How work-life balance programs boost employee retention and satisfaction

Frankfurt University of Applied
Sciences
University of Petroleum and Energy
Studies, Dehradun
Masters of Business Administration in Aviation Management
Management Competencies 2
Work-life balance as a tool for employee satisfaction and retention
Professor Dr. Yvonne Ziegler and Professor Katrin Seifarth
José Joaquim Fernandes - 1034431
7th
July 2014

Page i
Table of Contents
List of Appendices.......................................................................................ii
List of Figures ............................................................................................iii
Abbreviations .............................................................................................iv
Abstract...................................................................................................... v
1 Introduction.......................................................................................... 1
2 Problem Statement.............................................................................. 1
2.1 Scope............................................................................................ 2
2.2 Selection of literature .................................................................... 2
3 Retention and employee satisfaction................................................... 2
3.1 Retention ...................................................................................... 3
3.2 Employee Satisfaction .................................................................. 4
3.3 Empirical investigations ................................................................ 6
4 Work and life balance.......................................................................... 8
4.1 What is work-life balance?............................................................ 8
4.2 The historical balance between work and family........................... 9
4.3 How can work life balance be used as a tool?............................ 10
4.4 Challenges with work life balance............................................... 12
5 Criticism............................................................................................. 13
6 Conclusions....................................................................................... 13
7 Bibliography....................................................................................... 17
Appendices .............................................................................................. 21

Page ii
List of Appendices
Appendix A Selection of literature ...................................................... 21

Page iii
List of Figures
Figure 1 Maslow Pyramid of Needs ........................................................... 5

Page iv
Abbreviations
No abbreviations have been used in this paper.

Page v
Abstract
This paper performs a theoretical analysis of work-life balance as a tool for
employee satisfaction and retention.
It sets out by establishing the concepts of retention and employee
satisfaction.
The paper establishes the concept of work and life balance and analyses
how work and life balance can be used as a tool for employee satisfaction
and retention.
It also highlights some of the important challenges in work and life balance
implementation.
The paper concludes that organisations can through careful
implementation of work and life balance programs ensure employees’ life
satisfaction increases thereby benefiting from the positive spill-over effect
on job satisfaction.
The paper moreover concludes that organisations will through increased
implementation of work-life-balance programs have the ability to increase
productivity at a marginal cost, increase job satisfaction of their
employees, while at the same time reducing turnover intentions, thereby
retaining their most valuable asset; employees.

1 Introduction
In today’s world, an increasing number of American families are likely
either married to or partnered with someone who is also working or the
breadearner is the single head of a household (Valcour et al. 2011).
Successfully integrating work, family and personal life is a difficult
challenge. According to Valcour et al. (Valcour et al. 2011) fully 90% of
working mothers and 95% of working fathers report experiencing work-life
conflict.
A primary function of flexible policies is to ease the work-life family conflict
by facilitating employees’ ability to attend family matters without missing
work obligations (Honeycutt and Rosen 1997).
For this reason, those with a great deal of responsibility for family and
household tasks stand to gain from flexible work arrangements. Day-time
family related activities that are made difficult by standard work
arrangements are facilitated by flexible work arrangements (Shockley and
Allen 2007).
According to Valcour et al. (Valcour et al. 2011) executives and human
resource managers report that work-life balance is one of the top human
resource challenges their organisation face.
2 Problem Statement
This paper performs a theoretical analysis of work-life balance as a tool for
employee satisfaction and retention.
It sets out by establishing the concepts of retention and employee
satisfaction and links organisational retention to employee satisfaction. It
supports the link by empirical investigations.
The paper establishes the concept of work and life balance, gives some
historical background for work and life balance, and analyses how work

and life balance can be used as a tool for employee satisfaction and
retention.
implementation.
The paper ends with self criticism and concludes that organisations can
through careful implementation of work and life balance programs ensure
employees’ life satisfaction increases thereby benefiting from the positive
spill-over effect on job satisfaction.
The paper moreover concludes that organisations will through increased
implementation of work-life-balance programs have the ability to increase
productivity at a marginal cost, increase job satisfaction of their
employees, while at the same time reducing turnover intentions, thereby
retaining their most valuable asset; employees.
2.1 Scope
This paper uses generalised views and draws on academic research
primarily found in the Scandinavian, Northern European and Northern
American work markets.
2.2 Selection of literature
The research articles were selected by undertaking a search through the
search engine Google Scholar and through the electronic databases
ScienceDirect and ResearchGate in addition to a general search on
Google.
For a detailed description of the selection of literature, please refer to
Appendix A.
3 Retention and employee satisfaction
This chapter establishes the concept of retention from an organisational
point of view. It then establishes employee satisfaction. The chapter ends

by supporting the link between retention and employee satisfaction by
empirical investigations.
3.1 Retention
This section establishes the concept of employee retention and discusses
why retention of employees is important to an organisation.
Retention of key employees is important for an organisation.
Without key employees, an organisation might not be in a position to
create or maintain its core competence (Hamel and Prahalad 1994) that
will help it in creating or maintaining a competitive advantage over its
competitors (Porter 2004).
In crafting breakthrough strategy, an organisation needs to access and
utilise a complex set of tangible and intangible assets, skills and
capabilities (Markides 2000).
Loosing Key employees in a client facing role could affect sales and
marketing (Kotler et al. 2013); loosing top executives, such as CEO’s,
could prove problematic in finding a suitable replacement (Bower 2007).
In addition to the above effects, replacing an employee is time-consuming
and expensive. The cost of replacing an employee can generally be
broken down into three categories: Separation cost for the departing
employee, replacement cost, and training cost for the new employee.
These cost are conservatively estimated a two to three times the monthly
salary of the departing employee and they do not include indirect costs
such as low productivity prior to quitting and lower morale and overtime for
other employees because of the vacated job (Snell et al. 2010).
Consequently reducing turnover could result in significant savings to an
organisation. Snell et al. (Snell et al. 2010) also notes, that the major
expense is the cost involved in training a replacement.

3.2 Employee Satisfaction
This section establishes the concept of employee satisfaction and
discusses why satisfaction of employees is important to an organisation.
Work performance can be seen to contain two factors; an employee’s skill
to perform a task and an employee’s desire to perform a task. The desire
to perform a particular task is not sufficient if the employee does not have
the sufficient skills required to perform the task. On the other hand, skill
itself is also not sufficient. The employee should also have a desire to
perform the task (Nordhaug et al. 1997).
Needs theory assumes that people perform tasks in order to achieve
different needs. Maslow (Maslow 1943) argued in his theory for five basic
categories of needs forming a hierarchy.
The five categories of needs are:
1. Physiological
2. Safety
3. Love/Belonging
4. Esteem
5. Self-actualisation
The five categories of needs are shown in the below figure.

Figure 1 Maslow Pyramid of Needs
Source:
http://upload.wikimedia.org/wikipedia/commons/thumb/5/58/Maslow%27s_hierarchy_of_nee
ds.svg/1280px-Maslow%27s_hierarchy_of_needs.svg.png
In Maslow’s hierarchy of needs, the family occupies a lower level than
employment.
Employers can benefit from the fact that family is a need which is
occupying a lower level in Maslow’s pyramid, and use this aspect in
designing work-life balance in their human resources strategies in order to
make employees more satisfied.
Furthermore, the contents- and process theories in motivation have been
frequently used as management strategies in order to increase work
performance, improve working conditions and create more enriching,
challenging and interesting jobs (Nordhaug et al. 1997).
Needs theory points to the fact that employees are looking for challenging
jobs, which gives them a feeling of respectability and also lets them know
how well they are performing in their role. These facts are based on the
human need for achievement, autonomy and knowledge of results.
Generally, the goal is to increase an employee’s engagement in their work
by creating jobs with these characteristics (Nordhaug et al. 1997). The
engagement of an employee can moreover be increased by using

methods which encourage the employee to participate in work related to
designing and improving work processes (Nordhaug et al. 1997).
3.3 Empirical investigations
Empirical investigations over the past three decades support strong
associations between life satisfaction and job satisfaction (Qu and Zhao
2012). In his study, Rode (Rode 2004) describes the perspective of job
satisfaction causing life satisfaction. This perspective is called the bottom-
up perspective. The opposite perspective, called the top-down
perspective, is where life satisfaction causes job satisfaction.
In their study, Qu and Zhao (Qu and Zhao 2012) use the top down
perspective to examine the effects of life satisfaction on job satisfaction
amongst hospitality employees.
According to Qu and Zhao (Qu and Zhao 2012) there are theoretical views
supporting the top-down perspective.
According to Orpen (Orpen 1978) a high level of fulfilment with life aspect,
such as family and recreating, often associate with feelings of high self
esteem and sense of control that produce strong expectancy and
instrumentality beliefs. These experiences and beliefs obtain high
performance and job satisfaction (Orpen 1978). The additional perspective
suggests that individuals spill over their positive feelings with family and
recreation to their work attitudes (Orpen 1978).
In their study, Ma and Yin (Ma and Yin 2012) examined the relation
between work and life orientation and work interfering with personal life
and causing conflict; as well as personal life interfering with work and
causing conflict. Their findings indicate that employee’s assessment of
work-and-life orientation are shaped by both work commitment and life
commitment.
Using a 2007 survey of over 2000 employees at nine different
organisations, McNamara et al. (McNamara et al. 2013) investigated the
association between hours worked per week and satisfaction with work–

family balance. Their study suggests that the negative association
between work hours and satisfaction with work–family balance is
attributable to demands of time from an employer exceeding the amount of
time available from the employees, implying larger negative associations
with satisfaction with work–family-balance at higher numbers of hours
worked.
They conclude that the normative climate within a workplace, (i.e., a
supportive work–family culture) can act as resources that offset the
potentially negative aspects of high-demand jobs (i.e., long hours of work).
In a study to analyse whether the Internet and other Information and
Communication Technologies generate work-family balance amongst
academics in Iceland, Heijstra and Rafnsdottir (Heijstra and Rafnsdottir
2010) found that academics were unwilling to change to a 9-to-5 job, as
they were reluctant to give up their flexibility and its accompanying
lifestyle. This was despite the fact that the concept in reality referred to the
possibility of prolonging the academics’ working hours.
Beauregard and Henry (Beauregard and Henry 2009) refers to the work of
Perry-Smith and Blum (Perry-Smith and Blum 2000) which showed that in
a national sample of 527 U.S. firms, organisations offering a greater range
of work-life balance practices reported greater perceived market
performance, profit-sales growth, and organisational performance.
Beauregard and Henry also refers to an analysis of the 1998 Workplace
Employee Relations Survey by Dex et al. (Dex et al. 2001) which found
that organisations offering parental leave enjoyed above average labour
productivity, and that the provision of flexible work hours and tele-work
was associated with reduced turnover.
The empirical investigations are important as they document and confirm
the link between how employees feel at work and at home.

4 Work and life balance
This chapter establishes the concept of work and life balance and gives
some historical background for work and life balance.
The chapter then analyses how work and life balance can be used as a
tool for employee satisfaction and retention thereby linking the
organisational retention to employee satisfaction.
implementation.
4.1 What is work-life balance?
Essentially the term work-life balance is a term open to considerable
subjective interpretation, since what constitutes balance is subject to
considerable cultural variation as defined by each individual or collectively
by a couple in a relationship (Khallash and Kruse 2012).
While there is no one accepted definition of what constitutes a work-life
balance practice, the term usually refers to one of the following:
Organisational support for dependent care, flexible work options and
family and personal leave (Beauregard and Henry 2009).
Hence these practices include flexible work hours (e.g., flex-time, which
permits workers to vary their start and finish times provided a certain
number of hours is worked; compressed work week, in which employees
work a full week's worth of hours in four days and take the fifth off),
working from home (telework), sharing a full-time job between two
employees (job sharing), family leave programs (e.g., parental leave,
adoption leave, compassionate leave), onsite childcare, and financial
and/or informational assistance with childcare and eldercare services
(Beauregard and Henry 2009).
In this paper, I adopt the definition by Khallash and Kruse (Khallash and
Kruse 2012) that work-life balance articulates the desire of all individuals –
not just those with family responsibilities – to attain a balance between

their paid work and their life outside work, from childcare and housework
to leisure and self-development.
Work-life balance has traditionally had a relatively narrow focus on health,
stress-related burnout, work hours, maternity rights, and formal
employment.
According to Khallash and Kruse (Khallash and Kruse 2012) it is
recognized that work and work-life balance is no longer limited to such a
narrow focus. Rather, work is an instrumental element and is a means to
support a way of life and to create optimal conditions for one’s family
and/or one self. Hence, work-life balance is about managing external
pressure from a competitive work environment with leisure and/or family.
Work, however, also constitutes a socio-psychological element that
creates respect and personal challenges. Thus, the work-life balance is
also about managing internal pressure from one’s own expectations and
setting realistic goals, which do not inflict on e.g. family responsibility. In
other words, work-life balance is not just defined by the pressure put on
the individual from employees, but increasingly also pressure exerted by
the worker’s own level of motivation – which only indirectly can be said to
derive from the external pressure created by a society, which fosters a
performance culture (Khallash and Kruse 2012).
The concept of work-life balance has also been widened to include
broader caring responsibilities, the need for flexible working hours, pursuit
of intellectual interests (lifelong learning) and other preferences people
have about the time they want to devote to their work and how they want
to do it, especially since these preferences vary over the course of an
individual’s life. Hence, work-life balance is segmented more and more
from a lifetime stage perspective (Khallash and Kruse 2012).
4.2 The historical balance between work and family
Work-life balance is based on the assumption of the separation of work
and private life, and that ‘balance’ is achieved when there is equal division
between the two. The distinction of work and life is a recent construction

and different from the integrated work and life common until the beginning
of the 20th century, where families all worked together. The distinction
came with the industrial age and development of factories where workers
needed to be in a physical place for certain times (Khallash and Kruse
2012).
But today we are on the verge of radical changes where traditional
corporate world is breaking down and giving way to new types of
organisations – like Facebook and Mozilla – organized in radically different
ways. These organisations have flat structures and open communication
to promote creativity and innovation. They focus on interdependence,
building networks, and encouraging relations between workers, customers,
and vendors. And as a result, they are breaking down barriers and once
again integrating work and life. This is driven forward by technology:
people are able to work when at home, outdoors or indoors, or in a
different part of the world. They are not bound to a specific work schedule
but can work whenever they choose to (Khallash and Kruse 2012).
The general view of work-life life balance is that work-life balance brings
benefits to both employers and individuals. Employers gain a quantitative
and qualitative improvement in the supply of available labour because
work-life balance affects workers’ productivity and keeps them in the
labour market (here for instance elderly and women), and individuals
adapt to balance the various demands made upon them, resulting in a
qualitative improvement to their lives (Khallash and Kruse 2012).
4.3 How can work life balance be used as a tool?
Employers play a major role in managing the conflict between quality time
and family performance (Panisoara and Serban 2013).
According to Aryee (Aryee 1992) data suggest that a rigid organisation
culture focused mainly on performance and disregarding employee’s
needs, can create a stressful climate which in turn constitutes a
determinant for high conflict between family time and job performance.

We talk a lot about work-life balance implying that 50/50 is the ideal split
between our job and everything else (Ignatious 2014).
Langer suggests in her interview with Beard (Beard 2014), that individuals
should think about work/life integration, not balance. Balance suggests
that the two have nothing in common, but that is not true. If they are kept
separate, there is not transfer from what is done successfully in one
domain to the other (Beard 2014).
Graysberg and Abrahams (Groysberg and Abrahams 2014) suggest that
leaders should make deliberate choices about the lives they want to lead
and about which opportunities to pursue and which to decline.
The tacit perception we have is that as our life pattern changes from being
single, to being married and subsequently creating a family with children,
our view of work-life balance would also change.
Interestingly, in their study of employees in four categories, unmarried,
married without children, married with children under 18 and married with
children over 18; Panisoara and Serban (Panisoara and Serban 2013)
concludes that the four groups of employees does not have a significantly
different level of work-life balance.
According to Khallash and Kruse (Khallash and Kruse 2012), a survey of
3000 Graduates from China, the UK, and the US showed that 90% of US
respondents and 87% of Chinese respondents said they would actively
seek out employers whose corporate social responsibility behaviour
reflected their own, supporting the claim that work-life balance, considered
in the context of corporate social responsibility indeed could give
companies a competitive advantage with regards to recruitment.
This is good news for employers, as it means that work-life balance as a
human resources tool will not only have a limited benefit to a select group
of employees, but indeed can be deployed in organisations for the benefit
of a large group of employees.

4.4 Challenges with work life balance
Research has found that employee perceptions of organisational work-life
support and supported constructs, family-supportive organisation
perceptions and organisational work-family culture are associated with
increased organisational commitment, organisational citizenship
behaviours, job-satisfaction and psychological well-being, and with
decreased work-family conflict and turnover intentions (Allen 2001).
Many organisations invest time, effort and financial resources in helping
employees combine work and non-work responsibilities, for example, by
offering family-friendly human resource policies (Valcour et al. 2011).
Although family friendly benefits can serve as valuable tools in helping
employees managing multiple lifestyles, research has shown that the mere
offering of benefits is not always sufficient (Shockley and Allen 2007), as
organisations must also adopt their environment, norms and values in
order for benefits to have the intended impact.
In his study, Nord et al. (Nord et al. 2002) found that human resource
systems were typically based on traditional work arrangements, and were
unfair to participants in the non-traditional work-life balance programs.
Getting the right information from employers to employees about the
existing work-life balance programs seems to be a challenge.
Beauregard and Henry (Beauregard and Henry 2009) refers to work by
Yeandle et al. (Yeandle et al. 2002) which, in a survey of 945 employees
in six different organisations across three sectors of employment (local
government, supermarkets, and retail banking), found that 50% of
employees were unaware of the family friendly practices offered by their
organisations.
Most importantly, perhaps, is that there is an increasing amount of
research supporting the notion that workers who make use of work-life
practices suffer negative perceptions from colleagues and superiors

Employees in many organisations are reluctant to ask for support, out of
fear that doing so will make them appear less committed and therefore
more expendable (Valcour et al. 2011).
Beauregard and Henry (Beauregard and Henry 2009) refers to an
experiment conducted by Allen and Russell (Allen and Russel 1999) which
found that employees who used work-life balance practices were
perceived by co-workers as having lower levels of organisational
commitment, which was thought to affect the subsequent allocation of
organisational rewards such as advancement opportunities and salary
increases.
Observations from Nord’s (Nord et al. 2002) study of two organisations
reveal that employees participating in work-life balance programs might be
perceived by their peers as slackers or not dedicated team players, while
others feared that taking advantage of the programs offered, might
negatively affect their careers.
5 Criticism
Very few academic references are dealing directly with South Asia. The
academic literature which I have found seems to discuss mostly job
satisfaction and work and life balance using the Scandinavian model, the
American model, and some recent empirical studies completed in the
emerging economies such as China.
Huge cultural differences as well as significant stages of maturity of the
concept of work and life balance are apparent from the literature; and a
model that works well in, say Scandinavia may not at all be applicable
across the globe, without significant modification or adaptation to very
local circumstances.
6 Conclusions
This paper has performed a theoretical analysis of work-life balance as a
tool for employee satisfaction and retention.

It set out by establishing the concepts of retention and employee
satisfaction.
The paper then established the concept of work and life balance and
analysed how work and life balance can be used as a tool for employee
satisfaction and retention thereby linking the organisational retention to
employee satisfaction.
It also highlighted some of the important challenges in work and life
balance implementation.
The findings by Qu and Zhao (Qu and Zhao 2012) imply that individuals
with high levels of life satisfaction are more likely to feel satisfied than
those with low levels of life satisfaction.
Employees overall life well-being strongly influences job satisfaction levels
(Qu and Zhao 2012).
In practical terms, when employees feel good about their lives they tend to
enjoy their job more than those who feel bad about it (Qu and Zhao 2012).
According to Beuregard and Henry (Beauregard and Henry 2009)
availability of work-life balance practices has also been related to
increased affective commitment to the organisation and decreased
turnover intentions among all employees, not only to the users of the work-
life programs.
Nord et al. (Nord et al. 2002) also conclude that employees feel
organisations benefit from increased loyalty and retention.
The findings of Qu and Zhao (Qu and Zhao 2012) moreover support the
fact that individuals who have low levels of work interfering family, tend to
have positive spillovers from life events to job attitudes, and also that
individuals with low levels of family interfering work have strong spillovers
from life well-being to job attitudes.
Not only does organisational work and life programs create happier and
more dedicated employees, the use of work-life balance programs, such

as flexible hours, is also associated with an increase in an organisations
productivity of approximately 10% (Beauregard and Henry 2009).
The argument from Panisoara and Serban (Panisoara and Serban 2013)
is that in order to lead to positive results, creating organisational cultures
which promote work-life balance have to be addressed to a wider variety
of employees.
Having employees who make use of available work-life practices may also
incur cost savings for organizations via longer work hours and enhanced
productivity. Employees may work longer hours because flexible
arrangements increase their availability for work and reduce their
commuting time, or because they are exchanging leisure time for flexibility.
They may choose to work during their peak hours in terms of personal
productivity or work extra hours during the organization's peak times in
exchange for flexibility at other times. They may also increase their work
effort to avoid losing a job that offers them the flexibility they desire
Managers are more interested in how employee’s life events and well
being affect job attitudes, so that they can design appropriate human
resource policies to take proper action to ensure the positive spillovers
from life to job (Qu and Zhao 2012).
The research of Qu and Zhao (Qu and Zhao 2012) demonstrate that their
conclusions mean that when work and family demands do not interfere
with each other, employees who have a higher life well-being feel greater
job satisfaction.
The findings of Qu and Zhao (Qu and Zhao 2012) have implications for
managers who often focus attention on increasing employees’ satisfaction
and performance.
Irrespective of whether you support the bottom-up perspective, where job
satisfaction causes life satisfaction; or the top-down perspective, where life
satisfaction causes job satisfaction, there is, both theoretically as well as

empirically, surely a clear link between the job satisfaction and the life
satisfaction of individuals.
Organisations can benefit from this link, by ensuring that work and life
balance components of the human resources programs offered to
employees are incorporated and implemented in their organisations.
In addition to this, it is generally agreed that many work-life balance
practices, such as flexible hours, telework, and informational assistance
with dependent care services, have low financial costs that are associated
primarily with program administration and do not require an extensive
initial outlay of resources (Beauregard and Henry 2009).
Presumably, more organisations would be interested in offering work-life
practices were they aware that benefits may accrue to them regardless of
whether or not their employees made use of the practices (Beauregard
and Henry 2009).
While organisations have a large share of the work related to work-life
balance programs, it is also important that employees effectively involve
their families in their work decisions and activities in order to successfully
prosper from combining work and home (Groysberg and Abrahams 2014)
Organisations can through careful implementation of work and life balance
programs ensure employees’ life satisfaction increases thereby benefiting
from the positive spill-over effect on job satisfaction.
The more employees are satisfied with working in the organisation they
are in, the less they will be looking for new opportunities. Organisations
will through increased implementation of work-life-balance programs have
the ability to increase productivity at a marginal cost, increase job
satisfaction of their employees, while at the same time reducing turnover
intentions, thereby retaining their most valuable asset; employees.

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Appendix A Selection of literature
The research articles were selected by undertaking a search through the
search engine Google Scholar and through the electronic databases
ScienceDirect and ResearchGate in addition to a general search on
Google.
In addition to this, research also involved studying Human Resource
Management textbooks recommended for use of the MBA in Aviation
Management at Frankfurt University of Applied Sciences (Snell et al. 2010)
as well as Copenhagen Business School GDBA programmes (Nordhaug
et al. 1997).
For the search engines and databases a number of searching keywords
related to Work-Life Balance (such as “Work-life balance”, “Work family
conflict”, “Antecedents and outcomes of work–family” as well as words
related to a geographical region (such as “Asia”, “Scandinavia”, “South
Asia”, “India”). This produced an extensive range of diverse articles (175+)
which had to be narrowed down by considering their significance to this
paper.
One of the major difficulties in determining their relevance was that the
majority of the articles included the concept of Work life balance on a very
specific topic, such as “Project Managers in the Chinese constructions
industry” or front end hotel employees, but not necessarily a subject or a
geographical limitation which could be generalised.
Consequently a subjective judgement had to be made as to whether there
was different coverage of focus for the relevance of this paper.
Whilst the database search ensured that international papers that
conventionally tend to be written in English were identified, a potential
limitation was that papers written in other languages, such as any of the
Indian languages, may have been omitted, which in turn may have
influenced the geographical perspective of the articles.

The majority of the references came from specialist Human Resources
and Behavioural sciences journals (Journal of Vocational Behaviour,
Journal of Behavioural Sciences, Social and Behavioural Sciences,
Human Relations) but some also appeared in other journals, such as
Harvard Business Review.

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