A Massey University study has found more than a quarter of employees feel depressed, with half saying their lives are impacted by depression.
Researcher Associate Professor Bevan Catley says a shift in management focus could be the solution.
"There is an important workplace component to improving employee mental health, and organisational changes can have a positive impact on many people," he says.
The New Zealand Workplace Barometer study surveyed more than 1400 people. It found employees are more likely to perform better when the management in the organisation cares about them, the engagement level is high and when management prioritises the wellbeing of each individual.
How well an organisation manages the psychological wellbeing of its employees proved to be a good predictor of stress-related illness.
"Promoting wellbeing at work has all sorts of positive gains in terms of business and societal benefits," Mr Catley told TVNZ1's Breakfast.
"Organisations that maybe don't have that well organised, well designed, well led workplaces then put themselves at risk of things like bullying."