To: Mr.

Sumendra Perera, CEO

From:G.S. Perera, Human Resource Manager
Date: 30th November, 2010
Subject: Work place stress in ABC (Pvt.) Ltd.

In response to your request of 3rd November, I have observed workplace stress in our
organization in last few weeks. I’m pleased to present the enclosed report which summarizes
causes, Contributory factors, Impact and cost of stress and suggestions to reduce stress for higher
performance.

Stress can be defined in many ways. In one way it can be defined as “Non specific response of
the body to any demands made up on it”. In another way Stress can be defined as “body's
reaction to a change that requires a physical, mental or emotional adjustment or response”. Stress
can have positive consequences as well as negative consequences. Optimum level of stress
improves the employee performance and too little or too much job stress leads to poor
performance. (figure1). Poor performance incurs a big economic cost to the organization. As
positive consequences are favorable to the organization and management of negative
consequences is important to have higher performance I will focus this report on negative stress.

Work stress can be defined as the” harmful physical and emotional responses that occur when
the requirements of a job do not match the capabilities, resources or needs of the worker". Work
stress arises when demands exceed abilities, while job-related strains are reactions or outcomes
resulting from the experience of stress.

Job stress poses a threat to the health of workers. Stress has long been associated with the onset
of significant physical and mental health problems. In the organizational environment, stress has
been implicated in the deterioration of performance efficiency by both managers and
subordinates. When performance efficiency suffers the quality of the overall organizational
environment and productivity deteriorates. As More than 95% of the workers in the organization
are factory employees and they are directly related to the productivity of the organization I will
focus on factory worker stress as on your request. Based on my observation I have identified

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various causes of stress in our organization and divided those causes in to four areas namely
Extra Organizational causes, Organizational causes, Group causes and Individual causes.
(figure2).

Extra Organizational causes are the factors outside the organization. This lead to reduce the
performance of the worker directly or indirectly. The major cause is family matters. Political and
legal conditions, Economic conditions of the country, Social and cultural conditions will also
lead the worker to be stressed.
Organizational stress is emerged from the reasons related to organization or job assigned to
individual. The main course which I have identified under Organizational stress is Excessive
work load. Day target of an employee is very difficult to achieve. As the worker find it is
difficult to reach the day target he/she is will get stressed. Unable to cover the day target in the
day time cause him to work overtime without getting paid. Again it will lead to increase his/her
stress. Also the wage paid for employees is inadequate to cover their expenses of the worker.
Many problems will arise from this matter.

Another major cause which I have identified is poor working environment. Heat in the working
environment, inadequate lightning, Malfunctioning equipments and uncomfortable seats leads
the worker to work under stress. Another major reason which I have identified is problems
regarding supervisors. They scold the worker even for a small mistake and he /she pressure the
worker unnecessarily. Harshness, Harassment and Discrimination also can be seen with
regarding supervisors. When workers are constantly pressured by the supervisor to produce
more, faster and with limited time, anger and frustration are natural byproducts.

There is only a downward communication in our organization. Top level managers always pass
the instructions, targets and deadlines to the factory workers but the workers do not get a chance
to communicate their suggestions and work related problems. Also there is no proper grievance
handling system in our organization. Workers always face problems in their working
environment but when they inform it to their immediate superior they do not take any actions
regarding the problem and the worker is not allowed to come to the Human Resource department
to inform it because there is a closed door policy in our company. Therefore the worker does not

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get any chance to find solutions to their work environment problems. This will lead the worker
to work under stress forever.

Since the decision making is done by the top management and workers do not get the chance to
participate decision making. Most of the time workers are not satisfied with the decisions taken
by the top management. Not getting the chance to participate in decision making which affect
them lead dissatisfaction of workers. Advance technology is also another cause. Sewing
machines in our organization is in a high technological standard and workers face many
difficulties in using the machines. There is no opportunity to promotion for the workers and that
may leads them to be stressed.

Group causes are the factors arising by group dynamics. Interpersonal and intergroup conflicts
play a major role. Personalities and perception of people are different. Workers in our factory are
from different area of the country. Their values, attitudes and perceptions are different from each
other. Therefore the possibility to have Interpersonal and intergroup conflicts is high.

Individual causes are those caused by the factors internal to the individual. Health problems are a
big leading factor of stress. When one worker is suffering from fever, there is a possibility for
other workers to influence by it. Likewise any illness can be spread over other people. Other
than that role conflicts also lead to increase level of stress of individual person.Apart from the
above causes I have identified several contributing factors which leading for stress. Since each
individual is different from others, sometimes contributing factors may lead to increase the stress
level of the worker. Age, sex, hometown, Family background can be identified

There are various impacts of work stress. Stress can results physical, emotional, and behavioral
problems which can affect workers health, energy, well-being, mental alertness, and personal
and professional relationships. It can also results defensiveness, lack of motivation, difficulty
concentrating, errors in production, reduce the quality of work, reduced productivity and
performance. The organization will is incurring a big cost from the above byproducts of stress.

Too much stress can sometimes results minor problems such as sleep loss, irritability, backaches,
or headaches, and can also contribute to potentially life threatening diseases such as high blood

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pressure and heart disease. One of the major impacts I have seen is Absenteeism.
Stressed out employees are more likely to miss work both as a coping mechanism and due to
health related problems. Workers experiencing high stress were over two times more likely to be
absent more than five times per year. Lost productivity and replacement costs make absenteeism
a costly consequence. The organization has to incur additional overtime wage cost to cover up
the production for absent days. The electricity and other additional overhead expenses will be
occur during the overtime period

Another impact is accidents. Stress causes a narrowing of attention, preoccupation, and fatigue -
a sure recipe for workplace injuries. Stressed out employees trying to do more with less are also
likely to take shortcuts which lead to accidents. With increasing work demands and time
pressures, people are less likely to take safety precautions, use proper equipment, and implement
appropriate body mechanics. Workers who have high stress are 30 percent more likely to have
accidents than those with low stress. Stress related accident claims are, on average, two times
more costly than non stress related cases. When a worker face an accident the organization will
incur a cost to give medical treatment. If the injury is serious the worker has to be take to the
hospital. Since the organization has to take the responsibility for any injury which results from
accidents in the organization, employer has to bear the cost of accident according to the law.

Grievances also can be occurring due to stress. Frequent grievances are both a legitimate
warning sign that organizational problems exist and a less extreme way of expressing
powerlessness, which in itself indicates organizational problems. The effect of a grievance
goes far beyond the employee and his or her supervisor. On average, every filed grievance
translates into approximately 80 hours of lost productivity by the worker filing the
complaint and by co-workers due to morale problems.

Occurring conflict and Interpersonal Problems is another issue. When personality conflicts spill
over into the workplace and it hinders getting the job done. Some workers are trying to be the
best production line by disturbing the other lines for their production. This will result Overall
decline in the organizational performance as the production of all production lines are equally
important to the organization. With a more diverse work force, the increased use of teams,
interpersonal demands on employees are increasing. This in itself creates tremendous stress. In

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fact, interpersonal demands due to working with team members and supervisors were the most
significant cause of burnout. Thus, in our organization, we have people who are already under
stress from a variety of causes put into an interpersonal context that, by its nature, is very
stressful. Being already stressed out, they are less likely to respond appropriately and
constructively, further heightening the likelihood they will find such a demanding interpersonal
context even more difficult and depleting. Obviously there is also a cost of conflict resolutions
and some times the property may get damage due to conflicts and the organization has to incur a
replacement cost for them.

Resistant to change can also be occurring when the company changes the working environment
or any other practice. Therefore there is an additional cost to the organization to train and
educate the workers about the organizational change. Increasing health problems can be seen as
a result of stress. When the workers are constantly reacting to small or large stressful situations,
without making physical, mental, and emotional adjustments to counter their effect, and the
organization is experiencing the threat of stress that can hurt workers’ health and well-being.
Organization has to spend money for providing medical facilities for the workers.

Ultimately the worker will try to leave our organization as a result of stress. According to my
observation, turnover thirty five percent of employee turnover is related to stress. When
we consider the cost of lost productivity and of recruiting and training new employees,
stress induced turnover is a very expensive problem. It is an additional cost to the company
to train and replace another worker for the resigned worker.

After analyzing those stressors I suggest several steps to reduce the stress level of the employees.
My one suggestion is to reduce the day target and giving a bonus for the employees who achieve
their target before the targeted time. In addition to that increase the wage by Rs.500/= for all
workers is suggested. We can assign to the factory to take advices for family problems as well as
work related problems.

Production area can be air conditioned to avoid heat and suitable lightening facilities can be
provided. Apart from that, malfunctioning equipments and broken seats can be repaired or

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removed from the production area. Proper training can be given for the supervisors for fair and
effective supervising.

A Two way communication can be introduced for effective communication. Apart from that we
can take steps to give the worker a chance to participate in the decision making in to some
extent. For the above two things keeping a suggestion box and directly asking from them can be
done. Proper grievance handling procedure can be introduced. As the first step for that we can
keep one day workshop to give some kind of knowledge regarding how to handle grievances.
Apart from that the organization should practice open door policy for grievance handling.

A proper training can be given to the workers to increase the ability to cope up with advanced
technology and to reduce interpersonal and inter group conflicts. Proper induction can be done
for the workers to eliminate role ambiguity, interrole and intrarole conflicts. A good performance
evaluation system should be introduced and can take steps to implement promotion system based
on the evaluation results and higher wage can be given for the higher grades. Workers can be
grade on their ability and after identifying a performance improvement a higher grade can be
given. Keeping a nurse in the medical centre is not sufficient and can make steps, a doctor to
visit the factory once a week to reduce health problems.

In this report the relationship between work stress and the worker performance is Cleary
elaborated and included four types of causes of stress namely Extra Organizational causes,
Organizational causes, Group causes and Individual causes. Contributing factors such as age,
sex, hometown is also including in this report and then the impact and the cost of stress to the
organization has explained. The importance of managing or reducing work stress to improve
performance is clearly stated and finally the suggestions to reduce work stress in order to
improve the organizational performance are included.

Feel free to call if you want to discuss the report or need additional information.

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Appendix

figure1

Figure2

Causes of work stress

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References

Stephen P Robinson, Organizational Behavior, 1996, 7th Ed.

Mullins,L.J., (1993-2002) Management and Organizational Behavior, 3rd Ed.
Kreitner and kinicki, Organizational Behavior, 1992, 2th Ed.
Fred Luthans, Organizational Behavior, 1995, 7th Ed.
http://www.athealth.com/Consumer/disorders/workstress.html
http://humannatureatwork.com/Workplace-Stress-1.htm
http://www.eoslifework.co.uk/gturmap.htm
http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1074428029&type=RESOURCES
http://www.hillsorient.com/articles/2005/04/209.html
http://changingminds.org/explanations/stress/stress_causes.htm