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Productivity is a critical concern of both the public and private sectors of the economy. The current knowledge about financial concerns of employees and their effect on workforce productivity is examined in this paper. Selected employee programs to address financial concerns are reported as examples of current efforts to reduce financial stress. Worker stress is known to result in lower productivity behavior identified as absences, tardiness, leaving early, mistakes, lack of job concentration, accidents, and lower output. The frequency of worker stress is reported in general but not in specifics by different types of employees. As financial stress or problems are increasing in general, the need for financial counseling and education in the workplace, particularly, is addressed in this paper. Employers' interest in personal financial concerns is increasing because of the increased need to improve productivity and to lower other costs. The employer's efforts in improving total well-being of employees contribute to better employee-employer relations, higher morale, retention rates, lower fringe benefit costs, lower transaction costs, and increased output.
Flora L. Williams, Associate Professor, Family & Consumer Economics, Department of Consumer Sciences & Retailing, Purdue University, West
Lafayette, IN 47907-1262, Phone: (317) 494-8297. E-mail:
Virginia A. Haldeman, Ed.D., Human Development and Family Studies, University of Nevada, Reno, Nevada, Phone: (702)784-6490, E-mail :
Sheran Cramer, Ph.D., University of Nebraska at Omaka, Omaha, Nebraska, Phone: (402) 554-2450, E-mail:
©1996, Association for Financial Counseling and Planning Education 147
Financial Concerns And Productivity
Flora L. Williams,
Purdue University
Virginia Haldeman,
University of Nevada-Reno
Sheran Cramer,
University of Nebraska-Omaha
Financial problems and concerns of people are increasing in an uncertain economy, and their effect
upon productivity is critical. Documentation of these effects to date is needed to promote financial
counseling and education programs for the worker at the workplace. The costs and benefits of
programs are addressed to promote the improvement and continued programs of employee assistance
or human resources in cooperation with other financial professionals.
KEY WORDS: financial concerns, financial problems, financial counseling, productivity, employee
Productivity is a critical concern of both the public and
private sectors of the economy. The current knowledge
about financial concerns of employees and their effect on
workforce productivity is examined in this paper.
Selected employee programs to address financial
concerns are reported as examples of current efforts to
reduce financial stress. Worker stress is known to result
in lower productivity behavior identified as absences,
tardiness, leaving early, mistakes, lack of job
concentration, accidents, and lower output. The
frequency of worker stress is reported in general but not
in specifics by different types of employees. As financial
stress or problems are increasing in general, the need for
financial counseling and education in the workplace,
particularly, is addressed in this paper.
Employers’ interest in personal financial concerns is
increasing because of the increased need to improve
productivity and to lower other costs. The employer’s
efforts in improving total well-being of employees
contribute to better employee-employer relations, higher
morale, retention rates, lower fringe benefit costs, lower
transaction costs, and increased output.
The current focus on productivity and employee wellness
upholds the necessity to examine financial problems,
stress, and programs. An assessment of the relationship
between financial concerns or stress and aspects of
productivity behavior can provide justification for
employee benefit program development, financial
education endeavors, and financial counseling services.
Results can provide information for documenting the
need and exploring the cost-effectiveness of financial
counseling provided as a community and/or as an
employee benefit service.
Productivity is of concern to many sectors of the
economy (e.g. Ferleger & Mandle, 1994; Hall, 1994;
Heikens, 1994; Heinemann, 1993; Key, 1994; Leichtling,
1994). However the phenomena of productivity is a
construct that does not have a single definite criterion
measure or operational definition. Neale and Liebert
(1980) suggest that the study of such constructs should
be guided by a theory which would hypothesize the
network of associations between the construct and
directly measurable variables. Thus, we present Choice
and Exchange Theory (Nye, 1978) as a guide to the
explanation and prediction of worker productivity as it is
impacted by behaviors associated with family financial
Theoretical Construct
Choice and Exchange Theory as developed by Nye
(1978) has roots in both economics and sociology. The
theory has four active components: alternatives, costs,
rewards, and outcomes. When an individual or family is
Financial Counseling and Planning, Volume 7, 1996
148 ©1996, Association for Financial Counseling and Planning Education
faced with a problem, there is an array of alternatives
from which to choose. Each alternative has associated
costs and rewards. The alternative(s) chosen, with
accompanying costs and rewards, determine the outcome.
Nye (1978) states that many choices are based on the
individual’s perception of the rewards and costs of the
alternatives at the moment of choice without, necessarily,
reviewing and evaluating all possible outcomes. Even
with review and evaluation of possible outcomes, the
choice may be based on overestimation of the anticipated
reward, or there may be a lack of perception of the costs
associated with the selected alternative. The theory
allows for later realization that a decision was not
Nye (1978) identified nine theoretical propositions which
can be used to guide hypothesis development. They are
considered to be general in application and substance and
culture free. These propositions can be strategic starting
points for applying theory:
1. Human beings seek rewards and avoid costs to maximize
2. Costs being perceived as equal, individuals will choose the
alternative which supplies or is expected to supply the most
3. Rewards being perceived as equal, individuals will choose
the alternative which exacts or is expected to exact the fewer
4. Immediate outcomes being perceived as equal, individuals
will choose those alternatives which seem to promise better
long-term outcomes.
5. Long-term outcomes being perceived as equal, individuals
will choose alternatives seen as providing better immediate
6. Other costs and rewards being perceived as equal, individuals
will choose the alternative which supplies or can be expected
to supply the most social approval.
7. Other costs and rewards being perceived as equal, individuals
will choose the alternative which appears to provide the most
8. Other costs and rewards perceived as remaining equal,
individuals will choose activities and positions which provide
the greatest financial remuneration and/or the smallest
financial expenditures.
9. Costs and other rewards being equal, individuals choose
associates and friends with opinions and values which agree
with their own and try to avoid those who consistently
disagree with them (Nye, 1978).
Application of the Theory
Choice and Exchange Theory enables a researcher to
investigate the question of whether there are significant
associations between the existence of family financial
problems (or having concerns about family financial
decisions) and the existence of behavioral factors
associated with employee productivity. The theory is
conducive to the investigation of associations between
alternative actions workers can take to alleviate the
financial problem (or concern) and enhanced worker
productivity. Positive and negative outcomes resulting
from the decisions made and actions taken can be
Some financial problems may be identified as sources of
concern. When these concerns are perceived by the
worker as an especially troublesome or grave problem,
that perception may contribute to personal physical or
emotional conditions which, in turn, may be associated
with a decrease in productivity. Financially related
concerns and behaviors associated with decreases in
productivity are listed in Table 1.
The following are some classic scenarios associated with
experiencing financial difficulties. Each is examined
using the Choice and Exchange Theoretical framework.
In some cases, experiencing financial problems may
serve as motivation to increase productivity in hopes of
increasing income, and thus solving the financial
problem. One cost is that it would take time to increase
productivity and gain the reward of increased income.
Another possible cost would be that additional income
would not be sufficient. In this option, there is a high
risk of delay to secure adequate financial resources. This
may result in another dip in productivity.
Another option is to take on a second job, or for another
household member to seek gainful employment (or if
already employed to seek a second job). The reward of
additional financial resources is attainable. A cost may
be further reduction in productivity at the place of
original employment due to overwork.
When credit over-extension is accompanied by inability
to meet credit payments and repossession or wage
attachment is threatened, the worker may contact a local
credit counseling agency or a financial counselor
affiliated with the industry or business. The costs of this
option include the time it takes to participate in such a
program and the loss of personal control over the
allocation of financial resources. The rewards are that
financial pressures are reduced and dunning by creditors
usually ceases once they are informed that the debtor is
a program participant and revised payment plans have
been arranged. Ash, O’Neill, and Haldeman (1985)
reported that once individuals were participating in a
Effects of Financial Concerns Upon Workplace Behavior and Productivity
©1996, Association for Financial Counseling and Planning Education 149
counseling program, they no longer perceived themselves
to be in a crisis situation.
Table 1
Financially Related Concerns and Behaviors Associated
with Decreases in Productivity
Concerns Behaviors
Action by a collection agency A grievance being filed by the
Bankruptcy High incidence of accidents/illness
Divorce High rate of absence, tardiness,
and/or leaving early
Excessive indebtedness
Inability to meet credit Incidence of physical or verbal
obligations aggression or low tolerance levels
Loan consolidation
Medical bills Increased incidence of mistakes,
Rendering of a legal judgment errors, faulty judgments
related to financial
Low morale or poor attitude
Support payments
Use of a consumer credit
counseling agency
Utility turn-off
In companies where the employer has established an
employee assistance program, on-site financial counseling
may be available. The rewards of participation would be
much the same as working with a local credit counseling
agency. However, there may be an associated cost when
the individual perceives having co-workers know he/she
is engaged in counseling, a social stigma. A positive
alternative may be the provision of financial management
workshops at the worksite or in collaboration with
educational agencies within the community. A more
costly option is for the worker to place the management
of family finances into the hands of a pro-rater or
attorney. The associations between any one of these
actions and the level of worker productivity is unknown
at this time.
The propositions from Choice and Exchange Theory can
serve as the basis for developing hypotheses which will
test associations between the independent and dependent
variables. The three factors present in all propositions
can serve as constant operational definitions for studies.
Suggested definitions are:
Rewards = positive individual evaluations such as:
wages that support an adequate level of
living, salary increases, reduced stress,
and the possibility of advancement.
= positive corporate evaluations such as:
higher morale, increased productivity,
and higher profits.
Costs = negative individual evaluations such as:
docked pay, wage attachments and
garnishments, and using overtime or
having a second job as a means of
meeting financial demands.
= negative corporate evaluations such as:
increases in absenteeism and accidents
resulting in lower productivity.
Outcomes = a change in behaviors associated with
worker productivity or actual
productivity of goods and services.
It is assumed that workers choose to work where rewards
can be exchanged for costs with a resulting maximization
of productivity.
Using Choice and Exchange Theory as the theoretical
construct, several hypotheses are suggested for future
research. For each hypothesis, the number of the
corresponding proposition stated above is given.
1. Given a set of established actions designed to reduce
financial stress, which of the alternative actions are
perceived to be the least costly and most rewarding
and yield the desired outcome of increased worker
productivity? (Proposition 1)
2. When a worker perceives the immediate outcome of
any of the possible actions to be decreased stress and
enhanced ability to concentrate on the job at hand, the
worker will select the action which promises the best
opportunity for eliminating future financial problems.
(Proposition 4)
3. When a worker perceives that the long-term outcome
for each action is reduction of the possibility for
future financial problems, the worker will choose the
alternative which will give the greatest and most
immediate financial relief. (Proposition 5)
4. When a worker perceives that the costs and rewards
of the alternatives are equal, the worker will choose
the action which will enable him or her to have the
Financial Counseling and Planning, Volume 7, 1996
150 ©1996, Association for Financial Counseling and Planning Education
greatest personal control over his or her personal
financial situation. (Proposition 7)
The challenge is to develop reliable and valid instruments
to measure financial concerns and behaviors associated
with productivity. Results of assessments utilizing such
instruments can provide information about providing
alternatives that can enhance worker productivity. Such
findings would serve as the basis for making informed
decisions about implementing financial counseling or
educational programs for employees.
A review of the literature or related works further
delineates the components of Choice and Exchange
Theory for assisting in explaining and predicting work
productivity. First, the problem component is discussed
in terms of financial problems/concerns of employees and
the effects of these problems and concerns on
productivity. Secondly, employer efforts/programs to
address employee financial problems constitute the
alternative section of the model. Finally, outcomes
resulting from such employer efforts and programs
complete the section of related works. The outcomes
evident from the examples of currently provided
employer efforts and programs suggest the need for
additional research related specific types of financial
programs and efforts and their resulting costs or rewards.
Financial Problems
Financial problems affect people in various walks of life.
Not only is the family life effected but financial problems
affect productivity in the job market also. A worker with
financial problems experiences lack of concentration
resulting in poor quality or quantity of work, fatigue due
to stress, becomes more accident prone and exhibits
higher grievance rates (Bailey, 1986). Lower output and
the tendency to default requires companies to spend more
in the way of transactions, benefit costs, and medical
Estimates of the effects of financial problems have been
based on records of the numbers of people in the
workforce who have sought employee counseling, and the
percentage of these who had financial problems. Brown
(1993) suggests that 10% is a conservative estimate of
the proportion of employees in the workplace with
financial difficulties affecting productivity. This estimate
comes from a company providing well above national
average pay and benefits. Another research report was
that personal financial problems affected nearly one-third
of America’s corporate workforce performance (Financial
Services Study, 1988).
The relative importance of financial problems
contributing to lowered productivity can be documented
by its rank with other problems of those who seek
counseling. The disentanglement of financial problems
from other problems is difficult. One such report of
those who had problems with alcohol or drug affecting
productivity, related problems were financial - 35%,
legal - 55%, worker compensation claims - 12%, and
accident or sickness claims - 14% (Brown, 1993).
Absenteeism of work place behavior has revealed that
financial problems are increasing due to more single-
parent households, divorce, second marriages, more one-
income households due to corporate downsizing, other
downsizing, over-spending, addictions, and not enough
money (Tagtmeier, 1992). Focus groups of employees
indicate that about 13% report financial problems as a
primary issue and 20% report them as secondary issues
resulting from other problems.
Financial concerns and employers’ way of dealing with
them have changed over the last two decades (Lecky-
Thompson, 1995). Whereas twenty years ago,
employees were expected to leave their problems outside
the workplace, now employee assistance programs help
with a variety of difficulties. Financial concerns “are
assuming greater proportions” and are multifaceted.
Whereas eight years ago, the concern was a simple issue
that worried an employee, a higher percentage have
multiple problems. These problems, according to
Richard Hopkins, president of the Employee Assistance
Professionals Association, can be distinguished among
types. They involve work problems (15%), personal
(25%), family or marital (25%), substance abuse 10%),
financial or legal (15%) and miscellaneous (10%)
(Lecky-Thompson, 1995).
A recent report (Byrne, 1996) also surveyed the request
for financial counseling as well as frequency of financial
concerns. Data were collected through the administration
of the Business & Industry Needs Assessment (BINA)
Survey, a 174-item questionnaire which measures
employee wellness, in areas including: exercise, diet, job
satisfaction, stress, substance use, family satisfaction,
depression, anxiety, driving. The BINA survey was
developed over nine years with funding from the
National Institute on Alcoholism and Alcohol Abuse
(NIAAA) and the National Institute on Drug Abuse
(NIDA). Of 10,308 survey participants at nearly 40
organizations, primarily in the northeastern states,
Effects of Financial Concerns Upon Workplace Behavior and Productivity
©1996, Association for Financial Counseling and Planning Education 151
responses regarding financial concerns were:
“concerned” or “very concerned” by 43% and “somewhat
concerned” by 32%. Concern about over-use of credit
cards was reported by 30% who were “concerned” or
“very concerned” and 21% who were “somewhat
Of respondents, 60% indicated they would like
counseling, a workshop or course, or information
regarding finances. The distribution was as follows:
11% responded they would like counseling; 19%
responded they would like a workshop or course; and
309% responded they would like information.
The current level and trend of personal bankruptcies and
consumer debt is evidence of the financial difficulty of
some workers and is indicative of the continuation of a
similar trend for the future. For more than 50 million
Americans, credit means bills they can’t pay, phone calls
from collection agencies, and rejection letters from credit
card companies (Detweiler, 1993). Additionally, 110
million people are in debt to credit card companies, many
perched precariously on the edge of a debt cliff with a
small downturn in the economy pushing them over the
edge. The number of consumers who can’t pay their bills
has skyrocketed and bankruptcy courts and credit
counseling offices are clogged with persons seeking
assistance. In excess of 400,000 people contacted
consumer credit counseling offices for help in 1990
because they were too deeply in debt to handle their
situation by themselves. More than 800,000 Americans
declared personal bankruptcy in 1991, more than double
the number who did so one decade earlier (Detweiler,
1993). In 1995, the number was over one million who
filed for bankruptcy.
Respondents to a Survey of Virginia’s largest corporate
employers identified the main causes of employee
financial troubles as overuse of credit, overspending, lack
of budgeting, too many debts, inadequate shopping and
spending skills, salary or wages too low, and lack of
knowledge about money (Garman, Porter & McMillion,
1989). The survey, sponsored by Employee Benefit
Offices, represented manufacturing, banking, and other
service sector firms.
The cost of personal problems and debilitating life styles
is estimated for Canadian business to be $25 million per
workday (Tittemore, 1994). The estimate is that “68% of
all workers will experience workplace problems severe
enough to prevent them from coping with day-to-day
duties” (p. 49). “At any time, 10-20% of working
Canadians will be performing at a reduced level because
of personal difficulties.” Personal problems are
estimated to cause more than 30% of all absenteeism.
Effect of Financial Problems/Concerns Upon
Financial problems affect productivity both directly and
indirectly. Based on information from managers in U.S.
corporations who worked with EAPs, Harris (1987)
estimated that financial problems cost U.S. companies a
minimum of $40 billion each year. Financial problems
also affect family and marital relationships, physical and
emotional health that can further lead to a decrease in
productivity. A worker can heighten his financial
problems through indecision over financial planning,
inadequate knowledge and through incorrect decisions
and management.
The cost of financial problems to a company can be
estimated by the following procedure, using Brown’s
(1993) conservative estimate:
C 10% of Workforce with Financial
Problems # ______
C 10% of Average Annual Wage in Wasted
Productivity $ ______
= The cost of Doing Nothing - Estimated
Annual Cost $ _____.
Employees burdened with financial problems are not
likely to perform at their full potential. Therefore,
employee financial welfare is a legitimate area for
management. Superiors need to be alert to detect
employee financial concerns, to advise employees on
possible ways to achieve the necessary financial
assistance and to convey employee financial needs to
senior management so they can be used in formulating
company policies and programs. Financial counseling
programs may include professional advise related to
employee stock ownership plans, credit unions, financial
grants, tuition assistance and scholarships. Financial
worries can result in erratic behavior, an item of
particular concern in relation to managerial personnel
(Adler and Leff, 1976). Employers, in order to increase
the productivity of their workers can help them acquire
information regarding financial assistance, personal
finance and formulate policies and programs to help them
in times of financial stress (Alder & Leff, 1976).
A survey of full-time personnel in companies with over
1000 employees who had household incomes in excess
of $25,000 and who were eligible for company benefits
Financial Counseling and Planning, Volume 7, 1996
152 ©1996, Association for Financial Counseling and Planning Education
documented the relationship of finances and productivity.
Forty-three percent of those under the age of 45 indicated
that their financial worries sometimes affected their job
performance. Sixty percent of those under age 45 and
48% of those over age 45 desired financial planning
assistance. Sixty-one percent of the respondents in the
same study indicated that corporations had the
responsibility to help employees reach financial goals
(Farish, March 1988). A U.S. Department of Defense
(DOD) study examined a number of factors including
absenteeism and financial problems (Hendrix, Steel &
Schultz, 1987.) Absenteeism increased with financial
problems. The magnitude of employee problems
resulting from the inter-relatedness of financial and
personal and or family/marital problems has the potential
to negatively influence work behavior to the extent that
the employee may become a “troubled employee.”
The theme is “minimize distraction for maximum output”
and “employees who have worries about career
advancement, finances and work-life balances don’t
perform to capacity” (Breuer, 1995, 71). Worries that
cause some employees to function at roughly 70%
capacity include their upward mobility chances, sending
children to college and how they will retire. An example
is told of a manager who was under such great stress from
financial worries, work-life issues and concerns about
career growth/employability, that he wore a heart monitor
(p. 72). The analysis reveals that finances are the
employees’ biggest stress after career stability which, of
course, involves family finances and economic security.
A current worry is the escalating gambling problems in
the workforce that are destructive patterns of behavior
(Falzon, 1995).
Financial concerns affect productivity at all levels of
employees. The rationale for providing financial
planning services for senior executives is that the time
and energy these employees would spend worrying about
their money would keep them from being maximally
productive (Tagtmeier, 1992). The rationale for
providing financial counseling for non-executives is that
stress directly affects their productivity and costs the
company time and money.
Costs of financial difficulties to the employer include
wage garnishments, firing and hiring a new employee
after the second wage garnishment, processing and
tracking creditors, and defaults on employer-sponsored
credit union loans (Tagtmeier, 1992). These costs can be
included in the formula to determine the cost/benefit of
financial counseling for employees either in-house or
contracted with an outside agency.
Employer Efforts and Programs
What have been employer efforts and programs to
address employee financial problems and the resulting
outcome of such efforts? The decades of the 1980s and
1990s evidenced a growing interest in financial
counseling by employee assistance programs (EAPs).
However, implementation of financial counseling
programs did not keep pace as evidenced by the mention
of financial problems last on their list. In the 1990s more
employees added financial planning to their benefits to
assist in decision making about retirement pensions and
to reduce company liability. Programs of basic financial
management an investment counseling increased during
the 1990s although “financial illiteracy” is still under-
addressed in the workplace (Cambridge Human Resource
Group, 1994).
Employee assistance programs are based upon the
premise that an employee’s job performance is negatively
influenced by financial problems, among other types of
personal and family problems. A survey of companies
indicated that almost half of them sponsored employee
assistance programs for their workers and that financial
problems were listed by 81% as one of the problems
most often covered (Wall Street Journal, l987, p. 27).
EAP programs offering assistance with financial/legal
problems are described as broad brushed in their
approach with staffs providing assistance directly
through in-house counseling efforts or by referral to
outside specialists and agencies.
Referrals to employee assistance programs are made by
supervisors and, in many instances, employees
themselves seek out the services. Approximately 15% of
EAP referrals involved financial matters (Harris, 1994).
Major benefits, i.e. reward or outcomes, claimed from
EAP programs included: valued employees were helped
and retained, absenteeism and turnover was reduced,
productivity was improved and employee stress reduced.
The costs and benefits of employee assistance programs,
although widely available and variable, help to interpret
the actual outcomes of such programs. Although the
reports are for programs in general, future research can
isolate costs and benefits for financial counseling. The
variables are costs per employee per year such as a range
from $4 to $90 and an average per employee per year
such as $30. Most studies of the benefits from employee
assistance programs report a savings, for example about
$3.50 per employee, in lower costs for health care claims,
Effects of Financial Concerns Upon Workplace Behavior and Productivity
©1996, Association for Financial Counseling and Planning Education 153
absenteeism, and workplace accidents for every dollar
spent. For example, an $8.00 figure of savings per dollar
spent includes higher worker productivity and reduced
training costs (Thorne, 1987). A study reported by
Bergmark (1989) concluded that an easily accessed, risk
free, multi-disciplinary assistance program helped
employees solve problems sooner, more effectively and
more efficiently. For example, health care benefit costs
in the EAP group were only 41% of a comparable non-
EAP group with the EAP’s average benefit costs being
28% lower.
A survey of the Employee Benefit Offices, at 47 of
Virginia’s largest corporate employers, based on number
of employees per job site, revealed that 67% of the
companies offered counseling for financial problems
(Garman, Porter & Macmillan, 1989). These firms
encompassed manufacturing, banking, and other service
sector firms. Three-fourths of the firms indicated that
employees had responded favorably to the availability of
financial counseling services. Positive outcomes
resulting from such programs, reported by 38% of the
firms, included improved attendance and better on-the-job
attitude toward work.
Among the models of financial education programs to
help employees be more productive and less stressed is
“Financial Crossroads,” for example, which can be used
as a self-study guide or a workbook for onsite workshops
(Breuer, 1995). Crossroads are the times with financial
aspects from serious illness, death of a family member,
divorce, care of an elderly parent, job loss of a family
member and retirement. After helping employees
visualize their situations and possible consequences, and
potential defensive strategies, it directs employees “to
find an outside financial advisor” to help develop
solutions (p. 75). Educational programs are aimed at
improving employee moral and well-being (Sell, 1993).
Programs are more effective if they are first field-tested.
Focus groups are useful in reviewing materials. A
program as a result was “Money Matters” which included
five magazines: why begin planning, how to control
spending, how to establish and reach goals and estate
planning (Sell, 1993). In addition an Info Line was
available to employees for further information and
explanation. Continued evaluation included focus groups
and records of frequency of questions, kinds of questions,
satisfaction with answers, application of information,
critique of the quality of information, change in behavior,
and use of coupons to obtain collateral material.
A “personal money management program” instituted by
one company taught employees and their families how to
manage their money while helping them better
understand and appreciate the company’s operating needs
(Jones and Matte, 1978). Components of the program
included live instruction on how to determine personal
financial needs, videotapes showing alternatives and
specific recommendations for financial needs, textbook
and workbook with pertinent personal money
management forms. Outcomes reported included several
benefits including development of interest in a well-
managed operation, learning management by objectives,
reduction of job time wasted on personal money matters
and good public relations.
Two phases of the financial counseling process,
“preventative” and “productive” have the potential for
making an impact on the outcome of worker
productivity. The preventative phase seeks to help a
person avoid financial problems in the future. Prompt,
careful delineation of sickness and retirement benefits to
employees is a critical part of this phase. Gaining greater
personal satisfaction for the employee is an objective of
the “productive phase”. Avoiding problems is
inadequate (Adler & Leff, 1976).
Financial counseling programs addressing financial
problems and concerns of employees can result in
improved benefit packages, decreased unrest or conflict
on the job and with management, reduced stress and the
possible resulting breakdown of physical and mental
health. Additionally, reduced confusion in selecting
various company benefits related to insurance, savings
and investing, pensions and retirement plans can reduce
employee financial concerns. Appropriate choices can
lessen stress from decisions about longer term plans for
financial security. Finally, reduced confusion related to
tax laws can also lessen stress with the ultimate
objective-improved productivity.
The focus is on productivity and creativity and requires
a new system of management (Breuer, l995). Assisting
employees with financial concerns involves indirectly
helping the employee to balance work and family. New
systems of work involve adjusting schedules for child
care responsibilities, flextime, personal leave days,
flexplace, and reshaping the work environment. The
advice for employers in helping their employees with
financial planning or financial difficulties is built on
theories of psychology, sociology, management and
economics. A financial counseling theory is evident in
this advice: “To eliminate financial problems, employees
must realize that personal money management is a
Financial Counseling and Planning, Volume 7, 1996
154 ©1996, Association for Financial Counseling and Planning Education
lifelong process because their needs change as they
progress through the financial life cycles; they must also
be aware that no individual or institution can completely
manage their money for them” (Tagtmeier, 1987).
Concerns by employers include attracting and retaining
talented personnel to increase their productivity.
Employers recognize that preparing their employees for
the future and resolving financial stress currently they can
accomplish both these goals (Sheley, 1995). Employees
are concerned that only about half (52%) who have
access to 401k plans actually contribute the maximum
and one third do not participate. Furthermore, Secretary
of Labor Robert Reich testified to the Senate in 1994 that
“45 % of current workers participate in a private pension
plan” (Sheley, 1995, 89). Human resource departments
are now offering financial education programs to promote
pension and personal savings in response to retaining
personnel and overcoming problems with events such as
divorce, illness, or children’s college, which of course
reduce retirement contributions (Sheley, 1995). They are
advised to first analyze their “workforce by
demographics, reading level and education level” (p. 92)
and then present creative and innovative programs.
To determine the effect of Employee Assistance
Programs, the following method has been established
(Tittemore, l994,50); but to determine the effect of
financial counseling the percentage of personal problems
due to financial concerns must be established:
Number of employees in the company = _____ (A)
10% (.10xA) are experiencing = _____ (B)
personal problems (As mentioned,
statistics indicate that 10% to 20%
of the workforce is incapacitated by
disruptive personal problems)
Average employee’s salary =_____(C)
Total salary of employees with
personal problems (BxC) =_____(D)
Costs due to reduced productivity (Dx.35) =_____(E)
(Employees experiencing personal problems
are at least 35% less productive)
Your savings are (Ex. 75) =$ _____ .
(Seventy-five percent of your employees’
personal problems can be corrected
through professional counseling).
The concern over financial problems and productivity is
critical due to increased financial difficulties and
uncertainty in the workplace. Information from research
on how to improve productivity related behavior and the
implementation of services are needed by business and
families in times of economic prosperity as well as
downturn since there will always be those experiencing
financial stress.
The review of literature has revealed a very limited
amount of research to date and a lack of precision tools
for determining the effect of financial concerns upon
productivity. Research tools need to be developed and
refined to assess the specific education and counseling
concerns of various industries and businesses. Although
basic financial management knowledge and skills are
always needed, specific financial concerns for the unique
workforce and changing era need to be identified.
The interrelatedness of financial concerns and other
personal problems and their resulting impact on
productivity had received little attention 10 years ago
(Felstehausen, 1983). Now that attention is increasing,
definitive and careful research is needed to disentangle
the relationship of financial problems to other personal
problems and the resulting impact on worker
Research is needed to identify lowered productivity in
certain behaviors by percentages of employees with
financial problems that can be reduced by financial
counseling and education. Research is needed to
document the direct and indirect effects of financial
concerns on the various types of productivity and for
different types of industries or businesses. Research is
needed to better document the cost/benefit of financial
counseling programs to improve productivity, employer-
employee relations, retention, and well-being.
Financial counselors and educators need to prepare more
programs in cooperation with industry and business
based on the excellent services or models already
available from a variety of current providers. The means
for effective and efficient evaluation of these programs
need to be developed.
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Byrne, M. (1996). Business and industry needs
assessment. King of Prussia, PA: Compass
Information Services, Inc.
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Workforce with permission of R. J. Reynolds Tobacco
Co., R.R. Employee Counseling, Winston-Salem, NC.
Unpublished paper.
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worries. Wall Street Journal, August 3.
Detweiler, G. (1993). The Ultimate Credit Handbook.
New York: Penguin Books.
Falzon, J. (1995). Legalized gambling: Win now, pay
later. EAP Association Exchange, 25 (4), 6-7.
Farish, P. (1988). HRM Update, Coming Benefits?
Personal Administrator, 33, 22.
Ferleger, L.A., & Mandle, J. R. (1994). The nontangible
economy. Challenge, 37 (5), 59-62.
Garman, E.T., Porter, N.M. & McMillion, J.A. (1989).
Financial Counseling by Corporations with Large
Number of Employees. Southeastern Regional
Family Economics Proceedings.
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if managers will let them. Organizational Dynamics,
22 (3), 33-46.
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productivity. Industrial Engineering, 26 (11), 44-45.
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business hostage? Denver Business
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key? Journal of Marriage and the
Family, 40 (2),
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finances, 6.
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a secure future. HR Magazine, 88-94.
Sell, N.W. (1993). Bank of America launches
companywide financial planning education program.
Employee Benefits Journal (September), 8-12.
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Employee Assistance, 4 (12), 14-16.
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financial planning. EAP Digest (March-April), 42-
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Guidelines for establishing and employee assistance
program. Business Insurance, 21, 33-34.
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Financial Counseling and Planning, Volume 7, 1996
156 ©1996, Association for Financial Counseling and Planning Education
... From the above investigations of the researchers on the topic, an important conclusion may be drawn: financial matters are certainly among the most important issues in daily life, as they affect not only an individual's personal and family life, but also their professional life. Studies [20][21][22][23] have shown a link between workplace productivity and poor financial behaviour [24,25]. According to Brown [20], employees' financial problems were one of the four major workplace problems and affected employee productivity and performance [21,22] in the context of employees' financial difficulties [20,26]. ...
... Studies [20][21][22][23] have shown a link between workplace productivity and poor financial behaviour [24,25]. According to Brown [20], employees' financial problems were one of the four major workplace problems and affected employee productivity and performance [21,22] in the context of employees' financial difficulties [20,26]. In turn, Garman, Leech and Grable [21] also pointed out the negative impact of inadequate financial behaviour of employees on their families and employers. ...
Full-text available
The COVID-19 pandemic has caused a loss of the sense of financial security among employees. The consequence is decreased productivity, affecting employers who also suffer related costs. Actions to support employees’ financial wellness are therefore important and necessary, especially in the case of those working in the strategic sector ensuring national energy security. The main aim of the article is to present, from the theoretical and practical point of view, the essence and role of Employee Financial Wellness Programs (EFWPs) in the creation of an effective incentive system in energy sector companies in Poland during the crisis caused by the COVID-19 pandemic. The following research methods were used: critical analysis of source literature, comparative analysis of existing data and the descriptive method with elements of deductive reasoning. In order to collect primary data, the indirect survey method was used, namely, the CAWI Internet survey technique, which was addressed to the main energy generation sector entities in the country. The research has shown that financial wellness instruments are new to the Polish market, where they have been in limited operation since 2021. It was confirmed that some companies in the energy sector are using such innovative tools, but they also show the need and interest to implement more extensive and comprehensive Employee Financial Wellness Programs that will reduce the financial stress of employees while motivating them to work more efficiently during the COVID-19 pandemic.
... Rights reserved. Barrafrem et al. (2020), Kahneman and Thaler (2006), Lind et al. (2020), Lu-Lerner (2020), Ruggeri et al. (2017), Prawitz et al. (2006), Thaler (1999 4 Consumption decisions and financial behavior ultimately determine financial well-being Modigliani and Brumberg (1954), Ajzen (1985) Castro-González et al. (2020), Iramani and Lutfi (2021), Joo and Grable (2004), Shim et al. (2009) 5 The prelation of consumers' needs and wants influences financial well-being by escalating from the urgency of basic needs to realizing immaterial wants Maslow (1943aMaslow ( , 1943b Gubbins (2020), Williams et al. (1996), Xiao and Anderson (1997), Xiao and Noring (1994), Xiao and O'Neill (2018) 6 Financial well-being must be assessed considering an individual's present financial situation and his or her expected financial future Shefrin and -(1988) Brown and Gray (2016) Salignac et al. (2020) her utility. This model of rational behavior is founded on a set of elements that includes (1) a set of alternatives or courses of action; ...
... Furthermore, the theory of motivation (Maslow 1943a) has been used to explain different extents of financial well-being. For example, some studies have consigned the relationship between income and household needs: as household income increases, financial needs change (Williams et al. 1996;Xiao and Anderson 1997;Xiao and Noring 1994). Moreover, spending control and budgeting, both behaviors linked to financial well-being, are usually analyzed with the theory of motivation (Xiao and O'Neill 2018). ...
Full-text available
This work aims to clarify the definition of financial well-being and make propositions for building a theory of financial well-being by describing and reviewing its theoretical foundations. Although financial well-being's scope is essentially individual, it is necessary to understand it in a broader context due to its social impact and association with socio-economic progress and happiness. We follow a qualitative-descriptive method based on the literature employed in empirical works and the principles enunciated by diverse scholars and institutions. The originality of this work lies in consolidating a financial well-being definition, relating, and contrasting several of its theoretical foundations together instead of addressing them separately. We argue in favor of establishing a theory of financial well-being to define, measure, and analyze it comprehensively. This proposal considers different dimensions such as time, human needs, saving motives, and institutional policies. Our results are of interest to those involved in research about financial well-being, general well-being, and the economics of happiness.
... Esses resultados reforçam a percepção de que as finanças não são uma dimensão isolada, mas conectam-se com outras dimensões da vida do indivíduo. Como pontuam Williams et al. (1996), os problemas financeiros podem afetar o convívio familiar e a produtividade. ...
... The consequence of financial stress, is that workers' productivity will be affected and it is obvious that productivity moves an establishment forward. In order to avoid this unhealthy situation of poor job performance and low productivity, a comfortable and appropriate working environment that reduces financial stress and suits humans' needs should be provided There have been studies conducted on financial stress and job performance among employees [19] but it has not been researched to the same extent with married female researchers. Hence this study examined the influence of some characteristic variables and financial stress on productivity among married female research scientists in Oyo State. ...
Full-text available
Research plays significant role in developmental process of any nation of the world. This makes productivity-measured by research publications in research institutes, very crucial. In realization of the pivotal roles of research in development, Nigeria, like any other nations that want development made certain efforts towards transforming her economy from less developed to developing one. One of the efforts in making Nigeria developed is the establishment of research institutes in all the six geo-political zones in the country. This research Institute employs both male and female research scientists because it is a non-gender biased institution like the universities of learning. However, there are challenges that are peculiar to the married female workers. In view of this, this study focused on the influence of some married female research scientists' variables, which are their characteristics (age, household size, age of youngest child, age of oldest child, academic qualification, and years of experience in the institution, rank/grade level and financial stress) on productivity among married female research scientists in Ibadan, Oyo state, Nigeria. The survey research was conducted on 80 respondents selected from four research institute in Ibadan, Nigeria. The results revealed that all the variables jointly predicted the productivity of the married female research scientists. Notwithstanding only years of experience in the institute, academic qualification and financial stress contributed relatively to productivity. Thus the researchers recommend that academic qualifications and years of experience should be the key determinant of job designation, responsibility and tasks given to employee. Also there is the need for financial counseling and education in the workplace, to reduce financial stress among research scientists.
... One of the conditions was the pressure that employees experience. Previous research has found that financial stress affects work safety outcomes (Petitta et al., 2020), productivity, and interpersonal relationships in the workplace (Williams et al., 1996). Furthermore, in recent years, with burdens such as housing loan repayments, the implementation of the two-child policy, and increased expenditures and payments for children, financial stress has become an important source of stress (Long and Wang, 2015). ...
Full-text available
This study applied self-determination theory (SDT) to investigate the relationships between work motivation and work behaviour of Chinese employees and the moderating role of financial stress. Data were obtained from 245 employees of five organisations in China using a convenience sampling technique. The results indicated that autonomous motivation positively predicted work performance and innovative work behaviour, while controlled motivation had a positive effect only on work performance of employees. In addition, financial stress moderated the relationships between autonomous motivation and work performance and innovative work behaviour of employees. Specifically, the beneficial effect of autonomous motivation on work performance and innovative work behaviour disappeared when financial stress was high. The findings of the present study supported cultural similarities in the positive role of autonomous motivation and showed cultural differences in the role of controlled motivation. The implications of this study are also discussed.
... Financial concerns are known to adversely affect one's life satisfaction through reduced physical and mental health (O'Neill et al. 2005), reduced relationship quality among family members, and reduced work productivity (Williams, Haldeman, and Cramer 1996). Also, financial concerns could cause suboptimal decisions in pursuing happiness through consumption (Tully, Hershfield, and Meyvis 2015). ...
Despite growing interest in leisure well-being and life satisfaction, there is still limited research concerning the role of perceived financial status on leisure travel experiences. The main objective of this preregistered research is to test the prediction that satisfaction with shopping experience during leisure travel contributes to the satisfaction hierarchy moderated by financial concerns. Through two surveys of online panel members in the United Kingdom, we found that satisfaction with shopping has a positive influence on satisfaction with leisure travel, which in turn has a positive influence on satisfaction with leisure life and life overall. We also corroborated that the shopping satisfaction–leisure travel satisfaction relationship is negatively moderated by overspending on shopping during travel, while the leisure travel satisfaction–leisure life satisfaction relationship is negatively moderated by current money management stress. Finally, expected future financial security has a direct positive influence on life satisfaction overall. Theoretical and managerial implications are discussed.
Full-text available
Authentication plays an important role in securing our systems but is threatened by increasingly sophisticated account hacking and account take over. Several security services have been developed, including multi-factor authentication (MFA) designed to cope with online account authentication. It remains unknown how users perceive and evaluate secure authentication for online account threats and consequently use it to protect their online account. Drawing on the Protection Motivation Theory (PMT) and the literature on anticipated regret, this study investigates the factors that affect the use of MFA secure authentication to avoid online account threats. This work extends PMT by showing how the emotion of anticipated regret heightens appraisals of threat and coping.
We explore why and how individuals adaptively and maladaptively respond to the threat of identity theft. We use protection motivation theory and regret theory, shedding light on how the individual’s reflection of a future negative event, which they did nothing to prevent, would influence their current behavior. Fear appeal is experimentally manipulated to test different models of high and low threat. By comparing the impact of anticipated regret and fear on individuals’ protection motivation, we find that discrete emotions of fear and anticipated regret behave differently in increasing adaptive and reducing maladaptive responses to identity theft. Specifically, whereas fear is only effective when threat is high, anticipated regret is effective in both high and low threat conditions. Also, we find that anticipated regret has the most potent effect on increasing adaptive coping responses in a low threat model. This means that anticipated regret could be used in situations where the threat is low rather than fear. This research provides empirical evidence of conditions under which fear and regret motivate personal security protection measures, enabling practitioners to promote identity theft protection more efficiently.
Full-text available
Employee financial wellness programs (EFWPs) are a new practice that may promote financial inclusion by making it easier for workers with low- and moderate-incomes (LMI) to access financial services. We examine the strengths and limitations of workplace financial counseling, credit-building services, and small-dollar loans, and describe community collaboration to promote employee financial wellness. Findings suggest that these services are reaching a population that experiences financial exclusion, though evidence is mixed concerning how these services help workers with LMI resolve key financial challenges. Community collaboration focused on employee financial wellness presents opportunities to advocate for higher wages and better benefits.
Concerns for line workers should not be overshadowed by concerns for productivity and job satisfaction of office workers. The working environment for assembly-line workers should be taken into account with regard to workplace design and worker enrichment programs. By addressing worker needs, a company may succeed in having satisfied, happy productive workers. In this article, primary considerations and guidelines are provided in order to ensure that assembly-line workers are kept productive and contented.
Absenteeism rates, individual performance measures, cold-flu episode (CFE) rates, and stress level measures were collected on 463 US Department of Defense civilian employees (aged 18–70 yrs), along with a series of hypothesized determinants of these factors. Exploratory path analysis was performed to determine which paths in the hypothesized causal chain were significant. Results indicate that job stress resulted from 2 major sources: the supervisor and job design characteristics. Life stress was affected mainly by family–spouse relationships. The frequency of CFEs was indirectly affected by job stress and life stress through their impact on somatic symptoms. Absenteeism increased with increased levels of CFEs, somatic symptoms, and financial problems. Job performance was affected directly by commitment to the job and indirectly by job stress and job satisfaction. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
The nontangible economy
  • L A Ferleger
  • J R Mandle
Ferleger, L.A., & Mandle, J. R. (1994). The nontangible economy. Challenge, 37 (5), 59-62.
Help employees plan now for a secure future
  • E Sheley
Sheley, E. (1995, Nov.). Help employees plan now for a secure future. HR Magazine, 88-94.
HRM Update, Coming Benefits? Personal Administrator
  • P Farish
Farish, P. (1988). HRM Update, Coming Benefits? Personal Administrator, 33, 22.
Helping employees with financial planning
  • G T Tagtmeier
Tagtmeier, GT. (1987). Helping employees with financial planning. EAP Digest (March-April), 42-47.