Job In Security in Temporary Versus Permanent Workers

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Job insecurity in temporary versus permanent workers:

Associations with attitudes, well-being, and behaviour

NELE DE CUYPER & HANS DE WITTE

Research Centre for Work, Organization and Personnel Psychology, Katholieke Universiteit Leuven,

Belgium

AbstractRecent research suggests that the relationship between job insecurity and psychological outcomes is

more negative among permanent compared with temporary workers. We investigate possibleinteraction effects between job insecurity and type of contract (temporary versus permanent) forvarious psychological outcomes (job satisfaction, organizational commitment, life satisfaction, andself-rated performance), some of which have received little attention. We aim to explain theseinteraction effects, while taking into account the heterogeneous nature of temporary workers in termsof tenure, employment prospects, and wish to do temporary employment. We argue that permanentworkers expect higher levels of job security; job insecurity breaches permanent workers’ but nottemporary workers’ expectations. This may relate to unfavourable outcomes. Similarly, theheterogeneous nature of temporary workers may relate to job security expectations and thus toreactions to job insecurity. This study was conducted on a sample of 477 temporary and permanentworkers from various occupational sectors in Belgium. The results suggested that the interaction effectbetween job insecurity and contract type may be limited to job satisfaction and organizationalcommitment. Furthermore, permanent workers had higher expectations about job security. Breach of

these expectations furthermore mediated the relationship between job insecurity and all outcomes,except for self-rated performance. However, the heterogeneity indicators were found to be unrelatedto job security expectations.

Keywords: Job insecurity, psychological contract, temporary employment, well-being, job satisfaction,

commitment, performance

Introduction

Current research has adopted increasingly complex designs to understand the responses of

temporary workers as regards well-being, work-related attitudes, and behaviour. In thisrespect, temporary employment refers to dependent jobs of limited duration, as in the case

of fixed term employment (OECD, 2002). Initial research has drawn on the relationship

between temporary employment and job insecurity (i.e., an overall concern about the

continued existence of the job in the future; Klandermans & Van Vuuren, 1999), and on the

likely harmful consequences of job insecurity to predict unfavourable outcomes among

temporary workers (De Cuyper & De Witte, 2006a; Parker, Griffin, Sprigg, & Wall, 2002;

Sverke, Hellgren, & Naswall, 2002). More recently, various authors have argued that job

Correspondence: Nele De Cuyper, Research Centre for Work, Organization and Personnel Psychology, K.U.Leuven, Tiensestraat 102, 3000 Leuven, Belgium. Tel: '32 16 32 60 14. E-mail: [email protected]

Work & Stress, January Á March 2007; 21(1): 65 Á 84



insecurity and temporary employment can be related through the mechanism of modera-

tion. In particular, they have established that the relationship between job insecurity and

psychological outcomes is more negative among permanent compared with temporary

workers. In this respect, most studies have focused upon proximal outcomes; i.e., outcomes

which are affected directly, such as job satisfaction or organizational commitment (De

Cuyper & De Witte, 2005, 2006b; De Witte & Naswall, 2003; Mauno, Kinnunen,

Makikangas, & Natti, 2005). Comparatively little evidence has been found concerningdistal outcomes such as well-being (e.g., Bernhard-Oettel, Sverke, & De Witte, 2005;

Virtanen, Vahtera, Kivimaki, Pentii, & Ferrie, 2002) or work-related behaviour (e.g., De

Cuyper & De Witte, 2006b); i.e. outcomes which are affected indirectly, either because they

develop over time or because they are conditional upon other processes (e.g., mediation

by proximal outcomes; Chirumbolo & Hellgren, 2003; Sverke et al., 2002). Moreover, the

psychological theories constructed so far are perhaps not fully adequate for understanding

potential interaction effects between contract type and job insecurity.

The aim of the present paper is therefore to develop knowledge on the relationship

between temporary employment and job insecurity, and how they together relate to various

psychological outcomes. First, we want to replicate earlier findings on the interactionbetween contract type and job insecurity, with specific attention to the distinction between

proximal and distal outcomes. In particular, we select job satisfaction and organizational

commitment as proximal variables, while life satisfaction and self-rated performance

represent distal variables. Second, we aim to understand why temporary and permanent

workers may differ in their reactions to job insecurity. Specifically, we integrate earlier

suggestions that the interaction effect may relate to (1) differences between temporary and

permanent workers regarding their expectations about the level of job security that should

be provided by the employer, or (2) to the heterogeneous nature of the temporary

workforce. In this respect, research in the realm of temporary employment has highlighted

the importance of contract duration (e.g., Rousseau, 1995), employment prospects (e.g.,

Connelly & Gallagher, 2004), and preferences regarding temporary employment (Krausz,

Brandwein, & Fox, 1995) for understanding temporary workers’ responses.

Empirical research: Job insecurity and contract type

The dominant approach has been to start from the harmful effects of job insecurity, as

found among samples largely dominated by permanent workers or excluding temporary

workers from the analyses (Virtanen et al., 2002). For example, job insecurity has been

found to be related to reduced job satisfaction and organizational commitment, poor well-

being, and undesirable behaviours (for review studies, see De Witte, 1999, 2005; Sverke

et al., 2002). As job insecurity is a significant and inherent feature of temporaryemployment arrangements (Kinnunen & Natti, 1994; Naswall & De Witte, 2003), this

would imply overall poorer results for temporary compared with permanent workers.

However, research on the psychological consequences of being temporarily employed has

yielded inconsistent and inconclusive results (Connelly & Gallagher, 2004; De Cuyper, De

Witte, & Isaksson, 2005). For example, some studies establish higher job satisfaction (e.g.,

Benach, Amable, Muntaner, & Benavides, 2002) and organizational commitment (e.g., Van

Dyne & Ang, 1998) among permanent compared with temporary workers. Other studies

find the opposite pattern (e.g., Mauno et al., 2005; McDonald & Makin, 2000), and still

others do not find significant differences (De Witte & Naswall, 2003; Van Breukelen &

Allegro, 2000). Likewise, temporary compared with permanent workers report both better(Liukkonen, Virtanen, Kivimaki, Pentii, & Vahtera, 2002) and poorer (Virtanen et al.,

66 N. De Cuyper & H. De Witte



2002) mental health. With respect to self-rated performance, either no differences (De

Cuyper & De Witte, 2005; Ellingson, Gruys, & Sackett, 1998) or poorer results for

permanent workers have been found (Van Dyne & Ang, 1998). The inconsistent

relationship between the predictor and criterion variables has inspired researchers to

formulate moderation rather than mediation hypotheses, in line with advice by Baron and

Kenny (1986).

Possible moderation hypotheses were originally proposed by De Witte and Naswall(2003). In their first hypothesis, the authors argue that being temporarily employed while

feeling insecure is the worst possible combination: the likely negative effects of temporary

employment and job insecurity may strengthen each other in a multiplicative rather than

additive way. This aligns with earlier findings from stress literature on the combined impact

of stressors on psychological outcomes (e.g., Koslowsky, 1998). By way of contrast, the

second hypothesis states that the relationship between job insecurity and unfavourable

outcomes is stronger among permanent workers than among temporary workers. This is

based on the assumption that permanent but not temporary workers expect their employer

to guarantee job security. Job insecurity, then, may be a symptom of impaired quality of the

employment relationship for permanent workers but not for temporary workers. This, inturn, may explain why job insecurity is particularly harmful among permanent compared

with temporary workers. Support for this second hypothesis comes from the studies by De

Witte and Naswall (2003), De Cuyper and De Witte (2006b), and Mauno et al. (2005): job

insecurity reduces job satisfaction and organizational commitment among permanent

workers but not among temporary workers. Still, these observations should be treated with

considerable caution: most evidence concerns proximal variables, while evidence for distal

outcomes is somewhat weaker. The studies by De Cuyper and De Witte (2005, 2006b),

Mauno et al. (2005), and Virtanen et al. (2002) each use various indicators of well-being.

The interaction effect between job insecurity and contract type was replicated for some of

these indicators, but not for others. Similarly, the interaction effect between job insecurity

and temporary employment is not consistently found in studies on work-related behaviour

such as performance or turnover intentions (De Cuyper & De Witte, 2005; Mauno et al.,

2005). This may suggest that job insecurity effects are particularly powerful when proximal

outcomes are concerned, as was established earlier by Sverke et al. (2002).

In this study, we investigate proximal (job satisfaction and organizational commitment)

and distal (life satisfaction and self-rated performance) outcomes to assess the possibility of

generalizing interaction effects between type of contract and job insecurity:

Hypothesis 1. The relationship between job insecurity and both proximal (job satisfaction,

organizational commitment) and distal (life satisfaction, self-rated performance) outcomes

is more negative among permanent workers compared with temporary workers.

Explaining the interaction effect between job insecurity and contract type

Two explanations have been proposed with a view to achieving understanding on why job

insecurity may relate to unfavourable outcomes among permanent workers but not among

temporary workers. The first explanation relates to differences in expectations between

temporary and permanent workers regarding the employer’s obligation to provide job

security, as advanced by De Witte and Naswall (2003), and further developed by De

Cuyper and De Witte (2006b) in the context of the psychological contract. The second

explanation highlights the heterogeneous nature of the temporary workforce in terms of contract duration, employment prospects, and preference for temporary employment.

Job insecurity in temporary workers 67



Job insecurity, the psychological contract, and psychological outcomes. Recent speculation

suggests that job insecurity may have unfavourable effects for permanent workers because it

represents an unwelcome change in their psychological contract, but that it does not in the

psychological contract that is dominant among temporary workers (De Cuyper & De Witte,

2006b; Mauno et al., 2005). The psychological contract refers to ‘‘the idiosyncratic set of

reciprocal expectations held by employees concerning their obligations and their entitle-

ments’’ (McLean Parks, Kidder, & Gallagher, 1998, p. 698). Most research has however

focused upon employees’ entitlements, i.e., what employees expect from their employer (De

Cuyper et al., 2005), and these entitlements are typically classified under the headings

relational or transactional. This classification has led authors to talk about relational and

transactional psychological contracts, even though they may not be mutually exclusive

(Rousseau, 1995). Rather, they may focus upon relational psychological contract entitle-

ments more than upon transactional psychological contract entitlements, or vice versa

(McLean Parks et al., 1998).

Relational psychological contract entitlements are part of a socio-emotional exchange

relationship, and they are mostly of a dynamic and subjective nature. They intend to

establish and maintain a long-term employment relationship. Therefore, it is generally

assumed that the psychological contract of permanent workers compared with temporary

workers includes more relational psychological contract entitlements, which in some

cases has been demonstrated (e.g., De Cuyper & De Witte, 2006b; De Cuyper, Rigotti, De

Witte, & Mohr , in press; Millward & Brewerton, 2000; Millward & Hopkins, 1998). In

particular, the psychological contract of permanent workers is likely to include job security

and a focus on advancement in the internal labour market as employees’ entitlements.

Hence, job insecurity may breach the psychological contract of permanent workers, where

this is known to relate to job dissatisfaction, reduced organizational commitment, lower life

satisfaction, and lower job performance (Conway & Briner, 2005; Robinson & Rousseau,

1994; Rousseau, 1995). By way of contrast, transactional psychological contract entitle-

ments focus upon monetary exchange, and they are based upon performance-related

considerations. They typically evolve over a specific, short-term period, which suggests that

they are more likely to be part of the psychological contract of temporary compared with

permanent workers. Psychological contracts in which transactional entitlements are

foremost may not include a long-term engagement from the part of the employer.

Accordingly, job insecurity may not breach these specific psychological contracts, which

is why job insecurity is less likely to relate to unfavourable outcomes among temporary

workers. Research in this area is scarce, and it has seldom investigated the entire

psychological contract reasoning. Still, first evidence reported by De Cuyper and De Witte(2006b) generally agrees with the psychological contract perspective. However, further

research is clearly needed to validate this psychological contract perspective. Therefore, our

second hypothesis is presented below.

Hypothesis 2a. (1) The psychological contract of permanent workers includes more

relational entitlements than the psychological contract of temporary workers. (2)

Psychological contracts in which relational entitlements dominate are breached in the

presence of job insecurity. (3) This breach mediates the relationship between job insecurity

and both proximal (job satisfaction, organizational commitment) and distal (life satisfac-

tion, self-rated performance) outcomes.




Hypothesis 2b. (1) The psychological contract of temporary workers includes more

transactional entitlements than the psychological contract of permanent workers. (2)

Psychological contracts in which transactional entitlements dominate are not breached in

the presence of job insecurity. (3) Hence, breach of transactional entitlements does not

mediate the relationship between job insecurity and both proximal (job satisfaction,

organizational commitment) and distal (life satisfaction, self-rated performance) outcomes.

Job insecurity, the heterogeneous nature of temporary workforce, and psychological outcomes.

Alternatively, Bernhard-Oettel et al. (2005) suggest that the interaction effect between

contract type and job insecurity may be conditional upon the specific type of temporary

worker under consideration. This aligns with earlier studies in the realm of temporary work

research which suggest that the heterogeneous nature of temporary workers should be

included in all analyses (e.g., Connelly & Gallagher, 2004, De Cuyper et al., 2005;

Gallagher & McLean Parks, 2001; Virtanen, Liukkonen, Vahtera, Kivimaki, & Koskenvuo,

2003). In particular, the authors (Bernhard-Oettel et al., 2005) establish that job insecurity

relates to mental distress and job-induced tension among permanent and fixed term

contract workers, but not among on-call workers. Following Aronsson, Gustafsson, and

Dallner (2002), they argue that fixed term contract workers compared with on-call workers

are more similar to permanent workers in terms of income level, income security and

tenure-based incentives such as eligibility for fringe benefits, and that this similarity may

explain the results. While a valuable contribution in underlining the heterogeneous nature

of the temporary workforce, a more complete explanation would account for the lack of job

insecurity effects among on call workers.

A promising approach might be to integrate the debate on the heterogeneous nature of

temporary workers into the psychological contract perspective. In particular, temporary

workers may be prone to harmful effects of job insecurity when relational psychological

contract entitlements are added to their otherwise transactional psychological contract. Inthis respect, there may be various factors which possibly affect the psychological contract of

temporary workers. First, organizational tenure may be a critical contract characteristic:

seniority is the governing principle to gain access to privileges and entitlements. Similarly,

Rousseau (1995; Rousseau & Wade-Benzoni, 1995) has argued that contract duration may

be crucial in formulating relational psychological contract entitlements, implying that

relational psychological contract entitlements are likely to be part of the psychological

contract of high-tenure temporary workers. Second, employees assessing their chance on a

permanent contract or on a renewed contract as high, compared to low, may anticipate

relational psychological contract entitlements (Connelly & Gallagher, 2004; Gallagher &

McLean Parks, 2001). Yet another test may involve temporary workers’ preferencesregarding temporary employment, which is often referred to as ‘‘volition’’ (e.g., Krausz,

2000; Krausz et al., 1995; Isaksson & Bellaagh, 2002; Marler, Barringer, & Milkovich,

2002). Temporary workers who would prefer to be permanently employed (‘‘involuntary

temporary workers’’) might aim at a psychological contract with relational entitlements

(Beard & Edwards, 1995), and they may actively seek information on relational job and

career aspects (Freese & Schalk, 1996). In the same way, those who are not forced into

temporary employment (‘‘voluntary temporary workers’’) may seek out transactional

exchanges (Millward & Brewerton, 2000; Van Dyne & Ang, 1998). This is demonstrated

in the study by Chambel and Castanheira (in press): direct hires who are high on volition

establish a more transactional and less relational relationship. Altogether, relationalentitlements are likely in the psychological contract of temporary workers with long




contract duration, those with favourable prospects and ‘‘involuntary’’ temporary workers.

For them, job insecurity is likely to breach their psychological contract, which, in turn, may

result in poor psychological consequences. Similarly, transactional psychological contract

entitlements may be foremost for those on short-term contracts, for those having no

prospects on a renewed or permanent contract and for voluntary temporary workers. These

temporary workers may not perceive job insecurity as a threat to their psychological

contract and, hence, job insecurity is less likely to relate to unfavourable psychologicaloutcomes. Another aim of the present study is to check whether job insecurity might be

more negative for some temporary workers as compared to others, aligning with the

psychological contract perspective.

Hypothesis 3. The relationship between job insecurity and both proximal (job satisfaction,

organizational commitment) and distal (life satisfaction, self-rated performance) variables is

more negative for (1) temporary workers with long versus short contract duration, (2) for

temporary workers with favourable versus unfavourable employment prospects, and (3) for

involuntary versus voluntary temporary workers.

Hypothesis 4. Temporary workers (1) with long versus short contract duration, (2) those with

favourable versus unfavourable employment prospects, and (3) involuntary versus voluntary

temporary workers have more relational and fewer transactional entitlements as part of their

psychological contract.

The successive arguments (1) that relational but not transactional psychological contracts

are breached in the presence of job insecurity and (2) that breach of the relational but not

transactional psychological contract may mediate the relationship between job insecurity

and the outcomes were advanced earlier (see hypothesis 2).

Method

Data collection

Data were collected in four Belgian organizations during autumn 2004, totalling 447

respondents. The organizations were recruited in different occupational sectors in order to

maximize the possibilities of generalizing from the findings. Furthermore, they all employed

a sufficient number of temporary (fixed-term contract) workers in order to meet the aim of

our study. All employees of these organizations were invited to fill out confidential

questionnaires, either during working time or at home, as they preferred. One organization

represented an industrial setting (n0249, response 87%), one organization was a public

enterprise (n080; response 58%), and two organizations represented the retail sector(n 1071, response 32.6%; n 2047, response 39.2%).While comparable to those reported

in earlier studies on temporary employment, response rates for the retail sector were

somewhat lower, possibly because these organizations did not have a HR department to

actively support the research and the research goals.

Respondents

About one respondent in three was employed on a fixed-term, temporary contract (n0142,

31.8%). The other respondents were permanently employed (open-ended contract;

n0305, 73.2%). Blue-collar workers dominated the sample (n0327, 73.2%), due to thelarge industrial sample. A total of 87.4% (n0390) of the respondents did not go to college




(higher education or university). However, 63.4% (n0297) of all the respondents

completed high school education. Furthermore, more women (n0279, 63.4%) than

men (n0161, 36.6%) participated. The majority was married or cohabiting (n0384,

88.1%). Mean age of the sample was 34 years and mean tenure was 10 years. Respondents

worked on average 32 hours per week.

There were differences between temporary and permanent workers on most background

characteristics. First, 64.7% (n090) of those temporarily employed did not followhigher education, compared to 84.7% of those permanently employed, X2(1, 427)0

21.96, pB.001. Second, there was a higher percentage of females in the temporary

(n0101, 72.7%) compared with the permanent (n0178, 59.1%) sample, X2(1, 440)0

7.50, pB.01. Also, there were relatively more singles in the temporary sample (n025,

18.0%) than in the permanent sample (n027, 9.1%), X2(1, 436)07.13, pB.05.

Furthermore, the temporary sample was on average younger ( M 027 years, 6 months)

than the permanent sample ( M 037 years, 4 months; F (1, 427)0110.28, pB.01), and

organizational tenure was lower for temporary workers ( M 01 year, 9 months) than for

permanent workers ( M 014 years, 2 months; F (1, 442)0258.90, pB.01). Also, tempor-

ary workers spent on average fewer hours working as compared to permanent workers, 28and 34 hours per week respectively, F (1, 438)035.47, pB.01. Finally, no contract-based

differences were found with regard to occupational position, X2(1, 446)01.25, p0.30.

Measures

Unless stated otherwise, all scales reported in this section were found to have single factor

structures (Principal Components Analysis; Varimax Rotation), and responses were made

on a five-point scale (10strongly disagree; 50strongly agree). Information about

correlations between scales for the total sample and for the temporary sample is reported

in Table I.

Control variables. In all analyses, we controlled for tenure (years), weekly working hours

(average hours per week), occupational position (00blue-collar worker; 10white-collar

worker), education (00no higher education; 10higher education), family situation(00single; 10married or cohabiting), and gender (00female; 10male). We furthermore

checked whether results changed under the influence of occupational sector. As they did

not, we did not control for sector. Finally, we did not control for age because of its high

correlation with tenure (r 0.75, pB.001).

Contract type. Permanent (open-ended) employment was coded as 1, temporary (fixed

term) employment as 0. Job insecurity (a0.86) was measured with a 4-item scale developed by De Witte (2000).

The scale included both affective (e.g., ‘‘I feel insecure about the future of my job’’) and

cognitive (e.g., ‘‘I am sure I can keep my job’’) items.

Dependent variables. Job satisfaction (a0.85) was measured with four items developed by

Price (1997). A sample item is ‘‘I am not happy with my job’’ (reverse coded). A higher

score reflected a more positive affect. Organizational commitment (a0.77) was measured

using the five items of Cook and Wall (1980), one of which read as follows: ‘‘I am quite

proud to be able to tell people who it is I work for.’’ Life satisfaction (a0.86) was measured

with six items on a 7-point scale (10very dissatisfied; 70very satisfied). The scale wasdeveloped for the purpose of this study. However, it was tested earlier in a pilot project, in




Table I. The correlation matrix: The total sample (upper half) and the temporary sample (lower half).

1 2 3 4 5 6 7

1. Tenure 1 na na na na na na

2. Prospects .21** 1 na na na na na

3. Volition .02 .30** 1 na na na na

4. Job insecurity (.26** (.65** (.36** 1 (.17** (.23** (.21** (

5. Job satisfaction (.11 .16 .08 .05 1 .68** .35**

6. Organizational commitment (.03 .18* .22** (.12 .65** 1 .28**

7. Life satisfaction (.12 .15 .04 (.13 .40** .29** 1 8. Self-rated performance .06 .22** (.05 (.24** .30** .29** .25**

9. Relational content .04 .08 .01 (.08 .16 .17 .11 (

10. Transactional content (.28** .04 .01 (.03 .12 .18* .05

11. Fulfilment: relational (.08 .18 .23* (.27** .27** .19* .14

12. Fulfilment: transactional (.28** .09 .07 (.15 .32** .29** .26**

13. Permanent na na na na na na na

* pB.05, ** pB.01.

na0not applicable.



which it was found reliable in a seven-country sample (Isaksson et al., 2003). A sample item

was ‘‘How satisfied do you currently feel about your leisure time?’’ Finally, self-rated

performance (a0.80) was measured with six items from Abramis (1994). Employees were

asked to judge the quality of their performance during the last working week (‘‘In your own

judgment, how well did you fulfil the following tasks?’’) on a scale from 1 (very badly) to 5

(very well). Items referred to, for example, achieving one’s objectives or performing without

mistakes.

Psychological contract. Fifteen psychological contract items were developed for the purpose

of this study, based on factor analyses of earlier instruments (Isaksson et al., 2002).

Respondents were asked to indicate whether (yes01) or not (no00) the organization

promised or committed itself to a diverse range of promises. Based on the reduction in

eigenvalues following Principal Components Analyses with Varimax rotation, we decided to

define two factors, together accounting for 50.86% of the total variance. The first factor

included seven items, which reflected relational psychological contract content (a0.88).

The items were the following: ‘‘Has your organization promised or committed itself to (1)provide you with a job that is challenging, (2) provide you with a career, (3) allow you

to participate in decision-making, (4) provide you opportunities to advance and grow, (5)

provide you with interesting work, (6) provide you with a reasonably secure job, and (7)

help you deal with problems you encounter outside work.’’ The second factor reflected

transactional psychological contract content (a0.89) with 6 items: ‘‘Has your organization

promised or committed itself to (1) provide you with a good working atmosphere, (2)

provide possibilities to work together in a pleasant way, (3) provide an environment free

from violence and harassment, (4) provide you with a safe working environment, (5) ensure

fair treatment by managers and supervisors, and (6) provide you with good pay for the work

you are doing.’’ Two items were excluded from the analyses because of their highcrossloadings (‘‘be flexible in matching demands of non-work roles with work,’’ ‘‘improve

your future employment prospects’’).

When respondents perceived that a promise was made, they had to indicate the extent

to which it was kept on a scale from 1 (promise not kept at all) to 5 (promise fully kept).

A mean value was calculated separately for relational (a0.81) and transactional (a0.81)

psychological contract breach. A higher score reflected a higher degree of fulfilment or less

breach.

Heterogeneity of the sample of temporary workers. We assessed this heterogeneity along three

dimensions. Organizational tenure was assessed by the number of years spent with the

current employer. Employment prospects (a0.80) were measured using three items, which

were developed for the purpose of this study. However, the scale was validated earlier in

a pilot project among seven countries (Isaksson et al., 2002). The items were the following:

‘‘I think I will be employed in this organization for longer than has been agreed in my

employment contract,’’ ‘‘I expect that I will have to leave here once my present employment

contract has run out’’ (reverse coded), and ‘‘I think my present employment contract will be

renewed when it expires.’’ Finally, volition (a0.82) was measured using four items which

were suggested by Krausz (personal communication, 2002) and similar to those suggested

by Ellingson et al. (1998). A sample item is ‘‘My current employment contract is the one

that I prefer.’’




Analyses

We performed hierarchical regression analyses, in which cases were excluded listwise. First,

to test for possible interactions between contract type and job insecurity (hypothesis 1), we

introduced the control variables in the first step, and contract type and job insecurity in the

second step. In the final step, the interaction term between contract type and job insecurity

was included. These variables were first centred, and then they were multiplied (Aiken &West, 1991). Regressions were done separately for all outcome variables.

Second, we followed a two-step procedure to investigate the psychological contract

perspective for the total sample (hypothesis 2). Specifically, to investigate possible

differences between temporary and permanent workers on psychological contract content,

we introduced the control variables (step 1) and contract type (step 2) in the regression

analyses, separately for transactional and relational psychological contract content.

Furthermore, we investigated whether (transactional and relational) psychological contract

fulfilment mediated the relationship between job insecurity and psychological outcomes.

This was tested by regressing (1) psychological contract fulfilment on job insecurity, (2) the

outcomes on job insecurity, and (3) the outcomes on both job insecurity and psychologicalcontract fulfilment (Baron & Kenny, 1986). Conditional for mediation was that (1) job

insecurity was related to psychological contract fulfilment, (2) psychological contract

fulfilment was related to the outcome variables, (3) so that it reduced the relationship

between job insecurity and the outcomes. When these conditions were fulfilled, the Sobel

test (Sobel, 1982) was used to assess the extent to which psychological contract fulfilment

carried the effect of job insecurity on the outcome variables.

Third, a similar procedure was followed, however excluding permanent workers from

the analyses, to account for the heterogeneity in the sample of temporary workers.

We investigated possible interaction effects between job insecurity and various hetero-

geneity indicators (hypothesis 3). In particular, the control variables (except for tenure)

were introduced in the first step of the regression analyses, the heterogeneity indicators were

introduced in the second step, job insecurity in the third step, and the interaction term in

the final step. In this respect, the procedure recommended by Aiken and West (1991) was

followed: the predictors were centred and multiplied. Finally, we checked whether tenure,

employment prospects, and volition added in explaining variance in relational and

transactional psychological contract content. The control variables (except for tenure)

were introduced in the first step of the regression analyses, and the heterogeneity indicators

were introduced in the second step (hypothesis 4).

Results

Hypothesis 1: Interactions between type of contract and job insecurity (total sample)

Our first hypothesis concerned the interaction between contract type and job insecurity. As

shown in Table II, the interaction term between contract type and job insecurity added in

explaining variance in job satisfaction and organizational commitment. However, it was not

significant for life satisfaction and self-rated performance.A next step was to investigate the direction of the interaction effects. Figures 1 and 2

suggest that the relationship between job insecurity and both job satisfaction and

organizational commitment was more negative for permanent workers than for temporary

workers. Temporary workers who were highly job insecure ( M 04.21) did not differsignificantly on job satisfaction from temporary workers low on job insecurity ( M 04.18),




t (140)0-.20, p0.84. However, permanent workers who reported high levels of job

insecurity ( M 03.62) were lower on job satisfaction as compared to their more secure

colleagues ( M 04.01), t (301)04.42, pB.001. Similarly, job insecurity did not relate

to reduced organizational commitment among temporary workers ( M low insecure03.83;

M high insecure03.74; t (140)0.87, p0.38), while it did among permanent workers

( M low insecure03.80; M high insecure03.43; t (301)05.12, pB.001). This pattern of results

suggests that hypothesis 1 was supported when proximal variables (job satisfaction,

organizational commitment) were concerned, however not when distal variables (lifesatisfaction, self-rated performance) were concerned.

Hypothesis 2: The psychological contract perspective (total sample)

Hypothesis 2a concerned relationships between contract type and relational psychological

contract entitlements, and between job insecurity and fulfilment of relational psychological

contract entitlements. Controlling for tenure, weekly working hours, occupational position,

education, family situation, and gender, permanent employment was a significant predictor

3.6

3.7

3.8

3.9

4

4.1

4.2

4.3

low job insecurity high job insecurity

j o b s a t i s f a c t i o n

temporary

permanent

Figure 1. The interaction between contract type and job insecurity for job satisfaction.

Table II. Summary of hierarchical regression analyses: Interaction between contract type and job insecurity.1

Job satisfaction Org. commitment Life satisfaction Self-rated performance

Step 1

Tenure .03 .19** (.02 .11

Hours .05 .04 .09 .06

White collar (.10 (.08 .11* .07

Higher education (.09 (.11* .04 (.12*Married .02 .01 .18*** (.05

Male (.13** (.02 (.12* (.03

Step 2

Permanent (.34*** (.33*** (.17* (.12

Job insecurity (.36*** (.38*** (.31*** (.31***

Step 3

Permanent)job insecurity (.19*** (.17** (.07 .10

Adj. R2 Step 1 .06 .02 .04 .01

Adj. R2 Step 2 .16 .12 .10 .07

Adj. R2 Step 3 .19 .14 .10 .07

1Only the last step of the regression analyses is reported.

* pB.05, ** pB.01, *** pB.001.




for relational psychological contract entitlements (b0.18, pB.01, R2adj0.11), in line with

predictions: (hypothesis 2a (1)). In a next step, we checked whether the relationship betweenjob insecurity and the psychological outcomes was mediated by fulfilment of relational

psychological contract entitlements. As predicted in hypothesis 2a (2), the results showed

that job insecurity was negatively related to the fulfilment of relational psychological contract

entitlements (b0(.26, pB.001, R2adj0.15). Also, job insecurity was related to reduced

job satisfaction, organizational commitment, life satisfaction, and self-rated performance

(Table III, step 2). The fulfilment of relational psychological contract entitlements was

positively related to all outcomes, except for self-rated performance. Moreover, after

introducing fulfilment of relational psychological contract entitlements, the relationship

between job insecurity and job satisfaction was no longer significant (zsobel0(3.63,

pB.001), while the relationship between job insecurity and both organizational commit-ment (zsobel0(3.08, pB.01) and life satisfaction (zsobel0(2.65, pB.01) was significantly

reduced (Table III, step 3). This suggests that fulfilment of relational psychological contract

entitlements fully mediated the relationship between job insecurity and job satisfaction, and

3.3

3.4

3.5

3.6

3.7

3.8

3.9


o r g a n i z a t i o n a l c o m m i t m e n t

temporary

permanent

Figure 2. The interaction between contract type and job insecurity for organizational commitment.

Table III. Summary of hierarchical regression analyses: Mediation by relational psychological contract fulfilment.1


Step 1

Tenure (.14** (.10 .02 .06 (.10 (.07 .07 .07

Hours (.02 .02 (.03 (.00 .05 .08 .06 .07

White collar (.12* (.09 (.11 (.00 .09 .11 .06 (.08

Higher education (.06 (.06 (.09 (.09 .03 .03 (.07 (.07

Married (.02 .00 (.02 (.00 .14 .15** (.08 (.08

Male (.21*** (.19*** (.03 (.01 (.16** (.15** (.07 (.07

Step 2

Job insecurity (.18** (.10 (.19** (.12* (.23*** (.19** (.26*** (.25***

Step 3

Relational fulfilment .30*** .25*** .18** .04

Adj. R2 .11 .18 .06 .11 .07 .10 .06 .06

1

Only step 2 and step 3 of the regression analyses are reported.* pB.05, ** pB.01, *** pB.001.




it partially mediated the relationship between job insecurity and both organizational

commitment and life satisfaction. This largely supported hypothesis 2a (3).

In hypothesis 2b, we formulated a complementary reasoning for transactional psycho-

logical contract content. Contrary to hypothesis 2b (1), however, permanent employment

was not significantly related to transactional psychological contract entitlements (b0(.03,

p0.68, R2adj0.01). Furthermore, job insecurity was negatively related to the fulfilment

of transactional psychological contract entitlements (b0(.16, pB.01, R2adj0.10),contrary to expectations formulated in hypothesis 2b (2), and to the psychological

outcomes (Table IV, step 2). The fulfilment of the transactional psychological contract

entitlements was associated positively with all outcomes. While it significantly reduced the

relationship between job insecurity and both job satisfaction (zsobel0(2.97, pB.01) and

organizational commitment (zsobel0(2.82, pB.01), this was not the case for life

satisfaction and performance (Table IV, step 3). Altogether, the relationship between job

insecurity and both job satisfaction and organizational commitment is partially mediated by

fulfilment of transactional psychological contract entitlements. This did not align with

hypothesis 2b (3). No mediation by fulfilment of transactional psychological contract

entitlements was found between job insecurity and both life satisfaction and self-ratedperformance, consistent with hypothesis 2b (3).

Hypothesis 3: Interactions between heterogeneity indicators and job insecurity (temporary sample)

We investigated whether there may be interaction effects between job insecurity and various

heterogeneity indicators on the psychological outcomes (Table V). Having favourable

employment prospects was positively related to job satisfaction, life satisfaction and self-

rated performance, and tenure was negatively related to job satisfaction. Furthermore, job

insecurity was not predictive for the proximal outcomes (job satisfaction and organizational

commitment), but it was for the distal outcomes (life satisfaction and self-rated

performance). Only one out of 12 possible interactions was significant. This largely rejected

hypothesis 3. The interaction term between job insecurity and volition added in explaining

organizational commitment. Figure 3 shows the nature of the interaction effect: involuntary

Table IV. Summary of hierarchical regression analyses: Mediation by transactional psychological contract

fulfilment.1


Step 1

Tenure (.14** (.03 .03 .12* (.10 (.04 .06 .11*

Hours (.01 .02 (.06 (.02 .09 .12* .05 .07

White collar (.12* (.09 (.10 (.08 .10 .11 .06 .07

Higher education (.06 (.04 (.11 (.10 .05 .06 (.11* (.10

Married (.03 (.03 (.03 (.02 .14** .15** (.10* (.10*

Male (.21* (.18*** (.04 (.02 (.16** (.15** (.04 (.03

Step 2

Job insecurity (.19*** (.13* (.22*** (.17** (.24*** (.20*** (.29*** (.26***

Step 3

Transactional fulfilment .39*** .33*** .22*** .17***

Adj. R2 .10 .26 .06 .16 .07 .11 .08 .10

1Only step 2 and step 3 of the regression analyses are reported.

* pB.05, ** pB.01, *** pB.001.




Table V. Summary of hierarchical regression analyses: The heterogeneous nature of temporary workers and job

Job satisfaction Org. commitment

Step 1

Hours worked .05 .07 .09 .03 .04 .09 .17

White collar (.05 (.04 (.08 (.08 (.08 (.14 (.02

Higher education (.10 (.10 (.10 (.15 (.15 (.16 .02

Married .05 .05 .04 .04 .03 .01 .13

Male (.26** (.27** (.23* (.17 (.18* (.11 (.06

Step 2

Tenure (.17* (.18* (.24* (.09 (.10 (.19 (.10

Prospects .18* .12 .13 .14 .10 .10 .19*Volition .04 .03 .06 .18 .17 .24* (.00

Step 3

Job insecurity (.09 (.12 (.08 (.13

Step 4

Job insecurity)tenure (.10 (.17

Job insecurity)prospects .02 .05

Job insecurity)volition (.17 (.30**

R 2adj .10 .10 .11 .07 .07 .13 .00

1Only steps 2, 3, and 4 of the regression analyses are reported.

* p B.05, ** pB.01, *** pB.001.



temporary workers who moreover felt insecure about their job ( M 03.80) did not report

lower organizational commitment than more secure involuntary workers ( M 03.59),

t (81)0(1.32, p0.32. In contrast, lower organizational commitment was found among

voluntary temporary workers who felt insecure ( M 03.60) compared with those who feltless insecure ( M 03.99), t (57)02.51, pB.05.

Hypothesis 4: The psychological contract perspective among temporary workers

Finally, we investigated whether the heterogeneous nature of the temporary workforce in

terms of tenure, employment prospects, and volition would relate to the psychological

contracts of temporary workers. Controlling for tenure, weekly working hours, occupational

position, education, family status, and gender, we did not find an association between

relational psychological contract entitlements and tenure (b0.09, p0.35), employment

prospects (b0.18, p0.06) or volition (b0.09, p0.35). The total explained variance (Adj

R2) was .18, with most variance explained by the background characteristics (Adj R

20.13).

Similarly, tenure (b0(.16, p0.10), employment prospects (b0.11, p0.23) and volition

(b0.12, p0.25) did not add significantly in explaining transactional psychological contract

content. The heterogeneous nature of the temporary workforce did not explain significantly

more variance (R2adj0.11) than did the control variables (R

2adj0.09). These results did

not support hypothesis 4.

Discussion

The first aim of this study was to investigate the relationship between job insecurity and

both proximal and distal variables in temporary compared with permanent workers. In this

respect, our analysis revealed that the interaction between contract type and job insecurity

added in explaining variance in the proximal outcomes, namely job satisfaction and

organizational commitment, but not in the distal outcomes, namely life satisfaction and

self-rated performance. Specifically, we found that job insecurity was more negative for

permanent workers when proximal variables were concerned, but not when distal variables

were concerned. These findings largely agree with earlier research: while the interaction

effect is consistently found in studies on job satisfaction and organizational commitment,

results for well-being and behaviour have been inconclusive (De Cuyper & De Witte,

2006b; De Witte & Naswall, 2003; Mauno et al., 2005).

3.3

3.4

3.5

3.6

3.7

3.8

3.9

4

4.1


o r g a n i z a t i o n a l c o m m i t m e n t

involuntarytemporary

voluntary

temporary

Figure 3. The interaction between volition and job insecurity for organizational commitment.




Second, we aimed to test a potential explanation for the interaction effect between

contract type and job insecurity. We argued that the psychological contract of permanent

workers may include more relational entitlements compared with the psychological contract

of temporary workers, evidence for which was found in the present study as well as in other

studies (Millward & Brewerton, 2000; Millward & Hopkins, 1998). We furthermore

established that job insecurity was perceived as a breach of relational psychological contract

entitlements, which, in turn, reduced job satisfaction, organizational commitment, and life

satisfaction. This may suggest that job insecurity is related to unfavourable outcomes

particularly among those holding psychological contracts in which relational psychological

contract entitlements are foremost, as do permanent workers.

However, results concerning the transactional psychological contract may seem to

invalidate this explanation: job insecurity was related to breach of transactional psycholo-

gical contract entitlements as well. Also, breach of transactional psychological contract

entitlements mediated the relationship between job insecurity and the proximal outcomes

(job satisfaction and organizational commitment). These results call for some explanation

and comment. One explanation may concern the measurement of transactional psycholo-

gical contract entitlements: while some items were clearly transactional in nature (e.g.,

provide you with a safe working environment; provide you with good pay for the work you

do), others could be interpreted as being somewhat relational in nature (e.g., provide you

with a good working atmosphere; provide possibilities to work together in a pleasant way).

Yet another explanation might be that relational psychological contract content is

conditional upon transactional psychological contract content. Indeed, contract type was

not predictive for transactional psychological contract content. This may align with

suggestions by McLean Parks et al. (1998) that variance in psychological contracts is

particular to the degree to which they include relational elements, while there may be little

variance in the number of transactional elements. This may suggest that workers do not

clearly distinguish between transactional and relational psychological contract entitlements

and their fulfilment, and it may explain why job insecurity related to fulfilment of both

transactional and relational psychological contract entitlements. In this respect, job

insecurity may be associated with unfavourable outcomes when both relational and the

transactional psychological contract entitlements are breached. Accordingly, rather than

distinguishing between transactional and relational content, future research may want to

apply an aggregate psychological contract measure. The high correlations between

transactional and relational psychological contract content and their fulfilment in this

study may offer additional support for this suggestion.

To date, there is no satisfactory explanation of why the interaction effect was found forproximal variables but not for distal variables. One explanation might be that temporary

workers may not perceive their employer as responsible for job insecurity, and thus, job

insecurity effects may not show in their attitudes towards the job, the employer or the

organization, but rather in more distal outcomes. In contrast, permanent workers may

blame their employer for feeling insecure, and this may translate into reduced job

satisfaction and organizational commitment, which in turn may have a spillover effect to

life satisfaction and self-rated performance. Alternatively, it might be that temporary

workers want to increase their chances to become permanently employed by showing

favourable attitudes (e.g., Connelly & Gallagher, 2004; Feather & Rauter, 2004; Mauno

et al., 2005). These impression management techniques may be less relevant when lifesatisfaction is concerned, and they may perhaps be too transparent when behaviours which




are easily evaluated by the employer are concerned. An important avenue for future

research may be to further explore this speculation about impression management.

Finally, most innovative in this paper was the combination of two perspectives to explain

the interaction effect between contract type (temporary versus permanent) and job

insecurity; namely the psychological contract perspective and the heterogeneous nature

of the temporary workforce. The assumed importance of distinguishing between different

types of workers, in particular fixed term contract workers and on call workers, washighlighted by Bernhard-Oettel and colleagues (2005). However, the authors do not

describe possible dimensions along which fixed term contract workers and on call workers

may differ, even though this may be highly relevant in the context of international research:

definitions of specific contract types are likely to differ across countries, and thus, more

general descriptions may ease comparisons across studies. Therefore, we selected three

heterogeneity indicators that are found relevant in the realm of temporary work research:

tenure, employment prospects, and volition. However, these heterogeneity indicators were

weak and overall non-significant predictors for both relational and transactional psycho-

logical contract content. Furthermore, only one out of 12 possible interaction terms

between heterogeneity indicators and job insecurity added in explaining variance in theoutcomes. Specifically, job insecurity was a relevant predictor of organizational commit-

ment among voluntary temporary workers but not among those for whom temporary work

was involuntary. This interaction effect is somewhat puzzling, as we predicted more

negative consequences of job insecurity among involuntary workers, rather than among

voluntary workers: involuntary workers would prefer a more secure job, and hence, job

insecurity was expected to be particularly harmful for them. However, it may be that

volition mask underlying motives for accepting temporary employment. Possibly, voluntary

temporary workers have accepted temporary employment because they think it will

eventually lead to permanent employment. For example, in the study by Tan and Tan

(2002), this stepping stone motive loaded on the factor that included items that aretraditionally considered as prototypical for voluntary workers, namely motives related to

gaining work experience and new skills, and the possibility to enrich resumes. Altogether,

our results suggested that the heterogeneous nature of temporary workers may perhaps be

somewhat less relevant when investigating the interaction effect between job insecurity and

temporary employment. Still, there may be various other indicators of heterogeneity, and

these definitely warrant further investigation.

Limitations

There were some drawbacks in this study. First, the study was limited with regard to thetype of temporary workers it focused upon, namely fixed-term contract workers. This

reflected the Belgian labour market, in which fixed-term contract workers cover the large

majority of all temporary workers. Possibly, including other types of temporary workers,

such as on call workers, day-to-day workers, or temporary agency workers, may introduce

more variance in the heterogeneity indicators, which, in turn, may affect the results. Other

sample restrictions may concern the relatively large share of blue-collar workers and the

relatively small share of highly educated workers. However, earlier research (De Cuyper &

De Witte, 2006b) on possible interactions between contract type and job insecurity yielded

similar results using a sample dominated by white-collar workers and highly educated

workers. Furthermore, we believe that the varied organizational context in this study mayoffer good possibilities for generalizing findings.




Second, interpretation was limited due to the cross-sectional and self-reported nature of

the study. Even though our interpretation was inspired by earlier research on job insecurity

and temporary employment, a longitudinal design may be more convincing. Still, it is quite

difficult to establish due to the high turnover among temporary workers. Furthermore, self

reports may not be too problematic when investigating interaction effects: common method

effects are likely to attenuate rather than to strengthen interaction (Conway & Briner,

2002). Also, contract type as one of the central variables in this study was an objectivecharacteristic of the employment relationship, further decreasing the risk of common

method effects.

Third, we investigated the psychological contract as a crucial construct to explain

differences between temporary and permanent workers. In this study, however, we only

addressed one side of the psychological contract, namely employees’ entitlements. Future

research may want to include employees’ obligations as well. For example, it may want to

investigate how a breach of the psychological contract may affect employees’ perceptions on

their obligations.

Finally, explained variance was low in most regression analyses, particularly when distal

outcomes were concerned. Our study mainly aimed at illustrating the differential impact of job insecurity for temporary and permanent workers. Adding other issues that may affect

employees’ well-being (e.g., job characteristics) is likely to enhance the explained variance.

Concluding remarks

This study has contributed to the literature in explaining the interaction effect between

contract type and job insecurity, as reported in earlier research. However, it has also pointed

out some important questions that may inspire future research. First, we showed that the

interaction effect between contract type and job insecurity may be limited to proximal

outcomes, such as job satisfaction and organizational commitment. In contrast, it may notadd in explaining distal outcomes, such as life satisfaction or self-rated performance.

Further investigation could reveal why the interaction effect is found for some variables but

not for others. Second, we formulated a tentative explanation for the interaction effect in

terms of contract-based differences in psychological contracts. While our results tended to

support this explanation, some important issues need further investigation. Most

importantly, future research may need to check whether or not transactional psychological

contract entitlements are shared by all employees, and whether relational psychological

contract entitlements are added to this core. Third, we took into account the heterogeneous

nature of the temporary workforce in terms of tenure, employment prospects, and

preference for temporary work. We showed that these indicators may not affect temporaries’

responses to job insecurity, nor their perception of the psychological contract. However, we

would like to invite researchers to explore this debate on heterogeneity into more detail, for

example by considering other heterogeneity indicators.

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Job In Security in Temporary Versus Permanent Workers

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