In a first-of-its-kind academic study that looked at both employee compensation and medical records, researchers at Washington University found that employee health and wellness declines as the employer shifts compensation towards bonuses and other incentive and performance-based compensation systems. In particular, the study showed that, as an employer moves towards a bonus-focused, pay-for-performance model of compensation, (a) its employees were more likely to be prescribed anti-depressants and anti-anxiety medications, (b) the employer was more likely to have higher employee turnover due to mental health-related departures, and (c) the observed negatives impact on mental health and wellness were more pronounced among female employees and those over 50 years old.
The study, which was recently published by the Academy of Management Discoveries, was done on 300,000 Danish workers age 16 to 65 over a 10-year period. You can read the full study here.
