How executives can balance employee wellness and high productivity

March 6, 2023, 12:38 PM UTC
Salesforce CEO Marc Benioff said wellness outshone high performance during the pandemic.
Photograph by Fortune

Good morning! Paolo here, filling in for Amber.

Salesforce CEO Marc Benioff recently told employees in a companywide memo that “wellness culture overpowered high-performance culture” during the pandemic. “Fear of escalations for people-related issues (burnout, psychological safety, equality, etc.) can make managers reticent to performance manage their teams,” he wrote. 

His sentiment expectedly generated outrage. But it also begs the questions: Are the two mutually exclusive? Does one come at the expense of the other? 

In the short term: perhaps. In the long term: definitely not. 

“Yes, over a limited period of time, maybe you ‘squeeze the workforce’ to sort of get that productivity, but, over the long haul, we need to design well-being into the flow of work,” says Ravin Jesuthasan, senior partner and global lead for transformation services at consulting firm Mercer.

The concerns regarding overall U.S. productivity aren’t unfounded. Annual average productivity—as measured by the economic output per hour worked—decreased by 1.7% from 2021 to 2022, the largest annual decline since 1978, according to the Bureau of Labor Statistics.

But the tension between wellness and high performance is born of a misconception, according to Jesuthasan. In an ideal scenario, “instead of viewing people as an obstacle to performing better, people become the fundamental asset.”

Tangentially, although employee well-being is a key enabler of strong performance, some companies might have to cut wellness benefits to avoid worse outcomes like layoffs or insolvency. That’s when data should come into play, Jesuthasan says. He recommends using conjoint analysis to assess which wellness initiatives employees value most before making determinations about what to cut. 

“Instead of asking someone, ‘What would you like?’ where typically ‘more’ is the answer,” says Jesuthasan, “ask people to make some choices and tradeoffs.” 

Once a company has a sense of what employees are willing to live without, it can apply portfolio theory—a method for selecting investments to maximize overall returns—to ensure the full roster of wellness benefits meets workers’ needs, even on a slightly reduced budget. 

That way, “what people value actually doesn’t go down because you’ve taken away things that they don’t value, which you might have been throwing money at,” Jesuthasan says. 

Paolo Confino

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Everything you need to know from Fortune.

Know your rights. A new law makes it harder for companies to shield themselves from legal liability in sexual harassment lawsuits, but the onus is still on employees to know their rights. —Megan Leonhardt

Medical misconduct. Digital mental health platform BetterHelp will return $7.8 million to customers after the Federal Trade Commission found it shared private medical information with companies like Facebook and Snapchat. —Frank Bajak

Is that a compliment? Almost half of employees don’t believe their manager’s praise is genuine, according to a survey by HR consultancy O.C. Tanner. Employees tend to consider recognition authentic when done at a regular cadence rather than a one-off. —Orianna Rosa Royle

Sailing through work. A cruise company is trying to recruit remote workers with a three-year, 135-country cruise. —Chris Morris

This is the web version of CHRO Daily, a newsletter focusing on helping HR executives navigate the needs of the workplace. Today’s edition was curated by Paolo Confino. Sign up to get it delivered free to your inbox.

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