STRESS

STRESS IN ORGANIZATIONS

As the pace at which our society operates increases, the pressures for every member of society to keep up with this pace also increase. Many of these pressures affect people through their jobs. Stress has become the "buzzword" that many people use to describe the impact that these pressures cause. In the short-term, stress can enable individuals to meet high levels of demand or pending deadlines. Prolonged stress, however, has been shown to cause illness and other conditions that can have detrimental effects on an employer's workforce. As Leon Warshaw noted in 1979 in his book on dealing with stress in the workplace: "Stress affects personality, modifying our perceptions, feelings, attitudes and behavior. And it reaches beyond its immediate victims to affect the political, social and work organizations whose activities they direct and carry out." In other words, the increasing rate of stress at work has wide-ranging effects—absenteeism, impaired teamwork, workplace violence, decreased efficiency, increased rates of physical and mental illness, employee burnout, risk of discrimination and growth in early retirement.

In his 2004 article "Workplace Stress Sucks $300 Billion Annually from Corporate Profits," Ron Ball cites a recent study by Ravi Tangi that establishes a formula for measuring the "hard costs" of stress on business as whole. This formula quantified stress as causing the following:

• 19 percent of absenteeism
• 40 percent of turnover
• 55 percent of employee assistance programs
• 30 percent of short- and long-term disability
• 10 percent of drug plan costs
• 60 percent of total workplace accidents
• 100 percent of workers compensation and litigation complaints

There are many factors that contribute to making a workplace stressful. Research clearly indicates that certain jobs are more stressful than others. For example, people who work as police officers, fire fighters, air traffic controllers, and elected officials are exposed to higher levels of stress that people who work as janitors, florists, medical records technicians, forklift operators, librarians and musical instrument repairers. The factors that contribute to making some jobs more stressful include: level of decision-making required; level of monitoring workers must endure; unpleasant or dangerous physical or emotional conditions; repeated exchange of information with others; and whether job tasks are generally structured or unstructured.

Understanding the factors that contribute to creating stress in the workplace can help employers begin to manage stress among the workforce. The rest of this section will describe some of the detrimental effects of stress on the workplace and offer potential solutions for employers to minimize the potential harm to employees and to the work environment as a whole.

CONTROLLING ABSENCES

In increasing numbers, employees are calling in "sick" when they are really suffering from stress. A 2005 survey reported in the Silicon Valley/San Jose Business Journal found that only 38 percent of the employees who called in sick were actually suffering from a physical illness. The other 62 percent of these workers who failed to show up were dealing with stress, family issues, morale issues, motivational issues, etc. These results indicate a need for employers to implement some type of absence control measures.

Research from a wide range of organizations from around the world indicates that about 5 percent of the workforce accounts for about one-third of the absences, or lost days of work. This same research indicates that younger workers often have more absence patterns than older workers. Also, workers with the best attendance records are not always the healthiest or most fit employees. In many instances, the workers with poor attendance records demonstrate poor irregular attendance problems at previous jobs, and within the first six months of any new job. Therefore, employers must take note of attendance patterns of prospective workers (when available) and pay close attention to attendance issues during probationary periods for new hires. Second, employers must set clear rules for attendance at work and identify disciplinary rules that will be enforced if workers fail to comply with the attendance rules. Supervisors must be adequately trained to set for these rules and enforce them for the employer. Further, the employer could examine monthly or quarterly budget reports that review the absenteeism statistics for each department of the company. If there is one department that seems to be experiencing higher-than-normal rates of absenteeism, it could be indicative of stress or morale problems that the employer may need to address.

TEAMWORK ISSUES

Traditional research has taught us that teamwork in the workplace is generally desirable and tends to produce positive results. It is important to note, however, that many workplace teams fail to produce positive results because people often prefer to worth with other people who are similar to them. These teams are often comprised of workers who come from diverse backgrounds, and they bring their own biases and cultural perceptions to the team dynamic. On some teams, this diversity can add richness and depth, and on other depths, this diversity facilitates the creation of barriers between team members. Employers can avoid breakdowns in teams by assigning manageable tasks to teams and setting reasonable deadlines for completion of these tasks. Also, employers should clearly define the charge and expectations for the team project and how it should undertake its mission. The less time teams have to get mired down in harmful infighting, the greater the chance of success.

WORKPLACE VIOLENCE

The following scenario is becoming increasingly typical: In December 2000, Michael McDermott, a software engineer at Edgewater Technology, selects and shoots co-workers in his Wakefield, Mass., office. Seven people die. Employers at the Internet solution provider had recently told McDermott that wages would be garnished from his paycheck to pay the IRS for back taxes.

Because of their increasing frequency, violent acts are now considered a major workplace safety and health threat. A 1999 study by Yale University's School of Management, which surveyed workers throughout the country asked, "How often are you angry at work?" and more than 20 percent of respondents answered, "All the time." That seed of dissatisfaction often grows as time passes. The Occupational Safety and Health Administration estimates that two million workers are victims of violent workplace acts each year. By 2003, workplace violence—including assaults and suicides—accounted for 16 percent of all work-related fatal occupational injuries. Homicides are annually among the top three causes of workplace fatalities for all workers.

Organizational interventions aimed at preventing workplace violence satisfy employers' moral and ethical obligations to provide their employees with safe work environments. Moreover, such interventions also help companies reduce their costs and comply with the law. Workplace violence can cost employers large sums of money. Employers must pay for victims' medical and psychiatric care, repairs and clean-up, insurance rate hikes, and increased security measures. Additional costs are incurred as the result of absenteeism, as the average victim misses 3.5 days of work following an incident.

Employers must also be concerned about workplace violence for legal reasons. The General Duty Clause of the Occupational Safety and Health Act states that employers can be cited for a violation if there is a recognized danger of workplace violence in their establishment, and they do nothing to prevent it. In addition to being fined by OSHA, employers can also be sued by victims of violence. The legal test for determining employer liability for violent acts committed by non-employees is as follows. The employer is liable if:

• it knew or should have known that a criminal act was probable (e.g., it was warned about threats made to an employee); and
• it could have reasonably protected the employee from criminal assault, but failed to do so; and
• its failure to protect the employee caused the subsequent injuries to occur (in other words, had the employer done its part, the injury would not have happened).

A similar legal test is used to determine employer liability for violent acts committed by employees. An employer is liable for negligent hiring if it knew or should have known of the applicant's violent tendencies, yet decided to hire that person anyway. In a similar vein, successful negligent retention suits can be filed when an employer retains a current employee despite knowledge of violent tendencies. Employers are liable in these situations if they had (or should have had) information signaling the danger of future violent acts, yet ignored this danger.

So what can a company do to minimize the occurrences of violent acts? In 2002, OSHA issued a set of guidelines listing some of the security measures that can be implemented to reduce the threat of violence. These measures include:

• provide improved lighting and employee escort services to and from parking lots
• ensure reception areas can be locked when no one is on duty
• create a policy stipulating that there are always at least two people on duty
• provide security systems, such as electronic access control systems, silent alarms, metal detectors, and video cameras
• establish policies regarding visitor access (sign-in, identification badges)
• equip field staff with cellular phones
• install curved mirrors at hallway intersections or concealed areas as well as bullet-proof glass
• provide safety education for employees so they know what conduct is unacceptable, and what to do if they witness or are subjected to workplace violence
• provide drop safes to limit the amount of cash on hand
• instruct employees not to enter any location where they feel unsafe.

An employer should consider these measures in light of the level of risk at a particular worksite. For example, metal detectors and bullet-proof glass would be appropriate for inner-city emergency departments, abortion clinics, and psychiatric facilities where violence is highest. In addition to implementing OSHA recommendations, an employer can further minimize violent acts through the use of pre-employment screening, strict anti-violence and anti-drug/alcohol policies, and training. All workers should be taught how to recognize early signs of a troubled or potentially violent person and how to respond to such persons. Managers should be further trained on how to properly handle terminations since such acts often trigger violence.

DECREASED EFFICIENCY AND
INCREASED RATES OF PHYSICAL
AND MENTAL ILLNESS

Excessive amounts of stress can have debilitating health effects, such as ulcers, colitis, hypertension, headaches, lower back pain, carpel tunnel syndrome and cardiac conditions. Stressed workers may perform poorly, quit their jobs, suffer low morale, generate conflicts among coworkers, miss work, or exhibit indifference toward coworkers and customers. These stress-induced outcomes now cost U.S. businesses somewhere between $200 and $500 billion per year.

Stress can sometimes cause workers to turn to drugs and alcohol. The use of drugs and alcohol is pervasive in the United States. For instance, nearly 10 percent of all full-time employees use illicit drugs (primarily marijuana and cocaine), and another 10 percent are alcoholics. An increasing number of U.S. workers are taking some type of stimulant—beyond caffeine. A 1999 Drug Enforcement Agency survey estimated that at least 15 percent of United States adults methamphetamine. Substance had tried abuse costs U.S. employers an estimated $75 billion a year in terms of lost productivity, accidents, workers' compensation, health insurance claims, and theft of company property.

While most organizations are taking steps to keep their workplaces drug-free voluntarily, government contractors are required to take such steps. The 1988 Drug-Free Workplace Act states that government contractors must ensure a drug-free workplace by notifying employees about:

• the dangers of drug abuse in the workplace;
• its policy of maintaining a drug-free workplace;
• any available drug counseling, rehabilitation, and employee assistance programs; and
• the penalties that may be imposed upon employees for drug abuse violations occurring in the workplace.

Employers can combat substance abuse at the workplace by screening out applicants and discharging employees who have been identified as substance abusers. Substance abuse is most commonly detected through urine and blood tests. About two-thirds of all corporations presently require drug testing of current or future employees. Supervisors can also detect substance abuse by observing their employees' behavior. Some of the symptoms to look for are mood swings, slurred speech, flushed cheeks, frequent absences on Mondays and Fridays, missing deadlines, and overreacting to criticism.

Detecting substance abuse early can be quite useful to a company, as illustrated by the findings of a U.S. Postal Service study. The Postal Service tested 5,465 applicants for drugs, but did not use these results in hiring decisions. About 4,000 of these applicants were eventually hired. In a three-year follow-up, employees who tested positive had a 66 percent higher absenteeism rate and a 77 percent greater termination rate than those testing negative. The Postal Service now estimates that had it not hired the drug-positive group, it could have saved $150 million in absenteeism, rehiring, retraining, and injury compensation costs.

When dealing with current employees with drug problems, some employers take a rehabilitative approach: they help abusers overcome their problem through remedial counseling. Employee assistance programs (EAPs) employ mental health professionals (usually on a contract basis) to provide services to workers who are experiencing substance abuse or other personal problems. For example, the EAP at the Chase Manhattan Bank helps employees resolve problems of drug or alcohol abuse, child care, elder care, marital or family relationship concerns, emotional distress, anxiety, depression, or financial difficulties. Employees may seek help on a voluntary, confidential basis, or may be referred by a supervisor who suspects that the employee's declining job performance is being caused by personal problems.

Many companies currently use EAPs. The potential payoff of an EAP is evidenced by a study that found that every dollar spent on an EAP returned an estimated $3 to $5 in lower absenteeism and greater productivity.

Employers must develop written substance abuse policies that specify their approach to handling these problems. The policy should specify the prohibited behaviors and note the consequences employees will face if they break the rules. Such policies serve two purposes: (1) to act as a deterrent and (2) to establish a sound legal basis for taking punitive action (e.g., suspension or discharge).

EMPLOYEE WELLNESS

Employee wellness is a relatively new human resource management focus that seeks to eliminate certain debilitating health problems (e.g., cancer, heart disease, respiratory problems, hypertension) that can be caused by a person's poor lifestyle choices (e.g., smoking, poor nutrition, lack of exercise, obesity). Such health problems have become quite prevalent: Cancer, heart, and respiratory illnesses alone account for 61 percent of all hospital claims. These ailments can cause workplace problems such as absenteeism, turnover, lost productivity, and increased medical costs. For instance, people who have high blood pressure are 70 percent more likely than others to have medical claims of more than $5,750 per year, and the cost of medical claims for smokers is 22 percent higher than it is for nonsmokers.

Many organizations attempt to help employees improve or maintain their overall health by offering them employee wellness programs. Such programs provide employees with physical fitness facilities, on-site health screening, and programs to help them quit smoking, manage stress, and improve nutritional habits. Employee wellness programs can be quite effective. Research indicates that participation in a wellness program reduces both absenteeism and turnover, and increases productivity. A study conducted at Mesa Petroleum, for example, found that the productivity difference between participants and non-participants amounted to $700,000 in the first year, and $1.3 million in the second year.

If they are to work, wellness programs must successfully enlist "high-risk" individuals—those in greatest need of the program. Unfortunately, most employees who participate in wellness programs are those who fall into a low-risk category. Because at-risk individuals do not seek help, many employee wellness programs fail to meet their objectives. Employers must, then, find some way to motivate high-risk individuals to participate. Some companies offer positive inducements (e.g., cash bonuses) to individuals who participate; other companies focus their efforts on non-participants by imposing certain penalties. For example, they may increase insurance premium contributions of non-participants or raise their deductible levels.

Companies can help eliminate, or at least minimize, job stress. A firm can eliminate many sources of employee stress by implementing effective HRM practices. For instance, the implementation of effective selection and training procedures can help ensure that workers are properly suited to the demands of their jobs. Providing clearly written job descriptions can reduce worker uncertainty regarding job responsibilities. The use of effective performance appraisal systems can relieve stress by clarifying performance expectations. And the implementation of effective pay-for-performance programs can relieve stress by reducing worker uncertainty regarding rewards.

Unfortunately, companies cannot always eliminate all sources of job stress; some stress may be inherent in the job. For instance, some jobs are dangerous (e.g., logging, police work, firefighting), and some place the worker in demanding interpersonal situations (e.g., customer relations specialists). When job stresses cannot be relieved, the worker must learn to cope with them. A firm can help by offering employees stress counseling or by providing them the opportunity to "work off" their stress through physical exercise. Some of the organizational interventions described earlier, such as the use of EAPs and wellness programs, can be helpful in this regard.