Employee Health: A Value Creating Organizational Resource

Abstract

U.S. businesses have overwhelmingly approached employee health from a cost management, rather than investment, perspective. This singular focus on costs is likely due to lack of clarity regarding the potential of employee health to be a value creating organizational resource and the underlying mechanisms by which health may be subject to organizational influence. In this dissertation, I outline the `resource potential' of employee health from an organizational perspective.

First, I draw upon the resource-based view and past research on health promotion and health care cost management to outline the significant organizational performance implications of employee health as a source of value generation in organizations. In so doing, I propose a model that explains the process by which employees' health risks, health motivations, and healthy behaviors impact organizational outcomes. Next, I develop a model that explains how two distinct categories of healthy behaviors - `healthy consumption' and `physical/mental fitness' uniquely impact medical costs and organizational productivity.

To test these models, I employ structural equation modeling to examine a dataset of 152 and 149 organizational level outcomes regarding models 1 and 2, respectively. I find support for my assertions that employee health is a value creating organizational resource and that health motivations are an important means by which this resource may be built. I also find that healthy consumption behaviors have a stronger relative impact on costs whereas physical/mental fitness behaviors strongly promote productivity.

Based on these findings, I argue that minimalistic cost management approaches to employee health are unwise from both organizational social and financial performance perspectives. In particular, this research demonstrates the crucial importance, and potential, of employee health and its components as value creating resources from a strategic organizational management perspective. Further, this research suggests that employee healthcare may be `strategic' social performance as organizational health promotion can simultaneously address both financial and social performance interests. Implications and areas for future research are discussed.