Do Factory Managers Know what Workers Want? Manager-Worker Information Asymmetries and Pareto Optimal Human Resource Management Policies

Key Insights for Managers

When designing audit programs, managers may work with factory managers to prioritize improving aspects of working conditions that have the greatest perceived impact on worker quality of life. But do factory managers accurately perceive which aspects are most important to workers? In this study, workers and managers of apparel factories enrolled in the Better Work Vietnam program were surveyed on what they believe most affects worker wellbeing. Workers reported that greater pay transparency, the presence of factory health services, and that working in an environment with better indoor air quality and more comfortable temperatures all contributed positively to their life satisfaction and emotional wellbeing. While surveyed managers correctly perceived that wages were an important contributor to worker satisfaction and wellbeing, they underestimated the perceived value of the other non-pecuniary aspects of working conditions that workers reported as valuable. Firms auditing their suppliers should consider incorporating worker feedback into their audit program to gain a more complete understanding of which factory issues have the greatest impact on workers. The study’s authors Paris Adler, Drusilla Brown, Rajeev Dehejia, George Domat, and Raymond Robertson surveyed over 3,500 workers and 300 factory managers in 83 Vietnamese apparel factories enrolled in Better Work Vietnam.