Firm Characteristics Associated with Organizational Support for Risk-Taking in Providing Employee Health Benefits

Employee benefits are often overlooked in research despite being an important part of compensation and linked with worker satisfaction, absenteeism, and productivity. Previous research has demonstrated that organizational support for risk taking predicts subsequent employer exploration of innovative employee health benefits. This paper examines organizational characteristics associated with the organizational support for risk taking. The results indicated that for profit firms with greater financial resources who perceive greater benefit to innovative health benefits are more likely to report greater organizational support for risk taking. With replication of these results, future work should examine how to increase organizational support for taking risks on employee health benefits whose potential promise has been demonstrated. Employee benefits are an important component of compensation for many US employees. Approximately 30% of worker compensation comes in the form of fringe benefits, and benefits have been linked to increased productivity and worker satisfaction, and reduced absenteeism [1]. While health and life insurance are common benefits provided to employees, firms also offer EAP programs, child care, flexible work hours, work-at-home programs, long-term disability insurance, and health and wellness programs including well-baby programs, gym memberships, stress reduction programs, on-site flu vaccines, and weight management programs. Relatively little is known about how corporations make decisions about the benefits they offer their employees, particularly when new benefits enter the market. The literature on corporate innovation provides some insight to guide initial inquiry. Innovation is typically defined as to include the development and adoption of new ideas, programs, or behaviors [2]. Others have defined creativity as the development of ideas, and innovation as the implementation of ideas [3]. While creativity and innovation are often studied in terms of firms developing, producing and providing new products and services, the potential for developing new programs to attract talented workers provides opportunities for firms to be creative and innovative in the area of human resources. One of many important contributors to company innovation is the organizational climate regarding risk-taking. Organizational climates which promote risk taking has been theorized to impact corporate innovation independently [4]or in combination with other organizational and environmental factors [5]. As an independent predictor, risk taking is viewed as a necessary prerequisite for adopting new ideas whose outcomes cannot be guaranteed [6]. A meta-analysis of 24 organizational studies demonstrated that organizational support for risk taking demonstrated a 0.78 effect size on innovation [7]. Pro-innovation managerial attitudes predict innovation adoption in both the public and private sector [8]. As a mediator, organizational support for risk taking may explain the relationship of organizational financial health [9] and size [10]. To complement our previous research identifying organizational risk taking as a significant predictor of innovative health benefit decision-making [10], the research team conducted an exploratory analysis of factors associated with organizational risk taking in human resource departments to inform future research on employee benefit decision-making. Methodology