SUBJECTIVE WELL-BEING AND LABOR PRODUCTIVITY: A GLOBAL AND ORGANIZATIONAL PERSPECTIVEABSTRACT
This study examines the relationship between subjective well-being in the workplace and organizational productivity through a systematic review of relevant scientific articles. A systematic review was conducted on 310 articles, employing inclusion and exclusion criteria to narrow it down to 36 pertinent articles. The review identified several factors affecting both subjective well-being and productivity, such as the company’s willingness to implement programs to improve well-being prioritizing friendly working conditions, fair compensation, flexible schedules, a respectful work environment, promotion of professional development, and emotional and economic incentives.
Keywords:
subjective well-being; labor productivity; organizations; quality of life; job satisfaction.
RESUMO
Este estudo examina a relação entre o bem-estar subjetivo no local de trabalho e a produtividade organizacional por meio de uma revisão sistemática de artigos científicos relevantes. Foram examinados 36 artigos selecionados por critérios de inclusão e exclusão dentre 310 identificados na revisão da literatura. A análise mostrou vários fatores que afetam o bem-estar subjetivo e a produtividade, tais como a disposição da empresa para implementar programas que melhorem o bem-estar, de modo que priorizem condições de trabalho amigáveis, remuneração justa, horários de trabalho flexíveis, ambiente de trabalho respeitoso, promoção do desenvolvimento profissional e incentivos emocionais e econômicos.
Palavras-chave
bem-estar subjetivo; produtividade no trabalho; organizações; qualidade de vida; satisfação no trabalho.
RESUMEN
Este estudio examina la relación entre el bienestar subjetivo en el lugar de trabajo y la productividad organizacional a través de una revisión sistemática de artículos científicos relevantes. Se realizó una revisión sistemática de 310 artículos, empleando criterios de inclusión y exclusión para reducirlo a 36 artículos pertinentes. Finalmente, nuestra revisión identificó varios factores que afectan el bienestar subjetivo y la productividad, como lo es la disposición que perciban por parte de la empresa a implementarles programas que mejoren su bienestar, de tal manera que se prioricen condiciones de trabajo amigables, una compensación justa, horarios flexibles, ambiente laboral de respeto, impulso al desarrollo profesional e incentivos emocionales y económicos.
Palabras clave:
bienestar subjetivo; productividad laboral; organizaciones; calidad de vida; satisfacción laboral.
INTRODUCTION
Subjective well-being is a topic widely researched, however from a global perspective, the literature has not explored the relationship and/or direct influence between subjective well-being and labor productivity. Doing this research from an organizational and global approach is very important, since it can be visualized as a cycle of affectation. In other words, global economic well-being directly affects companies, companies affect the well-being of workers, workers affect the productivity of companies and companies affect the productivity of the country.
Despite the measures to address workers’ well-being and the challenges around productivity growth posited at the Davos 2022 Economic Forum (World Economic Forum, 2022) and the global concerns about these topics reflected in the sustainable development goals portrayed in the UN’s Agenda 2030, subjective well-being has been challenged by issues such as the income inequality aggravated due to the COVID-19 pandemic. Given the high national debts, income inequality has affected particularly developing economies with low public investment in education and welfare. For the IMF (2017, p. 11), income inequality can impair the countries’ “future pace and the sustainability of growth and macroeconomic stability.”
Thus, it is possible to infer that there is a close relationship between subjective well-being and labor productivity. Gamero (2004) argued that job satisfaction is an important economic variable in economic research. The author proposes that the company’s overall economic condition is directly proportional to its employees’ satisfaction, well-being, or happiness. In addition, Gamero (2004) advocates that job satisfaction affects the labor market by job abandonment, absenteeism, or impact on productivity. Estrada (2018) corroborates this finding, pointing out that, to achieve high productivity of human talent, companies must develop a labor improvement plan seeking to impact workers’ personal and work lives.
According to Diener et al. (2018), well-being the perception or evaluation that an individual has of their own life, which includes an assessment of mental health, as well as the positive and negative aspects of experiences and emotions. Such is the importance of subjective well-being that the UN General Assembly established March 20th as the Day of Happiness worldwide, celebrating subjective well-being and issuing resolution 66/28 of 2012.
Bhutan was the first country to prioritize the value of happiness over income. Wangchuck, the monarch of the Kingdom of Buthan, is known as the pioneer of the Gross Domestic Happiness (GDH) indicator, also called Gross National Happiness, which is a socio-political instrument of organization and valuation of the country’s public policies, placing happiness as a core objective (Rodriguez-Calles, 2019).
The example of Buthan is particularly relevant to the global and organizational perspective of subjective well-being and labor productivity. The promotion of citizens’ well-being based on their perception of happiness has helped to understand the importance of promoting subjective well-being at the organizational and country levels. In essence, the initiative in Bhutan revealed that good governance and stability in public and economic policies stimulate investment and the creation of companies, which in turn generate economic and subjective well-being for citizens, thus contributing to a better quality of life in the regions and organizations where these good practices are implemented.
The value of happiness in this country originates in Buddhist economics, whose 5 pillars are minimizing suffering, simplifying desires, practicing non-harming, sincere care, and generosity. Following the idea that well-being is closely related to happiness, Bencsik (2023, p. 4783) points out physical, mental, and social well-being as the components forming the overall notion of well-being, which is a concept seeking to determinate how one feels regarding their body, mind, and relationships, including personal and work relations.
Therefore, the GDH “aims to define relevant indicators for each sector to guide development, allocate resources to achieve previously set goals, and measure outcomes (people’s happiness)” (Bencsik, 2023, p. 4781).
The research State of the Global Workplace (Gallup, 2023) concludes that, a good perception of life requires a good perception of work. According to the research, reflecting on how people are managed at work is crucial. The findings pointed out that “having a job you hate is worse than being unemployed” and reinforced the importance of the work-life balance, mentioning the impact of work relationships in people’s lives: “if you’re not thriving at work, you’re unlikely to be thriving at life” (Gallup, 2023, p.1). Hence, it is important that companies, especially in human talent areas, know workers’ motivations and generate programs that promote quality of work life to maintain commitment and motivation, which generate greater productivity, profitability, and sustainability at the organizational level.
Gallup’s (2023) research reinforces the positive relationships between workers’ well-being and engagement. It shows that most workers are either “quiet quitting” or “loud quitting” - that is, not engaged or actively disengaged, this indicates that there is still much to be done to increase engagement and, consequently, well-being. These workers are more likely to be stressed than engaged employees, which helps to explain the record-high level of employee stress in 2022, even though the world has recovered from the most severe periods of the COVID-19 pandemic. The research found that the US, Canada, and East Asia (especially China) were the regions with the highest levels of employee stress in the world. Although the study did not explore the sources of stress, the data allowed the researchers to infer the connection between stress, engagement, and well-being, suggesting that this context represents an opportunity. According to them, quiet quitting employee are expecting better leadership, and organizational interventions to improve people’s management could greatly increase the workers’ productivity.
Despite the above observations and positions, the magnitude of the relationship between subjective well-being and labor productivity for countries and organizations at the global level is not entirely clear. This study contributes to identifying the theoretical foundations of this relationship by offering a systematic literature review, examining how the subjective well-being of countries affects their productivity, or the productivity within organizations nationwide (Green, 2021).
GLOBAL PERSPECTIVE OF SUBJECTIVE WELL-BEING
Hovhannisyan et al. (2022) analyzed data from 40 developing countries across distinct regions to produce a multidimensional measure of job quality, capable to assessing and comparing job quality among countries. The authors’ proposal was based on four basic dimensions and indicators: sufficient income, access to employment benefits, job stability, and adequate working conditions.
At the global level, the study showed that in public administration, public services, finance, and business services sectors, most workers have stable jobs and earn wages above the poverty line, with about two-thirds receiving work-related benefits, which are elements linked to higher job satisfaction. Furthermore, workers over 25 years old have higher quality jobs than workers aged 16-24, and higher education ensures higher job quality through increased benefits and stability (Hovhannisyan et al., 2022).
In addition, the research found that the Sub-Saharan Africa region has a low proportion of waged employees (except for Botswana), therefore presenting the lowest job quality scores. In contrast, most countries in the East Asia and Pacific regions exhibit average levels of job quality, and Bolivia (BOL), the Lao People’s Democratic Republic (LAO), and Turkey (TUR) have similar measures of job quality but different proportions of waged employees.
The study by Chaparro and Lora (2017) sought to understand why companies create good working conditions, considering the costs of implementing them and their impact on wages and productivity. Using the 2007 Gallup World Poll with 18 countries in Latin America and The Caribbean, in addition to propensity score matching, they found a positive relationship between good working conditions and wages when multiple signs of good working conditions are present. The authors also conclude that there is a positive payoff for firms that invest in good working conditions.
A global perspective on subjective well-being: Women
As a matter of gender, women fare particularly well in the working conditions dimension, while men fare better in terms of the income dimension (Hovhannisyan et al., 2022). According to estimates by the IMF (2017), GDP would undergo a noticeable growth globally at all income levels if ’female labor force participation were balanced against male participation’, such that India would benefit the most with a 27% increase in its GDP. Another country whose culture influences the participation of women in the labor force is the United Arab Emirates, whose GDP would increase by 12% if they were to balance the participation between genders; in addition, Japan is the second Asian country that would see its GDP increase by 9% and in America, the United States would benefit by 5%.
Gamero (2004) indicates that despite the negative discrimination against women in the labor market, which translates into occupational segregation, lower salaries, limited opportunities for promotion, harassment at work, and higher rates of dismissal as shown by numerous studies, women tend to have more job satisfaction than men, a trend contrary to what would be expected given their conditions.
Although GDP would increase with greater hiring of women, it is also important to highlight the increase that this would mean in the general index of the perception of subjective well-being at the country level since it is women who, despite their disadvantages in the labor market, tend to feel more satisfied and perceive themselves as happier. Thus, more women working would mean more people who identify themselves as happy in the Gross National Happiness indicator (Kumari & Sahu, 2023).
Organizational perspective on subjective well-being: Fourth Industrial Revolution
Subjective well-being and labor productivity in companies have been affected by the fourth industrial revolution, which has brought with it a boom in technological development due to the introduction of artificial intelligence and robotics, among other technologies, maximizing productivity and causing a reduction of more than 5,000,000 jobs. This reveals an increasing need to train employees and stay ahead of the demands of the new labor market.
The fourth industrial revolution has brought about technological disruption that is transforming work dynamics globally. These new technologies are created to streamline organizational processes, improve communication, and automate services.
However, this revolution is affecting workers’ subjective well-being because it has generated an increase in social inequality. Many people do not have access to technology, and many jobs are being automated, causing stress and anxiety, which are negative indicators of subjective well-being. On the other hand, it is difficult for organizations to obtain human capital with the appropriate training in these new technologies. Therefore, it is urgently required to promote people’s access to training in the use of ICTs (Spencer, 2023).
Definition of subjective well-being and labor productivity
According to Bencsik (2023), well-being is a state of constant change influenced by factors, including context, mindset, habits, relationships, and goals. As for happiness, the author defines it as a long-term state focusing on quality of life and personal values (Bencsik, 2023).
For Herrera and Torres (2019), subjective well-being in the workplace is understood as the cognitive and emotional evaluation of people about their satisfaction with life in the work environment. This encompasses internal factors such as relationships with colleagues, superiors, and the nature of the work being developed, in addition to the always necessary extrinsic elements such as compensation and promotions. These authors even argue that subjective well-being in the workplace predicts workers’ organizational commitment.
The quality of work life involves favorable and unfavorable factors that influence the work environment and working conditions as a whole and have positively impacted both individuals and the economic health of organizations (Agarwal, 2020).
For Guerra et al. (2022), productivity is an indicator that reflects the efficiency of machines, people, systems, factories, etc., translating into the capacity to convert available resources into products needed by the population. The authors also defined labor productivity as the relationship between what a company produces and the resources it uses to achieve good profitability and established that the determining factors of productivity are an optimal and pleasant work environment, respect and motivation regarding employee development, and flexible working hours. The research consisted of applying a survey to a stratified random sample of 50 employees from different departments of Grupo Empresarial ADMG in Ecuador, with the following age range: 25 to 35 years old (58%), under 25 years old (6%), over 35 years old (36%).
METHODOLOGY
This research offers a systematic review or the scientific literature on subjective well-being and labor productivity and its impact on organizations. The guidelines of the PRISMA statement and the 27-item checklist (Yepes-Nuñez et al., 2021) were employed.
The PRISMA method is widely used because it allows a sequence of steps to choose, evaluate, and extract the most relevant or pertinent articles in scientific research, known as systematic reviews and meta-analyses, providing scientific rigor. The following is a description of the review process and its stages.
Inclusion and exclusion criteria
As inclusion criteria, studies were deemed eligible if they presented results dating no earlier than 2010 (i.e., published between 2010-2023), were published in English or Spanish, consisted of empirical research (and not systematic, literature, or narrative reviews), and dealt with subjective well-being and labor productivity.
Regarding exclusion criteria, studies that did not address the topics of well-being and productivity at work were disregards, as well as those that did not address variables within organizations. In addition, systematic reviews, conference proceedings, book chapters, expert opinions, and letters to editors were excluded, together with studies that did not have the full text available and did not address the variables of interest.
Search strategy
The initial search strategy used the electronic databases Scopus, Google Scholar, and Lens.org. Several search terms were included independently “subjective well-being at work” and “productivity” through combinations “subjective AND well-being AND productivity AND productivity AND at AND work” using the Boolean operators AND, OR to connect the words. An advanced systematic search was also performed, using search strings from the identified terms “In Scopus: In Google Scholar: In Lens.org:” No methodological restrictions were imposed on the search strategy.
Selection of studies
After importing all retrieved studies into Mendeley and eliminating duplicate articles, a researcher performed the selection steps of potential articles to analyze. For this, a preliminary search matrix was used with the following information: Year, Doi, Authors, Article title, Central study variables, Research objective, Population/sample, Instruments, Type of field study or review, Method of data analysis, Definitions, Results, Countries, Database in which found, and References. Studies selected as relevant in the preliminary search were reviewed in full in the second stage according to the same criteria.
Search outcomes
An initial search of 20,960 articles corresponding to the variable subjective well-being was performed. Then, the preliminary selection phase of the manuscripts was carried out and articles were selected that met the following inclusion criteria: year of publication between 2010 and 2023 (n:16,607), topics that study subjective well-being in the workplace (n: 913), subjective well-being and labor productivity in English and from the area of human resources (n:310), articles from psychology, neurosciences, economics, business, finance, econometrics, management and accounting (n:79), from countries with the highest number of publications in the subject of study, such as the United States, United Kingdom, and Germany (n:45), excluding those pertaining to neurosciences (n:36).
A total of 36 research studies were pre-selected from the advanced search and used for the narrative synthesis. They were distributed as follows: 30 in Scopus, 1 in Google Scholar, 5 in Lens.org. The PRISMA flow diagram is summarized in Figure 1.
RESULTS
At a global level, it is interesting to note that, of the OECD countries, Mexico’s workers spend the most hours in their companies but generate the least productivity and receive the lowest wages.
To delve deeper into this issue, we present a table with data obtained from OECD statistics, which shows the relationship between hours worked, productivity, and hourly wages in 13 countries with different economic, cultural, and lifestyle conditions in different parts of the world.
Table 1 shows that Latin American countries such as Mexico, Colombia, and Costa Rica have the longest working hours compared to other countries such as Germany, Denmark, and Luxembourg, which have shorter working hours. In addition, Ireland, Korea, and Costa Rica stand out in productivity in contrast to Mexico, Luxembourg, and Spain, which occupy the last positions in this variable. Finally, Luxembourg, Germany, and Korea have the highest variation in hourly wages, while countries such as Costa Rica and Colombia even showed a negative variation, followed by Japan, which has a low figure compared to other countries.
Annual comparison of hours worked, productivity, and hourly wage of different countries in the world.
Table 2 shows the happiness index of the countries, showing that Denmark is the 2nd happiest country in the world, only behind Finland. Of the countries considered in this article, Denmark, Switzerland, and Luxembourg have a higher index, while Korea, Colombia, and Japan are the least happy countries.
If we contrast the data obtained in Table 1 with the happiness index of each country, we see that Denmark and Luxembourg are the happiest countries among those selected and work the least hours, standing out from Germany, which, although its working day is not as long, is in fifth place. It is worth noting that Colombia is one of the least happy countries and is also a country where people work long hours, and the variation in salary is negative, as is also seen in Japan. In the specific case of Mexico, it is the fourth country with the least happiness, with the most hours worked, and the least productive.
Organizational perspective of subjective well-being
Hand in hand with the global picture but at the organizational level, a study conducted by Ramirez et al. (2020) over 6 months with employees of 5 organizations, of which 2 were public and 3 privates, showed that the productivity of a company depends on the effectiveness of the employee in the workplace and not precisely on the attendance or time spent in the office. Thus, quality work is better than a job where employees must strictly comply with certain number of work hours.
In response to the need to balance personal and work life in the search for a better quality of life, organizations have implemented intervention strategies to retain potential employees to obtain greater productivity, efficiency, effectiveness, and performance (Agarwal, 2020). This is how generating wellness programs in companies so that the worker perceives organizational support is of utmost importance to increase their job satisfaction and quality of life, which is reflected in greater commitment and labor productivity. All these findings were revealed in a study conducted by Estrada (2018) in which 1255 workers from different productive sectors participated, such as the manufacturing industry, nurses, family doctors, university professors and farmers.
DISCUSSION
The systematic review of articles on subjective well-being and productivity in organizations showed that interest in this topic has been increasing over the last 10 years, with 2022 being the year with the greatest relevance as a result of a change in the perception of people’s lifestyles, who opted to look for a job they like and prioritized their mental health. In addition, in the post-pandemic period, markets were in a period of economic recovery, there was an acceleration of the technological era, population migration increased, and there was a change in labor dynamics with the introduction of the working from home modality. As a result, human talent areas have promoted programs to improve the sustainability and profitability of companies.
It is worth mentioning that the authors who have written the most on the subject are Casas, Diener, and Lucas, while the countries that have shown the greatest interest in the study variables are the United States, the United Kingdom, China, and Germany, making evident the need for countries to improve the satisfaction of their inhabitants and thus increase their GDP.
According to a longitudinal review by Ramírez et al. (2020), which covered economic periods (crisis and abundance) in countries, as well as macroeconomic measures of productivity and employment, it was found that these variables are related to GDP and that this has an impact on the subjective well-being of citizens, as demonstrated by research where countries with higher GDP have a better perception of subjective well-being and, therefore, greater satisfaction with life.
Furthermore, Cáceres’ (2021) paper hints that a country’s rapid economic growth usually corresponds to a faster growth in the life satisfaction of its citizens. Similarly, as countries move from low to moderate income or moderate to high income, their populations tend to be more satisfied.
In contrast, Haerpfer, C., Inglehart, R., Moreno, A., Welzel, C., Kizilova, K., Diez-Medrano J., M. Lagos, P. Norris, E. Ponarin & B. Puranen (eds.) (2022.), which is an international research program that explores people’s values and beliefs, analyzed the levels of life satisfaction that citizens have globally over a 5-year period (2017-2022). From this study, it is especially striking that Latin American countries, on average, are the ones that expressed feeling completely satisfied with their standard of living, making it a focus of attention since Latin American countries do not have the highest standards of quality of life. However, the culture or perception of countries like Colombia are likely to show higher levels of satisfaction.
Hence, it is important to implement social programs that promote the happiness of citizens and that allow labor laws (labor legislation of the countries) to improve the quality of life of workers and thereby increase the productivity of organizations. For example, some legal norms are very rigid or flexible, and this does not ensure decent work, which implies that working conditions and types of contracts, in many cases, are not fair for the worker, promoting inequity and non-payment of benefits. In countries such as Colombia, despite changes in the laws that allow for a gradual reduction in the working day, as indicated in Article 161 of the new labor reform of the substantive and procedural labor code, there is still a tendency to abuse ambiguous types of contracts such as service provision orders to avoid paying legal benefits, but keep the worker under great labor pressure (Martínez-Buelvas et al., 2017).
It is worth mentioning that the relationship between satisfaction and income remains constant over time, whether the comparison is made between individuals in the same country or between different countries. This indicates that life satisfaction tends to grow hand in hand with material living standards, suggesting that economic growth improves subjective well-being. Thus, if only GDP per capita and the positive correlation between economic growth and life satisfaction were considered, richer countries would have higher levels of subjective well-being. However, it is important to note that each country may vary depending on numerous factors not considered here (salaries, types of contracts, political and cultural regime), and estimates are not particularly precise due to the scarcity of data.
As discussed in this article, the Gross Domestic Happiness Index takes a universal approach to measuring people’s happiness and well-being. According to Bencsik (2023), good governance, preservation and promotion of culture, environmental conservation, and sustainable and equitable socio-economic development are the four pillars included in this index. The importance of the first pillar lies in the fact that the governing authority serves as an example for the rest of the population, which applies not only at the political level but also at the organizational level since the leadership style determines the efforts made by the human talent area to stimulate employees and thus increase their quality of working life and consequently the company’s profitability (Tobgay et al., 2011).
Similarly, the other three pillars serve as criteria for development progress (Hermawati & Suci, 2015). A healthy work environment can have a significant impact on the preservation and promotion of culture, environmental conservation, and sustainable and equitable socio-economic development. Thus, when organizations adopt ethical practices (Li et al., 2024) that respect human rights, they create a space where employees can share their cultural backgrounds and experiences, promoting mutual understanding and the preservation of cultural richness.
Organizations that seek to implement the environmental conservation pillar as a means of redressing, in some way, the impact on the environment engage in social and environmental initiatives (Jain et al., 2024). The fourth and last pillar, which speaks of sustainable and equitable socio-economic development, addresses good financial practices and efficient management of economic and logistical resources. It focuses on the welfare of stakeholders, promoting the quality of life of employees, their families, and society in general (Spencer, 2023).
Today, pay or financial reward is no longer the most important attraction when choosing a job; young people’s priorities are now the search for attractive and challenging opportunities to make work and leisure activities more enjoyable (Poethke et al., 2023). The demands of the economically active population now prioritize good mental health, a high degree of satisfaction with life, a sense of purpose or determination, and the ability to manage stress. In addition, they include dimensions such as sustainability, social sensitivity, and cultural traditions (Badri et al., 2023).
CONCLUSION
After conducting a systematic review of articles related to subjective well-being in the workplace, quality of life, and labor productivity, we conclude that, at the global level, there is a clear need to expand the knowledge of some public domain instruments that show happiness, productivity, and subjective well-being indexes. Such elements work as a frame of reference for public policies that contribute to improve GDP. All this is in line with the main idea of the article, which is to support decent work and economic growth corresponding to the UN SDG 8.
It is inferred that at the organizational level, productivity, workers’ interest in their willingness to carry out their professional activities, and their sense of belonging are closely related to the willingness they perceive on the part of the company to implement programs to improve their well-being, in such a way as to prioritize friendly working conditions, fair compensation, flexible schedules, a respectful work environment, promotion of professional development, and emotional and economic incentives.
Therefore, investing in subjective well-being in the workplace is a way to guarantee labor commitment and increase the productivity of human capital, promoting the profitability and sustainability of companies. The challenge is to retain employees by offering labor quality, good leadership, and professional growth. It is necessary to consider that the quality of the organizations depends on the workers’ quality of life. In addition, we recommend that future research considers continuing with this line of research due to the new work dynamics generated by the changes brought by the fourth industrial revolution and the digital era to understand how the way of working is changing and challenging the areas of human talent.
Finally, it would be appropriate to consider cases of labor and economic growth in countries such as Singapore, whose former Prime Minister Lee Kuan Yew (Mechitov et al., 2021, p. 5) states that leadership changes or transforms a country and an organization, making undeniable the importance of having good leaders in countries and productive units and employing measures to achieve subjective well-being.
The human talent area of companies could take into consideration the findings of this article to forge wellness programs that promote professional development and generate conditions to improve quality and encourage innovation of their products or services. This creates win-win alliances without compromising the quality of life of their workers, thus ensuring that organizations have a generalized welfare, which eventually impacts investment and the country’s economy.
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Evaluated through a double-anonymized peer review
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The Peer Review Report is available at this link
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Associate Editor:
Adebukola E. Oyewunmi
