2 Cents: The mental health imperative in performance

The relationship between employee wellbeing and workplace performance has never been more critical to understand. As organisations evolve, the emphasis on mental health is becoming a cornerstone of effective management. Organisations that ignore mental and emotional wellbeing of their employees risk not only diminishing productivity but also fostering an environment that can lead to burnout, high turnover, and disengagement.

The urgency of addressing mental health in the workplace is particularly evident in Singapore, where the workforce is grappling with a persistent burnout crisis. According to the 2024 Wellness at Work Report by Employment Hero, 61% of employees in Singapore still feel burnt out, a figure only marginally improved from 2022.

A significant portion of the workforce lacks access to essential services such as on-site health assessments, mental health support, and comprehensive benefits management. Only 45% of employees reported that their employer provides access to confidential counselling. The situation is especially dire for Gen Z employees, 68% of whom reporting experiencing burnout, followed by Millennials at 65%.

The economic impact of mental health issues can be staggering. The World Health Organization estimates that depression and anxiety alone cost the global economy US$1 trillion in lost productivity each year. This figure underscores the importance of incorporating mental health into the broader performance management framework. Employees who struggle with mental health issues often experience reduced motivation, which, in turn, can affect their work quality and overall contribution to the organisation. On the other hand, organisations that prioritise mental health report increased employee satisfaction, lower turnover rates, and a more engaged workforce.

Traditional performance management systems have typically focused on measurable outcomes like sales targets, project completion, and productivity levels. While these metrics are essential, they offer only a partial view of an employee’s performance. For instance, an employee who consistently meets or exceeds their targets might still be struggling with underlying stress or anxiety that, if left unaddressed, could lead to burnout. This narrow focus fails to account for the wellbeing of the employee, which is integral to sustained performance and job satisfaction.

A more holistic approach to performance management involves integrating mental health and wellbeing into the evaluation process. This shift requires organisations to promote open communication, encouraging employees to discuss their mental health without fear of stigma.

Managers should be trained to have regular check-ins that go beyond task-related discussions, focusing also on how employees are coping with their workload and personal challenges. Providing access to mental health resources, such as counselling services and wellness programmes, is another critical step. These resources should be readily available and clearly communicated to all employees, ensuring that support is accessible when needed.

During performance reviews, it is vital for managers to assess not only an employee’s accomplishments but also their overall wellbeing. Conversations around work-life balance, stress management, and personal challenges can reveal areas where additional support might be necessary. By taking these factors into account, organisations can make informed decisions that support the long-term health and performance of their employees.

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Flexibility is also a key in supporting mental health. Recoginising that each employee’s needs are different, offering options such as remote work or flexible hours can significantly reduce stress and improve overall wellbeing. Training managers to recognise signs of mental health struggles and equipping them with strategies to support their teams are also essential components of a comprehensive performance management system.

Integrating mental health and wellbeing into performance management is not just a compassionate move—it is a strategic necessity for modern organisations. By addressing these factors, organisations can unlock the full potential of their workforce. Employees who feel genuinely supported in their roles are more likely to bring their best selves to work, leading to sustained productivity, creativity, and innovation. This proactive approach not only reduces the risk of burnout and turnover but also cultivates a resilient, adaptable workforce.

Ultimately, prioritising mental health within performance management fosters a culture of trust and inclusivity, where employees are not just seen as resources but as vital contributors to the organisation’s success.