1. The consequences of stress in an organization.
1 Financial consequences
Work stress is one of the main challenges faced by an organization. As we said, it can damage one’s individual healthbut also the image and finances of a company.
First, absenteeism has a cost. Its direct cost has increased since 1997 and represents about 7.1% of the wage bill. The indirect costs, which meansreplacement, decrease of productivity added to the direct cost come to 17% of the wage bill. As work stress might lead to unsafe practices, injuries and other physical factors more than doubled from 530 to1082 between 1990 and 2001. Incapacity for work due to work stress increased from 7% to 13%. But it also has an impact on group insurance plans. In 1995, approximately 5% and 10% of all drugs costcover by the insurance were related to mental health issues, which represent about $50 million annually.
In Canada, for instance, nearly 500 000 workers are absent from work each week because of workstress so the social cost related to mental health problem has increased to more than $20 billion annually.
A study made by Ravi Tangi in the article "Workplace Stress Sucks $300 BillionAnnually from Corporate Profits" in 2004 established a formula for measuring the “hard costs” of stress of business as whole. According to this formula, stress has caused 19% of absenteeism, 40% of turnover,55% of employee assistant programs, 30% of short and long term disability, 10% of drug plan costs, 60% of total workplace accidents and 100% of compensation and litigation complaints.
But one’s individual issues related to work stress might become a group concern, that is, absenteeism can decline the moral of the co-workers and the quality of productivity and decreasethe satisfaction of the customers.
Organizations encourage teamwork which is considered as desirable and produces positive results. But to a certain extent, it might create some tensions related...
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