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ISSN : 2234-3040(Print)
ISSN : 2234-3059(Online)
The East Asian Journal of Business Management Vol.5 No.4 pp.29-35

Perceived Employment Instability Effect on Psychological Well-being and Job Satisfaction: Resilience and Character Strength as Mediator

Hoe-Chang Yang**, Il-Suck Sun***, Soo-Hong Park****
**1st Author, Assistant Professor, Dept. of Distribution management, Jangan University, Tel: +82-31-299-3133, e-mail: pricezzang@naver. com.
***2nd Author, Assistant Professor, Dept. of Logistics management, Jangan University, Tel: +82-31-299-3108, e-mail:
****Assistant Professor, Dept. of Franchise Business Management, Jangan University, Tel: +82-31-299-3135, e-mail: save
****Corresponding Author, Assistant Professor, Dept. of Franchise Business Management, Jangan University, Tel: +82-31-299-3135, e-mail:
August 16, 2015 October 03, 2015 October 15, 2015


Purpose – This study intended to identify how resilience and character strength among employees are influenced by employment instability and the negative impact it could have on job satisfaction and psychological wellbeing.
Research design, data, and methodology – This study hypothesizes that employment instability will have a negative effect on resilience and character strength, but resilience and character strength will have a positive effect on job satisfaction and psychological wellbeing. A total of 150 valid questionnaires were collected and utilized for analysis.
Results – Employment instability was found to have a negative impact not only on job satisfaction and psychological wellbeing but also on employee resilience and character strength.
Conclusion – The results suggest that along with the necessity for a strategic approach at the corporate level, enterprises should also acknowledge employee failures and support them in job situations. They should create a positive work environment and a structure of empowerment, interesting jobs, and a positive organizational culture to build various systems and the ability to enhance self-esteem and stamina in order to reinforce character strength.


 1. Introduction

It’s not the latest issue that confidence in employment instability among Korean workers became a problem. Recently, the National Statistical Office reported that the number of workers increased by 131,000 persons compared to the same month of the previous year as of Aug. 2014, thus recording 6,077. In other words, the number of non-regular workers tended to decline for 3 consecutive years after 2012. Such a result is distant from the employment instability recognized by workers because non-regular workers are limited to temporary worker(including short-time worker)or part time worker or atypical worker. The reason is why internal and external workers have recently used various means to reduce cost and improve efficiency for their survival through fierce competition (Hirsch & De Sourcey, 2006; Sora et al., 2010) and among such means, the most frequently used one is reduction in labor force or active use of a new type of employment such as part time or temporary job (Silla et al., 2010: Staufenbiel & König, 2010).

So far, many researchers (e.g., Brockner, 1987; Cheng & Chan, 2008; De Witte, 2005; Greenhalgh & Sutton, 1991; King, 2000; Sora et al., 2010; Staufenbiel & Koing, 2010: Sverke et al., 2002) have reported that employment instability recognized by members not only had an impact on attitudinal aspects such as job satisfaction and organizational commitment and behavioral aspects such as performance, organizational citizenship behavior, and turnover intention but also had a negative impact on psychological and behavioral aspects such as customer orientation(Park & Cha, 2013), role ambiguity(Ashford et al., 1989), and locus of control (De witte & Naswall, 2003) and mental and physical health of members (Strazdins et al., 2004).

This study focuses on advanced researches indicating that employment instability may have a negative effect on job satisfaction, attitude among members and psychological wellbeing classified into psychological propensity because it is evident that employment instability recognized by members induced by such means for obtaining corporate competitiveness will continue to be deepened and this result is likely to have a negative impact on individual's life and organizational development. In this respect, this study expects that the role of members' resilience and character strength can solve such problems. This suggests that considerations on individuals are expected to provide many clues to enhancing psychological wellbeing and job satisfaction of an individual despite pressure caused by employment instability from positive psychological perspective recently having received attention in many researches reported till now and reports made via mass media.

2. Literature Review

Employment instability has become an issue of interest by many researchers(e.g., Davy et al., 1997; Rosenblatt & Ruvio, 1996) as concept that had systematically been studied from 1980s until recently(Sverke et al., 2002). Greenhalgh & Resenblatt(1984) defined employment instability as hopelessness in desiring to maintain employment continuity in such situations that employment is threatened. On the other hand, Davy et al.(1997) and Rosenblatt & Ruvio(1996) defined employment instability as expectation of continuity and indicated that employment instability reflects an individual's interest in the possibility of losing one's job currently being engaged, for example, loss of advancement opportunity, current job situation, and long-term career opportunity as well as interest in continuance of employment. Greenhalgh & Resenblatt(1984) summarized previous studies on employment instability and revealed that the intensity of threatening the continuance of employment may be dependent on an individual's subjective probability on job or job characteristics, which influences employment instability.

Resilience is a sub-concept presented in Luthans et al.(2004)'s Positive Psychological Capital and also called as recuperative power or elasticity. Resilience refers to a capability to return to the original state from hardship, conflict, failure, etc or conversely, also return to its initial state from positive events or processes and assigned responsibilities(e.g., Dyner et al., 1996; Fine, 1991; Luthar, 1991; Kannre, 1989). Luthans et al.(2004) asserted that resilience is an upper level that one can discover life values and meanings rather than just returning to its previous level or state. Therefore, resilience means recovery to a better state from one's negative experience in the past.

Character strength is a concept that appeared to examine human's positive trait, second topic of positive psychology and so means a positive trait reflected in thought, emotion, and behavior (Park et al., 2004). Character is an ensemble of important positive traits necessary for desirable life through culture and history and so character strength is a psychological procedure and mechanism that constitutes the virtues regarded as valuable philosophically or religiously(Park & Peterson, 2006). Linley & Harrington(2006) defined character strength as capability to feel and behave for achieving optimized functions for valuable outcomes and Clifton & Nelson(1992) defined it as combination of an individual's talent and related knowledge, skills, and efforts and ability to perform closely to a particular task consistently and even perfectly.

Psychological wellbeing is classified into self-realistic perspective(Ryan & Deci, 2001) and regarded as concept that is similar to subjective wellbeing, subjective quality of life, life satisfaction or wellbeing and highly correlated(Fodyce, 1988). Ryff(1989) proposed psychological wellbeing as index to measure the quality of life, arguing that psychological wellbeing does not simply mean satisfaction with happy life but also standard to determine how an individual functions well as member of society to understand the quality of life. Ryff & Singer(2000) insisted that psychological wellbeing is a concept calculated from an individual's realization of true potential and pursuit of perfection and that it is not directly related to happiness, but a product of a much better life.

Job satisfaction is defined as attitude resulted from the averaged state of all emotions that an individual might experience with respect to his/her job (Smith, 1955) or pleasant or ultimate emotional state obtained from his/her own job evaluation(Constance & Becker, 1973). Locke(1976), representative researcher of job satisfaction, defined job satisfaction as pleasant or good emotional state obtained by evaluating jobs or evaluating experiences obtained through the jobs. Like this, job satisfaction is defined as state of satisfaction (Arnold & Cooper, 1995; Hoppck, 1935; McCormick & Tiffin, 1974; Quinn, 1973) as well as view seen as emotion or feeling(e.g., Constance, 1973; Locke, 1976; Smith, 1955).

3. Research Model and Hypotheses

This study expects that employment instability, in other words, negative effects of members on psychological wellbeing associated with job satisfaction, attitude obtained from organizational life and individualistic quality of life can be alleviated by members' resilience and character strength to some extent. The reason is because, first, resilience is a factor that despite unavoidable difficulties, members survive in conflicting environment, resist against it, and further recover their failure or mistake and based on this, overcome adversity and develop themselves more and grow further. Resilience was initially known as temperamental trait(Beardslee et al., 1988; Rabkin et al., 1993) and many researchers (e.g., Luthar, 1991; Stewart et al., 1997) reported that resilience changes with the developmental stages of human being or with the environment that an individual experiences, in other words, it increases when facing difficulty or failure. The second reason is that positive psychologists claimed that it would be important to look for character strength because for growth of an individual or enhancement of mental strength, increasing positivity is more effective than reducing negativity(Gilman et al., 2009). Seligman(2002) insisted that humans can discover their true happiness by finding, developing, and utilizing their fundamental strength and reported in an actual research that when humans were given strength point feedback so that they could recognize their character strength, their ach-ievement toward job and satisfaction with life also increased (Black, 2001; Harter, 1988). Thus, based on previous researches, this study hypothesizes that each variable will have positive or negative effects on one another, and sets up a structured model as below.

note) There are not showed the hypothesis of mediating effect of resilience(H8, H9) and character strength(H10, H11)

<Figure 1> Research Model and Hypotheses

<Hypothesis 1> Employment instability shall have negative influence upon the resilience.
<Hypothesis 2> Employment instability shall have negative influence upon the character strength.
<Hypothesis 3> Resilience shall have positive influence upon the job satisfaction.
<Hypothesis 4> Resilience shall have positive influence upon the psychological well-being.
<Hypothesis 5> Character strength shall have positive influence upon the job satisfaction.
<Hypothesis 6> Character strength shall have positive influence upon the psychological well-being.
<Hypothesis 7> Psychological well-being shall have positive influence upon the job satisfaction.
<Hypothesis 8> Resilience shall mediated between employment instability and job satisfaction.
<Hypothesis 9> Resilience shall mediated between employment instability and psychological well-being.
<Hypothesis 10> Character strength shall mediated between employment instability and job satisfaction.
<Hypothesis 11> Character strength shall mediated between employment instability and psychological well-being.

4. Methodologies

4.1. Methods and Data Collection

To perform this study, a survey was carried out employees of the Seoul and Metropolitan Area. A total of 150 valid questionnaires were collected and utilized for analysis. Frequency analysis, descriptive statistic analysis, correlation analysis, simple regression analysis, multiple regression analysis, 3-step mediated regression analysis (Baron & Kenny, 1986), and structured equation modeling(SEM) for path analysis were conducted using SPSS 19.0 and AMOS 19.0

In this study we investigated 5 variables as follow: Employment instability was measured 5 items, Likert 5-point scale based on Brockener et al.(1992). Resilience was measured 6 items, Likert 6-point scale based on Luthans & Youssef(2007). Character strength was measured 48 items, Likert 5-point scale based on Seligman(2002)'s VIA-IS. job satisfaction was measured 25 items, Likert 7-point scale based on Scarpello & Campbell(1983). And Psychological well-being was measured 34 items, Likert 5-point scale based on Ryff(1989). All variables were converted into z-score to make correction of difference of these scales.

The demographic characteristics of the participants are presented in <Table 1>.

<Table 1> Demographic Characteristics

4.2. Reliability and Validity of Measurement Scale

To find out if measurement items are internally consistent, reliability was verified using Cronbach . Nunnally(1978) reported α that if Cronbach is over 0.7, it is considered reliable. In this α respect, the reliability of variables in this study was found to be 0.843~0.948. As a result of confirmatory factor analysis to verify feasibility of variables, employment instability and character strength was more than 0.5. However, resilience, job satisfaction and psychological well-being was less than 0.5 to confirm validity by comparing between coefficient of determination of R-square and AVE, respectively.

<Table 2> Reliability and Validity

5. Empirical Analysis

5.1. Correlation analysis

The directional nature and possible causal relationship between variables were identified through CFA (confirmatory factor analysis) and the results from correlation analysis which was carried out to identify the validity of variables whose validity was not identified were presented in <Table 3>.

<Table 3> Results of Correlation analysis

Note) ** p<.01, AVE marked in ( ).

As a result of correlation analysis, it was found that employment instability, as expected, was negatively related to resilience, character strength, job satisfaction, and psychological wellbeing and the other variables were all positively related.

5.2. Hypothesis testing

The demographic variables were controlled such as gender, marital status, age and educational level, continuous service year for the verification of the direct effect and the regression analysis was performed. According to its result, employment instability had statistically significantly negative influence upon resilience(β=-.325, p<.01) and character strength(β=-.349, p<.01), respectively. Therefore, hypothesis 1 and hypothesis 2 was adopted. Resilience had statistically significantly positive influence upon job satisfaction(β= .466, p<.01) and psychological well-being(β= .451, p<.01), respectively. Therefore, hypothesis 3 and hypothesis 4 was adopted. Character strength had statistically significantly positive influence upon job satisfaction(β= .414, p<.01) and psychological well-being(β= .529, p<.01), respectively. Therefore, hypothesis 5 and hypothesis 6 was adopted, too. Psychological well-being had statistically significantly positive influence upon job satisfaction(β= .442, p<.01). Therefore, hypothesis 5 and hypothesis 6 was adopted.

The result of the 3-step mediated regression analysis proposed by Baron & Kenny (1986) was performed among employment instability for the verification of the resilience and character strength's mediation effect has been presented in . resilience was partial mediated between employment instability and job satisfaction, and psychological well-being, respectively. Also, character strength was partial mediated between employment instability and job satisfaction, and psychological well-being, respectively. Therefore, hypothesis 8, hypothesis 9, hypothesis 9 and was hypothesis 10 was supported, respectively.

<Table 4> Results of mediation effects

note) ** p<.01, *** p<.001, Independent variable(IV): employment. We proposed three-step results of R2 and F-value.

And, path analysis was performed for which path affected among variables showed in <Figure 2>.

note) * p<.05, ** p<.01, *** p<.001
<Figure 2> Results of Path analysis

According to the verification result of the suitability of this model, the values were χ2 = 75.354, d.f = 3, p = .000, GFI = .845, AGFI = .223, NFI = .715 and RMR = .168 etc and they did not reach each suitability index proposed. It was known about this result that after proposing a modified model which can enhance the suitability of the study model using the Modification Index(MI) proposed by Jöreskog & Sörbom(1981), the improvement level of the modified model can be verified through the comparison with the original model or composition of additional route, input of additional variable or replacement of variables which apply theoretical ground will be needed.

A happy person not only forms a close relationship with friends and thinks and behaves in an optimistic and positive way(Diener & Seligman, 2002) but also overcomes stress better then a less happy person, lives a healthy and pleasant life, and feels satisfied with his/her job(Veenhoven, 1991). Therefore, character strength is likely to have a positive impact on resilience among members. Furthermore, it is reported that recognition of employment instability reduces psychological wellbeing(Kinnunen et al., 2003; Roskies & Louis-Guerin, 1990) and has an impact on physical symptoms (Heaney et al., 1994) and various physical fatigues and diseases(Landsbergis, 1988; Van Vuuren, 1990). Based on the theoretical grounds above, additional passage of “Character Strength Resilience”, → “Employment Instability Psychological Wellbeing,” among the → revised passages presented by Modification Index was set and the obtained findings are as follows:

The verification result of the suitability of modified model, the values were χ2 = 3.437, d.f = 1, p = .064, GFI = .991, AGFI = .864, NFI = .987 and RMR = .025 etc and they reached each suitability index proposed.

Note) * p<.05, ** p<.01, *** p<.001

<Figure 2> Results of Modified Path analysis

This study originally intended to identify how resilience and character strength among members are influenced each other based on the previous researches suggesting that instability recognized by members would have a negative impact on job satisfaction and psychological wellbeing due to a new type of employment such as part time job and temporary job and personnel reduction most frequently used by enterprises for reducing cost and enhancing efficiency.

As a result, our implications can be drawn as follows:

First, employment instability was found to have a negative impact on not only job satisfaction and psychological wellbeing but also members' resilience and character strength. Such a result needs to be approached carefully from corporate perspective. In fact, recognition of employment instability due to structural adjustment, etc generally acts as psychological pressure to surviving members as well as fired employees and has a negative impact in various aspects(Kuhnert & Palmer, 1991; Levanoni & Sales, 1990), for example, lowering trust in organization(Ashfold et al., 1989; Borg & Elizur, 1992) despite the presence of some findings that there are positive aspects in that it extends hours of working (De Cuyper et al., 2008) and increases productivity (Probst et al., 2007). Therefore, such a strategy of personnel reduction at the corporate dimension should be the last one and rather, more efforts to encourage members to participate in the process of enhancing efficiency are required.

Second, members' psychological factors such as resilience, character strength, and psychological wellbeing are found to improve job satisfaction. In particular, members' resilience was found to have a considerable effect on job satisfaction and character strength on psychological wellbeing. This result suggests that along with the necessity of strategic approach at the corporate dimension that enterprises acknowledge members' failure and support them in job situations, it is necessary to create a positive atmosphere, give interest in jobs, establish empowerment and positive organizational culture to obtain various systems and self-determination ability for enhancing self-esteem and vigor in order to reinforce character strength and provide the basis for enjoying a happy life through training from which members can enhance their character strength.




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