Dive Brief:
- Some new research under review has found that employers who treat workers better also tend to see more innovation in the workplace, according to an article at Harvard Business Review.
- Author Walter Frick notes that the correlation between boosting pro-employee areas such as safety, employee relations, diversity and corporate governance and innovation -- even after controlling for factors such as employer size and R&D spending -- has been shown across several academic studies.
- For example, he cited a study in the Journal of Economics released earlier in 2015 that found that firms offering stock options to non-executive employees experienced more innovation. The study authors also suggested that the relationship between the perk and innovation "was causal."
Dive Insight:
While treating employees well is likely to drive innovation, Frick writes there are some particular pro-employee trends that have a different effect. For example, he mentions a forthcoming paper in Management Science that examined the impact of unionization on innovation. In this case, researchers found unionization caused a significant decline in innovation (based on the number and quality of patents issued). Frick does note that earlier academic research on how unionization impacts innovation, in this case based on R&D spending, has been mixed.
“Ultimately, firms must find a way of motivating employees to be willing to take risks in order to come up with innovative inventions,” Edward Podolski-Boczar, professor at LaTrobe University in Australia and co-author of an ongoing worker treatment paper, told Frick. “Not all forms of improved employee conditions naturally translate into improved innovation outcomes,” he added. But as his research demonstrates, many do.
