Job Insecurity, Organizational Consequences and Individual Well-Being: The Role of Organizational Justice

Introduction and aims. In recent decades, job insecurity, that is the worry of job loss, has become increasingly important both for workers and organizations. The changes in the labor market, global competition, technological innovation, are factors that have determined over the years less financial security for organizations and, consequently, fewer job security for individuals. In addition to these factors that have characterized the last decades, the recent economic crisis added and it has contributed to increase the feelings of uncertainty, stress and anxiety of workers about the future of their job. As shown by OECD report on employment (Employment Outlook, 2011), there has been a deterioration in the labor market, particularly over the last four years, with an increase in unemployment not only among the atypical or temporary workers, but even among permanent employees. The increase of job insecurity perceptions has led a growing number of scholars to be interested in this topic and related issues. Several reviews and meta-analysis (De Witte, 2005; Sverke, Hellgreen & Näswall, 2002, Cheng & Chan, 2008) in particular have highlighted the negative effects of insecurity. Specifically, Sverke and colleagues (2002) have proposed a classification of potential consequences, based on four aspects: immediate or long-term, focused on individual or on organization. In fact, certain types of strain, such as attitudes, can develop "closer" in time to the stress experience, whereas others, such behavior, can occur after a longer period of time (see Zapf, Dormann, & Frese, 1996). In addition, some effects have their main impact on the individual and only indirectly on the organization (e.g., health), whereas other outcomes tend to be particularly harmful for the organization and have only an indirect effect on the individual (e.g., performance). Numerous studies have clearly shown the negative effects of job insecurity, but the strength of relationships resulted to vary among studies. In addition, some consequences have received less attention of research and, in some cases, the findings appear contradictory. In light of these considerations, the present thesis has been developed; the general aim is to increase the understanding of the relationship between job insecurity and its consequences, by addressing several specific research aims. The first aim proposes to examine reactions to insecurity especially those have not been thoroughly investigated in the literature. The second aim consists in studying the mechanisms of moderation that can buffer the relationship job insecurity-negative consequences. The third and final aim intends to investigate the possible mediating mechanisms which can explain how and why job insecurity perceptions translate into consequences for individual and organization. Both in the mechanisms of moderation than in mediating, the perceptions of organizational justice play an important role. In particular, fairness heuristic theory, instrumental and relational models of justice can provide an interpretation of how the reactions to job insecurity develop. Dissertation structure. The first chapter, introductory, presents the state of art about job insecurity research, its consequences and the role of organizational justice in these relationships. The three central chapters show the three proposed studies. Study 1 focuses on organizational reactions to job insecurity little examined by research, such as organizational citizenship behaviors and job performance. Furthermore, it analyses the moderating role of three types of justice (distributive, procedural, and interactional) on these consequences, thereby testing the principles of uncertainty management model (Lind & Van den Bos, 2002) but considering justice perceptions (and not job insecurity, as proposed by the model) like moderating variables. Study 2 examines breach of psychological contract and organizational justice (procedural and interactional) as two different variables intervening in the relationship between job insecurity and opposite organizational discretionary behaviors (citizenship and deviant), little investigated in the literature on job insecurity. Study 3 considers two mediating variables acting on each other in a causal chain (breach of psychological contract and distributive injustice), to explain the relationship between job insecurity and emotional exhaustion, the core element of burnout. The fifth and final chapter discusses the general results obtained in the different studies, in light of the specific aims proposed, emphasizing the empirical and theoretical contributions provided and highlighting the methodological limitations. Theoretical research model. The theoretical models proposed in the three studies were developed in the light of stress theories (transactional theory by Lazarus and Folkman, 1984, conservation of resources by Hobfoll, 1989) and the theory of psychological contract (Rousseau, 1989), to understand the consequences of job insecurity. These have been integrated with various theoretical models of organizational justice (fairness heuristic theory, instrumental and relational models) to provide an interpretation of moderation and mediation mechanisms through which the consequences develop. Research methodology. The research project involved 5 organizations of medium and small size, located between Verona and Trento, and a total of 570 blue-collar workers, a category particularly affected by the recent economic crisis. The research was carried out by administering a questionnaire consisting of several Likert scales that measured different variables included in studies. Research results. The role of organizational justice has demonstrated decisive in the relationships between job insecurity and its consequences, in all three studies. In the first, perceptions of procedural and interactional justice resulted to moderate the relationship between job insecurity and organizational consequences (affective commitment, organizational citizenship behaviors and perceived performance). In the second study, the relationship between job insecurity and two opposite extra-role behaviors (citizenship and counter-productive) was fully explained by two different mediating variables, organizational justice (procedural and interactional) and breach of psychological contract (multiple mediation model). Finally, in the third study we examined burnout as reaction to job insecurity, in particular the emotional exhaustion which is considered the key element. This relationship was explained through the processes of social exchange, using two mediating variables connecting to each other, i.e. breach of psychological contract and distributive injustice (three-path mediational model). In summary, the main result of this research shows that theories and models of organizational justice may contribute to explain the consequences of job insecurity, through mechanisms of moderation and mediation. From a theoretical point of view, this allows a better understanding of job insecurity’s construct and, in particular how the perceptions of uncertainty translate into negative consequences for individuals and organizations. The practical implications can be considered in relation to possible actions by management on organizational factors, as indeed those of justice, to improve perceptions of equity and, consequently, the relationship insecurity-negative consequences.