Recently, researchers in the field of structural health monitoring (SHM) have been rigorously striving to replace the conventional NDE techniques with the smart material based SHM techniques, employing smart materials such as piezoelectric materials. For instance, the electromechanical impedance (EMI) technique employing piezo-impedance (lead zirconate titanate, PZT) transducer is known for its sensitivity in detecting local damage. For practical applications, various external factors such as fluctuations of temperature and loading, affecting the effectiveness of the EMI technique ought to be understood and compensated. This paper aims at investigating the damage monitoring capability of EMI technique in the presence of axial stress with fixed boundary condition. A compensation technique using effective frequency shift (EFS) by cross-correlation analysis was incorporated to compensate the effect of loading and boundary stiffening. Experimental tests were conducted by inducing damages on lab-sized aluminium beams in the presence of tensile and compressive forces. Two types of damages, crack propagation and bolts loosening were simulated. With EFS for compensation, both cross-correlation coefficient (CC) index and reduction in peak frequency were found to be efficient in characterizing damages in the presence of varying axial loading.