Are your employees stressed out? Paying them more helps not only their stress levels, but their productivity as well, new research finds.
Cangrade, an employee success prediction and hiring automation platform, recently released "The Cost of Stress: 3 Things Every Company Should Know," a review that outlines the causes of workplace stress and ways to reduce it.
There is much more to workplace stress than meets the eye, said review author Dr. Greg Willard, PhD., a Harvard University professor and Cangrade senior vice president of scientific research.
Citing recent studies by the American Psychological Association (APA), Willard said work is consistently the most pervasive source of stress, affecting the health and well-being of 70 to 75 percent of Americans. Perceptions of individual stress levels are also more likely to increase than decrease over time.
As a result, the majority of employees say that stress is to blame for a range of workplace problems, such as difficulty concentrating, conflicts with coworkers, poor work quality, and tardiness or absenteeism, Willard said.
In addition, one in three workers report losing up to 10 percent of their productivity to stress, with one in five losing up to 25 percent. Sixty percent of employees say that stress has caused them to either quit their jobs or consider searching for new work, Willard said.
However, the APA studies also found that the leading cause of workplace stress is low salary, and the second-leading cause of stress overall for Americans is money matters. And while more money won't necessarily increase job satisfaction, not having enough money can contribute significantly to workplace stress.
"This suggests a new way of thinking about employee compensation. Simply paying employees more money can itself increase productivity on the job. Not because money is greater compensation for greater productivity per se, but rather because the employer has effectively alleviated the most prevalent source of stress," said Willard.
Aside from improving employees' stress levels, higher pay provides an additional benefit to employers, Willard said. Employees will not only be more willing to voice potentially important ideas, but they will also be less afraid to speak up when they see any problems.
Nonetheless, Willard points out that higher pay in the form of financial bonuses and raises will not have the same effect on productivity.
"Even as young children, we know the difference between doing something just because we want to and doing something because there is a reward. We want to do things that we want to do, because they are the things that we want to do," Willard said. "External rewards, in general, are very weak motivators, and, in fact, they often hurt performance or discourage us from wanting to do something at all."
Instead, research has found that paying a higher salary upfront is a more effective approach than offering external financial rewards.
"The major takeaway from this research is that salary should be considered an investment, not a cost," said Michael Burtov, CEO at Cangrade. "Research shows that paying employees just a little more can greatly reduce stress and negative workplace outcomes. Investing in employees, rather than paying a cost for the work that they produce, promotes passion, creativity and innovation in the workplace."
Originally published on BusinessNewsDaily.