Businesses Profit from Focusing on Lower-level Employees and Up

by: Nichole Gunn October 25, 2010

A new report titled “Profit at the Bottom of the Ladder” demonstrates the importance of providing resources and incentives to lower level employees.

It has long been the custom for companies to focus rewards on their top talent; the low-man-on-the-totem-pole didn’t really warrant too much attention. This was primarily based on the assumption that lower level employees are expendable and do not offer the same value for the company as upper level employees.

A six-year study by Jody Heymann and Magda Barrera put a wrinkle in this philosophy. The authors focused “on understanding the experience of companies that have invested in employees at the bottom of the corporate ladder.”

The study consisted of in-depth “case studies of companies in nine countries, ranging in size from 27 to 126,000 employees.” Participating company industries included: automobile, technology hardware and equipment, food production, construction, pharmaceutical, personal goods, and banking. Employees of all levels were interviewed, from the lowest paid to top level, including CEOs. Along with employee interviews, the authors compiled information through public sources, such as media reports and financial reports.

The findings, according to the authors, “demonstrate that investments in employees at the bottom can be an advantage both in times of economic growth and recession.”

One of the lessons to be drawn from the study focuses on employee incentives and overall health. It was found that the productivity of employees at all levels depends on four elements:

  • The health of employees
  • If the employees are adequately rested
  • If the employees are well prepared for their jobs
  • If the employees are sufficiently motivated

Strategies to help in these areas are: varying reward programs, incentive benefits, and wellness programs.

In a corresponding report by the New York Times, Boston College sociology professor Juliet Schor noted that the study “has strong case studies showing that firms can prosper when they take the high road, and that means their employees are also prospering. It’s a good direction for any economy."