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Creating healthy organizations.

Arvey-RD; Ben-Ner-A; Glomb-T
NIOSH 2002 May; :1-384
Organizational health was conceptualized as consisting of positive outcomes accruing to both firm shareholders and to employees. Research was conducted in several phases to test predictions based on this conceptual model and our report is presented in three volumes. Volume I summarizes the results of phase I which was an exploratory analysis using an existing database of organizational practices in firms located in the State of Minnesota. One hundred and thirteen firms had data on a variety of financial indicators as well as employee well-being measures. Based on four measures of financial health (Return-on-Assets, Return on Equity, after-tax economic return, and total shareholder return) and two measures of employee well-being (average wage for the firm, injury rate for the firm), firms were placed into relatively "healthy" or "unhealthy" classes along with two classes that represented different "mixtures" of firm and employee health. Further analyses revealed that relatively healthy firms differed from unhealthy firms on a number of human resource and management practices. Thus, this first phase proved to be illuminating in terms of the possibility of developing a multi-dimensional conceptualization and definition of "organizational health" and it's possible correlates. Volume I also presents the results of phases II and III of this project. Phase II presented the development of a conceptual model that added more specificity and detail to the definition of and conceptualization of "organizational health" based on related and recent research. In addition, a model was developed spelling out our ideas (based on previous research) concerning the process by which human resource and management practices might impact the development of various organizational programs that are health oriented (i.e., physical and safety oriented, psychologically oriented, socially oriented, and financially oriented). These programs, in turn, are expected to be related to a variety of firm and employee outcomes. Phase III involved an empirical study designed to again provide data to help test our ideas concerning the definition of "organizational health" as well as to test the associations between the human resources/management practices, organizational programs, and outcomes presented in our model. To this end, data was gathered on 819 firms in the State of Minnesota consisting of information derived from a survey of human resource managers of each firm on the various human resource/management practices (e.g., decision-making, communication emphases, TQM, etc.), and organizational programs (e.g., physical work environment, psychological, social, and financial programs, etc.). Wage data were collected from the Minnesota State Department of Economic Security and merged with the survey information for each firm. In addition, injury data for each firm was collected from the Minnesota Department of Labor and Industry, plus financial data on the firm was derived from Dunn and Bradstreet and Standard and Poor data sources and merged with the other information for each firm. Four measures of "employee health" or worker well-being were developed and used for analytical purposes: Employee Satisfaction, Employee Stress (developed from the human resource management survey), average wage, and injury incident rate). Two measures were used as indicators of firm health: Sales Volume and a Financial Well-being score (derived from the Dunn & Bradstreet data source). These measures demonstrated relatively low correlations amongst themselves. Firms were subsequently cluster analyzed resulting in four reasonably coherent clusters of firms. Cluster 1 represented relatively healthy firms exhibiting relatively high levels of satisfaction, low stress, low injury rates, high wages, high sales, and high levels of financial well-being. In contrast, Cluster 3 was represented by firms that had relatively low satisfaction, below average wages, higher than average injury rates, and low financial well-being scores-the relatively "unhealthy" firms.- The two other clusters consisted of firms showing a "mixture" of relatively high and low scores on the firm and worker well-being measures. Further analyses were employed to determine the variables that differentiated between these clusters of firms. Results showed that the clusters differed significantly on a number of firm characteristics (i.e. size and years in business). Analyses also reveled that the clusters differed on a two variables: A variable representing the relatively modernity and cleanliness of the physical environment (i.e. sanitation, ventilation, air quality)-an "Infrastructure and Environment factor, and a variable representing the relative amount of "face-to-face contact" individuals have with other employees and customers-a "Face-to-face" factor. Another set of analyses examined whether the clusters differed on a variety of human resource/management practices. Results were somewhat disappointing in that the various human resource and management failed to show consistent and significant relationships to the various firm and employee well-being measures once controls were made for unionization, firm size, and firm age, although several of them demonstrated significant zero-order correlations. Little evidence was shown that the organizational programs mediated any relationships between human resource and management practices and the various firm and employee well-being measures. In summary, for this phase of the research, fairly good evidence is developed for a coherent conceptualization of organizational health and affirmed through empirical and analytical methods. There is also evidence for organizational practices--- particularly the infrastructure and environments of firms and the amount of face-to-face contact amongst employees-impacting the firm and employee well-being measures. Only limited evidence is provided that the human resource and management practices-either directly or indirectly impact the various well-being measures of the firm and employees. Volume II describes the next phase of our research based on additional data provided by employees working in 42 different firms in the State of Minnesota. 42 Firms agreed to participate in a more in-depth study where we examined individual employees responses to a survey that included items concerning their psychological and physical health symptoms as well as reacting to a variety of firm and management practices. We provide an abstract of this phase of our research in Volume II. Volume III presents the case study write-ups of the firms that agreed to participate in our study by allowing us to interview human resource representatives and survey both employees and supervisors. The analytic work conducted on the employee survey responses is reported in Volume II. Volume III contains specific firm information including financial data drawn from public sources, abstracts of information drawn from interviews with the human resource manager of each firm, and a review of the relative standing of each of these firms on other quantitative information (e.g., percentile ranking of how the firms stands relative to all firms in the database on such things as number of health and safety plans offered, financial health of the firm, relative injury rate, etc.). Thirty-four of the firms could be classified into one of the four cluster types identified in the earlier stage of research (Volume I) and various themes were abstracted that appeared to represent how firms within these different clusters were described in terms of their cultures, their emphasis on safety, social, and financial programs for employees, how various organizational programs "came into existence", and so forth. It appears as if there are distinctly different types of programs and cultures that characterize the different clusters of firms.
Psychological-effects; Sociological-factors; Behavior-patterns; Work-practices; Management-personnel; Stress; Psychological-stress
Publication Date
Document Type
Final Cooperative Agreement Report
Funding Amount
Funding Type
Cooperative Agreement
Fiscal Year
NTIS Accession No.
PB2003-102270; 102271; 102272
NTIS Price
Identifying No.
Priority Area
Work Environment and Workforce: Organization of Work
Source Name
National Institute for Occupational Safety and Health
Performing Organization
University of Minnesota, Minneapolis, Minnesota