A study from researchers at Washington University in St. Louis and Aarhus University in Denmark charts the relationship of payment based on work done and employee mental health. According to phys.org, an aggregator of science, research, and technology news, performance-based pay is in place in 70% of U.S. companies. This means that employee income is based on a combination of bonuses, commission, profit sharing, and individual/team incentives, rather than guaranteed salaries. For some employees, performance-based pay can prove lucrative. But for others, such systems can lead to poor mental health.
The study, published in the Academy of Management Discoveries, charted the use of prescription medications for anxiety and depression by nearly 319,000 employees at about 1,300 companies in Denmark (2019 Feb 26. doi: 10.5465/amd.2018.0007). Those in lower-paid positions and older employees were most vulnerable.
“Basically, older workers seem to be driving all of this effect,” said coauthor Lamar Pierce, PhD, professor of organization and strategy, and associate dean at Washington University. “One, it’s harder for them to move, so they have less labor mobility. And, two, they have less flexibility: Learning new roles, adapting to change, they have more fully formed preferences at this point.”
A gender link also was evident; women were more likely to leave companies that adopted a pay-for-performance system. “Our study expands existing work by showing that the mental health costs of performance-based pay can be severe enough to necessitate pharmaceutical treatment,” the authors wrote.
Once a firm switched to the pay-for-performance system, the number of employees using anxiety and depression medications, which included Xanax and Zoloft, increased by 5.7%. The actual number of affected employees is almost certainly much higher, according to Dr. Pierce. Projecting the data to the United States, Dr. Pierce and his coauthor, Michael S. Dahl, PhD, estimated that 100,000 Americans could be affected.
“These types of mental health problems are incredibly costly to both the individual and firm. If this is reflective of a broader increase in stress and depression in employees, the costs are very high,” added Dr. Pierce. The study highlights the broader health and wellness implications of the companies’ compensation policies, he said. phys.org.
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More and more people in the United States with severe mental illness and addictions reportedly are homeless, particularly in the Pacific Northwest and on the West Coast. Legislation aimed at addressing that problem is under discussion by Washington state lawmakers and appears to have broad support. The bill, which would authorize creation of a teaching hospital with 150 beds for people with mental illness, garnered unanimous support in the state’s House of Representatives and now has passed a Senate committee.
“The need for mental health care across our state has outgrown our facilities and our supply of trained health care professionals,” said State Sen. Annette Cleveland, chair of the Senate Health & Long Term Care Committee. “This important facility will address those needs head-on by expanding our physical capacity, enlarging our skilled workforce and increasing access through the use of telehealth services. The establishment of this dedicated behavioral health facility at the University of Washington would be the first of its kind in the nation.”
Jürgen Unützer, MD, MPH told KOMO News that the facility would be accredited and modern. “We would have a facility that’s from 2021 that’s state of the art, that’s approved, that’s a safe, welcoming environment where people would take their family members and say ‘this is a place that can give me some hope,’ ” said Dr. Unützer, who chairs the department of psychiatry and behavioral services at the University of Washington, Seattle.
The legislation, H.B. 1593, is part of efforts by Gov. Jay Inslee to tackle mental health issues in the state. The state’s aging mental health infrastructure has been losing federal funding, and patient safety issues have been identified at state-run mental health hospitals. KOMO News.