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Stress in the workplace: How it is affecting your organisation and how can it be managed?

Keywords: Stress, stress management, workplace productivity, ROI, financial costs, employee well being, performance curve, stress management interventions


“When people like their lives, and that includes work life, they’ll do a better job of taking care of themselves.”~ Jeffery Pfeffer

What is stress at the workplace: what is the science behind it?

83% of US workers suffer from work-related stress. Stress is the non-specific response of the body to persistent and uncertain demands for change (Selye, 1936). Stress at the workplace is the adverse reactions of physical and mental forms that could occur when there is a conflict between job needs and the degree of control that staff is given to meet these requirements (Canadian Mental Health Association, 2016). A Tower-Watson study published in the Work & Stress Journal in November 2013 named stress as the number one workforce risk factor, placing it above diabetes, obesity, and lack of exercise.

The degree of stress experienced depends on the functioning of two protective physiological mechanisms: “Alarm reaction” (When confronted with a threat to our safety, our first response is physiological arousal: our muscles tense and breathing and heart rate become more rapid) and the “Adaptation” (The second adaptive mechanism allows us to cease responding when we learn that stimuli in the environment are no longer a threat to our safety.) Stress is experienced when either of these mechanisms are not functioning properly or when we find it difficult to switch appropriately from one to another. This forms the basis of individual approaches to stress management.

What are the stressors at a workplace and what are the signs of stress in an employee?

A systematic review of the evidence for work factors associated with psychological ill health and associated absenteeism (Michie and Williams 2001, unpublished data) found the key factors to be:

  • long hours worked, work overload, and pressure

  • the effects of these on personal lives

  • lack of control overwork and lack of participation in decision making

  • poor social support

  • unclear management and work role and poor management style.

According to Gwilt (2014), there are 10 signs of stress during change:

1. Absenteeism and arriving late to work.

2. Work attitude becomes careless and sloppy.

3. Starts to talk negatively about the job and the company.

4. Demonstrates resistance to change.

5. Often the ringleader of a “rumour mill” will talk about lack of trust.

6. Starts to focus on unnecessary detail.

7. Less cooperative and more hostile with management and colleagues.

8. Difficulty in concentrating and becoming more restless.

9. Complains of feeling unwell or having to deal with aches and pains.

10. Seems to be tense, uptight, or nervous and talks about having trouble sleeping.

How is Stress Affecting Your workplace and what is a Performance curve?

Stress has been called the "health epidemic of the 21st century" by the World Health Organization and is estimated to cost American businesses up to $300 billion a year according to the American Institute of Stress. Stress in limited quantities is beneficial to organizations and employees as well. It helps to achieve personal as well as goals of an organization. But stress in excess quantity can cause harmful effects on the body, mind, and psychology of employees. This negatively affects absenteeism, employee turnover rates, decreases productivity and efficiency. This financial costs of the company when the employees are stressed skyrocket as well, here are some statistics of the same:

  • Replacing an average employee costs 120-200% of the salary of the position affected.

  • The average cost of absenteeism in a large company is more than $3.6 million/year.

  • Healthcare expenditures are nearly 50% greater for workers who report high levels of stress.

  • 40% of job turnover is due to stress.

  • Insurance data indicates insurance claims for stress-related industrial accidents cost nearly twice as much as non-stress related industrial accidents.

Performance curve (The yerkes-dodson law): Pressure on an employee to perform a task is low then the employee gets bored due to lack of enough motivation due to pressure from superiors. At optimum pressure, the employee is highly motivated to do his work and shows best performance. But when levels of stress exceed the optimum level, employees are unable to cope up with such high stress and employees face various disorders like anxiety. Hence according to the above curve, in an organization, optimum pressure must be put on employees so that they give their best performance. (Ashok Panigrahi, 2016).

Organisational measures to combat stress- stress management interventions (SMI).

Improving employee well-being and reducing stress can have a number of benefits for organizations, from increasing performance, improving relationships, to reducing sickness and absenteeism rates (De Neve, Diener, Tay & Xuereb, 2013; Warr, 2003). Stress management interventions refer to a class of activities that are used by organizations to improve employee well-being and reduce stress, principally by either addressing the causes of stress or by reducing the impact of stress on an individual. Classifying stress management interventions (SMI) according to their focus and level implies that both individual and organizational-level interventions can be primary, secondary and tertiary in nature.

Source: NobaScholar (Holman, D., Johnson, S., & O’Connor, E., University of Manchester 2018)

Implementing organizational-level interventions can be difficult and complex. This means that an important part of organizational-level interventions, particularly primary interventions that seek to change organizational practice, is the efficacy of the implementation process. In particular, reviews suggest that successful organizational-level interventions involve four key activities: preparation, i.e., securing support; screening, i.e., identifying the psychosocial risks; action planning, i.e., developing change initiatives; and implementation, i.e., embedding change initiatives within the organization (Nielsen, Randall, Holten & González, 2010).

However, research has shown that helping employees learn stress coping techniques may only have short-term success—it is not a long term solution. The better option is to reduce the sources of workplace stress at an organisational level. This has been shown to have long-term benefits for the employees and the organisation as a whole.(Guthrie et al. 2010; Ford 2004; and Noblet LaMontagne 2006)

ROI (return on investment) for managing stress at work!

Some of the known ROIs for managing stress at work are Reduced absenteeism, Improved morale, Improved concentration, Improved employee loyalty, Increased productivity.

This was quantified in late 2014 by the federally funded PricewaterhouseCoopers return on investment analysis that concluded that every $1.00 spent on effective workplace mental health interventions (stress management) generates $2.30 in benefits to the organisation.

There is considerable academic evidence that properly diagnosing the sources of stress in an organisation, followed by undertaking primary interventions to remove or reduce the stressors, provide an organisation with the greatest value for their investment.

It is also important to remember that wellness and well-being are two different things. When organisations invest in the well-being of their employees they are creating a culture in their organization that encourages employees to manage stress by living a naturally more balanced lifestyle.


About the author

Hi! I am C G Abilasha, I am doing my triple major in Psychology, English literature and journalism from Mount carmel college, Bangalore. I love all things related to the mind and how it works and how we can use and change it. But, Do I know any psychology jokes, you ask? I am A-Freud not. I’m interested in pursuing I/O psychology in the future. In my free time, you will find me playing with my dog and reading books.


  • Tran, C. T. H., Tran, H. T. M., Nguyen, H. T. N., Mach, D.N., Phan, H. S. P., Mujtaba, B. G. (2020). Stress Management in the Modern Workplace and the Role of Human Resource Professionals. Business Ethics and leadership, 4(2), 26-40.

  • TY - JOUR AU - Panigrahi, Ashok, PY - 2017/01/01 SP - 154, EP - 160, T1 - Managing Stress at Workplace VL - 3, JO - Journal of Management Research and Analysis.

  • Panigrahi, Ashok, Managing Stress at Workplace (2016). Journal of Management Research and Analysis, October-December, 2016; 3(4): 154-160, Available at SSRN:

  • Holman, D., Johnson, S., & O'Connor, E. (2018). Stress management interventions: Improving subjective psychological well-being in the workplace. In E. Diener, S. Oishi, & L. Tay (Eds.), Handbook of well-being. Salt Lake City, UT: DEF Publishers.


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