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Work Stress and its impact on the Performance of Employees: A study on banking sector of District hangu

Work stress has become a common problem throughout the industrial world. It has increased its boundary over the individual performance, mental health and well being. Over the past fifty years a lot of research has been carried out on stress and it has been proven that intense and prolonged stress leads to negative impact on the individual performance, mental and physical well being.

So the basic aim and purpose this project is to point out relationship between stress and the performance of employees working in banking sector. Target populations for this project were the employees of banks working in District Hangu. The random sample technique was used to single out 50 participants for this study. A questionnaire consisting on two sections was used to collect the primary data. The collected data were further analyzed through mean and correlation. The questionnaire internal consistency was tested via Cronbach’s reliability test.

The coefficient values of demands, relationship and supports are positively related to employee performance but its p-value indicates that this relationship is statistically insignificant. On other hand the coefficient values of control, role and change is negatively related to employee performance but its p-value also indicates that this relationship is statistically insignificant.

Report indicates that there demands, relationship and supports are positively correlated to employee performance respectively, while control, role and change are negatively correlated to employee performance respectively. The value of given variables shows that the association of strength is week.

Chapter 1: INTRODUCTION

Introduction of the project

Now-a-days stress has become an integral part of jobs in every sector. Competition is growing day by day thus increasing the levels of stress among employees. The financial crisis and recession of 2008 around the world further contributed in mounting higher levels of stress among employees. The organizations, to make themselves efficient in utilization of resources, have gone through entire restructuring, layoffs, downsizing, and mergers. This has resulted in unstable employee-employer relationship which has caused a great deal of stress among employees and research has shown that high levels of stress seriously affect employee’s job performance and commitment towards organization. So the basic aim of this study is to check the impact of stress on the performance of the employees in banking sector.

Background

Work stress has become a common problem throughout the industrial world. It has increased its prevalence over the individual performance, mental health and well being. Over the past fifty years a lot of research has been carried out in the realm of stress and it has been proven that intense and prolonged stress leads to negative impact on the individual performance, mental and physical well being (Cooper, et al, 2001). Basically what is stress? Researchers can not agree on a single definition for stress on account of its complex nature (Kahn and Boysiere, 1992; Quick, 1994; Rees and Redfern, 2000). However, according to early stress researcher, Selye (1976) stress as a basically physiological reaction to certain threatening environments events. Topper (2007) defines stress as a person’s psychological and physiological response to the perception of demand and challenge. Most researchers classify stress to be either good Stress or bad stress. Good stress or eustress being the kind of stress that is positive and motivates employees to perform (Bland, 1999) and bad stress or distress being the kind of stress that brings negative consequences. In short, negative stress harms not only to the employees mental and physical health but also it harms the performance of the employees.

However, some studies have shown that if one can manage stress effectively, it can lead to a positive outcome and response. Jennifer (1996) and Selve (1976) proposed the positive affective response to the stress process and coined the term ‘eustress’. Other influential writers have also suggested that stress is not inherently maladaptive (Hart, 2003; Hart & Cotton, 2002; Tedeschi & Calhoun, 2004). Stress can energize, stimulate and induce growth and productivity in one’s profession if aptly managed.

It is important to add here that the performance of employees would be taken as dependent variable while the following will be independent variable of the study:

1). Excessive work demand/ work overload

2). Control

3). Relationship

4). Role

5). Change

6). Support at work

Introduction of the organization

Banks play a key in the process of economic growth in a country. Banking industry in Pakistan has seen great transition during 63 years of its history. Now in Pakistan, banking plays an important role in providing safeguard for national assets.  The whole of the economy and financial transitions are carried out through banks. There are a lot of banks which are working in Pakistan and they are supervised by State Bank of Pakistan.

The banking sectors in Pakistan has undergone during the past decade due to rapid and striking changes caused by the advent of technological revolution.  Everyone in their work is exposed to tension and anxiety as they gets through the duties assigned to them. Banking industry which is the backbone of the country’s economy is not an exceptional one. The job nature of banking employees is very tedious as it involves the direct customer interaction in all levels. So this study aims to find out the relationship between work stress and employees performance. For existing study I have selected both public and private sectors of selected banks which resides in District Hangu

Objectives of the project

The main objective of this study is to investigate the impact of job stress over employees work performance. The following objectives will also be focused.

• To measure the level of  employee work stress in banking sector
• To measure the employee performance level in banking sector
• To find out the relationship between work stress and  employees performance

Significance of the project

There are two primary groups that may benefit from this study. The first group, consisting of employees working in banking sector in Hangu who may learn to identify ways that stress negatively affects their work performance. Identifying the negative effects may enable them to take necessary action to cope with stress. By sharing this knowledge, employees can act as a vehicle to help management implement appropriate stress reduction programs. The second group that may benefit from this study are educators/ researchers who can use these findings as a valuable guide to incorporate into their research/ projects. By emphasizing to students the importance of developing programs to deal with stress, the students may be able to transfer this knowledge to the workplace, thereby improving the quality of the work environment.

Chapter 2: Review of Literature

It is an evident fact that those who are working in human service professions where employees are bound to take care of others’ health, safety or well being are must open to stress. According to a report issued by the National Institute for Occupational Safety and Health (NIOSH) (1999) that approximately 26% to 40% surveyed workers in the US deems their job as STRESSFUL. Stress now-a-days has attached with every human being  in general and with every workers in particular working in competitive organizations. Stress, on one hand, impacts the human health while on other hand; it works as motivational tool for employees. Stress enables the workers to face the challenges of the present day and even it enables them to timely carry out the assigned tasks.

The advent of technological revolution has left a massive impact on all sectors. Such revolution not only influenced on conventional patterns of each organization but also effected on policies that compelled each sector for adopting new reforms and put them on a new direction. Here, banking sector is one of the most effected sectors which encompassed the employees’ all related domains and their personal relations, such as: social economic and psychological. It was gathered from the available literature that approximately 60% employees of banks directly or indirectly have affected by one or other problem that brought by above referred changes. So all related domains of employees affect both their health and performance.

Research has shown that job related stress has sufficient impact on productivity, absenteeism, turnover and health related issues of employees. Apart of such severe results of work related stress also reduced the services of customers that often due to employees’ lethargy, depression and exhaustion. According to (Matheson and Ivancevich, 1982) that “cast incurred on reduced productivity, absenteeism and employee turnover is mainly on account of work stress”.

Rapid changes have compelled the workers to learn new skills to overcome on the increased complex work. As per report issued by the Princeton Survey Research Associates in (1997) that “approximately   75% employees are confronted with work stress that workers faced generation ago”. It was also contributed by many researchers that “low job satisfaction was associated with high stress”.

Since work stress affects the health of employees. So, organizations pay more attention toward financial compensation of workers to cope with work related stress problems. Even work stress and its impact on the performance of employees has also reduced the attention of researchers towards the family stress. According to (St. Paul Fire et al, 1992) that “work related problems have dominated over family problems”. That is way, a huge literature dealing with work stress has been added or reflected in the inventory of stress and further have been published in various journals especially in medical as well as psychological literature.

Employees working in banking sector posses many responsibilities. As (Cobb, 1975) has identified that “responsibility load creates severe stress among workers and managers”. An individual manger plays a vital role in coping wit the enormous responsibilities. Managers are the source of dealing stress. When there is lack of cooperation between boss-subordinate that may lead to stress. It was also pointed out that lack of management support, work overload, role conflict, and time pressure, relationship (poor and good) with clients, changes, long working hours, demands, and inadequate performance.

When employee does not able to cope with increased demands or unable to maintain a balance between family life and work life caused stress and finally reduces the employee performance. It was also contributed by (Aderson, 2002) that “a work and family conflict affects the performance of employees”. It was also observed that poor relationship may also cause stress. Apart of this, stress may also caused when employees working and he/ she feel that his/her work does not valued or his/ her personal needs are degraded and even stress may caused when employee perceives that he/ she does not involve in decision making by top management. In short, employees working in banks are under a great deal of stress on account of many antecedents of work stress.

Though many studies dealing with stress have been carried out in past two decades in many sectors, there are only few studies that encompasses local banking sector at district level. It is evident that I have gathered diverse theories that may vary from past research.  As we learnt that stress possesses both (1) positive and, (2) negative result on employees. This impact varies from district to district and province to province and country to country.  A lot of research has been carried out in big cities of Pakistan especially in Punjab but it is the first time that such project is carried out in South belt of KPK.

Chapter 3: Methodology

For the purpose of data collection, simple random sampling technique was used through which approximately 50 samples have been chosen from six major banks having branches in District Hangu such as: The Bank of Khyber, MCB, UBL, HBL, Bank Alfalah and Allied bank. The questionnaire was based on two sections. First section dealt with demographic information while second section was based on stress related and employees’ performance questions. It is also relevant to add here that stress related factors were tested via four points Likert scale (1= not applicable, 2=occasionally stressful, 3=stressful, 4=very stressful) while performance of the employees was noted through 5 points Likert Scale (1=Highly Disagreed, 2=Disagreed, 3=Neutral, 4=Agreed, 5=Highly Agreed).

3.1 Data Collection Sources:

Primary as well as secondary sources were employed. Secondary sources were (1) Published printed sources, (2) Books, and (3) Journals and Periodicals.

3.2 Data Collection Tools:

Closed ended questionnaire was developed for the purpose of collection of data for study. Through such questionnaire 36 questions were asked from the respondent the study.

3.3 Subjects/ Participants:

Target populations for this project were the employees of banks working in District Hangu and sample size were 50. Random sample technique was used. This is a technique in which each member of the subset has an equal probability of being chosen. A simple random sample is meant to be an unbiased representation of a group. I applied it while putting the following six steps into action. These were as under: (a) defining the population; (b) choosing one’s sample size; (c) listing the population; (d) assigning numbers to the units; (e) finding random numbers; and (f) selecting one’s sample.

3.4 Data Collection:

Data were collected via closed ended questionnaire. I assured quality control through well organized instrument comprising of two parts. Wherein part-I was based on demographic information of the employees. Part-II was exclusively focused on stress related factors and employees’ performance.

3.5 Data Processing:

The data were analyzed using simple mean and correlation techniques while the same data were analyzed through SPSS (V-16).

CHAPTER 4: DATA ANALYSIS

 

The data for this project have been collected via likert scale, so I hereby use the Cronbach’s Alpha in order to find out internal consistency of the items in the scale.

Table 1 Results of reliability test

Variables	Cronbach’s Alpha
Demands	0.714
Control	0.747
Relationships	0.535
Role	0.732
Change	0.66
Supports	0.807
Employee Performance	0.834

Interpretation

According to Uma Sekaran (2003), the closer the reliability coefficient Cronbach’s Alpha gets to 1.0, the better is the reliability. In general, reliability less than 0.60 is considered to be poor, that in the 0.70 range, acceptable, and that over 0.80 and 0.90 are good and very good. The reliability tests of our constructs happened to be in the acceptable to good and very good ranges. George and Mallery (2003) provide the following rules of thumb:“_ > .9 – Excellent, _ > .8 – Good, _ > .7 – Acceptable, _ > .6 – Questionable, _ > .5 – Poor, and_ < .5 – Unacceptable”. While increasing the value of alpha is partially dependent uponthe number of items in the scale, it should be noted that this has diminishing returns. According to above referred rules of thumb, the only variables in this project (relationship) that is 0.535 and stands POOR.

Table 2 Multiple Regression Analysis

 

Variables	Coefficients	t-Statistics	P-Value
(Constant)	1.292	6.831	0
Demands	0.231	0.925	0.364
Control	-0.253	-0.774	0.447
Relationship	0.487	1.68	0.106
Role	-0.203	-0.737	0.468
Change	-0.484	-1.71	0.1
Supports	0.267	1.125	0.272
R-Square	0.294
F-Statistics	1.669
a. Dependent Variable: Employee Performance

The coefficient value shows the direction and degree of effect of independent variable on dependent variable. If the value of coefficient is positive it shows that there is positive effect on dependent variable and vice versa. Table 2 result shows that the coefficient values of demands, relationship and supports are positively related to employee performance but its p-value indicates that this relationship is statistically insignificant. On other hand the coefficient values of control, role and change is negatively related to employee performance but its p-value also indicates that this relationship is statistically insignificant. The coefficient value suggests that if there is one unit change in demands, relationship and supports there will be about 0.231, 0.487 and 0.267respectively positive change in employee performance. The coefficient value of control, role and change suggests that if there is one unit change in control, role and change there will be about 0.253, 0.203 and 0.484 respectively negative changes in employee performance. The value of R² always lies in between 0 to 1. It shows percentage of change in dependent variable that has been explained by change in independent variables. According to result we can say that the value of R² is equal to 0.294, it indicates that 29.4% variation in employee performance has been explained by variation in independent variables. The value of F-Statistics shows that whether the overall model is statistically significant or not. The rule of thumb is if the value of F-Statistics is equal to or greater than 4 then your overall model is statistically significant. In this case the value of F-Statistics is less than 4; it shows that overall model is statistically insignificant.

Table 3 Descriptive Statistics

Variables	Mean	Std. Deviation
EP	1.3795	0.29875
Demands	0.9166	0.30053
Control	0.834	0.34314
Relationship	0.8147	0.30709
Role	0.8745	0.33543
Change	0.7701	0.33514
Supports	0.8993	0.36716

Descriptive statistics shows the statistical trend of respondents’ results, the mean value of employee performance (EP) is equal to 1.379. As performance of the employees was measured through 5 points Likert Scale (1=Highly Disagreed, 2=Disagreed, 3=Neutral, 4=Agreed, 5=Highly Agreed), so it shows that employees are highly disagreed.

The stress related factors were tested via four points Likert scale (1= not applicable, 2=occasionally stressful, 3=stressful, 4=very stressful). The mean values of demand, control, relationship, role and change are close to 1 which indicates stress factors are not applicable.

Table 4 Correlation Analysis

	EP	Demands	Control	Relationship	Role	Change	Supports
EP	1
Demands	0.134	1
Control	-0.15	0.652	1
Relationship	0.077	0.587	0.747	1
Role	-0.12	0.37	0.716	0.629	1
Change	-0.22	0.551	0.809	0.758	0.607	1
Supports	0.105	0.551	0.663	0.644	0.747	0.573	1

The value of correlation shows the strength of association among each variable. There is no dependent and independent variables. It values lie in between -1 to 1. The more it is close to 1; it shows that the association of strength is high. It could be positive or negative.

Table 4 report that there demands, relationship and supports are positively correlated to employee performance respectively, while control, role and change are negatively correlated to employee performance respectively. The value of given variables shows that the association of strength is week.

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