Can financial stress make leaders abusive?

Stress that stems from personal finances can make leaders, particularly men, abusive at work.

This is according to new research from Colorado State University, as led by Assistant Professor Keaton Fletcher in the Department of Psychology in partnership with Associate Professor Trevor Spoelma in the Anderson School of Management at the University of New Mexico.

Fletcher said financial stress does not necessarily refer to income levels, but is more related to perceptions about one's ability to fulfil their financial obligations and an associated sense of loss of control.

"We expected men to be more sensitive to loss of control that then resulted in abusive supervision, and that is consistently what we found," Fletcher said in a university media release.

"However, we also found that leaders who are women experienced the same stress and do exhibit abusive behaviours, but just less than men."

Reasons for abusive behaviour

The report, which surveyed both leaders and subordinates, noted that men may be more vulnerable to pressures from financial stress due to gendered societal expectations of them to be in control.

On the other hand, these societal expectations also prevent women from being abusive at work in response to financial stress as they are often punished for such behaviour.

These abusive behaviours at work, such as bullying a subordinate, may be leaders' way of regaining a sense of agency amid financial stress, according to Fletcher.

"There are negative effects and consequences associated with this kind of abuse – not only for workers who see it or receive it – but even for the supervisors doing it," he said.

To address the problem, Fletcher suggested investing in programmes that limit costs for childcare for employees, in addition to increased pay. Organisations can also offer training or fiscal education to their staff.

Financial stress among employees

The research comes as financial stress has become "increasingly common" in the United States, according to Fletcher.

In fact, a report from the Bank of America last year found that older millennials, women, and minority employees feel the most financial stress.

Despite this, Fletcher noted that "we are still learning what financial stress can do to an organisation and leader who is in a unique position to influence not only their own work, but the work of others."

"Research has so far focused on adverse outcomes like burnout, disengagement, or even injuries due to abuse by leaders. Our work here aims to offer a more comprehensive view of the ways this manifests, and the costs to an organisation that does not address or prepare for it, such as lost productivity," he said.