Management Practices, Work--Life Balance, and Productivity: A Review of Some Recent Evidence

Abstract

Increasing product-market competition is believed to be a driving force behind higher productivity. However, even those critics of globalization who accept this argument claim that there is a hard trade-off because tougher competition comes at the price of reducing work—life balance (WLB). Optimists, by contrast, argue that competition can spur better WLB practices and therefore higher productivity, so there is a ‘win—win’ situation. To address this issue we use an innovative survey tool to collect the first international data on management practices and WLB practices, surveying 732 medium-sized manufacturing firms in the USA, France, Germany, and the UK. We find that the USA has the best management practices but the worst work—life balance. When we look within countries, however, we reject the pessimistic ‘trade-off’ model. First, WLB outcomes are significantly associated with better management, so that well-run firms are both more productive and offer better conditions for their employees. Second, tougher competition increases average management quality but does not negatively affect employees' working environment. As with many other studies, better WLB practices are associated with significantly higher productivity. This relationship disappears, however, after controlling for the overall quality of management.