What does lack of job security do to employee creativity and productivity?

Lack of job security makes people more productive and less creative. This may say a great deal about the era we are in right now.

Organizations frequently downsize in the hopes of creating a ‘lean and mean’ company able to be flexible and quick to adapt to changing environmental needs. The purpose of the current research was to assess the effects of job insecurity on productivity, counterproductivity, and creativity in a simulated organizational environment and a field setting. In the first study, 104 non-traditional undergraduate students (M= 30.48 years) participated in a laboratory experiment that manipulated the threat of lay-offs (job insecurity) and measured creativity and productivity over two time periods. Compared to control group participants, results indicate that participant productivity increased in the condition of higher levels of job insecurity, whereas creative problem solving decreased. In the second study, 144 employees in five organizations completed a survey measuring their job insecurity perceptions, enactment of counterproductive work behaviours, and creative problem-solving ability. Regression analyses indicate that job insecurity predicted lower creativity scores, yet was also related to lower numbers of counterproductive work behaviours. Taken together, these studies suggest that job insecurity may have adverse effects on creativity, yet moderately beneficial effects on productivity. Results are interpreted in light of the increasing prevalence of job insecurity and organizational downsizing in today’s workplace.

Source: “Productivity, counterproductivity and creativity: The ups and downs of job insecurity” from Journal of Occupational and Organizational Psychology, Volume 80, Issue 3, pages 479–497, September 2007

Interesting is that higher productivity probably makes a company less likely to hire more people, perpetuating the cycle.

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