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The Destructive Impact of Stress on Employee Performance

impact of stress on employee performance

This article originally appeared on the SimplyHired blog.

The No. 1 enemy of an employee’s success is stress.

Often the source of stress is change, yet change is unavoidable. If leaders were to consider this lever, they could modernize the notion of what an engaged employee looks like and achieve new heights of engagement and productivity in the workplace.

The main reason stress is destructive to organizations is because it creates instability, often at a time when the organization is most in need of consistency. For instance, when the business is under pressure to meet a deadline, optimal performance is required by each individual. However, this stressful situation might cause some employees to crack and some leaders to snap.

Hiring and Engagement Tools Ignore Change

The pressures of business demand that management be on the lookout for new ways to engage employees.

An influx of tools purport to aid management’s ability to recruit the right employees and engage them to maximize the organization’s productivity. The full spectrum of typical HR activities – from pre-and post-hiring tests and assessments, to recruitment campaigns that promote the essence and purpose of the organization – all have the same weakness: they fail to account for the role of change in the equation. Even with a multitude of tools, sustained and consistent engagement and productivity has proved elusive for most organizations.

The three common ways organizations miscalculate the impact of change are:

1. Recruit to the Culture

Employer branding, purpose-driven organizational design and brand ambassadors share a common goal: making an organization attractive to top talent. Each of these approaches recruit individuals to the company as if the organization, its leadership and the business environment are fixed.

These hiring methods that attract candidates to the culture might also lead to havoc by creating a self-perpetuating system that inadvertently reinforces negative attributes. I saw this with the rise and fall of a coworker. Mandy had moved up in the ranks of the small company and in a short amount of time she was put in charge of the meeting planning department. By all accounts she was exceptional at her job, but as natural attrition occurred on her team, she always hired a replacement who was exactly like her. In time her team was comprised entirely of people who possessed nearly identical ideas, habits and experiences. The department continued to serve the organization well until a new senior leader wanted to shift the strategic use of meetings and events. Years of having recruited to the culture left the team too weighted with a particular capability set. It was unable to adapt, and management wiped out the department rather than try to fix it.

2. Fail to Anticipate Stress

Personality tests and work-style assessments that attempt to pinpoint candidates’ strengths, attitudes and motivators determine if prospective employees are a good fit for the team, but they do not predict if the employee will be productive, happy and committed long-term. That’s because these approaches to achieving employee engagement identify the nature of people’s character and values, but what the business needs to know are the drivers that determine how employees will behave, even as pressure rises.

As soon as any aspect of the situation shifts, whether at work or at home, it has the universal effect of diminishing productivity. Stress at work such as a new boss, a merger, competitive pressures or a new strategic direction, as well as tensions from other sources – discord at home, health issues or strained relationships – all impact each employee’s ability to be productive and attentive to their work. 

3. Rely on Engagement Surveys Alone

It’s a perilous combination: offering employees the opportunity to give a thumbs-down to management decisions or the business environment without management having enough understanding or will to act on the information and fix the problem.

An over-reliance on engagement surveys could give management a feel-good activity that has the appearance of being responsive but actually just reveals the sources of employees’ stress. Even more disconcerting, this exercise in simply recognizing the state of engagement has the opposite effect when employees realize that the regular pulse-checks are disconnected from the organization’s health because “engagement” has been defined too broadly and there is no plan to act on the survey results.

The current focus on measuring engagement, particularly in real-time, plays an important role in diagnosing issues, but it does nothing to mediate the unavoidable discrepancies between what employees want and the business needs. Leadership might learn what to fix but not how. 

The Employee Engagement Revolution Starts with Recruiters

Paying attention to the impact of stress on individuals’ motivations, work styles and productivity habits would make it possible for the organization as a whole to weather change without compromising engagement.

This is a revolutionary way of re-imagining what engagement looks like.

Recruiters who acknowledge that business conditions are in constant flux and understand that engagement must remain at an optimal level might want to recruit for their culture, account for stress and constructively use engagement surveys, but there is no simple way to do that, according to Pam Teagarden, an engagement expert and the founder of Authentum.

Organizations are made of up individuals, so it stands to reason that thriving people constitute a thriving organization. Teagarden’s research conducted at the University of Pennsylvania has generated an assessment system that predicts how business goals can be achieved by employees who are under stress. Her research shows that it’s possible for employees to be engaged at work even if disengaged in other aspects of their lives.

The outcome of this research is BASIS (Business and Attitude Style Information System), which Teagarden says can model how pressure on people impacts the business. Armed with this information, individuals and the organization can identify a path to success regardless of stress.

In our rapid and endless state of change, organizations must withstand and even thrive during unprecedented pressures. If employees can adapt their productivity levels without sacrificing their engagement levels, the organization will have a stable foundation for achieving its goals. In this environment change may still be stressful, but employees and the organization can be ready for it.

Leading during change requires excellent communications skills. Download this free 47-page eBook Character Trumps Credibility to start building your story bank and increase your effectiveness.

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