Impact of Occupational Stress On Employee Engagement

Proceedings of 12th International Conference on Business Management
http://ssrn.com/link/12th-ICBM-2015.html
7th and 8th December 2015 | Colombo, Sri Lanka
Impact of Occupational Stress on Employee Engagement
Nishanthini Simon (nishanthinisimon@yahoo.com )

Department of Industrial Management, University of Kelaniya, Sri Lanka.
Upamali Amarakoon
Department of Industrial Management, University of Kelaniya, Sri Lanka.
Abstract
Occupational stress is unavoidable in organisations today. It is a personal experience
resulting from noxious aspects of work content, work organisation and the work environment
where an individual reacts emotionally, cognitively, behaviourally and psychologically.
Excessive levels of occupational stress causes fatigue, anxiety, depression and social
withdrawal and disengages employees from work. Employee engagement is the individual’s
involvement and satisfaction with as well as enthusiasm for work. Engagement occurs when
individuals are emotionally connected to others and cognitively vigilant. An engaged
employee is found to be committed to her/his organisation’s goals and values, motivated to
contribute to its success and are able to enhance their own sense of well-being. Existing
literature suggests a negative relationship between occupational stress and employee
engagement. However, an acceptable level of stress is identified to improve individual’s
performance. Therefore, this conceptual paper argues that the relationship between
occupational stress and employee engagement is not a negative linear, but an inverted ‘U’
relationship. Accordingly, it suggests that maintaining an optimal level of occupational stress
can result in a higher level of employee engagement. The paper also presents implications for
theory and practice.
Keywords: Occupational stress, Employee engagement, Inverted ‘U’ relationship
JEL Classification: M51

1
Faculty of Management Studies and Commerce
University of Sri Jayewardenepura
Gangodawilla, Nugegoda
E-Mail: icbm@sjp.ac.lk
WEB: www.icbmusjp.org, mgt.sjp.ac.lk
Electronic copy available at: http://ssrn.com/abstract=2699785

Introduction
Research around the world suggests that occupational stress experienced by employees have
progressively escalated over the past few decades (The American Institute of Stress). Stress is
a person’s psychological and physiological response to the perception of demand and
challenge (Ongori and Agolla, 2008). Occupational stress, which refers to the stress involving
one’s job, is found to be the key contributor to the level of stress experienced by an adult
(The American Institute of Stress). Although occupational stress is unavoidable, excessive
levels of stress is identified as a threat to quality of life of employees, resulting in emotional
and physical harm (Danna and Griffin, 1999).
The behavioural symptoms of stress include over-eating or under-eating, social
withdrawal and angry outburst. The mental symptoms are frequent lapses of memory,
constant negative thinking, inability to make decisions and difficulty in concentrating (Ongori
and Agolla, 2008). Its physical symptoms include headaches, muscle tensions, sleeping
problems, chest pain and fatigue, on mood they are anxiety, depression, anger and
restlessness (Ongori and Agolla, 2008). Moreover, excessive levels of stress in the work
place is reported to result in poor performance, such as; decreased ability to undertake robust
decision making, poor levels of concentration, decreased capacity to perform, dampened
initiative, reduced interest in working, increased rigidity of thought, loss of responsibility and
less efficiency and productivity, as well as increased turnover (Noor and Maad, 2008;
Lorenzo, 2014; Ongori and Agolla, 2008). Overall, the occupational stress experienced by
employees disengages them from work, resulting in poor organisational performance
(Velnampy and Aravinthan, 2013).
Employee engagement is a positive, fulfilling work related state of mind that is
characterized by vigour, dedication and absorption (Schaufeli et al., 2002). It is the
individual’s involvement and satisfaction with, as well as enthusiasm for work (Harter et al.,
2002). An engaged employee is committed to her/his organisation’s goals and values,
motivated to contribute to organisational success and are able, at the same time, to enhance
their own sense of well-being (Engage for Success 2015). Gallup Workplace Audit identifies
employee engagement as a strong predictor of improved levels of customer satisfaction,
productivity, profitability, turnover, and safety records (Harter et al., 2002; Luthans and
Petersons, 2001). Confirming this, Towers Perrine study (2007) establishes a definitive link
between levels of engagement and financial performance and begins to quantify that link. It
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has also been suggested that engagement is associated with goal attainment, both in
organisational and personal domains (Jasonet al., 2006). Due to its significant impact on
positive organisation and individual level outcomes, employee engagement has received
increased scholar and practitioner attention.
Engagement occurs when individuals are emotionally connected to others and cognitively
vigilant (Khan, 1990). Employees are emotionally and cognitively engaged when they know
what is expected of them, have what they need to do their work, perceive that they are a part
of something significant with co-workers, whom they trust and have chances to improve and
develop (Harteret al., 2002). As mentioned above, occupational stress experienced by an
employee plays a key role in her/his emotional and cognitive availability at work (Ongori and
Agolla, 2008). Occupational stress, therefore, is theoretically associated with the employee
engagement.
The stress literature in general suggests a negative relationship between occupational
stress and employee engagement (e.g. Velnampy and Aravinthan, 2013). Excessive levels of
occupational stress decreases emotional and cognitive availability of employees (Ongori and
Agolla, 2008; Velnampy and Aravinthan, 2013) and therefore is likely to result in poor
employee engagement (Khan, 1990). However, the stress literature has primarily focused on
excessive levels of stress and its implications. The literature focusing on different levels of
stress (very low levels, medium and high) and their outcomes are limited. Emerging literature
suggests that stress is not necessarily a bad thing. For instance, Hicks and Mc Sherry (2006)
point out that stress is a human response to various aspects in her/his environment that comes
naturally and therefore, stress can sometimes act as a motivator.
Against this backdrop, this conceptual paper argues that the relationship between
occupational stress and employee engagement should not necessarily be a negative linear
relationship. The paper argues that the nature of the impact of occupational stress on
employee engagement is likely to differ based on the levels of occupational stress
experienced by employees.
The remainder of this paper is structured as follows: First, the literature on occupational
stress is presented in detail identifying the triggers of stress, the nature of stress and its
outcomes. Second, the employee engagement literature is presented highlighting its
antecedents. Third, the suggested relationship between occupational stress and employee
engagement is presented followed by discussion and directions for future research.
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Occupational Stress
Hans Selye, in 1936, introducing the concept of stress in to the life science referred to it as
“force, pressure, or strain exerted upon a material object or person which resists these forces
and attempts to maintain its original state”. Stress has become ubiquitous in our society,
today.
Occupational stress is a result of adverse and noxious aspects of work content, work
organisation and the work environment where an individual reacts emotionally, cognitively,
behaviourally and psychologically (Velnampy and Aravinthan, 2013). It is a personal
experience which impacts on an individual’s ability to cope. Stress is a consequence of any
external action, situation or event that creates physical and/or psychological pressure or
demands upon a person (Ismail et al., 2009).
Triggers of Occupational Stress

Occupational stress arises from either a lack of assessment or an incorrect appraisal of
persons and environment, leading to unreasonable expectations and disappointment
(Velnampy and Aravinthan, 2013). But, according to Ismail, Yao and Yunus (2009) not only
psychological factors influence stress, physiological factors such as control of work-load,
working environment, colleagues and conflicts at work also influence occupational stress.
Velnampy and Aravinthan (2013) identified six major factors that may cause occupational
stress. They are; physical environment, social stressors, career development, management
practices, job design and organizational factors. Research increasingly identifies work-life
conflict also as a main cause of occupational stress. For instance, Noor and Maad (2008) and
Beluah and Joseph (2014) argue that work-life conflict is strongly correlated with
occupational stress.
Overall, the literature highlights that two sets of variables can be distinguished in any kind
of job: job demands and job resources (Moura et al., 2014;Schaufeli and Bakker, 2004).
Demands are the “things that have to be done”. More specifically, it refers to demands such
as physical, psychological, social, or organisational aspects of the job that require sustained
physical and/or psychological (i.e., cognitive and/or emotional) effort and is therefore,
associated with certain physiological and/or psychological costs (Moura et al., 2014) such as
work-load, time pressure, performance pressure, unclear work roles, conflict at work and
emotional demand of work. Job resources refer to those physical, psychological, social, or
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organisational aspects of the job that (a) reduce job demands and the associated physiological
and psychological costs; (b) are functional in achieving work goals; and (c) stimulate
personal growth, learning and development (Moura et al., 2014). A few examples include
career opportunities, supervisor coaching, role clarity and autonomy. Although job demands
are not necessarily negative, they may turn into job stressors when meeting those demands
requires high effort. Similarly, job resources too can turn into negative when it lacks or
disappoints the employee (Schaufeli and Bakker, 2004).
However, the emergent literature suggests that, more than the job (demands and
resources), person-environment interaction determines the level of occupational stress
experienced by a person (The American Institute of Stress). Stress is identified to be a
personalised experience that can vary among different individuals, even in identical
situations. Therefore, while some individuals may thrive performing under pressure and
many tasks at the same time, others may find it overwhelming. Moreover, the research
suggests that the degree of occupational stress experienced by an individual depends on the
magnitude of the job demands and her/his sense of control or decision making capacity in
dealing with those demands (The American Institute of Stress).
Consequence of Occupational Stress

Consequences of occupational stress have made it an area of interest for both scholars and
practitioners. The literature in general has classified stress to be either good stress or bad
stress. While good stress is positive and it motivates employees to perform, bad stress brings
negative consequences (Ongori and Agolla, 2008). Supporting this line of thought, Selye
(1987) classified stress as eustress and distress, eustress being good stress and bad stress as
distress (in Ongori and Agolla, 2008). A person who has eustress is one who experiences low
or moderate levels of stress and the one who has distress will be experiencing higher levels of
stress (Ongori and Agolla, 2008).
Bad stress or distress contributes to low motivation and morale at work, decreased
performance, high turnover, sick leave, accidents, low job satisfaction, low quality products
and services, poor internal communication and conflicts (Ongori and Agolla, 2008). A high
levels of stress or distress has the capacity to interfere with an individual's productivity.
Similarly, it can have a great impact on their physical and emotional health (Hicks and
McSherry, 2006). As mentioned earlier, even though occupational stress had negative effects,
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it is not necessarily a bad thing. Hicks and McSherry (2006) imply that stress can sometimes
act as a motivator. However, the research focusing on good stress or eustress and its
outcomes are limited. Overall, occupational stress is widely accepted to have both positive
and negative effects on individuals. Research had primarily focused on excessive level of
occupational stress and its outcomes.
Employee Engagement
The positive outcomes associated with employee engagement has resulted in increased
research and practitioner attention over the past few years (e.g.Moura et al., 2014; Caponetti,
2012; Thakur, 2014; Bakker et al., 2008). Employee engagement refers to the individual’s
involvement and satisfaction with as well as enthusiasm for work (Harter et al., 2002; Jones
and Harter, 2005). Engagement occurs when individuals are emotionally connected to others
and cognitively vigilant (Khan, 1990). According to Khan (1990), engagement focuses on
how psychological experiences of work and work contexts shape the process of employees
being absent or presenting themselves during a task performance. In a similar vein, Schaufeli
and others (2002) define employee engagement as a positive, fulfilling, work-related state of
mind that is characterised by vigour, dedication, and absorption. Vigour is characterised by
high levels of energy and mental resilience while working, the willingness to invest effort in
one’s work, and persistence also in the face of difficulties. Dedication is characterised by a
sense of significance, enthusiasm, inspiration, pride, and challenge. Absorption is
characterised by being fully concentrated and happily engrossed in one’s work, whereby,
time passes quickly and one has difficulties with detaching oneself from work. Neufeld and
others (2006) define engagement in a broader sense, as the quality of a person-environment
relationship determined by the extent to which the negotiation, participation, and evaluation
processes occur during the interaction. Negotiation, participation, and evaluation, are
considered to be the active ingredients that stimulate the release of positive outcomes in any
person-environment mixture. Overall, the above discussion suggests a consensus in the
literature that engagement relates to one’s emotional and cognitive availability for and
willingness to invest in work activities (Luthans and Peterson, 2001).
On the contrary, disengaged employees uncouple themselves from work roles and
withdraw cognitively and emotionally leading to a display of incomplete role performance
and effortless, robotic or automatic task behaviours (Luthans and Peterson, 2001). Empirical
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findings from UK suggests that only 17 percent of employees are ‘truly’ engaged in their
organisations, while 63 percent are ‘not engaged’ and 20 percent are ‘disengaged’ – those
who mentally quit, but still carry on (Huckerby, 2002). Surprisingly, only 48 percent of
organisations were found to act on improving employee engagement (Pech and Slade, 2006).
The research suggests that engagement is a two way process – employers ‘harness
organizational members’, selves’ to their work roles; employees involve and express
themselves physically, cognitively and emotionally during role performance (Kahn, 1990).
Accordingly, a performance gap exists in identifying the factors influencing employee
engagement and guiding practitioners in creating the right environment to harness employee
potential.
Factors Influencing Employee Engagement

According to Wildermuth and Pauken (2008) engagement occurs naturally, when the
conditions are right, when the leaders are inspiring, when individuals find the ideal place in
which to apply their strengths. Similarly, Towers Perrine’s study identifies three levels of
factors influencing the Employee Engagement. Primary level includes, learning & growth,
image & reputation, senior management, strategic direction, and innovations; secondary level
includes, optimism & goal setting, openness to experience, and individual impact; and the
tertiary level includes, immediate management, performance feedback, work life, job stress
& frustration and empowerment (Towers Perrine, 2007). Even though other studies have not
clearly defined different levels of influencing factors, managerial, supervisory & co-worker
support, autonomy, feedback, opportunities for development & growth, trust in senior
leadership, organisational culture, and employee recognition are among the key influencing
factors identified in the literature. (Karunanithy and Ponnampalam, 2013; Ongori and Agolla,
2008).
Outcomes of Employee Engagement

Engaged employees are willing to go an extra mile to help their companies succeed (Towers
Perrine, 2007). Engaged workers are found to be energetic, positively connected to their work
and feel that they are doing their jobs effectively. Such employees have better health, create
their own resources and also influence others to engage in work (Bakker et al., 2008).
Engagement is associated with goal attainment both in organisational and personal domains
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(Jason et al., 2006). Individual gains of employee engagement includes; positive job related
attitude, strong identification with one’s work, good mental health, including positive
emotions, and reduced burnout risk (Caponetti, 2012). As engaged employees tend to be
mentally-healthy, it cuts down absenteeism. Employee engagement is found to be a strong
predictor of retention of talented employees, positive corporate image (Schaufeli and
Salanova, 2007), improved customer satisfaction, productivity, profitability, turnover, and
safety records (Caponetti, 2012; Harter et al., 2002; Luthans and Petersons, 2001).While
confirming the above, Towers Perrine study (2007) establishes a definitive positive link
between the levels of engagement and financial performance and quantifies that link.
Considering the low levels of engagement by employees (e.g. Huckerby, 2002) and positive
implications of high engagement reported above, the authors suggest employee engagement
as a strong source of untapped potential, particularly at a time when organisations look for
novel sources of competitive advantage.
Occupational Stress and Employee Engagement

As mentioned above, one’s job demands and job resources influence her/his employee
engagement (Mouraet al., 2014). Job demands such as a high work pressure, emotional
demands, and role stress may lead to low job satisfaction, impaired health and at last to
disengagement. Job resources such as social support, performance feedback, and autonomy
may instigate a motivational process, leading to job-related learning, job satisfaction,
organisational commitment and employee engagement (Mouraet al., 2014). However, it was
earlier mentioned that job demands, job resources and personal factors (e.g. perceived
person-environment fit, ability to balance work and family demands) as indicators of
occupational stress. Therefore, a theoretical relationship between occupational stress and
employee engagement can be established.
Furthermore, the literature suggests that excessive levels of occupational stress
experienced by employees limit their cognitive and emotional availability for work (e.g.
Ongori and Agolla, 2008; Velnampy and Aravinthan, 2013). One’s emotional and cognitive
availability for work is a key for her/his work engagement (Kahn, 1990). Therefore,
occupational stress is suggested to have a negative relationship with employee engagement,
such that higher levels of occupational stress experienced by an employee is likely to result in
lower level of her/his subsequent work engagement (Moura et al.,2014).
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Similarly, the growing literature in employee burnout suggest that factors which influence
employee engagement are negatively related to employee burnout (Karunanithy and
Ponnampalam, 2013; Ongori and Agolla, 2008). For instance, Schaufeli and Bakker (2004)
focusing on burnout and its positive antipode – engagement, confirmed that: (a) burnout and
engagement are negatively related, (b) burnout is mainly predicted by job demands but also
by lack of job resources, whereas engagement is exclusively predicted by available job
resources; (c) burnout mediates the relationship between job demands and health problems,
whereas engagement mediates the relationship between job resources and turnover intention.
As burnout results from excessive levels of stress, this stream of literature also suggests a
negative relationship between occupational stress and employee engagement.
Inverted ‘U’ shape relationship?

However, as discussed above, although excessive level of occupational stress has negative
impacts, stress is not necessarily a bad thing. For instance, positive stress adds anticipation
and excitement to life, and therefore many thrive under a certain amount of stress
(Karunanithy and Ponnampalam, 2013). Similarly, Lepine and others (2005) have
distinguished two types of stress as, (a) hindrance stressors and (b) challenge stressors.
Hindrance stressors have a negative direct effect on performance, as well as negative indirect
effects on performance through strains and motivation. Challenge stressors have a positive
direct effect on performance.
Overall, the literature suggests that moderate levels of stress can act as a motivator and
therefore, can results in a higher level of employee engagement (Hicks and McSherry, 2006).
On the contrary, employees with low levels of work demands are likely to be bored and
disengaged at work (Rosa, 2008; Sawang, 2011). However, as employees perceive extreme
levels of workload, the positive relationship between workload and engagement gets
weakened (Rosa, 2008).
Based on the above discussion, the authors argue that there is a certain level of
occupational stress which would result in an optimal level of employee engagement. In other
words, as presented in Figure:1, lower levels of occupational stress positively relates to
employee engagement. But after a certain point, occupational stress negatively relates to
employee engagement, such that increased level of occupational stress decreases employee
engagement. To provide an analogy, having a work deadline in spite of a certain degree of
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stress imposed on employees, will help them more efficiently use of resources and focus
more on work than when there are no deadlines. However, having too many tasks to handle in
too little time will increase employee stress and as a result the quality of their output may
suffer. Hence, the authors argue that the relationship between occupational stress and
employee engagement is not a negative linear but an inverted ‘U’ relationship. However, as
mentioned earlier, personal factors also influence the level of occupational stress experienced
by an individual. Therefore, the level of occupational stress experienced by an individual at
the time of optimal engagement is different for each individual.
High
Employe
e
Engagem
ent
Low
High
Occupational stress
Figure 1- Suggested Relationship between Occupational Stress and Employee Engagement
However, it is important to note that the slope (or steepness) of the curve presented in Figure
1 is not based on theoretical evidence.
The above argument is consistent with Yerkes-Dodson Law (Yerkes and Dodson, 1908)
which focuses on the relationship between work pressure and performance. When there is a
low level of work pressure, people are under-challenged and it creates boredom. In such
situations, individuals see no reason to work hard at a task and gets unmotivated leading to
poor performance. When there is a high level of work pressure, it leads to high stress, anxiety
and unhappiness. As individuals are overwhelmed by the volume and scale of competing
work demands, and they may start to panic leading to poor performance. Accordingly,
Yerkes-Dodson law suggests that the peak performance is achieved when people experience a
moderate level of work pressure. Similarly, Schmitt and others (2015), based on the
activation theory suggest that time pressure and work engagement have a curvilinear
10
relationship. Accordingly, a moderate level of time pressure has the ability to motivate
employees resulting in high engagement. However, a low and very high level of time
pressure de-motivates employees from work (Schmitt et al., 2015). Both work pressure and
time pressure are aspects of work demand, the literature supports authors argument that the
relationship between occupational stress and employee engagement is not a negative linear
but an inverted ‘U’ relationship.
Discussion
Employee engagement is increasingly identified as a significant contributor of positive
individual-level and organisational-level outcomes. Therefore, on one hand, practitioners
around the world attempt to create the right environment for higher levels of employee
engagement. On the other hand, occupational stress is unavoidable in today’s work
environment, but research suggests that higher levels of occupational stress negatively relates
to employee engagement (Moura et al., 2014). Closely studying occupational stress and
burnout literature the authors suggest that the relationship between occupational stress and
employee engagement may not always be negative. Further explaining the nature of
relationship, this paper suggests an inverted U shape relationship such that at low to moderate
levels of occupational stress, it positively relates to employee engagement, but relates
negatively at higher levels of occupational stress. Therefore, this paper advances current
understanding of the nature of relationship between occupational stress and employee
engagement.
From practitioner perspective, the authors’ argument suggest that employers should
continue to provide deadlines, targets to achieve and challenging jobs. However, it is
important to observe the level at which the employee perceive her/his occupational stress to
be too much. This level may vary from employee to employee and also from situation to
situation. As suggested in the employee engagement literature (e.g. Towers Perrine, 2007),
having a close and understanding supervisor subordinate relationship, therefore, is likely to
play a key role in maintaining the right levels of occupational stress and results in optimal
levels of employee engagement subsequently.
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Directions for Future Research

Future research may empirically test the suggested non-linear relationship between
occupational stress and employee engagement. While such study will advance the changing
impact on employee engagement at varying levels of occupational stress, will assist in
understanding if low to moderate levels of occupational stress has a weaker positive
relationship than the negative relationship between higher levels of occupational stress and
employee engagement. In other words, if the slope of the curve is steeper at higher levels of
occupational stress than that of lower levels of occupational stress.
Furthermore, the level of occupational stress which results in optimal levels of employee
engagement may vary for each individual, nature of their job and also depending on different
industries. Therefore, future studies can identify the optimal level of occupational stress for
different personality types, job characteristics and industry categories.
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Impact of Occupational Stress On Employee Engagement

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Proceedings of 12th International Conference on Business Management

Impact of Occupational Stress on Employee Engagement

Nishanthini Simon (nishanthinisimon@yahoo.com )

Keywords: Occupational stress, Employee engagement, Inverted ‘U’ relationship

JEL Classification: M51

Electronic copy available at: http://ssrn.com/abstract=2699785

Electronic copy available at: http://ssrn.com/abstract=2699785

Electronic copy available at: http://ssrn.com/abstract=2699785

Triggers of Occupational Stress

Consequence of Occupational Stress

Factors Influencing Employee Engagement

Outcomes of Employee Engagement

Occupational Stress and Employee Engagement

Inverted ‘U’ shape relationship?

Figure 1- Suggested Relationship between Occupational Stress and Employee Engagement

Directions for Future Research

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