If Employees Are Okay With A Little Sacrifice, Maybe They’ll Be Okay With Just A Little More

Employee Needs vs. the Bottom Line

A common debate found within leadership psychology and the business world as a whole, involves which way to best lead an organization and who are the main benefactors – the shareholders, employees, customers, local community, or some other group. The bottom-line or utilitarian view holds that by focusing on corporate profits, social bonds are formed in the pursuit of common goals and job security is maximized. The other position states that fulfilling employee needs through the principles of empowerment has a positive influence on motivation and productivity, which combine to produce greater profits. Both positions claim similar features of improved cooperation, elevated job satisfaction, increased motivation, and larger profits. Each position is examined in light of a popular theory and then further scrutinized by a neutral theory, before a position is taken and defended.


Does a for-profit business have a greater responsibility to shareholders or stakeholders (who aren’t also shareholders)? Is productivity increased through factors like job stability, economic incentives, and other extrinsic motivators, or through teamwork, empowerment, and related intrinsic drivers? This heavily debated topic has strong opinions on both sides, but what are the theories and evidence reinforcing either position? Is focusing on the bottom line just an excuse to maximize shareholder value at any expense, or is satisfying employee needs a way to pacify worker angst? These questions and many more demonstrate the nuances of which methods provide the most business-related benefits, those that work to satisfy employee needs, or those that focus upon increasing the company’s profits.

Both sides of this debate are rooted in psychological theories. Profit, or bottom-line, proponents often use utilitarian theories to discuss how a business that does not earn profits will not likely be around for too long, which would make it impossible to care for workers. Or, that a “rising tide lifts all boats,” which is to say, “greater economic wealth leads to greater social welfare” (Jones & Felps, 2013a, p. 216). Conversely, those on the employee needs side often reference Herzberg’s two-factor theory (growth and maintenance needs; Lundberg, Gudmundson, & Andersson, 2009) to promote the strength that fulfilling growth needs can have upon employee empowerment and increased motivation. Additionally, evolutionary psychology provides a theory of motivation that examines the impacts of resources (profits and tangible needs, extrinsic motivators) and social settings (the whole organization and social groups; intrinsic motivators). Therefore, evolutionary psychology is used as a neutral position in which to examine the points made by each competing argument, utilitarianism vs. empowerment.

In a for-profit business, the main objective is to maintain and grow the business. The question becomes, what is the best way to do this? This long-time debate often diverges into two camps, those who believe maximizing shareholder wealth fulfills the greatest good for the greatest amount of people (utilitarianism; Jones & Felps, 2013b), and those who posit that empowering workers through satisfying their growth needs creates increased productivity and, in turn, profit (Rodri­guez-Carvajal, Moreno-Jimenez, de Rivas-Hermosilla, Alvarez-Bejarano, & Sanz-Vergel, 2010).

Historical Importance

What is the purpose of being in business? One school of thought is that a for-profit company has a responsibility to those who put their money on the line – investors and shareholders. Under this view, a business that shows strong profits should be in a better position to take care of its employees by providing good benefits and job stability. The other camp, that businesses have a responsibility to those maintaining and growing the business, i.e. the workers, holds that prioritizing employee needs and creating a positive working environment improves motivation and performance. With elevated productivity, higher profits are likely to follow.

Do profit-driven companies promote corporate cultures that lead to business disasters such as Enron, which had to invent new ways to show a continuing profit (Hake, 2005)? Because streamlined processes are needed to maximize profits (higher efficiency), this insinuates that empowerment models are inherently less efficient (Pencavel, Pistaferri, & Schivardi, 2006). With earning less profit, does this put a strain on employee needs and potentially result in not having enough resources to properly care for employees, or even remain in business? Both sides of this debate have theoretical and empirical evidence to support their positions. It is easy for one side to pick a single piece of evidence to refute the other position, which often has this debate devolve into dogmatic beliefs rather than sound reasoning. In reality, it appears there is no single reason to follow either business strategy, but instead, a larger view is needed to take into account the numerous variables that influence working environments. For instance, focusing on the bottom line reveals some of the downsides to human motivation, such as greed. Conversely, focusing on employee needs minimizes the importance of maintaining and growing the business. Possessing a better understanding of human psychology, leadership, and environmental influences is essential in taking a well-informed position in this on-going debate.

Positions and Distinctions

The utilitarian approach to business posits that the organization should focus on policies and procedures that do the most good for the most amount of people. Authors Jones and Felps (2013b) discussed how a utilitarian system can not only maximize shareholder wealth, but also be a driver of social welfare. For example, shareholder wealth advocate, Jensen (2002), argued that shareholder wealth maximization creates economic efficiency, which creates a more efficient use of resources, that leads to greater economic wealth, which builds greater social welfare. Additionally, having a single, specific organizational goal of maximizing profits, rather than the vague goals expressed through increasing job satisfaction, provides a common vision for all employees to unite behind (Jones & Felps, 2013b). Furthermore, authors Blanchflower and Oswald (1999) provided evidence that job security is the strongest predictor of employee satisfaction, which advances a powerful argument for focusing on the bottom line. This suggests that employee happiness is not a casualty of a profit-focused company, but instead can be increased by the tenets of utilitarianism.

It may seem that utilitarianism removes morality from the workplace if the main focus is upon the bottom line, but author Valentinov (2015) presented utilitarianism as a balance between a loss of rights and greater economic returns. In social settings, individuals must be willing to make sacrifices for one another, and this is where bonds forms (Valentinov, 2015). This aspect provides moral justification for utilitarian theories, that sacrificing one’s needs creates relationships where groups work together for mutual gains. These social aspects present a unique look at utilitarianism through the lens of how it can increase social justice, rather than navigate around it, as is a common perception.

The other position of this debate revolves around theories of empowerment, which work to fulfill employee needs. Authors Rodri­guez-Carvajal et al. (2010) presented specific features that have been repeatedly found to be responsible (or contributory) for positive organizational behavior and mutual gains. For instance, they discussed factors contributing to job satisfaction, such as organizational culture, leadership style, and emotional well-being. When a business prioritizes its workforce, the workforce is primed to be more motivated and experience greater productivity, which, in turn, often leads to greater performance-related outcomes (Rodri­guez-Carvajal et al., 2010).

Theories of empowerment are rooted in motivational theories, such as Herzberg’s two-factor theory, that provide evidence for how organizations can promote the conditions contributing to empowerment and ways to improve upon those conditions (Liden, Wayne, & Sparrowe, 2000). Additionally, employee empowerment has been shown to boost intrinsic motivation, and ties increased performance to the social aspects found in the workplace (Liden et al., 2000). Furthermore, Herzberg’s theory can be directly applied to job characteristics that have a positive effect on work satisfaction (Liden et al., 2000). For instance, job characteristics such as skill variety, task significance, and feedback have been shown to increase feelings of empowerment.

Because each side of this debate presents a theory to justify its efficacy, it would help to view both arguments through a neutral theory of motivation to see how well each position stands in a different light. Evolutionary psychology provides a framework of how to better understand behavior and motivation through examining our ancestral past. Through this lens, cooperation, common goals, communication, social norms and values, and many more workplace features take on a different look. Researchers Cortina and Liotti (2014) discussed the evolutionary foundations of group interactions and how they inspire motivation, altruism, and culture. According to evolutionary psychology, these components are responsible for not only our individual survival, but also for group survival (Cortina & Liotti, 2014). When discussing either position of the employee needs vs. profit debate, it becomes helpful to understand why social interactions and relationships are so important for success. Furthermore, evolutionary psychology considers the importance of hierarchical structures and resource attainment (Cortina & Liotti, 2014). Each of these features holds positions on both sides of this debate.

Position Sustainability

Before diving deeper into both sides of the debate, on their faces, both arguments make strong points. Bottom-line advocates might claim that without earning profits, there won’t be a company to provide good jobs, and as already discussed, job security is a strong predictor of job satisfaction (Blanchflower & Oswald, 1999). On the other hand, fulfilling employee needs, both growth and maintenance (intrinsic and extrinsic, respectively), empowers workers and increases trust in leaders and the organization (Bass & Avolio, 1994). As empowerment increases trust and trust furthers feelings of empowerment (Hoxha, 2015), their reciprocal relationship has repeatedly been shown to boost effectiveness and performance (Chan, Taylor, & Markham, 2008; Hoxha, 2015).

To simplify the arguments, bottom-line advocates believe that focusing on the company’s bottom line (a utilitarian approach) creates job security, which leads greater job satisfaction, that boosts motivation and, in turn, performance. With higher performance, the company should see higher profits, which means shareholders needs are also being fulfilled. Therefore, by prioritizing the bottom line, the organization should see all stakeholder needs being met. Conversely, employee-needs advocates, working from theories of empowerment, see this process unfolding in the exact opposite direction. When workers are empowered, they experience higher levels of morale, motivation, and trust, which translate into increased productivity and effectiveness (Taylor, 2015). In turn, better productivity leads to higher profits and happy shareholders. This approach also has all stakeholder needs being fulfilled.

Prominent Leadership Styles

Although a bottom-line-focused company doesn’t preclude a democratic leadership style where employees contribute to corporate decisions, it seems to flourish under more hierarchical structures where executives create a vision and goals, managers implement policies, procedures, and strategies to accomplish those goals, and workers diligently carry out their duties. When profits are the main focus, it is easier to unite around one common goal. An authoritarian leader with a strong view of how to reach increased profits can be a unifying force. However, Burnes and By (2012) discussed that most theories of leadership (e.g. situational, transformational, etc.), excluding older trait theories, can be used as long as they focus upon ethics and a charismatic leader to unite behind. The authors do make the case that there must be some form of transactional, authoritative leadership to create and enforce policies. The goal here is to implement strategies that increase profits, which works to provide a stable job and work environment, leading to better benefits and happier workers.

On the other hand, theories of empowerment often focus exclusively on transformational styles of leadership. This approach promotes the psychological processes responsible for boosting motivation, such as focusing on common goals, teamwork, social relationships, self-sacrifice, modeling, and many more positive and ethical features (Tucker & Russell, 2004). Without a democratic, collaborative environment, it is unlikely that an empowerment approach will be effective. A leader who demonstrates a responsibility to workers’ needs is attempting to boost their teamwork and self-efficacy, which should translate into higher productivity and increased profits. By setting high ethical values and standards, the transformational leader is working directly on principles related to elevating intrinsic motivation and self-esteem, or attempting to grow employees into reaching their full potential and become leaders themselves (Tucker & Russell, 2004).

Position and Defense

Admittedly, the argument that job stability is the best predictor of job satisfaction (Blanchflower & Oswald, 1999), which is positively correlated with increased performance (Zelenski, Murphy, & Jenkins, 2008), is a difficult one to defeat. However, how well does this position stand in practice? What other influences interfere with the efficacy of this strategy? Because of the mighty pressure greed and power put upon leadership, a profit-focused vision can easily become corrupted without the proper checks and balances in place. The employee needs, or employee empowerment strategy provides a well-equipped defense against many corrupting factors.

In fact, the very nature of empowerment strategies is meant to be a checks and balance system preventing adverse conditions from influencing the workplace, and works to develop organizationally-relevant practices better suited to organically prevent or mitigate negative influences. For instance, in a democratic system where workers collaborate to solve common problems and develop business solutions, corporate greed and accumulated power are much more difficult to achieve. Furthermore, theories of empowerment work more directly upon job satisfaction and motivation, as opposed to those of profit-focused strategies that see job satisfaction as a byproduct of healthy profits. Empowerment features such as teamwork (Carr & Walton, 2014), personal involvement and empathy (Tucker & Russell, 2004), and strong communication principles (Trahant, Burke, & Koonce, 1997), are all ingredients creating trust. And trust is the main aspect that makes employee-needs approaches more effective than bottom-line ones. Or, as Ciulla (2004) discussed, when there are other priorities focusing on the greatest good, can workers completely trust their leaders to have their best interests?

Almost all theories of motivation, including Herzberg’s two-factor theory, detail many of the elements that combine to promote higher morale, productivity, and increased happiness, including job satisfaction. It should come as no surprise that these same elements form the foundation of empowerment theories. Additionally, the transformational style of leadership is built upon these same foundational aspects. Taken together, which is arguably the best way to improve upon employee needs, both the company and the workers are being benefitted to a higher degree than would be experienced by a utilitarian approach that would inevitably have some people’s needs going unfulfilled.

First, how does caring for employee needs, or empowering them, work to increase motivation? There has been so much research performed in this area that it is difficult to know where to begin. Herzberg’s (1974) two-factor theory states that humans have two sets of needs, maintenance factors that concern basic survival needs, and growth factors that are motivating elements of the work itself. Maintenance needs, such as salary, healthcare, and job security, do not in themselves promote higher motivation, but in their absence lead to demotivation (Herzberg, 1974). Therefore, Herzberg’s growth needs are the very same ones that empowering employees aims to satisfy.

Under the guidance of transformational leadership that focuses upon employee needs, both the organization and employees can experience mutual gains (Rodri­guez-Carvajal et al., 2010). For instance, mentoring programs, organizational support, and employee well-being have all contributed significantly to employee work satisfaction and health (Rodri­guez-Carvajal et al., 2010). Although the utilitarian approach has job security as being a predictor of job satisfaction (Blanchflower & Oswald, 1999), the benefits to employee satisfaction brought on by empowerment have been shown to be good predictors of job performance (Judge, Thoresen, Bono, & Patton, 2001), which is a key ingredient to organizational success, including profits. Researchers Thomas and Velthouse (1990) discussed the four elements of empowering employees as job meaningfulness, impact, competence, and choice. Each of these four elements is a goal of empowering workers, rather than a byproduct of having job stability. The very nature of fulfilling employee needs is to build trust, loyalty, and performance to motivate workers, which again, can have a positive effect on corporate profits.

When discussing any aspects of empowerment, it is difficult to separate one variable from the others. For instance, how does the social setting, work environment, organizational culture, and nature of the work itself add to job meaningfulness? The social bonds formed with leaders and coworkers alone contribute to feelings of self-worth and self-determination (Deci, Connell, & Ryan, 1989). Or, since it seems nearly impossible to separate the combined influences of fulfilling employee needs, maybe it would be more convincing to list some of the real-world results. Emotional exhaustion, job strain, burnout, and other work stress has been linked to a lack of job control (Taylor, 2015). Luckily enough, increasing job control and the feelings of self-determination are direct goals of empowering workers (Liden et al., 2000). Additionally, employees experiencing high levels of job satisfaction are more likely to assist coworkers, exert additional effort for the benefit of the organization, demonstrate a desire to remain with the company (employee retention), and less likely to file complaints or grievances (Locke & Latham, 1990). It should be obvious how each of these aspects contribute to higher organizational performance and increased profits, while focusing exclusively on empowering the workforce.

But what about the benefits of a utilitarian approach that prioritizes profits as a way to promote the “greater good?” After all, some of the same benefits as empowerment theories have been realized, so what makes prioritizing workers’ needs a better strategy? As most people have come to realize, power corrupts. Additionally, greed can be a strong influence on unethical behavior. If for no other reason, an organizational culture that promotes the values of empowerment inherently has a decentralized power structure that encourages collaboration, feedback, social interactions, and other democratic principles (Liden et al., 2000; Rodri­guez-Carvajal et al., 2010). This self-imposed checks and balance system is the very mechanism that boosts trust. The word “empowerment” itself, contains “power.” This indicates that leadership willingly decreases their power and gives it to the workforce to improve upon motivation and self-determination.

One of the strongest points of the utilitarian model is that greater profits lead to greater social welfare (Jensen, 2002). However, Jones and Felps (2013b), proponents of utilitarian theories themselves, claimed that the empirical evidence for this is weak. Additionally, the authors pointed out that profits are also influenced by outside forces, or market demands and prices, which would impact employees even when they have no control over this variable. While it is true that job stability is a great predictor of job satisfaction, as previously discussed, a commonly used tactic to improve upon corporate profits is to downsize (Jones & Felps, 2013b), thus defeating the point. Because fear acts as such a strong motivator, it can be tempting for leadership to use job insecurity as a motivational tactic (Orlitzky & Frenkel, 2005), something that goes against the very ideals of empowerment. Additionally, even in the absence of layoffs, the fear of it being a possibility because of past company experiences substantially harms worker happiness (Jones & Felps, 2013b).

Rawls (1999) pointed out that even under collaborative efforts to increase corporate profits, workers often have little to no influence as to where those increased profits go. Therefore, they may put in the extra effort, but may not share in the benefits. This also implies that workers may have to make personal sacrifices to reach common goals (Valentinov, 2015). Although this has been argued to increase social bonds, it’s difficult to conceive that people would be willing to make sacrifices for people they’ve never met or even know about (Valentinov, 2015). And if employees are willing to make sacrifices in the name of utilitarianism, how easy would it be to create a system of social injustice that exploits these workers (Rawls, 1999)? This directly leads into the moral and ethical problems that can effortlessly seep into the system. If employees are okay with a little sacrifice, maybe they’ll be okay with just a little more.

This is why building trust through the foundations of empowerment is so important. While organizations focusing on profits can use democratic or transformational leadership and empowerment techniques, they will probably never gain the full trust of employees since the profit motive is always greater than that of employee needs. By prioritizing employee needs, the company is implying that workers matter and the organization is willing to provide current and future resources to develop the strongest workforce possible. In other words, the organization is demonstrating that it trusts its employees, just as the transformational leader builds trust by showing it. However, there are also tangential benefits that more clearly demonstrate the real-world effects organizational trust can provide. Trust can act as a control system to monitor leadership, coworkers, and the environment (Bromiley & Cummings, 1995). This aspect reinforces the checks and balance system discussed earlier, but in a more proactive manner. For instance, if management trusts that employees will do their jobs with little to no oversight, employees will perform in expected ways so as not to ruin that established trust. Another benefit of increased trust is that it influences public perception (Audi, Loughran, & McDonald, 2016). Not only does this also boost the public’s trust of the company, but also can have an impact on the bottom line.

But how does empowerment and fulfilling employee needs align with a neutral theory that examines the foundations of human motivation, that of evolutionary psychology? The short answer to this is, perfectly. In fact, evolutionary psychology and empowerment go hand in hand. Evolutionary psychology examines the mechanisms humans evolved to overcome issues related to individual survival and procreation (Buss, 1991). For example, cooperation is thought to be a strong social motivator, even at personal expense, to help accomplish mutual goals, defend against common enemies (competition), build group trust, and strengthen social bonds (Cortina & Liotti, 2014). Additionally, shared social norms and values act as the social glue binding groups together (Cortina & Liotti, 2014). Furthermore, cultures with higher levels of cooperation are more likely to be victorious over less cooperative ones (Cortina & Liotti, 2014). All these features and many, many more that are too numerous to divulge here, demonstrate that the principles of empowerment are exactly the same as the evolutionary components that promote individual and group survival. If the point of increasing profits is to maintain and grow the business, then what better way to do so than following the same tenets that led to modern-day humans? Rather than fighting against our ancestral past, it’s time to embrace it and benefit from the fruits empowerment can bring.


If conditions are optimal and unlikely to change in an ever-changing world, then a bottom-line approach to business might see happy, productive workers helping to make healthy profits. However, the strong evolutionary foundations of empowerment theories have demonstrated substantial benefits to individuals, groups, and whole organizations. By prioritizing employee needs, company leadership is working to build employee trust and establish organizational values that reflect a commitment to developing a new generation of leaders. Furthermore, these same principles have a great impact on motivation, leading to increased productivity, job satisfaction, employee retention, and higher profits. Therefore, embracing a worker-needs model can boost corporate profits, just as a bottom-line approach might, but also provides strong safeguards through implicit checks and balances that reinforce strong social and corporate values, rather than leaving the organization exposed to future problems caused by power and greed.



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