Managing traumatic change: The role of leadership as a buffer against the negative impact of job insecurity on employee outcomes

This study investigates the potential role leadership plays in moderating the relationship between job insecurity and employee outcomes. It is proposed that the negative impact of job insecurity on employee morale can threaten the successful implementation of an organizational change initiative. This study explores leadership styles and behaviors that may help employees maintain organizational commitment despite feelings of job insecurity. This study utilizes Bass and Avolio's (1990) Six Factor Model of Leadership, and Graen and Uhl-Bien (1995) Leader Member Exchange model to test their moderating effects of job insecurity on employee outcomes. A sample of 93 full-time employees from the City of Los Angeles Personnel Department was used. The department was experiencing budget cuts that resulted in layoffs just before data was collected. Moderated regression models were calculated for leadership styles and behaviors to test the potential impact on the relationship between job insecurity and employee outcomes. The results of the study provide support for the moderating effects of transformational leadership on the relationship between job insecurity and satisfaction with supervisors. Further results do not support the moderating affects of leadership on the relationship between insecurity on employee outcomes. Practical and theoretical considerations are discussed with regards to the role of leadership in managing organizational change.