While it is unclear how job insecurity is related to performance, past research has suggested two different possibilities. Interestingly, they conflict. One possibility is that job insecurity leads to poor work attitudes, which then leads to a decrease in work performance. Another possibility is that job insecurity leads employees to ‘step up to the plate’ and increase their performance to avoid being laid off. Although these lines of reasoning are at odds with each other, researchers in this study (Staufenbiel & König, 2010) argue that both processes can operate simultaneously.
THE RESEARCH STUDY
The researchers in this study collected data from 152 employees working for a German electronics wholesaler. They found that job insecurity leads to reduced work attitudes, which in turn leads to a decrease in job performance, an increase in turnover intentions and higher rates of absenteeism. However, job insecurity also seems to simultaneously push employees to increase their performance at work, be absent less often, and be less likely to consider quitting.
The researchers found that this dual explanation for how job insecurity affects workplace outcomes is much more plausible than considering only its negative effect on performance. It is important to note, however, that job insecurity’s negative influence on performance, turnover intentions, and absenteeism is stronger than its positive effect on these important outcomes.
THE BOTTOM LINE
The researchers warn against managers using job insecurity as a motivational tool – “get to work or we’ll find someone to replace you!” While this approach may get employees to step it up a notch in the short term, it can also negatively influence their work attitudes. This can have the opposite effect on performance – an effect that lasts much longer.
Staufenbiel, T., & König, C. J. (2010). A model for the effects of job insecurity on performance, turnover intention, and absenteeism. Journal of Occupational and Organizational Psychology, 83(1), 101–117.
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