Investor types like to pretend that trading shares is an emotion-free science. Apparently, it’s a serious business and definitely not a socially acceptable form of gambling for the upper-middle class. Back in the real world, it’s called playing the stock market for a reason, and lots of emotion was involved this year when Redditors sent shares in GameStop soaring (and the mood of regulators and hedge funds plummeting).
Now it’s common knowledge that a rising stock market improves public wellbeing – everyone perks up during a boom. Unsurprisingly, the impact is biggest for those with lots of shares, for good or ill: big shareholders saw the biggest rise in depression and antidepressant use during the great recession.
But what about within individual companies? Employers have always understood the emotions, using share schemes to motivate workers. New research confirms worker satisfaction does rise with stock prices when their compensation is directly tied to company share value.
Lots of HR consultants will think this is good news but, just to add a word of caution, stock values (and therefore our mood) can plunge as well as soar. For your wealth, wages and wellbeing all to be determined by one company’s performance sounds like a lot of eggs in one basket. Employers should remember there are lots of other ways to perk workers up. Higher pay, more job security, oh, and decent management, all help. Those are all gambles worth taking.
Torsten Bell is chief executive of the Resolution Foundation. Read more at resolutionfoundation.org
