Workplace wellbeing in the digital era: the moderating role of organizational innovation practices

Purpose This paper analyses whether and how the establishments' innovation level moderates the relationship between electronic performance monitoring (EPM) and workplace wellbeing (WW). While previous studies have explored the effects of EPM on WW, empirical evidence remains mixed and has paid limited attention to organizational conditions that may shape these effects. Building on an integrated theoretical approach that combines the innovative work practices (IWP) framework and socio-technical systems theory within an innovation management perspective, we argue that an establishment's innovation profiles constitute a key contextual factor that conditions employees' responses to EPM practices. Design/methodology/approach Using microdata from 21,869 establishments with more than 10 employees across all European Union countries and the United Kingdom, drawn from the 2019 European Company Survey (ECS), a large-scale, cross-country dataset covering a wide range of industries and organizational types, we conduct a probit analysis stratified by establishment's innovation profiles (non-innovative, internally innovative and market-innovative). WW is captured through a composite indicator based on manager-reported measures of work climate, employee motivation, absenteeism and employee retention. Findings Our findings reveal that EPM has a negative and statistically significant association with WW. However, this negative relationship is not uniform across establishments. Rather, establishments' innovation profile plays a moderating role in the relationship between EPM and WW, with innovation acting as a buffering mechanism that attenuates the adverse effects of EPM on WW. In quantitative terms, the estimated marginal effects indicate a reduction of approximately 4.2% points in the probability of having WW levels above the sample median for non-innovative establishments, whereas the effect becomes statistically insignificant in establishments with innovative practices. These results hold across a broad cross-country and cross-sector sample of European establishments, although they are contingent on the organizational innovation environment in which EPM practices are implemented. Originality/value This study makes a unique contribution to the literature by demonstrating that the WW consequences of introducing EPM critically depend on establishments' innovation level. Theoretically, the study advances innovation management and socio-technical perspectives by demonstrating that innovation environments function as a boundary condition that shapes the wellbeing consequences of digital monitoring, thereby explaining the heterogeneous and often modest effects reported in prior research. This highlights the importance of innovation management for balancing efficiency gains from digitalization with employee wellbeing.