RUNNING HEAD: Work Stress and Employee Performance in Banking Industry
Work Stress and Employee Performance in Banking Industry: A study based on
Kathmandu Valley
Kripa Kandel, Ravi K.C., Rihasha Niroula, Roshan Subedi, Sabina Aryal
School of Management, Tribhuvan University
Abstract
Stress is a universal element and individuals in every walk of life have to face it. The
employees working in different organizations have to deal with stress. Especially,
bankers are under a great deal of stress due to many antecedents of stress. These
stresses lead to decreased organizational performance, decreased employee overall
performance, decreased quality of work, high staff turnover, and absenteeism. It also
causes health problems such as anxiety, depression, headache and backache. Eight
components of job stress: work type, salary pay scale, lack of job security, poor
communication, work overload, lack of motivation, lack of management support and
lack of performance evaluation and appraisal were examined in this study. The
objective of the study is to explore the stress related problems of bankers and examine
the factors that play crucial role for creating stress among the employees of banks. And
finally, to understand the impact of stress on employee performance, 200
questionnaires were filled by the bankers from different banks of Kathmandu valley.
The results show that all the components of stress cause great stress in bankers and
significantly decreases their performance.
Key words: Work stress, Employee Performance, Work load, Banking sector
Introduction
Stress is an adaptive response to a situation that is perceived as challenging or
threatening to a person’s well-being. McGrath (1976) defined job stress as “a
condition in which employees are needed to fulfill the duties that exceed the
person’s ability and the resources which are required to perform these duties,
under the situation where there is huge difference between rewards and demand for
fulfilling the duties.” Although stress includes both good and bad aspects but it is
not necessarily bad. Stress leads to decreased employee overall performance, high
error rate and poor quality of work, high staff turnover, and absenteeism due to
health problems such as anxiety, emotional disorder, work life imbalance,
depression and other forms of ailments such as frequent headache; obesity and
cardiac arrests. Work stress is the response people may have when presented with
Work Stress and Employee Performance in Banking Industry
work demands and pressures that are not matched to their knowledge and abilities
and which challenge their ability to cope. According to Robbins and Sanghi (2006)
“A dynamic condition in which an individual is confronted with an opportunity,
constraints, or demand related to what he or she desires and for which the outcome
is perceived to be both uncertain and important.” In general, the combination of
high demands in a job and a low amount of control over the situation can lead to
stress.
Now-a-days stress has become an integral part of jobs in every sector. In recent
years the banking industry of Nepal has been able to attract young talents who
have chosen banking profession as their preferred career. But banks have been
going through enormous changes in organizational structure, new technology and
new ways of structuring the operation, etc. that have left their mark on the working
conditions and daily lives of employees. Due to this, employees are facing lots of
problems while performing their work. There is excessive pressure in the banking
industry to perform any tasks that often leads to stress which undermines
employee performance and can make people believed that employees uncertainty
of their abilities; if they had sufficient qualifications to fulfill job requirements,
lack of knowledge and skills opposite to task demands will end in internal conflict
and job stress ill (Rao, S. & S. Borkar, 2012). It is generally acknowledged by a
various people working in the banking industry that stress and burnout drain the
performance of the staff. It is discovered in research that there is a negative
correlation between quality of services delivered to customers and work-related
stress, that is, highly stressed employees have failed to provide high quality
services as compared to less stressed ones (Varca, 2009).
Competition is also growing day by day among the banking industry. The job
environment of banking employees is extremely tedious as it includes the
immediate client connection in all levels. Bankers are under a massive deal of
stress and that too because of many factors of stress, for example, Overload, Role
ambiguity, Role conflict, Responsibility for people, Participation, Lack of
Performance evaluation and appraisal, Lack of feedback, pay scale, Lack of
management support and staying aware of quick innovative change
The objective of the study is to explore the stress related problems of bankers of
Kathmandu valley and examine the factors that play crucial role for creating stress
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Work Stress and Employee Performance in Banking Industry
among the employees of banks as well as effect of such stress in their
performance.
Literature Review
In banking sector particularly higher management doesn’t realize the impact of
stress on employee performance which ultimately results in critical managerial
dilemmas as Subha and Shakeel (2009) described “Higher level of stress existed
with no managerial concern for solution consequently lowering the employee
performance, staking organizational reputation and loss of skilled employees, these
situations call for immediate concern from organization management for
employing effective stress management practices to increase employee satisfaction
and overall employee performance.”
According to Oreoluwa and Oludele (2010), the major changes implemented such
as workforce cutbacks in the banking sector in recent times have had a large
impact on workers by negative effects on their working and personal lives.
Cutbacks put pressure on the remaining workforce with increased work overload
or stress. From their study, they found that there is higher level of stress among the
executives than the non-executives in the Nigerian Banking Industry. The heavy
workload demands in the banks often turn into long working hours which affect
personal health significantly. Moreover, to compete with other banks, bank
management must necessitate change to improve performance. Management can
improve it by re-engineering, rationalization of branches and business lines,
increased working hours, staff education and retraining. The findings indicated that
bank workers who are victims of management reactions are subject to stress.
However, the study had a research gap as it did not address other factors that
would affect employee satisfaction. In addition, the study failed to utilize factor
analysis and odd ratio regressions as these are the appropriate methodologies of
analyzing Likert scale data.
An individual in his or her job in bank face stress as Jamshed et al., (2011)
suggested “The workplace is potentially an important source of stress for bankers
because of the amount of time they spent in their respective banks.” And that stress
often decreases their performance. “Therefore, occupation of individuals could be
a major source of stress in the given circumstances. When individuals face stress
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Work Stress and Employee Performance in Banking Industry
due to various conditions of their occupation and fail to cope with stress, it results
into burnout.” Basically, in banking sector lack of administrative support from
boss(manager), work overload & time pressure, riskiness of job, poor relationship
with customers & coworkers, and work family balance cause stress which in turns
decrease employee performance.
Massaran Bamba (2016) stated the objective of the study is to investigate the
impact of job stress over employees work performance. This paper is of great
theoretical and realistic significance to strength the research on the work pressure,
job performance, and their relationship which can help to make the best use of the
potential of people properly and improve their quality of life and their work
satisfaction and can finally help the company to improve the level of production.
Preet Kaur Risham and Sharma Gautam Poonam (2016) said that in India, banks
are amongst top ten stressed work places. This article is an effort to study the need
of stress management programs due to increasingly dangers of stress under which
it becomes difficult for an employee to work. It also suggests that the organization
should understand the share they should spend on stress management programs so
that they can maximize their profit which would also help in generating
satisfaction amongst employees and creating a stressful environment.
Earlier studies and researches were conducted on employees of various industries
but this study focuses on the banking industry inside Kathmandu valley. After the
review of articles related to work stress and employee performance, it was found
that no such studies were conducted in banking sector in Kathmandu valley. To fill
research gap, this study aims to study factors affecting work stress among banking
employees and the impact of such stress on job performance. This study also aims
to see whether the international studies are relevant to Nepalese context or not.
This study examines the impact of various factors (independent variable) on stress
of employees and their work performance. Stress level and employee performance
is taken as the dependent variable. This study has age group and gender as the
moderating variable.
4
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Work Stress and Employee Performance in Banking Industry
Theoretical Framework
Independent variables
•
•
•
•
•
•
•
•
Work Type
Salary Pay scale
Job Security
Communication
Work Overload
Motivation
Management Support
Performance
Evaluation& Appraisal
Dependent Variables
•
Work stress and
employee
performance
Moderating Variables
•
•
Gender
Age group
Research Methodology
Descriptive research design was used in this study, where survey was carried out
by sending questionnaire to the employees working in the banks, to describe the
characteristics of variables of interest, frequencies, and categories of factors of
stress. The correlation research design has also been used to find association
between work stress and employee performance.
Structured questionnaires were distributed to employees of different branches of 5
commercial banks in Kathmandu through online forms. Total of 200 responses
were collected from the selected banks: Prabhu Bank, NMB Bank, Civil Bank,
Global IME and NIC Asia as per our judgement, convenience and easy access to
the data sources. The study was conducted from the employee point of view.
Primary data were collected through online questionnaire where the questionnaires
contained both open ended questions and close ended questions, prepared with the
help of Google forms. The secondary data involved in this article has been
gathered from different reports, publications and journal articles.
Quantitative method had been used for the collection of data for exploring the stress
related problems of bankers and examining the factors that play crucial role for
creating stress among the employees of banks. The questionnaire data were analyzed
using SPSS software. Frequency analysis, and descriptive analysis was used as
statistical tools to draw conclusion on factors that play crucial role on stress level and
employees’ performance. Mean of Likert scale questions were analyzed to find the
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Work Stress and Employee Performance in Banking Industry
factors that contribute to stress. Levene’s test was carried out to find the association
between gender and stress level. Pearson’s correlation matrix was used to determine
the relationship between stress level and decreased work performance.
Data Presentation and Analysis
Respondent’s profile
Table 1: Respondent's Gender
Gender
Frequency
Percent
Male
110
55%
Female
90
45%
Total
200
100%
Above table shows that male respondents were greater than female respondents,
which implies that any results drawn from this report can be generalized on male
employees while results may not be generalized on female employees.
Table 2: Respondents Age
Age
Frequency
Percent
18-24
70
35%
25-31
63
31.5%
32-38
36
18%
39-45
22
11%
46 and above
9
4.5%
Total
200
100%
The response was distributed into 5 age groups. Since majority of the respondents
were of age group 18-24 years, followed by age group 25-31 years, the results of this
study can be applied to those youths only whereas it may not be applicable to
employees of other age groups.
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Work Stress and Employee Performance in Banking Industry
What makes you feel stressed in your work place?
Table 3: Reason behind stress
Problems
Frequency
Percent
Work Type
28
14%
Salary Pay scale
22
11%
Lack of Job security
30
15%
Poor Communication
28
14%
Work Overload
33
16.5%
Lack of Motivation
24
12%
Lack of Management Support
16
8%
Lack of Performance Evaluation & Appraisal
15
7.5%
Others
4
2%
Total
200
100%
The table 3 shows us the reasons or problems of why employees working in the
banking industry feel stressed. It can be seen that work overload is the main factor
that play crucial role for creating stress among the employees of the bank. It might
be so because, employees in Nepalese banks has such type of cultures where they
take work as a burden, not as an opportunity to learn.
How would you rate the level of your stress?
Table 4: Level of stress
Level of Stress
Frequency
Percent
Mild
50
25%
Moderate
57
28.5%
Severe
65
32.5%
Extreme
28
14%
Total
200
100%
Among the 200 respondents who were working in the banking industry of
Kathmandu valley, majority of them were having severe level of stress at their
workplace. It was immediately followed by employees having moderate level of
stress. Very few responded that they felt extreme level of stress. This might be so
because those that felt extreme level of stress might have left the banking sector.
Those who responded the moderate and severe level of stress might have higher
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Work Stress and Employee Performance in Banking Industry
stress tolerance capacity or they might not have found the alternate job
opportunities.
Table 5: Descriptive statistics
Variables affecting work performance
N
Mean
Work overload
200
2.9950
Lack of training
200
3.2950
Long working hours
200
2.9700
Responsibility delegation
200
2.7700
Job insecurity
200
3.1950
Role conflict
200
3.4200
Rest breaks between works
200
2.9050
Above table 5 shows that, on the Likert scale of “never, occasionally, sometimes,
often, always”, Role conflict, Job insecurity, Lack of trainings often affect employees’
performance. Likewise, Work overload, Long working hours, Breaks in between
Works and Responsibility delegation sometimes affect the employees’ performance.
Table 6: Independent sample t test between gender and stress level
Levene's
Test for
Equality of
Variances
F
Sig
.
Lev
el of
Stre
ss
Equal
varianc
es
assume
d
Equal
varianc
es not
assume
d
1.13
9
.28
7
Independent Samples Test
t-test for Equality of Means
t
df
Sig.
(2taile
d)
Mean
Differen
ce
Std.
Error
Differen
ce
1.40
8
198
.161
-.201
.143
1.41
5
193.6
82
.159
-.201
.142
95%
Confidence
Interval
Low
Upp
er
er
.081
.483
.481
.079
The table 6 shows that the p value is 0.161. Since p-value (i.e. 0.161) is more than
0.05 (level of significance), it indicates that the stress level of male and female do not
differ significantly. Since, there is no significant mean difference between male and
female, it can be concluded that the moderating variable gender does not influence the
level of stress.
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Work Stress and Employee Performance in Banking Industry
Table 7: Correlation matrix showing relationship between Stress Level and Work
Performance
Correlation Matrix
Stress
Level
Stress Level
Pearson
1
Correlation
Sig. (2-tailed)
Decreased Work
Pearson
.926**
Performance
Correlation
Sig. (2-tailed)
.000
**. Correlation is significant at the 0.01 level (2-tailed).
Decreased
Work
Performance
.926**
.000
1
This table 7 shows the significant positive relationship between stress level and
decreased work performance of bank employees. Since the correlation coefficient is
0.926, we can conclude that increased in level of stress increase the chance of
decrease in work performance.
Discussion
This study was conducted to explore the stress related problems in bankers and
examine the factors affecting their stress. In our study, majority of the respondents
were male. Results drawn from this report can be generalized on male employees
while results may not be generalized on female employees. Our sample included
majority (35%) of respondents of age category 18-25, it may be so because of more
involvement of youths in banking sector.
Work overload was the major reason behind stress among the employees, which was
followed by lack of job security, poor communication and work type. It might be so
because employees in Nepalese banks has such type of cultures where they take work
as a burden, not as an opportunity to learn. Most of the respondents felt their stress
level was severe and very few felt that their stress was extreme. Those that felt
extreme level of stress might have left the banking sector and those who responded
the moderate and severe level of stress might have higher stress tolerance capacity or
they might not have found the alternate job. Role conflict often influenced employees’
performance. Lack of training and job insecurity were often considered main factors
that affected employees’ performance. Independent t test shows that there is no
association between gender and the level of stress, which means gender does not
Work Stress and Employee Performance in Banking Industry
10
influence the level of stress. Major factor affecting the job performance were ‘role
conflict’, ‘lack of training’ and ‘job security’. Likewise, stress level has negative
impact on job performance, i.e. increase in stress level significantly decreased work
performance.
Conclusion and Recommendation
This article aims to explore the reason behind stress in bank employees and the effect
of such in their performance. Role conflict, work overload and lack of training still
played significant role in affecting the employee’s performance. As per data analysis
and presentation through tables, it is realized that gender differences do not
significantly influence the stress level. As concluded in research by Rao, S. & S.
Borkar, (2012), Subha Imtiaz & Shakeel Ahmad (2009), Varca, P. E. (2009), this
research also concludes that stress level decreases the employees’ performance. This
result is consistent with international studies. This might be because of similarities in
working practices in banking sectors over the countries.
Most of the Banking organization should focus on minimizing the job role conflict
among the employees. Sufficient and related training should be provided to improve
the employees’ performance. Work overload and long working hours should be
avoided with sufficient breaktime between the jobs. Stress level decreases the
performance level significantly, which eventually impact negatively on overall
performance of the banking organization.Employees are the real assets of the
organization. Most of the banking employees felt stress because of the lack of job
security, work type and poor communication. Such organization shall provide job
security and better working environment to the employees. Clear job roles and a
better platform for clear communication shall be established. However, it is not
enough because employees deserve other additional benefit packages that increase
their performance level and their commitment. Hence, uplifting the motivational state
of employees to create a positive energy at work place is must.
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