Faculty of Social Science and Humanities

Department of Management

The impact of increased work stress on employee

performance

Master thesis of

Business management study program

Author SMNVV23AK2, Abdelhamid

YOUNES

Supervisor Dr. Dvorak_jaroslav

 Klaipėda,2024

CONTENT

INTRODUCTION.............................................................................................................. 3

I Theoretical framework of work stress........................................................................... 4

1.1. Basics about work stress................................................................................................. 6

1.1.1. Sources of work stress and the most important models for interpreting them........... 10

1.1.2. Ways to deal with work stress................................................................................... 14

1.2. Work pressures on employee performance.................................................................... 19

1.3. Generalities about performance and employee performance........................................ 21

1.4. Various studies on the nature of the relationship between work stress and job
performance.......................................................................................................................... 24

II. METHODOLOGY OF THE RESEARCH.................................................................. 28

III. An applied study of work stress and employee performance................................... 31

3.1 Generale introduction to the agency.............................................................................. 31

3.2.Work pressures within the agency.................................................................................. 39

3.3. Preparing andanalyzing a questionnaire (RECCOMENDATIONS).............................50

CONCLUSIONS ................................................................................................................ 69

REFERENCES.................................................................................................................... 72
INTRODUCTION

Introduction
The employee is the cornerstone of any organization, driving its operations, innovation, and
overall success. However, the modern workplace is increasingly characterized by stressors that
impact both individual performance and organizational outcomes. Stress, often defined as a
disruption of internal equilibrium caused by external pressures (Selye, 1959), can manifest in
acute or chronic forms, influenced by socio-demographic factors such as age, gender, marital
status, and working conditions (Halbreich, 2021; Lucassen et al., 2014). Addressing workplace
stress is therefore critical for fostering a productive and supportive environment.

Organizations face the challenge of managing a workforce with diverse educational

backgrounds, ambitions, personalities, and beliefs. These differences can lead to complex
interpersonal dynamics that influence collaboration, motivation, and performance (Jason, 2011).
In response, organizations must strive to create conditions that alleviate stress, promote
employee well-being, and enhance overall organizational efficiency.

At a broader level, stress is not confined to workplace settings but extends into societal domains,
with significant implications for public health. Studies consistently highlight the interplay
between stress and socio-demographic factors, revealing that women, married individuals, and
younger adults often experience higher levels of stress (Rodríguez et al., 2020; Marmot, 2015).
Recent global developments, such as the COVID-19 pandemic, economic crises, and geopolitical
conflicts, have further exacerbated stress levels worldwide, contributing to rising rates of mental
health issues, including emotional exhaustion, depression, and anxiety (McEwen, 2022; Katta et
al., 2023). Countries with limited healthcare resources and higher socio-economic vulnerabilities,
such as Lithuania, exhibit particularly alarming rates of stress-related mental health challenges
(Nochaiwong et al., 2021).

This thesis seeks to explore the multifaceted nature of stress within organizational contexts and
its broader societal impacts. By analyzing the factors contributing to stress, and its consequences
on mental health and productivity particularly performance, this study aims to identify effective
strategies for stress management. Ultimately, the findings will contribute to improving individual
well-being, organizational performance, and societal health in an increasingly complex and fast-
paced world.

Problematic

In order to identify the impact of work pressures on employee performance and explore effective
coping mechanisms, this research will address the following problematic questions :

- What is the impact of increased work pressures on employees’ performance in company?

Objectives

In this work the factors combatting pressures withing the organization are studied. the main aim
of the study is to identify effective strategies for managing work-related stress within
organizations. By focusing on organization well-being performance, we will understand how
stress and work pressures negatively impact organizational performance, leading to decreased
productivity and damaged employee relationships.

And during this thesis, tasks

1- Identify the pressures to which the individual is exposed within the organization
2- Analyzing ways to deal with work stress
3- Investigate a distinct strategic study examining the relationship between work stress and job
performance and providing recommendations and methods for improving work stress
management.

Methods.
Comparative, analytical as well as statistical and logical analysis methods were used for the
investigation. The article analyses work of Lithuanian and foreign scientists, published in
scientific publications.
A community-based, cross-sectional study was conducted among 606 working individuals
residing in Klaipeda City, Lithuania, between February and March 2018.
Data was collected through a questionnaire-based survey, conducted with the approval of the
Kaunas Regional Biomedical Research Ethics Committee (Permission No. BE-2-1). Participants
were included if they met the following criteria: aged 18-65 years, currently employed, with no
history of clinically diagnosed diseases, and willing and able to participate in the study.

Data for continuous variables are presented as mean ± Standard Deviation (SD), while
categorical variables are reported as frequencies. Descriptive statistics and univariate analyses
were performed using SPSS version 23.0.
 1.1. Basic about work stress
The term “stress” is used in numerous ways today, describing everything from feeling ill in the
morning to anxiety leading to depression. Among certain scientific groups, it has both negative
and positive connotations. Within the context of this report, stress will only be considered as
having a negative impact and will be dealt with in the framework of the workplace. Stress is not
a health impairment, but is the first sign of a harmful physical and emotional response
The definition of ‘Stress’ and overall research on stress was pioneered by a Canadian
endocrinologist of Austria and Hungarian descent named Hans Selye in the year 1936, he later
defined stress as the “non-specific response of the body to any demand made upon it” (Selye,
1976, p.137; Selye, 1978) and also made a distinction between good stress, which he called
Eustress and bad stress 33 which he called Distress (Selye, 1974). Lazarus (1966) also defined
stress as the inability of an individual to cope with the demands placed on them. This occurs
when the existing coping mechanisms are insufficient in comparison to the responsibilities
placed on a person (Cox, 1978) and an imbalance between the demands and the resources
provided (Lazarus and Folkman, 1984). Stress is regarded to be an inevitable aspect of work and
life (Costa and McCrae, 1992; Kinman, 1998) and has also be known to be a multi-dimensional
construct (Cavanaugh et al., 2000).
Stress can define a negative condition or a positive condition that responds to a stressor and that
can have an impact on a person’s mental or physical health and wellbeing.
Occupational stress can be referred to variously as job stress, work stress, organisational stress
and work-related stress; all these are often used interchangeably in literature (Vokic and
Bogdanic, 2007). It is a state of not being able to cope with the pressure and demands of a job
(Ress 1997, Cited Vokic and Bogdanic, 2007) and has been a common health issue in recent
times (Lu et al., 2003). Employees within every organisation can experience stress irrespective of
the industry or sector the organisation falls within. Although, previous studies have shown that
employees within the health, human service and helping professionals such as lecturers who are
constantly communicating and interacting with people are more likely to experience job stress
than their counterparts in other sectors (Cole and Walker, 1989; Antoniou et al., 2003)
Several countries with health and safety regulations define work stress as the adverse reaction of
employees to excessive work demands. The National Institute of Occupational Safety and Health
(NIOSH) in the USA describes it as a mismatch between job requirements and employee
capabilities, while the Health and Safety Executive (HSE) in the UK focuses on the adverse
reaction to excessive pressures. Comcare in Australia defines it as a mismatch between employee
demands and their coping abilities. For the (ILO) stress is the harmful physical and emotional
response caused by an imbalance between the perceived demands and the perceived resources
and abilities of individuals to cope with those demands.

According to WHO (2016), a job can be only considered healthy when the workload of an
employee is in the same proportion to their abilities and available resources. Losses
Organisations should take responsibility of protecting the wellbeing of their employees by
curtailing the causes of stress in their work environments and workplaces and ensuring that
individual differences are factored in whilst providing intervention (Quick and Henderson,
2016).
Work stress has become a global organisational challenge this is as a result of changing social,
economic and political factors across the globe.
In the light of these changes, organisations have also altered certain factors within their work
environments and working conditions which have also increased employee’s responsibilities and
overall job demands (ILO, 2016).
Various sectors across the world are also being affected by these changes (Khanna and Maini,
2013).
This has also been a threat to the health of those affected, concerns have been raised regarding
the negative impact of work stress on academic employees.
In the year 2006, a report published by NIOSH revealed that 70% of employees considered their
job to be stressful and another 26% claimed to be burned out and exhausted as a result of stress
at work, in a similar report published by the same organisation at a different time saw that 75%
of the respondents were convinced that the stress they were presently being exposed to were
higher at their various jobs were definitely higher than counterparts a decade ago.

According to American Psychological Association (APA, 2018), it was also stated that
employers lose a total of $300 billion due to employees calling in sick, absenteeism,
presenteeism and declining performance and productivity.
In Europe, Matrix (2013) carried out a survey on the cost of work related stress within the
European region, and findings showed employees absenteeism cost employers €272 35 billion,
declined productivity of employees cost employers €242 billion whilst health care costs and
social welfare cost employers €63 billion and €39 billion respectively which summed up to a
total of €617 billion annually.
Various physical and mental illnesses such as heart attacks, depression, cardiovascular disease,
hypertension, cancer amongst others have been discovered to be attributed to exposure to job
stress (Houkes et al., 2001; Ganster and Rosen, 2013; Gazzaniga et al., 2015; Sonnentag, 2018).
Work stress and responses to stress has also been found to vary based on individual’s perception,
certain employees might perceive a higher level of workload as a threat whilst others might see
such workload as a challenge (Chang et al., 2003; Sacramento et al., 2013; Ozer et al., 2014).

In a HEI all over the world over the past 30 years there has been ongoing research and a
significant academic interest on the concept of stress. Numerous researchers have investigated
stress amongst academic employees in higher education institutions from both medical and
organisational perspective in different countries. However, despite the proliferation of research
studies on occupational stress amongst academics there has not been a significant reduction in
the level of stress (Lavicoli et al., 2004; Bowen et al., 2016).

1.1.1.Sources of work stress and the most important models for

interpreting them.
Sources of occupational stress can only be adequately investigated by using a multidisciplinary
approach, by examining the whole spectrum of psychological, sociological, and physiological
problems that make stimulus demands on an individual in his working environment.
Use of a multidisciplinary approach acknowledges also that stressors in the working environment
can affect an individual at home and in his social environment and vice versa.

Thus, when studying the sources and manifestations of stress in a specific occupational group,
personnel in
factories or hospitals-it is essential to be aware of the importance of the extra organizational
sources of stress that can affect the performance and the mental and physical health of an
individual at work. Two major extra-organizational areas from within which stress may arise are
the home environment, marital relations and financial concerns-and the social environment,
social activities and relationships and urban versus rural living conditions.
A large number of potential stressors in the working environment have been determined in
numerous studies. They include such factors as shift work, the under-utilization of abilities, work
underload and boredom, work overload, role conflict, unequal pay, job future ambiguity,
relationships at work, the quality of equipment, and physical danger.
Ergonomic conditions
Poor physical working conditions can exacerbate stress at work. For example, it is thought that
the design of the control room at a nuclear power plant is an important variable in terms of stress
to the workers and that more sophisticated ergonomic designs are required . It was found that an
important stress factor leading to the Three Mile Island nuclear power plant accident was the
distraction caused by the excessive sounding of emergency alarms . Air traffic controllers
frequently complain about ergonomic conditions at work . Most ergonomically deprived
environments, however, are those of blue-collar workers.

Shift work
in numerous occupational studies it has been found that shift work is a common occupational
stressor, affecting neurophysiological rhythms, such as body temperature, metabolic rate, and
blood sugar level, mental efficiency, and work motivation, which may ultimately result in stress-
related disease.
Air traffic control is a particularly highly stressed occupation, four times the prevalence of
hypertension and also more mild diabetes and peptic ulcer was found in a group studied in the
early 1970s than in its control group of second-class airmen. Although other job stressors were
attributed as being instrumental in the causation of these stress-related maladies, shift work was
the major one isolated. Nevertheless, although it is acknowledged that there are stressors
associated with shift work, Selye suggests that most investigations support the conclusion that
shift work becomes physically less stressful as individuals adapt to it. Even so, "exclusion from
society" is a common complaint among shift workers.
Work overload
Work overload is seen as being either quantitative, too much to do-or qualitative, too difficult.
Although empirical evidence demonstrating that work overload is a main factor in occupational
ill health is not available, it has been associated with certain behavioral malfunctions. For
example, a relationship was demonstrated between quantitative overload and cigarette smoking,
an important risk factor in coronary heart disease, and in a study of 1500 employees job overload
was found to be associated with such stress-related symptoms as lowered self-esteem, low work
motivation, and escapist drinking.
Work underload
Work underload together with a repetitive, routine, boring, or under stimulating working
environment, a paced assembly line-has been associated with ill health. This may, for example,
be a problem facing a nuclear power plant operator, as 99.9% of his time is spent on
monotonous, rather than stimulating, tasks. Indeed, as in the job of policeman, an operator in a
nuclear power plant has to accept periods of boredom that may suddenly be disrupted because of
an emergency, this sudden jolt to the physical and mental state may have a detrimental effect on
his health. Furthermore, boredom and lack of interest in the job may reduce an operator's ability
to respond to an abnormal situation.
Physical danger
Certain occupations have been determined to be of high risk in terms of danger-e.g., policeman,
miner, soldier, and fireman. When faced with abnormal situations, nuclear power plant personnel
are also subjected to physical danger but the type of stress that is induced by uncertainty as to
whether an event presenting physical danger might occur, is often substantially relieved if the
worker feels himself to be adequately trained and equipped to cope with the emergency should it
arise.

Role in the organization

It has been determined that a person's role at work is a main source of occupational stress. Stress
may stem from role Sources of stress at work and their relation to non-working environments
ambiguity, not being clear as to what is required-or role conflict, conflicting job demands-such as
are involved in being responsible for people, and conflict arising from organizational boundaries.
It has been indicated that organizational stressors stemming from role ambiguity and conflict can
result in stress-related maladies such as coronary heart disease.
Furthermore, it has been found that those in managerial, clerical, and professional occupations
are more prone to the type of occupational stress that is related to role conflict. After a review of
the relevant literature, it was concluded that the correlations between role conflict and ambiguity
and the components of job satisfaction tend to be strong, between role conflict and ambiguity and
mental disorder, however, they tend to be weak. Personality is an important determinant of how
an individual reacts to role conflict, greater job-related tension is produced in introverts than in
extroverts and it is held that flexible people show greater job-related tension under conditions of
conflict than do rigid individuals.
Responsibility for workers and for their safety appears to be a potentially viable occupational
stressor.
The pressures of nuclear power plant operators were defined in terms of their responsibility for
the safety of others when faced with abnormal situations. Responsibility for others was seen as a
potential stressor in police work although not to the same extent as in air traffic control. This was
verified by a study of occupational stress in air traffic controllers which determined
responsibility for people's safety and lives to be a major occupational stressor.
Career development
Cooper & Marshall maintain that environmental stressors related to career development stem
from "the impact of overpromotion, underpromotion, status incongruence, lack of job security,
thwarted ambition.
In a study of United States Navy employees, status congruency, or the degree to which there is
job advancement, including promotion to the next rank, was found to be positively related to
military effectiveness and negatively related to the incidence of psychiatric disorder.
However, it was considered, in the case of nuclear power plant operators, that large increases in
pay would not necessarily increase their job satisfaction; the result could be that they would
remain in jobs that no longer gave them satisfaction.

Relationships at work
Relationships at work, their nature, and the social support received from colleagues, supervisor,
and subordinates, have been related to job stress. Poor relations with other members of an
organization may be precipitated by role ambiguity, which produces psychological strain in the
form of low job satisfaction. It was found that a high degree of social support from peers relieves
job strain; it was also shown to condition the effect of job stress on cortisone, blood pressure, and
glucose levels; and the number of cigarettes smoked as well as the rate of giving up cigarette
smoking. It is interesting to note that greater help and social support is provided to air traffic
controllers by friends and colleagues than by supervisors.

Organizational structure and atmosphere Occupational (managerial style)

Stress in relation to organizational structure and atmosphere results from such factors as office
politics, lack of effective consultation, exclusion from the decision-making process, and
restrictions on behavior. It was found that greater participation led to higher productivity,
improved performance, lower staff turnover, and lower levels of physical and mental disorder,
including such stress-related behavior as escapist drinking and heavy smoking.
Many people wonder how they can manage and cope with workplace stress, to understand the
complex relationship between various stressors and their impact on individuals, several models
have been developed. Here are some of the most prominent ones:
Demand-Control-Support (DCS) Model
This model posits that job stress arises from a mismatch between job demands (workload, time
pressure, etc.) and job control (decision-making authority, autonomy). Social support from
colleagues and supervisors can mitigate the negative effects of high demands and low control.
Effort-Reward Imbalance (ERI) Model
The ERI model suggests that stress occurs when the effort invested in a job is perceived to be
disproportionate to the rewards received (e.g., salary, recognition, career advancement). A high
effort-reward imbalance can lead to feelings of injustice and frustration.

Job Demands-Resources (JD-R) Model

This model emphasizes the importance of job resources, such as autonomy, social support, and
opportunities for growth, in buffering the negative effects of job demands. High job demands
combined with low job resources can lead to increased stress and burnout.

Conservation of Resources (COR) Model

The COR model proposes that individuals strive to acquire, conserve, and protect resources (e.g.,
energy, time, social support). When individuals perceive a threat to their resources, they
experience stress.
Person-Environement Fit (P-E Fit) Model
This model suggests that stress arises when there is a mismatch between an individual's abilities,
needs, and values and the demands and opportunities of their work environment. A good fit
between the person and the environment leads to job satisfaction and reduced stress.

.1.1.2. Ways to deal with work stress

This point has been examined through a number of different lenses:
Health promoting factors at work: the sense of coherence
Antonovsky's salutogenic model offers a refreshing perspective on workplace stress. Instead of
solely focusing on risk factors, it emphasizes the resources and factors that promote health and
well-being. Central to this model is the concept of 'sense of coherence,' which highlights the
importance of an individual's perception of their environment and their ability to cope. By
understanding how individuals construct meaning in their work and by strengthening their sense
of coherence, organizations can create healthier and more productive workplaces.By viewing
stressors as opportunities for growth and possessing the resources to cope with them, individuals
with a strong sense of coherence are better equipped to navigate life's difficulties and maintain
overall well-being.
The development of sense of coherence: is characterized by a sense of comprehensibility,
manageability, and meaningfulness, is associated with better health outcomes. Conversely, a
weak sense of coherence can increase vulnerability to stress and illness. Work environments,
particularly those of young adults, play a crucial role in shaping the sense of coherence.

Positive work experiences, such as job satisfaction, autonomy, and social support, can strengthen
the sense of coherence, while negative experiences, such as job insecurity, excessive workload,
and lack of control, can weaken it. Therefore, prioritizing the well-being of young workers and
creating supportive work environments is essential for promoting both individual and
organizational health.
Meaningfulness, manageability, and comprehensibility at work: it is recommended to Prioritize
the well-being of young workers, Recognizing that early life experiences significantly influence
the development of the sense of coherence, it is crucial to focus on creating positive work
environments for young adults.
Evenely Create supportive work environments involves fostering a sense of comprehensibility,
manageability, and meaningfulness through factors such as job satisfaction, autonomy, social
support, and opportunities for growth and development.

Manageability: the crucial factor in determining manageability are Balance between Overload
and Underload, it is maintaining an appropriate balance between workload and available
resources.
The Individuals need to feel a sense of control over their work,witch including the ability to
make decisions and solve problems. Adequate resources, such as knowledge, skills, materials,
and equipment, are essential for effective problem-solving.
Social Support: Strong social relationships at work, both formal and informal, can significantly
enhance manageability. Supportive colleagues can provide assistance, understanding, and
encouragement.
Finally, the nature of work itself impacts manageability. Challenging work that requires the
application of knowledge and skills can boost a sense of accomplishment and satisfaction.
Conversely, monotonous or repetitive tasks can lead to feelings of underload and dissatisfaction.
By striking a balance between workload, resources, social support, and the nature of work,
organizations can significantly improve employee well-being and productivity.

Comprehensibility :
A strong sense of comprehensibility at work is crucial for employee well-being and
productivity. To foster this sense, organizations should consider the following factors:
Meaningful Work: Employees should understand how their work contributes to the
organization's overall goals. This can be achieved by providing clear job descriptions, offering
opportunities for skill development, and granting autonomy in decision-making.
Clear Roles and Expectations: Clear and concise job descriptions, regular performance reviews,
and open communication channels can help employees understand their roles and expectations.
Positive Social Interactions: A positive work environment, characterized by teamwork,
supportive leadership, and social events, can enhance employee satisfaction and engagement.
Job Security: Fair employment practices, opportunities for career growth, and transparent
communication can reduce anxiety and uncertainty.
Organizational Culture: A positive organizational culture that emphasizes transparency, fairness,
and employee recognition can foster a sense of belonging and purpose.
Opportunities for Growth and Development: Providing training and development opportunities,
mentorship programs, and clear career paths can motivate employees and enhance their job
satisfaction.
Work-Life Balance: Flexible work arrangements, time management training, and stress
management techniques can help employees balance their work and personal lives.

.1.2. Work pressures on employee performance

Time is valuable, hence with the commitments people uphold from being a professional to
domestic accountabilities, time pushes everyone to squeeze every second they could have
(Hochschild, 1997; Perlow, 1998, 1999). Time pressure seemed to become increasingly a main
issue of work in most developing countries (Moore et. al 2012). In one unique experiment that
was conducted, of how time pressure and completion of work impacts the existence of „cognitive
lockup‟, it was discovered that if most people would have completed their task the likelihood for
cognitive lockup is to rise (Schreuder & Mioch, 2011. On the contrary if people execute their
task for the second time the probability somehow decreases (Schreuder & Mioch, 2011).
However, no effect was seen between time pressure and employees‟ performance (Schreuder &
Mioch, 2011). Few researches e.g. (van d.k 2009, De D. 2003, Durham et al. 2000, Karau &
Kelly 1992, Kelly and Loving, 2004), shared the following concerns that lead time pressure at
individual level:
Performance becomes faster due to the inconsideration of several options.
Poor quality of work due to inability of executing task in a systematic or effective manner; and
More empirical processing of information and those results from refraining of providing
adequate resolution or decision.
In team level, when time pressure increases it helps members to focus on the main tasks and
emphasizes in completing the task as fast as possible, even though it impacts both their
interaction and job performance but the same time quality of work is being sacrificed (Kelly &
Loving, 2004).
It is obviously not ideal to take more time on all tasks because employees‟ concern is not only
on one task but also about their output – getting the most executed within the limited time given
(Kelly & Loving, 2004).
Time pressure need not perceived or imply as negative. But in most cases, when employees‟
performance is impacted by time pressure they are prone in making more mistakes (Johnson et
al., 1993 cited in Moore et al, 2012).
Time pressure has a negative and significant influence on employee performance.
It is a known fact that the issues of heavy workload and stress at job seemed to be rising day-by-
day and literally, every employee seemed to be exposed to this workload issue regardless of their
background or industries they belong (Shah et al. n.d). In today‟s market, organisations do not
have much of a choice but to chase on complex aims or objectives that are often challenging to
reconcile, either to succeed in becoming more productive, profitable or more competitive. What
seemed to „push to shaft‟ towards these directions; are globalisation, economy liberalisation and
ICT advancement (Vinet, Bourbonnais, & Brisson, 2003). For one to operate systematically and
efficiently, workload needs to be define properly and when a workload is either too low or too
high it could back fire either ways on the overall employees‟ performance (Dasgupta, 2013).

Employees‟ are demanded to possess versatility, being flexible and required to be available
when duty calls. Due to these factors, employees‟ seemed to be overwhelmed and seemed to find
it straining in carrying out their tasks within the limited timeline given (De Coninck & Gollac,
2006).
Workload connects to the force of a task or job, it produces mental stress and when in stress
employee loses interest to complete their task or they try to avoid the consequences of not
accomplishing them (Fournier et al. 2011).
What is ironic is that the work distribution in a public sector is different compared to the private
sector. Employees‟ in the public sector usually do little but seek extra benefits, they are usually
not overloaded, but they literally exposed themselves under the pretext of workload stress
(Fournier et al. 2011).
In a positive end, workload is not always negative, but it also provides opportunities for
employees‟ to gain experience faster and increase their productivity, but at the same time,
massive work overload could also result in less productivity and incompetence (Shah et al. n.d).
Workload has a negative and significant influence on employee performance
Motivation is a process that allows someone to strive towards achieving their goals, it is also an
intelligence that cannot be observed directly (Seth, 2003), cited (Ibrahim and Brobbey, 2015).
Motivation is one of the most vital concepts of psychological process where managers could
encourage growth to their fellow peers in achieving specific goals (Adnan, 2005). According to
Bartol and Martin (1998), they considered motivation as a powerful instrument that strengthen
actions and activates the inclination to continue.
Motivation also play as a driver to fulfill and unfulfilled needs that inspires a performance that
are objectively set. Due to the current volatile and competitive market, most of the organisation
are striving to compete for survival, as such, motivating their employees‟ is vital for any
organisation to succeed through the measurement of employees‟ performance (Dobre, 2013).
Based from an international study conducted by Mullins of Proudfoot Consulting (2005), he
discovered that the main factor for less productivity is due to low working morale, relates to low
motivation, feeling unappreciative and being rewarded poorly.

Kalimullah (2010), also suggested that if organisation practice motivating their employees‟, their
employees‟ will eventually aligned their goals with the organisation and perform better, they will
continuously look forward to improve in their work even though if working under any stressful
or challenging conditions (Dobre, 2013). Employees‟ are considered as the main source of an
organisation‟s advantage towards business competition.
Therefore, one could determine if the organisation will grow or live on depends on how they
motivate their employees‟ (Lawler, 2003). Not all employees‟ are the same, they all have
different visions, different abilities, physiological needs that motivates them, so it is important
that the organisation take time and seriousness evaluating what‟s important to motivate their
employee in order to see better performance, productivity and loyalty (Dobre, 2013).

Lack of Motivation has a negative and significant effect on employee performance.

Rizzo et al(1970) well-defined „role ambiguity‟ as a mirror of certainty on relationships, time
allocation, power, tasks, clear guidance, policies and the aptitude to envisage authorisations as a
result of attitudeor performance (Tang & Chang, 2010). It is also associated with anxiety (Katz
& Kahn, 1978).
Role ambiguity ascends when certain parts becomes unclear, ambiguous and defined poorly and
if these are not mentioned or discussed correctly, „role ambiguity‟ certainly will arise (Srikanth
& Jomon, 2013). American Institute of Stress (2004) projected that the overall organisational
cost for American businesses, due to „job stress would costs more than US$300 billion annually
(Tang & Chang, 2010). Role ambiguity or role conflict occur when some of the processes
conflicts or contradicts from the norm and value of the processes applied in the organisation
(Coverman, 1989, Ruyter et al., 2001). According to Luthan (1997), anyone would experience
conflicts within their role should they go through more than two pressures at one-go and end-up
obeying to one of the pressures.
Role ambiguity also happens when an employee goes through hard time trying to adjust two or
more roles at the same time (Harijanto et al. 2013). When someone deals with role ambiguity or
role conflict they experience emotional challenge, being pathologically loss with reality and a
massive slump in success (Karatepe and Uludag, 2008 cited in Harijanto et al. 2013).
To Fisher (2001) role ambiguity causes loss of productivity. Burney and Widener (2007) equally
argued that role ambiguity was undesirably related to areas like decisionmaking and strategic
planning.
Concisely, whenever an employee‟s job is being linked closely to other subordinates, the effect
of role ambiguity is greater compared to those employees‟ whose work is rather independent
(Tang & Chang, 2010).

Role ambiguity has a negative and significant influence on employee performance.

Therefore, the conceptual framework is illustrated below
Figure 1: Research Theoretical Framework
Source: Developed for this research

.1.3. Generalities about performance and employee performance

Performance Appraisal: is a part and parcel of organization’s strategic management and

important tool used for recruiting, selecting, training, developing and rewarding employees as
well as for planning their career growth, establishing industrial relations and providing them with
other benefits such as safety and sanitary well-being. Moreover,

it helps to highlight the issues that both managers and employees have to pay more attention to, it
determines roles and
responsibilities and as a result helps to improve performance. Next, performance appraisal
protects the organizations from individuals who legally challenge management decisions with
claims for promotions, transfers, payments, and termination (Stone, 2008).
Nowadays performance appraisal is more popular in Western countries. As surveys reported, its
popularity in the US increased from 89% in the mid of 70’s to 94% by the mid of 80’s, supported
mainly by the large and medium sized companies (Redman and Wilkinson, 2009).
There’s been also similar increase in the numbers in the surveys on the UK and by now it’s
become a common practice to use performance appraisal systems in other eastern countries such
as China, Hong Kong, Japan, Africa and India. Moreover there have been many academic studies
based on performance appraisal while over 20 articles monthly appear in the electronic academic
press (Redman and Wilkinson, 2009). Based on UK market, performance appraisal plays an
important role in financial services and lately, it has gained relevance for the public sector.
It is widely used in schools, hospitals, universities, local authorities, etc. It is worth mentioning
that appraising is not applied only to the middle layer of organization hierarchies, but as an IRS
survey has shown, 39% of performance appraisal is applied to every employee and its
application showed an increase of 75% after five years. Nevertheless, there are still limitations
regarding the public sector as the IRS survey found only 17% of public organization using
performance appraisal to every employee (Redman and Wilkinson, 2009).

However, there are many ways of performance appraisal practices and the way they should be
done. Based on Bernadin’s, Kanes’ and Pillanova’s arguments there are some basic instructions
that have to be followed in order for an organization to succeed in creating an effective appraisal
system which are as follows:
1) precision in defining and measuring performance appraisal,
2) relying on internal and external customers data in the process of evaluation
3) formal approach to the investigating process and correction of the effects of situational
constraints on performance (Bernardin, 2010).

Moreover, an appraisal system requires the involvement of managers, employees, HR

professionals, as well as internal and external customers in the process of decision making about
the measurement content, measurement process, rating errors control, in defining the rater as
well as the ratee, and finally about the administrative characteristics. The basic of the appraisal
system is set by the strategic planning and objectives of the organization and its details are
reviewed in order to achieve an appraising system designed in accordance with the overall goals
of the organization (Bernardin, 2010).
These systems are: 1. the ranking: the manager evaluates person’s performance compared to
others, classifying the results on a “the best” to “the worst” scale,
2. the grading: employee’s performance is matched with specific levels such as superior, good,
acceptable, marginal and unsatisfactory,
3. the graphic scales: evaluating performance by using a specific characteristic or behavior of the
employees,
4. the critical incidents: illustrating if employee performance is effective or not,
5. the behaviorally anchored rating scales (BARS): which combine the traditional rating scale
and critical incidents method,
6. the behavior observation scales: using critical incidents to create a list of the desired
behaviors,
7. the essay description: a written statement describing an employee’s strengths, weaknesses,
performance and development created by the rater,
8. the management by objectives (MBO): specific goals are set with each employee and then the
progress is occasionally reviewed,
9. the balanced scorecard: evaluating employee performance in four basic areas which are
people, internal operations, customer satisfaction and financial,
10. the workplace surveillance: monitoring employee performance and behavior through specific
equipment (Stone, 2008).
For the implementation of performance appraisal systems there are many developments which
have both broadened the range and increased the number of appraisers while at the same time
enhanced the managerial control and the exploitation of performance appraisal power to the

maximum through upward appraisal, peer evaluation, evaluation of the subordinates, use of
external customers and the 360o appraisal (Redman and Wilkinson, 2009).
Upward appraisal was more common in US and was transferred through mother companies to
the world operations and then to other companies requiring an anonymous questionnaire in order
to avoid employee worries about providing honest feedback regarding managerial performance.
Moreover, the evaluation can be applied by the immediate supervisor who has the knowledge of
the job, the performance standards that are must be met and the performance of the individual
employee.
Another type is peer evaluation and it is commonly used by organizations whose employee total
quality management concepts and teams are subject to peer pressure which is the key for
performance improvement (Stone, 2008).
The role of peers is necessary for some jobs as using a number of colleagues can supervise
reliably the whole team (Cascio, 2003).
Drotter with Ram Charan and Zames Noel adopted the Leadership Pipeline model to
performance appraisal process that enables people in large companies to accumulate skills and
experience and tackle bigger and more complex assignments.
In many decentralized organizations, the hierarchy of managerial takes the form of six career
passages or pipeline turns.
The pipeline is bent in six passages and each of these represents a different level of leadership
and consists of major events of a leader’s life (Charan et al., 2011).
By the exploitation of the content of these passages in combination with the challenges involved
in order to make these transactions, it is a unique opportunity for the organization to build a
Leadership Pipeline and as a result a leadership culture which is the key for the organization to
respond to changes and threats in the business environment (Drotter and Charan, 2001).
Each passage requires high managerial skills, time application and work values as the higher the
passage level the more demanding it becomes. These passages are:
1. Managing self to managing others.
2. Managing others to managing managers

3. Managing managers to managing a function

4. Functional manager to business manager
5. Business manager to group manager
6. Group manager to enterprise manager The advantage that this model offers and other models
lack of is that leadership pipeline diagnoses and troubleshoot potential problems at the level they
occur, while it assesses precise skills, time applications and lacking values.

Finally, one of the unique abilities of this model is that “taggs” people who have been promoted
too quickly and 10 have not yet the requisite experience causing problems to the organization
(Charan et al., 2011).
Employee Performance Appraisal
Performance appraisal is based on the theory that organizational objectives are achieved through
the individual effort of employees. Consequently, performance appraisal can be realized as an
overall measure of organizational effectiveness. Moreover, through performance appraisal the
employees’ work performance can be improved by helping them realize and use their full
potential in carrying out the organization’s full potential and as a result in carrying out
organization’s objectives (Segaran, 1999).
Performance appraisal is a critical management activity due to the fact that managers are always
observing and judging employee behavior and activities and as a consequence has a direct impact
on the employee’s pay increases, promotions, demotions, terminations, training and career
development. This is the reason why organizations are constantly searching for more effective
ways of appraising performance. A recent example is Microsoft’s where its controversial
forceddistribution system was dropped after numerous complaints from supervisors and their
subordinates. Another example is Ford’s highly controversial system which replaced the older
one as it resulted in high ratings and its data indicated that there were almost no ineffective
workers (Bernardin, 2010).
In order organizations achieve an effective performance management, Stone (2008) emphasizes
in the dynamic form of performance appraisal which refers to employee growth, development
and the setting of new goals.

The main characteristics of dynamic performance appraisals are the establishment of goals, the
performance feedback and the performance improvement.
With good performance improvement an effective feedback can be achieved as it is necessary for
a goal setting program to help employees see how they perform and as a result allows them to set
new goals in the future. Moreover, goal setting is vital for performance improvement, as the
employee can understand and is challenged of what is to be achieved.
Newell and Scarbrough (2002) analyze the main purposes of the appraisal process starting with
those that give the opportunity to managers and employees to discuss about the latter’s’ progress
deciding mutually any improvements that can be made in order to perform more effectively.
Another purpose is that the employees have the opportunity to predict their future capabilities
regarding the level and the type of their work. Lastly, the above purposes are connected with a
third one, that of reward which seems to be the most important from the side of employees.
From the side of HR managers, there are some basic researched-based guidelines that have to
consider in order their companies achieve effective performance review discussions. First of all,
problems that arise should be discussed as problems and in any case as criticisms, because only
with the manager’s support can lead to problem solutions and consequently to employee
improvement.
Secondly, during the evaluation the personality of the employee should not be touched and the
employee should be encouraged from the manager to talk.
As a result to this discussion, specific performance objectives should be set and things that can
be changed as feedback is more effective for behaviors that the employee can really change.
Last but not least, it is very important during the discussion the manager not to show positional
authority, but the discussion should be held on “neutral ground”. This enhances effective talk
without judgments and promotes problem solving and mutual goal setting (Stone, 2008).
Through this kind of dialogue, power differences are not an issue which gives to the employee
the right to express his views about his goals and the ability to take further responsibilities
(Schneider and Barsoux, 2003).

In order performance appraisal discussions become effective Stone (2008) explains that there
must be three main factors to accomplish this process:
1. The knowledge of the manager regarding the employee’s job and performance
2. The support of the manager to the employee
3. The degree of manager’s involvement of the employee in the discussion.
Potential absence of one of the above factors may have negative results in the quality of the
performance appraisal interview and on its ultimate value because through the discussion
between the supervisor and the employee mutually review about the employee’s responsibilities
is applied, they both examine the employee’s performance, they mutually explore what each can
do in order to ensure performance improvement and finally they mutually review employee’s
short term and long term goals (Stone, 2008).
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