How does work pressure affect the decision quality, efficiency and productivity of employees?
What role does leadership stress management play in overall performance?
Key Insight:
In knowledge-intensive work, performance depends on clear thinking, collaboration, and smart decisions. Chronic stress undermines all three.
Research clearly shows: Ineffective stress management – especially by leaders – is not just a health risk but a major threat to organizational performance.
Stress on Individual & Team Level
Does pressure really improve productivity?
Short-term pressure may boost output. But on long-term, when high demands persist, focus fades, motivation sinks and quality drops.
Research shows that employees under long-term pressure in jobs with high demands and with low control face:
- more absenteeism,
- reduced work ability
- reduced cognitive function
- more mistakes
- lower productivity
Working until late night during weeks. Constant message overload. Juggling multiple projects at once. Half of them listed on the top OKRs.
At first, adrenaline helps – but after a time, frustration grows, motivation drops, and energy fades due to less sleep and constant overthinking.
What seemed like “just this one important project” in the beginning, often reveals a deeper issue: it’s not just “that one exceptional project”, it’s the general structure and stress culture and the pressure rarely stops.
How does team stress affect collaboration and innovation?
Under chronic stress, teams show significantly more mistakes and less innovation.
- less effective communication
- struggle to resolve conflict
- avoid risk because of fear
This ultimately leads to missed opportunities and reduced innovation.
Teams often work on various projects at a time. Individual team members have 80-20 assignments, splitting their time between different projects and teams. They jump between contexts, messages, calls, emails – and start to loose focus and efficiency. Forget things. Get irritated. In software teams daily stand-ups turn into rushed updates to just get over with. While innovation and productivity slowly decline.
In knowledge work – where creativity and complex thinking are essential – this creates a silent but powerful performance drain.
Impact of Leadership
How do leaders amplify or buffer stress?
Leaders have a direct impact on their employees and how they receive their workload. Depending on how they handle it this can multiply stress and dysfunction in their teams by:
- Unrealistic demands
- Poor communication
- Low empathy for their situation
When leaders take on new projects for the team without adjusting priorities, when they focus more on appearing “busy” than on actual team capacity. When they overlook individual needs and abilities or get nervous about top-down demands and push them down unfiltered – they amplify pressure and strain within the team.
Research shows that supportive leadership on the other hand buffers stress and enhances good performance by setting realistic goals, pro-active capacity management, and by open dialogue.
Stress resilience clearly starts at the top – and leaders first need to know to manage their own pressure.
Organizational Level Impact
How does culture shape healthy performance?
Stress is not only about individual behavior – organizational structures and culture matter a lot:
- Harmful environments include unclear roles, low autonomy, poor reward systems, or toxicity in employee relationships because of high competition.
Unclear ownership and responsibility in big initiatives. No alignment between departments and shift blame around – often it is labelled as “miscommunication”, though the root cause also can be structural.
These organizations are also less likely to succeed in a competitive market (Park, 2007).
- Supportive environments foster flexibility, fairness, decision latitude, and psychological safety.
This can be clear and limited priorities. Or fostering psychological safety by actively collecting and work on their feedback.
Value rest times – during work and after work – without implicit pressure to overwork and send late night emails.
Leaders act as role models and be the first in setting healthy boundaries instead of glorifying non-stop availability.
Can stress prevention be a performance strategy?
Yes, because research clearly shows:
Organizations with health-oriented cultures perform better, and suffer lower costs of turnover and absenteeism, health care and litigation (Palmer et al., 2004 as cited in Park, 2007), as burnout risks decline and commitment grows.
Targeted prevention enhances employee satisfaction and mental health, and strengthens organizational intelligence.
This is not just about wellness apps.
High-performing organizations integrate stress management into their structure: realistic workloads, supportive leadership, flexible structures, and proactive communication.
Takeaway
Performance suffers where long-term stress is not well managed.
Organizations that treat stress as a strategic issue have a clear advantage with a more resilient and capable workforce.
Managing stress is not about lowering ambition,
it’s about enabling people to perform at their best and preserving capacity.
I recommend to view stress prevention not as a soft benefit, but as a hard performance lever:
- for their leaders to self-manage stress and multiply to the teams
- integrate it in the organizational structure and culture
With warm regards,
Magdalena
Literature Sources
Avr, M., & Srinivas Rao, B. (2024). A study of work stress and its impact on employees’ performance and job satisfaction. International Journal of Education and Science Research Review 10, 119–125. https://doi.org/10.47392/IRJAEM.2024.0324
Ganster, D. C., & Schaubroeck, J. (1991). Work stress and employee health. Journal of Management, 17(2), 235–271. https://doi.org/10.1177/014920639101700202
Gilboa, S., Shirom, A., Fried, Y., & Cooper, C. (2008). A meta-analysis of work demand stressors and job performance: Examining main and moderating effects. Personnel Psychology, 61(2), 227–271. https://doi.org/10.1111/j.1744-6570.2008.00113.x
Park, J. (2007). Work stress and job performance. Ottawa, Canada: Statistics Canada. https://www150.statcan.gc.ca/pub/75-001-x/2007109/article/10320-eng.htm
Putu, I. A. M. D. (2020). Millennial generation in accepting mutations: Impact on work stress and employee performance. International Journal of Social Science and Humanities, 3(1), 87–94. https://doi.org/10.29332/ijssh.v3n1.268
How People Work 