Impact of Employees' Mental Health on Organisational Productivity in Multinational Corporations: An Empirical Study with Reference to Telangana State

Keeping Telangana's MNC workforce productive is vital for the state's economic growth and for its standing as a global business destination. This study examined the structural relationships among employees' mental health, work engagement and productivity in a sample of 200 MNC employees in Telangana, using a validated model estimated through the MLE method of SEM. The exploratory and confirmatory analyses showed that the theorised dimensions of psychological distress (occupational stress, anxiety and low mood, and burnout), positive mental health (emotional, psychological and social well-being) and work engagement (vigour, dedication and absorption) behaved as closely related facets of three higher-order constructs. CFA confirmed that a five-construct measurement model was reliable and valid, and the dimension-level model supported the higher-order structure of the mental health and engagement constructs. According to the structural model, positive mental health strengthens work engagement and psychological distress weakens it, and engagement then drives individual and organisational productivity. Positive mental health had a direct effect on individual work productivity as well. By contrast, the effects of psychological distress on both productivity outcomes, and the effect of positive mental health on organisational productivity, passed wholly through work engagement. Work engagement is thus the mechanism by which mental health turns into productive effort. The study concludes that employee mental health is a strategic determinant of organisational productivity in MNCs, and that money spent on reducing distress and building well-being is best understood as an investment in performance.

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