Vol. 38, No. 18

2-1-2006
By: Jeff Grabmeier

Pay cuts lead to worker insomnia, but supervisor training helps

When workers take a pay cut, money is not the only thing lost - they may also lose sleep, according to new research.

A study at four hospitals found that nurses who received an unexpected pay cut reported higher levels of insomnia than their colleagues whose pay did not change. But insomnia symptoms dropped sharply for nurses whose supervisors were trained to offer emotional support and full information to those suffering the salary cut.

"There's both bad news and good news in these results," said Jerald Greenberg, author of the study and professor of management and human resources at Ohio State's Fisher College of Business.

The bad news is that sources of stress in the workplace - such as a pay cut - really can have a negative physiological effect on workers. Insomnia has been linked to workplace accidents and lowered productivity.

But the good news is that management can help minimize these problems both easily and inexpensively, Greenberg said.

"There's nothing magical about the supervisor training I did at the hospitals during the study," he said, "but unfortunately, it is seldom done at many organizations."

The study, published in the January issue of the Journal of Applied Psychology, was conducted at four private hospitals in different cities in the Northeast. All the hospitals were owned by the same large health care organization.

Greenberg was already working with the hospitals on a different project when he learned about plans to implement a new pay system. Instead of being paid hourly and receiving overtime pay, nurses were being converted to salaried employees, working the same number of hours. The result was that the nurses' pay would be reduced by about 10 percent.

The company decided to implement the pay cut in phases, with nurses at two of the hospitals receiving the pay cuts first.
Greenberg received permission to study how the stress caused by the pay cut affected the workers. Ultimately, 467 nurses at the four hospitals participated in the research.

Before pay cuts were announced, nurses at all four hospitals filled out questionnaires over four weeks measuring their levels of insomnia. In week five, nurses at two of the hospitals were informed about the new salary system that would reduce their pay.

Nurses continued using the insomnia questionnaires the following four weeks. Results showed that nurses who experienced the pay cut showed "dramatic increases" in symptoms of insomnia, to an average score of 6 on a 7-point scale, Greenberg said. The average score before the pay cut was half that, he said.

Greenberg conducted supervisor training at one of the two hospitals where the nurses received salary reductions as well as one that did not have pay cuts. The instruction consisted of two four-hour sessions conducted on consecutive days.

The training involved what is known as "interactional justice" - the perceived fairness of the treatment people receive from authority figures such as supervisors, Greenberg said. He trained the supervisors on such skills as how to treat others with politeness, dignity and respect, how to show emotional support and how to avoid intimidation, manipulation and degradation. He also explained the importance of providing thorough, accurate and complete explanations of key decisions, and the importance of being accessible to discuss issues with employees.

The study revealed that nurses who worked for supervisors who received this training showed steep drops in their levels of insomnia in the four weeks following the training. Meanwhile, nurses whose supervisors did not receive the training saw small drops in insomnia levels after the four-week period, but nothing compared to the nurses with the trained supervisors.

After six months, Greenberg tested all the nurses again. He found that nurses with trained supervisors saw their levels of insomnia continue to fall, to the point where their levels were just slightly higher than those nurses whose pay had not been cut at all. Those nurses with untrained supervisors saw small decreases in insomnia levels, but they were still significantly higher than all other nurses.

Greenberg said he believes the training was successful because it helped supervisors focus more attention on how they treated their employees - at a particularly stress-provoking time when those employees needed help. He said he believes these results apply for other sources of job-related stress, not just pay cuts.

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