With layoffs happening left, right and center, many employers have been capitalizing on the fact that their workers now live in constant fear of losing their jobs.

Some say they only want to encourage maximum dedication to company tasks. Others want to get away with poor office employer behaviors, reduce costs or deny their employees benefits and promotions. 

One thing is obvious, though: the impact of job insecurity on employee well-being is adverse.

So does capitalizing on job insecurity actually boost the performance of employees?

The simple answer is no. 

Granted, it may improve short-term performance and tick certain boxes, but it negatively affects the organization in the long-term. Let’s see how. 

Job-insecure workers are less likely to follow rules

Workers who feel like they are at risk of being fired may overcompensate by never missing deadlines, being as punctual as possible, never taking long lunches, taking on the projects of their colleagues and working extra hours—developing unsustainable behavioral patterns.

However, there is only so much work they can take on and so much effort they can put in. Sooner than later, these workers who feel job-insecure become more likely to break the rules over the next three months. 

How so?

Let’s imagine a worker who knows they are at risk of being fired and begins to “relieve their colleagues of their extra work” or work extra hours. 

What do you think will happen in, let’s say, 3 months?

Resentment starts to brew, they get uncomfortable and agitated and begin to seek ways to make it easier. Not by dropping the extra projects as you may expect, but by adopting unhealthy coping mechanisms (caffeine, over or under-eating, isolating etc.) because just as with performance, the self-control necessary to follow the (extra) rules takes substantial cognitive resources. 

The worker may also start looking out for themselves, gradually draining any sense of loyalty they have to the company by trading and sharing company secrets or other confidential information as they search for new jobs—something that eventually happens.

Job-insecure workers choose visible work over valuable work

If a workplace adopts the carrot-and-stick tactic, its employees become preoccupied with ensuring that their bosses are aware of their contributions rather than actually improving their performance. 

Loose ends are left untied, and only short-term goals are worked on. Those are the ones that bring the carrots, after all. 

For example, a job-insecure developer that has been told to design a website for a new project may, at face value, design a beautiful website, but that website may have been made with messy codes. He doesn’t care. And why would he? He only intends to get the carrots—maybe an excellent performance review, an employee-of-the-month award, or a LinkedIn recommendation while he hunts for new jobs on the side. 

Some level of impression management is healthy, but to make your workers insecure is to kill your company with your own hands. Your workers only work to impress you and not to make particularly valuable contributions or viable long-term contributions. 

Job-insecure workers may intentionally sabotage their coworkers 

To make themselves look better in comparison and ultimately please you, job-insecure workers may sabotage their coworkers.

They aren’t necessarily concerned about doing excellent and valuable work; they only aim to be better than their colleagues.

Because of the job insecurity they feel in the workplace, they become inclined to make comparisons. As long as about 2 or 3 other coworkers don’t have performances as strong as theirs, they feel safe.

At the risk of sounding like a broken record, this is a recipe for the collapse of your company. 

How?

It is common knowledge that a company is only as strong as it is united. When your workers compete within themselves, withhold essential information, lie to you and to themselves, and generally look-out for themselves only, your organisation becomes a ticking time bomb.

Besides, it doesn’t exactly alleviate their job insecurities. Ironically, it increases it. The extra attention they get from berating and competing with other employees puts extra pressure on them and ultimately exacerbates their job insecurity.

An organization with a high number of job-insecure workers is less likely to employ and retain great talents 

The fact is word gets around—with Glassdoor and other organization review websites.

Your organization is ultimately disadvantaged when valuable talents refuse to work for your company and spread the word against working for your company. Nobody likes to feel like they are on the verge of getting fired, and this study on Talent Attraction and Retention in MENA we did with 46% of the respondents prioritizing long-term job security just proves that further.