IDENTIFYING THE IMPACT OF FINANCIAL OBLIGATIONS ON OVERALL STRESS AND WORK-LIFE OF BANK EMPLOYEES

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1 International Journal of Marketing and Human Resource Management (IJMHRM) Volume 6, Issue 3, Sep-Dec (2015), pp , Article ID: IJMHRM_06_03_001 Available online at ISSN Print: ISSN and ISSN Online: X IAEME Publication IDENTIFYING THE IMPACT OF FINANCIAL OBLIGATIONS ON OVERALL STRESS AND WORK-LIFE OF BANK EMPLOYEES Neera Kundnani Research Scholar, Pacific Academy of Higher education and Research University, Udaipur Dr. Pallavi Mehta Associate Professor Faculty of Management, Pacific University, Udaipur ABSTRACT Financial Stress is a stress caused due to personal financial obligations of an individual which affects his/her work-life in a negative way. Financial stress is generally faced by individuals who belong to lower and middle income group. This research aims at identifying the weight age of financial obligations of an individual in his/her overall stress and to find out how stress caused by financial obligations is related to work-life of employees in banking sector. Findings show that financial obligations contributes maximum percentage in overall stress and it also shows that stress caused due to financial obligations is negatively related to work-life balance. The study also tried to suggest some strategies for employers and employees to reduce the effects of financial stress. Key words: Stress, Financial Stress, work-life balance, Employer strategies Cite This Article: Neera Kundnani and Dr. Pallavi Mehta, Identifying the Impact of Financial obligations on overall Stress and Work-Life of bank Employees. International Journal of Marketing and Human Resource Management, 6(3), 2015, pp INTRODUCTION India s lower middle class and upper middle class are the bird of Gold who has led India towards economic progress from last two decades. Only a quarter of India s 1.2 billion people can be defined as middle class according to the standards set by the Asian Development Bank. Middle class Indians are in the lowest bracket of spending power, many of which are not well educated and in unstable jobs in unorganized 1 editor@iaeme.com

2 Neera Kundnani and Dr. Pallavi Mehta sector. They are likely to fall down below poverty line if they face sudden financial uncertainties. The majority of middle class are in clerical and white collar jobs& depend on government and rich people to provide employment and those at entrepreneurial level are very less according to magnitude of India s population. According to McKinsey Global institute country s middle class will be 583 million strong by 2025 making India the fifth largest consumer market. The above discussion led us to conclude that middle class group is suffering from enormous financial stress. Employers and government must take steps for the benefit of these Gold birds for the dream future. 2. STRESS Stress is a response to an inappropriate level or overload of pressure which effects physically, emotionally and psychologically. There are various factors inside and outside the workplace which causes stress in an individual such as demographic status, individual factors and organizational factors. However stress caused due to financial obligations is discussed and focused in this study. Financial Stress can be defined as those financial burdens which exhaust an individual monetarily, physically and emotionally. Factors influencing financial stress of an individual can be complied in following categories Personal Characteristics Includes individual s demographic status(such as age, marital status, number of children etc.) and personality traits. Financial Literacy- Means knowledge of financial concepts and tools to male profitable financial decisions. Financial Behavior Refers to behavior of individual towards Savings and Investments for future financial expenses. Financial Situation- Refers to Wealth of an individual like property ownership, accumulated wealth, salary and benefits. Financial Stressors Refers to losses from uncertain events like losing a home, personal bankruptcy or job loss etc Impact of Financial stress Individual s personal finance problems affect their performance at job. Lowers the satisfaction level Reduces employer s profitability with increased absenteeism, lower employee engagement, accidents etc. Financial stress affects health of an individual negatively. Financially sound individuals are more competent at their jobs Work-Life Balance (Kirschemeyer,2000) defined work-life balance as Achieving satisfying experiences in all life domains, and to do so requires personal resources such as energy, time and commitment to be well distributed across domains. Though there are lot many definitions of work-life balance presented by various psychologists but a factor that contributes maximum in balancing work-life is money which has not been focused 2 editor@iaeme.com

3 Identifying the Impact of Financial obligations on overall Stress and Work-Life of bank Employees much while considering factors affecting work-life and is vital for work-life. Here money not only means salary or income it means a lot more than that like: Being financially sound Financial knowledge Savings and investments Financial liabilities and expenses Loans and advances Financial responsibilities Above factors affects work-life in direct and indirect way and it is crucial for healthy work-life. 3. SIGNIFICANCE OF RESEARCH The purpose behind this research is to find out the severe factor causing stress and how is it related to work and life. The study is intended to serve as a guide for Employer and Employee who are concerned to reduce major source of stress affecting work-life and suggesting ways to improve financial well-being for better work and life. 4. SCOPE OF THE STUDY The proposed research work is limited to analyzing the role of financial obligations in stress and its effects on work-life but there are other factors which are responsible for individual stress and effects work-life such as work environment, family support, personality etc. However this study will help in identifying major source of stress so that it can be reduced which in turn will reduce the overall stress at maximum level. 5. REVIEW OF LITERATURE A review on the previous studies on stress among the employees is necessary to know the areas already covered. This will help to find our new areas uncovered and to study them in depth. The earlier studies made on stress management among the employees are briefly reviewed here. Drentea and Lavrakas (2000):Over the limit: the association among health, race and debt.in this authors tried to explore that credit card debt and stress regarding debt is associated with health. Authors found that individuals who reported higher level of financial stress shows higher level of physical impairment and illness than those with lower levels of financial stress. E. Garman et al. (2002): Financial Stress and Workplace performance: Developing Employer-Credit Union Partnerships. A colloquium where researchers revealed that as employees gain control over their financial lives they become more competent at job, personal finance problems affects job performance, financial stress affects employer as well as employee both and suggested measure to improve financial wellbeing. J Kim and Garman (2003): Financial Stress and Absenteeism: An empirically Derived Model. In this study authors examined the relationship between financial stress and absenteeism. Authors revealed that financial stress is negatively related to organizational commitment and positively related to absenteeism. 3 editor@iaeme.com

4 Neera Kundnani and Dr. Pallavi Mehta (Australia and New Zealand Banking Group Limited (ANZ), 2005; Marston & Shevellar, 2010)Several interacting factors have been identified as contributing to financial stress, highlighting the complexity of pathways into and out of this state. These factors can be summarised as: unhealthy financial ways of thinking, circumstances outside the individual s control, and lack of skills and knowledge J.Kim et al. (2006) Relationship between Financial Stress and Workplace Absenteeism of Credit Counseling Clients. Authors conducted this study with the aim to find out impact of financial stress on workplace absenteeism. The results revealed that clients having high level of financial stress experience high level of absenteeism spending more hours on handling personal finances which reduces their time at work. MB Ross (2007): Impact of financial stress on Employee job satisfaction. This study was conducted with the purpose to identify how financial stress affects job satisfaction. The results revealed that employees affected by financial stress showed lower satisfaction level as compared to those who are not affected by financial stress. Steen and MacKenzie (2013): Financial Stress, Financial Literacy, Counselling and the Risk of Homelessness. The study was conducted to find out the link between financial stress, financial literacy and appropriate financial counseling help to prevent homelessness. The study provided evidence in supporting that financial literacy and financial counseling can reduce impact of financial stress and risk of homelessness. 6. RESEARCH GAPS Though there are many studies related to factors causing stress in work-life but it has been found that less research has been found on major factor which causes stress among all other factors, so that stress level can be reduced at maximum extent by controlling that very factor i.e financial stress. 7. OBJECTIVES Hypothesis To find out role of financial obligations in overall stress of bank employees To find out relationship between financial obligations and Work-life balance Ho 1 : There is no significant relationship between financial obligations and work-life balance of bank employees. Ha 1: There is a significant relationship between financial obligations and work-life balance of bank employees. 8. METHODOLOGY AND DATA COLLECTION Sample Size 51 bank employees selected on the basis of convenient sampling Data Collection Primary Data was collected using an unstructured questionnaire the respondents surveyed with a view to gain information regarding their orientation towards life and factors that affects their stress levels. The questionnaire contained questions to know their optimistic and pessimistic reactions towards various situations in work-life. 4 editor@iaeme.com

5 Identifying the Impact of Financial obligations on overall Stress and Work-Life of bank Employees 8.1. Statistical tools Relation between financial obligations and work-life balance is identified using correlation analysis and chi-square tests Data Analysis & interpretation On the basis of questionnaire filled by respondents which consists of some personal questions related to work-life and questions to judge there stress level and on the basis of answers given by them they were rated and scores were calculated Preference for Work-life balance or money Graph 1 Percentage of respondents showing preference over WLB/Money Inference: From the above Graph 1 it can be said that 82.35% prefer work-life balance over money as compared to only 17.65% considering money more important than work-life balance Identifying the role of financial obligations in overall stress Contribution of Factors From the below Table 1it can be seen that work-life balance and financial obligations contributes maximum percentage in overall stress factors i.e 12.57% and 10.93% respectively. 5 editor@iaeme.com

6 Neera Kundnani and Dr. Pallavi Mehta Table 1Weightage of factors in overall stress S. Composite Factors affecting stress level Percentage No Score 1 Excessive home responsibilities % 2 Excessive work at workplace % 3 Work-Life Balance % 4 When you are nervous at workplace % 5 When things are outside your control % 6 Enough sleep exercise & healthy food % 7 Working for long hours overtime & even on holidays % 8 Think or worry about work(when you are not actually at work) % 9 Usually miss out quality time with your family or friends because of pressure of work % 10 Feel tired to do things that needs attention at home because of your job % 11 Feel you are unable to perform your role as father/mother well % 12 Feel you are unable to perform your role as employee well % 13 Increasing Financial obligations % 14 Unclear expectations of work % 15 Job insecurity 56 4% TOTAL % Relationship between Work-life balance and financial obligations Correlations Increasing financial obligations Work Life Balance *. Correlation is significant at the 0.05 level (2-tailed). Increasing financial obligations Work Life Balance Pearson Correlation * Sig. (2-tailed).044 N Pearson Correlation * 1 Sig. (2-tailed).044 N Table 2 Correlation between Financial obligations and Work-life balance. Inference:- From the Table 1.11 it can be seen Karl Pearson s coefficient of correlation r = i.e ther is negative correlation between increasing financial obligations and work-life balance. 6 editor@iaeme.com

7 Identifying the Impact of Financial obligations on overall Stress and Work-Life of bank Employees Hypothesis Testing There is no significant relationship between Financial obligations and work-life balance of bank employees. Financial obligations* Work-life Balance Increasing financial obligations Table 3 Cross-Tabulation Financial obligations*work-life Balance Work-Life Balance No Yes Subtotal Count Row N % Count Row N % Count Row N % Very Low % % % Low % % % Medium % % % High % % % Very High % % % Subtotal % % % From the Table 3 it can be seen that out of 18 employees having low financial obligations 83.3% are able to balance their work-life and out of 13 employees having high financial obligations only 23.08% are able to balance their work-life. Chi-Square Test Increasing financial obligations WLB No Yes Total Very Low Medium High Very High Total Table 4 Chi-square table Tabular value Calculated value Degree of Freedom HO Accepted or Rejected Rejected From the data from Table 4 the calculated value of chi-square is and the table value for df =3 and α =.05 is i.e Calculated value >Table value, so the null hypothesis which states that there is no significant relationship between financial obligations and work-life balance is rejected. 9. FINDINGS AND CONCLUSIONS From analysis of data and use of statistical test we have come across with following results. According to demographic profile of Respondents maximum respondents are from age group of following are from age group and less respondents from upper age group. Maximum respondents working in Banks are professional or graduates. Respondents from Public sector are higher compared to private sector. 7 editor@iaeme.com

8 Neera Kundnani and Dr. Pallavi Mehta Nuclear families are more as compared to joint families with low percentage of females working in banks. Married respondents are more as compared to unmarried. From among the respondents maximum are Assistant Managers and clerical staff following are managers, deputy managers and senior managers and maximum respondents fall in moderate income slab. From the above data it can be said that respondents who are married or from joint families or having moderate income may have higher financial obligations in absence of sound financial background which affects their work-life. Respondents working in banks having balanced life are maximum and maximum respondents prefer work-life balance more important than money. Though from our research it is proved that money indirectly affects work-life balance. From the analysis of composites scores of factors affecting stress level obtained from respondents as per their ratings of factors it has been found that after work-life balance, financial obligations have second highest percentage in overall factors. From Correlation analysis it has been found that there is negative relationship between financial obligations and work-life balance i.e when financial obligations increases work-life balance decreases when financial obligations decreases work-life balance increases. From Cross-Tabulation of financial obligations and work-life balance it has been found that employees having low financial obligations have higher percentage in work-life balance and employees having high financial obligations have low percentage in work-life balance i.e employees with low financial obligations are more better in balancing work-life as compared to employees with high financial obligations. By applying Chi-square for testing of hypothesis it has been found that calculated value is more than table value which rejects our null hypothesis and accepts alternate hypothesis i.e there is significant relationship between financial obligations and worklife balance. From the above research it is concluded that financial obligations play a major role in factors affecting stress level and by controlling this factor work-life balance can be improved which is the foremost factor affecting stress level and thus we can control the maximum stress to some extent. 10. RECOMMENDATIONS To control financial stress of employees for their benefit as well as benefit for the whole organization employer can opt for following strategies. Surveying employees about their financial needs before making a financial wellness plan Research and employer experience confirm that employees learn financial lessons more easily from their colleagues and staff financial talks and experiences. Promoting the EAP s (Employee Assistance Programs) which provides proactive financial counselling and consultation services to employees on financial issues. EAP programs, in particular, are effective for addressing financial stressors (e.g., debt, creditors, bankruptcy, etc.). It is difficult, and in some cases inappropriate, for employers to address financial stressors among their employees. EAPs enable employees to take an active role in addressing problems that originate outside of the workplace. 8 editor@iaeme.com

9 Identifying the Impact of Financial obligations on overall Stress and Work-Life of bank Employees Providing Retirement benefits to employees secures employees loyalty for the organisation specially in private sector where there are less provisions of retirement through government. Providing financial education for savings and investments for future critical and emergency needs so that work-life is least affected. Apart from employers initiatives employee s must also try to have control over their financial problems through timely savings and investments for better and controlled life today and in future. REFERENCES [1] Australia and New Zealand Banking Group Limited (ANZ) Understanding personal debt & financial difficulty in Australia. Macquarie Park, NSW: ACNielsen. [2] Drentea, Patricia and Paul J. Lavrakas Over the limit: the association among health, race and debt." Social Science & Medicine 50: [3] E Garman et al. (2002) Colloquium at University of Wisconsin-Madison. Financial Stress and Workplace Performance: Developing Employer-Credit Union Partnerships, [4] J.Kim (2006) Relationship between Financial Stress and Workplace Absenteeism of Credit Counseling Clients. ype=pdf [5] J Kim and Garman (2003) Financial Stress and Absenteeism : An empirically Derived Model Financial Counseling and Planning, Volume 14(1), 2003 [6] Marston, G & Shevellar, L The experience of using fringe lenders in Queensland: A pilot study: Social Policy Unit, The University of Queensland. [7] MB ROSS (2007) Impact of Financial stress on Employee job satisfaction [8] Steen and MacKenzie (2013) - Financial Stress, Financial Literacy, Counselling and the Risk of Homelessness Australian Accounting Business and Finance Journal Vol 7, Issue [9] Sambuddha Mitra Mustafi 13 May [10] M.Vivek and S.Janakiraman. A Survey on Occupational Stress of Bank Employees. International Journal of Management, 4(6), 2013, pp editor@iaeme.com