Uncovering the link between worker well-being and factory performance: A longitudinal study with workers in China
Purpose. Companies are concerned about the well-being of workers in their supply chains, but conventional audits fail to uncover critical problems. Yet, if the happy worker – productive worker thesis is correct, it would benefit factories in fast-developing countries, particularly China which is key to many global supply chains, to ensure the well-being of their workers. We set out to better understand the relationship between well-being and performance in four Chinese factories. Approach. Over 12-months we collected digital diaries from 466 workers in four factories, and monthly data about the performance of their factories. We used this data to gain insights into the well-being of workers in these factories; to design experimental interventions to improve this; and to consider any effects these had on factory performance. Findings. Our experiments showed that training interventions to improve workers’ well-being through their work relationships and individual skills improved not just a factory’s general worker well-being, but also some aspects of its performance and worker retention. Thus, it brought benefits not only for the workers but also for the factory owners and their client companies. Originality. While there is a significant body of research investigating the happy worker –productive worker thesis, this was not conducted in Chinese factories. Our work demonstrates that in this and similar environments, workers’ eudaimonic well-being is more important than might be assumed, and that in this context there is a relationship between well-being and performance which can be practically addressed.