Researchers Sound the Alarm: Sleep and Organizational Productivity

Monday, August 22, 2022


Researchers are sounding the alarm, and their warning is clear: organizations must reevaluate how poor sleep impacts performance and work culture—especially when popular views on sleep are based more on myth than on science.

Organizations worldwide unknowingly undervalue sleep because they likely miss the costly consequences of poor sleep. “Sleep is for the weak.” We’ve likely all heard this myth or something like it at some point in our careers. Though, whether it’s said with a smirk or a straight face, the result is the same.

As a consequence, employees may view their unhealthy sleep patterns as a necessary sacrifice made in the name of productivity and success. The unfortunate reality is quite the opposite: such sacrifices do more harm than good.

Disregarding the importance of sleep creates a detrimental feedback loop where employees suffering from poor sleep simultaneously experience more stress and decreased productivity—factors which can further impede good sleep practices and compound symptoms.1

And even worse, researchers find that even when stressful situations subside, the disturbances to sleep may continue.2 In other words, the myth that sleep and rest stand in the way of success and profitability proves costly.

Keep reading to learn what researchers have to say about how poor sleep habits wreak havoc on productivity and work culture.

Why Employers May Pay the Price of Poor Sleep

An organization—like the human body itself—is composed of many moving parts and systems that create functional outcomes when working in unison. When the cells or organs of the body work at a lessened capacity, though, we begin to see things like disease and bodily dysfunction.

An organization is no different. When employees suffer from sleep deprivation, the resulting dysfunction may really hurt the organization’s overall health by hitting important vectors of functionality, like its bottom line—which many CEOs would view with all the seriousness of a fatal disease.

Data reveals that damage to the bottom line occurs by way of a twofold penalty:

  • An additional $4,300 in additional healthcare costs3 per employee per year is shown to be a result of sleep-deprived employees.
  • The cost of lost productivity is nearly as damaging—costing $3,200 per employee4 per year.

These two penalizations equate to a whopping total cost of $7,500 per employee per year. So instead of asking, “Can my organization afford to tackle these problems?”, the more appropriate question may be whether your organization can afford not to. Like with any optional investment, there’s an opportunity cost to consider.

There’s a reason why titanic companies like Google started to invest significant money into employee rest and relaxation policies as far back as 2013. Did you know Google employees may take naps and spend relaxation time in meditation rooms while on the clock?

Big companies aren’t the only ones doubling down on this strategy either. Asana—a smaller but rapidly growing company with tremendous success—provides nap rooms for its employees.

Beyond hurting the bottom line, poor sleep habits can create many other serious problems for an organization.

How Sleep Deprivation Unravels Leadership Potential

Beyond the traceable monetary costs of increased healthcare costs and lost productivity, there are various other issues to consider. Because much like opportunity cost, when employees fail to actualize their potential, the organization suffers.

To fully understand how sleep is impacting leadership potential, let’s take a look at the parts of the brain associated with leadership and how they perform under poor sleep conditions.

The last part of the brain to develop into its modern form was the neocortex. It is responsible for the indispensable functions of sensory perception, speech, and motor functions.

The front part of the neocortex, called the prefrontal cortex, is responsible for what’s referred to as ‘executive functions’. And as the name suggests, these executive functions carry out the higher order thinking that professionals rely on throughout the day.

Executive functions are as follows:

  • Inhibition (the ability to inhibit one’s impulses)
  • Organizing
  • Problem solving
  • Reasoning
  • Planning and executing plans

According to the Harvard Business Review,5 successful business leaders rely on at least one of these functions at any given time—and often more. In a study of 81 organizations and 189,000 people from around the world, neuroscientists found that four leadership behaviors were intrinsically linked to success:

  • Results-oriented perspective
  • Problem solving
  • Seeking out different perspectives to consider
  • Supporting others

The fascinating part about these behaviors is that how well someone can do them is directly linked to how well they sleep which relates to the prefrontal cortex.

The Prefrontal Cortex: The Brain of Your Organization

The neocortex—responsible for sensory perception, speech, and motor functions—is able to maintain functionality quite well even without sleep.

Scientists6 have shown, however, that the prefrontal cortex suffers immensely in the absence of quality sleep. So much so in fact, that after just 17 hours of wakefulnes a person will demonstrate higher-order thinking equivalent to someone drinking alcohol (specifically with a blood alcohol level of 0.05%).

By the 20th hour of wakefulness, cognitive functionality sharply declines to a level comparable to someone with double the blood alcohol level (specifically to .1% which is considered legally drunk in the United States).

So maybe it’s time to rethink those late-night video calls or slack meetings?

In other words, as one’s executive thinking declines, the potential for miscommunication, misunderstandings, and other issues arise. Particularly if a leader loses inhibition—a common result of sleep loss—they might be more prone to emotional reactions, which can destabilize group dynamics.

But even in the case of a non-leader employee, the detriments of sleep problems can rock the foundations of even the most robust organizations.

The Self-Fulfilling Prophecy of Work Performance

One of the most corrosive risk factors of sleep related issues among employees is the potential for drastic reduction in subjective effort, which is defined as the way a person self-assesses their personal performance at work.

Studies7 on individual effort show a distinct problem: when professionals are not well-rested, they tend to pursue less challenging tasks. Meaning, this preference for low-risk work among the sleep deprived leads to a tendency where employees may exhibit signs of procrastination, since they feel ill-equipped to tackle more challenging tasks.

Of course, the impact of low subjective effort will vary depending on whether one procrastinates on simple tasks or complex ones; however, one of the more concerning aspects is how low subjective effort compounds other sleep related problems.8 Employees who tend to report low subjective effort also report feeling as if they could be doing better at work—they know they aren’t performing up to their potential.

This process of procrastination induced by poor sleep creates a feedback loop: employees feel unfulfilled by not living up to their potential, which creates feelings of discontent. The problem of discontentedness in one’s profession may spawn more sleep issues or increase the severity of existing issues.

In turn, the increasing severity of sleep-related issues can further increase procrastination and lower one’s subjective effort even further—creating a self-fulfilling prophecy that follows this pattern:

  • Poor sleep begets low subject effort
  • Low subject effort leads to increased procrastination
  • Procrastination leads to feelings of unreached potential and discontent
  • Discontentedness invites more sleep issues, and the cycle begins again with the potential for even greater dysfunction.

What’s alarming about this cycle is that even if an employee is genuinely high functioning while under the effects of sleep deprivation, the perception of low subjective effort alone may be enough to create this cycle of dysfunction.

Fixing an Organization’s Sleep Problems

The severity of sleep-related problems is such that any organization would be remiss to ignore them. The symptoms of sleep problems can impede every level of an organization’s hierarchy and impact its daily performance across many vectors—not to mention its bottom line.

Thankfully, this problem is receiving enough academic and corporate attention that the demand for solutions is at an all-time high. And there are a number of emerging and innovative companies looking to answer that call.

Emerging technologies looking to resolve organizational dysfunction typically come in one of two categories: applications and policies. Companies like Google and Asana have implemented policies for naps, meditation, and relaxation to combat issues of overwork and burnout.

But some organizations may find themselves in need of more immediate intervention. As such, some organizations prefer to implement innovative applications that combat sleep issues with high-tech methodology.

For example, Chorus Sleep9 develops such applications to directly target the problematic behaviors and symptoms that cause poor sleep—and leverages biometric technology to provide personalized feedback and therapeutic plans of action for each employee. Chorus helps individual employees and their families sleep better—with some shockingly impressive success rates ( 80% of people reported better sleep ).

Practice What You Preach

Researchers have sounded the alarm and their warning is clear: so long as organizations fail to properly assess the cost-benefit analysis of employee’s poor sleep, both the organizations and their employees will pay the price—either by lost productivity, health problems, or diminished bottom lines.

But the reality is that neither sleep-friendly policies nor innovative applications will resolve an organization’s sleep issues if they don’t practice what they preach. So how might organizations practice what they preach?

Even if your employees use the best sleep technology on earth, they’re still likely to be distressed by late-night emails and overwork. The origin of the ‘9 to 5 workday’10 was based on a schedule meant to optimize productivity. And the research is clear: attempting to push productivity beyond these bounds does nothing but hurt productivity and cause dysfunction in workers.

Organizations should acknowledge the myth of productivity ad infinitum, and cast it aside by the same stroke of logic that would be used to dismiss the idea of an infinitely scalable and infinitely profitable asset. At a certain point, employees need to be taken care of to deliver their best performance, because optimal health is ultimately the source of all productivity.

In addition to implementing employee-friendly policies and innovative applications like Chorus to help practice what they preach, organizations need to acknowledge and commit to the underlying values of promoting employee health—and like any worthwhile change, it begins with a shift in mindset and waking up to a few unsettling truths.

Because when organizations practice what they preach by valuing the bottom lines of employee health as much as their fiscal ones, they improve the value of both—which constitutes a win-win for workers and organizations alike.


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