The consequences of job insecurity for employees: The moderator role of job dependence.

With globalization and increased international competition have come more flexible forms of employment and increased job insecurity. The authors address the impact of perceived job insecurity on employees’ work attitudes and intentions. After reviewing relevant research on stress theory and the relationship between job insecurity and its consequences, they test two hypotheses on 942 employees in Spain, namely: first, that job insecurity relates negatively to job satisfaction and organizational commitment and positively to intention to leave; and, second, that job insecurity, economic need and employability interact in the prediction of these outcomes. s a result of globalization and international competition, the labour marA ket has undergone rapid change over recent decades. Organizations have therefore had recourse to various measures to reduce costs and increase efficiency, for example downsizing, restructuring, merging, privatization and outsourcing (Hellgren and Sverke, 2003; Allen et al., 2001; Reisel and Banai, 2002; Tivendell and Bourbonnais, 2000; Probst, 2003). Out of these transformations there have emerged new forms of employment relationship based on flexibility – and these can increase workers’ feelings of insecurity about actual jobs (Sverke and Goslinga, 2003; Chirumbolo and Hellgren, 2003). Job insecurity has been defined as “perceived powerlessness to maintain desired continuity in a threatened job situation” (Greenhalgh and Rosenblatt, 1984, p. 438). In response to job insecurity, workers’ attitudes evolve in ways that can have important consequences for their health and behaviour (Davy, Kinicki and Scheck, * Open University of Catalonia, email: bsora@uoc.edu. ** University of Valencia, email: Amparo.Caballer@uv.es. *** University of Valencia, IVIE, email: Jose.M.Peiro@uv.es. Research for this article has received the support of the Fifth Framework Programme of the European Community for Research, Technological Development and Demonstration Activities, of the Generalidad Valenciana’s Programme for R+D+I Groups (Group 03/195) and of the CONSOLIDER Project SEJ2006-14086/PSIC. Responsibility for opinions expressed in signed articles rests solely with their authors and publication does not constitute an endorsement by the ILO. Copyright © The authors 2010 Journal compilation © International Labour Organization 2010 60 International Labour Review 1991; Chirumbolo and Hellgren, 2003; Burke, 1998). However, research findings are not consistent on these issues. Sverke, Hellgren and Näswall (2002) have suggested that this inconsistency could be due to the fact that the relationship between job insecurity and employees’ reactions may be moderated by individual differences. In our view, situational variables such as job dependence (understood as a combination of lack of employability and economic need) could “moderate” these relationships, especially in national contexts where high rates of unemployment, low unemployment benefits and great cultural value attributed to job security may promote job dependence (Greenhalgh and Rosenblatt, 1984). The aim of this article is to examine the consequences of job insecurity on employees’ attitudes and intentions towards their jobs and to analyse the moderator role of job dependence in the relationship between job insecurity and its consequences in an unsupportive environment, such as Spain’s (Caballer et al., 2005). Job insecurity as an antecedent of attitudes and intentions at work According to stress theory (Lazarus and Folkman, 1984), job insecurity is perceived as a work stressor, given that the anticipation of possible job loss can be perceived as a source of anxiety just as important as the loss itself. In this vein, a growing body of research has focused on how job insecurity can be harmful to employees. In fact, it has been observed that job insecurity has a negative influence on employees’ attitudes, including their job satisfaction and organizational commitment (Adkins, Werbel and Farh, 2001; Chirumbolo and Hellgren, 2003; Armstrong-Stassen, 1993), as well as a positive relation to intention to leave the organization (Rosenblatt, Talmud and Ruvio, 1999; Chirumbolo and Hellgren, 2003). Thus, within the framework of stress-strain research, we aim to analyse the influence of job insecurity on employees’ attitudes towards their jobs and intended behaviour. More specifically, based on the results of previous studies, the following hypothesis was generated: Hypothesis 1: Job insecurity is negatively related to job satisfaction and organizational commitment and positively related to intention to leave the organization. Job dependence as moderator between job insecurity and its consequences for employees Although previous research indicates that job insecurity negatively influences employees’ work attitudes and behavioural intentions, some aspects of these relationships are not fully understood. In their meta-analysis, Sverke, Hellgren and Näswall (2002) observed incongruent results in previous studies. They analysed the strength of the relationship between job insecurity and its consequences and noted that the studies varied very considerably in their findings. Indeed, a number of studies have found that job insecurity has significant negaThe consequences of job insecurity for employees 61 tive relations with job satisfaction and well-being and positive relations with propensity to leave; nevertheless, other studies do not present such significant relationships (Davy, Kinicki and Scheck, 1991; Hollenbeck and Williams, 1986; Cavanaugh and Noe, 1999). Taking into account these inconsistencies, Sverke, Hellgren and Näswall (2002) suggested that other factors may be influencing the relationship between job insecurity and its consequences. Similarly, Greenhalgh and Rosenblatt (1984) suggested that individual differences could moderate the relationship between perceived job insecurity and individuals’ reactions. Furthermore, situational variables can also influence the perception of job insecurity as a more or less dangerous threat and this, in turn, can influence how serious the consequences are. In this context, an individual’s dependence on his/her current job can be an important situational variable that could play a moderator role. Specifically, Greenhalgh and Rosenblatt (1984) suggested that employees whose chances of finding another job were small and whose main source of income was provided by the job under threat would probably be more dependent on that job than employees with great employability and alternative sources of income. So they concluded that when employees perceive job insecurity, the more job-dependent employees will probably perceive it as a more dangerous threat and will react more negatively than will less job-dependent employees. Additional evidence can be found in the literature. The economic outcomes of work are fundamental determinants for workers. Some studies have analysed the ranking of the importance of outcomes (Lawler, 1971; Wahba and Bridwell, 1976). They showed that at higher levels of pay, the importance of economic results as a motivator decreased relative to other outcomes, and that if employees were poorly paid, they ranked pay levels higher (Brief and Aldag, 1989). Following this line of reasoning, Brockner et al. (1992) carried out a study with a sample of 597 employees of retail stores, whose results showed that the inverted-U relationship between job insecurity, perceived control and work effort was moderated by economic need. Therefore, the employees with a higher economic need to work were more influenced by perceived job insecurity than employees with a low economic need to work. Regarding employability, Herriot, Hirsh and Reilly (1998), Silla, Gracia and Peiró (2005) and Martin, Staines and Pate (1998) highlighted that, currently, employees seek to increase their training and development in order to raise their employability, since new contracts are not of long duration. Employees with high employability therefore perceived themselves as more skilled, adaptable and confident and, consequently, they evaluated the possibility of job loss as less harmful, or even as an opportunity for growth (Fugate, Kinicki and Ashforth, 2004). Thus, employability involves “determining, attaining, and maintaining the skills needed to work, marketing oneself in order to obtain work, and working competently in order to retain work” (Romaniuk and Snart, 2000, p. 319). In summary, these studies point out that economic need and employability can mitigate the negative effects of job insecurity, so that the perception of job insecurity may lead to less detrimental experiences for employees and organizations. Following this rationale, we assume that highly job-dependent 62 International Labour Review employees with high economic need and low employability will not find a new job easily and quickly. They will therefore perceive job insecurity as a more dangerous threat, and will react more negatively to it, compared with employees less dependent on their jobs. According to this rationale, we hypothesize the following: Hypothesis 2: There will be three-way interaction between job insecurity, economic need and employability in the prediction of job satisfaction (H2a), organizational commitment (H2b) and intention to leave the organization (H2c). Employees who perceive job insecurity and experience high job dependence will have lower job satisfaction and organizational commitment, but a stronger intention to leave the organization.