Job Insecurity Harms Both Employees and Employers

Despite the well-documented negative impact of job insecurity on workers’ well-being, many employers continue to intentionally instill fear of job loss in their workforce, believing that doing so can motivate workers and reduce costs. But is this approach actually effective? The authors conducted a series of surveys of more than 600 American workers and found that while insecure workers may indeed be motivated to try to improve their performance and conform more closely to company policies, the associated stress, frustration, Resentment and exhaustion but insecurity create a cognitive load that counteracts positive effects on performance or rule compliance. Employees in precarious jobs are also more likely to focus on making their contributions visible than actually doing valuable work, and some even intentionally hide information or sabotage their colleagues to compare themselves better. Worse, many of these behaviors set off vicious circles that further diminish perceptions of job security. As such, the authors argue that fostering a sense of job insecurity is not only cruel—it’s often counterproductive.

According to a recent survey, 15% of US workers today feel at risk of losing their jobs (although actual unemployment rates remain at record lows). And that’s no coincidence: Studies have shown that many workplaces intentionally incite fears of job loss to motivate workers and reduce costs, since disabled workers may be less likely to seek raises and other benefits. In fact, organizations like Facebook and General Electric have made no secret of the fact that they are strategically using the threat of job loss to boost performance, despite the well-documented negative impact of job insecurity on feelings of social connection, identity, and empowerment physical condition of employees Mental health.

The impact on employee well-being is clearly problematic. But moral issues aside, we were curious if this approach actually works when it comes to boosting performance. So we conducted a series of surveys of more than 600 American workers across a variety of industries to examine the relationship between perceived job insecurity and behavior at work—and we found that while job insecurity might improve certain short-term performance metrics, overall it did is a serious net negative for employees and organizations alike.

Job insecurity can push employees to do so To attempt to improve performance…

When we asked workers in our studies what they did when they felt insecure about their job, many described how they would take on extra work, stay longer, and try to perform well. As one retail executive explained, “My company has previously had furloughs and layoffs… Knowing this, I try to commit myself to keeping my department running and try to really contribute beyond my previous responsibilities. I find [this] helped me a lot in keeping my job.” A care manager described a similar approach: “In the past, when faced with the possibility of losing my job, I have typically tried to review my own behavior and see if Improvements can be made in my work ethic or job performance that would increase my job security.”

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And yet, when we asked people to think about how well they were doing at their core job responsibilities, we found that feeling more job insecure three months later had no impact on performance. This is consistent with previous research, which has largely found that job insecurity is either not or slightly negatively correlated with performance evaluations. In addition, we also found that even when people felt their performance had improved, it did not appear to reduce their job insecurity. In other words, despite their stated desire to improve, people didn’t actually do better because they felt more insecure at work, and if they did better, it didn’t actually reduce their insecurity.

…but the additional burden often negates the benefits.

This is because during the workplace insecure workers are motivated to do so To attempt To perform well, the threat of job loss (and the associated stress, frustration, resentment, and exhaustion from taking on extra work or looking for other jobs) complicates performance and essentially negates any potential benefits. As one participant put it: “I have found that caring about my job makes me a less effective rather than a more effective worker. I’m more anxious and distracted.” Another described how the looming layoffs made him feel like “a walking ball of anxiety,” which ultimately made him less able to impress management, though he tried harder work and represent yourself. If you’re stressed about losing your job, you’ll have to work harder to maintain the same level of performance — so even if you’re more motivated to improve, that extra work probably won’t translate into better results.

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Workers with insecure jobs are less likely to abide by the rules.

Beyond overall performance, we hypothesized that feelings of greater job insecurity might prompt workers to avoid improper behavior, such as being late or sabotaging company property. For example, one teacher in our study described: “I’m constantly doing whatever I’m asked to do and I try to fly under the radar. I’m afraid that if I speak out or do anything against the norm, I risk getting fired, especially during these trying times.” Sharing a similar sentiment, one retail worker explained, “I was scared [of job loss] in the past … the main things I did to keep from losing my job was always make sure I was on time, never take long lunch breaks and do my best to show up on time to avoid overtime.”

But as we looked at the data over time, we found again that people’s intentions didn’t always match their actions. Despite their greater motivation to follow rules, workers who felt more unsafe at work were more likely to break rules over the next three months. And, unsurprisingly, workers who reported more misconduct were more likely to feel more insecure about their job, setting off a vicious cycle in which greater job insecurity leads to more (albeit unintentional) rule violations, which in turn further reduces perceived job security . Just like with performance, the self-control required to follow rules requires significant cognitive resources, and so the increased mental burden of job insecurity makes people less able to follow protocols even when they want to.

Workers with job insecurity prioritize visible contributions—not necessarily valuable ones.

Finally, we found that the more worried people are about losing their job, the more focused they are on making their boss aware of their contributions, rather than actually improving their performance. While some level of impression management is healthy, many of the employees in our studies prioritized the visibility of their work over tasks that might have been more valuable to the company, and some would even hide information or intentionally sabotage their colleagues to make themselves look better let in comparison.

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For example, one employee suggested that he didn’t do his best job, but was concerned above all with appearing better than his peers: “As long as there’s someone who isn’t as strong,” they shared, ” should I be safe.” Others described that self-promotion was “a key element in protecting my job” and that when they felt insecure about their job security, they focused on “trying to make me look valuable.” , and making sure they were “seen three times” better than the next person.”

Interestingly, we found that hiding knowledge from colleagues in some cases actually reduced workers’ job insecurity, perhaps because making them feel irreplaceable and therefore more confident in their position could be an effective strategy ( although this is clearly to the detriment of the organization). However, the over-focus on making one’s contributions more visible was not only costly for employers, it also further reduced workers’ perceived job security, likely because the extra attention increased the pressure to perform on these workers, thereby adding fuel to the fire of their job insecurity .

Job insecurity doesn’t pay off.

Sure, when it comes to motivating employees, there’s certainly a place for carrots and sticks. But our data suggests that fostering a sense of job insecurity isn’t just cruel—it’s often counterproductive. As one participant described, “Whether you’ve been laid off, downsized, forced into early retirement, or have seen contract labor dry up, losing your job is one of life’s most stressful experiences. Aside from the obvious financial agony it can cause, the stress of losing a job can also take a toll on your mood, relationships, and overall mental and emotional health.”

When workers fear losing their jobs, their performance doesn’t improve, they break more rules, and focus on selling themselves, often to the detriment of their teams and their organizations. Worse, many of these behaviors set off vicious circles that further reduce job security and impact both individual well-being and organizational results. Of course, job insecurity cannot be completely eliminated—but our research suggests that whether they are motivated by increasing wellbeing or performance, leaders should do whatever they can to help employees feel safe and secure in their roles to feel safe.

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