Availability and Use of Work–Life Balance Programs: Relationship with Organizational Profitability

Abstract

The present paper investigated the relationship between work–life balance programs (WLBPs) and business outcomes at the organizational level. First, we examined the effect of WLBPs on organizational profitability (revenues minus expenditures per employee). Second, we extended the discussion on the job demands-resources (JD-R) model by considering how and why WLBPs can mitigate nonjob demands. Specifically, we tested the moderating role of the availability and use of WLBPs in the WLBPs-organizational profitability relationship. We found that both availability and use of WLBPs moderate the WLBPs-profitability relationship. We discussed implications of the findings.

1. Introduction

Organizations are increasingly adopting work practices that aim to support employees to fulfill both their employment- and family-related responsibilities [1,2]. These family-friendly practices, or work–life balance programs (WLBPs), are provided to employees to support their personal and professional well-being and development [3,4]. Examples of such initiatives include eldercare, family or personal leave, on-site childcare, physical-fitness centers, informational assistance (e.g., psychological counseling), and financial assistance (e.g., tuition reimbursement) [3]. Although the benefits of WLBPs are well-documented [5], a longitudinal research design has been rarely applied to the literature, making it difficult to ascertain whether WLBPs contribute to organizational performance [3,6].

In addition, researchers suggested using more objective performance outcomes in examining the effect of WLBPs on organizational performance [7,8]. Kelly et al. noted that the effect of WLBPs on business outcomes at the organizational level (e.g., organizational productivity, stock market performance, and return on investment) is still limited, compared with work outcomes at the individual level (e.g., job satisfaction, turnover intention, and affective commitment) [8]. Thus, existing studies on the effect of WLBPs on organizational financial performance can be further established if the outcome is examined with an objective financial performance measure. For example, associating WLBPs with the organizational profit margin (i.e., operating revenues minus operating costs) provides strong support for WLBPs.

While research on WLBPs has investigated the effect of the existence of WLBPs on organizational outcomes, little is known about whether the availability and use of WLBPs by employees influence the WLBPs-organizational outcomes relationship. According to Bowen and Ostroff, human resource management (HRM) practices can be understood as communications that present narratives to employees and create strong situations in which employees develop shared perceptions and expectations [9]. As such, HRM practices perceived and accessed by employees build strong situations that contribute positively to the achievement of the desired organizational outcomes. Thus, WLBPs are likely to be more beneficial (and inclusive) when they are easily available to most employees, easily accessible without constraints from the organization’s culture, and customized to satisfactorily suit the needs of the end user [10]. Essentially, making WLBPs available to employees is a viable option for organizations that seek to maximize the full potential of their workforce. This is because employees who actually use WLBPs are more likely to appreciate the benefits of such initiatives. Thus, the relationship between WLBPs and organizational profitability can be stronger in organizations with high proportions of employees that utilize WLBPs. In this study, we investigated the moderating role of the availability and use of WLBPs in the relationship between WLBPs and organizational profitability.

In sum, this study advanced the literature on the relationship between WLBPs and organizational performance by (1) using a longitudinal research design, (2) taking an objective business outcome (i.e., profitability), and (3) examining the moderating role of availability and use of WLBPs in the relationship between WLBPs and organizational profitability.

2. Literature Review

2.1. Job Demands-Resources Model

The conceptual framework for this study is built on the job demands-resources (JD-R) model [11]. The JD-R model promotes the idea that job demands and job resources are the initiators of well-being impairment and motivational processes, respectively [12]. Job demands (e.g., work overload, interpersonal conflict, emotional demands, and job insecurity) are demanding aspects of jobs “that require sustained physical or mental effort … associated with certain physiological and psychological costs”, and job resources (e.g., feedback, job control, and social support) are resource aspects of jobs that can “(a) be functional in achieving work goals; (b) reduce job demands and the associated physiological and psychological costs; (c) stimulate personal growth and development” [11].

The JD-R model suggests that HRM practices enhance organizational performance by recognizing how demands and resources work together to predict the desired organizational outcomes [12]. In this study, we considered WLBPs as job resources designed to mitigate the unwanted impact of nonjob demands on employees’ productivity. By reducing nonjob demands, employees become better focused on their work.

We further considered the dimensions of the availability and use of job resources. According to Bowen and Ostroff, HRM practices send messages from employers to employees about expected behaviors and the rewards associated with such behavioral attitudes [9]. Although several HRM practices are available in organizations, employees may not be aware of the existence of WLBPs. Moreover, in cases where they are aware of the existence of such programs, some employees may not be encouraged to use them due to certain factors, such as poor organizational work–life balance culture (e.g., having ill-equipped business managers who lack adequate knowledge on how to properly manage employees that utilize WLBPs) and colleagues unenlightened on the use of WLBPs. If WLBPs are available to and widely used by most employees, such WLBPs create strong organizational situations that advance a shared meaning about these initiatives in ways that lead to the intended outcomes (e.g., organizational performance) [9,10].

2.2. WLBPs, Availability of WLBPs, and Profitability

According to the JD-R model, organizational resources (e.g., WLBPs) promote positive organizational outcomes by enhancing employee attitudes and behaviors [11]. Refining the JD-R model further, Bakker et al. suggested that organizational resources alone may only have a modest impact on employee attitudes and behaviors [13]. If employees are not aware of such resources that are available to them, the positive effect of organizational resources on organizational outcomes is likely to be limited [13]. Relatedly, in a review on the JD-R model, Schaufeli and Taris proposed considering moderators in linking job demands/resources to organizational outcomes [14]. For example, the provision of flexible working hours is more likely to bring positive organizational outcomes when employees perceive increased control over their time [15]. Similarly, if employees believe that WLBPs are highly available to them, the relationship between WLBPs and organizational outcomes can be stronger.

In addition, recent HRM studies began to differentiate between intended HRM practices from available and/or actually used HRM practices by employees [16,17,18]. Combining the JD-R model with the recent HRM literature, Veth et al. proposed that HRM practices (like WLBPs) are organizational-level resources that are prerequisites of employee commitment and performance [18]. As such, WLBPs alone may have a limited impact on achieving positive organizational outcomes through employees; rather, the success of WLBPs may depend on availability and/or use by employees [18]. For instance, by making WLBPs available to most employees, organizations can increase the saliency of organizational resources in their organizational contexts [13].

Although organizations adopt WLBPs to support their employees in achieving better work–life balance, their employees often are not cognizant of the availability of such initiatives. For instance, even if WLBPs are contained in employee handbooks, there is a variation in awareness of family-leave provision, and line managers are also usually limitedly trained in communicating the availability of WLBPs to employees [19]. Relatedly, supervisors tend to have poor awareness of WLBPs, and this deficiency influences the line manager’s ability to direct employees to use such practices [20]. In some cases, organizations provide WLBPs to certain groups of employees exclusively, thereby limiting the availability (and use) of such programs to other employees in the organization. The availability of WLBPs tends to improve work-related attitudes independent of their actual use. For example, when employees are aware of flexible work hours, they tend to exhibit higher organizational commitment and job satisfaction, regardless of whether such programs are actually used [21,22]. Grover and Crooker reported that WLBPs increased organizational commitment and decreased turnover intention when available to all employees, rather than when limited to those who use these practices [23].

The availability of WLBPs can also increase employees’ perception of organizational support, particularly if such initiatives are considered by the employees as being useful [4]. Perceived organizational support can also be viewed as a favorable resource, thereby prompting positive actions toward the organization. Integrating the JD-R model with social-exchange theory, Veth et al. suggested that employees may interpret organizational resources (e.g., WLBPs) as a favorable treatment by their employees; however, when receiving WLBPs that are favorable treatment from their organizations, employees may feel obliged to exhibit positive attitudes or behaviors toward their organizations [18,24]. Using the provision of WLBPs as an indicator of favorable treatment, employees may reciprocate in ways that are beneficial to their organizations, e.g., increased job satisfaction, organizational commitment, and organizational citizenship behaviors. When employees perceive their organizations as being supportive of families, such a perception can mediate the link between the availability of WLBPs and employees’ affective commitment toward the organization and job satisfaction [25]. Furthermore, providing WLBPs can be a source of competitive advantage for a firm: as the anticipated organizational support of potential employees increases, the firm can be more successful in recruitment and retention [2]. The availability of WLBPs can also increase positive employee attitudes and behaviors by increasing the relevance of WLBPs [1,2]. Employees who consider using such initiatives in the future are likely to appreciate the benefits of WLBPs. Providing WLBPs can also attract more external investors by improving the organization’s reputation and signaling its legitimacy [26,27]. Thus, we propose that the relationship between WLBPs and organizational profitability is stronger when employees’ awareness of WLBPs is higher.

Hypothesis 1.

The availability of WLBPs moderates the relationship between WLBPs and organizational profitability such that the relationship is stronger when more employees are aware of WLBPs.

2.3. WLBPs, Use of WLBPs, and Profitability

Even when organizational members are fully aware of the various WLBPs, they may be reluctant to use these practices for several reasons. For example, upon a birth of a child, male workers are still reluctant to take family leave, and may instead take a vacation or other types of days off [28,29]. Hall referred to this phenomenon as ‘invisible daddy track’ [30]. A male employee tends not to take time off work for family reasons because of concerns for their future career.

Extending the JD-R model further, Bakker et al. suggested that high levels of job resources combined with high demands that require employees to use the resources may result in high levels of organizational commitment. Thus, resources alone may have a limited impact on positive employee behaviors and attitudes. According to Veth et al., organizational-level resources are only prerequisites of employee-level attitudes and behaviors [18]. When such resources are actually used by employees, the provision of organizational resources can result in its intended outcomes because employees are more likely to find values of the organizational resources [18]. Similarly, Kelly et al. speculated that use of WLBPs can be more powerful to drive positive organizational outcomes than the availability of WLBPs because “these policies are expected to make life more manageable when they are used” (p. 313).

More so, the use of family-leave provisions is often discouraged because taking such leave would be perceived as an indicator of lack of organizational commitment [31,32,33]. For example, Eaton found that the provision of WLBPs improved employees’ organizational commitment when they used WLBPs without damages to their career [34]. Relatedly, although most American law firms have a part-time working policy, only a few lawyers use it because of the fear of career damages [35].

Allen and Russell reported that employees who use WLBPs are perceived by coworkers as having low organizational-commitment levels, which can further influence the subsequent organizational reward allocation, including salary increases and career opportunities [36]. Judiesch and Lyness reported that managers who take (family- or illness-related) leaves of absence were less likely to receive promotions or salary increases [37]. It is therefore not surprising that WLBPs tend to be underutilized because of their perceived negative impact on career progression [31,38].

If employees perceive that a balance of work and family responsibilities is not supported by their employer, and that they anticipate career derailment if they use WLBPs, employees may refrain from using the WLBPs out of fear of damages to their careers. This, in turn, may reduce the intended beneficial outcomes of WLBPs. On the contrary, employees who benefit from the actual use of such initiatives are more likely to perceive organizational support from their employers. WLBPs are opportunities for employees; employees can grasp the benefits of WLBPs when they actually use such programs [39]. Thus, the use of WLBPs may positively moderate the link between their provision and organizational profitability.

Hypothesis 2.

Employees’ use of WLBPs moderates the relationship between WLBPs and organizational profitability such that the relationship is stronger when more employees use WLBPs.

3. Methodology

3.1. Sample

The Workplace and Employee Survey data collected by Statistics Canada were used to test the research hypotheses.

Table 1. Means, standard deviations, and correlation.

Variables	M	SD	1	2	3	4	5	6	7	8
1. Profitability T3	14.97	0.09
2. Profitability T1	14.97	0.09	0.96 **
3. Manufacturing T1	0.28	0.45	0.03 *	0.03
4. Firm size T1	2.01	1.18	0.01	−0.00	0.15 **
5. Differentiation strategy T1	0.86	0.95	−0.01	−0.01	0.13 **	0.20 **
6. Union density T1	0.07	0.22	−0.02	−0.00	0.06 **	0.32 **	0.07 **
7. Work–life balance programs (WLBPs) T1	0.12	0.22	0.05 **	0.04 *	−0.01	0.39 **	0.10 **	0.26 **
8. Use of WLBPs T2	0.01	0.04	0.02	0.03	0.02	0.13 **	0.08 **	0.07 **	0.25 **
9. Availability of WLBPs T2	0.06	0.13	0.07 **	0.05 **	−0.01	0.26 **	0.12 **	0.23 **	0.53 **	0.60 **

N = 4070 (rounded), T1 (2003), T2 (2004), T3 (2005), ** p < 0.01, * p < 0.05.

presents the means, standard deviations, and correlations. After deleting missing data, we obtained a final sample of 4070 establishments (following the requirement of Statistics Canada, the sample size was rounded to the nearest 10 to ensure confidentiality). The response rates of the 2003 employee sample was 82.7%, the 2004 employee sample was 85.7%, and the 2005 employer sample was 77.7%. In addition, we weighted the sample to reflect population estimates, following the requirement of Statistics Canada.

3.2. Measures

WLBPs. WLBP information was obtained from employee responses in 2003. We calculated the mean of the employer-provided personal support or family services, childcare, eldercare, fitness and recreation (on-site or off-site), employee assistance (e.g., counseling, substance-abuse control, and financial assistance), and other personal or family services. If an employee reported that an employer-provided personal support or family services existed, we coded the WLBP as either 1 or 0 (yes = 1, otherwise = 0) (α = 0.78).

Availability of WLBPs. From the 2004 employee survey, we calculated the availability of WLBPs using the number of employees who reported that each of the six WLBPs was offered to them. For example, if only half of the employees reported that eldercare services were offered by their employer, then we considered the availability of eldercare services as 0.5. Items included employer-provided personal support or family services, childcare, eldercare, (on-site or off-site) fitness and recreation, employee assistance (e.g., counseling, substance-abuse control, and financial assistance), and other personal or family services (α = 0.79).

Use of WLBPs. Employees were asked to report the use of employer-provided WLBPs within the past 12 months in the areas of childcare, employee-assistance services, eldercare, fitness and recreation services, and other personal support or family services (yes = 1, otherwise = 0). We calculated the mean of employee responses on the use of the WLBPs in 2004. This measure was a formative construct where an employee who used a certain WLBP initiative did not necessarily have to use other WLBPs (e.g., an employee who used childcare support was more likely not to use fitness and recreation support or eldercare). The use of WLBPs as a formative construct was also reflected by the low reliability (α = 0.33).

Profitability. Profitability was measured by the operating margin (gross operating revenue minus gross operating costs) divided by the total number of employees in 2005. After adding a constant value (i.e., the minimum value plus 1) to handle negative values, we further calculated the log transformation to normalize the distribution.

Control variables. The control variables included the profitability in 2003, firm size (number of employees, log transformed), an industry dummy (service = 0, manufacturing = 1), union density (the number of union members divided by the total number of employees), and differentiation strategy. We used these variables because (1) past performance is often the best predictor of future performance, (2) the adoption of WLBPs is likely to be higher among large-sized firms, (3) the adoption of WLBPs is likely to differ across industries, (4) unions can influence management decisions on WLBPs, and (5) business strategy can impact HRM practices and organizational profitability. The differentiation strategy was measured as the importance of each strategy (not applicable/not important = 0, slightly important = 1, important = 2, very important = 3, and crucial = 4) in the following areas: undertaking research and development, developing new products/services, and developing new production/operating techniques (α = 0.80).

4. Results

Table 1 shows the means, standard deviations, and correlations of the variables. We conducted a hierarchical linear regression to test our research hypotheses. Before testing the moderation effects, we first mean-centered all the continuous independent variables. Then, we residual-centered the interaction terms to reduce the multicollinearity issue [40]. The variance inflation factors remained below 2.2, supporting the notion that the multicollinearity issue was limited.

Hypothesis 1 predicted that the availability of WLBPs moderates the relationship between WLBPs and organizational profitability. We found that the availability of WLBPs positively and significantly moderates the WLBPs-profitability relationship (Model 3 in

Table 2. WLBPs, use, and availability.

Variables	Model 1	Model 2	Model 3	Model 4
Profitability at T1	0.96 **	0.96 **	0.96 **	0.96 **
Manufacturing at T1	0.00	0.01	0.01	0.01
Firm size at T1	0.02 **	0.01 †	0.01 †	0.01 †
Differentiation strategy at T1	0.00	0.00	0.00	0.00
Union density at T1	−0.02 **	−0.02 **	−0.02 **	−0.02 **
WLBPs at T1 (1)		0.01 *	0.01 *	0.01 *
Use of WLBPs at T2 (2)		−0.02 **	−0.02 **	−0.02 **
Availability of WLBPs at T2 (3)		0.02 **	0.02 **	0.02 **
(1) X (2)			0.02 **
(1) X (3)				0.02 †
R2	0.92	0.92	0.92	0.92
Δ R2		0.001 **	0.000 **	0.000 †

DV = productivity T3, N = 4070 (rounded). T1 (2003), T2 (2004), T3 (2005), ** p < 0.01, * p < 0.05, † p < 0.10.

; see also Figure 1). Therefore, Hypothesis 1 was supported.

Hypothesis 2 predicted that the use of WLBPs moderates the relationship between WLBPs and organizational profitability. The regression results indicated that the use of WLBPs positively and marginally moderates the WLBPs-profitability relationship (Model 4 in Table 2; see also Figure 2). Therefore, Hypothesis 2 was marginally supported.

5. Discussions

5.1. Theoretical Implications

The key contribution of our study is that we extended the JD-R model to the organizational level as well as refined it by considering how the availability and use of job resources (in this case, WLBPs) affect the desired organizational outcomes (in this case, organizational profitability). Our findings contribute to research on the JD-R model by differentiating how resource availability and the use of resources are associated with the desired organizational outcomes. This is in line with the JD-R model, which describes the associations between job demands, job resources, and organizational outcomes.

We also extended the body of knowledge on the JD-R model by showing how it can be used to connect HRM policies (that are designed to enhance employee motivation and performance) and occupational-health management (that is designed to reduce employee absenteeism due to ill health, reduce occupational hazards, and improve employee well-being) [14,41]. The JD-R model suggests that motivational processes (i.e., job resources) and health impairment (i.e., job demands) are inseparable from one another. We propose that it can be extended to take an integrative approach to HRM and occupational health, especially those in dire need of improving the health and well-being of employees as well as organizational effectiveness (e.g., profitability) [14].

The availability of WLBPs can signal to existing (and prospective) employees that the organization is an employer of choice, one that is concerned with their overall well-being and success. The availability of such initiatives can also present the organization as one that considers its employees as both assets and relevant stakeholders within the organization, not just numbers that add to the bottom line. Making WLBPs available to employees can instill the notion that the company will go to great lengths to ensure that its employees perform well both inside and outside the workplace. Such perceptions have been shown to encourage the nurturing of the desired behaviors among employees in ways that benefit the organization: e.g., reduced turnover intention, reduced absenteeism, and increased loyalty [1,21,23]. Enabling more employees to become aware of the availability of WLBPs in an organization could foster an atmosphere that promotes active involvement (and hence increases participation and productivity).

We hypothesized the positive moderation effect of the use of WLBPs on the relationship between WLBPs and organizational profitability, but we found that the interaction between WLBPs and the use of WLBPs was negative. As hypothesized, WLBPs increased organizational profitability when the use of WLBPs was high. When the use of WLBPs is low, the intended beneficial outcomes of WLBPs might not be achievable. Interestingly, WLBPs did not increase organizational profitability when the use of WLBPs was low. While we still believe that increased use of WLBPs is desirable, we speculate that there might be challenges in managing a group of people who frequently use WLBPs. For example, it may be difficult for a team manager to control employee behaviors, coordinate collaboration, and arrange work schedules when a larger number of team members decide to use flextime. In addition, the high use of WLBPs in an organization might reflect that more employees require support for nonwork demands. While the benefits of using flextime at the employee level is well documented, its impact on the organization’s bottom line has not been much investigated [8,42]. Thus, we encourage researchers to investigate the role of the use of WLBPs from a different context.

5.2. Practical Implications

Employees struggle with work and life balance issues; if they didn’t, the need to use WLBPs would not exist. By being aware that such programs exist and by utilizing them, employees bring forward the need for organizations to address the various complexities that workers face on a daily basis as they seek to balance their personal and professional lives. At the organizational level, the business case for the provision of WLBPs by organizations relies on attracting better applicants to enhance organizational performance. This also accentuates the need to discourage employers from discriminating against employees who use WLBPs. Thus, it is not recommended that organizations should restrict the recruitment and retention of employees who have dependents (children or elders) that require such personalized care.

In addition, the increased use of WLBPs by employees raises the pull on organizational resources, which becomes greater when considering the costs of the maintenance and operation of such programs for organizations (e.g., subsidizing the costs of gymnasiums, on-site daycare facilities, and counseling sessions). Such outcomes eventually add to the overhead cost and, in turn, reduce the organization’s profitability. However, we found that WLBPs positively contribute to profitability, indicating that practitioners can implement such programs despite concerns about their increased costs, since the benefits of implementation outweigh those costs.

Our findings are also of interest to occupational-health management and HRM professionals. While accentuating the benefits of providing WLBPs to employees could appeal to occupational-health professionals, highlighting the motivational perspective (e.g., how the provision of such initiatives affects organizational costs) could attract the attention of HRM professionals when evaluating the costs compared with the benefits of making such programs available to employees.

5.3. Limitations

Studies on WLBPs have suffered from selection bias in a way that limits our understanding of the effect of WLBPs on organizational profitability. To fully understand how WLBPs influence organizations in general, it is pertinent to investigate the relationship from a representative sample. While it is recognized that WLBPs differ across firms and industries [43], we predict that implementing such initiatives in organizations leads to greater organizational profitability. Moreover, using the JD-R model, conducting such investigations as longitudinal studies would provide stronger evidence of the effectiveness of WLBPs, thereby making it possible and more practical to show how job demands and organizational resources combine to project the effects of the availability, awareness, and use of WLBPs on organizational profitability.

This study investigated the job-resource dimension of the JD-R model. It is desirable to capture a job-demand dimension in future studies. For example, Goff et al. reported that the provision of an on-site childcare center was not significantly related to work–life conflict [44]. These authors argued that providing WLBPs does not necessarily reduce work–life conflict, and a limited number of studies examined the mediation effect of job demands in the relationship between WLBPs and organizational outcomes.

In testing our research hypotheses, we used a large longitudinal sample from North America. To further generalize the findings, future studies could examine how the availability and use of WLBPs influence organizational profitability in other geographic regions [45]. This study may also suffer from a sample bias. In addition, one of key methodological issues in HRM studies is the possibility of reverse causality [46,47]. Few studies have applied a longitudinal research design with a short time lag (3 to 15 months) that limit the ability of the study to determine the longitudinal effect [47]. Although we considered a time lag between WLBPs and organizational profitability, the possible reverse causality between WLBPs and organizational profitability needs to be addressed in the future.

Finally, our study did not take into account the role played by such factors as gender, education, career/life stage, family structure, marital status, and age in influencing how employees use WLBPs. Recently, Shin et al. reported that female and male workers responded to HRM practices differently [48]. Availability and use of WLBPs across gender is an interesting future topic as well. These important factors, among other things, are likely to determine the motive and scope of employees’ use of WLBPs, and future research should endeavor to integrate these variables to expand the scope of the investigation into this topic.

6. Conclusions

The availability, awareness, and use of WLBPs facilitate the achievement of overall business objectives (e.g., increased organizational profitability). The practical implication of our findings is that employers draw the attention of relevant stakeholders to the need of recognizing that work–life imbalance remains a concern for employees. Indeed, addressing this concern should be built into the overall business strategy of organizations if they are to maximize the potential of their employees. As crucial assets of any business, employees (and by extension, their health and well-being) play a functional role in actualizing the desired organizational outcomes, making it pertinent for organizations to address employees’ concerns in a manner that shows that it cares for their well-being (e.g., through the provision of WLBPs). Despite the additional costs often associated with the provision of WLBPs in the workplace, the benefits from WLBPs have been shown to outweigh such costs.

In this study, we extended the JD-R model to the organizational level as well as refined it by considering how it affects the availability and use of job resources. The use of the JD-R model offers a framework for investigating the role of WLBPs on organizational profitability. The model suggests that WLBPs can work as organizational resources that can mitigate health impairment and promote positive organizational outcomes. As such, having a good understanding of this connection is pertinent for HRM professionals in today’s organizations. Moreover, by increasing the awareness of the availability of WLBPs among employees and by encouraging them to use such initiatives, organizations stand to reap positive rewards that could ultimately enhance their profitability in the long run.