The Intersection of Employee Wellness and Employee Performance

May 19, 2023 | Performance Management Discussion

happy employee performing well


In today’s rapidly changing and increasingly demanding work environment, employee wellbeing is more important than ever. It’s no longer just a nice-to-have, but a strategic imperative that directly impacts organisational performance. But what exactly is employee wellbeing, and why does it matter so much? How can it be measured and improved? In this blog post, we will delve into these questions, drawing on the latest research and insights to explore the powerful connection between employee wellness and performance.


The Connection Between Employee Wellness and Performance

It might seem intuitive that a happy, healthy employee would be a more effective one, but the evidence goes beyond the anecdotal. Research consistently shows a strong connection between an employee’s wellness and their performance at work. When employees are thriving in their personal and professional lives, they bring a higher level of engagement, productivity, and resilience to their roles. Conversely, when employees are struggling or suffering, they are more likely to experience burnout, disengagement, or even physical health issues, all of which can negatively affect their work performance.

A notable study by Gallup has shed light on this connection, revealing how different aspects of wellbeing interact with work performance. Gallup’s research shows that when employees are thriving—physically, emotionally, and professionally—they are more productive, miss fewer workdays, and are less likely to leave their jobs. This connection underscores the fact that employee wellness is not a peripheral HR concern but a core factor that can drive or hinder an organisation’s success.

How to Measure Employee Wellbeing

Understanding the wellbeing of employees is paramount for creating a thriving work environment. One effective approach to measuring wellbeing is using Gallup’s Life Evaluation Index.

The Life Evaluation Index

The Life Evaluation Index is a tool developed by Gallup that uses a simple, yet powerful, metaphor of a ladder. This ladder has steps numbered from zero at the bottom to ten at the top. Participants are asked to imagine that the top of the ladder represents the best possible life for them and the bottom of the ladder represents the worst possible life. They are then asked two questions:

  1. On which step of the ladder would you say you personally feel you stand at this time? (0-10)
  2. On which step do you think you will stand about five years from now? (0-10)

The answers to these questions provide a snapshot of an individual’s current and anticipated wellbeing, offering valuable insight into their quality of life.

Identifying Thriving, Struggling, and Suffering Employees

The Life Evaluation Index categorises people into three groups based on their responses: thriving, struggling, and suffering.

  • Thriving employees have positive views of their current life and anticipate a positive future over the next five years.
  • Struggling employees have a less positive or uncertain view of their current life and the future.
  • Suffering employees report that their life is currently miserable and anticipate a negative future 


By using the Life Evaluation Index, organisations can gain a clear understanding of the wellbeing of their workforce. This information can be a crucial starting point for interventions designed to improve wellbeing, reduce burnout, and ultimately enhance productivity and retention.

The Five Elements of Wellbeing

To further understand wellbeing in a comprehensive manner, Gallup has identified five universal elements of wellbeing. These elements are distinct facets of life that differentiate thriving individuals from those who are struggling or suffering.

  1. Career Wellbeing: Do you like what you do every day? This relates to how much you enjoy your daily activities and whether you feel motivated to achieve your goals.
  2. Social Wellbeing: Do you have meaningful relationships in your life? This element highlights the importance of having supportive relationships and love in your life.
  3. Financial Wellbeing: Can you manage your economic life to reduce stress and increase security? This is about effectively managing your economic life.
  4. Physical Wellbeing: Do you have good health and enough energy to get things done on a daily basis? This is about having good health and enough energy to get things done daily.
  5. Community Wellbeing: Do you like where you live? Are you proud of your community? This is about the sense of engagement you have with the area where you live.

Career Wellbeing: The Foundation of the Rest

Of these five elements, one stands out as the foundation for all the rest: career wellbeing. Why is career wellbeing so fundamental? It’s because what you do every day in your career has a significant influence on all other areas of your life. When you enjoy your career and feel motivated and inspired, it brings a level of satisfaction that spills over into all other areas of your life.

For employers looking to make a significant impact on employee wellbeing in the shortest amount of time, focusing on improving career wellbeing can be a game changer. It can lead to employees feeling more engaged, productive, and loyal to the organisation. In turn, improvements in career wellbeing can have positive effects on social, financial, physical, and community wellbeing, creating a holistic sense of thriving among employees

The Interplay of Work and Personal Life

Contrary to the common notion of work-life balance, which suggests a separation of the two, work and personal life are not mutually exclusive entities. They have a profound influence on each other, creating a continuous interplay that can affect an individual’s overall wellbeing.

The Two-Way Street

Our work life can greatly influence our personal life and vice versa. For instance, a stressful day at work might affect our mood at home, while personal issues can impact our productivity and focus at work. This interaction underlines the importance of maintaining a positive environment in both spheres of life, as challenges in one area can easily spill over into the other.

Furthermore, Gallup’s research has indicated that a thriving personal life can enhance work performance. Employees who enjoy a high level of wellbeing in their personal life tend to bring positive energy to their work, which can enhance their productivity, creativity, and engagement with their job roles.

Holistic Approach to Wellbeing

Given the interconnected nature of work and personal life, it is essential for organisations to adopt a holistic approach to wellbeing. This means considering not just the physical health of employees, but also their career satisfaction, financial stability, social relationships, and community involvement.

A comprehensive wellbeing programme can help employees thrive in all areas of their lives, which can in turn reduce the risk of burnout, disease, and other adverse effects. As employees thrive in more elements of wellbeing, the costs associated with health problems, stress, and anxiety decrease, thereby creating a healthier and more productive workforce.

In conclusion, it’s in an employer’s best interest for their employees to lead thriving lives, as this positively impacts their performance at work, creating a beneficial cycle of wellbeing and productivity.

The Impact of Workplace Wellbeing on Retention and Attraction

High workplace wellbeing is not just beneficial for the individual employee, it can have significant advantages for organisations too. It can serve as a potent talent magnet and retention booster, directly influencing the overall health of an organisation.

Boosting Employee Retention

A work environment that promotes high wellbeing can effectively reduce turnover rates. Employees who are thriving in their roles are less likely to consider changing jobs compared to those who are struggling or suffering. This suggests that to retain talented employees, organisations must help them lead thriving lives. This begins by building the foundations of career and social wellbeing through engaging employees, providing clear expectations, appropriate resources, recognition at work, developmental opportunities, and a purpose that motivates them. The trust created through satisfying these workplace needs paves the way for meaningful conversations about wellbeing with employees, further enhancing their engagement and loyalty.

Attracting Top Talent

The focus on wellbeing also significantly influences an organisation’s ability to attract top-tier talent. In today’s competitive job market, job seekers are increasingly prioritising personal wellbeing and work-life balance. In fact, 61% of U.S. workers cite these factors as “very important” when considering a job switch. When employees believe that their organisation genuinely cares about their wellbeing, they are more likely to advocate for their organisation as a great place to work. This not only enhances the organisation’s employment brand, but also attracts candidates who value a culture of wellbeing.

By prioritising wellbeing and creating a culture that promotes thriving, leaders can attract and retain star talent, especially in a tight labour market. The message is clear: wellbeing matters, not just for the individual, but for the overall success of the organisation.

The Reciprocity and Additivity of Employee Engagement and Wellbeing

Employee engagement and wellbeing are not isolated concepts. They are interconnected, each exerting an influence on the other, and together, they can create a high-performance work environment.

Reciprocity of Engagement and Wellbeing

Employee engagement and wellbeing reciprocate one another, meaning that each one affects the other. Engaged employees, who feel a strong connection to their job and their organisation, tend to have higher levels of wellbeing. They’re more likely to feel satisfied, positive, and fulfilled in their roles, which contributes to their overall sense of wellbeing. 

Conversely, employees with high wellbeing are likely to be more engaged in their work. They bring positive energy and resilience to their roles, are more motivated, and tend to perform better, leading to greater levels of engagement. 

Additive Impact on Performance

Engagement and wellbeing also have an additive effect on performance. Each makes a unique impact on an employee’s life and together they can amplify performance. 

When employees are both engaged and thriving, they are more productive, less likely to experience burnout, and report lower levels of stress, worry, sadness, and anger. Indeed, the benefits of combining engagement and wellbeing are compelling: employees who are engaged and thriving are less likely to experience burnout often or always, report daily stress, experience daily worry, and report daily sadness and anger, compared to those who are engaged but not thriving.

In conclusion, employee engagement and wellbeing, when brought together, create a high-performance employee environment in which the two inform and build on one another, leading to increased productivity, improved morale, and reduced turnover.

Benefits to Employers

Prioritising employee health and wellbeing is not just an altruistic gesture—it’s a strategic move that can lead to significant benefits for employers. Let’s delve into the potential advantages that organisations can reap when they put a spotlight on employee health and wellbeing.

Increased Productivity and Profitability

When employees are thriving—both in terms of engagement and wellbeing—they are more productive. They bring their best selves to work, leading to improved output and performance. Moreover, teams that believe their organisation cares about their wellbeing perform better on various metrics, including customer engagement, profitability, and productivity.

Reduced Turnover

Organisations that prioritise employee wellbeing see a drop in turnover rates. Employees who feel their wellbeing is cared for are less likely to leave, reducing the costs and disruption associated with high turnover.

Fewer Safety Incidents

Investment in employee wellbeing also correlates with a decrease in safety incidents. When employees are physically and mentally well, they are likely to be more alert and aware, reducing the risk of accidents and errors.

Enhanced Organisational Resilience

Well-designed wellbeing initiatives and strategies provide much-needed organisational resilience. They equip employees with the resources and support they need to navigate personal and professional challenges, enabling them to bounce back from setbacks more effectively.

In conclusion, employers who genuinely care for employee health and wellbeing can expect a multitude of tangible benefits, from higher productivity and profitability to lower turnover and fewer safety incidents. Such a holistic approach to wellbeing sends a powerful message about the kind of organisation you are—one that values its people, invests in their health and happiness, and in turn reaps the rewards of a committed, productive workforce.

Potential Strategies for Improving Employee Wellness and Performance

Focus on five elements of wellbeing: Gallup has identified five key areas that contribute to overall wellbeing: Career, Social, Financial, Physical, and Community. Organisations can look for ways to support their employees in each of these areas. For example, they might provide career development opportunities, encourage social interactions, offer financial planning resources, promote physical health, and foster a sense of community within the workplace​.

Engage employees: Engagement is closely tied to wellbeing. When employees feel engaged at work, they are more likely to be thriving in their lives overall. Companies can engage their employees by meeting their workplace needs, such as clear expectations, the right materials and equipment, recognition, developmental opportunities, and a motivating purpose​.

Prioritise wellbeing in the organisational culture: The organisation’s stance on wellbeing can influence its employment brand and ability to attract and retain talent. Leaders should make wellbeing a priority and create a culture where employees feel cared for, not just as workers, but as whole persons​​.

Develop holistic wellness programs: While physical health is important, organisations can also support the overall wellbeing of their employees by taking care of the whole person. This could involve a variety of initiatives, from mental health resources to flexible work arrangements to support work-life balance.

Measure and monitor wellbeing: Gallup uses the Life Evaluation Index to measure wellbeing, asking people to rate their current life and their expectations for the future. Organisations might use similar methods to keep track of their employees’ wellbeing over time and identify areas where more support is needed​.


In conclusion, enhancing employee wellbeing is a critical investment for organisations. By focusing on improving wellbeing, organisations can expect to see a multitude of benefits, including higher productivity, increased profitability, reduced turnover, and fewer safety incidents. 

To accomplish this, organisations can adopt a holistic approach to wellbeing that encompasses five key areas: Career, Social, Financial, Physical, and Community wellbeing. Such a comprehensive approach ensures that employees are supported in all aspects of their lives, not just at work. Ensuring that employees feel engaged, appreciated, and cared for can significantly improve their overall wellbeing and productivity. Furthermore, creating a workplace culture that prioritises employee wellbeing can have a positive impact on the organisation’s reputation, making it more attractive to prospective employees.

Measuring and monitoring wellbeing using tools like Gallup’s Life Evaluation Index can provide valuable insights into the wellbeing of employees and help organisations identify areas where more support may be needed. This not only helps in enhancing the quality of life of employees but also contributes to the overall success of the organisation..

Despite these general strategies, it’s worth noting that specific wellbeing initiatives can vary widely depending on the organisation and its unique needs. Therefore, organisations should consider their specific context and workforce when developing and implementing wellbeing strategies and initiatives.

Lastly, it’s important to be aware of the current wellbeing situation globally and in the United States. For instance, as of the last available data, 1 in 4 Americans reported feeling a lot of sadness the previous day, 28% of U.S. employees experience burnout on the job very often or always, and 7 in 10 people globally are struggling or suffering in their lives. These figures underscore the importance of addressing employee wellbeing and implementing effective strategies to improve it.

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