work-life balance as a tool for employee satisfaction and retention - jose fernandes

Frankfurt University of Applied

Sciences

University of Petroleum and Energy

Studies, Dehradun

Masters of Business Administration in Aviation Management

Management Competencies 2

Work-life balance as a tool for employee satisfaction and retention

Professor Dr. Yvonne Ziegler and Professor Katrin Seifarth

José Joaquim Fernandes - 1034431

7th July 2014

Page i

Table of Contents

List of Appendices ....................................................................................... ii

List of Figures ............................................................................................ iii

Abbreviations ............................................................................................. iv

Abstract ...................................................................................................... v

1 Introduction .......................................................................................... 1

2 Problem Statement .............................................................................. 1

2.1 Scope ............................................................................................ 2

2.2 Selection of literature .................................................................... 2

3 Retention and employee satisfaction ................................................... 2

3.1 Retention ...................................................................................... 3

3.2 Employee Satisfaction .................................................................. 4

3.3 Empirical investigations ................................................................ 6

4 Work and life balance .......................................................................... 8

4.1 What is work-life balance? ............................................................ 8

4.2 The historical balance between work and family ........................... 9

4.3 How can work life balance be used as a tool? ............................ 10

4.4 Challenges with work life balance ............................................... 12

5 Criticism ............................................................................................. 13

6 Conclusions ....................................................................................... 13

7 Bibliography ....................................................................................... 17

Appendices .............................................................................................. 21

Page ii

List of Appendices

Appendix A Selection of literature ...................................................... 21

Page iii

List of Figures

Figure 1 Maslow Pyramid of Needs ........................................................... 5

Page iv

Abbreviations

No abbreviations have been used in this paper.

Page v

Abstract

This paper performs a theoretical analysis of work-life balance as a tool for

employee satisfaction and retention.

It sets out by establishing the concepts of retention and employee

satisfaction.

The paper establishes the concept of work and life balance and analyses

how work and life balance can be used as a tool for employee satisfaction

and retention.

It also highlights some of the important challenges in work and life balance

implementation.

The paper concludes that organisations can through careful

implementation of work and life balance programs ensure employees’ life

satisfaction increases thereby benefiting from the positive spill-over effect

on job satisfaction.

The paper moreover concludes that organisations will through increased

implementation of work-life-balance programs have the ability to increase

productivity at a marginal cost, increase job satisfaction of their

employees, while at the same time reducing turnover intentions, thereby

retaining their most valuable asset; employees.

1 Introduction

In today’s world, an increasing number of American families are likely

either married to or partnered with someone who is also working or the

breadearner is the single head of a household (Valcour et al. 2011).

Successfully integrating work, family and personal life is a difficult

challenge. According to Valcour et al. (Valcour et al. 2011) fully 90% of

working mothers and 95% of working fathers report experiencing work-life

conflict.

A primary function of flexible policies is to ease the work-life family conflict

by facilitating employees’ ability to attend family matters without missing

work obligations (Honeycutt and Rosen 1997).

For this reason, those with a great deal of responsibility for family and

household tasks stand to gain from flexible work arrangements. Day-time

family related activities that are made difficult by standard work

arrangements are facilitated by flexible work arrangements (Shockley and

Allen 2007).

According to Valcour et al. (Valcour et al. 2011) executives and human

resource managers report that work-life balance is one of the top human

resource challenges their organisation face.

2 Problem Statement

This paper performs a theoretical analysis of work-life balance as a tool for

employee satisfaction and retention.

It sets out by establishing the concepts of retention and employee

satisfaction and links organisational retention to employee satisfaction. It

supports the link by empirical investigations.

The paper establishes the concept of work and life balance, gives some

historical background for work and life balance, and analyses how work

and life balance can be used as a tool for employee satisfaction and

retention.


implementation.

The paper ends with self criticism and concludes that organisations can

through careful implementation of work and life balance programs ensure

employees’ life satisfaction increases thereby benefiting from the positive

spill-over effect on job satisfaction.

The paper moreover concludes that organisations will through increased

implementation of work-life-balance programs have the ability to increase

productivity at a marginal cost, increase job satisfaction of their

employees, while at the same time reducing turnover intentions, thereby

retaining their most valuable asset; employees.

2.1 Scope

This paper uses generalised views and draws on academic research

primarily found in the Scandinavian, Northern European and Northern

American work markets.

2.2 Selection of literature

The research articles were selected by undertaking a search through the

search engine Google Scholar and through the electronic databases

ScienceDirect and ResearchGate in addition to a general search on

Google.

For a detailed description of the selection of literature, please refer to

Appendix A.

3 Retention and employee satisfaction

This chapter establishes the concept of retention from an organisational

point of view. It then establishes employee satisfaction. The chapter ends

by supporting the link between retention and employee satisfaction by

empirical investigations.

3.1 Retention

This section establishes the concept of employee retention and discusses

why retention of employees is important to an organisation.

Retention of key employees is important for an organisation.

Without key employees, an organisation might not be in a position to

create or maintain its core competence (Hamel and Prahalad 1994) that

will help it in creating or maintaining a competitive advantage over its

competitors (Porter 2004).

In crafting breakthrough strategy, an organisation needs to access and

utilise a complex set of tangible and intangible assets, skills and

capabilities (Markides 2000).

Loosing Key employees in a client facing role could affect sales and

marketing (Kotler et al. 2013); loosing top executives, such as CEO’s,

could prove problematic in finding a suitable replacement (Bower 2007).

In addition to the above effects, replacing an employee is time-consuming

and expensive. The cost of replacing an employee can generally be

broken down into three categories: Separation cost for the departing

employee, replacement cost, and training cost for the new employee.

These cost are conservatively estimated a two to three times the monthly

salary of the departing employee and they do not include indirect costs

such as low productivity prior to quitting and lower morale and overtime for

other employees because of the vacated job (Snell et al. 2010).

Consequently reducing turnover could result in significant savings to an

organisation. Snell et al. (Snell et al. 2010) also notes, that the major

expense is the cost involved in training a replacement.

3.2 Employee Satisfaction

This section establishes the concept of employee satisfaction and

discusses why satisfaction of employees is important to an organisation.

Work performance can be seen to contain two factors; an employee’s skill

to perform a task and an employee’s desire to perform a task. The desire

to perform a particular task is not sufficient if the employee does not have

the sufficient skills required to perform the task. On the other hand, skill

itself is also not sufficient. The employee should also have a desire to

perform the task (Nordhaug et al. 1997).

Needs theory assumes that people perform tasks in order to achieve

different needs. Maslow (Maslow 1943) argued in his theory for five basic

categories of needs forming a hierarchy.

The five categories of needs are:

1. Physiological

2. Safety

3. Love/Belonging

4. Esteem

5. Self-actualisation

The five categories of needs are shown in the below figure.

Figure 1 Maslow Pyramid of Needs

Source: http://upload.wikimedia.org/wikipedia/commons/thumb/5/58/Maslow%27s_hierarchy_of_needs.svg/1280px-Maslow%27s_hierarchy_of_needs.svg.png

In Maslow’s hierarchy of needs, the family occupies a lower level than

employment.

Employers can benefit from the fact that family is a need which is

occupying a lower level in Maslow’s pyramid, and use this aspect in

designing work-life balance in their human resources strategies in order to

make employees more satisfied.

Furthermore, the contents- and process theories in motivation have been

frequently used as management strategies in order to increase work

performance, improve working conditions and create more enriching,

challenging and interesting jobs (Nordhaug et al. 1997).

Needs theory points to the fact that employees are looking for challenging

jobs, which gives them a feeling of respectability and also lets them know

how well they are performing in their role. These facts are based on the

human need for achievement, autonomy and knowledge of results.

Generally, the goal is to increase an employee’s engagement in their work

by creating jobs with these characteristics (Nordhaug et al. 1997). The

engagement of an employee can moreover be increased by using

methods which encourage the employee to participate in work related to

designing and improving work processes (Nordhaug et al. 1997).

3.3 Empirical investigations

Empirical investigations over the past three decades support strong

associations between life satisfaction and job satisfaction (Qu and Zhao

2012). In his study, Rode (Rode 2004) describes the perspective of job

satisfaction causing life satisfaction. This perspective is called the bottom-

up perspective. The opposite perspective, called the top-down

perspective, is where life satisfaction causes job satisfaction.

In their study, Qu and Zhao (Qu and Zhao 2012) use the top down

perspective to examine the effects of life satisfaction on job satisfaction

amongst hospitality employees.

According to Qu and Zhao (Qu and Zhao 2012) there are theoretical views

supporting the top-down perspective.

According to Orpen (Orpen 1978) a high level of fulfilment with life aspect,

such as family and recreating, often associate with feelings of high self

esteem and sense of control that produce strong expectancy and

instrumentality beliefs. These experiences and beliefs obtain high

performance and job satisfaction (Orpen 1978). The additional perspective

suggests that individuals spill over their positive feelings with family and

recreation to their work attitudes (Orpen 1978).

In their study, Ma and Yin (Ma and Yin 2012) examined the relation

between work and life orientation and work interfering with personal life

and causing conflict; as well as personal life interfering with work and

causing conflict. Their findings indicate that employee’s assessment of

work-and-life orientation are shaped by both work commitment and life

commitment.

Using a 2007 survey of over 2000 employees at nine different

organisations, McNamara et al. (McNamara et al. 2013) investigated the

association between hours worked per week and satisfaction with work–

family balance. Their study suggests that the negative association

between work hours and satisfaction with work–family balance is

attributable to demands of time from an employer exceeding the amount of

time available from the employees, implying larger negative associations

with satisfaction with work–family-balance at higher numbers of hours

worked.

They conclude that the normative climate within a workplace, (i.e., a

supportive work–family culture) can act as resources that offset the

potentially negative aspects of high-demand jobs (i.e., long hours of work).

In a study to analyse whether the Internet and other Information and

Communication Technologies generate work-family balance amongst

academics in Iceland, Heijstra and Rafnsdottir (Heijstra and Rafnsdottir

2010) found that academics were unwilling to change to a 9-to-5 job, as

they were reluctant to give up their flexibility and its accompanying

lifestyle. This was despite the fact that the concept in reality referred to the

possibility of prolonging the academics’ working hours.

Beauregard and Henry (Beauregard and Henry 2009) refers to the work of

Perry-Smith and Blum (Perry-Smith and Blum 2000) which showed that in

a national sample of 527 U.S. firms, organisations offering a greater range

of work-life balance practices reported greater perceived market

performance, profit-sales growth, and organisational performance.

Beauregard and Henry also refers to an analysis of the 1998 Workplace

Employee Relations Survey by Dex et al. (Dex et al. 2001) which found

that organisations offering parental leave enjoyed above average labour

productivity, and that the provision of flexible work hours and tele-work

was associated with reduced turnover.

The empirical investigations are important as they document and confirm

the link between how employees feel at work and at home.

4 Work and life balance

This chapter establishes the concept of work and life balance and gives

some historical background for work and life balance.

The chapter then analyses how work and life balance can be used as a

tool for employee satisfaction and retention thereby linking the

organisational retention to employee satisfaction.


implementation.

4.1 What is work-life balance?

Essentially the term work-life balance is a term open to considerable

subjective interpretation, since what constitutes balance is subject to

considerable cultural variation as defined by each individual or collectively

by a couple in a relationship (Khallash and Kruse 2012).

While there is no one accepted definition of what constitutes a work-life

balance practice, the term usually refers to one of the following:

Organisational support for dependent care, flexible work options and

family and personal leave (Beauregard and Henry 2009).

Hence these practices include flexible work hours (e.g., flex-time, which

permits workers to vary their start and finish times provided a certain

number of hours is worked; compressed work week, in which employees

work a full week's worth of hours in four days and take the fifth off),

working from home (telework), sharing a full-time job between two

employees (job sharing), family leave programs (e.g., parental leave,

adoption leave, compassionate leave), onsite childcare, and financial

and/or informational assistance with childcare and eldercare services

(Beauregard and Henry 2009).

In this paper, I adopt the definition by Khallash and Kruse (Khallash and

Kruse 2012) that work-life balance articulates the desire of all individuals –

not just those with family responsibilities – to attain a balance between

their paid work and their life outside work, from childcare and housework

to leisure and self-development.

Work-life balance has traditionally had a relatively narrow focus on health,

stress-related burnout, work hours, maternity rights, and formal

employment.

According to Khallash and Kruse (Khallash and Kruse 2012) it is

recognized that work and work-life balance is no longer limited to such a

narrow focus. Rather, work is an instrumental element and is a means to

support a way of life and to create optimal conditions for one’s family

and/or one self. Hence, work-life balance is about managing external

pressure from a competitive work environment with leisure and/or family.

Work, however, also constitutes a socio-psychological element that

creates respect and personal challenges. Thus, the work-life balance is

also about managing internal pressure from one’s own expectations and

setting realistic goals, which do not inflict on e.g. family responsibility. In

other words, work-life balance is not just defined by the pressure put on

the individual from employees, but increasingly also pressure exerted by

the worker’s own level of motivation – which only indirectly can be said to

derive from the external pressure created by a society, which fosters a

performance culture (Khallash and Kruse 2012).

The concept of work-life balance has also been widened to include

broader caring responsibilities, the need for flexible working hours, pursuit

of intellectual interests (lifelong learning) and other preferences people

have about the time they want to devote to their work and how they want

to do it, especially since these preferences vary over the course of an

individual’s life. Hence, work-life balance is segmented more and more

from a lifetime stage perspective (Khallash and Kruse 2012).

4.2 The historical balance between work and family

Work-life balance is based on the assumption of the separation of work

and private life, and that ‘balance’ is achieved when there is equal division

between the two. The distinction of work and life is a recent construction

and different from the integrated work and life common until the beginning

of the 20th century, where families all worked together. The distinction

came with the industrial age and development of factories where workers

needed to be in a physical place for certain times (Khallash and Kruse

2012).

But today we are on the verge of radical changes where traditional

corporate world is breaking down and giving way to new types of

organisations – like Facebook and Mozilla – organized in radically different

ways. These organisations have flat structures and open communication

to promote creativity and innovation. They focus on interdependence,

building networks, and encouraging relations between workers, customers,

and vendors. And as a result, they are breaking down barriers and once

again integrating work and life. This is driven forward by technology:

people are able to work when at home, outdoors or indoors, or in a

different part of the world. They are not bound to a specific work schedule

but can work whenever they choose to (Khallash and Kruse 2012).

The general view of work-life life balance is that work-life balance brings

benefits to both employers and individuals. Employers gain a quantitative

and qualitative improvement in the supply of available labour because

work-life balance affects workers’ productivity and keeps them in the

labour market (here for instance elderly and women), and individuals

adapt to balance the various demands made upon them, resulting in a

qualitative improvement to their lives (Khallash and Kruse 2012).

4.3 How can work life balance be used as a tool?

Employers play a major role in managing the conflict between quality time

and family performance (Panisoara and Serban 2013).

According to Aryee (Aryee 1992) data suggest that a rigid organisation

culture focused mainly on performance and disregarding employee’s

needs, can create a stressful climate which in turn constitutes a

determinant for high conflict between family time and job performance.

We talk a lot about work-life balance implying that 50/50 is the ideal split

between our job and everything else (Ignatious 2014).

Langer suggests in her interview with Beard (Beard 2014), that individuals

should think about work/life integration, not balance. Balance suggests

that the two have nothing in common, but that is not true. If they are kept

separate, there is not transfer from what is done successfully in one

domain to the other (Beard 2014).

Graysberg and Abrahams (Groysberg and Abrahams 2014) suggest that

leaders should make deliberate choices about the lives they want to lead

and about which opportunities to pursue and which to decline.

The tacit perception we have is that as our life pattern changes from being

single, to being married and subsequently creating a family with children,

our view of work-life balance would also change.

Interestingly, in their study of employees in four categories, unmarried,

married without children, married with children under 18 and married with

children over 18; Panisoara and Serban (Panisoara and Serban 2013)

concludes that the four groups of employees does not have a significantly

different level of work-life balance.

According to Khallash and Kruse (Khallash and Kruse 2012), a survey of

3000 Graduates from China, the UK, and the US showed that 90% of US

respondents and 87% of Chinese respondents said they would actively

seek out employers whose corporate social responsibility behaviour

reflected their own, supporting the claim that work-life balance, considered

in the context of corporate social responsibility indeed could give

companies a competitive advantage with regards to recruitment.

This is good news for employers, as it means that work-life balance as a

human resources tool will not only have a limited benefit to a select group

of employees, but indeed can be deployed in organisations for the benefit

of a large group of employees.

4.4 Challenges with work life balance

Research has found that employee perceptions of organisational work-life

support and supported constructs, family-supportive organisation

perceptions and organisational work-family culture are associated with

increased organisational commitment, organisational citizenship

behaviours, job-satisfaction and psychological well-being, and with

decreased work-family conflict and turnover intentions (Allen 2001).

Many organisations invest time, effort and financial resources in helping

employees combine work and non-work responsibilities, for example, by

offering family-friendly human resource policies (Valcour et al. 2011).

Although family friendly benefits can serve as valuable tools in helping

employees managing multiple lifestyles, research has shown that the mere

offering of benefits is not always sufficient (Shockley and Allen 2007), as

organisations must also adopt their environment, norms and values in

order for benefits to have the intended impact.

In his study, Nord et al. (Nord et al. 2002) found that human resource

systems were typically based on traditional work arrangements, and were

unfair to participants in the non-traditional work-life balance programs.

Getting the right information from employers to employees about the

existing work-life balance programs seems to be a challenge.

Beauregard and Henry (Beauregard and Henry 2009) refers to work by

Yeandle et al. (Yeandle et al. 2002) which, in a survey of 945 employees

in six different organisations across three sectors of employment (local

government, supermarkets, and retail banking), found that 50% of

employees were unaware of the family friendly practices offered by their

organisations.

Most importantly, perhaps, is that there is an increasing amount of

research supporting the notion that workers who make use of work-life

practices suffer negative perceptions from colleagues and superiors


Employees in many organisations are reluctant to ask for support, out of

fear that doing so will make them appear less committed and therefore

more expendable (Valcour et al. 2011).

Beauregard and Henry (Beauregard and Henry 2009) refers to an

experiment conducted by Allen and Russell (Allen and Russel 1999) which

found that employees who used work-life balance practices were

perceived by co-workers as having lower levels of organisational

commitment, which was thought to affect the subsequent allocation of

organisational rewards such as advancement opportunities and salary

increases.

Observations from Nord’s (Nord et al. 2002) study of two organisations

reveal that employees participating in work-life balance programs might be

perceived by their peers as slackers or not dedicated team players, while

others feared that taking advantage of the programs offered, might

negatively affect their careers.

5 Criticism

Very few academic references are dealing directly with South Asia. The

academic literature which I have found seems to discuss mostly job

satisfaction and work and life balance using the Scandinavian model, the

American model, and some recent empirical studies completed in the

emerging economies such as China.

Huge cultural differences as well as significant stages of maturity of the

concept of work and life balance are apparent from the literature; and a

model that works well in, say Scandinavia may not at all be applicable

across the globe, without significant modification or adaptation to very

local circumstances.

6 Conclusions

This paper has performed a theoretical analysis of work-life balance as a

tool for employee satisfaction and retention.

It set out by establishing the concepts of retention and employee

satisfaction.

The paper then established the concept of work and life balance and

analysed how work and life balance can be used as a tool for employee

satisfaction and retention thereby linking the organisational retention to

employee satisfaction.

It also highlighted some of the important challenges in work and life

balance implementation.

The findings by Qu and Zhao (Qu and Zhao 2012) imply that individuals

with high levels of life satisfaction are more likely to feel satisfied than

those with low levels of life satisfaction.

Employees overall life well-being strongly influences job satisfaction levels

(Qu and Zhao 2012).

In practical terms, when employees feel good about their lives they tend to

enjoy their job more than those who feel bad about it (Qu and Zhao 2012).

According to Beuregard and Henry (Beauregard and Henry 2009)

availability of work-life balance practices has also been related to

increased affective commitment to the organisation and decreased

turnover intentions among all employees, not only to the users of the work-

life programs.

Nord et al. (Nord et al. 2002) also conclude that employees feel

organisations benefit from increased loyalty and retention.

The findings of Qu and Zhao (Qu and Zhao 2012) moreover support the

fact that individuals who have low levels of work interfering family, tend to

have positive spillovers from life events to job attitudes, and also that

individuals with low levels of family interfering work have strong spillovers

from life well-being to job attitudes.

Not only does organisational work and life programs create happier and

more dedicated employees, the use of work-life balance programs, such

as flexible hours, is also associated with an increase in an organisations

productivity of approximately 10% (Beauregard and Henry 2009).

The argument from Panisoara and Serban (Panisoara and Serban 2013)

is that in order to lead to positive results, creating organisational cultures

which promote work-life balance have to be addressed to a wider variety

of employees.

Having employees who make use of available work-life practices may also

incur cost savings for organizations via longer work hours and enhanced

productivity. Employees may work longer hours because flexible

arrangements increase their availability for work and reduce their

commuting time, or because they are exchanging leisure time for flexibility.

They may choose to work during their peak hours in terms of personal

productivity or work extra hours during the organization's peak times in

exchange for flexibility at other times. They may also increase their work

effort to avoid losing a job that offers them the flexibility they desire


Managers are more interested in how employee’s life events and well

being affect job attitudes, so that they can design appropriate human

resource policies to take proper action to ensure the positive spillovers

from life to job (Qu and Zhao 2012).

The research of Qu and Zhao (Qu and Zhao 2012) demonstrate that their

conclusions mean that when work and family demands do not interfere

with each other, employees who have a higher life well-being feel greater

job satisfaction.

The findings of Qu and Zhao (Qu and Zhao 2012) have implications for

managers who often focus attention on increasing employees’ satisfaction

and performance.

Irrespective of whether you support the bottom-up perspective, where job

satisfaction causes life satisfaction; or the top-down perspective, where life

satisfaction causes job satisfaction, there is, both theoretically as well as

empirically, surely a clear link between the job satisfaction and the life

satisfaction of individuals.

Organisations can benefit from this link, by ensuring that work and life

balance components of the human resources programs offered to

employees are incorporated and implemented in their organisations.

In addition to this, it is generally agreed that many work-life balance

practices, such as flexible hours, telework, and informational assistance

with dependent care services, have low financial costs that are associated

primarily with program administration and do not require an extensive

initial outlay of resources (Beauregard and Henry 2009).

Presumably, more organisations would be interested in offering work-life

practices were they aware that benefits may accrue to them regardless of

whether or not their employees made use of the practices (Beauregard

and Henry 2009).

While organisations have a large share of the work related to work-life

balance programs, it is also important that employees effectively involve

their families in their work decisions and activities in order to successfully

prosper from combining work and home (Groysberg and Abrahams 2014)

Organisations can through careful implementation of work and life balance

programs ensure employees’ life satisfaction increases thereby benefiting

from the positive spill-over effect on job satisfaction.

The more employees are satisfied with working in the organisation they

are in, the less they will be looking for new opportunities. Organisations

will through increased implementation of work-life-balance programs have

the ability to increase productivity at a marginal cost, increase job

satisfaction of their employees, while at the same time reducing turnover

intentions, thereby retaining their most valuable asset; employees.

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Appendix A Selection of literature

The research articles were selected by undertaking a search through the

search engine Google Scholar and through the electronic databases

ScienceDirect and ResearchGate in addition to a general search on

Google.

In addition to this, research also involved studying Human Resource

Management textbooks recommended for use of the MBA in Aviation

Management at Frankfurt University of Applied Sciences (Snell et al. 2010)

as well as Copenhagen Business School GDBA programmes (Nordhaug

et al. 1997).

For the search engines and databases a number of searching keywords

related to Work-Life Balance (such as “Work-life balance”, “Work family

conflict”, “Antecedents and outcomes of work–family” as well as words

related to a geographical region (such as “Asia”, “Scandinavia”, “South

Asia”, “India”). This produced an extensive range of diverse articles (175+)

which had to be narrowed down by considering their significance to this

paper.

One of the major difficulties in determining their relevance was that the

majority of the articles included the concept of Work life balance on a very

specific topic, such as “Project Managers in the Chinese constructions

industry” or front end hotel employees, but not necessarily a subject or a

geographical limitation which could be generalised.

Consequently a subjective judgement had to be made as to whether there

was different coverage of focus for the relevance of this paper.

Whilst the database search ensured that international papers that

conventionally tend to be written in English were identified, a potential

limitation was that papers written in other languages, such as any of the

Indian languages, may have been omitted, which in turn may have

influenced the geographical perspective of the articles.

The majority of the references came from specialist Human Resources

and Behavioural sciences journals (Journal of Vocational Behaviour,

Journal of Behavioural Sciences, Social and Behavioural Sciences,

Human Relations) but some also appeared in other journals, such as

Harvard Business Review.

work-life balance as a tool for employee satisfaction and retention - jose fernandes

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