The relationship between layoff perception and survivors work effort

The current study looks into the relationship of various factors relating to perceived threat, perceived control, perceived fairness, self-esteem and economic need to work associated wit

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

MAI THI XUAN AI

THE RELATIONSHIP BETWEEN LAYOFF PERCEPTION

Ho Chi Minh City - Y 2014

University of Economics, HCMC INTERNATIONAL SCHOOL OF BUSINESS

THE RELATIONSHIP BETWEEN LAYOFF PERCEPTION AND

SURVIVORS’ WORK EFFORT

By

MAI THI XUAN AI

Mbus 3.2 ID: 22120084 Supervisor

DR PHAM QUOC HUNG

December, 2014

Acknowledgements

First, I would like to thank my supervisor Dr Pham Quoc Hung who has given me great supervision and advice in this process His feedback, guidance and knowledge in the subject were very valuable throughout the whole process of this research

I feel a deep sense of gratitude to all respondents who spent their valuable time to answer

my questionnaire and supply me with their knowledge and experiences in job performance and job motivation Especially, I am moved and fired by the support of my dear friends who deliver my questionnaires to others to help me collect convenient data

I am grateful to my classmates in MBUS 3; they shared many interesting ideas and knowledge and assisted many sources for my research

Last but not the least; I am extremely thankful to my family who has given me outstanding support and understanding throughout my studies

December 08, 2014

Mai Thi Xuan Ai

Table of Contents

Acknowledgements I Table of Contents II List of Tables V List of Figures VI Abstract VII

CHAPTER 1 INTRODUCTION 1

1.1 Research Background 1

1.2 Research Problem 3

1.4 Research Objectives 4

1.5 Research question 4

1.6 Research Contributions 4

1.7 Research structure 5

1.8 Summary 5

CHAPTER 2 LITERATURE REVIEW, HYPOTHESES AND RESEARCH MODEL 6

2.1 Introduction 6

2.2 Literature review 6

2.2.1 Perceived threat 6

2.2.2 Perceived control 8

2.2.3 Perceived fairness 10

2.2.4 Self-esteem 12

2.2.5 Economic need to work 14

2.3 Research Model 16

CHAPTER 3 RESEARCH DESIGN AND METHODOLOGY 17

3.1 Introduction 17

3.2 Research Process 17

3.3.1 Measurement of Perceived threat 18

3.3.2 Measurement of Perceived control 19

3.3.3 Measurement of Perceived Fairness 20

3.3.4 Measurement of Self-esteem 20

3.3.5 Measurement of Economic Need to Work 21

3.3.6 Measurement of Work Effort 22

3.4 Research Instruments 23

3.4.1 Survey Design 23

3.4.2 In-depth Interview Design 23

3.5 Sampling Plan and Data Collection 25

3.6 Methods and Techniques 26

3.6.1 Descriptive Statistic Analysis 26

3.6.2 Reliability Analysis - Cronbach’s Alpha 26

3.6.3 Confirmatory Factor Analysis (CFA) 27

3.6.4 Multiple Regression Analysis 28

3.7 Summary 28

CHAPTER 4 DATA ANALYSIS AND RESULTS 29

4.1 Introduction 29

4.2 Rewording 29

4.3 Data analysis and result 30

4.3.1 Descriptive Statistic for Demographics 30

4.3.2 Descriptive Statistic for Variables 32

4.3.3 Reliability Analysis- Cronbach’s Alpha 34

4.3.4 Confirmatory factor analysis 36

4.3.5 Multiple Regression Analysis 38

4.4 Summary of Key Findings and Discussion 48

4.5 Summary 51

CHAPTER 5 CONCLUSIONS, IMPLICATIONS AND LIMITATIONS 52

5.1 Introduction 52

5.2 Managerial Implications 52

5.3 Limitations and Suggestion for Further Researches 55

References 57

APPENDIX 67

Appendix 1: Questionnaire ( in English version) 67

Appendix 2: Questionnaire (In Vietnamese version) 71

Appendix 3: Confirmatory Factor Analysis 75

Appendix 4: Multiple Regression Analysis 83

List of Tables

Table 3.1 Scale items for Perceived Threat construct……… ………18

Table 3.2 Scale items for Perceived Control construct……….……… 19

Table 3.3 Scale items for Perceived Fairness construct ……….……….20

Table 3.4 Scale items for Self-esteem construct ……….21

Table 3.5 Scale items for Economic Need to Work ………22

Table 3.6 Scale items for Work Effort construct ……….22

Table 4.1 Descriptive Statistic for Demographics …….……… ….……… 29

Table 4.2 Rewording ……… ……… ……… 30

Table 4.3 Descriptive Statistic for Variables ……… ………32

Table 4.4 Reliability Analysis- Cronbach’s Alpha ………… ……… ……….35

Table 4.5 Composite Reliability and Average Variance Extracted ……… ……37

Table 4.6 Model Summary for Independent Variables ……… …… …… 39

Table 4.7 Multiple Regression Results with Independent Variables……… …….40

Table 4.8 Model Summary with Moderating Variable of Self-esteem………….…….….42

Table 4.9 Hierachical Regression Results with Moderating Variable of Self-esteem……45

Table 4.10 Model Summary with Moderating Variable of Economic Need to Work……46

Table 4.11 Hierachical Regression Results with Moderating Variable of Economic Need to Work……….………47

Table 4.12 Results of Hypothesis Test………48

List of Figures

Abstract

Layoff survivors' work effort is important for the successful and uninterrupted operations of the organizations that have undergone the process of restructuring in

terms of work force reduction

The current study looks into the relationship of various factors relating to perceived threat, perceived control, perceived fairness, self-esteem and economic need to work associated with work effort of layoff survivors in selected organizations in Vietnam Sample is selected on convenience basis with three hundred and nineteen participants (called survivors of layoff) from seven companies in garment industry and banking are located in Ho Chi Minh City and Binh Duong Province, which have undergone the process of downsizing Using Confirmatory Factor Analysis (CFA) to measure model fit and illustrates the association between factors of layoff and work effort The study used Multiple Regression analysis to analyze the relationship between factors of layoff and work effort, Hierarchical Multiple Regression to test the moderating effect of self-esteem and economic need to work on the relationship between perceived threat and work effort Result indicates that perceived threat, perceived control, self-esteem has a statistically significant effect on work effort, however; perceived fairness and economic need to work are not related to work effort Self-esteem and economic need

to work in this study play role as independent variables and moderating variables The findings of this study show that self-esteem moderates the relationship between perceived threat and work effort; perceived fairness and work effort; perceived control and work effort Similarly, economic need to work also has the moderating effect on the relationship between perceived threat and work effort

Based on these findings, implications for managing downsizing, restructuring and layoff has been discussed

CHAPTER 1 INTRODUCTION

1.1 Research Background

The world has been globalised which has affected the structure and jobs of many organizations Vietnam, like the countries of Asia has faced an economic crisis since 2007s which have created some hurdles for motivating the employees There are improvements that organizations expect from implementing such restructuring

strategies: decreased bureaucracy, faster decision making, increased productivity and better earnings (Arnold & Staffelbach, 2012, Introduction section)

A mixture between the globalization and the economic crisis has forced many

organizations to downsize and restructure to create layoff events and its impacts in job insecurity, layoff fairness among employers and employees, employees’ control in laying off situation, employees’ self-esteem and their economic need to work

regarding to their work effort during and after layoff events

The present study was motivated from previous studies about layoff perception and its related issues published in many countries from Western, Eastern to Asia A

considerable amount of literature has been published on layoff perception Surveys such as that conducted by Brockner (1992) showed that if perceived threat and control are both high, survivors should feel neither complacement nor helpless, and thus

should work relatively hard One decade later, Brockner et al., (2004) reported two cases tested which showed that the negative impact of layoffs on survivors’

organizational commitment was reduced when perceived control was relatively high Another test showed that the tendency for survivors’ job performance to be adversely

affected by high threat to their well-being was reduced when perceived control was relatively high In other words, perceived control was more strongly related to

employees’ organizational commitment in the presence than in the absence of layoffs and to survivors’ job performance when they experienced the post-layoff environment

as more threatening Several researchers pointed to some of the way when employers

do not fulfill employees’ promises and obligations, the employees reciprocated by

altering his or her contributions to the organization (e.g by reducing their efforts and

performance) Thus, psychological contract breach was reported negatively related to

employee job performance (Gouldner, 1960; Coyle-Shapiro, 2002; Turnley et al.,

2003; Zhao et al., 2007; Bal et al., 2010)

In 2010, Malik et al published a paper in which they showed that organizational

commitment and job satisfaction were the factors effecting productivity among layoff

survivors Moreover layoff survivors value pay and authority more as compared to

work conditions The pay and authority are the strong predictors of overall job

satisfaction of layoff survivors as compared to the environment in which they work

Regarding to layoff fairness of employers or organization to employees in layoff

situation, Wanberg et al (1999) demonstrated that explanation is very important in the

layoff process Individuals who reported that they were given full explanations of why

and how termination decisions were made were more likely to perceive their layoff as

fair, be willing to endorse the terminating organization, and indicate they did not wish

to take the past employer to court

Other discussions were on self-esteem into survivors’ work effort in layoff situation

Alternatively, self-esteem may be helpful only in some job contexts Baumeister et al

(2003) showed that the modest correlations between self-esteem and school

performance do not indicate that high self-esteem leads to good performance

Laboratory studies have generally failed to find that self-esteem causes good task

performance (Baumeister et al., 2003) However, Brockner et al.(1988 & 1993)

examined that” high levels of worry among low self-esteem survivors led them to work

harder when the threat of future layoffs was high”, and that the worry level of low

self-esteem survivors was unrelated to their work motivation when the threat of future

layoffs was low Furthermore, Brockner (1992) found that there was a moderating

effect of economic need to work on the relationship between perceived threat of layoff

and work effort In conclusion, work effort in layoff situation is affected by many

factors but in this scope of this study, Perceived Threat, Perceived Control, Perceived

Fairness, Self-esteem and Economic Need to Work will be focused to explain their relationship with Work Effort

1.2 Research Problem

Like the rest of East Asia, Vietnam suffered a sharp decline in economic growth rates

in 2008 and 2009 as the region felt the impact of the global financial crisis (GFC) which spread from the United States and Europe to most countries on the globe According to the Department of Employment (2009), Vietnam faced a number of challenges on the eve of the global financial crisis, experienced higher unemployment and other labor market problems The topic of this thesis is about the aftermath in Vietnam companies after the economic downturn in 2008 During and after the crisis the focus has been on employees that lost their jobs and their livelihood because of the economic downturn Unemployment rate rose considerably mainly because major investor countries such as Singapore, Japan, the US, Western Europe, etc into Vietnam have decreased, a big number of enterprises have to narrow production, resulting in job lost and lack of work The economic downturn created a unique research opportunity and the subject of survivors is very fitting at this time Few years have passed since the crisis struck Vietnam and many survivors are still working for a downsized company It will interesting to find out if survivors in Vietnam companies will experience the same reactions as can be found in other countries all over the world

1.3 Research Scope

The study focuses on layoff perception in the situations of downsizing and restructuring of organizations; it examines the effects of layoff to those who remain in the organizations during and after layoff wave Study has a clear definition of the variables, and used the necessary statistics for the analysis process Other relevant work on the effects of downsizing on survivors was also selected and analyzed The correlated pairs of the following variables are presented in this research: Perceived

Threat, Perceived Control, Perceived Fairness, Self-esteem and Economic Need to Work Studies are also examined for any possible relationships between those implemented in public and non-public organizations

1.4 Research Objectives

The purpose of this study is to identify the main factors of layoff affecting survivors’

work effort and how they affect to layoff survivors’ work effort in Vietnam

1.5 Research question

1 What are the main factors of layoffs affecting survivors’ work effort in Vietnam?

2 How do these factors influencing survivors’ work effort in Vietnam?

1.6 Research Contributions

Through the years, many previous researches have been conducted on survivors’

reactions to layoffs (Fisher, 1985; Brockner et al., 1987 & 1992 & 1993&1994; Bies, 1987; Konovsky & Folger, 1991; Knovsky & Brockner, 1993; Lim, 1996; Mishra & Spreitzer, 1998; Robbins, 1999) However, they mainly focused on separated

phenomenon of survivors’ layoffs such as psychological contract breach and work

performance (Robinson, 2000; Turnley,2003; Rust et al.,2005; Zhao et al.,2007; Bal

et al.,2010), threat of future layoffs, self-esteem ( Brockner et al.,1993; Milstone,2001), perceived fairness of layoffs among individuals (Thibaut & Walker,1975; Wanberg et al., 1999), perceived control to the negative effects of

layoffs on survivors’ organizational commitment and job performance (Greenberger

et al., 1989; Brockner et al.,2004), social support for survivors’ layoffs( House,1981;

Kirmeyer & Dougherty, 1988; Lim, 1996) Despite the large number of researches studies on layoff and behaviors of employees during and after layoff none of the study has been conducted on the complicated relationships among the effects of layoff perceived threat, perceived fairness, perceived control, self-esteem and economic need to work at the same time, especially in Vietnam context Therefore,

this study aims at filling the gap in the recent literature on the survivors’ reactions to

layoffs

The current study is based on the findings from the data collection to verify the literature review In addition, it provides a fuller theoretical understanding of layoff perceptions in relation to the factors affecting survivors’ work effort such as perceived

threat, perceived fairness, perceived control, self-esteem and economic need to work in reacting during and after layoff events Meanwhile, the findings also suggest some recommendations for employers in managing human resources well; fairness in firing employees; how to communicate cleverly in layoff situation in order to keep the remaining workforce continuing with companies and motivating their work effort

1.7 Research structure

The research consists of five chapters In the first chapter an introduction to the research is put forward and research problem is analyzed The second chapter presents the literature review, hypotheses and research model The third chapter covers the methodology with reliability analysis – Cronbach’s Alpha, confirmatory factor

analysis and multiple regression analysis used in this thesis In chapter four the results from the study is presented In chapter five, discussion of findings, conclusion and recommendation for future research are discussed

perceived threat, perceived control, perceived fairness, self-esteem and economic need

to work), work effort, the relationship between work effort and each factor of layoff events

2.1 Introduction

Chapter two provides the literature review of concepts used in this For each concept, there is an association with the work place of office employees After that the research model and hypotheses will checked with the background of literature

2.2 Literature review

2.2.1 Perceived threat

Throughout the economic recession of 2007–2009 organizations reduced personnel

through downsizing and layoffs leading to widespread increase in job insecurity even for those who remain employed (Modrek & Cullen, 2013) By definition, Dae-seok Kang & Kim (2012) defined that perceived threat reflects the worries related to the continuation of the present job It includes the fear of losing one's job and

unemployment, or having certain roles or responsibilities being removed, or being assigned certain tasks or responsibilities that are less desirable Perceived threat makes it difficult to react adequately due to ambiguity and this leaves the employee

with “the sense of an uncontrollable situation and powerlessness” (p.316)

Perceived threat itself can have a destructive impact on employees as well as on organisations (Greenhalgh & Rosenblatt, 2010) Arnold & Staffelbach (2012)

explained that, for employees, surviving a restructuring can feel threatening because they do not know how the change will affect the future continuity of their present job During restructuring, employees do not only feel insecure about the changing priorities of the organisation and the probability of losing their job It is not

uncommon for survivors to worry about the possibility of future layoffs, which, in

turn, could influence their work behaviors and attitudes When survivors believe that future layoffs are likely, they are bound to feel worry (Brockner, 1988)

Milstone (2001), in discussing the workers under threat of layoff let safety measures slide, mentioned that the economy is in a downturn and along with it comes the threat

of layoff and emotional stress But that's not all According to a new study on workplace pressures, when workers feel that their jobs are threatened, they tend to step up production, thereby easing up on safety standards and placing themselves at risk for injuries and accidents These are the conclusions of a study on workers at a large U.S food processing company who were experiencing threat of layoff Psychologists Tahira Probst and Ty surveyed food processors at two different plants, one where employees had recently seen colleagues on another shift laid off under threat of plant closure, and another plant where some of the employees were required

to change their working hours to the night shift or risk layoff Workers are surveyed

at the time of these stressful changes and six months later At each of these times, workers indicate how often during a typical shift they will "ignore safety rules and regulations at work" or "take shortcuts to get the job done faster." They are also asked to indicate their level of agreement (or disagreement) with statements such as

"my job is almost guaranteed" or "the future is vague." Results show that workers who experience the most stress and worry over losing their jobs tended to increase their production by easing up on safety precautions over time and, consequently, experienced more workplace injuries and accidents Because the food processing plant work requires repetitive procedures with sharp implements, the injuries mostly involved abrasions, cuts or gashes to the wrists, hands or arms The researchers speculate that, under threat of layoff, the workers were working harder and faster, hoping to make themselves more valuable to the company, thereby cutting corners and paying insufficient attention to safety precautions In the study of layoff and surviving employees'- the relationship between job insecurity and work effort of Brockner et al (1994), the results indicate that moderate levels of job insecurity in the

face of layoffs will lead survivors to increase work effort, particularly when they are the major breadwinners in their households The data also indicates that most respondents viewed the threat of a layoff as high and their ability or the firm's ability

to minimize the consequences as low Employees who have a high economic need to work expressed a significant amount of worry concerning the future of their jobs These results suggest that retailers who anticipate layoffs need to handle layoffs in ways that create moderate levels of job insecurity In doing so, employees who perceive a high likelihood of losing their jobs will also feel as if they can exert some control over the situation and will work harder Therefore H1 is proposed:

H1: Perceived threat has a positive effect on survivors’ work effort

2.2.2 Perceived control

Conceptual models of control and empirical evidence suggest that one’s social

context, including work, is a key source of perceived control (Heckhausen, Wrosch,

& Schulz, 2010) Experiencing job loss can be expected to shape perceived control

through sizeable changes to one’s living contexts To begin with, unemployment is a

life transition that produces numerous stressors that disrupt people’s lives such as

having difficulty supporting one’s family and needing to find new employment,

which often impose considerable load on one’s adaptive system (Pearlin, 2010)

Second, experiences at work and social interactions in the work context are often a

key source of one’s sense of control In job loss situation, opportunities for mastery

experiences are constrained and access to social relationships is reduced

(Heckhausen et al., 2010)

Organizational psychologists have conceptualized perceived control in two related but distinct ways that are not mutually exclusive (Greenberger et al., 1989; Spector,

1986) One conception (the “self-determination” framework) suggests that people’s

sense of control depends upon whether they perceive their behavior to be

self-determined versus coerced, or to use DeCharms’ (1968) terminology, whether they

see themselves as “origins” who initiate behavior versus “pawns” who simply react

to their environments To the extent that survivors perceive that they have high levels

of discretion over or input into their work activities, they are likely to experience a high degree of perceived control

A second conception suggests that perceived control depends upon how much people believe that important outcomes are contingent upon, rather than independent

of, their behavior (Rotter, 1966) To the extent that they believe that their behavior influences important outcomes, they are likely to experience a high degree of perceived control For example, people are likely to believe that their behavior influences important outcomes if they see themselves as having high levels of ability

to perform the task at hand, or if they see themselves as being able to influence those parties who control important outcomes (Seligman, 1998)

In sum, perceived control is reflected in employees’ perceptions of

self-determination and/or impact, and will be treated as such in the present studies

Moreover, employees’ perceived control results from dispositional and/or situational

factors, although it is beyond the scope of the present studies to evaluate the relative influence of dispositional and situational factors on perceived control Some employees are dispositionally more likely to perceive control than others (e.g.,

Rotter’s locus of control, 1966), and some post-layoff work environments are likely

to be more control-promoting than others (Mishra et al., 1998)

According to Brockner (2004), layoffs handled in ways that address survivors’ need

to perceive that they have control are likely to lead to more positive consequences, for both organizations and employees alike

When threat to well-being was relatively high, perceived control was significantly

(and positively) related to survivors’ job performance, b = 25, p < 01 However,

when threat to well-being was relatively low, perceived control was not significantly related to survivors’ job performance Threat to well-being and perceived control (both assessed six months earlier) interacted to influence survivors’ job performance

Perceived control was more positively related to survivors’ work effort when threat

to well-being was relatively high (Brockner, 2004) Therefore, H2 is proposed:

H2: Perceived control has a positive effect on survivors’ work effort

2.2.3 Perceived fairness

Fairness conception has been shown in researches as diverse as personnel selection and staffing, performance appraisal, compensation and benefits, resource allocation, conflict resolution, layoffs, and other human resource functions (David, 2011,

para.2)

Most previous studies on the determinants of survivors’ reactions have examinated

the role of perceived fairness Research has shown that when layoff survivors (individuals who are not laid off) view layoff procedures at their organization to be unfair, they are likely to exhibit decreased morale, self-esteem, organizational commitment, trust, and productivity (Brockner, Grover, Reed, DeWitt, & O Mailey, 1987; Brockner, Wiesenfeld, & Martin, 1995; Konovsky & Brockner, 1993) In a similar manner, layoff victims' (individuals who were laid off) perceptions of their past organization having poor procedures for making layoff decisions have been associated with a desire for regulation of layoffs and an unwillingness to recommend the past employer to others (Konovsky & Folger, 1991)

Literature suggests that there are three main forms of organizational justice; distributive, procedural and interactional (Brockner & Greenberg, 1990; David, 2011) Distributive justice (Homans, 1961) or 'outcome fairness' is the extent to which the procedures used in making an allocation decision are legitimate and appropriate (Daly & Geyer, 1994) For example, the fairness of the selection criteria used in a redundancy situation to decide which employees are to remain and who are

to leave Survivors who believe that the outcomes associated with the layoff are unfair are more likely to react adversely to the layoff For example, the fewer

survivors believe an organization offered concrete benefits to a layoff’s victims, the

more likely they are to perceive the layoff as distributively unfair (Brockner, 1992)

Over the past three decades, research has clearly indicated that people are concerned not only about the fairness of outcomes, but also the fairness of the process (called procedural justice) that determines or leads to these outcomes (David, 2011) Procedural justice (Thibaut & Walker, 1975) is the extent to which the procedures used in making the allocation decision are seen as fair (e.g., the way in which management conveyed the news of the redundancy) Survivors who believe the procedure used to implement a layoff were unfair are likely to react unfavorably to it (Brockner, 1992)

Recent studies have also highlighted an important form of the third fairness known as

interactional fairness (or interactional justice).It is related to the interpersonal treatment an individual has received, interactional justice (Bies, 1987) For example, whether the organization or management explained to the individual the reasons underlying the decisions that were made, this view is supported by Astrachan (1995) who suggests that anxiety is stimulated by the mere announcement that people in the organization are leaving Wanberg et al (1999) inserted that explanation is very important in the layoff process Individuals who reported that they were given full explanations of why and how termination decisions were made were more likely to perceive their layoff as fair, be willing to endorse the terminating organization, and indicate they did not wish to take the past employer to court While the vast majority

of managers and leaders want to be fair and believe that they are, it is nevertheless not uncommon that employees or members of public often think and feel that they have not been treated fairly This suggests employers should have the communication strategies

Recently, David (2011) stated in his study that interactional fairness may be further subdivided into “informational fairness and interpersonal fairness” Informational

fairness is about people's expectation that they should receive adequate information

on and explanation of the process and its outcomes Interpersonal fairness is about people's expectation that they should be treated in a respectful, honest and interpersonally sensitive manner (para.13) it creates motivation for employees to effort in working H3 is proposed:

H3: Perceived fairness is positively related to work performance

2.2.4 Self-esteem

Self-esteem refers to an individual’s overall self-evaluation of his/her competencies

(Rosenberg, 1965) It is that self-evaluation and descriptive conceptualization that individuals make and maintain with regard to themselves In this sense, self-esteem is

a personal evaluation reflecting what people think of themselves as individuals For Korman (1970), self-esteem reflects the degree to which the individual “sees him

[her] self as a competent, need-satisfying individual” (p 32); thus, the high

self-esteem individual has a “sense of personal adequacy and a sense of having achieved

need satisfaction in the past” (Korman, 1966: 479) In the past a great number of

researchers have sought to study about self-esteem affecting to various variables Self-esteem in this study is mentioned relating to work effort and its moderating effect on the relationship between perceived threat of lay off and work effort

The result of the study of Baumeister et al (2003) shows that the modest correlations between self-esteem and school performance do not indicate that high self-esteem leads to good performance Instead, high self-esteem is partly the result of good school performance Efforts to boost the self-esteem of pupils have not been shown

to improve academic performance and may sometimes be counterproductive Job performance in adults is sometimes related to self-esteem, although the correlations vary widely, and the direction of causality has not been established Occupational success may boost self-esteem rather than the reverse

Alternatively, self-esteem may be helpful only in some job contexts Laboratory studies have generally failed to find that self-esteem causes good task performance,

with the important exception that high self-esteem facilitates persistence after failure (Baumeister et al., 2003)

Coworker layoffs can have a significant effect on the work effort and subsequent productivity of survivors Just how dramatic an effect depends, to a large degree, on the level of self-esteem held by the survivors (Brockner, 1988, pp 217, 228;

Brockner, Davy, & Carter, 1985)

Higher self-esteem leads to more positive attitudes, high self-esteem will promote employee satisfaction and well-being (Baumeister et al., 2003) Low self-esteem individuals are more likely than their high self-esteem peers to work harder after a layoff Why? Low self-esteem individuals are more likely to experience worry and insecurity as a result of downsizing They therefore work harder because they are worried about their job security and see increased work effort as a means toward reducing the threat to their job security Brockner (1988) has shown that for a

number of reason, low self-esteem individuals are more “behaviorally plastic’ than

high self-esteem ones Low self-esteem individuals are more likely to be influenced

by variety of external and social cues Because low self-esteem generally lack

confidence in their ability to meet the challenges posed by demanding, stressful circumstances, they should feel more worried by the threat of future layoffs

In 1993, Brockner, in his study, he added that the threat of future layoffs could

demotivate the low self-esteem individual’s more than high self-esteem individuals

Low self-esteem feels more helpless or distracted, interfering with their ability to concentrate on the task at hand On the other hand, low self-esteem may show greater motivation in response to the threat of future layoffs High self-esteem employees they feel confident that they have ability to perform well in the future, or believe that they can be chosen by the organization to remain in the event of future layoffs Low self-esteem employees may feel that they need to work harder to have a chance to avoid losing the jobs in future layoffs

Ferris et al (2010) stated in their empirical study that self-esteem is not only directly effect on work effort but also moderates the effect of other variables on work effort

as well Previously, Brockner et al (1993) examined that high levels of worry among low self-esteem survivors led them to work harder when the threat of future layoffs was high, and that the worry level of low self-esteem survivors was unrelated to their work motivation when the threat of future layoffs was low Therefore H4, H5, H6 and H7 are proposed:

H4: Self-esteem is positively related to work effort

H5: Self-esteem will moderate the relationship between perceived threat and work effort

H6: Self-esteem will moderate the relationship between perceived control and work effort

H7: Self-esteem will moderate the relationship between perceived fairness and work effort

2.2.5 Economic need to work

Although the harmful effect of job insecurity normally has caused by its

“unpredictability and uncontrollability” employees can control through factors such

as general economic conditions (Dae-seok Kang & Kim, 2012, p.316), if employees

attempt to avoid disadvantages at least until shortly before advent of the final stage,

“the perception of job insecurity can lead to a highly-developed sense of self-interest

and an acceptance that they are now responsible for maintaining their careers” (

Peiro´ et al., 2012)

Brockner (1992) specified the three –way interaction between perceived threat,

perceived control, and economic need to work He performs midscale splits on three variables and computes the mean levels of work effort for the resulting groups The result shows that those with high economic need to work, there is a sharp inverted-U

insecurity, when perceived threat and perceived control are both high or both low,

survivors’ work effort is considerably greater than when job insecurity is high( high

threat, low control) or low( low threat, high control) However, for those with low economic need to work, there is virtually no relationship between perceived threat, perceived control and work effort Survivors who are major breadwinners in their households are likely to be greatly influenced by their level of job insecurity

(Brockner et al., 1992, p 415), whereas those who are not major breadwinners are less likely to translate their feelings of job insecurity into their work effort

Survivors’ economic need to work moderates the relationship between threat of

future layoff and work effort The relationship is more pronounced for those whose economic need to work is relatively high Economic need to work not only directly effects on work effort it also effects on the relationship between perceived threat and work effort Therefore, H8 and H9 are proposed:

H8: Economic need to work is negatively related to work effort

H9 Economic need to work will moderate the relationship between perceived threat and work effort

Perceived threat

Perceived Control

Perceived fairness

Work effort

H2 (+)

H3 (+)

H9

Economic need to work

CHAPTER 3 RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction

Chapter 3 is going to develop the hypotheses and research model in chapter 2 Its purpose is to present the research design and methodology In this chapter, it will perform the research process, measurements of constructs, design of in-depth interviews, plan of sampling and collecting data, as well as the methods and techniques

used for data analysis

3.2 Research Process

Figure 3.1 Research Process

Literature Review

Item

Generation

Conceptual Framework

Questionnaire design

Draft Questionnaire

Final Questionnaire

Revision Back

Translation

Main Survey (n = 319)

Multiple Regression Analysis

Cronbach Alpha CFA Research

Study

3.3 Construct Measurement

In order to fulfill the purposes of this research, six constructs are adapted to measure Perceived Threat, Perceived Fairness, Perceived Control, Work Effort, Self-esteem, and Economic Need to Work Every construct will be measured by a multiple-item measurement scale taken from previous researches Later, these statements will be changed to suit characteristics of working environment in Vietnam, showed in Appendix 2 – Final Questionnaire (English version) and translated into Vietnamese in

Appendix 3 (Vietnamese version)

3.3.1 Measurement of Perceived threat

Perceived threat is measured by three items adapted from Caplan et al (1975) and Brockner et al (1993), Milstone (2001)

A seven-point Likert scale is used to document responses on all items, ranging from

““Strongly disagree” (equaled “1”) to “Strongly Agree” (equaled “7”)

Table 3.1 Scales items for Perceived threat construct

No Scales items for Perceived threat construct Code Source

1 More layoffs in the organization are likely to

occur in the near future in your company

(1975) and Brockner et

al (1993): Milstone(2001)

2 I am not certain of the opportunities for

promotion and advancement which will exist in

the next few years with this company

PTH2

3 I am not certain about what my future career

picture look with this company

PTH3

3.3.2 Measurement of Perceived control

Perceived control is measured by nine items of three dimensions were cited in Spreader (1995) These items are drawn from the analysis of Jones's (1986) (for Competence items), Hackman and Oldham's (1985) (for self-determination items), Ashford’s

(1989) (for Impact items)

The responses on all items are recorded using a seven-point Likert scale, ranging from

“Strongly disagree” (equaled “1”) to “Strongly Agree” (equaled “7”) The higher the

score is, the more control an employee get

Table 3.2 Scales items for Perceived control construct

No Scales items for Perceived control construct Code Source

5 I am confident about my ability to do my job PCL5 Jones's (1986),

Oldham's (1985),

Ashforth's (1989)

6 I am self-assured about my capabilities to

perform my work activities

PCL6

7 I have mastered the skills necessary for my job PCL7

8 I have significant autonomy in determining how I

10 I have considerable opportunity for independence

and freedom in how I do my job

3.3.3 Measurement of Perceived Fairness

Perceived fairness is measured by four items adapted from Brockner, 1990 and Brockner et al., 1992

The responses on all items are recorded using a seven-point Likert scale, ranging from

“Strongly disagree” (equaled “1”) to “Strongly Agree” (equaled “7”) The higher score

in response is the more fairness an employee gets

Table 3.3 Scales items for Perceived Fairness construct

No Scales items for Perceived fairness construct Code Source

14 The severance pay that the organization offered

to the laid-off people was a generous amount

Brockner et al., 1992

15 The reasons for the layoff explained to you by

your supervisor

PFR2

16 Management tried to help the laid-off employees

find a comparable job elsewhere in the company

PFR3

17 The company provided sufficient forewarning to

those who would be laid-off

PFR4

3.3.4 Measurement of Self-esteem

Moderating factor of Self-esteem includes nine items adapted from Rosenberg (1965)

Items 2, 5, 6, 8, 9 are reverse scored Give “Strongly Disagree” 1 point, “Disagree” 2 points, “Agree” 3 points, and “Strongly Agree” 4 points Keep scores on a continuous

scale Higher scores indicate higher self-esteem

Table 3.4 Scales items for Self-esteem construct

No Scales items for Self-esteem construct Code Source

(1965)

20 I feel that I have a number of good qualities SE3

21 I am able to do things as well as most other

people

SE4

24 I wish I could have more respect for myself SE7

25 All in all, I am inclined to feel that I am a failure SE8

3.3.5 Measurement of Economic Need to Work

Moderating factor of economic need to work is measured by four items developed by Brockner (1992) and Potuchek (1992), Hood (1986), and Perry-Jenkins and Crouter (1990)

The responses on all items are recorded using a seven-point Likert scale, ranging from “Not at all important” (equaled “1”) to “Extremely important” (equaled “7”) for

item 28,29,30 ranging from “ Not at all” ( equal “1”) to “ A very great deal” ( equal

“7”) The higher the score is, the more importance of economic need to work an

employee get

Table 3.5 Scales items for Economic Need to Work construct

No Scales items for Economic Need to Work construct Code Source

27 To what extent are you the major breadwinner in your

home?

(1992) and Potuchek (1992), Hood (1986), and Perry-Jenkins and Crouter (1990)

28 How important is it to you to be a good financial

provider for your family?

EN2

29 How important is earning money for basic family

needs a reason for your being in full-time

3.3.6 Measurement of Work Effort

Dependent variable is work effort with a 3-item scale developed by Brockner (1992)

is used to measure work effort Response options ranged from strongly disagree (1)

to strongly agree (7)

Table 3.6 Scales items for Work Effort construct

No Scales items for Work Effort construct Code Source

(1992)

33 I intentionally expend a great deal of effort in

carrying out my job

WE3

Cary(2008)

3.4 Research Instruments

This study employs a mixed method, integrating both the quantitative and qualitative methods to collect data as the quantitative data is objective, whereas the qualitative data aims to obtain more in-depth information and to make the research more reliable The collection of data in quantitative method is based on survey questionnaires In addition, qualitative method is based on face-to-face interviews to make the research more reliable Both methods use in the thesis will provide a complete analysis of the statistic descriptive data

3.4.1 Survey Design

Questionnaire for respondents includes two parts The first part of the questionnaire will be designed to see what layoff factors that influence work efforts of layoff survivors, the questions of this part using seven-point Likert scale questions from 1 for

“Strongly disagree” to 7 for “Strongly agree” and 1 for “ not at all important ” to 7 for

“ Extremely important” The second part includes the background information such as age, gender, employee’s position, year working experience In order to avoid

misunderstanding the meaning of the questions due to lack of English proficiency that may affect the objectiveness of the research results, the questions will be translated into Vietnamese The English and Vietnamese versions of the questionnaire are in Appendices

3.4.2 In-depth Interview Design

In-depth interviewing is a qualitative research technique that involves conducting intensive individual interviews with a small number of respondents to explore their perspectives on a particular idea, program, or situation (Patton, Michael Q (2002) In-depth interview is qualitative research which the objectives for collecting data of research are established Interviewer will give the questions to interviewees to answer The purpose of in-depth interview is make the interviewees understand deeply about layoff situation in organization The interviewees are people selected from the people

going to answer questions in survey and in the environment of layoff having certain understanding about the topic We may use the interview results for more explanation

- The understanding of interviewees about layoff related to threat of future layoff, the fairness of organization in layoff situation, the control of employees when layoff happened, self-esteem and economic need to work of employees

- The opinions of interviewees about the relationship between independent and dependent variables

- The understanding of interviewees about statements in questionnaire Statements are clear or not

- The questions and multiple answers are acceptable or not

Conducting the interview

Five employees working in the companies in HCMC are chosen to ask questions in the in-depth interview table The participants are made guarantees that all information provided will be kept confidential and used to serve the purpose of this research and their names will be not mentioned in any document There are no correct or wrong answers, the interviewer is just looking for the opinions about the research objectives The interviewer explains why she would like to research about layoff and the effects of layoff to the remaining workforce in organization, why she

thinks that the participants’ opinions are very important in this research The

interviewer is trying to learn and get the opinions and experiences from the interviewees The respondents are encouraged to interrupt the interview if they remember something is very important The allowance of using recorder and note taking during the interview are asked and implemented All information will be recorded and noted carefully and kept confidentially The participants are ensured that they are in comfortable situations, can spend time to answer the questions, can understand what they are asked and can supply necessary information for interviewer As well as the time scale should be ensure that is not too long or short and all evaluated information can be collected The bias of the interviewer will not be

reminded in the topic by giving the questions like “Do you think that .?” but it would be asked like “How do you think about ?” When the information is collected

enough, the interviewer will stop the interview She shows the appreciation about the contribution of participants in this research

3.5 Sampling Plan and Data Collection

Data was collected within one month Questionnaires were designed in Microsoft word with check box for each answering option The questionnaires were sent to eleven 8 companies which the researcher knew they are all companies in the downsizing process or just finished laying-off wave These companies are located in

Ho Chi Minh City and Binh Duong Province specifying in garment field and another

in banking field Seven companies in garment industry all are researcher’s customers

that why she got big convenience in collecting data In fact, during collecting data time the researcher also met some difficulties At first the questionnaires were sent to some representative person of each company who research have close relationship and asked them to distribute questionnaire to people in the same company to fill in and collected to send back to researcher by email, however, during two weeks only few questionnaires were finished Almost employees requested to fill in questionnaires they did not feel necessary to finish soon and the person distribute questionnaires were also not enough powerful to ask other employees to finish filling

in questionnaires In addition, some employees they did not like to answer some

delicate questions about themselves, their thinking about companies, etc, and known

by other person in same company Therefore, researcher redesigned questionnaires through internet approach with Google tool support The settings are configured to make sure that one person only answer one time and questionnaire were sent directly

to researcher All questions must be ticked completely if someone forgot any question; they will be reminded by the automatic system Besides, the end of the online questionnaire, the email of researchers also attached, in case the employees has any questions about the statements of questionnaire they can send email directly

to researcher the next two weeks research directly went to these companies to collect data Due to layoff and its related issues sometime are sensitive and delicate the employees they do not want other people know what they are thinking and what happening inside company they are working for, so that questionnaires were sealed

in envelope for each employee and they return back in same envelope to avoid to know who are the author of each questionnaire But actually to finish collecting questionnaires also needed a big help of manager of each department in pushing their staff to fill in as soon as possible For the survey, 400 questionnaires were distributed directly and email to respondents After the data collection, total 319 responses were collected

3.6 Methods and Techniques

3.6.1 Descriptive Statistic Analysis

Descriptive Statistic Analysis is used to screen and clear data set for error Besides, it will help the researcher has a general view about the characteristic of data by looking

at the mean, frequency, variance, and standard deviation

3.6.2 Reliability Analysis - Cronbach’s Alpha

According to Hair, et al (2006), reliability analysis is used to check out the consistency of a measure within a variable or set of variables If a measure has a high reliability, it will have consistent values under consistent conditions In this study,

the reliability will be checked out through the value of Cronbach’s Alpha Cronbach’s Alpha is the reliability measurement coefficient of a measure, not the

reliability coefficient for each observation The value of reliability is measured in the

range between 0 and 1 If a scale has the value of Cronbach’s Alpha is equal or

greater than 30, it can be accepted (Nunnally & Bernstein, 1994) A scale has a good reliability when its variation is in the range from 70 to 80 If the value of

Cronbach’s Alpha is greater than 60, the reliability of the scale can be accepted If the value of Cronbach’s Alpha is greater than 95, there are very small differences in the scale’s variables It is the redundancy in measurement (Nunnally & Bernstein,

1994)

3.6.3 Confirmatory Factor Analysis (CFA)

For a given theory, confirmatory factor analysis is used to test certain hypotheses regarding the number and relationship of specific common factor variables to the measured observed variables (Marcoulides & Hershberger, 1997) Through statistical analysis of the sample data, a proposed model can then be confirmed or not confirmed (Long, 1983) Confirmatory factor analysis is also considered a type of Structural Equation Model that uses measurement models to illustrate the associations between the observed measures and the latent factors (Brown, 2006) Typically, chi-square statistics are used as an indicator of differences in fit between the hypothesized model and the data, with non-significant p-values indicating a good fit However, the chi-square goodness-of-fit tests often produce significant chi-square values due to the detection of trivial differences in large sample sizes, so additional fit indices were also inspected (Brown, 2006; Byrne, 2001) Based on the recommendations of Hu and Bentler (1998, 1999), model fit for both samples was evaluated using a combination of fit indices using empirically derived cutoff scores CFA specifically, relies on several statistical tests to determine the adequacy of model fit to the data

- A chi-square value close to zero indicates little difference between the expected and observed covariance matrices In addition, the probability level must be greater than 0.05 when chi-square is close to zero

- The Comparative Fit Index (CFI) is equal to the discrepancy function adjusted for sample size CFI ranges from 0 to 1 with a larger value indicating better model fit Acceptable model fit is indicated by a CFI value of 0.90 or greater

- Root Mean Square Error of Approximation (RMSEA) is related to residual in the model RMSEA values range from 0 to 1 with a smaller RMSEA value indicating better model fit Acceptable model fit is indicated by an RMSEA value of 0.06 or less

If model fit is acceptable, the parameter estimates are examined The ratio of each parameter estimate to its standard error is distributed as a z statistic and is significant

at the 0.05 level if its value exceeds 1.96 and at the 0.01 level it its value exceeds 2.56 (Hoyle, 1995) Unstandardized parameter estimates retain scaling information of variables and can only be interpreted with reference to the scales of the variables Standardized parameter estimates are transformations of unstandardized estimates that remove scaling and can be used for informal comparisons of parameters throughout the model Standardized estimates correspond to effect-size estimates

3.6.4 Multiple Regression Analysis

Multiple Regression Analysis is a general statistical technique used to analyze the relationship between independent variables and dependent variables Its basic formulation is: Y = X + X + + X (Hair, et al., 2006)

3.7 Summary

This chapter describes the research process of this study The construct measurements for variables with Likert scale are measured by multiple items In-depth interview is used to find out the opinions of respondents about the study, discover more new ideas for the topic and check the availability of the questionnaire with the real life Besides, sampling plan is feasible when it focuses on office

employees working in companies in HCMC and Binh Duong Province The convenience samples satisfied the requirements of the research To test the reliability and valuation of variables, some calibration methods are chosen for testing such as Descriptive Statistic Analysis, Reliability Analysis - Cronbach’s Alpha, Confirmed

Factor Analysis (CFA), and Multiple Regression Analysis

CHAPTER 4 DATA ANALYSIS AND RESULTS 4.1 Introduction

Chapter 4 introduces about the analyses of data and shows the results by using

statistic methods such as Descriptive Analysis, Reliability Analysis – Cronbach’s

Alpha, Confirmatory Factor Analysis (CFA) and Multiple Regression Analysis

4.2 Rewording

Items were adapted from some authors in several studies, some items in the

questionnaires had to be adjusted to be synchronous for all items in the same factor

so that respondents could answer by the Likert scale of “Strongly disagree” and

To what extent do you believe more layoffs in the organization are likely to occur in the near future?

More layoffs in the organization are likely to occur in the near future in your company

opportunities for promotion and advancement which will exist in the next few years

I am not certain of the opportunities for promotion and advancement which will exist in the next few years with this

with this company? company

what your future career picture look with this company?

I am not certain about what my future career picture look with this company

15 Perceived

Fairness

How clearly were the reasons for the layoff explained to you by your supervisor?

The reasons for the layoff were explained to you by your supervisor

31 Economic

Need to Work

To what extent are you the major breadwinner in your home?

How important is it to you to be the major breadwinner in your home

4.3 Data analysis and result

4.3.1 Descriptive Statistic for Demographics

To check whether there is any mistake in 319 valid respondents, the researcher proceeds the Descriptive Statistic Moreover, the frequency table is also used to describe the

characteristics of respondents such as gender, age, working year, first position, present position and final position

First position Frequency Percentage

Table 4.2 Descriptive Statistic for Demographics

From table 4.2, the major group of respondents was female (65.5%) Concerning to the participants, most of employees were from 30 to 39 years old (59.2%) 68 employees made up 21.3% of working in one year, there was only one employee had long working year above ten years and made up 0.3% Almost participants were staff when joining companies they expected their final position promoted to department manager, deputy department manager or director, however; the great part of respondents they did not think they were able to be promote in the future (39.5%) A large proportion of respondents still wished to have promotion to become department manager in the next few years