UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ MAI THI XUAN AI THE RELATIONSHIP BETWEEN LAYOFF PERCEPTION AND SURVIVORS’ WORK EFFORT MASTER OF BUSINESS (Honours) Ho Chi Minh City - Year…2014… TIEU LUAN MOI download : skknchat@gmail.com 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 TIEU LUAN MOI download : skknchat@gmail.com 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.
Mai Thi Xuan Ai I TIEU LUAN MOI download : skknchat@gmail.com Table of Contents Acknowledgements. I Table of Contents. II List of Tables. V List of Figures.
LITERATURE REVIEW, HYPOTHESES AND RESEARCH MODEL .5 Economic need to work. RESEARCH DESIGN AND METHODOLOGY .18 II TIEU LUAN MOI download : skknchat@gmail. Measurement of Perceived threat. Measurement of Perceived control.
Measurement of Perceived Fairness. Measurement of Self-esteem. Measurement of Economic Need to Work. Measurement of Work Effort.
In-depth Interview Design .5 Sampling Plan and Data Collection. Methods and Techniques. Descriptive Statistic Analysis. Reliability Analysis - Cronbach’s Alpha.
Confirmatory Factor Analysis (CFA). Multiple Regression Analysis .28 CHAPTER 4 DATA ANALYSIS AND RESULTS .3 Data analysis and result .1 Descriptive Statistic for Demographics .2 Descriptive Statistic for Variables .3 Reliability Analysis- Cronbach’s Alpha .4 Confirmatory factor analysis. Multiple Regression Analysis. Summary of Key Findings and Discussion .51 CHAPTER 5 CONCLUSIONS, IMPLICATIONS AND LIMITATIONS .52 III TIEU LUAN MOI download : skknchat@gmail.
Limitations and Suggestion for Further Researches .71 Appendix 3: Confirmatory Factor Analysis .75 Appendix 4: Multiple Regression Analysis.83 IV TIEU LUAN MOI download : skknchat@gmail.com List of Tables Table 3. Scale items for Perceived Threat construct……………………. Scale items for Perceived Control construct………………. Scale items for Perceived Fairness construct ……….
Scale items for Self-esteem construct …………………………………………. Scale items for Economic Need to Work ………………………………………22 Table 3. Scale items for Work Effort construct …………………………………………. Descriptive Statistic for Demographics …….
Descriptive Statistic for Variables ……………………………………. Reliability Analysis- Cronbach’s Alpha ………… …………………. Composite Reliability and Average Variance Extracted ………………. Model Summary for Independent Variables …………………….
Multiple Regression Results with Independent Variables………………. Model Summary with Moderating Variable of Self-esteem…………. Hierachical Regression Results with Moderating Variable of Self-esteem……45 Table 4. Model Summary with Moderating Variable of Economic Need to Work……46 Table 4.
Hierachical Regression Results with Moderating Variable of Economic Need to Work………………………………………………………………………. Results of Hypothesis Test……………………………………………………48 V TIEU LUAN MOI download : skknchat@gmail.com List of Figures Figure 2. Research Model…………………………………………………………16 Figure 3.17 VI TIEU LUAN MOI download : skknchat@gmail.com 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. VII TIEU LUAN MOI download : skknchat@gmail.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 1 TIEU LUAN MOI download : skknchat@gmail.com altering his or her contributions to the organization (e. 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.
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.
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 2 TIEU LUAN MOI download : skknchat@gmail.com Fairness, Self-esteem and Economic Need to Work will be focused to explain their relationship with Work Effort.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.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 3 TIEU LUAN MOI download : skknchat@gmail.com 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.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. 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.