Job Insecurity and Employee Commitment: Managers' Reactions to the Threat and Outcomes of Redundancy Selection1
| Published date | 01 March 1996 |
| Author | Jerry Hallier,Phil Lyon |
| DOI | http://doi.org/10.1111/j.1467-8551.1996.tb00109.x |
| Date | 01 March 1996 |
British
Journal
of
Management, Vol.
7,
107-123
(1996)
Job
Insecurity and Employee
Commitment: Managers' Reactions to
the
Threat and Outcomes
of
Redundancy Selection1
Jerry Hallier and Phil
Lyon*
Department of Management and Organization, University of Stirling, Stirling FK9 4LA and "School
of
Food and Accommodation Management, Duncan
of
Jordanstone College, Dundee University,
Perth Road, Dundee DD14HT,
UK
Increases in managerial redundancies have followed in the wake of recession and
fiercer competition. Although popular accounts have warned of a growing disaffection
among managers, few studies have examined the effects of abandoning their traditional
job security. This article examines changes in the work attachments
of
long-service
managers under the threat of redundancy. Over a 12-month period, interviews were
conducted with 42 middle managers who, at the beginning
of
the research, had been
warned of possible redundancy. Initially, most of the managers experienced significant
threats to their established views about themselves and their employers. The develop-
ment
of
these early perceptions into altered work attachments depended largely on
outcomes
of
the redundancy process.
For
reprieved managers organizational commit-
ment was quickly re-established. In contrast, those demoted to engineering roles
or
re-
employed by other companies became less trusting and developed new explanations of
their past employment experiences. These findings illustrate the tension between the
need
of
managers to be assured of their place within the organizational structure and
recent threats to their traditional careers and employment security. Also we may expect
difficulties in the development
of
organizational commitment to emerge as the per-
sonal risks to managers increase.
Introduction
Traditionally, employers have bestowed on man-
agers a level of preferential treatment unavailable
to other types of worker. Irrespective of the ex-
plicit terms of the legal contract of employment,
the value
of
the psychological contract stemmed
The authors wish to thank David Fryer, Jean Hartley
and two anonymous reviewers for their helpful com-
ments and suggestions on an earlier draft
of
this paper.
Author for correspondence:
J.
Hallier at address given.
Tel: 01786 467318; fax: 01786 467329.
from the implicit benefits and obligations ac-
cepted as normal and binding between manager
and employer.
Thus,
in exchange for the man-
ager's commitment to the job and organization,
the employer provided employment security,
superior economic rewards and opportunities for
predictable career progression (Argyris, 1960
Ashford
et
al.,
1989; Roskies and Louis-Guerin,
1990). However, since the mid-1980s employers
have begun to withdraw these employment and
career advantages.
In response to recurring recession, greater
competition and developments in information
0
1996 British Academy
of
Management
108
J.
Hallier and
I?
Lyon
technologies, employers have severely reduced
the numbers and levels of managers employed in
organizations (Willis, 1987; Coulson and Coe, 1991;
Kirkpatrick, 1991; Department of Employment,
1992; Inkson, 1993; Kozlowski
et al.,
1993). More-
over, those managers who have survived these
delayering exercises now face heavier workloads,
wider responsibilities and longer working hours
(Nicholson and West, 1988; Inkson, 1993; Insti-
tute
of
Management, 1993). More significantly,
the emergence
of
shorter and less predictable
managerial employment is widely regarded as a
permanent outcome
of
business restructuring
(Child, 1984; Piercy, 1984; Nicholson and West,
1988; Institute of Management, 1993). As a result,
popular accounts
of
these changes have advised
managers to abandon their expectations of jobs
for life and to take personal responsibility for
their careers (Golzen and Garner, 1992;
The
Times,
1993).
Although these changes to managerial work
and employment have attracted comment from
both popular and academic writers, there is little
evidence about the effects of job insecurity on
managers’ mental health, work attitudes and
expectations (Roskies and Louis-Guerin, 1990).
Contributing to the scarcity of investigations
of
this type has been the tendency for the earlier
preferential treatment of managers to continue to
inform the assumptions of managerial research.
For example, theory and research on the effects
of job insecurity have tended to focus on workers
in general. In
so
far as managers are considered
specifically, their role in implementing strategies
which create and influence perceptions of insec-
urity among the rest of the workforce is empha-
sized (Sutton
et al.,
1986; Cameron
et al.,
1987;
Greenhalgh, 1991; Greenhalgh and Sutton, 1991).
Also if managers personally experience job in-
security it is assumed that their reactions will
be less intense than those
of
subordinates because
of their greater organizational influence, financial
resources and opportunities for employment
mobility (Greenhalgh and Sutton, 1991).
Accompanying this view has been the emer-
gence in the 1980s of a human resource manage-
ment (HRM) literature which has focused on the
empowerment of managers to implement organ-
izational change following the decline of trade
union influence (Mueller and Purcell, 1992; Neu-
mann, 1992; Storey, 1992). Within much HRM
research all levels of management are regarded as
the instigators and beneficiaries of the new ideo-
logy of excellence, unitarism and culture change.
In reality, however, both managers’ empower-
ment and decline in security may simply reflect
the emergence of a range of personal outcomes
for different levels, functions and ages
of
manage-
ment employee.
In a similar way, research into the effects of
unemployment on managers has detected few
differences between their reactions and those
of
other types
of
worker (Hucynski, 1978 Fineman,
1979; Hartley, 1980; Swinburne, 1981; Ostell and
Divers, 1987). Taken together, studies of mana-
gerial and white collar unemployment report a
similar decline in mental health to the one found
in blue collar workers (Fryer and Payne, 1986;
Roskies and Louis-Guerin, 1990). Nevertheless,
these findings shed little light on whether man-
agers experience unemployment differently to
other categories of worker because
of
variations
in their financial resources, work values or coping
strategies.
Because of the evidence from these three
strands of research, it is tempting to conclude that
the risks to the mental health and work attach-
ments of managers have been exaggerated and
require little further investigation. Despite this a
number of issues remain unresolved and raise the
possibility of a more varied picture
of
managers’
responses to job insecurity.
Firstly, it may be premature to conclude that
the perceptions and effects of job insecurity
amongst managers will remain constant as the
risks to their employment continue beyond the
short term. At present few managers appear to
feel insecure unless their employment is directly
threatened in the immediate future (Roskies and
Louis-Guerin, 1990; Institute of Management,
1993). Newman (1988) accounts for most mana-
gers’ denial of the risks to their employment by
their tendency to see their occupation as a meas-
ure of their self-worth and a means to reinforce
their sense of control over events. However, such
denial strategies may become less effective as un-
employment and shorter working lives become
more established as common features of managers’
employment experience.
Also, the traditional work orientations
of
man-
agers have been reflected in attitudes and expec-
tations about their rights and obligations under
their implicit contracts (Child, 1972). Conceivably,
the withdrawal of many of the expected benefits
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