Impact of Stress on Organizational Performance

This report investigates the impacts of stress on organizational performance, specifically focusing on the case of Peoplebank, a large IT recruitment company. It explores the negative effects of stress on employee health, productivity, morale, and turnover. The report also provides recommendations for implementing a comprehensive stress management approach to improve organizational performance.

Running head: IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
Name of the Student
Name of the University
Author Note

1IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
Executive Summary
The aim of this report will be to to investigate the impacts of stress on the performances of
the organizations. This will help the organizations to take accurate, timely, objective as well
as concise information to make effective decisions. In this case, the organizational stress is
hampering the productivity of the Peoplebank, a large IT recruitment company from
Australia.

2IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
Table of Contents
Introduction................................................................................................................................3
Understanding Stress and Its Impacts........................................................................................3
Comprehensive Stress Management Approach.........................................................................5
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................7

3IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
Introduction
In this report, the aim of the discussion will be to investigate the impacts of stress on
the performances of the organizations. This will help the organizations to take accurate,
timely, objective as well as concise information to make effective decisions. In this case, the
organizational stress is hampering the productivity of the Peoplebank, a large IT recruitment
company from Australia. The work-related stress causes deterioration in the health of the
employees, which results in sickness absence of more than 5,000 days in the financial year of
2017-18, which comes to 21 days lost per employee on an average basis. It has been viewed
that the recruitment sector is facing the highest number of ill health due to the work-related
stress. The company has identified that the stress in the workplace has caused the decline in
the productivity of the business, and also low employee morale and high employee turnover.
Now the organization is looking for a comprehensive stress management approach.
Understanding Stress and Its Impacts
Stress is a normal thing in the corporate world, and it can be both mental as well as
physical. In the context of the given company in this report, the daily work-related stress has
affected the physical health of the employees like increase in the heart rate, metabolism,
blood pressure, respiration and blood flow to the muscles. This again affects the body to react
quickly as well as effectively to any kind of work related pressure. if no physical, mental and
emotional adjustments are made by the employees to face the work related stress, that stress
in turn will adversely affect the health conditions of the employees of Peoplebank (O'Keefe,
Brown & Christian, 2014). It can also cause lack of motivation, which is actually faced by the
organization, which resulted in low productivity of the organization. Stress actually hampers
the to function productively in the organization. It will be difficult to concentrate on the work
flow in the workplace, and also failure to meet the deadlines in an environment where there is

4IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
too much work pressure. Stress will also hamper the maintenance of the relationship between
the clients of Peoplebank and the company itself. The relationship between the employees
and the management level as it may happen in some cases that the managers may not
understand the stressful situations of the employees and expects high productivity from the
employees without analyzing their situations, and this will increase the employee turnover
rate. More the number of stressed person will increase, more will be the decrease in the
productivity of the organization, and more will be the employee turnover for the organization,
which will hamper the reputation of Peoplebank in the marketplace. As the employees are
suffering from ill health due to too much of stress, it will increase the absenteeism of them,
which is actually happening in the organization of Peoplebank, and this is hampering the
regular workflow as well as the productivity of the employees in the organization. Lack of
human resource in the companies like Peoplebank who has to deal with lots of clients on
daily basis will adversely impact the business of the company. The loss of experience as well
as the knowledge will also have a negative impact on the business (Xiang et al, 2013).
Some incidents relating to health and safety standards may also occur in the office
premises of Peoplebank, which will occur some embarrassing situations in the company.
These kind of situations also affects the morale and motivation of the employees of the
organization, both in case of who are suffering from stress as well as those who have to take
their responsibilities. Too much ill health has increased the employee turnover. Hence, many
experienced organizations may leave the company due to ill health conditions, or for too
much absenteeism. In this scenario, the company has to hire new people in places of the
vacant places, which will increase the cost of Peoplebank, and this may affect the amount of
revenue earning of the company. The stressed employees of may be less productive as well as
efficient to the organization, and along with this the low morale and motivation, absenteeism
and high turnover rate will hamper the workflow, efficiency as well as the productivity of the

5IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
organizations like Peoplebank, whose base is dependent on the relationship with the clients. It
will be also difficult to maintain the level of customer service levels with high level of
absenteeism, issues relating to morale and motivation of the employees working in
Peoplebank, high rate of turnover and low productivity and inefficiencies. The clients will
detach the relationship with the company if they will not be satisfied with the service
provided by the organization, and have to deal with a number of complaints as well as
potential loss of them. The communication between the employees of the company will also
get hampered, as the stressed employees may become angry and irritated due to too much
stress, and can behave badly with the other employees of the organization, which will hamper
the team dynamics, communication within as well as the outside of the company, and also
having a negative impact on the internal and external relationships. And all these will
deteriorate the financial and business operations and performances, in terms of profitability,
sales and cash flow (Cui et al, 2013).
Comprehensive Stress Management Approach
A comprehensive or complete workplace stress management is usually performed in
an enterprise, to assess the effectiveness of a complete workplace stress management
program which consists of Participatory Action-Oriented Training (PAOT) as well as
individual management. Interviews will be taken to the employees who are stressed out and
suffering from ill health. After the individual as well as organizational level mediations, there
will be a reduction of many adverse psychological factors and responses to stress. For
managing then stress from work, useful mediations need to be applied to the office of
Peoplebank. They need to focus on the psychological resources of the employees on
individual basis as well as on the context of company. Thus, there will be two separate
approaches to manage the factors related to work. At the personal level, cognitive-behavioral
and relaxation methods can be used by Peoplebank to handle the stress related issues for the

6IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
individual employees. This will help to improve the psychological resources and responses of
each of the stressed out employees. On the other hand, job adjustment as well as workplace
communication activation can be applied on the organizational level, in order to increase the
stress related factors of the organization as a whole. Mediations in the individual level have
more influences on physiological, psychological and from organizational aspects. The
cognitive-behavioral approach is said to be the best and most useful framework or method in
a meta-analysis of workplace stress mediations. Primary prevention, if applied in the
mediations in the organizational level, will help to reduce the cause of stress, which will help
to maintain the workflow in Peoplebank and increase the productivity of the organization
(Zink, 2014).
Both individual and organizational management approaches need to be involved to
improve the mental health in the workplace in order to control the cause of work-place stress
of Peoplebank. The development is required in the work environment at psychosocial level,
which will help to improve the mental health of the employees of the organization, as mental
health is very closely related in the improvement of the productivity. Participation in the
promotion of the health related issues in the workplace has increase a lot. Involvement by the
employees can improve justice, social support and autonomy, that are the primary drivers of
work based issues. One of the methods is Participatory Action-Oriented Training (PAOT)
which engages the workers in the mediations or intercessions in the workplace. Employees
who will participate in this kind of workshops will be able to recognize the difficulties caused
by their own work environment. This program actually helps to suggest proper and suitable
remedies to the work related problems and helps to improve the environment for working.
This participation related approach used to reduce the stress of work in the workplace
surroundings helps to reduce the psychosocial troubles. Moreover, it helps to strengthen the
safeguard elements against the factor of stress. The function of both the participatory

7IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
approach techniques as well as the psychosocial stress reduction methods will be helpful and
effective to improve the mental health of the employees and also to increase the productivity
of Peoplebank (Appelbaum, 2013).
Recommendations
Peoplebank need to identify the factors which are causing the stress of the employees
of the organization. This will help to take the appropriate measures by the management so
that time and money both can be saved. Employees need to be motivated enough so that they
can reduce the stress and increase the productivity of the organization and maintain a steady
workflow of the organization. Time management should be properly maintained so that the
employees can minimize the stress of the employees of Peoplebank. Proper frameworks
should be followed to motivate their employees. If Peoplebank needs to maintain the
productivity of their organization, they need to boost up the morale of their employees.
Conclusion
From the above report, it can be said that employees are the most important part of
any organization and it is the duty of the organizations to look after their employees, in order
to maintain and increase the productivity of them and to have a competitive edge over others
in competitive world.

8IMPACT OF STRESS ON ORGANIZATIONAL PERFORMANCE
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