Masters Theses

A. M. Lindsey

Date of Award

8-1997

Degree Type

Thesis

Degree Name

Master of Science

Major

Human Resource Development

Major Professor

Roger W. Haskell

Committee Members

Greg Petty, Robert Hanson

Abstract

Downsizing has become increasingly common among companies as a means of increasing their competitive positions. This trend to downsizing has had a negative effect in terms of employee motivation and morale among the survivors of these layoffs. Lower motivation and morale frequently result in lower employee productivity, which results in loss of customer base, which in turn leads to more layoffs. This begins the process over again, resulting in a downward cycle that may eventually lead to the company’s collapse. Future productivity and success depend on reducing job insecurity and maintaining positive attitudes held by the remaining employees. The purpose of this study was to identify the level of job insecurity, as measured by the Job Insecurity Scale (JIS), among employees at a company which had undergone significant downsizing over a two year period, and to identify demographic characteristics could be used to predict job insecurity. Such an identification would allow the company to implement programs and strategies for maintaining morale and productivity for the groups most at risk for job insecurity.

Results from the studies that have been conducted on the relationship of job insecurity to demographic characteristics have been mixed. Although no real consensus regarding the relationship of job insecurity to productivity and demographic factors was found, researchers have shown the effect of job insecurity on employee mental and physical health is quite negative, resulting in absenteeism, lost productivity, and increased medical costs. Researchers have also shown that the survivors of a downsizing share common needs for justice, security, role clarification and honest and frequent communication from their organization.

Five findings of interest concerning the company under study were identified. First, two demographic factors, gender and social support, were found to be significant with respect to job insecurity; however they were not strong predictors of job insecurity. Second, the least secure employees were female, and had lower levels of education and more economic dependence on their jobs than the most secure employees. Greater numbers of the least secure employees had also received new job responsibilities. Third, the least secure employees and the most secure employees showed a considerable degree of congruence in their groups’ internal rankings of job features which were the most important to them, but little congruence was found between the two groups’ perceptions of the threat to those job features. Fourth, a moderate amount of congruence was found between the least secure employees’ and most secure employees’ internal rankings for the importance of certain changes to their jobs, either positive or negative; however, a considerable amount of congruence was found between the two groups’ perceptions of which changes were most likely to occur. The fifth finding concerned the written comments of the employees in this study. Their comments reflect feelings of job insecurity based on a perception that there was a lack of communication about the issues surrounding the downsizing and that the company, as currently structured, is in serious decline.

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