ABSTRACTPurpose
The purpose of this research is to determine whether there exists a relationship between an individual’s job insecurity attitudes that can lead to a decrease in the job performance using job stress as the mediator.
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Approach
A questionnaire shall be prepared and used for conducting a survey that shall aim to capture the job insecurity attitude, stress levels and the subsequent decrease/ increase in the performance levels of an individual. This questionnaire shall be administered to the targeted IT industry and the result shall be analysed using the pertaining research tools. These will be the self-administered questionnaires.
Target Group
The target group for our research is the Indian IT industry. The age group considered is 20 – 50 years thus encompassing the different levels in the organisation.
Location of the Research
As the methodology of our research is a self administered survey, our research locations virtually spans the whole of India where the different IT hubs are located.
Practical Implications
The practical implications of this research would entail the steps that the HR managers in an organisation should take so that any factors that can cause job insecurity attitude are relaxed and the job performance remains at the optimal level.
Limitations
The major limitation of this research is the impact of the recent macroeconomic conditions on the heavily survey dependent research. Also, the lack of any available material targeting the topic and the IT industry is an impediment to the investigation.
INTRODUCTION
The IT industry is coming of age. The importance of information systems had been realised and tapped upon globally and India corporates have also awakened to the possibilities that this industry has opened to them. This has also led to the rise of the various IT industries in India namely Infosys, Accenture, Tata Consultancy Services and many others. However, this has also led to several HR issues for the managers of these organisation starting from acquiring and retaining the best talent available majorly during the boom time to the lay offs during the recession times. But the major impact of the boom period and the subsequent dip has been an increase in an employee’s anxiety and stress levels due to job insecurity that the employee experiences.
Being HR managers, the major role is to ensure that the work force that the organisation employs can perform to its optimal level so that the organisation benefits from it. Job insecurity has been described as insecurity resulting from threat to one’s job continuity. Implied in this definition is the view that job insecurity is an internal experience of the individual employee that is characterized by uncertainty in the face of job threats. The intent of this research is to establish the interconnectedness of the above given variables i.e. Job Insecurity in relation to Job performance via Job Stress.
RESEARCH BACKGROUND
Past studies have been done in various sectors for finding out the relationship between stress and job performance. A study showed strong support for the hypothesis that there is an inverse relationship between job stress and job performance ( Rubina Kazmi, Shehla Amjad, Delawar Khan). The previous research on the relationship between the job stress and job performance suggested that it can be explained by an inverted-U theory (Muse, 2003). However, recent researches have indicated a negative linear relationship between stress and performance (Muhammad, 2007). Study has also been carried out to find the effect of job insecurity on job performance. It showed that insecurity at work contributes to worsened performance with withdrawal from the job as the extreme result (William D. Reisel, Swee-Lim Chia, Cesar M. Maloles, III).
Perceived Job Insecurity
There have been several managerial researches in which Job Insecurity becomes one of the central variables. There have been several researches that show that job insecurity has been a part of complex variety. An employee’s way of expressing the fact that he feels insecure about job can be expressed through thoughts and emotions which can also lead to mental and physical effects and coping behaviors.
This is an implicit behavior in the sense that none of the organizations across globe can state that there organization is free of Job Insecurity. There has been extensive media attention on this phenomenon due to the reason that managers across the globe need to sustain competitive position and financial performance by restructuring and downsizing which leads to several adjustments in terms of manpower planning. The uncertainty among workers is present across all firms in all the ranks and jobs.
Since last 10 years; this phenomenon has intensified and hence the need for clear understanding of effects of job insecurity on organizational performance has generated a growing body of research. (William D Reisel, Swee-Lim-Chia, Cesar M. Maloses, III,2005)
It is also observed that since last 10 years organizations across globe have been facing, restructuring, downsizing and merging with almost doubling the figures over the past decade. Researchers say that it is due to these effects that employees face feelings of insecurity, stress and anxiety which is concerned to the nature and the prevalence of these factors in one’s job.
Researchers have identified several factors for example relocation of employees, loss of jobs, status, benefits, and opportunities are common outcomes of mergers or takeovers. They also recommend that demoralization, suspicion, helplessness, and stress are a reaction to a potential layoff. Other research has highlighted insecurity as a primary outcome of layoffs (Susan J. Ashford, Cynthia Lee, Philip Bobko,1989)
The employee’s experiences Job Insecurity which usually is defined as a combination of perceived threat. This perception could be regarding their job; sense of powerlessness to handle the activities on their own in an organization.
Researchers claim that Job Insecurity has also been found to be a phenomenon that is associated with ailments and reduction in performance. The ailments are physical as well as mental and the reduction is in performance as well as reduction in occupational safety.
The work related stress reactions have been observed as an outcome of Job Insecurity.
These reactions concern decreases in psychological well-being and job satisfaction, as well as higher degrees of psychosomatic complaints, and physical strains there have been several evidences that lead to the conclusion that job insecurity is the cause of harmful potentials. Researchers during several years have conducted Meta analysis that states that Job Insecurity has been more strongly associated with mental health rather than physical health outcomes (Sverske,2002) Researchers also state that despite of the fact that there has been an association between job insecurity and employee health. The findings however have been uncertain in terms of strengths of these associations.
One more aspect that still has been uncovered by researchers is extensively related to the possibility of an association between job insecurity and negative safety outcome in the work context. The “Job insecurity” has been identified as a contributor to the employees’ level of risk appetite in the sense how open the employee is to accept risky behaviors.
Job Stress
Stress is an inseparable part of today’s life. Everyday an individual faces one or the other stressful situation. The threats of uncertainty, unemployment, increasing work-pressure, high expectations at work and various other factors can lead to stress. In fact, modern times have been called the “age of anxiety and stress” (Coleman, 1976).
Selye (1936, 1956) defines stress as a dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important. Organizational stress in individuals is caused due to high performance expectations in the job. If the stress level is not well-managed it may have adverse effect on the performance of the individual. High levels of unchecked and unmanaged occupational stress not only undermine the quality, productivity and creativity of the employees but also employees’ health, well-being and morale (Calabrese et al., 1987; Matteson and Ivancevich, 1987; Frese, 1985). The experience of workplace stress has been subject to a large amount of research and interest in the topic shows no sign of waning (Johnson, 2005). As per American Institute of Stress, a 1999 government study indicated that the number of people fearful of losing their jobs had more than doubled over the past decade. It is very relevant in the current scenario as well; with the growing demands of the job in the IT sector there is more stress to perform better. Some research has been done in the field of Information Technology field regarding the stress levels encountered by the employees. Aziz (2003) investigated the prevalence of organizational role stress among Indian information technology and call centre employees, reporting high level of stress. As per a research conducted by (Tarafdar, 2007) the information and communication technology (ICT) related stress is inversely related to productivity.
Job Performance
Employee performance is an essential element in the success of large corporations and small businesses. Employees are the core of a company, and their collective attitude can greatly affect the direction and objective of any business plan. An important element in improving organization performance is to improve employee motivation and performance.
Job performance of an employee is affected by a lot of factors including the organizational performance, supervisor attitude, team composition, clarity about the responsibilities and stress at job. Job stressors include role ambiguity, role overload, role conflict, and resource inadequacy etc. In this study effect of stress on employee’s performance has been measured. Employee’s performance is also affected by the person’s personality traits (M.Wright, K. Kacmar, G.C.Mcmahan and K Deleeuw). Detailed research has been done by using supervisor’s evaluation of the employee performance using a 7 point likert scale. In the research proposal, the affect of these factors have been neglected and the focus of the research is on the affect of stress irrespective of the employee’s personality traits.
RELATION TO IT
Organizational scholars have identified “Job Insecurity” as a particularly important variable for Research. The reason behind this is the presence of four recent phenomena which have led to increase in the level of job insecurity across organizations in United States.
The four different phenomena’s are:-
The prolonged economic downturn beginning in the mid-1970s resulted in the highest rates of job loss since the Great Depression of the 1930s
An upsurge of mergers and acquisitions since the mid-1960s
Rapidly changing industrial structure-from a predominantly manufacturing economy to a service economy
The trend toward decreasing union representation of the workforce
The upsurge in M& A has resulted to job loss or a reduction in the comforts enjoyed by an employee or the expectations of an employee from a job. The rapid change in industrial structure has changed perception of majority of employees about the assumption of stability of their employers. The reduction in representation of union or absence of union which has led to an increase in the numbers of employees that is vulnerable to the effects of unilateral decisions. Furthermore, workers react to job insecure; and their reactions have consequences for organizational effectiveness. (Leonard Greenhalgh and Zehava Rosenblatt, 1984)
However, some researchers are of the view that Immigration and Outsourcing.
Immigration and overseas outsourcing may decrease job security for people in certain occupations. For example, telephone call center positions in the information technology sector are increasingly being outsourced to India where the same roles can be filled at a lower cost [1] .
RESEARCH GAP
The IT industry still being in its nascent stage, not much research has been done in this field.
Despite its increasing importance, job insecurity has yet to receive significant attention from organizational researchers. The variable has been included as a facet of job satisfaction in numerous studies; but few scales have been specifically developed to investigate the importance of the construct per se (Leonard Greenhalgh and Zehava RosenblatT, 1984).
Also the existing strong presence of Job Insecurity as a subject of research in various papers done by researchers, scholars and practitioners; there however is missing some authors and their papers who can strongly exemplify the Job Insecurity present in IT/ITes and specifically IT/ITes in India.
Most importantly, there has been awareness about job insecurity leading to job stress and there has been research pertaining to job stress leading to an impact on the job performance of the employees. However there has been no research that focuses on job insecurity being a leading factor in dip in job performance with the linking cause being job stress.
RESEARCH MODEL AND HYPOTHESIS
Job Insecurity – Job insecurity as per the research model is the perceived insecurity that the employee undergoes which might be due to factors like manpower planning, M&A and extraneous factors like recession and micro and macro economic conditions. The job security is measured for the IT sector employees in India.
Job Stress – Job insecurity attitude added with factors like work load, peer pressure, role ambiguity, role conflict can lead to employee stress.
Job performance – If an employee is not able to cope with the stress factors then it might lead to decline in job performance which in severe cases might force the employee to leave the job. The perceived job performance of the employee also decreases with an increase in perceived job insecurity. This decrease in perceived job performance by the employee himself can cause a decrease in the level of his/her performance eventually.
Years of experience – Years of experience has a significant impact on perceived job insecurity. Job insecurity does not necessarily mean a person’s threat towards losing a job, but may also include conditions where the employee doesn’t see definite career progression and promotion in proportion to the time spent in the organization. This moderator will help to assess employee’s perceived insecurity based on his total work experience.
HYPOTHESIS
Hypothesis of interest – The job insecurity attitude impacts the job performance due to job stress.
Null hypothesis – There is no relation between the job insecurity, job performance and job stress.
METHODOLOGY
A self-administered questionnaire will be constructed and administered to IT professionals. This questionnaire will be a combination of the various scales used to measure the constructs under investigation. Specific scales to measure job insecurity, job stress and job performance would be taken from previous research. These scales would be compiled into a questionnaire and the survey data would used to analyze the relationship between the research constructs. The survey would be floated to employees working in IT industry. To analyze the effect of the moderator the target group would be divided into people with work experience less than 5 years and those with more than 5 years of experience. The ratio of lower level employees to the higher level employees would be approximately 60:40.
Job Insecurity
The scale that has been used here consists of 5 items. The questions designed were specifically focused towards perceived threat and worries of organizational change and downsizing. The questioners are developed to ensure that all dimensions related to perceived threat have been covered, which ranges from the norm and flow of discussion of organization in meetings and open house discussion to the backward, downward, related or unrelated integration which have been conducted in the organization to the steps or the actions taken by the organization will lead to liquidity or solvency of organization to the amount of wrong information or negative publicity. It also covers whether any steps have been taken by the firm to reengineer or restructure of the workplace have been done at the organization(Fred Storseth, 2006).
Y1: People may lose their jobs due to downsizing
Y2: Cutbacks are frequently discussed
Y3: Departments have been/may be merged
Y4: It is a risk for company closedown
Y5: Are there rumors concerning changes at your workplace?
Job Stress
Measurement of Stress has been much debated, as to whether or not it should be limited to the measurement of stress causing factors in the objective conditions or on a person’s reaction to them. However, as per American Institute of Stress, stress is a very personalized factor and varies from one person to another in the identical situations for different reasons. It is an individual’s perception to the environment. Therefore, the scale used for the measurement for stress is Perceived Stress Scale (PSS) given by Cohen et al. It is a measure of the degree to which situations in one’s life are appraised as stressful (Cohen et al. 1983; Cohen and Williamson 1988). It was argued to provide a conceptually better measure of appraised stress by an individual (Cohen 1986). The items were designed to tap how unpredictable, uncontrollable, and overloaded respondents find their lives. The scale also includes a number of direct queries about current levels of experienced stress. Stress is believed to result from experience overload, experience unpredictability and uncontrollability of events (Cohen, 1983). The content of the items is nonspecific and can be used to measure stress in any context, without any inclination to a subgroup. Two items directly address “stress” or “hassles,” three refer to situations of overload, whereas nine items refer to uncontrollable, unmanageable, or unpredictable situations. Thus, the PSS focuses on a more cognitive appraisal of stress and the respondent’s perceived control and coping capability. The questions in the PSS ask about feelings and thoughts during the last month. Two variants of the scale are available, one for the short duration assessment and another over a period of time. The short duration one has the questions regarding the last month whereas the general one over the last two years. For the research purpose the long period version of the PSS is used.
The items on the scale are given below:
In the last two years, how often have you been upset because of something that happened unexpectedly?
In the last two years, how often have you felt that you were unable to control the important things in your life?
In the last two years, how often have you felt nervous and/or stressed?
In the last two years, how often have you dealt successfully with irritating life hassles?
In the last two years, how often have you felt that you were effectively coping with important changes that were occurring in your life?
In the last two years, how often have you felt confident about your ability to handle your personal problems?
In the last two years, how often have you felt that things were going your way?
In the last two years, how often have you found that you could not cope with all the things that you had to do?
In the last two years, how often have you been able to control irritations in your life?
In the last two years, how often have you felt that you were on top of things?
In the last two years, how often have you been angered because of things that happened that were outside of your control?
In the last two years, how often have you found yourself thinking about things that you have to accomplish?
In the last two years, how often have you been able to control the way you spend your time?
In the last two years, how often have you felt difficulties were piling up so high that you could not overcome them?
The responses are on a five point scale from 0 = Never to 4 = Very Often
PSS scores are obtained by reversing responses (e.g., 0 = 4, 1 = 3, 2 = 2, 3 = 1 & 4 = 0) to the four positively stated items (items 4, 5, 7, & 8) and then summing across all scale items.
Job Performance
In the research, employee’s performance is being measured using a 10 item scale developed by Patrick M. Wright,K. Kacmar, G.C.Mcmahan and K Deleeuw. The scale measures the response on a 5 point scale from Strongly disagree to strongly agree. The scale has questions like “My work habits are excellent”, “My supervisor is never disappointed in my work” and the response would be filled by the employee.
Self reporting of performance by an employee has some error because an employee always has a tendency to report improvement in task performance or no improvement in task performance irrespective of actual improvements in task performance (Scott A. Beal ,James L. Eubanks).The other method to assess employee performance would be receiving employee’s performance rating in the questionnaire but the ratings and their respective meanings vary from organizations. If supervisor’s view of an employee’s performance has to be taken then the target group would be restricted and it would be difficult to get the survey filled from an employee and his/her supervisor failing which the analysis cannot be made. This method will also make the analysis process very complex. In the given context, using self-reporting scale looks like the best option.
IMPLICATIONS
The practical implications of the research mainly would be the various Human Resource tools that a manager can utilise so as to prevent a dip in job performance. As the IT industry is a relatively young industry in India and its demographics are also more towards the younger side in comparison with most of the other industries in India. Thus, the industry is growing at a rapid pace and needs to have an in efficient workforce which can help sustain the momentum. Also, being a service industry, it has its success dependent on the workforce that it entails, and thus a workforce that is focussed and active is what the IT industry truly needs.
It is observed that post any major macro economic conditions such as recession, depression etc. the perceived job insecurity amongst employees rises and this is the time to implement measures to control this insecurity.
Also the subsequent employee stress levels should be monitored so as to employ counsellors and other programmes to help them relieve their stress.
It also important to keep a check on the employee’s performance levels and in case of a sudden dip in the performance levels, they should be alerted and provided assistance for the same.
LIMITATIONS
There are several issues that can work as limitations for the purpose of accuracy of the result.
Recency effect of the sub-prime crisis and its effect on the Indian IT industry. Also the Satyam Fraud Case has affected the reputation of the Indian IT industry. These factors can be a cause of increased job insecurity attitudes at all levels in the organisation causing a timing bias.
As the research is based primarily on the self administered survey, it is subject to and dependent on the responses obtained that may be forged.
