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Although a large number of studies have examined the relationship between the physical work environment and employee performance, the relationship between employee well-being and facility management (FM) has received limited attention. The purpose of this paper is to explore the relationship between FM services and employee well-being in terms of job satisfaction, satisfaction with the workplace, job affect and engagement within the context of the job demands-resources (JD-R) model, distinguishing between soft FM services and hard FM services.

The analysis is based on the responses of 1,390 employees, who responded to all the relevant items used in this analysis. In addition to the linear estimations, the research uses an instrumental variable (IV) estimation, the Lewbel IV estimator (Lewbel, 2012), to establish a causal relationship between FM services and employee well-being.

The findings of this paper suggest that there is a positive relationship between the FM index and the four well-being proxies. In addition, the findings indicate that the effect of soft FM on employee well-being is generally weaker than the effect of hard FM, especially with regard to job affect and engagement.

The current research treats FM services as a resource instead of a cost and goes beyond the financial value of FM by providing a quantitative analysis on the added value of FM services in terms of employee well-being. Most importantly, this study incorporates FM services in the JD-R model and uses an alternative approach to linear regression and traditional IV regression to solve for endogeneity issues.