According to a recent poll, 15% of U.S. workers today feel at risk of losing their jobs (despite actual unemployment rates remaining at record low levels). And this is no accident: Studies have shown that many workplaces intentionally stoke fears of job loss in an attempt to motivate workers and reduce costs, since job insecure workers may be less likely to demand raises and other benefits. Indeed, organizations such as Facebook and General Electric have made no secret of their strategic use of the threat of job loss to boost performance, despite the well-documented negative effects of job insecurity on employees’ sense of social connection, identity, and physical and mental health.
Job Insecurity Harms Both Employees and Employers
Despite the well-documented negative effects of job insecurity on workers’ well-being, many employers continue to intentionally stoke fears of job loss among their workforce, under the assumption that this can motivate workers and reduce costs. But is this approach actually effective? The authors conducted a series of surveys with more than 600 American employees and found that while job insecure workers may indeed be motivated to try to improve their performance and adhere more closely to company policies, the stress, frustration, resentment, and exhaustion associated with this insecurity create a cognitive load that counteracts any positive effect on performance or rule-following. Job insecure workers are also more likely to focus on making their contributions visible rather than on actually doing valuable work, and some even hide information or intentionally sabotage their coworkers to make themselves look better in comparison. Worse yet, many of these behaviors spark vicious cycles that further reduce perceptions of job security. As such, the authors argue that fostering a sense of job insecurity isn’t just cruel — it’s often counterproductive.