Work Stress. Why Organisations should focus on it and provide effective examples

Term Paper, 2015

25 Pages


Table of Contents

1. Introduction

2. The Business Case Why Organisations Should Focus on Work Stress
2.1. Economic Impact
2.2 Organisational Outcomes
i. Operational Issues and Costs
i. Intangible Costs
2.3 Individual Outcomes
2.4 Models:
i. Inverted U Shape Relationship – k/a Yerkes-Dodson Law 1908
ii. Person - Environmental Fit Model (Cooper et al. 1988)
ii. Demands – Support – Constraints Model (Payne 1979)
2.5 Ways to Manage
i. Institutional Programs:
i. Collateral Programs:
2.6 Organisations Effectively Dealing with Work Stress
i. Award Winning Organisations Dealing with Stress
i. Local Organisation Examples of HSE Three Level Approaches

3 Summary

4 Conclusion

5 References

6 Appendices

1. Introduction

Stress can pervade anyone at any level of business. Recent research shows that work-related stress is widespread and not confined to particular sectors, jobs or industries. The Health & Safety Executive’s (HSE) formal definition of work-related stress is:

"The adverse reaction people have to excessive pressures or other types of demand placed on them at work (HSE, 2015)."

Stress is not an illness; it is deemed to be a state (Acas, 2015). Dr Selye in the 1920s coined the phrase “stress” as a non-specific physical strain on the body (Selye, 2015). Further research deemed that the condition could be both mental and physical where stress becomes too excessive and prolonged. This varies from individual to individual affecting those unable to cope. It is unclear whether this is stress or depression, however, it is linked with high sickness absence, staff turnover, and increased errors. Therefore, it is a cost to both businesses and individuals. For athletes; actors; musicians’;, etc. stress is deemed to be good and enhances performance.

There is a difference between (motivating) pressure and stress (Lancashire Training, 2015). Pressure can help achieve goals and perform better. Dr Sheperd writes about the epidemic of the 21st century, differentiating "real" stress (physiological response) from "pop" stress (being stressed out by your boss) (Sheperd, 2002, p47).

2. The Business Case Why Organisations Should Focus on Work Stress

Work stress can be easy to manage and needs the right fit between the board, line managers and employees. Matched with open discussions and action taken regarding goals and achievements, the organisation can create a healthy environment. However, many organisations do not have this, creating a financial and non-financial impact. The key issues are: economic; organisational; and individual. This is why it is imperative that organisations address these negative issues and positively act upon them.

There is also good stress, called eustress, which gives us energy and motivates us to strive and produce (Muse, et al., 2003). This is the stress/pressure that athletes and artists place reliance. Robbins and Judge consider positive and negative attitudes and commentaries: “My job is great” is a positive attitude, and “My job is boring and tedious” is a negative attitude (Robbins & Judge, 2013. p135). Creating the right environment for employees is challenging, however, achieving this employees will outperform in sales, profit, and self-esteem.

2.1. Economic Impact

Stress is a cost to the British economy estimated at £3.7 billion per year, according to the Health and Safety Executive. (HSE, 2015). However, the entire cost of dealing with issues relating to stress has been estimated at £6.5 billion per year (Shearer, 2013).

Only 13% of employees worldwide are engaged in their work (IHRM, 2013). Gallup estimates that active disengagement additionally costs the UK between £52 billion and £70 billion per year. Presenteeism is the act of employees attending work while ill and not performing (Centre for Mental Health, 2015). Studies highlight the impact of improved engagement correlated with enhanced profitability and return on investment (Macleod & Clark, 2012).

2.2 Organisational Outcomes

Management needs to adopt strategies to reduce stress for employees. There are indirect costs such as continuity and succession planning, business interruption, and competitive disadvantages due to the loss of skills and resources. Management must address future trends, and a stable workforce is essential to do this.

Business Link analysed 543 Small Medium Enterprises (SME's) (Appendix 3), and they proved that over 50% of those surveyed felt that managing stress was an important part of their role. The greatest score was the morale of staff, with impact on productivity falling in the top 3. This compared to the legal consequences of managing stress with only 11%.

i. Operational Issues and Costs

Increased absenteeism and labour turnover is a high cost for employers. Deterioration in performance with reduced output/quality are signs of stress. Presenteeism has an impact on organisations with a cost per employee per annum of £605 (presenteeism) and £335 (absenteeism) (Cooper, 2013).

Further productivity/cost issues derive from group stress and the associated dysfunctional behaviour. Signs of stress in a group can manifest with disputes and disaffection. Stress can vary from individual to individual (Bortz, 2010). Numerous publicised cases detail complaints, grievance procedures, and huge settlements. Such procedures are ordinarily preceded by sickness absences where the employee cannot cope with work (Acas, 2006). This creates additional costs within the organisation.

Burnout is a chronic and highly debilitating form of stress (Levinson, 1996). Compensation Costs for victims of burnout are predominantly derived from idealistic and self-motivated achievers. In an organisation, such individuals need to be nurtured to ensure that the best workers/high achievers are not disabled and, therefore, avoiding lost contribution. These A-Type personalities are often at the top echelons of businesses and, therefore, the cost of replacing them and compensating them for work related stress is high. Examples of compensation are a former hospital boss (£500,000) (Carr, 2013), and a teacher (£250,000) both paid for stress-related injuries (Marshall, 2012).

There are low incidents of extreme and violent behaviour, and it is unusual to have incidents of workplace rage. However extreme acts publicised, need to be avoided at all costs in order to prevent atrocities. Postal employee Patrick Henry Sherrill shot 14 co-workers before turning the gun on himself (Ames, 2005. p28). This psychological disorder leads people to commit insane acts. Not only are there compensation costs to account for, but brand damage are immeasurable.

i. Intangible Costs

Within an organisation that has increased reports of stress a cycle of stress can occur. It is important that management acts quickly to try and alleviate these pervasive organisational maladies. This often results in poor performance that leads to customer dissatisfaction and complaints. The individual/s then feel worse due to their substandard performance resulting in further stress, illness, grievance, and finally exit. “The problem is, people then get stressed-out about being stressed-out” (Muse, et al., 2003). The resulting recruitment needs are made difficult in attracting new staff into a toxic environment.

Many causes of stress exist within an organisation (Appendix 1) (Mullins, 2013. p108). A Gallup Poll 2012 on a survey of employee stress revealed that only 29% of US employees were completely satisfied with on the job stress:

Gallup Poll 2012

Abbildung in dieser Leseprobe nicht enthalten

Figure 1 Gallup. (2012). U.S. Workers Least Happy With Their Work Stress and Pay. Available: 27th Feb 2015.)

Gallup figures clearly indicate that there is a problem with current methodologies to alleviate stress and that they are either not being used or not working. (Appendix 7) details some recommendations to relieve this state.

2.3 Individual Outcomes

Establishing an identity through work alone can restrict a sense of self and make individuals vulnerable to depression, loss of self-worth, and loss of purpose when work is threatened (Muse, et al., 2003). Stress can have immensely debilitating effects on an individual and can attack both psychologically and physiologically. The stigma of stress can force concealment and have extreme consequences.

Positive social relationships in a work environment help to lower stress at work and, therefore, reduce stress impacts (Robbins & Judge, 2013. p135). Individual external outcomes can arise such as family death; terminal illness; threat/abuse; economic issues, etc. impacting individuals stress levels.

Humans are complex, and the structure of mood can create an impact on employee performance (Appendix 2) (Robbins & Judge, 2013. p135). One personality type, however, seem to enjoy stressful negative environments, and that is the Machiavellian personality (Hunter, et al., 1982). They engage in more deviant behaviour that can create high levels of stress in order to win more and persuade others to do what they may not ordinarily undertake.

Figure 1 details the numerous outcomes for an individual. Detailed in blue below are outcomes that affect men, and detailed in pink are outcomes that affect women.

Health Effects of Stress

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Figure 2 HSE. (2015). What is Stress?. Available: Last accessed 5th Mar 2015.

Stress can impact on an individual's physiological make-up as detailed above. Stress can also cause psychological dissatisfaction in outcomes such as tension, anxiety, etc. and can result in burnout. Victims of burnout tend to be idealistic and self-motivated achievers and often seek unattainable goals that lead to unrealistic expectations and disappointment when unmet. Many of these individuals can never work again due to the effects.

Changes in productivity can be a behavioural outcome from individuals. This can be linked with absenteeism and staff turnover. Stress can increase smoking and drinking habits, rapid speech, display fidgeting, etc. Rollinson noted a cognitive outcome in decreased concentration and attention span, and unpredictable response speeds (Rollinson, et al., 1998. p145). This is also substantiated in Harvard Business Review (Muse, et al., 2003).

2.4 Models:

i. Inverted U Shape Relationship – k/a Yerkes-Dodson Law 1908

There remains controversy over this theory as many researchers view stress as a linear relationship. This curve changes with the person, task and time and that efficiency increases when stress increases, but only up to a point; after then, performance falls off (Muse, et al., 2003).

Inverted U Shape Yerkes-Dodson Law 1908

Abbildung in dieser Leseprobe nicht enthalten

Figure 3 Muse, A; Harris, S; Feild, H. (2003). Has the Inverted-U Theory of Stress and Job Performance Had a Fair Test?. Human Performance . 16 (4), 349-364.

This simplistic model works best in manual labour environments, however for “A” type personalities, athletes and artists who perform their best work when under high stress this is not a good framework. Individuals would not get out of bed in the morning in the low-pressure state and would consider that work was boring and demotivating. As a contrast to this the Dimensions of Resilience (Appendix 7) display tools required to counteract high-stress periods (Lewis, 2013). However, both models omit the happiness factor that Harvard Business Review highlights as essential, and the elasticity of human nature (Muse, et al., 2003).

Goldman Sachs makes effective use of the Inverted-U Shape model albeit no doubt a stretched version. They focus on work stress alleviation to attract and motivate employees. In addition to their remuneration packages, equity programmes, healthcare, and retirement benefits they have an array of wellbeing services called the Wellness Exchange (Goldman Sachs, 2015). The idea being that to keep employees at the peak of the inverted U the Bank works to ensure that they and their family are supported.


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Work Stress. Why Organisations should focus on it and provide effective examples
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work stress, Business, organisations, behavioural science
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Irene Anne McLaughlin (Author), 2015, Work Stress. Why Organisations should focus on it and provide effective examples, Munich, GRIN Verlag,


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