(This is the second of a two-part series on stress at work. In this instalment, columnist Sharon Adams looks at the issue from an employer's perspective.)

I once worked for a company with a CEO who bragged he was a bully.

And he installed bullies as heads of key departments.

Soon, even the company's best performers felt threatened, undervalued. The workhorses felt beaten up. And the underachievers became positively paranoid - with good reason. It's tough to feel safe when you think you see target signs on the backs of even the most valued employees.

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A change in corporate culture can help reduce stress levels.

One joked that the company should have installed a Prozac dispenser next to the water cooler outside all corner offices.

But stress is no joking matter for business. The Canadian Mental Health Association estimates one-fifth of a company's payroll is burned up dealing with stress-related problems such as absenteeism, disability leaves, employee turnover and prescription costs.

Health Canada pegs the cost to Canadian business as high as $10 billion annually.

One-third of disability claims now relate to mental-health problems, making it the leading cause of worker disability. (Count up the number of people you personally know who have had, or are on, medical or stress leave).

It's anybody's guess how much productivity is lost from all the walking wounded, who are too tired, too stressed, too worried by conflicts between work and home life to give their job their full attention.

The Global Business and Economic Roundtable on Addiction and Mental Health says mental health problems (which include stress and problems caused by stress, such as depression and addiction) cost the country $33 billion a year.

Health Canada's environmental and workplace health website (www.hc-sc.gc.ca/) says stress-related risk can be "shut down to a trickle at source when managers choose to make different kinds of decisions about how they govern the workplace."

But it's easier said than done because managers, supervisors and business owners are themselves under increasing stress-loads, too.

"We've seen a change in the pervasiveness of work," says Rod Phillips, president and CEO of Sheppel"fgi, which designs and supplies employee assistance programs.

Flattening of organizations has meant expansion of management and supervisory functions. And then there's the electronic revolution, which can make managers available 24/7.

It's routinely expected that managers will work 10- to 12-hour days, says Phillips, and be available on days off.

"It's not sustainable over time," he says. It's resulted in increasing levels of absenteeism and managers now taking more and more advantage of employee assistance programs.

OK, so we're all under more stress. And just as we can individually work at reducing and minimizing personal stress risk, companies can reduce the corporate stress risk.

The Whitehall Study, a long-term research study examining the health of more than 10,000 British civil servants, draws a direct link between the worst health effects and two work factors: High demand and low control over work, and lack of appreciation of what you do. There are other stressors, of course, but these two are correlated with the worst problems, such as heart attacks and mental illness.

So any company that wants to lower the stress risks - and associated costs - could begin by addressing these two issues.

Look at the most stressed-out employees and managers. What can be done to hand them more control over their work?

Flexible hours can go a long way to reducing stress around work/life balance. And some companies have found productivity increases when employees telecommute.

In fact, I believe flexibility can relieve a lot of stress. In corporate situations (we all know the assembly line is different), does it really matter when and where the work is done, as long as it is done on time, there's enough of it and it's of high quality?

Allowing an employee to shift start and quitting times to suit personal responsibilities - such as dropping off kids and checking in on aging parents - can relieve a lot of stress on the employee and the organization. Doesn't fit because you need someone in early? Have you considered part-time positions and job-sharing?

How about allowing someone to telecommute a couple times a week - or more?

Or - here's an idea a long time in coming - how about asking employees for their opinion?

One German company (The RWE Group) invited workers in this situation to form teams to identify and suggest improvements. It resulted in a change in corporate culture, in which business meetings turned into co-ordinated team discussions and problem-solving sessions, greatly reducing the need for management to solve problems and make directives. And, I suspect, decreasing the amount of stress perceived around lack of control.

Health Canada's website suggests a job inventory with an eye to equalizing workload. Another excellent resource is the Lambton County, Ont., website (www.lambtonhealth.on.ca) called Healthy Living @ Work, which offers a detailed workplace action guide for organizational stress management as well as smoke-free living and physical activity.

Companies that want to go further can give Health Canada's stress, satisfaction and health survey to employees to measure the level of stress and pinpoint its sources.

I once worked for a great boss who believed fervently in matching an employee's jobs to skills and habits. And my stress level as a manager went down tremendously with two simple changes. We switched one person who struggled with details into a job that required more creativity and fewer financial figures, and altered working hours for another whose workday (and thus, mine) stretched over 12 hours regularly because he performed better in the morning than the late afternoon. An earlier start for him meant an earlier finish for me. Not to mention lower overtime claims from him.

I'll make special mention of the dreaded Blackberry invasion. Just because you can reach an employee 24/7 doesn't mean you should. Write a policy. Then nobody can inadvertently abuse the situation or be inadvertently (or advertently) abused. If you don't see a need for it, reread George Orwell's 1984 for an idea of what happens to people who feel they have no privacy. Big Brother could very well be you, or one of your managers or supervisors.

The second major variable from The Whitehall Study is very easily addressed - recognition for a job well done.

"It's so remarkably simple," says Phillips. And yet so few companies actually do it.

The success of every company is due to its employees - from the assembly-line worker who turns out a perfect product hour after hour, to the clerk whose attention to service keeps customers coming back, to the supervisor who makes sure every employee is delivering, to the manager who envisions the future path the company will tread.

"Acknowledgement can take many forms," says Phillips, from recognition from peers, special awards from the company, pizza during the big push to make a deadline, telling anecdotes at meetings about special contributions, to raises and promotions.

Why don't companies do more to acknowledge the importance of employee (and manager) contributions?

They're afraid that by singling out one employee for recognition, they'll put some other employee's nose out of joint.

"They always say 'What if I miss someone?' " says Phillips.

If you miss someone, say so - and thank them, too. Your employees will know that you don't overlook anyone's stellar contribution. And it gives you more than one opportunity to say thanks.

Alas, says Phillips, "most often it's easier to do nothing."

Easier, yes. But not less expensive.

(Sharon Adams can be reached at sharon@businesssedge.ca)