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The Psychology of the Recession on the Workplace

The Psychology of the Recession on the Workplace

New Horizons in Management series

Edited by Alexander-Stamatios G. Antoniou and Cary L. Cooper

An economic recession can affect the aggregate well-being of a population. This highly regarded and timely book shows a significant increase in the mean levels of distress and dissatisfaction in the work place in recent years. In particular, increasing job demands, intrinsic job insecurity and increasingly inadequate salaries make substantial contributions to psychological distress, family conflict and related behaviors. The contributors reveal that the recession has fundamentally altered the way employees view their work and leaders. With employers and employees still facing a continued period of uncertainty, a severe impact on employment relations is a continuing reality.

Chapter 8: Economic recession, job insecurity and employee and organizational health

Ronald Burke

Subjects: business and management, human resource management, organisational behaviour, strategic management


Feelings of job insecurity are on the rise as private and public sector organizations attempt to cope with the effects of the recent and current economic recession. A common response is to layoff/terminate employees, ask for wage concessions, and change full-time jobs to part time jobs or contingent jobs. As a consequence, increasing research attention has been devoted to understanding the causes and consequences of job insecurity. Job insecurity has been shown to affect employees, families and organizations. Job insecurity is seen ‘as a subjective experience reflecting uncertainty about future employment’ (Sverke et al., 2010: 175) and as employees’ ‘concern about the permanence of the job’ (van Vuuren and Klandermans, 1990: 132). Job insecurity is therefore a job stressor since it relates to the possibility of unwanted job loss. One can make a distinction between objective and subjective job insecurity. Objective job insecurity is influenced by the amount of unemployment in society, degree of economic recession in a given sector, amount of organizational restructuring and change, amount of downsizing and layoffs, length of time in a temporary employment relationship, and length of time taken to find another job.

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