The relationship between layoff perception and survivors work effort

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business




MAI THI XUAN AI




THE RELATIONSHIP BETWEEN LAYOFF PERCEPTION
AND SURVIVORS’ WORK EFFORT




MASTER OF BUSINESS (Honours)










Ho Chi Minh City - Y2014

University of Economics, HCMC
INTERNATIONAL SCHOOL OF BUSINESS



THE RELATIONSHIP BETWEEN LAYOFF PERCEPTION AND
SURVIVORS’ WORK EFFORT


By
MAI THI XUAN AI
Mbus 3.2
ID: 22120084
Supervisor
DR. PHAM QUOC HUNG


December, 2014
I


Acknowledgements

First, I would like to thank my supervisor Dr. Pham Quoc Hung who has given me great
supervision and advice in this process. His feedback, guidance and knowledge in the subject
were very valuable throughout the whole process of this research.
I feel a deep sense of gratitude to all respondents who spent their valuable time to answer
my questionnaire and supply me with their knowledge and experiences in job performance
and job motivation. Especially, I am moved and fired by the support of my dear friends who

deliver my questionnaires to others to help me collect convenient data.
I am grateful to my classmates in MBUS 3; they shared many interesting ideas and
knowledge and assisted many sources for my research.
Last but not the least; I am extremely thankful to my family who has given me outstanding
support and understanding throughout my studies.


December 08, 2014.
Mai Thi Xuan Ai







II


Table of Contents
Acknowledgements I
Table of Contents II
List of Tables V
List of Figures VI
Abstract VII
CHAPTER 1. INTRODUCTION 1
1.1 Research Background 1
1.2 Research Problem 3
1.4 Research Objectives 4
1.5 Research question 4

1.6 Research Contributions 4
1.7 Research structure 5
1.8 Summary 5
CHAPTER 2. LITERATURE REVIEW, HYPOTHESES AND RESEARCH MODEL
6
2.1 Introduction 6
2.2 Literature review 6
2.2.1 Perceived threat 6
2.2.2 Perceived control 8
2.2.3 Perceived fairness 10
2.2.4 Self-esteem 12
2.2.5 Economic need to work 14
2.3 Research Model 16
CHAPTER 3. RESEARCH DESIGN AND METHODOLOGY 17
3.1. Introduction 17
3.2 Research Process 17
3.3 Construct Measurement 18
III

3.3.1. Measurement of Perceived threat 18
3.3.2. Measurement of Perceived control 19
3.3.3. Measurement of Perceived Fairness 20
3.3.4. Measurement of Self-esteem 20
3.3.5. Measurement of Economic Need to Work 21
3.3.6. Measurement of Work Effort 22
3.4 Research Instruments 23
3.4.1 Survey Design 23
3.4.2. In-depth Interview Design 23
3.5 Sampling Plan and Data Collection 25
3.6. Methods and Techniques 26

3.6.1. Descriptive Statistic Analysis 26
3.6.2. Reliability Analysis - Cronbach’s Alpha 26
3.6.3. Confirmatory Factor Analysis (CFA) 27
3.6.4. Multiple Regression Analysis 28
3.7. Summary 28
CHAPTER 4 DATA ANALYSIS AND RESULTS 29
4.1 Introduction 29
4.2 Rewording 29
4.3 Data analysis and result 30
4.3.1 Descriptive Statistic for Demographics 30
4.3.2 Descriptive Statistic for Variables 32
4.3.3 Reliability Analysis- Cronbach’s Alpha 34
4.3.4 Confirmatory factor analysis 36
4.3.5. Multiple Regression Analysis 38
4.4. Summary of Key Findings and Discussion 48
4.5 Summary 51
CHAPTER 5 CONCLUSIONS, IMPLICATIONS AND LIMITATIONS 52
5.1. Introduction 52
IV

5.2. Managerial Implications 52
5.3. Limitations and Suggestion for Further Researches 55
References 57
APPENDIX 67
Appendix 1: Questionnaire ( in English version) 67
Appendix 2: Questionnaire (In Vietnamese version) 71
Appendix 3: Confirmatory Factor Analysis 75
Appendix 4: Multiple Regression Analysis 83

V

List of Tables

Table 3.1. Scale items for Perceived Threat construct…………………… ……………18
Table 3.2. Scale items for Perceived Control construct……………….………………… 19
Table 3.3. Scale items for Perceived Fairness construct ……….………………………….20
Table 3.4. Scale items for Self-esteem construct ………………………………………….21
Table 3.5. Scale items for Economic Need to Work ………………………………………22
Table 3.6. Scale items for Work Effort construct ………………………………………….22
Table 4.1. Descriptive Statistic for Demographics …….…………………… ….……… 29
Table 4.2. Rewording ……………………………………… ………………… ……… 30
Table 4.3. Descriptive Statistic for Variables …………………………………… ………32
Table 4.4. Reliability Analysis- Cronbach’s Alpha ………… ………………… ……….35
Table 4.5. Composite Reliability and Average Variance Extracted ……………… ……37
Table 4.6. Model Summary for Independent Variables …………………… …… …… 39
Table 4.7. Multiple Regression Results with Independent Variables……………… …….40
Table 4.8. Model Summary with Moderating Variable of Self-esteem………….…….….42
Table 4.9. Hierachical Regression Results with Moderating Variable of Self-esteem……45
Table 4.10. Model Summary with Moderating Variable of Economic Need to Work……46
Table 4.11. Hierachical Regression Results with Moderating Variable of Economic Need to
Work……………………………………………………………………….………………47
Table 4.12. Results of Hypothesis Test……………………………………………………48



VI


List of Figures

Figure 2.1. Research Model…………………………………………………………16
Figure 3.1. Research Process……………………………………………………… 17
















VII


Abstract

Layoff survivors' work effort is important for the successful and uninterrupted
operations of the organizations that have undergone the process of restructuring in
terms of work force reduction.
The current study looks into the relationship of various factors relating to perceived
threat, perceived control, perceived fairness, self-esteem and economic need to work
associated with work effort of layoff survivors in selected organizations in Vietnam.
Sample is selected on convenience basis with three hundred and nineteen participants

(called survivors of layoff) from seven companies in garment industry and banking are
located in Ho Chi Minh City and Binh Duong Province, which have undergone the
process of downsizing .Using Confirmatory Factor Analysis (CFA) to measure model
fit and illustrates the association between factors of layoff and work effort. The study
used Multiple Regression analysis to analyze the relationship between factors of layoff
and work effort, Hierarchical Multiple Regression to test the moderating effect of self-
esteem and economic need to work on the relationship between perceived threat and
work effort. Result indicates that perceived threat, perceived control, self-esteem has a
statistically significant effect on work effort, however; perceived fairness and
economic need to work are not related to work effort. Self-esteem and economic need
to work in this study play role as independent variables and moderating variables. The
findings of this study show that self-esteem moderates the relationship between
perceived threat and work effort; perceived fairness and work effort; perceived control
and work effort. Similarly, economic need to work also has the moderating effect on
the relationship between perceived threat and work effort.
Based on these findings, implications for managing downsizing, restructuring and
layoff has been discussed.

1

CHAPTER 1. INTRODUCTION

1.1 Research Background
The world has been globalised which has affected the structure and jobs of many
organizations. Vietnam, like the countries of Asia has faced an economic crisis since
2007s which have created some hurdles for motivating the employees. There are
improvements that organizations expect from implementing such restructuring
strategies: decreased bureaucracy, faster decision making, increased productivity and
better earnings (Arnold & Staffelbach, 2012, Introduction section).
A mixture between the globalization and the economic crisis has forced many

organizations to downsize and restructure to create layoff events and its impacts in job
insecurity, layoff fairness among employers and employees, employees’ control in
laying off situation, employees’ self-esteem and their economic need to work
regarding to their work effort during and after layoff events.
The present study was motivated from previous studies about layoff perception and its
related issues published in many countries from Western, Eastern to Asia. A
considerable amount of literature has been published on layoff perception. Surveys
such as that conducted by Brockner (1992) showed that if perceived threat and control
are both high, survivors should feel neither complacement nor helpless, and thus
should work relatively hard. One decade later, Brockner et al., (2004) reported two
cases tested which showed that the negative impact of layoffs on survivors’
organizational commitment was reduced when perceived control was relatively high.
Another test showed that the tendency for survivors’ job performance to be adversely
affected by high threat to their well-being was reduced when perceived control was
relatively high. In other words, perceived control was more strongly related to
employees’ organizational commitment in the presence than in the absence of layoffs
and to survivors’ job performance when they experienced the post-layoff environment
as more threatening. Several researchers pointed to some of the way when employers
do not fulfill employees’ promises and obligations, the employees reciprocated by

2

altering his or her contributions to the organization (e.g. by reducing their efforts and
performance). Thus, psychological contract breach was reported negatively related to
employee job performance (Gouldner, 1960; Coyle-Shapiro, 2002; Turnley et al.,
2003; Zhao et al., 2007; Bal et al., 2010).
In 2010, Malik et al. published a paper in which they showed that organizational
commitment and job satisfaction were the factors effecting productivity among layoff
survivors. Moreover layoff survivors value pay and authority more as compared to
work conditions. The pay and authority are the strong predictors of overall job

satisfaction of layoff survivors as compared to the environment in which they work.
Regarding to layoff fairness of employers or organization to employees in layoff
situation, Wanberg et al. (1999) demonstrated that explanation is very important in the
layoff process. Individuals who reported that they were given full explanations of why
and how termination decisions were made were more likely to perceive their layoff as
fair, be willing to endorse the terminating organization, and indicate they did not wish
to take the past employer to court.

Other discussions were on self-esteem into survivors’ work effort in layoff situation.
Alternatively, self-esteem may be helpful only in some job contexts. Baumeister et al.
(2003) showed that the modest correlations between self-esteem and school
performance do not indicate that high self-esteem leads to good performance.
Laboratory studies have generally failed to find that self-esteem causes good task
performance (Baumeister et al., 2003). However, Brockner et al.(1988 & 1993)
examined that” high levels of worry among low self-esteem survivors led them to work
harder when the threat of future layoffs was high”, and that the worry level of low self-
esteem survivors was unrelated to their work motivation when the threat of future
layoffs was low. Furthermore, Brockner (1992) found that there was a moderating
effect of economic need to work on the relationship between perceived threat of layoff
and work effort. In conclusion, work effort in layoff situation is affected by many
factors but in this scope of this study, Perceived Threat, Perceived Control, Perceived

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Fairness, Self-esteem and Economic Need to Work will be focused to explain their
relationship with Work Effort.

1.2 Research Problem
Like the rest of East Asia, Vietnam suffered a sharp decline in economic growth rates
in 2008 and 2009 as the region felt the impact of the global financial crisis (GFC)

which spread from the United States and Europe to most countries on the globe.
According to the Department of Employment (2009), Vietnam faced a number of
challenges on the eve of the global financial crisis, experienced higher unemployment
and other labor market problems. The topic of this thesis is about the aftermath in
Vietnam companies after the economic downturn in 2008. During and after the crisis
the focus has been on employees that lost their jobs and their livelihood because of the
economic downturn. Unemployment rate rose considerably mainly because major
investor countries such as Singapore, Japan, the US, Western Europe, etc. into
Vietnam have decreased, a big number of enterprises have to narrow production,
resulting in job lost and lack of work. The economic downturn created a unique
research opportunity and the subject of survivors is very fitting at this time. Few years
have passed since the crisis struck Vietnam and many survivors are still working for a
downsized company. It will interesting to find out if survivors in Vietnam companies
will experience the same reactions as can be found in other countries all over the
world.
1.3 Research Scope
The study focuses on layoff perception in the situations of downsizing and
restructuring of organizations; it examines the effects of layoff to those who remain in
the organizations during and after layoff wave. Study has a clear definition of the
variables, and used the necessary statistics for the analysis process. Other relevant
work on the effects of downsizing on survivors was also selected and analyzed. The
correlated pairs of the following variables are presented in this research: Perceived

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Threat, Perceived Control, Perceived Fairness, Self-esteem and Economic Need to
Work. Studies are also examined for any possible relationships between those
implemented in public and non-public organizations.
1.4 Research Objectives
The purpose of this study is to identify the main factors of layoff affecting survivors’

work effort and how they affect to layoff survivors’ work effort in Vietnam.
1.5 Research question
1. What are the main factors of layoffs affecting survivors’ work effort in Vietnam?
2. How do these factors influencing survivors’ work effort in Vietnam?
1.6 Research Contributions
Through the years, many previous researches have been conducted on survivors’
reactions to layoffs (Fisher, 1985; Brockner et al., 1987 & 1992 & 1993&1994; Bies,
1987; Konovsky & Folger, 1991; Knovsky & Brockner, 1993; Lim, 1996; Mishra &
Spreitzer, 1998; Robbins, 1999). However, they mainly focused on separated
phenomenon of survivors’ layoffs such as psychological contract breach and work
performance (Robinson, 2000; Turnley,2003; Rust et al.,2005; Zhao et al.,2007; Bal
et al.,2010), threat of future layoffs, self-esteem ( Brockner et al.,1993;
Milstone,2001), perceived fairness of layoffs among individuals (Thibaut &
Walker,1975; Wanberg et al., 1999), perceived control to the negative effects of
layoffs on survivors’ organizational commitment and job performance (Greenberger
et al., 1989; Brockner et al.,2004), social support for survivors’ layoffs( House,1981;
Kirmeyer & Dougherty, 1988; Lim, 1996). Despite the large number of researches
studies on layoff and behaviors of employees during and after layoff none of the
study has been conducted on the complicated relationships among the effects of
layoff perceived threat, perceived fairness, perceived control, self-esteem and
economic need to work at the same time, especially in Vietnam context. Therefore,
this study aims at filling the gap in the recent literature on the survivors’ reactions to
layoffs.

5


The current study is based on the findings from the data collection to verify the
literature review. In addition, it provides a fuller theoretical understanding of layoff
perceptions in relation to the factors affecting survivors’ work effort such as perceived

threat, perceived fairness, perceived control, self-esteem and economic need to work in
reacting during and after layoff events. Meanwhile, the findings also suggest some
recommendations for employers in managing human resources well; fairness in firing
employees; how to communicate cleverly in layoff situation in order to keep the
remaining workforce continuing with companies and motivating their work effort.
1.7 Research structure
The research consists of five chapters. In the first chapter an introduction to the
research is put forward and research problem is analyzed. The second chapter presents
the literature review, hypotheses and research model. The third chapter covers the
methodology with reliability analysis – Cronbach’s Alpha, confirmatory factor
analysis and multiple regression analysis used in this thesis. In chapter four the results
from the study is presented. In chapter five, discussion of findings, conclusion and
recommendation for future research are discussed.
1.8 Summary
Chapter one is written with research background, research problems, research question,
research objectives, research contributions and research structure.
It describes the context of labor market in Vietnam, especially in Ho Chi Minh City
and Binh Duong Province. In which layoff events have influences on work effort of the
remaining workforce in the organizations. The study suggests exploring why layoff
affects on work effort of the remaining employees during and after layoff events.
Besides, the findings of this study are hopefully recommended to management board to
create policies to develop human resources in their companies; to consider before
giving firing decisions; to set up the communicating strategies before, during and after
layoff events. The next chapter provides the literature of layoff events (including

6

perceived threat, perceived control, perceived fairness, self-esteem and economic need
to work), work effort, the relationship between work effort and each factor of layoff
events.

CHAPTER
2. LITERATURE REVIEW, HYPOTHESES AND RESEARCH MODEL
2.1 Introduction
Chapter two provides the literature review of concepts used in this. For each concept,
there is an association with the work place of office employees. After that the
research model and hypotheses will checked with the background of literature.
2.2 Literature review
2.2.1 Perceived threat
Throughout the economic recession of 2007–2009 organizations reduced personnel
through downsizing and layoffs leading to widespread increase in job insecurity even
for those who remain employed (Modrek & Cullen, 2013). By definition, Dae-seok
Kang & Kim (2012) defined that perceived threat reflects the worries related to the
continuation of the present job. It includes the fear of losing one's job and
unemployment, or having certain roles or responsibilities being removed, or being
assigned certain tasks or responsibilities that are less desirable. Perceived threat
makes it difficult to react adequately due to ambiguity and this leaves the employee
with “the sense of an uncontrollable situation and powerlessness” (p.316).

Perceived threat itself can have a destructive impact on employees as well as on
organisations (Greenhalgh & Rosenblatt, 2010). Arnold & Staffelbach (2012)
explained that, for employees, surviving a restructuring can feel threatening because
they do not know how the change will affect the future continuity of their present
job. During restructuring, employees do not only feel insecure about the changing
priorities of the organisation and the probability of losing their job. It is not
uncommon for survivors to worry about the possibility of future layoffs, which, in

7

turn, could influence their work behaviors and attitudes. When survivors believe that
future layoffs are likely, they are bound to feel worry (Brockner, 1988).

Milstone (2001), in discussing the workers under threat of layoff let safety measures
slide, mentioned that the economy is in a downturn and along with it comes the threat
of layoff and emotional stress. But that's not all. According to a new study on
workplace pressures, when workers feel that their jobs are threatened, they tend to
step up production, thereby easing up on safety standards and placing themselves at
risk for injuries and accidents. These are the conclusions of a study on workers at a
large U.S. food processing company who were experiencing threat of layoff
Psychologists Tahira Probst and Ty surveyed food processors at two different plants,
one where employees had recently seen colleagues on another shift laid off under
threat of plant closure, and another plant where some of the employees were required
to change their working hours to the night shift or risk layoff. Workers are surveyed
at the time of these stressful changes and six months later. At each of these times,
workers indicate how often during a typical shift they will "ignore safety rules and
regulations at work" or "take shortcuts to get the job done faster." They are also
asked to indicate their level of agreement (or disagreement) with statements such as
"my job is almost guaranteed" or "the future is vague." Results show that workers
who experience the most stress and worry over losing their jobs tended to increase
their production by easing up on safety precautions over time and, consequently,
experienced more workplace injuries and accidents. Because the food processing
plant work requires repetitive procedures with sharp implements, the injuries mostly
involved abrasions, cuts or gashes to the wrists, hands or arms. The researchers
speculate that, under threat of layoff, the workers were working harder and faster,
hoping to make themselves more valuable to the company, thereby cutting corners
and paying insufficient attention to safety precautions. In the study of layoff and
surviving employees'- the relationship between job insecurity and work effort of
Brockner et al (1994), the results indicate that moderate levels of job insecurity in the

8

face of layoffs will lead survivors to increase work effort, particularly when they are
the major breadwinners in their households. The data also indicates that most
respondents viewed the threat of a layoff as high and their ability or the firm's ability
to minimize the consequences as low. Employees who have a high economic need to
work expressed a significant amount of worry concerning the future of their jobs.
These results suggest that retailers who anticipate layoffs need to handle layoffs in
ways that create moderate levels of job insecurity. In doing so, employees who
perceive a high likelihood of losing their jobs will also feel as if they can exert some
control over the situation and will work harder. Therefore H1 is proposed:
H1: Perceived threat has a positive effect on survivors’ work effort
2.2.2 Perceived control
Conceptual models of control and empirical evidence suggest that one’s social
context, including work, is a key source of perceived control (Heckhausen, Wrosch,
& Schulz, 2010). Experiencing job loss can be expected to shape perceived control
through sizeable changes to one’s living contexts. To begin with, unemployment is a
life transition that produces numerous stressors that disrupt people’s lives such as
having difficulty supporting one’s family and needing to find new employment,
which often impose considerable load on one’s adaptive system (Pearlin, 2010).
Second, experiences at work and social interactions in the work context are often a
key source of one’s sense of control. In job loss situation, opportunities for mastery
experiences are constrained and access to social relationships is reduced
(Heckhausen et al., 2010).

Organizational psychologists have conceptualized perceived control in two related
but distinct ways that are not mutually exclusive (Greenberger et al., 1989; Spector,
1986). One conception (the “self-determination” framework) suggests that people’s
sense of control depends upon whether they perceive their behavior to be self-
determined versus coerced, or to use DeCharms’ (1968) terminology, whether they

9

see themselves as “origins” who initiate behavior versus “pawns” who simply react
to their environments. To the extent that survivors perceive that they have high levels
of discretion over or input into their work activities, they are likely to experience a
high degree of perceived control.
A second conception suggests that perceived control depends upon how much
people believe that important outcomes are contingent upon, rather than independent
of, their behavior (Rotter, 1966). To the extent that they believe that their behavior
influences important outcomes, they are likely to experience a high degree of
perceived control. For example, people are likely to believe that their behavior
influences important outcomes if they see themselves as having high levels of ability
to perform the task at hand, or if they see themselves as being able to influence those
parties who control important outcomes (Seligman, 1998).
In sum, perceived control is reflected in employees’ perceptions of self-
determination and/or impact, and will be treated as such in the present studies.
Moreover, employees’ perceived control results from dispositional and/or situational
factors, although it is beyond the scope of the present studies to evaluate the relative
influence of dispositional and situational factors on perceived control. Some
employees are dispositionally more likely to perceive control than others (e.g.,
Rotter’s locus of control, 1966), and some post-layoff work environments are likely
to be more control-promoting than others (Mishra et al., 1998).
According to Brockner (2004), layoffs handled in ways that address survivors’ need
to perceive that they have control are likely to lead to more positive consequences,
for both organizations and employees alike.
When threat to well-being was relatively high, perceived control was significantly
(and positively) related to survivors’ job performance, b = .25, p < .01. However,
when threat to well-being was relatively low, perceived control was not significantly
related to survivors’ job performance. Threat to well-being and perceived control
(both assessed six months earlier) interacted to influence survivors’ job performance.

10

Perceived control was more positively related to survivors’ work effort when threat
to well-being was relatively high (Brockner, 2004). Therefore, H2 is proposed:
H2: Perceived control has a positive effect on survivors’ work effort
2.2.3 Perceived fairness
Fairness conception has been shown in researches as diverse as personnel selection
and staffing, performance appraisal, compensation and benefits, resource allocation,
conflict resolution, layoffs, and other human resource functions (David, 2011,
para.2).
Most previous studies on the determinants of survivors’ reactions have examinated
the role of perceived fairness. Research has shown that when layoff survivors
(individuals who are not laid off) view layoff procedures at their organization to be
unfair, they are likely to exhibit decreased morale, self-esteem, organizational
commitment, trust, and productivity (Brockner, Grover, Reed, DeWitt, & O Mailey,
1987; Brockner, Wiesenfeld, & Martin, 1995; Konovsky & Brockner, 1993). In a
similar manner, layoff victims' (individuals who were laid off) perceptions of their
past organization having poor procedures for making layoff decisions have been
associated with a desire for regulation of layoffs and an unwillingness to recommend
the past employer to others (Konovsky & Folger, 1991).
Literature suggests that there are three main forms of organizational justice;
distributive, procedural and interactional (Brockner & Greenberg, 1990; David,
2011). Distributive justice (Homans, 1961) or 'outcome fairness' is the extent to
which the procedures used in making an allocation decision are legitimate and
appropriate (Daly & Geyer, 1994). For example, the fairness of the selection criteria
used in a redundancy situation to decide which employees are to remain and who are
to leave. Survivors who believe that the outcomes associated with the layoff are
unfair are more likely to react adversely to the layoff. For example, the fewer

11

survivors believe an organization offered concrete benefits to a layoff’s victims, the
more likely they are to perceive the layoff as distributively unfair (Brockner, 1992).

Over the past three decades, research has clearly indicated that people are concerned
not only about the fairness of outcomes, but also the fairness of the process (called
procedural justice) that determines or leads to these outcomes (David, 2011).
Procedural justice (Thibaut & Walker, 1975) is the extent to which the procedures
used in making the allocation decision are seen as fair (e.g., the way in which
management conveyed the news of the redundancy). Survivors who believe the
procedure used to implement a layoff were unfair are likely to react unfavorably to it
(Brockner, 1992).
Recent studies have also highlighted an important form of the third fairness known as
interactional fairness (or interactional justice).It is related to the interpersonal
treatment an individual has received, interactional justice (Bies, 1987). For example,
whether the organization or management explained to the individual the reasons
underlying the decisions that were made, this view is supported by Astrachan (1995)
who suggests that anxiety is stimulated by the mere announcement that people in the
organization are leaving. Wanberg et al. (1999) inserted that explanation is very
important in the layoff process. Individuals who reported that they were given full
explanations of why and how termination decisions were made were more likely to
perceive their layoff as fair, be willing to endorse the terminating organization, and
indicate they did not wish to take the past employer to court. While the vast majority
of managers and leaders want to be fair and believe that they are, it is nevertheless
not uncommon that employees or members of public often think and feel that they
have not been treated fairly. This suggests employers should have the communication
strategies.

Recently, David (2011) stated in his study that interactional fairness may be further
subdivided into “informational fairness and interpersonal fairness”. Informational

fairness is about people's expectation that they should receive adequate information

12

on and explanation of the process and its outcomes. Interpersonal fairness is about
people's expectation that they should be treated in a respectful, honest and
interpersonally sensitive manner (para.13) it creates motivation for employees to
effort in working. H3 is proposed:
H3: Perceived fairness is positively related to work performance
2.2.4 Self-esteem
Self-esteem refers to an individual’s overall self-evaluation of his/her competencies
(Rosenberg, 1965). It is that self-evaluation and descriptive conceptualization that
individuals make and maintain with regard to themselves. In this sense, self-esteem is
a personal evaluation reflecting what people think of themselves as individuals. For
Korman (1970), self-esteem reflects the degree to which the individual “sees him
[her] self as a competent, need-satisfying individual” (p. 32); thus, the high self-
esteem individual has a “sense of personal adequacy and a sense of having achieved
need satisfaction in the past” (Korman, 1966: 479). In the past a great number of
researchers have sought to study about self-esteem affecting to various variables.
Self-esteem in this study is mentioned relating to work effort and its moderating
effect on the relationship between perceived threat of lay off and work effort.
The result of the study of Baumeister et al. (2003) shows that the modest correlations
between self-esteem and school performance do not indicate that high self-esteem
leads to good performance. Instead, high self-esteem is partly the result of good
school performance. Efforts to boost the self-esteem of pupils have not been shown
to improve academic performance and may sometimes be counterproductive. Job
performance in adults is sometimes related to self-esteem, although the correlations
vary widely, and the direction of causality has not been established. Occupational
success may boost self-esteem rather than the reverse.
Alternatively, self-esteem may be helpful only in some job contexts. Laboratory

studies have generally failed to find that self-esteem causes good task performance,

13

with the important exception that high self-esteem facilitates persistence after failure
(Baumeister et al., 2003).
Coworker layoffs can have a significant effect on the work effort and subsequent
productivity of survivors. Just how dramatic an effect depends, to a large degree, on
the level of self-esteem held by the survivors (Brockner, 1988, pp. 217, 228;
Brockner, Davy, & Carter, 1985).
Higher self-esteem leads to more positive attitudes, high self-esteem will promote
employee satisfaction and well-being (Baumeister et al., 2003). Low self-esteem
individuals are more likely than their high self-esteem peers to work harder after a
layoff. Why? Low self-esteem individuals are more likely to experience worry and
insecurity as a result of downsizing. They therefore work harder because they are
worried about their job security and see increased work effort as a means toward
reducing the threat to their job security. Brockner (1988) has shown that for a
number of reason, low self-esteem individuals are more “behaviorally plastic’ than
high self-esteem ones. Low self-esteem individuals are more likely to be influenced
by variety of external and social cues. Because low self-esteem generally lack
confidence in their ability to meet the challenges posed by demanding, stressful
circumstances, they should feel more worried by the threat of future layoffs.
In 1993, Brockner, in his study, he added that the threat of future layoffs could
demotivate the low self-esteem individual’s more than high self-esteem individuals.
Low self-esteem feels more helpless or distracted, interfering with their ability to
concentrate on the task at hand. On the other hand, low self-esteem may show greater
motivation in response to the threat of future layoffs. High self-esteem employees
they feel confident that they have ability to perform well in the future, or believe that
they can be chosen by the organization to remain in the event of future layoffs. Low
self-esteem employees may feel that they need to work harder to have a chance to

avoid losing the jobs in future layoffs.

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Ferris et al. (2010) stated in their empirical study that self-esteem is not only directly
effect on work effort but also moderates the effect of other variables on work effort
as well. Previously, Brockner et al (1993) examined that high levels of worry among
low self-esteem survivors led them to work harder when the threat of future layoffs
was high, and that the worry level of low self-esteem survivors was unrelated to their
work motivation when the threat of future layoffs was low. Therefore H4, H5, H6
and H7 are proposed:
H4: Self-esteem is positively related to work effort
H5: Self-esteem will moderate the relationship between perceived threat and work
effort
H6: Self-esteem will moderate the relationship between perceived control and work
effort
H7: Self-esteem will moderate the relationship between perceived fairness and work
effort
2.2.5 Economic need to work
Although the harmful effect of job insecurity normally has caused by its
“unpredictability and uncontrollability” employees can control through factors such
as general economic conditions (Dae-seok Kang & Kim, 2012, p.316), if employees
attempt to avoid disadvantages at least until shortly before advent of the final stage,
“the perception of job insecurity can lead to a highly-developed sense of self-interest
and an acceptance that they are now responsible for maintaining their careers” (
Peiro´ et al., 2012).
Brockner (1992) specified the three –way interaction between perceived threat,
perceived control, and economic need to work. He performs midscale splits on three
variables and computes the mean levels of work effort for the resulting groups. The
result shows that those with high economic need to work, there is a sharp inverted-U

relationship between job insecurity and work effort. At moderate levels of job

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insecurity, when perceived threat and perceived control are both high or both low,
survivors’ work effort is considerably greater than when job insecurity is high( high
threat, low control) or low( low threat, high control). However, for those with low
economic need to work, there is virtually no relationship between perceived threat,
perceived control and work effort. Survivors who are major breadwinners in their
households are likely to be greatly influenced by their level of job insecurity
(Brockner et al., 1992, p. 415), whereas those who are not major breadwinners are
less likely to translate their feelings of job insecurity into their work effort.
Survivors’ economic need to work moderates the relationship between threat of
future layoff and work effort. The relationship is more pronounced for those whose
economic need to work is relatively high. Economic need to work not only directly
effects on work effort it also effects on the relationship between perceived threat and
work effort. Therefore, H8 and H9 are proposed:
H8: Economic need to work is negatively related to work effort
H9. Economic need to work will moderate the relationship between perceived threat
and work effort









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2.3 Research Model

H1 (+)








Figure 2.1 Research Model


2.4 Summary
This chapter introduced five factors of Perceived Threat, Perceived Control, Perceived
Fairness, Self-esteem and Economic Need to Work which might affect on Work Effort.
Nine hypotheses and the research model are discussed in theoretical background. Chapter
three will show research design and methodology used in this study.
Perceived threat
Perceived Control
Perceived fairness
Work
effort
H2 (+)
H3 (+)
H9
Economic
need to work

Self-esteem
H5
H4 (+)
H8 (-)
H6
H7