Impact of Stress on Organizational Performance

This article investigates the impact of stress on organizational performance and provides recommendations for stress management programs. It discusses the factors contributing to workplace stress, such as organizational environment and improper guidance from supervisors. The article also explores various stress management strategies, including training programs, occupational stress indicators, and specific techniques like cognitive behavioral therapy. Recommendations for Peoplebank include implementing these strategies to reduce stress among employees and improve organizational performance.

Running head: BUSINESS COMMUNICATION 1
Business Communication
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Executive Summary
Peoplebank is a large Australian IT recruitment company with IT employees, who are
experiencing work stress which became a reason of ill-health and increased rate of
absenteeism among employees. Through study of relevant literature, it has been revealed that
organizational environment, improper guidance from supervisors, unfriendly co-workers and
such other factors increase stress among employees. In order to reduce stress among
employees, stress management programs should be developed.
Introduction
Peoplebank is a large Australian IT recruitment company with hundreds of IT
employees who work on client projects daily. The management of multiple projects on daily
basis and interfacing with a number of clients is a challenging and stressful task for the
employees. In a recent internal survey, it has been revealed that work-related stress becomes
the reason of ill-health due to work stress and accounts for 5000 days of sickness absence in
the year 2017-18 and an average of 21 days of leaves per person. Presently, the recruitment
industry is reporting highest prevalence of ill-health among employees due to work stress. In
Peoplebank, workplace stress is contributing a lot to lost productivity in sickness absence,
high staff turnover and low morale among employees. Because the employees are the core
base of the organization, Peoplebank wants to implement a comprehensive stress
management approach so that workplace stress could be reduced among the employees.
Being engaged as a consultant by Peoplebank, the business report needs to be prepared
investigating on the impact of stress on organizational performance. After obtaining
information from academic literature, major recommendations including interventions and
strategies will be provided that would enable healthier workforce and approach towards
business.

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Discussion
Djebarni (2016) investigated and analysed the impact of stress on effectiveness of the
leaders in the organizations. Through semi-structured interviews of managers concerned with
impact of three types of stressors which are boss stress, job stress and workplace related
stress. The training programs should include an effective plan to teach managers how to deal
with stress and should make them able to motivate their subordinates by keeping it at optimal
level. The research revealed that five major types of coping are information seeking, direct
action, inhibition of action, cognitive processes and to seek support of others. The research
concluded that integrated training programmes have been developed to deal with stress
related issues such as occupational stress indicators (OSI). It help the users to define stress
related issues and provide a structure for future decision-making and identifying effective
strategies for dealing with stress (Djebarni, 2016).
Similarly, Giga, Noblet, Faragher, and Cooper (2013) have also discussed about the
impact of Stress Management Interventions (SMI). The results of the research conducted by
the researchers revealed that vast majority of interventions are targeted at individual
employee level. The tendency to intervene at individual level is evidenced by comparatively
large number of specific stress management and prevention techniques such as cognitive
behavioural therapy (CBT) as well as employee assistance programs (EAP). The strategies
that targeted individual-organizational interface figured prominently with the most common
strategies that involved co-worker support (CSG) as well as participation and autonomy
(PAR). In the context of organizational level strategies, job redesigning and restructuring
(JRD) has been suggested (Giga, Noblet, Faragher, & Cooper, 2013). The job stress
interventions aim to prevent development of potentially stressful situations, reducing the
intensity of stressors, helping in equipping people with knowledge, skills and resources to
dealing with stressful conditions.

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Chandrasekar (2011) also justifies the fact that workplace environment influences
employee morale, productivity, and engagement both negatively as well as positively. The
researcher identified that inappropriate workplace environment impact the performance of the
employees in a negative manner.The quality of workplace environment impacts the level of
motivation and subsequently, the performance of employees. The researcher suggested that
interest in work, opportunity to develop social abilities, enough information, adequate
authority, friendly co-workers, competent supervision, clearly defined responsibilities and
good salary are considered as job factors that motivate the performance of the employees in
order to achieve target. Considering all these aspects, the researcher suggested that workplace
environment plays an essential role in encouraging the workplace performance required in the
competitive business environment in the present scenario. The managers and supervisors of
the organization should be well-versed with range of workplace factors that influence
employee motivation. The skills required include the ability of the employees to engage in
mutual goal setting, clarifying role expectations and providing performance feedback
regularly (Chandrasekaer, 2011). In addition, there is requirement of time and energy to be
given to provide relevant performance incentives, managing the processes, providing suitable
resources as well as for workplace coaching.
The organizational health framework is considered as an alternative theoretical
perspective to the traditional stressors and strain approach for providing guidance to the
research on occupational stress (Cotton & Hart, 2013). The researcher has focused on the
determinants of employee wellbeing, discretionary performance, and withdrawal behavioural
intentions which include submission of stress related employee compensation claims and the
use of uncertified sick leaves.
Rose, Jones, and Fletcher (2007) have discussed about the impact of stress
management programme on wellbeing of staff and their performance at workplace. The stress

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management programmes have been implemented for people with learning disabilities. After
assessing anxiety and depression level among employees, it was determined to whom they
were interacting with, nature and type of interaction, and amount of time spent on various
aspects of job. Based on all such information, intervention is developed aimed at the
employees involved in order to reduce the levels of anxiety and depression among staff
members. The goals were established to reduce levels of anxiety and depression among staff
members. The researcher identified that increased positive interactions and assistance
provided to clients as well as formal education programmes reduces the levels of anxiety and
depression among employees and could have positive impact on the work performance of the
employees (Rose, Jones, & Fletcher, 2018).
Slaski and Cartwright (2013) conducted research on emotional intelligence training
and its impact on stress, health and performance of employees. The researchers examined the
role of emotional intelligence as a moderator in the process of stress. The researchers
revealed that when managers were given training in emotional intelligence, stress and health
and performance management were taken into consideration. The research revealed that
emotional intelligence training resulted in increased emotional intelligence and improved
health and wellbeing among employees (Slaski & Cartwright, 2013).
The work-related stress can influence productivity, health and emotions and it needs
to be kept under control. According to Bucurean and Madalina-Adriana (2011), when people
lose confidence, they refuse to take responsibilities and get irritated very easily. They get
dissatisfied with their jobs as a result of which their performance reduces and organization
gets affected. Majority of managers and entrepreneurs know about the main symptoms of
stress and have knowledge for managing and reducing it before it could affect daily work of
the employees. Because stress affects organizational welfare as well as personal behaviour of
the employees and supervisors, the ability of managing can establish difference between

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success or failure of jobs. The research conducted by the researchers revealed that even if job
itself is a stressor, various other factors responsible for creating stress include family
problems, personal problems as well as social problems(Bucurean & Madalina-Adriana,
2011).
Sikuku, Wamalwa, and Katiba (2017) aimed their study to establish the influence of
organizational stress on work performance among the employees. After conducting a
descriptive survey, it was identified that stress is a major hindrance that affects the
performance of the employees. The results revealed that stress affect the performance of
employees and their productivity in a negative manner and seminars need to be organized on
stress management on regular basis in order to help the employees to manage stress (Sikuku,
Wamalwa, & Katiba, 2017).
Conclusion
After conducting in-depth analysis of relevant literature, it has been realized that
workplace stress reduces the performance of employees to an extensive level. It has also been
realized that there are various factors that contribute to increasing stress among employees
and they are organizational environment, improper guidance from supervisors, unfriendly co-
workers and such others. In order to reduce stress among employees, stress management
programs should be developed.
Recommendations
There are few recommendations which should be utilized by Peoplebank in order to
reduce stress among employees and to reduce employee turnover;
 Training programs to deal with stress and to motivate subordinates by keeping stress
at optimal level

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 Occupational stress indicators (OSI) to define stress related issues and provide a
structure for future decision-making and to identify effective strategies for dealing
with stress
 Specific stress management and prevention techniques such as cognitive behavioural
therapy (CBT), employee assistance programs (EAP), co-worker support (CSG) as
well as participation and autonomy (PAR) should be utilized.
 In context of organizational level strategies, job redesigning and restructuring (JRD)
has been suggested.
 Requirement of time and energy to be given to provide relevant performance
incentives, managing the processes, providing suitable resources as well as for
workplace coaching
 Enhanced positive interactions and assistance provided to clients as well as formal
education programmes reduces the levels of anxiety and depression among employees
and could have positive impact on the work performance of the employees
 Emotional intelligence training resulted in increased emotional intelligence and
improved health and wellbeing among employees.
References
Bucurean, M., & Madalina-Adriana, C. (2011). Organizational stress and its impact on work
performance. Annals of Faculty of Economics, 1, 333-337.
Chandrasekaer, D. K. (2011). Workplace environment and its impact on organisational
performance in public sector organisations. International Journal of Enterprise
Computing and Business Systems, 1(1), 1-19.
Cotton, P., & Hart, P. M. (2013). Occupational Wellbeing and Performance: A Review of
Organizational Health Research. Australian Psychologist, 38(2), 118-127.

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Djebarni, R. (2016). The impact of stress in site management effectiveness. Construction
Management and Economics, 14, 281-293.
Giga, S. I., Noblet, A. J., Faragher, B., & Cooper, C. L. (2013). The UK Perspective: A
Review of Research on Organisational Stress Management Interventions. Australian
Psychologist, 38(2), 158-164.
Rose, J., Jones, F., & Fletcher, B. C. (2018). The impact of a stress management programme
on staff well-being and performance at work. International Journal of Work, Health
& Organisations, 12(2), 112-124.
Sikuku, C. A., Wamalwa, D. B., & Katiba, M. D. (2017). The Influence of Organizational
Stress on Performance among Employees: A Case of the Kenya Forestry Research
Institute (KEFRI) Headquarters, Muguga and Karura Centres. International Journal
of Education and Research, 5(8), 25-35.
Slaski, M., & Cartwright, S. (2013). Emotional intelligence training and its implications for
stress, health and performance. Stress & Health, 19(4), 233-239.