Published on: July 8, 2025 at 3:53 pm
Organizations have profound effects on the mental and physical well-being of their employees, but far too many don’t prioritize meeting the needs of their personnel or even bother to track how they’re doing in those areas. Even companies that are successful in terms of short-term performance and profitability are hurting themselves over the long term by not taking employees’ perspectives into account and working to reduce their stress.
That’s according to Academy of Management Scholar Jeffrey Pfeffer of Stanford University, one of today’s most influential management professors and researchers. Pfeffer notes that the workplace is a prominent source of chronic stress and that a “time-is-money” culture exacerbates the problem. Experts have found that experiencing high cortisol levels due to long-term stress is linked to health problems, including anxiety, depression, headaches, heart disease, weight gain, and impaired concentration, which could hurt job performance.
“The problem is not that the workplace is killing people—which, by the way, it is—but that nobody in a leadership position seems to care about it,” Pfeffer says. “While some organizations have adopted an attitude of stewardship with respect to the physical environment, even many of them have done a much poorer job of understanding that they are stewards of the lives of their employees, who have entrusted both their physical and mental well-being to the organization that they’re working for, and some leaders have not done a very good job of understanding and exercising their stewardship responsibilities.”
In addition to policies and procedures that encourage employees to think about their time in terms of money, the threat of being laid off is an immense source of stress for workers. Well-paid employees with a sense of job security are more productive than their stressed-out counterparts, Pfeffer says, and layoffs often backfire on organizations who make headcount cuts to boot.
“Layoffs are always a short-sighted action, but of course, we live in a world in which employers are mostly short-sighted because they’re getting evaluated on the basis of quarterly results and nobody is actually evaluated based upon the mental health or physical health of their workforce,” Pfeffer says. “In evaluating the success of their organization, leaders should do a better job of worrying about a broader set of dependent variables than just productivity and financial performance.”
