David Amankwaa, Sami Pöndelin & Riku Saressalo
As the need for wellbeing is on the rise so is the need for softer values of leaders. Companies are currently in transitional phases. The main purpose of our paper was to find out the most suitable leadership style to promote employee wellbeing. As we discovered, though, was that no single leadership style is dominantly the best but rather a combination of many styles is the best. Human-centric leadership has been proved to be most suitable for promoting such wellbeing and these leadership styles also invest in wellbeing programs and extensive medical care. As such we focused on a few different models that are quite similar, but they all have their own distinct features.
Demand and need for wellbeing
The wellbeing of employees has long been recognized as one of the most important drivers in employee retention and performance. Wellbeing also reduces sick leaves and motivates employees. Happy and healthy employees also act as a living advertisement for customers and potential employees; who wouldn’t want to work in an environment where their wellbeing is of utmost importance or do business with happy and productive people?
The importance of the employee’s wellbeing has been on a steady rise during the past decades. More and more companies have focused on creating wellbeing programs that really take into consideration mental and physical wellbeing. Companies offer wide ranging healthcare plans, discounts to gym memberships and free access to gyms, get together and other activities that keep employees healthy. Companies use posters in their offices highlighting the importance of wellbeing and what tools employees have at their disposal to help themselves.
A study found out that poor mental health of employees increased the costs for employer with 25% in 2021 compared to 2019. Presenteeism was the main factor for the increase, causing lower production values and rates. Turnover saw the biggest rise between the compared years. The study also found that in the UK, 28% of workers who took the survey responded that they either left in 2019 or are planning to leave their respected workplaces during 2022. Related to the increase in costs, close to 40% of costs related to turnover could be traced to issues with mental health and wellbeing. The COVID-19 pandemic is not the sole purpose for increased awareness and interest in wellbeing. (Deloitte 2022.)
Fuller & Kerr (2022) article tells that trending changes of the work markets is not a presents trend, but rather a continuum of what has been ongoing for over a decade, manifesting as 0,10 % yearly increase in quit rates. Also, Volini, Schwartz, Denny, Mallon, Van Durme, Hauptmann, Yan & Poynton (2020, 16) reported in Deloitte’s Human Capital Trends publication, that 80 % of business leaders and HR professionals contributing to wellbeing at corporation level perceives that wellbeing is top priority of the organization when asked about the ongoing trends concerning human capital. Only 50% responded that they were ready or very ready to tackle the present or futures problems concerning the perceived impact of occupational well-being.
Wellbeing initiatives and programs
Employee wellness programs have numerous benefits, and a smart leader will strive for the wellbeing of their employees. The benefits range from small day to day actions to healthcare programs that ensure proper rest periods and stress reducing activities. As people become more and more health conscious, it would be foolish to forget these factors. When a leader is proactive, supports their employees and co-workers, encourages wellbeing, and takes care of their employees the employees tend to be happier and more motivated. (CDC 2016; Herron 2022.)
A Canadian study aimed to evaluate the impact of Canadian employee wellness programs and found that wellness programs have clear benefits. They reduce stress, improve blood pressure, may help quit smoking and drinking, may help lose weight and overall, they have a stress-reducing factor that helps with cardiovascular diseases and their prevention. According to a survey in connection to the study, support from management, dedicated resources from the company and a wide array of communication tools helped achieve these results. The study concluded that the benefits are indeed measurable and may, in fact, lead to the employees adopting a healthier lifestyle overall resulting in the increase of both mental and physical wellbeing. (Lowensteyn, Berberian, Belise, DaCosta, Joseph & Grover 2017.)
Even though wellbeing initiatives and programs supporting employee wellbeing have various benefits for employer and employee, the leader’s role also plays a crucial part in the implementation stage and should not be overlooked. In the U.S, 70% of large employers have wellbeing programs or have invested to wellbeing, on top of the corporate health plan, but the lack of leaders’ initiative and failure of displaying themselves as role models creates a gap between the participant attendance rates, ranging from 25% to 75%. In HERO benchmark survey, consisting of811 companies, 28% reported that leaders publicly recognize actions improving health and wellbeing, and 23% of leaders act as a role-model for balanced work life. Moreover, 17% of the organizations held leaders accountable for employees’ well-being, and 51% gave little to no support, or tools for leaders to improve the well-being of the workforce. The effectiveness of wellbeing initiatives and programs correlate with the numbers. The most comprehensive companies, when it comes to wellbeing, had the biggest improvements to wellbeing when leaders were active with the aspects or actions, or had more support to improve the wellbeing. (Zahrt 2018.)
Leadership Aspects and Models Improving Occupational Wellbeing
According to most of the research, transformational leaders have a beneficial impact on employee well-being and safety. Within transformational leadership theory, a transformational leader is as a person who seeks to satisfy higher needs and engages the full potential of the follower, and the fulfillment of followers’ emotional needs is a key characteristic of transformational leadership. Transformational leaders may fulfill followers’ psychological needs in several ways. The basic tenet of conservation of resources theory is that humans are motivated to protect their current resources and to acquire new ones. Self‐determination theory is a theoretical framework used to understand human motivation. According to self‐determination theory, nurturance and growth of the human psyche are dependent on the satisfaction of three universal psychological needs: autonomy, competence and relatedness. (Kelloway, Dimoff & Nielsen2017, 74-76, 84.)
Employee well-being can be explained by the enhancement of personal and social resources and the satisfaction of psychological needs, while safety can be promoted by transformational leaders through a positive influence on the safety climate at work, according to the conservation of resources theory and the self-determination theory. The amount of this favorable effect, as well as the emergence of transformational leadership in companies, is influenced by factors relating to the leader, follower, and context. Promoting transformational leadership in organizations could be one method among several for ensuring employee health and safety on the job. (Kelloway et al. 2017, 74-76, 84.)
Organizational leaders play an important role in creating employees’ perceptions. Firstly, employees should be valued and recognized in the workplace. Secondly, they should be involved in the decisions that affect them. Thirdly, they should have the opportunities to grow and develop through their work. Then, they should work in an environment that cares about their health and safety. Additionally, they should belong to effective and cohesive teams in the workplace. In this way, when leaders compliment employees on a job well done, they cultivate the sense of recognition. When leaders ask employees for their opinion on an organizational issue they contribute to their sense of involvement. Coaching employees and assessing how the organization can provide the resources employees need to acquire new skills and develop existing skills contribute to growth and development. Talking about health and safety daily is a key component and an effective means of safety leadership. Finally, focusing on team building and team cohesion through setting group goals, coaching, knowledge sharing, and focusing on group dynamics is a leadership function that leads to both more effective teams and a psychologically healthy workplace. (Kelloway et al. 2017, 121-122.)
Managers can learn to be more aware of employees’ health and well‐being, which can lead to improved employee relations, lower stress levels among both managers and employees, and improved cooperation within the overall workforce. Workplaces with a strong social support network are likely to benefit both organizations, management teams and individual employees. Organizations can improve the health and well‐being of their employees by providing managers with the tools and training needed to support employees and encouraging employees to use resources and engage in help‐seeking behavior. (Kelloway et al. 2017, 157.)
Responsible leadership is difficult to define as responsibility should be a key tenet of any company, and it should be an integral part of all daily actions. The term is rather vague, and it means different things to different people. Responsible leaders have common elements though, and they all share values that are economic, societal, and environmental. (Muff, Liechti & Dyllick 2020.) Caring leadership is creating a strong culture of care, respect and compassion. Employees should feel like they can be themselves and bring their best qualities into their working environment. They should feel valued, heard, supported, and appreciated. Caring leaders foster trust and confidence,and the loss of those qualities has been recognized as one of the root reasons of the issues organizations face today. (McDowell, Williams & Kautz 2013.)
Authentic leadership is transparent leadership. These leaders are seen as genuine and honest. Authentic leaders strive to build relationships with their employees and want to inspire them and want to build trust and motivation. As stated in a study by Deloitte, authenticity is paramount.(O’Brien, Main, Kounkel & Stephan 2019.) Ethical leaders demonstrate and promote ethical conduct in their actions and relationships in the workplace. Ethical leaders also try to put other ethical people into positions of leadership and management. Ethical leaders lead by example, they are willing to evolve, and they respect and treat everyone equally. Ethical leadership is important to the company itself, the employees and even to the customers. (Western Governors University 2020.)
This chapter has discussed the importance of good leadership in organizational safety and well-being. According to Kelloway et al. (2017), research has found that constructive leadership styles, such as transformational and authentic leadership, have a positive impact on safety, while destructive styles, such as passive leadership, have a negative impact. Some models of safety leadership suggest that a combination of transformational and transactional leader behaviors can be particularly effective in promoting safety performance. (Kelloway et al. 2017, 24-25.) We must move beyond “crazy bosses”, “brutal bosses”, “despotic leaders”, “the dark side of leadership”, “toxic leaders”, “petty tyranny” ways of leadership still being used today and try to challenge the ongoing destructive forms of leadership and their relationships with employee wellbeing.
According to studies referenced in this essay,we found that the key to wellbeing at work is the active participation of the employer. Wellbeing is a critical part in forming the employee experience and companies need to invest in the human equity. Wellbeing programs and human centric leadership styles are extremely important as the need for wellbeing has been on a steady rise and will continue to increase. Employees themselves also must be active and grab the opportunities they are presented, and many are proactive in seeking new jobs if their current employer is not up to their standards and values. Future research should consider the potential effects of leadership aspects and models improving occupational wellbeing more carefully.
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