Pressures to improve the cost effectiveness of the health-care delivery industry promise to make life stressful for those who work within the industry during the 1990s. Employees who work in stressful conditions eventually feel anxious about themselves, their performance, how they are being treated, and others. Employees cope with these anxieties by using psychological defenses that have a major impact on interpersonal relations and work performance. This article shows how stress and anxiety diminish employee effectiveness and illustrates the connection between managing employee defensiveness and performance. Intervention guidelines are provided to help clinical laboratory managers develop insightful, informed, and effective interventions when performance problems occur.