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.