Investments in employees boost performance, U. of Haifa study shows

Businesses looking to boost their performance would be well-served to place more trust in their employees, research conducted at the University of Haifa found.

July 9, 2006 09:20
2 minute read.
businessman 88

businessman 88. (photo credit: )

Businesses looking to boost their performance would be well-served to place more trust in their employees, research conducted at the University of Haifa found. "[Using parameters such as] how much employees are involved in the decision making process, the amount of training invested in them and the level of promotions made from within the organization, we can say that in a business where you see more trust, the performance is better," Shay Tzafrir, a lecturer in the human services department at the university, who conducted the survey, told The Jerusalem Post. Tzafrir added that with employer support, while performance proved to be better in both the inter-relationship between members of the organization and the company's success in the market, it was less so in contributing to actual profits. Still, in his research, Tzafrir included 30 companies from which he was able to obtain financial information which, he said, "showed a clear relationship between a high level of trust and profits." Elsewhere, a high degree of trust brought about what he called "high perceived performance." Quoting other research on the subject, Tzafrir said that when a negative decision is made in an organization, such as implementing layoffs, it takes approximately 16 months for the attitudes of employees to return to the same levels as before the event. Ofer Arad, founder and CEO of The Human Factor, a consulting services company, meanwhile, said that, while the budget for training and seminars to motivate staff was often the first to be cut in difficult times, this attitude was a mistake. "We want to take companies out of survival mode and into development. Investing in employees allows them to focus on their creativity rather than worrying about having to impress their bosses," Arad said. "The problem is that it is very difficult for companies to see the return on investment because you cannot measure the success from training, coaching and consulting." Arad noted, however, that while there was a growing awareness in Israel to invest more in employees, the local market was still lagging behind developed countries such as the US and Britain, due mainly to cultural and financial issues. "There is still an attitude among Israelis that they can do everything," he said. "And, where they do understand that motivating people and encouraging them to take responsibility is very important, it does not necessarily reflect in their actions." In line with the findings of the research, Arad added that displays of trust in employees were more prevalent in hi-tech companies than in traditional industry. With the economy in an upswing and an atmosphere similar to that prior to 2000, companies might be expected to increase their investment in their workers but Arad was not convinced that point had been reached yet. "There are many companies doing well in Israel, but there is also a gap between the statistics about how the market is growing and what is happening in reality," he said. "I think there are many companies and sectors that are still in trouble." The University of Haifa's Tzafrir noted, however, that he saw an improvement in managers' attitudes. "Now we see a boom in the market and possibly an increase in the levels of trust," he said. "For an organization to succeed today it needs employees to give more than the formal requirement - they need to make sure that employees' hearts are in their work."

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