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A rock or a soft place?
incentive schemes, weird things can happen – and the 2008
banking crisis certainly was one weird thing.
“Work–family initiatives”?! That’s rather soft and
fluffy, isn’t it?
But how do you create a rm which is more of a community?
Well, let me just pick one; what about “work–family initiatives”?
Or does that sound rather soft and uffy to you? Guess it does. It
concerns stuff such as on-site childcare, exible working arrange-
ments, family stress initiatives, and other similar nonsense.
Which tough, self-respecting corporation would want to be
associated with that? Or should they? I guess it might actually
help companies to become more attractive employers, which
should ultimately help performance. Hey, even the stock market
might appreciate such a thing, right?
Some time ago, Professor Michelle Arthur, from the University
of New Mexico, set out to examine stock-market reactions to the
announcement of Fortune 500 rms adopting such work–family
initiatives, which she collected from the Wall Street Journal.
For example, one of them said, “IBM began a childcare referral
service for its employees” or, “Procter & Gamble are broadening
the scope of their family-friendly policies”, etc. She found 231
of them and then, for each of them, tested the stock-market
reaction to the announcement, through what in statistics is
known as an “event study”.
The results were clear. In the early 1980s, the stock market hardly
reacted at all to such uffy initiatives; if anything, the effect of
the uffy announcement on a rm’s share price was slightly
negative (20.35 percent). However, that changed quite a bit in
the 1990s. When in that period rms declared a work–family
initiative, their stock price immediately jumped up, 0.48 percent
on average. Now that may seem like peanuts to you, but if you’re
a $5 billion company, it means that even one such initiative
would already immediately increase the value of your rm by $24
million. That’s a lot of peanuts. And a lot of shareholder value.
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