Want to Reduce Health Care Cost? Improve Manager Performance

123RF Stock Photo

The work environment created by first-line supervisors and managers has a direct effect on employee well-being and, consequently, on health and health care cost.

A growing body of studies shows, for example, that supervisor and manager behavior affects individuals’ blood pressure and risk of heart disease. To test this relationship, researchers at the Karolinska Institute and Stockholm University in Sweden tracked the cardiovascular health of male employees aged 19 to 70 over nearly a decade.

Those who deemed their managers to be the least competent had a 25 percent higher risk of a serious heart problem. In a British study published in 2005, the researchers found that men who described their supervisors as fair and just had reduced stress and a 30 percent lower risk of coronary heart disease than those who said they were treated unfairly at work.

A daunting challenge

Addressing the entire array of manager behaviors may seem a daunting challenge. Managers have complex jobs, and they interact with employees in myriad ways over the course of a work day.

Research suggests, however, that changing just two elements of the manager-employee relationship can make a big difference in workplace stress levels and in employees’ self-reported psychological and physical health.

One of those elements is the relationship between the psychological demands of a job and the amount of support people receive in dealing with their work requirements. Job demands become elevated when an employee faces frequent challenges: pressure to perform, long task lists, complex role requirements.

Helping employees manage job stress

Managers exert direct and indirect influence over all of these factors. Ideally, job demand is complemented by job resources: problem-solving assistance from a manager, help from teammates, performance feedback (especially recognition for success) and autonomy in deciding how to go about the work.

Job resources help people manage stress, buffering the effects of work demands, reducing obstacles to performance and bolstering engagement in the face of difficult work. Support from managers and co-workers makes surmounting job challenges feasible and fulfilling rather than frustrating and stress-inducing.

The second interaction involves the relationship between the effort required by a job and the rewards that come to those who perform. Rewards include pay, bonuses, esteem (respect and feeling of success), career growth and job security.

Stress grows when an imbalance exists between the energy cost of a job and the rewards it brings. When effort outweighs reward in the mind of the employee, health-robbing job strain increases. As with job demands and resources, the manager has a profound impact on both the energy required to do a job and the rewards that employees receive, especially the intrinsic and intangible elements.

Article Continues Below

Stressed employees 3x more likely to have health issues

Employees who have the most stressful jobs – those with high energy requirements and emotional demands with little support and insufficient rewards – are about three times as likely to report health problems as people who have low-demand jobs with more control and greater rewards.

As one group of medical researchers observed:

Psychosocial stress has been shown to increase the progression of coronary atherosclerosis. One could speculate that a present and active manager, providing structure, information and support, counteracts destructive processes in work groups, thereby promoting regenerative rather than stress-related physiological processes in employees.”

An advantage ready for the taking

What would it mean if managers became a force for better employee health?

Towers Watson estimates that American employers spend about $11,000 annually per employee in total direct and indirect health-related costs. Plus, for every dollar paid out to cover medical services and pharmaceuticals, companies spend another $2.30 on health-related productivity costs — the costs associated with absenteeism and presenteeism.

By reducing the care requirements brought on by depression and anxiety alone, managers can make a major financial contribution to their companies. Add to that the competitive advantages that accrue to companies whose healthy, energized, resilient employees continue to innovate and produce efficiently in spite of the often traumatic change that has become part of the landscape of work.

Here lies a multifaceted marketplace edge ready for the taking — an advantage to which managers can make a material contribution. 

Thomas O. Davenport is a senior consultant with Towers Watson , a global human resources consulting firm, based in San Francisco. Tom concentrates chiefly on helping clients improve the people-focused elements of business strategy implementation. He's also the author of two books: "Manager Redefined: The Competitive Advantage in the Middle of Your Organization," and "Human Capital: What It Is and Why People Invest It." Contact him at tom.davenport@towerswatson.com.

Topics

1 Comment on “Want to Reduce Health Care Cost? Improve Manager Performance

  1. I would love to ditch the money we are throwing into wellness programs and instead use it for better selection, training, development (and severance) for our managers. I believe it would have more of an effect on controlling healthcare costs but studies from Stockholm won’t help my case. We need more data on this.

Leave a Comment

Your email address will not be published. Required fields are marked *