Collective Efficacy: A Concept Whose Time Has Come

Posted by Joel Bennett on

Corporate wellness strategies correlate with financial performance. But correlation is NOT causation. Something more powerful (collective efficacy) may be going on that accounts for BOTH wellness and financial outcomes.
There has been very good press last month on three studies showing a correlation between use of wellness programs/strategies and corporate stock or financial performance (see references below). Even the NASDAQ referenced these studies in an article on corporate health scorecards. These studies are important and promising. They also recall older and previous research on the relationship between "best places to work" and financial performance.

Wellness Score Cards and Financial Success

It is easy to get excited about  these data. the authors admit, the findings do not show cause-and-effect. We cannot say whether wellness causes financial performance. It is entirely possible there is some other third, hidden factor that accounts for the relationship between wellness and financial performance. I suspect the hidden factor reflects the importance of corporate social responsibility, which itself is referenced in these studies.


First, these studies all use unique corporate samples and all depend on completing some sort of business scorecard. These scorecards are usually used to apply for an award to be recognized (Koop Corporate Awards, Corporate Health Achievement Award (CHAA)). These scorecards are also used in a community of practitioners (HERO Employee Management Best Practices Scorecard). Second, these scoring practices imply the motives for recognition, social comparison, or to demonstrate efficacy. Specifically, they suggest collective efficacy (or collective self confidence) .* Third, it seems reasonable to assume that none of these findings would have been possible without (1) some group of people completing the scorecard or at least pooling data from a group, (2) data that self-reflects the achievements of the group, and (3) in a manner that shows confidence or is as self-promotional as possible. In other words, the data reflects a high level of belief in corporate or collective effectiveness.

Collective Efficacy

The above analysis might seem like I am pointing to a self-serving bias: only those apply for (and win) the award who believe enough in themselves and already have the financial wherewithal.  It is actually common practice in self-report studies to control for this bias. Instead, I am taking a positive slant on the data. So the hypothesis is that:

collective efficacy is the underlying cause of

BOTH financial performance and employee well-being

Corporate America--with its high level of ongoing scrutiny on short term performance--may best exemplify a social context where collective efficacy comes to the forefront. Those in the health business should be aware that such efficacy is important at all levels of society. In other places, we have described this collective efficacy toward well-being as the "We in Wellness".

Some Recent Findings

In the research literature, the term "self-efficacy" (individual self-confidence) is significantly more common than "collective-efficacy". But there has been increased use of collective efficacy in recent years. I selected recent references to show that collective efficacy operates on many levels.
  • National level data reveals Neighborhood Collective Efficacy reduces risk of ADHD. Perceived neighborhood collective efficacy may buffer the impact of individual-and family-level risk factors for ADHD in children. In this study from researchers out of the Mayo Clinic \based on over 90,000 interviews, researchers found that compared to neighborhood socioeconomic conditions and built environment,  perceived neighborhood collective efficacy was most associated with reduced risk of ADHD.
  • Regional data reveals Neighborhood Collective Efficacy correlates with Workplace Integration.In this study, researchers found a correlation between positive belief in one's neighborhood and engagement at work. The more respondents felt their community was effective than the more they were engaged and integrated at work.
  • Within Organizations, Perceptions of Organizational Efficacy significantly predict employees’ subsequent helping behavior and job performance. This longitudinal study of 846 employees of 105 work teams (in China) found that aggregate perceptions of the company predicted, over time, supervisors' independent ratings of individual job performance.

So What?

As one reflects on these data, does it not make sense that we could combine the lessons of collective efficacy for economic health and the lessons of collective efficacy for community health?  What are you doing in your business that allows this common resource to be shared across levels of society? What role do you play? In business, collective efficacy manifests as corporate social responsibility. In communities, it manifests as neighborhood collective efficacy. What is your company doing to reinforce this relationship? * There are several definitions of collective efficacy; e.g., "social cohesion among neighbors combined with their willingness to intervene on behalf of the common good." See other definitions here . JAN_2016_BLOG_OWLS__2
References on Wellness Strategies and Corporate Financial Performance (all these links take you to free or open access to each article (at least for the time being)

Share this post

← Older Post Newer Post →

Leave a comment

Please note, comments must be approved before they are published.