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 Abstract

Modern day
business organizations that are operate in complex and demanding markets are
often create stress among its
employees. Some argue that a certain level of stress is vital for people to achieve greater heights. Others think they
will perform much efficiently if they are allowed to work under minimal stress. However,
organizations are designing their job roles to get that extra punch from the human resources; and
those who capable of handling such complexities will be rewarded. As such, this study was carried out in the Northern
region of Sri Lanka, with the primary
objective of understanding the effect of stress of bank employees and its
impact over performance. Secondly,
this research is trying to identify
the effect of stress relate to
job, organizational and individual factors and their relationships over performance.

Above
objectives are achieved with the techniques; correlations and regression.
Correlations and coefficient is
carried out to determine the relationship between variables. To test the effect
of stress over performance, a regression analysis
is carried out. Further, revealed
that the relationship between stress and performance is negative and concluded that the stress is impacting
over the performance of the employees of bank industry.

Key words: Stress, Performance, Bank Industry,
Sri Lanka

1.  
Introduction

Stress is a complicated model. Stress is the response of a person to a
stimulus that disturbs physical or
mental equilibrium. In other words stress is the challenge or a threat to
peoples’ well- being. Although
some  stresses are good and make you motivate; most others are bad and undermine
both mental and physical health. To
make the best use of people as a valuable resource of the organization, attention
must be given to the relationship between staff and the nature of their jobs. The organization’s work and the design of
jobs can have a significant effect on
staff. In this connection, the level of stress is also an important factor that
may have impact on the employees’ behaviour. An adverse
level of stress
affects overall performance of the

organization. Further, from the employees’ point of view their stress is
caused not only from the organizational
factors but also from their individual factors such as family problem, death of close family member etc. Therefore
to get an efficient outcome,
organization should appropriately administer the level of
stress. In order to achieve this objective, all the factors which lead to stress should be properly
managed. The level of stress is differed from a person to another. Positive stress will bring
eagerness and enthusiasm to life, and negative stress will destroy the momentum of life. The impact
of stress over the performance of employees’ is an interesting combination. Job performance refers to whether an
employee does his/her job well or not.
Job performance consists of behaviors that employees do in their jobs that are
relevant to the goals of the organization (Campbell, McCloy, Oppler and Sager, 1993). Success
of the organization depends on the performance of the employees. Most
employees feel they will perform more effectively and efficiently when they are
allowed to work with autonomy and lesser
stress. On the other hand, when there is a higher stress, often results an
increase level of staff turnover, absenteeism and work environment disputes.

Northern region
of Sri Lanka was heavily affected by the thirty years of ethnic war. However, with the end of the civil war in 2009,
most of the banks & financial institutions penetrated into the northern region by offering
competitive products and financial services,
increasing the competition. This situation compelled
all the banks to focus on improving
the service standards
to retain the customer base. Thereby the targets given to employees
have been increased. Extensive marketing campaigns, promotions throughout the months
are a normal scenario in this region,
thus prevented these employees been travelled back to their homes even during
the weekend. This has hugely affected
over the stress levels of those employees. Although
the conditions are such, in order to capitalize over the new market opportunities, banks are continuously giving targets to its
employees and pushing behind towards increasing of numbers. Due to insufficient staff, employees are
loaded with heavy workload and assigned to multiple tasks with strict deadlines. Management see the risk of
decreasing service levels of the bank employees
and their motivational levels, and in a situation where unable to identify or
calculate the magnitude of it. The
staff turnover ratio is high in this region which elaborates the stress level of the employees. Although the number of
researches has been done in the field of stress and work stress in their pure extremes, no one is carried out any in
relation to financial institutions of Sri
Lanka and specifically in relation to banks in Northern Province of Sri Lanka.
So this study will focus on whether
there is a relationship between stress and employees’ job performance in the banking industry
of Sri Lanka.

2.  
Literature Review

2.1  Stress

Hans Selye
first introduced the concept of stress in to the life science in 1936. He
defined stress as “The force,
pressure, or strain exerted upon a material object or person which resist these forces and attempt to maintain its
original state.” (Selye, 1956). Stress is ubiquitous in our society. It has become an integral part of
everyday living. Stress is an unavoidable consequence of modern living. With the growth of industries, pressure in the
urban areas, quantitative growth in
population and various problems in day to day life are some of the reasons for
increase in stress. Stress is a condition of strain that has a direct bearing on emotions,
thought process and

physical
conditions of a person. Steers (1981) indicate that, occupational stress has
become an important topic for study
of organizational behaviour due to several reasons such as stress has harmful
psychological and physiological effects on employees, stress is a major cause of employee turnover and absenteeism, stress
experienced by one employee can affect the safety of other employees and by controlling dysfunctional stress,
individual and organization can be managed
more effectively. During the past decade, the banking sector had under gone
rapid and striking changes
such as policy changes due to globalization and liberalization, increased
competition due to the entrance
of more private (corporate) sector banks, downsizing, introduction of new technologies, etc. Because of these changes,
the employees in the banking sector are experiencing a high level of stress than ever before. According
to French and Caplan & Jones (1975), pressure of both
qualitative and quantitative overload can result in the need to work excessive
hours, which is an additional source of stress. Having
to work under time pressure in
order to meet deadlines is an independent source of stress. Studies show that
stress levels increase as difficult
deadlines draw near. Stress is often developed when an individual is assigned a major responsibility without
proper authority and delegation of power. Interpersonal factors such as group cohesiveness, functional dependence,
communication frequency, relative authority
and organizational distance between the role sender and the focal persons are
important topics in organizational behaviour (Brief, Schuler, & Van
Sell, 1981).

2.2  Sources of Stress

The antecedents of stress, or the so-called stressors, affecting today’s
employees are summarized in the
following Figure 1. As shown in it, these causes come from both outside and
inside the organization and from the groups that employees are influenced by and from employees themselves.

Figure 1: Categories of stressors

2.2.1    Extra organizational stressors

Although most
analysis of job stress ignore the importance of outside forces and events, it
is becoming increasingly clear that these have a  tremendous
impact. Taking an open-systems perspective of an organization (that is, the organization is greatly affected
by the external environment),
it is clear that job stress is not limited just to things that happen inside the organization, during working
hours.

Extra
organizational stressors include things such as societal/ technological change,
the family, and relocation, economic
and financial conditions, race and class, and residential or community conditions. The phenomenal rate 
of  social and technical change
has had a  great effect on

people’s lifestyles, and this of course is carried over into their jobs. Although
medical science has increased the life spans of people
and has eradicated or reduced the threat of many diseases, the pace of modern living has increased
stress and decreased personal wellness. It is generally recognized that a person’s family has a big impact on personality development. A family
situation-either a brief crisis, such as a squabble or the illness of a
family member, or long term strained relations with the spouse or children-can act as a significant stressor for employees.

Relocating the
family because of a transfer or a promotion can also lead to stress. For most people in recent years, their financial situation
has proved to be a stressor. Some stress researchers define these personal
life stressors as unresolved environmental demands (for example, family or financial problem)
requiring adaptive behaviours in the form of social re- adjustments. Life’s changes may be slow or sudden. These sudden
changes have been portrayed in novels
and movies as having a dramatic effect on people. These life changes can also
directly influence job performance.

Sociological
variables such as race, sex and class can also become stressors. More recently, research has found that women experience
more psychological distress than men, but men are more prone to severe physical illness. Also, People in the
middle and upper classes may have particular
or common stressors. The same is true
of the local community or region that
one comes from. For example, one
researcher identified the condition of housing, convenience of services
and shopping, neighbourliness, and degree of noise and air
pollution as likely stressors.

2.2.2   
Organizational stressors

Organizational stressors affect large number of employees.
Stress in an organization can be due to an insensitive bass, unpleasant co – workers, work over load and the need to complete
a task in a limited time. For instance a high pressure environment
that places chronic work demands on employees
fuels the stress response. In contrast, research provides preliminary support for
the idea that participative management
can reduce organizational stress.

The office design and general office environment are important
organizational level stressors. Research
demonstrators are the poor lighting, loud noise, improper placement of furniture
and dirty or smelly environment also
create stress. Managers are advised to monitor and eliminate these stressors.

Besides the potential stressors that occur outside the organization,
there are also those associated with
the organization itself. Although the organization is made up of groups and
individuals, there is also more macro
– level dimensions, unique to the organization that contains potential stressors.

2.2.3  Group Stressors

The group can
also be a potential source of stress. These group stressors can be categorized
into three areas such as lack of
group cohesiveness, lack of social support and intra-individual, interpersonal, and inter group
conflict.

2.2.3.1 
Lack of group cohesiveness

Starting with the historically famous Hawthorne studies,
it has become very clear that cohesiveness, or ―togetherness‖, is very important to employees, especially at the lower levels of organizations. If an employee is denied
the opportunity for this cohesiveness because of the task design, because the supervisor does things
to prohibit or limit it or because the other members of the group shut the person out, the resulting lack of cohesiveness can be very stress – producing.

2.2.3.2  Lack of social support

Employees are
greatly affected by the support of one or more members of a cohesive group. By sharing their problems and joys
with others, they are much better off.
If this type of social support
is lacking for an individual, the situation can be very stressful.

2.2.3.3  Intra-individual, Interpersonal, and inter group conflict

Conflict is very closely
conceptually linked to stress. Conflict
is normally associated with incompatible or hostile acts between intra-individual dimensions such as personal goals or motivational needs/values, between individuals within a group, and
between groups.

Group related
stressors include factors
such as conflict, poor communications, unpleasant relationships,
and fear of being ostracized from the group as a valued member working with superiors, peers, or subordinates with
whom one does not get along can be a constant source of stress. Some people can deal with misunderstandings and
conflicts in an open way and resolve issues
as they arise. Many, however, find it difficult to do this and build internal
stresses for themselves. When
conflicts, poor communications, and unpleasant interactions have to be faced at the work place, individuals try to avoid
the stresses by remaining absent as frequently as possible, and even
start looking for other jobs.

2.2.4  Individual Stressors

Individual
level stressors are those directly associated with a person’s job duties and
his family relationships. Marital
difficulties Breaking off a relationship and discipline troubles with children are example of relationship problems
that creates stress for employees and that are not left at the front door when they arrive at door. Managers create stress for employees by exhibiting inconsistent behaviours, failing to provide support,
showing lack of concern, providing
inadequate direction creating a high productivity environment and
focusing on negatives while ignoring good performance. In a sense, the categories of stressors discussed
so far (extra organizational,
organizational, and group) eventually get down to the individual level.

2.3  Job Performance

There is no any universally
accepted definition
for the term ―performance‖. Different managerial
experts put the different definitions for these them. In this way Porter and
Lawler (1968) have defined job
performance as the net effect of a person’s effort as modified by this
abilities and traits and by his role perceptions. This definition implies
that performance in a given situation can be viewed as resulting from the
interrelationships between effort, abilities, and traits and role perceptions. Motowidlo (2003) define job
performance is based on employee behavior and the outcome is vital for the organizational success.
Muchinsky (2003) explained
job performance as a combination of employee’s behaviors.
Further he described
that it can be monitored, measured

and evaluated
as outcomes at employee level and linked with the organizational goals.
Therefore job performance is a
vital determinant for organizational success.

2.4    Job Stress and Job Performance

According to
Singh (2001), when there is no stress, job challenges are absent and
performance tends to be low. As
stress increases, performance tends to increase, because stress helps a person call up resources to meet job
requirements. It is a healthy stimulus that encourages employees to respond to challenges. Eventually stress
reaches a plateau that corresponds approximately with a person’s top day-to-day performance capability. At this point
additional stress tends to produce no
more improvement. Finally, if stress becomes too great, performance begins to decline, because stress
interferes with it (Table 1).

Table 1 – Stress
Levels and Consequences

Ziauddin, Riaz, Farooq
& Tahir (2010) explored stress as the main cause behind the low satisfaction of employees about the job
and low job commitment which ultimately hinders the overall performance of the working organizations. Robert Marie
& Mark (2009) highlighted that
sick leaves, high labour turnover and early retirements are the worst results
of job/work related stress.
Rehman, Aslam, Hasan,
Waheed & Imran (2010) also revealed stress
as the main cause of employees’ poor health and reduced performance around the globe.

2.5   
Conceptual Framework

After the careful study
of literature review,
the following conceptual model is formulated to depict the relationship between
stress and performance (Figure 1). The framework shows three

(3) independent variables such as job related factors
of stress, organization factors of stress and individual factors of stress. Job performance of the employees is the dependent variable.

Independent variables                                                          Dependent variable

3.   Hypotheses

Based on the above conceptual model the following
hypotheses (H) has been formulated for this study.

H1:      There is a significant relationship between job related
stress and job performance of employees

H2:      There is a significant relationship between organizational stress and job performance of employees.

H3:      There is a significant  relationship
between individual stress and job performance of employees.

H4:      There is a significant relationship between stress and job performance of employees.

4.   Research Methodology

The study relied on survey method as the researchers assumed it to be the
most appropriate method according to
the nature of the study. The sample for this study is 125 banking employees in the bank industry. The total number of
employees was 176 in all the branches of the selected bank in the Northern region.
The data collection was done by using a self-administrated structured questionnaire. The
questionnaire consists of 52 questions. Five point Likert type scale has been used in the questionnaire to
measure stress and job performance such as, 5 for strongly agree, 4 for agree, 3 for neutral, 2 for
disagree and 1 for strongly disagree have been given in order to analyze data. The questions are designed based on
literature collected (Selye, 1993; Ferris, Bergin &
Wayne, 1988). Questions regarding
the personal details cover age, marital status,
dependents, experience and education etc.To test the hypotheses, Pearson’s
product moment correlation analysis and multivariate analysis were used. The statistical computer package SPSS
version 20.0 was utilized to analyze the data. The Cronbach’s coefficient was used to get the inter item consistency reliability (Walsh,
1995). Cronbach’s alphas were 0.710 for stress
and 0.701 for job performance suggesting that each instrument’s internal
consistency was satisfactory.

5.   Results

5.1   
Testing of Hypotheses

The results of Pearson’s product moment correlation analysis used to test
the hypotheses are presented in the
Table 2. The desired level of significance is 0.01. As these hypotheses are non
– directional hypotheses, two-tailed test was used.

Table 2: Pearson Correlation for all selected
independent variables and dependent
variable

**. Correlation is significant at the
0.01 level (2-tailed).

The analysis of the results indicate a negative correlation between job
related stress and job performance (r
= -0.488) and is significant at 0.01. There is a negative relationship between organizational stress and performance. The correlation coefficient (r = -0.616)
is significant at

0.01. The negative relationship between individual stress and performance
(r = -0.602) and is significant at
0.01. The stress reveal its significant negative correlation with performance
(r = – 0.729) at p = 0.01 shows that
employees’ performance is highly correlates to the stress they have been undergone.

Multivariate analysis evaluates the simultaneous effects of all the independent variables on dependent
variable. The results
of regressing the three independent variables against the dependent variable employees’ job performance are shown in the Table 3.

Table 3: Aggregate impact
of the stress factors on job performance

The adjusted square of the multiple R is 0.529 indicating that the 52.9%
of variance in job performance is
explained by the three independent variables jointly. There is statistical
evidence to claim that three
independent variables have significantly explained the 52.9% of the variance in job
performance of the selected
domain.

6.  
Discussion

The success of
the organization depends on the performance of the employees. The employee performance is affected by many factors. Particularly, employees’
stress mostly affects their work performance. The stress can cause dissatisfaction; by this employees
cannot perform their

work successfully and effectively. As hypothesized it was found that there are significant relationships between jobs related stress, organizational stress
and individual stress and job performance of employees. The overall
relationships of different elements of stress showed that organizational stress has the strongest negative
relationship with job performance. Analysis
of the collected data revealed
that stress has a significant impact
on the employees’ performance.

The sample
indicated that majority of the banking employees are male (72.8%). And the ages
of 41.6% of employees are in the
range of 26 – 35 years and 44.8% of the employees have 4 – 7 years’ experience. 70.4% of the employees
are General Certificate in Education (Advanced
Level) qualified. There is 36.8% of employees responsible for cash
operations in their job role. Further majority
of employees are single
(69.6%) among the employees considered for the study.

7.  
Conclusion

The main objective of this study was to understand the relationship between
stress and performance of employees in banking
industry of Sri Lanka. For this purpose, the study covered fourteen
branches of a selected bank from northern
region in Sri Lanka. In line with this research, it is found that stress might
affect to reduce job performance. According to the analysed data, employees stress has an impact on
their job performance. That is, a
change at the stress level
experienced by employees affects to their job performance. Further there is a
negative relationship between
employees’ stress level and their job performance. Strong correlations exist between
elements of stress and job
performance of employees. The
regression analysis of the data shows that the coefficient of determination adjusted
R. square = 0.529, so, it can be concluded that 52.9% of the variability
in employees’ job performance is accounted for by the variables in this model. Most of the organizations do not give
importance to the stress undergo by their employees; this study will give
them ample reasons to consider stress of employees’ as an important factor
in increasing employees’ performance.

8.   Recommendation

Stress experienced by employees should be managed to improve their performance.
Thereby in order to reduce adverse
stress managers should provide additional employees to manage the crowded branches, improve easy two way
communication between managers and staff, introduce more recreational activities such as indoor games, TV room and
internet facilities for each employee.
Further the staff should be allowed to get advices from their supervisors and
connect with other peers. A strong
support system will buffer them from the negative effects of stress. Further
the organization should create a supportive organizational climate and counselling facility should be readily
available for the staff. It is recommended to create a stress free environment for the employees
who will thereby
improve their performance up to the satisfactory level of the management

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