People vs productivity: A corporate investment dilemma

Our organization has been profitable for the past three years. For now, we have spare cash to spend on only one of two choices. Which should be our priority: motivating workers with an improved cafeteria or acquiring new equipment that enhances labor productivity? — Jelly Bean.

- REY ELBO

Should management invest in employee facilities that build morale through a modern cafeteria (or cleaner restrooms or a wellness space)? Or should it acquire new equipment designed to supercharge labor productivity?

At first glance, it appears a classic fork in the corporate road without an obvious, knee-jerk answer. To other people managers, this dilemma is very much a chicken-and-egg situation. And that’s what makes it tricky. Think about it this way:

Not buying new equipment for labor productivity could result in old equipment limiting output, increasing downtime, and inflating costs. That, in turn, reduces the money available to fund employee perks in the future.

The other side of the coin is employee care and wellness. Any productivity gains from new equipment may never be realized. Machines don’t run themselves. Demotivated, burned-out employees won’t maximize the value of technology. Worse, they may leave, saddling the company with turnover costs that cancel out efficiency gains.

So, which should come first? The truth is, they evolve together in a cycle: Equipment investment fuels profits that could be used to enable investment in people. If they are cared for, you extract maximum value from the equipment. ‘That cycle creates sustainable profits.

REAL-WORLD EXAMPLES