All companies have ups and downs, it’s part of running a business in a capitalist economy. No one expects things to be good all the time. As such, sometimes companies go through periods in which cutbacks are a reality, and employees must be let go. Sad, but true. In an effort to get more from their employees, some business owners or managers may use job insecurity as a motivating factor to get employees to work harder, work longer hours, or to try and outperform colleagues. But does this threat of the lay-off actually work? A few of the brains over at HBR (Mindy Shoss, Shiyang Su, Ann Schlotzhauer, and Nicole Carusone) have published the results of a 3-month long study of how job insecurity affected employees.
According to a recent Gallup poll 15% of workers do not feel that their jobs are secure, despite unemployment being at record low levels. This new study surveyed over 600 participants and how they felt over a months-long process. One very interesting aspect of the study is that in the short term, these threats or scare tactics seem to work well to motivate workers. People will try to work harder to make themselves an indispensable part of the team, to impeccably follow the rules, and to make higher-ups aware of their achievements even if those achievements added no real value to the company. Over the long-term, however, the burnout becomes very real. Many participants described the heightened anxiety around job security as negatively impacting their job performance. Eventually, most people felt so distracted, tired, or worried that they began failing at their core tasks. Yes, they may have been working longer hours, but productivity, reliability, and creativeness suffered overall.
While some companies freely admit to using this strategy, others may do it unknowingly. Discussions of scarcity, austerity, or potential cutbacks can be overheard or mentioned in passing, and still have a negative impact on employees. Check out the full article here and get access to the full range of studies on the subject. See if your company and your employees are caught in this cycle of negativity.