Organizational Performance and Stress: A Peoplebank Business Report

This business report, prepared for Peoplebank, investigates the significant impact of stress on organizational performance. It begins with an executive summary and table of contents, followed by an introduction outlining the scope of the analysis. The report delves into the causes of stress, including complex tasks, management issues, and excessive workloads, and explores their consequences, such as absenteeism, high employee turnover, reduced productivity, and decreased profitability. It then presents strategies for managing stress at both individual and organizational levels, supported by survey findings. The report concludes by emphasizing the detrimental effects of stress and recommending interventions, including primary, secondary, and tertiary strategies, along with a call for stress management programs and open communication. References and appendices, including figures on the causes and impact of stress, complete the report.

Impact of Stress on
Organizational Performance
Student’s Name:
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Executive Summary
The report presents an analysis of the impact of stress that is generated on the overall
performance of the organization. It discusses the major causes of stress in the workplace. The
report also helps in investigating the several consequences of stress on the performance of both
employees and the organization. Further it also dictates the managing of stress by using various
interventions or strategies on organization and individual. It finds that the level of stress is high
among employees at the workplace, which led to a decrease in profitability of the company. The
recommendations outline the significance of using primary, secondary, and tertiary interventions
as well as stress management programs on reducing stress at the workplace.

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Table of Contents
Introduction.................................................................................................................................................3
Discussion....................................................................................................................................................3
Causes of stress.......................................................................................................................................3
Consequences of stress...........................................................................................................................3
Management of stress.............................................................................................................................4
Conclusion...................................................................................................................................................6
Recommendations.......................................................................................................................................6
References...................................................................................................................................................8
Appendices................................................................................................................................................10

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Introduction
The paper will demonstrate the impact of stress on the performance of the organization. It will
discuss the significant findings on stress such as causes, consequences as well as management of
stress. Stress has become a serious concern which occurs in every organization, and it is a
complex concept in today's world. The level of stress influence the overall performance of the
organization in terms of employees, work, profitability, or sale. Stress at the workplace has
become a critical challenge for all organizations because it affects both the employees and the
organization. An excessive level of stress seems to be harmful to the employees as it may lead to
loss of employee turnover, absenteeism, low productivity as well as inefficiency. The managers
will adopt strategies or interventions for managing or reducing stress at the workplace.
Interventions reduce the impact of stress on organizational performance. Stress needs to be
managed or reduced at the workplace for better performance of both employees and
organization.
Discussion
The stress related to work referred to the reaction of people when they face special tasks that are
out of their knowledge or ability (Bakotić, 2016). Stress is a condition that shows helplessness in
solving a task.
Causes of stress
The research shows that various factors of the organization are responsible for causing stress in
the workplace, which affects the performance of the employees as well as the performance of the
organization (Bennett & Dorjee, 2016). Some of the causes of stress in the organization are
complexity as well as diversity of tasks, concern for the future of the firm, inappropriate cycle of
management, high responsibilities that need management position, effects of improper decision,
working with poorly trained workers, excessive authority centralization and extension of work
program due to arising of special situation (Bentley et al., 2016).
Consequences of stress
The consequences of stress are the outcomes brought in the performance of the organization. The
consequences can be the following:

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Absenteeism: From the research, it has been found that employees who face stress in the
organization absent from their work, and they are unable to perform their jobs, which result in
negative performance. The employees may also suffer from various health issues like mental
health or addictions. The organizational performance affected due to loss of knowledge and as
well as lack of resources.
High turnover of the employees: Due to stress, the turnover of the workers may increase, or the
employees who are experienced may leave the firm (Deery & Jago, 2015). Recruitment of new
employees causes a huge loss of time and costs of the organization.
Productivity and efficiency: The stress makes the employees less efficient as well as less
productive in performing their work, which harms the overall performance of the organization
(Kokt & Ramarumo, 2015).
Loss of profitability: Stress among the employees may lead to a decrease in the profitability of
the organization (Lomas, Medina, Ivtzan, Rupprecht & Eiroa-Orosa, 2017). As the employees
could not focus on the sale or revenue of the firm due to stress, the profitability of the
organization deteriorates as a result of a decrease in a sale.
Management of stress
Individual – Stress can be managed by the individuals by taking positive actions such as change
of mindset, development of a healthy lifestyle, and alteration of behavior (Lu & Kuo, 2016). This
could help them in preventing serious problems.
Organizational – Stress could be managed in the organization by applying an appropriate
management cycle, offering stress management training to the employees, improvements of
techniques used for work, adopting profitability measures and ensuring effective work
environment (Nielsen et al., 2017).
The paper adopts a survey method for investigating the impact of stress on organizational
performance. The information has been collected from the various respondents based on their
perception of stress that effective organizational performance (Zheng, Kashi, Fan, Molineux &
Ee, 2016). It has been found that 89.1% of respondents agreed on organizing seminars for stress
management, while 69.6% of respondents suggest improving the working conditions for
managing stress and increasing organizational performance. It has also been observed that 15.9%

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of respondents believed that lack of commitment could be the result of stress, whereas 11.6%
reported low morale as a consequence of stress. 22.5% reported that improper working
conditions cause stress, and 28.3% said that a lack of proper training led to stress.

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Conclusion
The paper concluded that stress harms the overall performance of the organization. The findings
indicated that the employees and organization suffered a high level of stress due to various
factors such as incorrect management cycle, diversity as well as complexity in jobs,
inappropriate decision, and others. It has also been found that stress has become a significant
challenge for the employees. It was investigated that stress when generated at the workplace
leads to absenteeism, decreases the efficiency and productivity, loss of profitability, and high
employee’s turnover. Several interventions could be used for reducing stress at the workplace,
such as primary intervention, secondary intervention, and tertiary intervention. The management
of the organizations requires to conduct stress management programs or research programs for
minimizing the levels of stress. A transparent communication approach requires to be
implemented for managing stress among the employees.
Recommendations
 It is strongly recommended that the management should conduct research programs for
developing technical as well as managerial skills for the workers to reduce the impact of
stress on the performance of the organization
 The organization management should conduct an analysis of the environment or mood of
the organization for identifying the reasons for stress
 Individuals require to take interventions such as be more assertive which means an
employee should listen to others carefully, be self-confident, respect the others
 Management of time should be improved by considering priorities and time-wasting
activities
 An organization should motivate a culture of open communication about wellbeing and
mental health so that the employees feel free to talk about stress at work
 It is required to increase flexibility in the process of the work such as sharing of tasks,
telecommuting, compressed more weeks for managing stress at workplace
 It is recommended to an individual that he should plan for staying organized, which help
in minimizing stress at work. To stay organized means to be efficient with the work
 The employees should avoid conflict among the co-workers in the workplace as it creates
difficulty in work and thus, try to avoid the people who do not feel comfortable while
working with others

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 An organization should be clear about its communication policies which means it should
avoid calling workers after working hours which help in reducing stress at work
 Primary intervention should be used for reducing stress at the workplace as this
intervention target the source of stress as well as prevent the occurrence of stress among
the employees. It could be done by redesigning job or forming labor and safety
committee
 Secondary intervention should be used, which aims to alter the response of the individual.
This could be done by providing classes on stress management to the employees
 The tertiary intervention aims to reduce the issues related to stress by using proper
management such as counseling to staffs or rehabilitation programs

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References
Bakotić, D. (2016). Relationship between job satisfaction and organizational
performance. Economic research-Ekonomska istraživanja, 29(1), 118-130.
Bennett, K., & Dorjee, D. (2016). The impact of a mindfulness-based stress reduction course
(MBSR) on well-being and academic attainment of sixth-form
students. Mindfulness, 7(1), 105-114.
Bentley, T. A., Teo, S. T. T., McLeod, L., Tan, F., Bosua, R., & Gloet, M. (2016). The role of
organisational support in teleworker wellbeing: A socio-technical systems
approach. Applied Ergonomics, 52, 207-215.
Cardon, M. S., & Patel, P. C. (2015). Is stress worth it? Stress‐related health and wealth trade‐
offs for entrepreneurs. Applied Psychology, 64(2), 379-420.
Deery, M., & Jago, L. (2015). Revisiting talent management, work-life balance and retention
strategies. International Journal of Contemporary Hospitality Management, 27(3), 453-
472.
Kokt, D., & Ramarumo, R. (2015). Impact of organisational culture on job stress and burnout in
graded accommodation establishments in the Free State province, South
Africa. International Journal of Contemporary Hospitality Management, 27(6), 1198-
1213.
Lomas, T., Medina, J. C., Ivtzan, I., Rupprecht, S., & Eiroa-Orosa, F. J. (2017). The impact of
mindfulness on the wellbeing and performance of educators: A systematic review of the
empirical literature. Teaching and Teacher Education, 61, 132-141.
Lu, C. S., & Kuo, S. Y. (2016). The effect of job stress on self-reported safety behaviour in
container terminal operations: The moderating role of emotional
intelligence. Transportation research part F: traffic psychology and behaviour, 37, 10-
26.

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Nielsen, K., Nielsen, M. B., Ogbonnaya, C., Känsälä, M., Saari, E., & Isaksson, K. (2017).
Workplace resources to improve both employee well-being and performance: A
systematic review and meta-analysis. Work & Stress, 31(2), 101-120.
Zheng, C., Kashi, K., Fan, D., Molineux, J., & Ee, M. S. (2016). Impact of individual coping
strategies and organisational work–life balance programmes on Australian employee
well-being. The International Journal of Human Resource Management, 27(5), 501-526.

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Appendices
Appendix A
Figure: Causes of stress
(Source: Nielsen et al., 2017)

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Appendix B
Figure: Impact of stress on performance
(Source: Cardon & Patel, 2015)