Talk to the employee
According to Psychology Today, you must sit down with the employee and openly talk to them about the problem. Sometimes it may be hard for the employee to talk about their problems, especially if they are of a personal nature. This is why you do not need to go into detail. Focus only on relevant information.
Find out the cause of the stress
Find out what triggers the stress and what the root of the problem is. Is it something at work or in the employee's personal life? Is it something you can address or not? All these pieces of information are key to solving the situation successfully.
Plan what should be done next
Based on your definition of the problem and its causes, agree with the employee on how you can help them right now. Find out what would be the ideal solution based on the employee wishes and be open to all the options they might give you.
Delegate the work of the employee or make it easier for them
No matter whether the source of the stress is at work or in the personal life of the employee, it is clear, given that you detected the signals, that it is impacting the work performance of the given team member. Therefore you need to ease their workload. Talk to them about whether they want to take a break; alternatively, delegate part of their agenda to someone else or make the work of the employee somehow less demanding.
Enable the employee to work on tasks they enjoy
One way to make work easier for the employee in the short term is to take away tasks that stress them out, and enable them to focus more on tasks they enjoy.
Come up with a long-term solution
All the points described above focus more on short-term solutions to acute stress. However, your goal should be to find a long-term, sustainable solution which will prevent any repetition of such a situation. You should therefore agree with the employee on how the system will be set up for the future.
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