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… 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 I Table of Contents Acknowledgements Table of Contents List of Tables List of Figures Abstract CHAPTER INTRODUCTION 1.1 Research Background 1.2 Research Problem 1.4 Research Objectives 1.5 Research question 1.6 Research Contributions 1.7 Research structure 1.8 Summary CHAPTER LITERATURE REVIEW, HYPOTHESES AND RESEARCH MODEL 2.1 Introduction 2.2 Literature review 2.2.1 Perceived threat 2.2.2 Perceived control 2.2.3 Perceived fairness 2.2.4 Self-esteem 2.2.5 Economic need to work 2.3 Research Model CHAPTER RESEARCH DESIGN AND METHODOLOGY 3.1 Introduction 3.2 Research Process 3.3 Construct Measurement II 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 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 CONCLUSIONS, IMPLICATIONS AND LIMITATIONS 52 5.1 Introduction 52 III 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 IV 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 V List of Figures Figure 2.1 Research Model…………………………………………………………16 Figure 3.1 Research Process……………………………………………………… 17 VI 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 selfesteem 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 CHAPTER 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 not fulfill employees’ promises and obligations, the employees reciprocated by Appendix 3: Confirmatory Factor Analysis Results of CFA calculating estimates (standardized estimates) 75 Results of CFA calculating estimates (standardized estimates) _after modification 76 Model Fit Summary CMIN Model Default model Saturated model Independence model RMR, GFI Model Default model Saturated model Independence model Baseline Comparisons Model Default model Saturated model Independence model Parsimony-Adjusted Measures Model Default model Saturated model Independence model NCP Model Default model Saturated model 77 Model Independence model FMIN Model Default model Saturated model Independence model RMSEA Model Default model Independence model AIC Model Default model Saturated model Independence model 78 Standardized Regression Weights: (Group number - Default model) PCL9 PCL8 PCL7 PCL6 PCL3 PCL2 PCL1 PFR4 PFR3 PFR2 PFR1 WE4 WE3 WE2 WE1 EN4 EN3 EN2 EN1 SE9 SE8 SE6 SE4 SE3 SE2 SE1 79 Standardized Regression Weights: (Group number - Default model) Covariances: (Group number - Default model) e20 e21 e22 e22 e26 e28 e14 e15 e6 e7 e9 e9 e10 e10 e10 e10 e11 e11 e11 e11 e11 80 * New model fit Summary Model Fit Summary CMIN Model Default model Saturated model Independence model RMR, GFI Model Default model Saturated model Independence model Baseline Comparisons Model Default model Saturated model Independence model Parsimony-Adjusted Measures Model Default model Saturated model Independence model NCP Model Default model Saturated model 81 Model Independence model FMIN Model Default model Saturated model Independence model RMSEA Model Default model Independence model 82 Appendix 4: Multiple Regression Analysis Model Summary of Independent Variables Model Summaryb Model a Predictors: (Constant), PCL, SE, EN, PFR, PTHR b Dependent Variable: WE Multiple Regression Results of Independent Variables Coefficientsa Model (Const ant) PTHR PCL PFR SE EN a Dependent Variable: WE 83 R 350a Model Summary of Moderating Variable of Self-esteem Model Summaryd Mode l a Predictors: (Constant), Economic Need to Work, Perceived Fairness, Perceived Control, Perceived Threat b Predictors: (Constant), Economic Need to Work, Perceived Fairness, Perceived Control, Perceived Threat, Self-esteem c Predictors: (Constant), Economic Need to Work, Perceived Fairness, Perceived Control, Perceived Threat, Self-esteem, Self-esteem-Perceived Fairness, Self-esteem- Perceived Control, Self-esteem - Perceived Threat d Dependent Variable: Work Effort 84 Hierarchical Regression Results with Moderating Variable of Self-esteem Coefficientsa Model (Constant) Perceived Threat Perceived Control Perceived Fairness Economic Need to Work (Constant) Perceived Threat Perceived Control Perceived Fairness Economic Need to Work Self-esteem (Constant) Perceived Threat Perceived Control Perceived Fairness Economic Need to Work Self-esteem Self-esteemPerceived Control Self-esteemPerceived Fairness Self-esteem Perceived Threat a Dependent Variable: Work Effort 85 Model Summary of Moderating Variable of Economic Need to Work Model Summaryd Model R 336a 336b 358c a Predictors: (Constant), Self-esteem, Perceived Threat, Perceived Fairness, Perceived Control b Predictors: (Constant), Self-esteem, Perceived Threat, Perceived Fairness, Perceived Control, Economic Need to Work c Predictors: (Constant), Self-esteem, Perceived Threat, Perceived Fairness, Perceived Control, Economic Need to Work, Economic Need to Work - Perceived Threat d Dependent Variable: Work Effort 86 Hierarchical Regression Results with Moderating Variable of Economic Need to Work Coefficientsa Model (Constant) Perceived Threat Perceived Control Perceived Fairness Self-esteem (Constant) Perceived Threat Perceived Control Perceived Fairness Self-esteem Economic Need to Work (Constant) Perceived Threat Perceived Control Perceived Fairness Self-esteem Economic Need to Work Economic Need to Work - Perceived Threat a Dependent Variable: Work Effort 87 ... 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... 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. .. 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 What are the main factors of layoffs