NOTE: Free essay sample provided on this page should be used for references or sample purposes only. The sample essay is available to anyone, so any direct quoting without mentioning the source will be considered plagiarism by schools, colleges and universities that use plagiarism detection software. To get a completely brand-new, plagiarism-free essay, please use our essay writing service.
One click instant price quote
Running head: EXPLORING WORKPLACE STRESS: THE FINANCIAL IMPACT BETWEEN JOB-RELATED STRESS AND HEALTH CARE COSTS Exploring Workplace Stress: The Financial Impact between Job-Related Stress and Health Care Costs March 11, 2009 SUMMARY This research was conducted to assess the costs of workplace stress from an organizational viewpoint, answering the question whether employer-controlled factors, such as workplace stress make any different in health care costs. The objectives of this research are to: Examine whether there is a correlation between workplace stress and employee productivity; Examine whether lifestyle related factors contribute to workplace stress; Examine whether wellness incentive programs can lower health related costs and give the company a return on investment; A literary review was compiled in order to provide a deeper insight into the costs of workplace stress. This research indicates that workplace stress is inescapable and can be induced by bad and good situations. Although some researchers claim that stress can enhance employee performance, many scientists assert that over-stressed employees can improve their productivity if they could cope with stress more effectively.
Taking into account that the vast majority of stress factors are job related, providing organization-wide programs would obviously help workers to cope with stress situations in a more effective way. Moreover, the companies can lower healthcare costs by implementing wellness programs that reduce stress. TABLE OF CONTENTS SUMMARY 1 TABLE OF CONTENTS 3 LIST OF FIGURES 4 CHAPTER 1: INTRODUCTION 5 Context of the Problem 5 Statement of the Problem 9 Research Questions and Sub - Questions 13 Significance of the Study 13 Research Design and Methodology 13 Limitations of Study 16 CHAPTER 2: LITERATURE REVIEW 16 Introduction 16 Workplace Stress Defined 17 The Effects of Stress on Workers 20 The High Cost of Workplace Stress To Companies 21 Workplace Stress and Violence 26 Coping With Workplace Stress 28 Changing The Face of Job Related Stress: What Employees Are Doing That Works 31 CHAPTER 3: THE LINK BETWEEN JOB-RELATED STRESS AND EMPLOYEE PERFORMANCE 31 Introduction 31 Job Related Stress and Employee Performance 35 CHAPTER 4: JOB RELATED STRESS AND LIFE-STYLE FACTORS 42 Introduction 42 Definition of the Employment Relationship 42 A Healthy Balance Between All Activities 43 CHAPTER 5: THE IMPROVEMENT OF COMPANY WELLNESS PROGRAMS AND HEALTH CARE COSTS 57 Introduction 57 The Current Cost of Poor Health 57 Wellness Program vs. Managed Care 59 Standards For Wellness Programs 59 What Works for Wellness Programs and Stress 60 Wellness Programs as Cost Saving 62 Cons Associated With Wellness Programs 64 Using Incentives To Create Employee Motivation 65 The Benefits of Wellness Programs 65 RECOMMENDATIONS 67 CONCLUSION 68 REFERENCES 70 LIST OF FIGURES Figure 1.
Average Number Of Days Employee Is Absent From Work Because Of Stress-Related Or Other Reasons 6 Figure 2. The Inverted U Relationship Between Stress And Productivity 37 Figure 3. Major Categories Of Workplace Stress Sources And Consequences Each Category Has On Employees 40 Figure 4. Timed Used In An Average Workday For People Who Were Employed, Ages 25 To 54 With Children Under 1844 Figure 5.
Alcohol And Tobacco Consumption Among Australian Police Officers 46 Figure 6. The Difference Between Traditional And Egalitarian Mean And Women As It Relates To Job Insecurity 49 Figure 7. Epinephrine Reactivity During Experimental Stress In Male (M) And Female (F) Managers And Male (M) And Female (F) Clerical Workers 51 Figure 8. Correlation Between Perceived Stress And Physiological Stress Responses At Work In Male And Female White-Collar Workers 53 Figure 9. Correlation Between Stress At Work And At Home In Male And Female White-Collar Workers 53 Figure 10. Overtime At Work And Epinephrine Levels At Home In Mothers And Fathers Of Preschool Children 55 Figure 11.
Responsibility For Unpaid Duties Among Male And Female White-Collar Workers 56 Figure 12. Presenteeism Is Costing More Than Absenteeism Or Other Challenges 58 Figure 13. Shows The Most Popular Ways That Organizations Are Using To Decrease Healthcare Costs 62 CHAPTER 1: INTRODUCTION Context of the Problem The impact of job-related stress on employers is absolutely enormous. As the nature of the work in developed country becomes more and more complex, undergoing drastic changes, as business companies de-layer, downsize or outsource, the employees experience more and more stresses at workplace. According to Elkin and Rock (1990), in the U. S.
over fifty four percent of all employees absence at workplace due to sickness and illnesses are stress related. Europe is also not an exception to this rule. According to the recent study conducted by the European Foundation for the Improvement of Living and Working Conditions approximately 28 % of 15, 000 employees working in European countries indicate stresses and strains to be work-related health problem (Paoli, 1997). As it is reported by numerous researchers, in the vast majority of the world countries (especially among the developed ones) the total cost of workplace stresses has been estimated at approximately ten percent of GNP (Gross National Product) (Karasek and Theorell, 1990), taking into consideration all aspects related to stresses at workplace, such as high labor turnover, absences due to sicknesses, escalating costs of health insurance, premature retirement because of the employees health problems, and high expenditures on treatment of the stress consequences, to mention a few. As far as employers cover over 63 percent of total health insurance costs for the non-elderly United States population, increasing health care expenditures and health care utilization automatically implies rising costs for health care due to high stress levels within the organization. According to the study conducted by Anderson, D et al (2000), the workers, reporting high stress levels make up over eight percent of total health care expenditures.
In addition, the employees reporting being under constant stress and strain tend to have health care costs higher up to 46 percent compared to the employees with medium or low stress levels. It should be also mentioned that high stress levels within the organization affects employees productivity and attendance. According to the recent literature review, stress is one of the most significant causes of worker absenteeism (Aldana and Pronk, 1999). It was also found out by the Bureau of Labor Statistics Survey of Occupational Injuries and Illnesses (2006) that the average number of days employee is absent from work because of stress-related reasons reaches fifteen days, while the median number of days employee is absent from work due to nonfatal injuries and illnesses makes up only 7 days.
As it is demonstrated by the chart below, the workers who are absent from work due to stress related factors tend to take more than 10 days off. Over 34 percent of the employees take more than 30 days off. Figure 1: Average Number Of Days Employee Is Absent From Work Because Of Stress-Related Or Other Reasons (Aldana and Pronk, 1999). The American Psychological Association (APA) says that 60 percent of work absences are psychologically-related, resulting in a cost of $ 57 billion annually. Health costs for workers who report high levels of stress (seemingly half the workforce these days) are almost 50 % higher (Goetzel, Anderson, White, Oz minkowski, Dunn, Wasserman, 1998) than those in the general population. The combination of high demands in a job and a low amount of control over the situation can lead to stress.
Downsizing, restructuring, job demands that cannot be met overtime, and fear of job loss all contribute to a workforce unable to manage the pressures of their jobs. One insurance company study concluded that problems at work result in more health complaints than financial or family problems (St. Paul Fire and Marine Insurance Company, 1992). The American Psychological Association (APA) released survey results that one third of Americans are currently living with "extreme stress, " and that 74 % of those respondents said work was the primary cause.
In the same survey, 55 % of respondents said stress made them less productive (American Psychological Association webpage). Over half said they had previously left a job or considered doing so because of stress. Another Gallup Poll study found that 80 % of workers feel stress on the job and nearly half said they need help dealing with stress, 42 % said their co-workers need the same help (Gallup Poll, Publication No. 99 - 101). Despite many efforts focusing on identifying the causes and sources of workplace related stresses and strains on employees health and its organizational outcomes for business companies, almost no research has been conducted to focus on job-related stress and its impact on employer health care costs. In this respect, little or no research has been done to focus on strategies able to enhance working conditions, and, therefore, to reduce job-related stress and health care costs. In examining common practices related to stress, its prevention and intervention at the workplace, few hypotheses can be developed.
First, despite the fact that there is a significant activity in the fields related to stress management at workplace, it is mostly focused on the strategies aimed to reduce the negative consequences and effects of stresses and strains, instead of developing an approach on how to reduce the presence of stressors at the workplace (Kahn and Byosiere, 1992). Second, it should be mentioned that the vast majority of all activities related to stress at the workplace, are focused on employee rather than business company or the workplace, adopting an employee-oriented approach. To put it differently, most researches are focused on enhancing workers ability to cope with stress instead of adopting an organization-oriented or job-oriented approach, where the employer is offered to redesign job or to make some changes in corporate culture or business management style to reduce the level of stress at the workplace, thereby, reducing health care costs and stress-related expenditures within the organization (Kelly, 1992). Finally, there is a lack of more comprehensive research and systematic stress assessment (for example, identifying risk groups or risk factors, risk audits, etc. ) (Kahn and Byosiere, 1992). Stress management at the workplace is not very effective, as in stress research there is a huge gap between the practice and theory, especially in relation to job-related stress and the way it affects employer health care costs. Therefore, it becomes crucial to understand the costs of job-related stress within the organization, to examine the most significant work stress cost indicators, to evaluate the capacity of the companies to produce cost indicators, and to provide enough information to equip the employers with ability to develop a self-assessment tool enabling the companies to measure and assess the costs of job-related stress.
Finally, the main purpose of this research is to ascertain the impact that job-related stress has on employer health care costs. Statement of the Problem Stress at the workplace becomes an increasingly recognized phenomenon having negative impact on both employers and employees. Stress-related problems reported by employees have drastically increased over the past few years and are now one of the most important problems facing business companies. This becomes even more important, if to take into consideration global economic crisis, resulting in increased stress levels, and global job cuts, to mention a few. 75 percent of the general population experiences at least "some stress" every two weeks (National Health Interview Survey). According to other surveys, conducted at different locations of the United States and at different points of time, in which employees were asked to report their stress levels at the workplace, approximately 50 percent of employees indicated their stress level as slight, and almost 7 percent were extremely stressed at their workplaces. In rural areas, the inability to work in a productive manner due to stress-related reasons has almost doubled with the average number of days off per person due to stresses or strains has also increased (Paoli, 1997).
The effects of stress may lead to actual medical illnesses, including heart problems, stomach problems, high blood pressure and headaches. Stress also affects the immune system, which protects us from many serious diseases. Yet, although stress at the workplace is often referred to as solely health problem, it has also became an economic threat to many business companies and organizations. According to the surveys, psychological disorders (including stress-related) became the major cause of long-term and short-term disability claims in the United States. Also, as it was already mentioned, the median duration of employees absenteeism due to stress-related problems is 4 times higher than the average length of absences due to occupational diseases and accidents at the workplace (Paoli, 1997). Therefore, although it is quite difficult to make exact calculations due to lack of reliable data, it is still possible to make an assumption that the real cost of absenteeism because of stress-related problems is significantly higher.
Studies show that $ 300 billion, or $ 7, 500 per employee, is spent annually in the U. S. on stress-related compensation claims, reduced productivity, absenteeism, health insurance costs, direct medical expenses (nearly 50 % higher for workers who report stress), and employee turnover. Also, according to the study conducted by Anderson...
Free research essays on topics related to: high stress levels, job related stress, white collar workers, american psychological association, health care costs
Research essay sample on Job Related Stress Health Care Costs
