Work Related Stress – Do Corporates understand this problem, and do they care?

Are major corporates playing lip service to EU OSHA (The European Agency for Safety & Health at Work) guidelines on work related stress and psychosocial risks? Having recently had the opportunity to review this campaign, and the proposed methodology of incorporation into a multinational corporate environment, where the primary implementation was the proposed OSHA poster campaign, and the implied consideration was not to blame management, I have my doubts that management understand the significant impact to bottom-line resulting from a stressed workforce.

What do we mean by stress and psychosocial risks? – as defined by the European Agency for Safety and Health at Work

Psychosocial risks arise from poor work design, organisation and management, as well as a poor social context of work, and they may result in negative psychological, physical and social outcomes such as work-related stress, burnout or depression. Some examples of working conditions leading to psychosocial risks are:

• excessive workloads;
• conflicting demands and lack of role clarity;
• lack of involvement in making decisions that affect the worker and lack of influence over the way the job is done;
• poorly managed organisational change, job insecurity;
• ineffective communication, lack of support from management or colleagues;
• psychological and sexual harassment, third party violence.

When considering the job demands, it is important not to confuse psychosocial risks such as excessive workload with conditions where, although stimulating and sometimes challenging, there is a supportive work environment in which workers are well trained and motivated to perform to the best of their ability. A good psychosocial environment enhances good performance and personal development, as well as workers’ mental and physical well-being.

Workers experience stress when the demands of their job are greater than their capacity to cope with them. In addition to mental health problems, workers suffering from prolonged stress can go on to develop serious physical health problems such as cardiovascular disease or musculoskeletal problems.

For the organisation, the negative effects include poor overall business performance, increased absenteeism, presenteeism (workers turning up for work when sick and unable to function effectively) and increased accident and injury rates. Absences tend to be longer than those arising from other causes and work-related stress may contribute to increased rates of early retirement, particularly among white-collar workers. Estimates of the cost to businesses and society are significant and run into billions of euros at a national level.

How significant is the problem?
Stress is the second most frequently reported work-related health problem in Europe.
A European opinion poll conducted by EU-OSHA found that more than a half of all workers considered work-related stress to be common in their workplace. The most common causes of work-related stress were job reorganisation or job insecurity (reported by around 7 in 10 respondents), working long hours or excessive workload and bullying or harassment at work (around 6 in 10 respondents). The same poll showed that around 4 in 10 workers think that stress is not handled well in their workplace.

In the larger Enterprise Survey on New and Emerging Risks (ESENER) around 8 in 10 European managers expressed concern about work-related stress in their workplaces; however, less than 30% admitted having implemented procedures to deal with psychosocial risks. The survey also found that almost half of employers consider psychosocial risks more difficult to manage than ‘traditional’ or more obvious occupational safety and health risks.

Having considered these definitions, and reflected on my own experience over the years creating, changing or rescuing investment banking operations I found myself compiling my top ten reasons for stress in the workplace. In no particular order they are:

• Managers who rule by fear and/or dictate cause stress
• Managers who do not know how to manage people cause stress
• Managers who fear for their own position cause stress
• Managers promoted under the Peter Principle cause stress
• Managers who are emotional and/or insecure in the decision process cause stress
• Managers who promote politics or other unhealthy competition amongst their staff cause stress
• Managers who do not have an intimate knowledge of the business cause stress
• Inexperienced people – wrong people for the job – cause stress
• People suffering stress in their private life are prone to suffer stress in the workplace
• Likewise people stressed in the workplace can take it home and cause stress in their private life which then reflects back into the workplace

My generic definition of a manager in this list is a strategic or tactical role, from main Board director down to line manager.

Therefore, from my own experience over many years, both as a Director of Operations and Management Consultant, my observation is that management are by far the most significant cause of stress in the workplace. This is logical if you think about it because these are the people who define the workplace.

The workplace that I speak of is probably one of the most stressful. Investment banking operations are extremely dynamic, constantly changing to meet new market demands, every transaction dealt during a trading day must be processed that day, imperfect settlement means that on a normal day some 30% of transactions fail (significant funding and hedging cost considerations), more on a volatile trading day, and little errors can result in a high cost. A typical trading day could see some USD 3 billion of turnover with an average transaction value of some USD 4 million or equivalent in other currencies. An error of just 0.25% on such volumes could result in a daily loss of some USD 7.5 million – the cost to run such operations for 1 year. So the stakes are high, and there is no room for errors.

With this background in mind it should not be too difficult to imagine the impact of any of the stress situations that I have identified above. During my career I have experienced the stress caused by poor management ranging from excessive demand on staff both in effort and time, fear, incompetence, poor leadership, breaches of human dignity, mental cruelty, demand for favour (including sexual), and physical brutality. I have experienced the human impact caused by workplace stress, whether it be mental breakdown in the workplace requiring long-term medical treatment, broken marriages, dropout, and even a premature death resulting from a mental beating from a tyrant director. In the environments in which I have worked it would be very unusual not to experience the extremes of human behaviour as it is a dynamic people business, and attracts some of the most aggressive people, many of whom have no understanding of compassion, or consideration of the impact of their decisions on others.

Examples of managers who rule by fear and/or dictate are plentiful. These people are particularly bad if they have an emotional character, and/or are very insecure. If these people are given too much power they can raise havoc in the workplace. Whether they like you or not carries more weight than merit, and total loyalty is a pre-requisite irrespective of how bad the leadership, or poor the business decisions. Very much also depends on their mood on the day resulting in erratic business decisions. Sacrificial lambs are a feature of such people as they comply with the final phases of poor management, i.e. punishment of the innocent, and decoration of the uninvolved. A manager makes a mistake; some innocent underling becomes the sacrificial lamb and loses their job.

For those not familiar with the phases of a management doomed for failure I will recount the origin of the eight original phases, which I see have now been condensed to seven or even six. In the mid-1970’s I was with Chase Manhattan Bank engaged in a project being managed by the consulting firm Arthur Anderson (no longer with us). After the first year the progress of this project was so dysfunctional that a group of us within the bank compiled the equivalent of a university Rag Mag for Christmas 1977. We identified the phases of our dysfunctional project as Confidence, Enthusiasm, Confusion, Disillusionment, Panic, Search for the Guilty, Punishment of the Innocent, and Decoration of the Uninvolved. For those who remember we also designed the tie with the motif of a picture of an anchor with a ‘W’ underneath it as presents for the associated Arthur Anderson staff, and still widely available in the City of London. This was not my first experience of poor management, and the associated profound stresses on the staff, but it was by far my most prolonged period of continual stress as a result of chronic management.

I was later asked to restructure an investment bank where the existing debt securities operations was a shambles. Operations staff were working an average 60 – 80 hours per week, there was no integration of the various functions involved, politics and finger-pointing was rife, poor transaction processing was the norm, moral was non-existent, and systems were wholly inadequate.

Having immediately realised that the executive management was located 18 floors above the operations totally removed from what was happening, and the various departmental heads were lacking the knowledge required for the business, my first task was to make it clear to the management all the way up to chairman of the bank that there would be no interference, that no-one, including the MD and Chairman, could request anything from any of my staff without coming through me first, and that my authority extended across the trading floors. I also refused to join them, preferring to have my office within the operations area (which was later mimicked by the MD). As the former head of settlements had suffered a nervous breakdown I recruited a known entity to fulfil this role, and replaced all department heads who were either not qualified, or not capable. Within 3 months anyone still on the floor at 6pm had to write down why they were still there, and put it on my desk. This is a psychological process more for them than for me as they have to read what they have written, and thus ask themselves whether or not it is credible. I needed them to go home to their families, and return fresh the next day to meet the ever present challenges of a new trading day.

After 25 weeks we had a fully integrated professional operation with new in-house systems. Politics on the floor was actively discouraged, and my door was always open to anyone on the floor for non-business related issues. At least twice each year we had informal gatherings for all staff and their families at which other halves were actively encouraged to raise any concerns they had. For every 5 people on the floor a representative was appointed, and these people were encouraged to meet together monthly to discuss any issues affecting the working environment (necessary feedback). Their output came directly to me, was taken seriously, and corrections made when necessary. We had a hard working, but happy group of people with the only workplace stress being that caused by the normal everyday imperfections in the business sectors in which we operated.

From experience I would suggest that the maxim for a stress-free workplace is to rule by consent, and lead by example.

Before restructuring this investment bank it was losing some £2 million per month through stress related errors caused directly by poor management. Therefore corporates need to understand that the overwhelming cause of stress in the workplace is poor management. Neither poster campaigns or denial will address this problem. The impact on the bottom line can be substantial if such stress is not taken seriously.