Fear factor - Macleans.ca

Fear factor

Can having a staff scared for their jobs be good for business?

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Fear factorDespite signs that the global economy is recovering from the recession, many people are still afraid of losing their jobs. A recent study in the U.K. indicates that workers are so terrified about being fired, they’re eschewing sick days. Forty-three per cent of Brits say they haven’t once called in sick this year for fear of seeming like a slacker—that’s a 20 per cent increase over 2008. For some, no ailment is too severe, including a migraine, bad back or swine flu.

Canadians are feeling similarly insecure: two recent polls, one by Harris/Decima and another by Desjardins Financial Security, revealed that more than one third of Canadians still worry about being fired because of the economic downturn. And if they’re looking for hope, they won’t find it in Finance Minister Jim Flaherty’s assertion earlier this month that “we will have a persisting unemployment problem well into 2010.” It’s no wonder that across the country anxious workers have been skipping vacation or clocking overtime in an effort to appear dedicated, capable and indispensable to their bosses.

Having a staff willing to work more—and conceivably harder—seems ideal for employers. “Moderate amounts of fear, enough to grab your attention, are very energizing,” says Judith Bardwick, a former psychology professor who has consulted with businesses including IBM and Johnson & Johnson on how to optimize employee performance. Workers who sense the end is near can be motivated to make a final push for survival. There are anecdotes of some auto plants achieving their highest productivity in the year they were shut down, says Ann Frost, professor of organizational behaviour at the University of Western Ontario’s Richard Ivey School of Business.

Job insecurity can also foster competition among employees, which could boost the quality of work being done and the level of responsibility employees are willing to accept. “People don’t want to be the lowest on the totem pole,” says Frost, so they’ll work as hard as they can for as long as possible. It’s a logical response, adds Douglas Reid, a strategic management professor at Queen’s University School of Business. “The moment someone realizes that their livelihood is being taken away from them, they’re going to start engaging in self-preservation activities.”

So could a little job insecurity actually be good for business? Not exactly, say experts, who all agree that these extreme levels of output can’t be sustained, especially when they’re motivated by fear rather than genuine enthusiasm. “The stress eats at people,” says Frost. And that’s not the only issue. A study in the Journal of Occupational Health Psychology in 2001, published on the heels of the last economic bust, examined factory workers at a food-processing plant who were worried about layoffs. The result: they became complacent about safety, which put them at a higher risk for workplace injuries and accidents. Sacrificing sick days, says Reid, is also hazardous to an employee’s health.

That’s why, no matter how motivating the fear of being fired may be in the short term, it’s fundamentally damaging to businesses and individuals, experts say. “Fear as a tactic to improve performance is a very short-sighted strategy,” says Bardwick, who wrote One Foot Out the Door, about the relationship between bosses and employees. In time, she explains, “the majority will feel betrayed, so there is a great deal of anger as well as fear and anxiety.” Reid calls fear at work “corrosive” and believes it “turns person against person.” What’s more, employees who feel they have no future at a company can become paralyzed with grief, says Frost, and “productivity just goes through the floor.”

The best employers have a way of diffusing employees’ fear before it gets in the way of productivity. Bardwick claims it comes down to keeping workers feeling engaged and valued. Southwest Airlines, say Reid and Frost, is a good example of this. The airline, unlike many of its competitors, is known for rarely laying off staff. In a sense, the company operates the same no matter what’s going on in the global economy: rather than fixate on quarter-to-quarter revenues, Reid says it manages for the long term, and sees its carefully chosen employees as the key to slow growth. That Southwest hires infrequently and selectively may offer comfort to workers that there’s not a lot of fat to trim. Managers also “delegate a lot of authority” to staff, says Reid, which provides each person with a sense of importance, which is a great motivator.

In contrast, he cites Nortel Networks, the former telecommunications giant, as an example of a company mishandling the working scared. “The drip-feeding of information about the future,” which was bleak, says Reid, only increased the level of anxiety in the workplace. Nortel’s “inability to staunch the flow of bad news,” he adds, meant employee morale was perpetually being hammered.

There’s no shortage of bad news these days. Often, worried workers cope by feeding themselves and others the line, “I’m just grateful to have a job.” Frost says that while it may be true, “I’m not sure it makes them any more committed to their employer.” So when things do turn around, they may leave on their own. That’s what the boss should be afraid of.