Psycho-social risks (PSR) cover a wide array of health issues related to the work environment, encompassing both psychological and physiological problems. Because they have received attention primarily from sociologists and psychologists, they may have been either underestimated or ignored by management in the past.

PSR Council on Business & SocietyContributing Professors: Annick Ancelin-Bourguignon, ESSEC Business School, Prof Naotaka Watanabe, Keio Business School, Adrian Zicari, ESSEC Business School, Gérard de Pouvourville, ESSEC Business School

The importance of these issues and their impact on the productivity of employees are clear, so organizations and managers must find a way to alleviate them. However, this is easier said than done, as modern trends in management systems and performance assessment tend to actually exacerbate PSR. As such, rather than adopting short-term, “band-aid” solutions to these issues, it may be necessary to reassess the overall management approach.

Views on PSR

Stress at work Council on Business & SocietyBroadly speaking, PSR are defined as any ill-being or suffering at work. These are most commonly psychological, but can also be physiological. There are three common views on PSR. First, there is the psychological view, which suggests that people suffering at work are fragile and require more support than they are typically receiving. This view, however, is not supported by empirical evidence. Second, there is the industrial view, which considers PSR to be like any other industrial risk and which should therefore be treated as such. Third, the psycho-sociological view suggests that there is a weakening of communities at work. It should be pointed out, however, that research is incomplete and none of these views claims to fully address organizational context and the influence of management systems.

At what cost?

PSR is a growing problem in workplaces. It requires identifying the various contributing factors and positing potential ways to address them. Estimates for the economic impact of PSR vary by country but are likely to be very high. In 2002, the cost of stress at work and related mental health problems was already, on average, 3-4% of gross national product in the fifteen countries then in the EU, amounting to €265 billion (USD 250 billion) annually. A 2007 estimate suggested that the cost of stress in the U.S. has risen to the same figure: $200-300 billion annually. Furthermore, in 2007 studies show that in the EU-27, 27% of workers were exposed to factors that could adversely affect their mental well-being. These studies in total suggest that more than 50% of all lost working days are related to work-related stress.

Modern times…

Management systems can be active contributors to the growth of PSR. Performance management systems (PMS) such as performance-based compensation, rank-and-fire, or unnecessarily severe individual appraisals can aggravate PSR. Specifically, the use of PMS can lead to greater work constraints rather than increased productivity. Workers pushed to pursue infinitely greater excellence will eventually revolt, pointing out for example that endlessly doing “more with less” logically leads to eventually doing “everything with nothing.” Excessive pressure can result in a loss of meaning for work: benchmarking, rankings, and performance-based compensation foster competition between employees, creating conflict between individuals, and can lead to feelings of insecurity. Finally, unrestrained PMS clash with values that some companies claim to adhere to in their annual reports – “our employees are our most important asset”. Workplaces are a source of not only subsistence but also social interaction, self-esteem, etc., and unchecked evaluation and compensation systems often represent the threat of punishment as a daily experience. The argument can therefore be made that the use of certain managerial practices, including PMS, should be minimized to the greatest extent possible.

Stress can be positive too

stress can be positive too

On the other hand, while PMS and other forms of management control are undoubtedly a source of job-related stress, some degree of control will always be required and some stress can be highly positive. Simply stated, there are two dimensions to stress. The first is the pressure dimension, which can have a positive effect on performance. The second is the threat dimension, which adversely affects performance. The two dimensions do not necessarily share a close correlation. A preliminary study by ESSEC suggests that limited resources increase both dimensions of stress, and highly interactive use of PMS by top management (not merely one-way or top down) decreases both dimensions of stress. In addition, performance-based compensation increases the pressure dimension of stress but not the threat dimension. The same study hypothesizes that increasing the comprehensiveness of performance measurements increases the pressure dimension while decreasing the threat dimension, but there is not yet sufficient evidence to support this assertion in its entirety. In short, research suggests that management controls are a double-edged sword: there are some desirable features to those that are used well, and undesirable features to those that are implemented poorly.

Mentoring as a solution

MentoringAt the individual, workplace, and organization levels, the introduction of a mentoring program can be an effective tool for primary prevention of PSR. Such programs can mitigate harmful circumstances before they have a chance to metastasize into serious problems. A mentoring program is characterized by a carefully constructed environment that facilitates a developmental relationship between the mentor and mentee. Relationships are overseen and monitored by administrators or coordinators, who may be “laymen” or experienced and qualified PSR professional. A pilot study on mentoring by Dr. Watanabe of Keio Business School found that there was a positive correlation between how much “mentee” experience an employee had received in the past and their present job satisfaction. The same study found a negative correlation between past mentee experience and present strain. There seems to be no specific technique in mentoring: the relationship itself is the most important part.

PSR are mainly a consequence of management systems rather than individual managers. Modern management systems can be highly impersonal and it may be beneficial to re-emphasize relationships and restore a sense of community at work. In essence, it is important to foster a climate of trust that makes it possible to raise concerns or issues of stress – naturally.

Written and edited by Prof. Edward Yagi and Tom Gamble from transcripts taken from the 2014 Council on Business & Society global forum Health and Healthcare: At the Crossroad of Business and Society.

The Council on Business & Society Global Alliance is an ongoing international dialogue between six of the world’s leading business schools and an organiser of Forums focusing on issues at the crossroads of business and society – The Council Community helps bring together business leaders, academics, students and journalists from around the world. #CouncilonBusinessandSociety

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