Why It Pays To Spoil Employees

May 22, 2010  |  

(Entrepreneur.com) — Employee incentives pay off. A new study gives business owners even more reason to invest in lower-level employees. According to The New York TimesJody Heymann of McGill University‘s Institute for Health and Social Policy spent six years studying businesses with employee-friendly policies and the ways in which they profited from those policies. The study, entitled “Profit at the Bottom of the Ladder,” monitored productivity at companies like Dancing Deer Baking Company, which began providing employees free English classes and soon saw an increase in efficiency.American Apparel also offered its employees incentives by paying factory workers based on the amount of clothes they made, tripling their daily output. The report concludes, “The companies in our study showed that investing in their employees at all levels made economic sense, going against the common market wisdom that considers these investments an unnecessary expense.”

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