Relationship among Psychological Climate, Pay Satisfaction & Job Insecurity in Layoff Survivors.

AuthorUchenna, Onuoha Chibuzor


Forced termination of employment due to organizational restructuring exercise may result in layoff survivors perceiving high job insecurity. Survivor employees may experience survivor syndrome, a condition described as "a set of attitudes, perceptions and behaviors of workers who remain following involuntary employee reductions" (Robbins, 1999). Since the goal of any restructuring program is to improve organizational effectiveness (Sitlington & Marshall, 2011), success in managing the psychological transition of survivor employees towards contributing maximally to organizational efficiency may require that managers understand how the heightened threat of job loss affect layoff survivors' attitudes and perceptions of critical employee work outcomes.

In Nigeria, job insecurity alongside other variables have been studied in such sectors as banks (e.g. Adejuwon & Lawal, 2013; Okurame, 2014), telecommunication (e.g. Ugwu & Asogwa, 2017), hospitality (e.g. Karatepe & Olugbade, 2016) and education (e.g. Akpan, 2013). Similarly, job insecurity has been examined outside Nigeria (Camgoz, Ekmekci, Karapinar & Guler, 2016; de Beer, Rothmann Jr. & Pienaar, 2016; Haynie, Svyantek, Mazzei & Varma, 2016; Vuji'eis, Jovieis, Lalis, Gagis & Cvejano, 2015). But job insecurity and its likely effects on layoff survivors perception of work outcomes, especially among employees in the oil and gas sector in Nigeria, is under-researched, despite the mass retrenchment the sector witnessed in the recent past. Therefore, the present study aimed at bridging the knowledge gap by examining the relationship among pay satisfaction, psychological climate and perceived job insecurity in employees who survived forced dismissals in the downstream oil and gas industry in Nigeria.

Most definitions of job insecurity relate it to the subjective feeling of high level of uncertainty about the sustainability of one's present job in the light of current happenings in an industry (Greenhalgh & Rosenblatt, 1984; Hartley, Jacobson, Klandermans & Van Vuuren, 1991). Perception of job insecurity may increase during organizational restructuring (Armstrong-Stassen, 2005; Grunberg, Moore & Greenberg, 2001; 2006). Findings from previous studies showed that perception of job insecurity was positively associated with negative work attitudes (Brockner, 1988; Cheng & Chan, 2008; Sutton, 1987; Sverke, Hellgren & Naswall, 2002; Wang, Lu& Siu, 2015). Studies also showed that perceived job insecurity is indirectly related to performance of volitional behavior through the perception of psychological contract breach (Piccoli, De Witte & Reisel, 2017). In other words, the finding implied that a heightened threat of involuntary job loss may be interpreted as a violation of the 'lifetime employment' which employees believed they were promised at the time of joining the organization. Such negative interpretation may affect employee perception of post-change work outcomes.

An employee outcome that may be adversely affected by perception of job insecurity is satisfaction with remuneration. Studies have reported that work attitude is affected by remuneration with pay being of significant importance to employees (Chng & Wang, 2015; Rynes, Gerhart& Minette, 2004). Pay satisfaction assesses an individual's overall positive and negative feelings associated with pay. Findings from past studies showed that pay is positively related to employee attitude and behavior (Baroudi, Fleisher, Khapova, Jansen & Richardson, 2017; Chng &Wang, 2015; Gupta & Shaw 2014;Wang & Seifert, 2017). Pay cut is negatively related to commitment even with the prospect of job loss (Wang & Seifert, 2017) and pay satisfaction (Haynie, Svyantek, Mazzei & Varma, 2016). This means that the higher the perception of job insecurity, the less likely it is that an employee will be satisfied with his/her pay. However, Haynie et al. (2016) finding elucidated that pay satisfaction may be of less importance to an employee who is gripped by the threat of dismissal, than the security of the job itself. This is because unplanned job loss may mean the loss of important personal and social valuables that may compromise the individual's wellbeing and mental health (Mauno, Cheng& Lim, 2017; Stolove, Galatzer-Levy, & Bonanno, 2017; Vander Elst, Naswall, Bernhard-Oettel, De Witte &Sverke,2016).

However, that downsizing equally elicited positive reactions (e.g. increased commitment) in layoff survivors who perceived fairness in the process of organizational downsizing has been reported (Grunberg, Moore& Greenberg, 2001; van Dierendonck& Jacobs, 2012). In fact, Wiesner, Vermeulen & Littler (1999) reported that downsizing had a positive effect on job satisfaction of layoff survivors and suggested that perceived job insecurity may have a positive influence on pay satisfaction since it is a component of global job satisfaction. This is consistent with Bewley (2005) &Li & Ahlstrom (2016) who found that the fear of job loss elicited favorable attitudinal and behavioral responses in employees.

Also, the process involved in organizational restructuring implementation may influence organizational climate perception in layoff survivors. The psychological climate in work setting is a reference to the degree of satisfaction associated with an employee's subjective appraisal of organizational practices, procedures and outcomes (Baltes, 2001). Perception of unfairness in the organizational process that culminated to the involuntary retrenchment of former colleagues is capable of eliciting a feeling of psychological contract breach (Richter et al.,2016) because it communicates to layoff survivors that the organization no longer reciprocated hard work, loyalty and dedication with lifetime employment. But it has been reported that when an accurate explanation for the rationalisation is shared with layoff survivors, it led to positive influence on their future commitment to the organization (van Dierendonck & Jacobs, 2012).It is expected that treating employees as stakeholders should reduce their tendency to exhibit negative attitude that otherwise would have occurred if accurate reasons for the decision were not provided.

Elman and O' Rand (2002) reported that both highly educated and less educated employees perceived job insecurity but that the perception differed, and underscored the need to examine educational attainment as a factor in perceived job insecurity. Furthermore...

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