Exploring the Impact of Job Stress on Employee Performance: A Case Study of the Commercial Bank of Ethiopia in Wolaita Sodo

Abstract

The competitive edge of a bank is largely dependent on the optimal utilization of its employees. When employees experience stress, their ability to perform effectively diminishes. In service-oriented organizations such as banks, employees often face significant work-related stress, a primary factor contributing to poor job performance. Achieving success in such environments requires employees to perform well, maintain commitment, and enhance productivity while minimizing stress. This study examines the causes of job stress and its impact on employee performance in selected branches of the Commercial Bank of Ethiopia in Wolaita Sodo. The study adopts a causal design to explore the cause-and-effect relationships among variables. The target population includes bank employees with over one year of service, with a sample size of 185, of which 170 questionnaires were returned.

The confidence interval was set at 95%. Data collection employed a judgmental sampling technique after establishing homogeneity among ten selected branches. Both primary and secondary data sources were utilized, with questionnaires and interviews used for primary data collection. Reliability was confirmed with a Cronbach alpha value of 0.755 from a pilot study of 40 samples. The study used descriptive and inferential statistics to analyze the data and illustrate relationships among variables. All five independent variables showed significant positive correlations. A multiple linear regression model revealed an R² coefficient of 50.4%. The findings indicated that most respondents agreed that high levels of job stress negatively impacted employee performance. Specifically, three variables, lack of job design, work role imbalance, and work overload, were statistically significant and positively affected employee performance.

Consequently, managers and stakeholders should manage these variables by preparing job descriptions, planning, time management, and prioritizing tasks to reduce role imbalances. The study recommends that managers consider these findings when developing organizational structures, job designs, and task allocations. Future research should extend the insights of this study to all branches of the Commercial Bank of Ethiopia or explore similar topics in academic settings, such as the impact of job stress on university lecturers.