IMPACT OF FINANCIAL STRESS ON WORK ENGAGEMENT AND JOB PERFORMANCES OF THE EMPLOYEES IN THE REPUBLIC OF SERBIA: PILOT STUDY

Abstract

Contemporary living conditions are challenging from many points of view. The COVID-19 pandemic still generates uncertainty and produces health and financial stress for many people. The current energetic crisis, by influencing inflation, also generates financial stress for many of them. On the other hand, organizations are under the pressure to be profitable and maintain productivity through workers' engagement. Based on the above, the subject of this paper is an investigation of the impact of financial stress on work engagement and job performance of employees in the Republic of Serbia. The aims of the paper are as follows: to find out whether financial stress influences work engagement and job performance of the employees in the Republic of Serbia, as well as to suggest the measures that employers could implement to reduce the financial stress of their employees. For this paper, a pilot study was conducted. The results of the study showed that financial stress significantly negatively influences two of three aspects of work engagement, further that dedication as one of the work engagement aspects significantly positively influence employees` performance, and finally, that financial stress does not have an influence on employees’ performance, but mediated by dedication as one of work engagement aspect, has a negative influence on employees' performances. The contribution of the paper is twofold: it contributes to domestic literature through the empirical investigation of the impact of financial stress on the above-mentioned variables, and second, it draws attention to the employers on the importance of financial wellness programs for employees in the attempt to prevent or minimize the negative influence of financial stress on their performances.

Full text

28th International Scientific Conference
Strategic Management
and Decision Support Systems
in Strategic Management
Proceedings
SUBOTICA, SERBIA
18-19 May, 2023

Conference Proceedings
28th International Scientific Conference
Strategic Management and Decision Support Systems in Strategic
Management
SM 2023
18-19 May, 2023
Subotica
ISBN: 978-86-7233-416-6
Organizer and publisher:
University of Novi Sad,
the Faculty of Economics in Subotica,
Segedinski put 9-11,
24000 Subotica, Serbia
http://www.ef.uns.ac.rs/sm2023/
CIP - Каталогизација у публикацији
Библиотеке Матице српске, Нови Сад
005.21(082)
INTERNATIONAL Scientific Conference Strategic Management and Decision Support Systems in Strategic
Management (28 ; 2023 ; Subotica)
Conference proceedings [Elektronski izvor] / 28th International Scientific Conference Strategic Management and Decision
Support Systems in Strategic Management SM 2023, Subotica, 18-19 May, 2023. - Subotica : Faculty of Economics, 2023
Način pristupa (URL): https://www.ef.uns.ac.rs/sm2023/. - Opis zasnovan na stanju na dan 31.5.2023. - Nasl. sa naslovnog
ekrana. - Bibliografija uz svaki rad.
ISBN 978-86-7233-416-6
а) Стратешки менаџмент -- Зборници
COBISS.SR-ID 117214473

Scientific Board
• Nebojša Gvozdenović, Faculty of Economics in Subotica, Serbia, president
• Ivana Medved, Faculty of Economics in Subotica, Serbia, vice president
• Daniela Nuševa, Faculty of Economics in Subotica, Serbia, vice president
• Radenko Marić, Faculty of Economics in Subotica, Serbia
• Ksenija Leković, Faculty of Economics in Subotica, Serbia
• Dražen Marić, Faculty of Economics in Subotica, Serbia
• Goran Vukmirović, Faculty of Economics in Subotica, Serbia
• Maja Strugar Jelača, Faculty of Economics in Subotica, Serbia
• Nemanja Berber, Faculty of Economics in Subotica, Serbia
• Agneš Slavić, Faculty of Economics in Subotica, Serbia
• Slobodan Marić, Faculty of Economics in Subotica, Serbia
• Bojan Leković, Faculty of Economics in Subotica, Serbia
• Radmila Bjekić, Faculty of Economics in Subotica, Serbia
• Marko Aleksić, Faculty of Economics in Subotica, Serbia
• Aleksandra Marcikić Horvat, Faculty of Economics in Subotica, Serbia
• Otilija Sedlak, Faculty of Economics in Subotica, Serbia
• Dragan Stojić, Faculty of Economics in Subotica, Serbia
• Viktorija Petrov, Faculty of Economics in Subotica, Serbia
• Olgica Glavaški, Faculty of Economics in Subotica, Serbia
• Nada Milenković, Faculty of Economics in Subotica, Serbia
• Marija Jeremić, Faculty of Economics in Subotica, Serbia
• Žana Jurjević, Faculty of Economics in Subotica, Serbia
• Kristina Peštović, Faculty of Economics in Subotica, Serbia
• Dušan Saković, Faculty of Economics in Subotica, Serbia
• Bojana Vuković, Faculty of Economics in Subotica, Serbia
• Mirjana Marić, Faculty of Economics in Subotica, Serbia
• Olivera Grljević, Faculty of Economics in Subotica, Serbia
• Vuk Vuković, Faculty of Economics in Subotica, Serbia
• Lazar Raković, Faculty of Economics in Subotica, Serbia
• Nebojša Taušan, Faculty of Economics in Subotica, Serbia
• Ivana Domazet, Institute of Economic Sciences, Belgrade, Serbia
• Darko Marjanović, Institute of Economic Sciences, Belgrade, Serbia
• Milena Jakšić, University of Karagujevac, Faculty of Economics, Serbia
• Milka Grbić, University of Karagujevac, Faculty of Economics, Serbia
• Dejan Jovanović, University of Karagujevac, Faculty of Economics, Serbia
• Tadija Đukić, University of Niš, Faculty of Economics, Serbia
• Bilјana Đorđević, University of Niš, Faculty of Economics, Serbia
• Sanja Dobričanin, University of Priština, Faculty of Economics, Serbia
• Mladen Čudanov, University of Belgrade, Faculty of Organizational Science
Beograd, Serbia
• Veljko Jeremić, University of Belgrade, Faculty of Organizational Science
Beograd, Serbia

• Milenko Krajišnik, University of Banja Luka, Faculty of Economics, Bosnia and
Herzegovina
• Dragan Gligorić, University of Banja Luka, Faculty of Economics, Bosnia and
Herzegovina
• Srđan Lalić, University of East Sarajevo, Faculty of Business Economics, Bosnia
and Herzegovina
• Vladimir Šimović, University Algebra Zagreb, Croatia
• Katarina Poldrugovac, University of Rijeka, Faculty of Management in Tourism
and Hospitality, Croatia
• Tomislav Hernaus, Faculty of Economics & Business, University of Zagreb,
Zagreb, Croatia
• Nina Pološki Vokić, Faculty of Economics & Business, University of Zagreb,
Zagreb, Croatia
• Ivan Brezina, Faculty of Economic Informatics Bratislava, Slovakia
• Tom Gillpatrick, Portland State University, USA
• Leland Buddress, Portland State University, USA
• Pawel Lula, Cracow University of Economics, Poland
• Vulnet Ameti, State University of Tetova, Macedonia

Table of content
Milka Rimac Bilusic, Nina Pološki Vokić
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Human Resource Management Orientation
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Gábor Balogh, József Poór, Zsuzsa Karoliny, Ákos Jarjabka, Ildikó Éva
Kovács, Katalin Szabó
The Development Of Regional And Local Hr Practices In Human Resource
Management Due International Comparison On Three Consecutive Cranet
Researches
(10-16)
Zsuzsanna Szeiner, Ildikó Éva Kovács, József Poór
New Ways Of Managing International Human Resources In Times Of Multiple
Global Crises And Deglobalization
(17-24)
Felix Diefenhardt, Marco Leander Rapp, Wolfgang Mayrhofer, Verena
Bader
Doing More By Doing Less? The Role Of Setting Formalized Guardrails In
The Application Of Hr Analytics
(25-31)
Agneš Slavić, Dimitrije Gašić, Nemanja Berber
Talent Development And Organizational Success: Evidence From Selected
Balkan Countries Based On Cranet Research 2021
(32-41)
Kinga Kerekes, Monica Aniela Zaharie, Patricia Iulia Rațiu
The Relationship Between Work Design And Job Satisfaction And Its
Implications For Romanian Companies
(42-49)

Júlia Bachmann-Matisa, Gábor Balogh
The Role Of Training And Development In Decision-Making - Based On The
2021/2022 Cranet Survey
(50-58)
Nancy Papalexandris
Meeting The Challenge Of An Ageing Workforce: The Role Of Hrm
(59-63)
Csilla Czeglédi, Gábor Andrási
How Can Business Education Develop Ethical Professionals For Employers?
(64-72)
Gabriella Horváth-Csikós, Timea Juhasz, Anna Forgacs
What Soft Skills Can Be Developed In A Mentor? - The First Experiences Of A
Mentoring Programme
(73-81)
Nurul Retno Nurwulan
Lean-Green Manufacturing To Sustain Environmentally Friendly Industry: A
Review
(82-86)
Nurul Retno Nurwulan
Implementation Of Swot Analysis And Quantitative Strategic Planning Matrix
On A Low-Cost Private School
(87-93)
Inês Rodrigues, Wellington Alves
Connecting The Dots: How Does Lean Thinking Contribute To Project
Management?
(94-103)

Tímea Venczel-Szakó, Dorottya Anna Szabó, Norbert Sipos
Home Office And Employee Satisfaction During And After Covid
(104-112)
Sebastian L. Grüner
Reframing Types Of Uncertainty As A Starting Point For Efficient Decision
Making
(113-125)
Brigitta Szabó-Bálint, Tímea Venczel-Szakó, Norbert Sipos
Workplace Expectations Of Young Hungarians - Dream Or Reality?
(126-130)
Joao Magalhaes, Vanda Lima
Quality Management And Digital Transformation In A Portuguese Hei: A
Process Management Approach
(131-139)
Julianna Németh
What Affects Wages
(140-148)
Vladimir Šimović, Robert Svetlačić, Dušan Bobera
Ecological Agriculture As An Important Factor In The Development Of
Sustainable Tourism In Croatia
(149-157)
Viktorija Petrov, Zoran Drašković, Đorđe Ćelić, Zorica Uzelac
Bridging The Knowledge Gap Between Science And Industry: Empirical
Research Of University Of Novi Sad And University Of Belgrade
(158-165)
Marina Beljić, Olgica Glavaški, Jovica Pejčić
Tax Strategies And Fdi Sensitivity In Crisis Conditions: The Case Of Eu
(166-174)

Stefan Stojkov, Emilija Beker Pucar, Aleksandar Sekulić
Asymmetrical Effects Of Oil Price Shocks On Stock Indices Of Selected Eu
Members
(175-182)
Stojanka Dakić, Dejan Brcanov
The Impact Of The War In Ukraine On The Post-Covid Serbian Labor Market
(183-190)
Radule Tošović
Strategic Provision Of Necessary Mineral Raw Materials For Economic And
National Needs
(191-198)
Mina Kovljenić, Bojan Matkovski
Influence Of Foreign Trade Of Agri-Food Products On Food Security In Crisis
Conditions: Evidence From Serbia
(199-205)
Dauti Bardhyl, Aziri Brikend, Ismaili Raman
Regional Balanced Developments In North Macedonia. Challenges, Trends
And Perspectives
(206-214)
Danilo Đokić, Milan Tatić
Farm To Fork Strategy As A Framework For New Serbian Agriculture And
Rural Development Strategy
(215-219)
Nikola Šarić, Dunja Tomić
Models Of Contracts About Efficiency Wage
(220-226)

Dunja Tomić, Nikola Šarić
Income Inequality And Material Deprivation In Serbia
(227-231)
Miloš Đaković, Nada Milenković, Jelena Andrašić
Determinants Of Public Debt - Comparative Analysis Of European Countries
(232-241)
Katarina Božić, Suzana Stevanović, Vitomir Starčević
The Effects Of Financial Leverage On Business Operations In The Conditions
Of Geopolitical Changes
(242-247)
Alexandra-Mădălina Țăran, Magda-Mihaela Luca, Oana-Ramona Lobonț
Worldwide Trends In The Scientific Production On The Relationship Between
Public Governance And Health Systems In The Context Of Post Covid-19
Pandemic
(248-257)
Vera Mirović, Milica Inđić, Branimir Kalaš, Miloš Pjanić
Measuring Market Capitalization On The Belgrade Stock Exchange In
Conditions Of Geopolitical Turbulence And Changes
(258-264)
Nađa Đurić
The Importance Of Managing Human Resources During The Companies’
Merging Process
(265-272)
Nikola Milićević, Nenad Đokić, Ines Đokić
Intention To Use Green Banking Services In The Context Of Energy
Challenges
(273-278)

Rui António Cruz, Carina Silva, Marisa Ferreira
Circular Economy Funding And Its Potential Impact On Financial
Performance: A Bibliographic Review
(279-286)
Nevena Kapor, Dragan Vojinović
Strategies Of Internal Communication In Banks Of Bosnia And Herzegovina
(287-296)
Jitka Meluchová, Ján Vlčko
Expense Evaluation Of Accounting Automatization For Smes Compared To A
Human Accountant
(297-302)
Danijel Horvat
Application Of Robotic Process Automation Technology: Example Of
Invoicing
(303-310)
Nedeljko Prdić, Sara Kostić
Digital Era Consumers’ Attitudes About Social Networks Influence On Green
Markets Products Purchase
(311-317)
Dražena Gašpar, Mirela Mabić, Ivica Ćorić
Digitalization In Wood Processing Companies - Managers' Perspective
(318-325)
Ivana Domazet, Darko Marjanović
Information And Communication Technologies - A Key Factor Of The
Competitive Digital Economy
(326-332)

Vuk Vuković, Nebojša Gagić, Lazar Raković, Slobodan Marić
Erp Systems For Small And Medium Enterprises From The Sap And
Microsoft Perspective
(333-339)
Olga Korzhova, Tatiana Lapina, Tatiana Stuken
Digital Business Transformation: Expectations And Reality
(340-345)
Milan Jovanović, Ondrej Jaško, Ivan Todorović
Standardization Of The Commercial Process In Order To Form A Network
Organization In Retail
(346-353)
Rajko Ivanišević
Impact Of Digital Transformation On Information Security Risk In Information
Systems
(354-360)
Radojko Lukić
Performance Analysis Of Trading Companies In Serbia Based On Dibr -
Waspas Methods
(361-372)
Dušan Saković, Kristina Mijic, Dijana Rađo
Analysis Of Reporting On Properties According To The Professional
Regulations In Order To Improve The Performance Of Financial Reporting
(373-380)
Aleksandr Chernykh
Assessing The Effectiveness Of Anti-Russian Economic Sanctions In A Data-
Restricted Context
(381-388)

Ivan Brezina, Juraj Pekár, Marian Reiff
Analysis Of Financial Indicators Development Of The World's Largest
Environmental Companies
(389-393)
Bojana Vuković, Dejan Jakšić, Teodora Tica, Nedeljko Tica
Strategic Aspects Of Earnings Management
(394-401)
Dragana Đorđević
Russian – Ukranian War: The Impact Of Economic Sanctions On Russian And
Global Economy Through The Eyes Of An Accountant
(402-409)
Nenad Benović, Rade Popović, Ivan Milenković
Sustainability Of Public Debt In Serbia
(410-417)
Judit Pótó
Finance And Accountability In Growing Nonprofit Organisations
(418-425)
Tamara Jeftić, Dimitrije Gašić
The Effects Of The Compensation System On Job Satisfaction And Turnover
Intentions Of Employees In The Republic Of Serbia
(426-436)
Marjan Angeleski, Olivera Kostoska
A Literature Review On Artificial Intelligence In Global Supply Chain
Management
(437-445)
Radmilo Todosijević, Ljiljana Kontić, Miloš Todosijević
Economic Diversification In A War Environment
(446-453)

Marija Lazarević-Moravčević, Mihailo Paunović, Marija Mosurović Ružičić
The Influence Of The Organizational Structure On Companies’ Innovative
Activity
(454-461)
Radmila Bjekić, Maja Strugar Jelača, Marko Aleksić, Slobodan Marić
Social Competencies Of Leaders As Key Factor Of Employee Work
Engagement During The Crisis
(462-469)
Dragana Kijački
The Influence Of Talent Management Factors On Employee Satisfaction In
The Banking Sector Of Serbia
(470-480)
Bojan Leković, Milenko Matić, Maja Ivanović-Đukić, Jerko Glavaš
Determinants Of Logistics Entrepreneurs In European Countries
(481-487)
Sandra Milanovic, Biljana Đorđević
Impact Of Financial Stress On Work Engagement And Job Performances Of
The Employees In The Republic Of Serbia: Pilot Study
(488-496)
Stefan Zdravković, Dragana Gašević
The Effects Of Cultural Intelligence, National Identity And Tradition On The
Purchase Of Global Brands
(497-504)
Veljko Marinković, Dražen Marić
Rfm – Clv Approach For Measuring The Value Of Consumer Segments
(505-509)

Norbert Katona
Strategic Marketing Trends Of 2023 In Hungary
(510-516)
Sanja Džever, Dražen Marić, Ksenija Leković
Impact Of Online Recommendations Credibility On Tourists Behavior
(517-524)
Dinko Jukić
Managing Brand Image In School
(525-532)
Zvjezdana Krstić, Marijana Maksimović
The Metaverse: A Game-Changing Opportunity For Marketing
(533-540)
Jelena Stanković, Suzana Đukić
Electronic Communication As A Means Of Generation Of Consumer Loyalty
(541-552)
Daniela Nuševa, Radenko Marić, Goran Vukmirović, Nikola Macura
The Impact Of Geopolitical Turbulences On Global Logistics Activities
(553-559)
Saša Ćirić
Brand Image Measurement
(560-569)
Tamás Honti
Conceptualisation Of Political Marketing With Public Choice Theory And The
Postmodern Approach
(570-577)

Tamás Ujházi, Bence Vereckei-Poór
Modeling User’s Preferences Towards Electric Vehicles. A Discreet Choice
Model Approach
(578-588)

DOI: 10.46541/978-86-7233-416-6_62
Biljana Đorđević
Faculty of Economics, University of Niš, Niš,
Republic of Serbia
Sandra Milanović
Faculty of Economics, University of Niš, Niš,
Republic of Serbia
biljana.djordjevic@eknfak.ni.ac.rs sandra.milanovic@eknfak.ni.ac.rs
IMPACT OF FINANCIAL STRESS ON WORK ENGAGEMENT AND
JOB PERFORMANCES OF THE EMPLOYEES IN THE REPUBLIC OF
SERBIA: PILOT STUDY
Abstract: Contemporary living conditions are challenging from many points of view. The COVID-19 pandemic still
generates uncertainty and produces health and financial stress for many people. The current energetic crisis, by
influencing inflation, also generates financial stress for many of them. On the other hand, organizations are under the
pressure to be profitable and maintain productivity through workers' engagement. Based on the above, the subject of
this paper is an investigation of the impact of financial stress on work engagement and job performance of employees
in the Republic of Serbia. The aims of the paper are as follows: to find out whether financial stress influences work
engagement and job performance of the employees in the Republic of Serbia, as well as to suggest the measures that
employers could implement to reduce the financial stress of their employees. For this paper, a pilot study was conducted.
The results of the study showed that financial stress significantly negatively influences two of three aspects of work
engagement, further that dedication as one of the work engagement aspects significantly positively influence employees`
performance, and finally, that financial stress does not have an influence on employees’ performance, but mediated by
dedication as one of work engagement aspect, has a negative influence on employees' performances. The contribution
of the paper is twofold: it contributes to domestic literature through the empirical investigation of the impact of financial
stress on the above-mentioned variables, and second, it draws attention to the employers on the importance of financial
wellness programs for employees in the attempt to prevent or minimize the negative influence of financial stress on their
performances.
Keywords: financial stress, work engagement, employee performance, financial wellness programs.
1. INTRODUCTION
Stress is an integral part of everybody's life. People are exposed to stress at work, in traffic on the way home from work,
in private life etc. (Davis & Mantler, 2004). Many people are also exposed to stress in their attempt to survive due to
natural disasters or wars. One of the specific forms of stress to which people are exposed nowadays is financial stress as
well. People face it trying to manage their finance, pay bills, scholarships and other costs of everyday life. This type of
stress recently has been strongly influenced by the COVID-19 pandemic causing many people to lose their job or, in the
best, to have unstable employment. In addition, energy source prices increasing due to the current energetic crisis caused
inflation in many countries and decreased the relative value of employees` salaries. It caused many people additional
difficulties to pay bills and other expenses.
Although financial stress is usually considered a private matter of a thing, many studies confirmed that it has an impact
in working place as well. According to some research, financial stress causes distraction from work, absenteeism, reduced
morale of employees, increased turnover etc. (Kim & Garman, 2003; Kim & 2004; Sabri & Aw, 2020). Some of the
studies in the previous period focused on investigating how financial stress affects work engagement as well. In most of
them, it was found that financial stress has a negative influence on it (Padula et al., 2012; Fiabane et al., 2013; Rahmi et
al., 2020). Work engagement is, however, one of the most significant manifestations of employees' behaviour and attitudes

489
in a working place. As such, it has many important outcomes for organizations, such as organizational commitment,
organizational citizenship behaviour, innovation, initiative, active learning behaviour, knowledge sharing, creativity,
proactivity, adaptability, decision-making quality, safety behaviours etc. (Motyka, 2018). In short, the engagement of the
employees is one of the key factors of an organization’s success and competitiveness (Macey et al., 2009).
Financial stress also tends to influence employees' performance. In many studies, the negative impact was confirmed
(Kim & Garman, 2003; Kim & Garman, 2004; Sabri & Aw, 2020). Consequently, financial stress tends to have a negative
impact on organizational performance. As Qureshi et al. (2015) noted, if there is something that hinders employees'
performance, that has a great potential to erode companies' profits. That put financial stress on employees as one of the
significant issues of an organization to be dealt with.
Having in mind the importance of work engagement for employees’ attitudes and behaviour, and hence organizational
performances and success, as well as the fact that the current economic situation for many people in the Republic of
Serbia (and worldwide) causes financial stress, the subject of the paper is defined. It is the investigation of the impact of
financial stress on work engagement and job performance of the employees in the Republic of Serbia. The aims of the
paper are as follows: to find out whether financial stress influences work engagement and job performance of the
employees in the Republic of Serbia, as well as to suggest the measures that employers could implement to reduce the
financial stress of their employees. For the purpose of the paper pilot study in which 112 respondents participated was
conducted.
The paper consists of three parts. The first part of the paper contains a literature review on the concepts such as financial
stress, work engagement and job performance as well as hypothesis development. The second part of the paper contains
the results of the empirical study and their discussion, while the third part of the paper contains a suggestion for employers
as well as concluding remarks.
2. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
Financial stress. There are many definitions of stress, but this phenomenon generally could be defined as an „unpleasant
feeling that one experiences when one perceives that something one values has been lost or is threatened" (Davis &
Mantler, 2004, p. 2). These authors further state that the loss could be referred to as material things, social issues, symbolic
issues or economic issues (job security, money etc.). People who experience stress are usually worried, have the sense
that their life is controlled by external forces, are feared, and anxious, and demonstrate defensive attitudes and behaviour
(Furnham, 1997).
Stress could have many sources. One that is the most influential is the stress derived from personal finances, i.e., financial
stress. The reason for that is that many aspects of personal life and basic life activities are associated with personal
financial resources (Bagwell, 2000).
Although the term „financial stress" is frequently used in everyday life and has extensive use in the literature, the generally
accepted definitions still missing. According to some authors, financial stress is a subjective assessment of one's financial
state, including the perceived ability to pay expenses, satisfaction with one's financial situation, amount of savings and
investment, and debt anxiety (Kim & Garman, 2003). On the other side, Suprapto (2020) simply defined financial stress
as that it is pressure derived from debt or the inability to meet an obligation. Although there are different definitions of
financial stress (which in their foundation are more or less similar), the authors mostly agree that financial stress has a
negative influence on many aspects of a person's life, such as health, financial well-being, psychological status etc.
Financial stress can cause illnesses such as headaches, and high blood pressure (Choi, 2009), disturb financial status, i.e.
financial well-being (Iramani & Lutfi, 2021), cause depression and anxiety (George & Kane, 2014) etc.
Many studies confirmed that the financial stress of employees has significant negative implications in the working place
as well. In many studies it was found that financial stress causes distraction from work, absenteeism, reduced morale of
employees, increased turnover etc. (Kim & Garman, 2003; Kim & Garman, 2004; Sabri & Aw, 2020).
Work engagement. Work engagement is a very important topic in the field of human resources, organizational psychology,
work psychology, organizational behaviour, and many other areas, but also in business practice. One of the frequently
cited definitions of work engagement in the literature is that it is "a positive, fulfilling, work-related state of mind that is
characterized by vigour, dedication and absorption" (Schaufeli et al., 2006, p. 702). According to Schaufeli et al. (2002),
a high level of vigour refers to the energy, mental resilience, and persistence of the employees. Dedication refers to the
sense of significance, enthusiasm, inspiration, and pride in the job. Finally, absorption refers to working in a state of
complete concentration on one's work.
As there are many definitions of this concept, there are also many classifications of the types of work engagement.
According to some authors, there are intellectual, affective and social types of engagement of employees (Barkhuizen &
Rothmann, 2006). Intellectual engagement refers to intensive thinking about work and how work can be done more
efficiently and effectively. Affective engagement refers to the positive feeling that employees have while performing
work, while social engagement refers to the active sharing of employees' opinions and attitudes with colleagues about
possible improvements to work processes and activities. Saks (2006), for example, distinguishes two types of engagement:
employee engagement, referring to the realization of professional activity, and organizational engagement, referring to
the implementation of an organization member's role (Saks, 2006).

490
Many studies confirmed that work engagement has an impact on various types of employees’ attitudes and behaviours. It
was found that work engagement has a positive impact on job satisfaction, organizational commitment, work
performance, financial returns, work-life balance etc. (Bakker et al., 2012; Albdour & Altarawneh, 2014; Yan et al., 2017,
Wood et al. 2020). Motyka (2018), further, reported that according to various studies, work engagement has a positive
impact on the initiative, active learning behaviour, knowledge sharing, creativity, proactivity, adaptability, decision-
making quality, and safety behaviours of the employees.
Since work engagement has various positive influences on many individual and organizational outcomes, various
mechanisms for its improvement are proposed in the literature. Stein et al. (2021), for example, suggest that organizations
should try to make work less stressful and more enjoyable or reward employees with different kinds of financial and other
rewards.
Job performances. Job performance is an important theme in the literature as well. This issue is important for both,
employees and employers. Its importance for the employees stems from the fact that their performances influence many
important issues in their professional life, such as job satisfaction, salary, promotion etc. The theme of job performance
is important for employers as well since individual performance influences overall organizational performance.
Job performance is a complex concept as it is a multi-dimensional concept. In its essence job performances may be
differentiated from the process and the outcome perspective (Sonnentag et al., 2008). Job performance from the process
perspective refers to behaviour that employees demonstrate in performing their job. In other words that is the action itself
(Campbell, et al., 1990). On the other side, job performance from the outcome perspective refers to the results of the
employees' behaviour. However, the behavioural and outcome perspective are related, but not totally. Namely, in some
cases, the employees’ results are affected by determinants that are beyond their actions (Sonnentag et al., 2008).
A great deal of attention in the literature regarding job performances is paid to the distinction between task and contextual
performances as well. It is noted that contextual performances are those activities that are comparable for almost all jobs,
whereas task performance is job specific. Further, it is stressed that task performance depends mainly on employees’
abilities, whereas contextual performances are mainly predicted by motivation and personality. Finally, the authors state
that task performances are in-role behaviour and part of the formal job description, whereas contextual performances
mostly refer to extra-role behaviour and are discretionary (Sonnentag et al., 2008).
For job performance measurement purposes various measures, and technics are developed so far. Those techniques range
from rating scales, tests of job knowledge, and hands-on job samples, to checking the archive records (Campbell et al.,
1990). However, performance ratings (i.e., peer ratings and supervisor ratings) are the most frequent way of measuring
job performance (Viswesvaran et al., 1996).
All previous concepts are very important themes for academic researchers and practitioners. Therefore, many studies in
this field were conducted so far.
A certain number of studies investigated how financial stress impacts employee engagement. In many of them, it was
found that that impact is negative. For example, in the study conducted by ADP, LLC (2018) twenty-six per cent of the
employees, ages 18 through 70, reported that their money issues (financial stress) hurt their engagement. In another study,
it was found that 44% of employees with worsened financial health reported lower engagement (Birth Plan, 2021). In
some earlier research it is reported that employees under high financial stress are distracted from their work and spend
more time dealing with financial problems (Kim & Garman, 2004). Based on the above, the first hypothesis that we are
going to test in the paper is:
H1: Financial stress has a negative impact on the work engagement of the employees in the Republic of Serbia.
Many studies in previous periods focused on the investigation of the relationship between work engagement and job
performance. In most of them it was found that work engagement has a positive impact on in-role job performance
(Schaufeli et al., 2006; Rich et al., 2010) as well as on productivity (Baumruk, 2004; Richman, 2006). Bakker and Bal
(2010) similarly found that engaged teachers received higher ratings from their supervisors on their in-role performance.
Yongxing et al. (2017) further, found that work engagement has a positive impact on job performance with the moderating
effect of perceived organizational support. Based on the above, the second hypothesis that we are going to test in the
paper is:
H2: Work engagement of the employees in the Republic of Serbia has a positive impact on their job performance.
Literature in the previous period also dealt with the relationship between financial stress and employees' performance.
For example, it has been shown that financial stress promotes absenteeism (Kim & Garman, 2003). Kim and Garman
(2004) also found that employees under high financial stress may be distracted from their work and would spend more
time dealing with financial problems. More recently, Sabri and Aw (2020) found that financial stress has a negative impact
on workplace productivity. Some investigations in previous periods have shown that the cost of financial stress to an
employer is around $ 5.000 per employee per year (George & Kane, 2014). When it is about the influence of work
engagement on job performance, as was elaborated above, that influence in many studies found to be positive (Macey et
al., 2009; Motyka, 2018). Having in mind these facts, the third hypothesis that is going to be tested in the paper is:

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H3: Work engagement mediates the influence of financial stress on the job performance of the employees in the Republic
of Serbia.
3. METHODOLOGY OF RESEARCH
Sampling design and data collection. The data that was used for the purposes of the paper was collected using a self-
reported questionnaire in the period from January to February 2023. They were collected by the students of the Faculty
of Economics in Niš during their internship in the organizations where they realized it. The data on which the hypotheses
were tested consisted of 112 questionnaires filed by the respondents who participated in the pilot study.
Measuring instruments. To collect data on personal financial stress, the questionnaire developed by Turner et al. (1995)
was used. The referred questionnaire consists of three questions assessed on the five-point Likert scale (from 1 = totally
disagree to 5 = totally agree). One of the questions used in the survey was: “I have too many debts/I owe too much
money.” When it comes to the work engagement measurement and the assessments of the work engagement facets such
as vigour, dedication, and absorption, the shorter version of the questionnaire named “Utreht work engagement scale –
UWES-9” was used. (Seppälä et al., 2009). This questionnaire is widely accepted and implemented by many authors. The
level of work engagement of respondents was measured by nine questions divided into three segments and assessed on
the 7-point Likert scale (from 1 = never to 7 = always). For example, the question that has been used was "I am proud of
the work that I do". Lastly, the questions used for the detection of the self-reported level of employees' performances are
derived from the questionnaire of Huey Yiing and Zaman Bin Ahmad (2009). Respondents ranked their job performance
on the three scales depending on the question. The first question concerning the level of job performance was rated on a
scale ranging from "does not meet the standard" to "exceeds standard". Furthermore, the employees' performance was
assessed in comparison to others of the same rank from "low level" to "high level". Their job contributes to the
organization in comparison to other members of the work unit was ranged from "less contribution" to "more contribution".
Data analysis procedure. The collected responses from respondents were analysed by the SPSS 23.0 software, the AMOS
and the PROCESS macro extension developed by Hayes (2018). The analysis itself involved examinations of the
respondents' demographics, the data's normality, the confirmatory factor analysis of the researched variables and the
mediation research model constructed following the predetermined hypotheses. According to Hair et al. (2019), the cut-
off points for Cronbach's alpha and average variance extracted (AVE) were 0.6 for the former and 0.5 for the latter. The
presence of a relationship between research variables whose influence has been examined is indicated by bivariate
correlation. Moreover, presumptions of regression analysis were tested. Following the recommendations of Hayes (2018),
model 4 for parallel mediation was implemented. Bootstrapping procedure on 5000 observations and 95% confidence
interval indicates an indirect effect of an independent variable through mediators on the dependent variable in the research
model. Only a confidence interval that does not include zero was observed as evidence of the mediation effect.
4. RESEARCH RESULTS AND DISCUSSION
Research results. The following Table 1 indicated the structure of the sample. Of the 112 respondents, 72 were females.
The dominant age cohort was between 36 and 45 years old and the majority of respondents held high school diplomas.
Table 1. The demographic structure of the sample
Item Classification N% of the total
sample
Gender Male 40 35.7
Female 72 64.3
Age < 25 8 7.1
26 - 35 16 14.3
36-45 40 35.7
46 - 55 38 33.9
56-65 10 8.9
Education High school 56 50.0
Vocational education 28 25.0
High education (BSc, MSc and PhD) 28 25.0
Source: Authors’ calculations
In order to check the reliability and validity of the used scales, before the mediation analysis, a confirmatory factor
analysis was conducted.

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Table 2. Reliability of the variables
V
ariable Factor loadin
g
s Cronbach α
Financial stress FS1 .928 .932
FS2 .895
FS3 .942
Work engagement - Vigor VI1 .828 .854
VI2 .804
VI3 .747
Work engagement - Dedication DE1 .815 .908
DE2 .794
DE3 .827
Work engagement - Absorption AB1 .736 .889
AB2 .837
AB3 .839
Employee Performance EP1 .909 .909
EP2 .910
EP3 .838
Source: Authors’ calculations
In Table 2 the reliability in the form of factor loadings and Cronbach alpha values is presented. All items describing one
latent variable have satisfactory levels of reliability and none of them is below the cut-off point of 0.6. Moreover, factor
loadings ranged between 0.763 and 0.942 for latent variables thus indicating satisfactory reliability larger than 0.5.
Table 3 presents the analysis of composite reliability (CR), average variance extracted (AVE), square root of AVE and
correlations between latent variables.
Table 3. Validity of the variables
Variable Mean SD CR AVE 1 2 3 4 5
1. Financial stress 2.250 1.190 .935 .909 .935
2. Work engagement - Vigor 3.554 1.164 .860 .818 -,302* .904
3. Work engagement - Dedication 4.339 1.468 .909 .876. - 354** ,489** .936
4. Work engagement - Absorption 4.006 1.516 .891 .854 -,118 ,706** ,458** .924
5. Employee Performance 3.667 .860 .910 .878 -.032 ,198 .522** ,290* .937
Note: AVE – average variance extracted; On the diagonal square root of AVE as a measurement of discriminant
validity of variables; ** correlation significant on the level of p < .01, * correlation significant on the level of p < .05.
Source: Authors’ calculations
Data referring to testing the validity and correlations testing indicates that each construct's CR was more than 0.7 and
varied from 0.860 to 0.935. The AVE for each latent variable, however, was more than 0.5 and ranged from 0.818 to
0.909. These findings demonstrated the measures' strong convergent validity. The measurements and confirmation of
variables' discriminant validity were further examined through a comparison of correlations and the square root of AVE.
According to data from Table 3, it can be concluded that between financial stress and work engagement facets – vigour
and dedication – exists a negative relationship. On the other hand, all aspects of work engagement are positively correlated
indicating that they are related to each. This could be explained by the fact that they are used for assessment of the similar
aspects of work engagement. Data from Table 3 also show that dedication and absorption as work engagement aspects
are positively related to the employees' performance meaning that when dedication and absorption increase, the
employees' performance will also increase.
In order to test the hypothesis we created a model in which financial stress was used as an independent variable, three
aspects of work engagement (vigour, dedication and absorption) were used as mediator variables, while employees'
performance was used as a dependent variable. Table 4 presents the results of the parallel mediation analysis we further
conducted.

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Table 4. Results of the parallel mediation
Relations R2 F B SE t p 95% CI
path a1 = FS → VI .091 6.716* -.295 .114 -2.592 .012 [-.52; -.07]
path a2 = FS → DE .125 8.979** -.437 .146 -2.997 .004 [-.73; -.14]
path a3 = FS → AB .014 .960 -.151 .154 -.9800 .332 [-.46; .16]
path b1 = VI → EP .340 8.373*** -.103 .110 -.938 .353 [-.32; .12]
path b2 = DE → EP
.338 .075 4.509 .000 [.19; .49]
path b3 = AB → EP .080 .094 .850 .340 [-.11; .27]
path c’ = FS → EP (direct effect) ,106 ,098 1,082 ,284 [-.09; .30]
path c = FS → EP (total effect) ,001 ,037 -,023 ,119 -,192 ,849 [-.26; .22]
path ab (indirect effect)
-.129 .070 [-.27; .01]
VI ab1 .035 .049 [-.04 .13]
DE ab2 -.172 .068 [-.26; -.03]
AB ab3 -.014 .030 [-.09; .04]
Note: **significant on the level of p < .01, *significant on the level of p < .05.
Source: Authors’ calculations
The parallel mediation analysis has revealed that financial stress significantly negatively influences two of three categories
of work engagement. Therefore, we may conclude that the first hypothesis (H1) is mostly confirmed. The data from Table
4 also shows that the influence of financial stress is less strong on vigour (β = -.295, p < .05, 95% CI [-.52; -.07]) than on
dedication (β = -.437, p < .05, 95% CI [-.73; -.14]).
The parallel mediation analysis has also revealed that when it comes to the effect of dedication as a work engagement
manifestation on employee performance significant influence was also found (β = .338, p < .05, 95% CI [.19;.49]).
However, no other significant influences of work engagement manifestations on employee performance are observed.
Therefore, we may conclude that the second hypothesis (H2) is partially confirmed.
Finally, data from Table 4 show that the total mediation effect of financial stress on employee performance through three
work engagement parts is not significant. Also, the direct effect of financial stress on employee performance is not
significant. However, dedication emerged as a statistically significant mediator in the relationship between the
independent and dependent variables in the model (β = -.172, 95% CI [-.26; -.03]). Therefore, we may conclude that the
third research hypothesis (H3) is not confirmed when the total mediation effect is assessed, but it is partially confirmed
since dedication emerged as a statistically significant mediator in the relationship between financial stress and employee
performance.
Discussion. The previously presented research results were an attempt of the authors to show whether the financial stress
of the employees in the Republic of Serbia negatively hits their engagement and performance. However, none of these
effects was confirmed completely in the pilot study we conducted. However, since the survey is still ongoing, and the
sample in the next step of the research will be bigger, the final results of this kind of research could be different. Hence,
in the discussion part of the paper in this phase of the research, we put attention to finding supporting studies in the
literature for our third hypothesis since it contains all variables that we used in the study. We found similar results as they
are in our study in the study conducted by Junça Silva and Lopes (2021). Their research showed that when work
engagement increases occupational stress decreases, but employees` performance increases. They also found that work
engagement could be a mediator between the perceived organisational support predictor and employee performance even
though the perceived organisational support predictor does not influence a dependent variable.
Implication for the employers. Since the financial stress of the employees tends to negatively influence employees
performances by occupying their energy, time and focus, many employers started to implement Employee Financial
Wellness Programs (EFWPs). This program aims to strengthen employees' financial well-being through services such as
financial coaching, payroll advances and short-term instalment loans, credit counselling, debt management, and online
financial management tools (Fox-Dichter et al., 2018). According to Fox-Dichter et al. (2018), a recent survey of
employers found that many offered EFWPs to help their employees with financial struggles and also to improve their
performance, increase retention, and decrease absenteeism. Although there are not many studies that investigated the
influence of EFWPs so far, some of them confirmed that implementing wellness programs had a positive influence on
employees' extrinsic and intrinsic job satisfaction levels within the organization (Marshall, 2020). Since job satisfaction
has great potential to positively influence employees' performances, it is reasonable to believe that EFWPs have a positive
influence on many outcomes important for employers.

494
5. CONCLUSION
Since many employees nowadays face financial stress due to job insecurity caused by the COVID-19 pandemic and
inflation caused by the energetic crisis, this paper dealt with this category and its influence on work engagement and
employee performance. After a theoretical review of these categories, the results of the empirical study were presented
and analysed.
The empirical study conducted in the context of the Republic of Serbia had the form of a pilot study. However, some of
the results are already indicative. For example, it was found that financial stress, when mediated by dedication as one of
the aspects of work engagement, has a negative influence on employees' performance. Although the hypotheses in the
research were not completely confirmed, this result encouraged authors to continue this research, so the survey is still
ongoing.
The contribution of the paper is twofold. First, it full-fills the gap in the literature in the Republic of Serbia regarding the
impact of financial stress on work engagement and job performance which, by the knowledge of the authors, has not been
empirically investigated in this context. Further, this paper draws attention to the employer on the importance of EFWPs
that could implement in their organizations to prevent or minimize the negative impact of financial stress on their
employees and, consequently, on their performances.
However, this paper is not without limitations. This paper’s primary weaknesses are the fact that it is based on the pilot
study (and hence on a small sample of respondents) as well as on the convenience sampling method that was used in the
empirical research. These facts prevent the generalization of the results of the study to the whole working population.
Since the authors continued to carry out the empirical research, in the next phase more reliable empirical results are
expected.
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