reasons. First, technology has improved steadily over the past few decades, allowing faster and higher quality communication from home. Access to the Internet is the primary reason that people can now work effectively out of their homes. Another reason for an increase in telecommuting is many employees' desire to commute less often. With dual-career families in which spouses work in different cities, or in large urban areas, employees may find some hours of their day taken up with a long commute. By telecommuting even a few days a week, employees can cut devote more time to work and/or family. Additionally, telecommuting can reduce pollution associated with driving to work. While telecommuting shares many of the advantages of other flexible work arrangements, it has some distinct disadvantages.
The primary disadvantage is the employee's lack of access to the workplace, supervisors, coworkers, and even customers. If a person's work is improved through the physical presence of the employee in the workplace, it may not be advisable to institute telecommuting. A second major concern with telecommuting is the inability to supervise the remote worker. While many employees are not allowed to telecommute until they have a record of effective performance in the workplace, performance problems resulting from a lack of supervision may arise in some cases. Finally, a major drawback is that the employee loses touch with the organizational culture; the patterns of behavior that one observes in a certain workplace are not as easy to learn when a person is absent from that work-place. This may be irrelevant in some workplaces, but crucial to meeting objectives in others. Additionally, by being absent and perhaps not learning the organizational culture, the employee may reduce his or her ability to be promoted.
Job sharing is allowing two employees with complementary schedules to split the responsibilities of a single traditional full-time job. This typically allows employees to keep the fringe benefits of a full-time position, while working fewer hours. Job-sharing may be used temporarily when an employee reduces hours, perhaps to continue working while managing child-care duties. A 2002 study conducted by Hewitt Associates studied the benefits provided by more than 1,000 companies and found that 28 percent of organizations offer job sharing. While job sharing accommodates the schedules of employees, having two people accountable for one position may result in conflict. Therefore, care should be taken when allowing employees to job share.
Paid time off, in the form of vacation days, sick days, and other forms of paid absences, are ways to help employees manage issues associated with health, school, leisure, or any other non-work activity. Many employers now allow employees to draw leave time from a single pool for any type of leave rather than allowing only a fixed number of days for each type of absence. Leaves and time-off programs include paid and unpaid authorized leaves such as sabbaticals, social service leaves, leaves for emergencies, paid leave banks, and family-care leaves. Many employees want and need leaves in addition to annual vacations for reasons such as care of newborns or sick family members and for personal interests or volunteer work. These leaves are different from flexible work schedules in that flextime addresses when and where the work gets done; time-off programs provide employees with leave during unusual or emergency times. Many companies provide this benefit by leave-sharing programs. These allow employees to voluntarily donate their paid time off to coworkers. Companies may also offer paid leave banks in which employees are given a single pool of time off to use for vacations, personal time, illnesses, and family emergencies. Employers using paid leave banks do so to provide flexibility to employees and to assist managers in scheduling time off. However, the availability of more flexibility for leave time may hinder the organization if key employees are absent when needed, and thus, these programs must be properly managed.
FAMILY AND MEDICAL LEAVE ACT
The Family and Medical Leave Act of 1993 (P.L. 103-3) brought a major change in the attitudes toward leaves in the business world. It requires businesses with 50 or more employees to provide employees with at least 12 weeks a year of unpaid leave for birth, adoption, or personal or family illnesses. Employers must pay health-care coverage during the leave and return employees to their same or equivalent jobs. Social and demographic changes were the impetus for this law; the law, along with pressure stemming from the same social and demographic changes, has driven the adoption of family-friendly benefits. Families may no longer have a full-time parent at home. Employees need time off to care for themselves or family members such as sick children, spouses, and elderly relatives. Impetus also came from other countries, primarily western European countries, Canada and Japan, all which have family leave policies more generous than those outlined in the Family and Medical Leave Act. In 1993 the United States was the only country of 188 surveyed by the International Labor Organization that had no mandatory parent leave law.
Most business groups opposed the FMLA on the grounds that it would reduce business efficiency and add administrative costs to employers. However, studies generally have found that it has not been a major burden or had a significant impact on employer costs. In a study conducted by Westat for the U.S. Department of Labor in 2000, respondents indicated that the FMLA had either no noticeable effect or a positive effect on the business productivity (83 percent), profitability (90 percent), and growth (90 percent) of their company. Further, respondents indicated that intermittent leave, which was posited to be most disruptive to organizations, had no impact on productivity (81 percent) or profitability (94 percent). Not only did businesses report few negative effects from the FMLA, nearly 79 percent of the employees surveyed in the study indicated that the leave had positive effects on their ability to care for family members.
WORK-LIFE BALANCE AND THE BOTTOM LINE
Companies often seek to add work-life balance benefits because it makes good business sense. The three top reasons are (1) recruitment/retention of employees, (2) commitment to the firm, and (3) productivity. Retention is important to employers, and will become more critical as baby boomers retire and are replaced by smaller generations. Additionally, employee retention is increasingly valued as corporations realize that the cost of recruiting and training is more expensive than providing work/life balance benefits.
Several research studies have been done to determine the effects of work-life balance benefits. Paul Osterman, in a major 1995 study, suggested three reasons for employers to adopt work/family programs: to lower absenteeism rates, to bolster recruitment and retention of employees, and to encourage commitment to the firm. In another study by Steven L. Grover and Karen J. Crooker, published in Personnel Psychology, the authors found a relationship between employee commitment and benefits such as parental leave, flexible scheduling, child-care assistance, and child-care information. An interesting aspect of this study was that employee commitment increased regardless of whether the employee was a user or nonuser of the benefits. In a more recent study done by Aeon Consulting in 1998, family-friendly benefits were again correlated with employee commitment. A study published in 2004, conducted by Wendy Caser and Louis Buffardi, indicated that flexible scheduling and dependent care assistance offered by organizations were related to applicants' intentions to pursue jobs at these companies.
Further, a report by the Families and Work Institute entitled The 1997 National Study of the Changing Workforce found that the quality of workers' jobs and the supportiveness of the workplace are predictors of productivity, job satisfaction, commitment, and retention. This study was based on 2,877 employees. In contrast to the positive effect of a supportive workplace, the study found that difficult and demanding jobs in nonsupportive environments tended to suffer from poorer job performance.
BACKLASH FROM CHILDLESS EMPLOYEES
One concern with the introduction of new family-friendly programs into the workplace is backlash from childless employees. These employees may feel that they are not getting the same level of benefits as their coworkers with children, because they cannot take advantage of the programs in which the organization has invested. As such, employees with children receive more total compensation (because of the added benefits) than do childless employees. This problem may be alleviated with a flexible benefits plan, in which those employees who do not choose family-friendly benefits may choose other types of benefits. Additionally, experts suggest that employers develop "work/life" programs that allow employees flexibility for any activity outside of work, rather than just "family-friendly" benefits for employees with children. Thus, if all employees are able to take advantage of flexible hours, telecommuting, or other types of work arrangements to better manage their lives, then the policies are likely to be accepted by all employees.
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