Do managers need to worry about employees’ financial stress? A review of two decades of research
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Connects with: @aldana1998 @prawitz2006 @voydanoff1990 @vieira2021 @starrin2009 @sorgente2023 @sinclair2016 @sinclair2010 @shapiro2012 @joo1998 @guan2022 @friedline2021 @dunn2016 @debruijn2020 @davis2004 @archuleta2013
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rosso2024 - p. 2
I
rosso2024 - p. 2
The attentive reader may have noticed that the former paragraphs referred to “economic” and “financial” issues, qualified as “problems”, “stress”, or “difficulties” with apparent little loss of meaning. The expression “financial stress” is related to a wide range of terms identified over the years (J. Kim & Garman, 2003; Klug, Selenko, & Gerlitz, 2021; Prawitz et al., 2006; Sinclair, Graham, & Probst, 2024; Starrin, Åslund, & Nilsson, 2009). Some scholars state that there is no unified definition of financial stress and that the terms are used as if they were self-evident (Klug et al., 2021; Sinclair & Cheung, 2016; Starrin et al., 2009). As Sears (2008, p. 23) noted, “there are almost as many operationalizations of financial stress as there are papers that examine them”.
rosso2024 - p. 3
Concerning the content analysis, all the relevant data, such as methodology, sample size, theoretical frameworks, constructs measured, scales used, workplace outcomes, conclusions, and relationships between constructs and workplace outcomes, were collected and tabulated.
rosso2024 - p. 8
Etymologically, the word “economic” is related to the management of household resources (from the Greek “oikonomos” or “the ruling of the house”), and “financial” is related to money management or the payment to settle a debt (from Latin “finis” or “an end”) (Online Etymology Dictionary, 2022). Thus, “economic” stress is associated with structural difficulties that affect the present or future household’s standard of living, such as income (e.g., income loss) or employment (e.g., job insecurity). On the other hand, “financial” stress is related to the availability of resources to pay for something or settle a debt. For example, it can be argued that promoting financial literacy training could be ineffective in reducing economic stress caused by job insecurity.
rosso2024 - p. 8
The use of objective data is still relevant, and the combination of objective and subjective measures is encouraged (Artazcoz et al., 2021; Klug et al., 2021; Sinclair & Cheung, 2016).
Note: Acho que uma versão MIMIC de estresse financeiro seria interessantíssima
rosso2024 - p. 8
On the economic side, only two objective measures were used as proxies of “economic hardship”: the level of unemployment (Witteveen & Velthorst, 2020) and dichotomous questions about income and job losses (Im & Komp-Leukkunen, 2021).
rosso2024 - p. 8
As Sears (2008) found, the actual income level was cognitively evaluated regarding its adequacy to afford necessary and non-necessary items, whose insufficiency was related to the affective reaction of strain. The cognitive component is assessed by evaluating sufficiency (e.g., “ability to make ends meet”). In contrast, the affective component is measured through negative emotions (e.g., “I feel pressured by my financial situation”).
rosso2024 - p. 9
We define economic/financial poverty as “the state of lacking economic/ financial means to satisfy basic needs”. Thus, economic/financial poverty must be measured objectively, and the income level of the respondents must be evaluated according to a defined threshold and if it is enough to satisfy basic needs
rosso2024 - p. 9
Hardship was defined as the scarcity of resources and the inability to pay for food, clothes, and health care. Its evaluation relies on subjective perceptions of the lack of resources to afford essential goods and a socially accepted standard of living, including needs and wants (CFPB, 2015; Friedline, Chen, & Morrow, 2021; Vinokur et al., 1996).
rosso2024 - p. 9
e define economic/financial hardship as “the perception of inability to afford essential needs and desired wants”. To assess these constructs, the questions must ask if the respondents’ income or financial resources are perceived as insufficient to afford basic needs and a desired standard of living.
rosso2024 - p. 10
we define economic/financial threat as “the appraisal of a real or perceived danger to one’s standard of living/finances”. The threat measurement should ask if the respondents recognize the situation as threatening their standard of living or financial resources.
rosso2024 - p. 10
The word “stress” is derived from the Latin stringere (to draw tight) and borrowed from physics, meaning the result of pressure (load) put on some material that can cause damage or make it lose its shape (strain). In psychology, stress is a generic term that subsumes a variety of manifestations (Hobfoll, 1989; Pearlin et al., 1981). The early works imprecisely adopted the idea of “stress as a response” and not as the result of a stressor, and that became the term’s everyday use (Cooper & Dewe, 2004; Hobfoll, 1989; Lazarus, 1993; Solberg Nes, 2016).
rosso2024 - p. 10
We define economic/financial stress as “the response to a real or perceived danger to one’s standard of living/finances”. This definition does not characterize the response as positive or negative. The individual evaluation of the coping resources will tell if the demand is considered a threat or a challenge. The economic/ financial stress construct may be assessed by asking if the individual perceives the situation as a danger to their standard of living or finances, regardless of the coping resources available.
rosso2024 - p. 10
The APA’s Dictionary defines distress as the negative response to stress (VandenBos & American Psychological Association, 2015). In the context of family economics, Voydanoff (1984, p. 274) referred to economic distress as the “aspects of economic life that are potential stressors for individuals and families”.
rosso2024 - p. 10
We define economic/financial distress as “the negative response due to insufficient resources to deal with a real or perceived threat to one’s standard of living/finances”. The measurement of this construct may ask if the respondents perceive the situation as threatening to their standard of living/finances and if they consider not having the necessary coping resources to balance its effects. The negative distress response may have psychological, emotional, or physiological consequences associated with more specific constructs.
Note: Distinção importante… Se distresse é resposta ao estresse, essa resposta envolve aspectos tanto subjetivos como objetivos, assim como a medição do estresse em si.
rosso2024 - p. 10
The APA’s Dictionary defines worry as “a state of mental distress or agitation due to concern about an impending or anticipated event, threat, or danger”, and persistent and excessive worry is a primary symptom of generalized anxiety (VandenBos & American Psychological Association, 2015, pp. 1163–1164).
rosso2024 - p. 10
We define economic/financial worry as “the negative psychological consequences of insufficient resources to deal with a real or perceived threat to one’s standard of living/finances”. The questions about worry must focus on psychological states such as preoccupations, repetitive thoughts, and difficulty concentrating.
rosso2024 - p. 10
The second construct of this group, strain, is defined as an emotional overload due to excessive demands or the individual’s perceptions of financial pressures and lack of resources
rosso2024 - p. 10
Thus, we define economic/financial strain as “the negative psychological and emotional responses due to insufficient resources to deal with a real or perceived threat to one’s standard of living/finances”. The measurement of this construct must address the emotional response to a threat.
rosso2024 - p. 11
Anxiety is defined in the APA’s Dictionary as an emotional response characterized by apprehension and somatic symptoms due to an anticipated danger (VandenBos & American Psychological Association, 2015) We define economic/financial anxiety as “the negative psychological, emotional, and physiological responses due to insufficient resources to deal with a real or perceived threat to one’s standard of living/finances”. Economic/financial anxiety measurement must ask about physical responses to stress, such as difficulty sleeping, nervousness, or headaches.
rosso2024 - p. 11
It is not advisable to draw a distinctive line between psychological constructs, as subjective perceptions and reactions seldom manifest simultaneously in distinct proportions along the stress continuum. However, the proposed nomological net allows a more precise analysis of the constructs, preventing ambiguous definitions and scale misuse.