Adopting a 'high road’ employee reward strategy improves workplace productivity and wellbeing

Abstract: Recent research suggests that democratising the workplace is an effective way of improving productivity and wellbeing. But few studies have focussed on how to democratise the workplace. This study aims to explore how organisations can democratise the workplace via employee reward strategy, and how this impacts productivity and wellbeing. I hypothesised that a ‘high road strategy’ to employee reward – maximising value rather than minimising cost – would be the most effective way of improving workplace productivity and wellbeing. I also hypothesised that reward strategies in the Nordic countries, which tend to resemble a high road strategy, would be more effective than reward strategies in the UK. I used quantitative analyses on the European Company Survey 2019 data set, exploring different components of a high road reward strategy as predictors of productivity and wellbeing. My results suggested that a high road strategy to employee reward does improve workplace productivity and wellbeing. The strategy consists of maximising employee representative influence (via frequent meetings with management) and reward system comprehensiveness (via emphasis on pay based on company performance); it does not require broad collective bargaining coverage. Nordic reward strategies were more effective than UK strategies: perhaps due to Nordic two-tier bargaining systems facilitating employee representative influence and an emphasis on pay based on company performance. Future research should explore other ways of maximising employee representative influence, as well as other components of a high road reward strategy.