A review and evaluation of employment security practices and their relationship to financial and employee performance
The purpose of this research project was to investigate the relationship between the practice of employment security and the financial and human resource performance of large U.S. industrial corporations. The independent variable in this study was employment security and the dependent variables were sales per employee, net income as a percentage of sales, assets and equity, employee absenteeism, and employee length of service. Two data sources were used: financial data was collected from the Fortune 500 listings of U.S. industrial corporations, and the human resource data from a 35-item questionnaire that was mailed to Fortune 500 companies.^ A sample of 46 U.S. industrial corporations were chosen for this study, 23 companies that practice employment security and 23 companies that do not. The statistical techniques used to test the hypotheses included t tests and regression analysis.^ Many of the results were inconclusive and mixed. There was no significant difference in employee productivity, as measured by sales per employee, when comparing companies that practice employment security with those that do not. Employee absenteeism and employee length of service also showed no significant difference when comparing the two groups. The financial comparisons, measuring the ratio of net income to sales, assets, and equity, were mixed and inconclusive with the following exceptions. The study found no significant difference in the ratio of net income to sales or assets for each of the ten years studied, and found no significant difference in the ratio of net income to equity for nine of the ten years.^ The results, though mixed, gave some support to those writers and human resource executives surveyed who expressed the opinion that employment security would not endanger the financial status of those companies that followed the practice. The results also support other writers and business executives that believe an employment security practice would have relatively little effect on sales per employee, employee absenteeism or employee length of service. ^
Paul H Loseby,
"A review and evaluation of employment security practices and their relationship to financial and employee performance"
(January 1, 1990).
ETD Collection for Pace University.