ORGANIZATIONAL CULTURE
As organization designs change, psychologists have investigated new ways to analyse those organizations. One approach that has caught the attention of many social scientists is to view organizations as ‘cultures’.
Manifestations of culture
Imagine describing to your friends the experience of visiting a distant foreign country. You might talk about the dress, laws, religious beliefs, cultural values and traditions, physical environment, social attitudes, buildings, night life, recreational activities, language, humour, food, values and rituals of that country. Organizations can also be described in terms of their cultures, including their values, attitudes and beliefs. Manifestations of culture include:
Hierarchy – e.g. the number of levels of command or management, from the head of the organization to the lowest level employee.
Pay levels – high or low, whether there is performance-related pay, and what the differentials are between people at different grades.
Job descriptions – how detailed or restrictive they are, and what aspects they emphasize (e.g. safety, productivity, cost saving or quality).
Informal practices – e.g. norms such as management and nonmanagement employees sitting at separate tables in the canteen; strictly formal dress, uniforms or casual dress.
Espoused values and rituals – e.g. an emphasis on cooperation and support vs. cut-and-thrust competition between teams; cards, gifts and parties for those leaving the organization; celebrations at certain times of the calendar or financial year.
Stories, jokes and jargon – e.g. commonly told stories about a particular personal success or the failings of management; jokes about the sales department; jargon or acronyms (most government departments have a lexicon of acronyms and jargon, which is often impenetrable to outsiders).
Physical environment – office space, canteens, rest rooms. Are all spaces clean, tidy and comfortable or only the areas on public display? Are there decorations, such as plants and paintings, and adequate employee facilities, such as water fountains? The meanings of all these aspects of the organization taken together tell us about its underlying culture (Schein, 1992).
There has been particular interest in how to ‘manage’ organizational culture, and considerable resources have been spent trying to create ‘a service culture’ or ‘an open culture’ or ‘a people culture’, to name but three examples.
Understanding culture
Organizational psychologists have adopted three approaches to understanding culture (Martin, 1992): integration, differentiation and fragmentation. These differing dimensions suggest that organizational culture is complex and that we can best understand it by adopting a multidimensional perspective.
1. The integration perspective Those who adopt this view believe that a ‘strong culture’ will lead to more effective organizational performance. A strong culture is consistent throughout the organization, and there is organization-wide consensus and clarity. Senior management set the values and develop a mission statement. When this is effectively communicated and implemented via managerial practices, organization-wide consensus is shaped. So employees know what they are supposed to do and agree on the value of doing it. McDonald (1991) described such a culture in the Los Angeles Olympic Organizing Committee. The employees wore attractive uniforms, developed elaborate rituals, introduced brightly coloured stadium decorations, adopted an intense working pace and told many stories about their charismatic leader, which all reinforced an organization-wide commitment around a shared set of values. However, organizational psychologists now believe that culture is more complicated than the integration perspective alone implies.
2. The differentiation perspective This view recognizes that employees or members have differing interests, task responsibilities, backgrounds, experiences and expertise, which means that work attitudes and values, as well as pay and working conditions, will vary throughout the organization. Add the differing social identities due to gender, class and ethnic background, and, according to this perspective, the concept of a unifying culture seems inappropriate. Instead, it is proposed that within the organization there are overlapping and nested sub-cultures, which co-exist in relationships of harmony, conflict or indifference. Van Maanen (1991) found just this differentiation even in the ‘strong culture’ of Disneyland. Food vendors and street cleaners were at the bottom of the status rankings whereas, among ride operators, those responsible for ‘yellow submarines’ and ‘jungle boats’ had high status. Some tension was noted between operators, supervisors and even customers as the different groups interacted. At the same time, supervisors were engaged in an endless struggle to catch operators breaking the rules. According to Van Maanen, the conflict or differentiation perspective offers a more realistic account of organizational culture than the integration perspective.
3. The fragmentation perspective Ambiguity is a defining feature of many organizations. According to the fragmentation
perspective, this ambiguity occurs because there simply is no consensus about meanings, attitudes and values of the organization. Meyerson (1991) demonstrated this approach in a study of a social work organization. Where goals were unclear, there was no consensus about appropriate ways to achieve them, and success was hard to define and to assess. In this organization, ambiguity was the salient feature of working life. As one social worker reported: ‘It just seems to me like social workers are always a little bit on the fringe; they’re part of the institution, but they’re not. You know they have to be part of the institution in order to really get what they need for their clients, but basically they’re usually at odds with the institution’ .
There is considerable debate about the types of cultures that are associated with organizational effectiveness but some researchers have gathered data from the employees of successful companies on which characteristics they associate with their companies’ success. These include emphases on customer service, quality of goods and services, involvement of employees in decision making, training for employees, teamwork and employee satisfaction.
POWER AND POLITICS
Why do people get up out of their warm beds to get to work on time on a cold winter morning? Why do they conform to the office dress code? Why do they allow the boss to talk to them in a way they would not permit from others? The explanation goes beyond the simple need for pay – it relates to issues of power and contro
l. Customer service
Strong emphasis on customer service
Company provides quality service
Customer problems corrected quickly
Delivers products/services in a timely fashion
Quality Senior management committed to quality service
Senior management demonstrates quality is a top priority
Supervisors provide service guidance
Supervisors set good examples in relation to quality
Work group quality is rated
Continuous improvement
Clear service standards are set
Quality is a priority vs. meeting deadlines
Quality is a priority vs. cost containment
Involvement
Front line staff have the authority necessary to meet customers’ needs Encouragement to be innovative Encouragement to participate in decisions
Sufficient effort to get opinions of staff
Management use employees’ good ideas
Training
Plans for training and development
Opportunities for staff to attend training
Staff given opportunities to improve skills
Staff are satisfied with training opportunities
Staff have the right training to help them improve
New employees get necessary training
Information/Knowledge
Management gives clear vision/direction
Staff have a clear understanding of goals
Staff are informed about issues
Departments keep each other informed
Enough warning about changes
Satisfaction with organizational information
Teamwork/Cooperation
Cooperation to get the job done
Management encourages teamwork
Workload divided fairly
Enough people to do the work
Problems in teams corrected quickly
Overall satisfaction
High job satisfaction
Jobs use skills and abilities
Work gives a feeling of accomplishment
Satisfaction with organization
Rate the organization as a place to work
Proud to work for the organization
Would recommend working at the organization
High job security
Not seriously considering leaving the organization
The pursuit of power
‘Power’ can be defined as the probability of someone carrying out their own will, despite resistance (Weber, 1947). It is not usually wielded nakedly in organizations because it creates resentment and resistance. Instead, those in power tend to use influence andpersuasion, which is generally effective because we know that they have the power to achieve their ends ultimately. The pursuit of power for its own ends can be very destructive. McClelland (1975) conducted an analysis of people’s needs for power and showed how those with a strong power motive may present themselves well at interview but be a disaster at work, alienating others and reducing the capacity of the organization to achieve cooperative, collaborative, concerted action. This is because they tend to interpret most situations in power terms and act in Machiavellian or manipulative ways to assert or gain power.
Power, according to French and Raven (1959), derives from five sources:
Legitimate power comes from position in the hierarchy and is imposed by authority.
Expert power results from access to knowledge and information, so the computer wizard often gains considerable power in an organization.
Reward power is illustrated by the person who allocates offices, parking spaces, pay rises, equipment or stationery –such people may have considerable power without being in a senior position in the hierarchy.
Coercive power is the power to force others into action or inaction by the threat of punishment, such as delaying the payment of expenses claims.
Referent power is wielded by someone whose persuasiveness, popularity or charisma lead others to accede to his/ her wishes or suggestions.
A pluralist view The power and politics perspective (Pfeffer, 1981) examines the way individuals and groups within organizations compete for resources and other desired ends (e.g. office space, visibility, recognition, promotion). This ‘pluralist’ view regards organizations as made up of a variety of interests and beliefs that should all be heard. It contrastswith the notion that organizations can (with appropriate management) be one ‘happy family’ with everyone in the organization believing in the same ideals as the strong leader. This latter perspective is the ‘unitarist’ view (Burrell & Morgan, 1979). The pluralist perspective is particularly relevant as businesses become more global and our societies become more multiethnic.
Organizations must reflect their societies if they are to be sensitive to the needs and desires of their customers, quite apart from the moral issues of equal opportunities. Organizational psychologists are therefore becoming increasingly concerned with managing a workforce that is diverse in terms of ethnicity, disability, age, culture and gender. Women at work A major area of research on power in organizations examines the experiences of women at work. The list of potentially relevant themes (some of which also apply to men) is long, including: bias in selection, placement, performance appraisal and promotion; sexual harassment; obstacles to achievement and advancement; conflict between work and family responsibilities. Other concerns relate to being in a non-traditional (i.e. ‘male’) job and being in the minority (worse still, a ‘token’) as a female manager (Gutek, 1993). A significant problem is stereotyping. The effects reach deep into adult employment, where 52 per cent of employed women work in occupational groups in which more than 60 per cent of their co-workers are women, such as clerical and secretarial work, service work and sales. Similarly, 54 per cent of men work in occupational groups where more than 60 per cent of their coworkers are men, including occupational groups such as managers and administrators, craft and related occupations, plant and machine operatives (Equal Opportunities Commission, 1998).
Women are also vastly over-represented in part-time work and pregnancy is still (illegally) treated by some employers as a cause for dismissal. In 1998, the UK Equal Opportunities Commission reported that 34 per cent of complainants had been dismissed or threatened with dismissal when they first announced their pregnancy; 28 per cent were told so before going on maternity leave, 18 per cent while on leave, and 3 per cent on their return to the workplace (Equal Opportunities Commission, 1998). Perhaps most revealing of the pervasive discrimination against women in the workplace is the data on pay. The gender gap in average hourly pay of full-time employees, excluding overtime, narrowed between 1998 and 2003 to its lowest value since records began. However, women’s average hourly pay was still only 82 per cent of men’s. Average gross hourly earnings, excluding overtime, of full-time women were 82 per cent of the equivalent average for men. Although women have increased their representation somewhat in the ranks of executives (from 8.9 per cent in 1991 to 18 per cent in 1998), they still account for less than 5 per cent of company directors (Equal Opportunities Commission, 2004) in the UK. In the US in 2004, only 8 of the top 500 companies were headed by a woman. One issue, which is much debated, is whether women have different managerial or leadership styles from men. The bulk of theresearch suggests there are large differences within genders as well as between them, but that women adopt a consistently more democratic and participative style of management than men do (Eagly & Johnson, 1990; Powell, 1993). Some researchers argue that women also have a more ‘transformational’ style, inspiring and encouraging their employees, whereas men tend to use a ‘transactional’ style, punishing and rewarding selectively to achieve the desired task-related behaviours (e.g. Rosener, 1990).
REDUNDANCY AND UNEMPLOYMENT
The fierce competition of globalization has led organizations to outsource parts of their operations that other companies can do less expensively. This has led to more insecurity within organizations, and to waves of downsizing as organizations cut jobs that seem to add cost but little value. Our concern here is with the effects of redundancy and unemployment on those who experience these events.
REDUNDANCY – A KIND OF BEREAVEMENT
While the beginning of an individual’s experience in an organization is a process of learning new behaviours, the end may be a process of letting go as a result of redundancy. Redundancy can come about because of downsizing. It can also be a result of skills obsolescence, as when e-mail networks reduce the need for an internal post system and the traditional mail coordinator is no longer required. Or it can be a result of outsourcing. For example, school meal services may be contracted out to private catering firms, making ‘dinner assistants’ redundant.Some employees volunteer for redundancy, and are happy to leave the organization with some financial package as compensation. Often, though, redundancy is perceived in terms of loss – loss of income, prestige, status and social identity. Those who are left behind in the organization often experience guilt, and, although they may be willing to work harder, they generally feel more insecure having witnessed the dismissal of colleagues (Daniel, 1972; Hartley et al., 1991). Redundancy has even been compared to bereavement, with associated psychological stages of shock, denial, disbelief and, later, acceptance.
PSYCHOLOGICAL EFFECTS OF UNEMPLOYMENT
Unemployment usually has very negative psychological consequences. Research from the 1930s to the present day has consistently shown that the unemployed have poorer mental health than comparable groups of employed people. Unemployed people have worse profiles on measures of anxiety, depression, life dissatisfaction, experienced stress, negative self-esteem and hopelessness about the future. They are also more likely to report social isolation and low levels of daily activity. Their physical health is poorer, and they are more likely to attempt and commit suicide (Fryer, 1992; Warr, 1987).
The average psychological wellbeing of school leavers who become unemployed diverges from those who get satisfactory jobs, even when their wellbeing before leaving school is similar. And people who move out of unemployment into satisfactory jobs show sharp improvements in mental health. These findings are striking in their consistency. The same picture emerges across studies, samples, different research groups, countries and over time. Striking, too, is the fact that the psychological effects of unemployment extend to the whole family. In a classic study of a whole village affected by unemployment, the effects were shown to spread across the whole community, lowering its spirit and functioning ( Jahoda, Lazarsfeld & Zeisel, 1972).
As organization designs change, psychologists have investigated new ways to analyse those organizations. One approach that has caught the attention of many social scientists is to view organizations as ‘cultures’.
Manifestations of culture
Imagine describing to your friends the experience of visiting a distant foreign country. You might talk about the dress, laws, religious beliefs, cultural values and traditions, physical environment, social attitudes, buildings, night life, recreational activities, language, humour, food, values and rituals of that country. Organizations can also be described in terms of their cultures, including their values, attitudes and beliefs. Manifestations of culture include:
Hierarchy – e.g. the number of levels of command or management, from the head of the organization to the lowest level employee.
Pay levels – high or low, whether there is performance-related pay, and what the differentials are between people at different grades.
Job descriptions – how detailed or restrictive they are, and what aspects they emphasize (e.g. safety, productivity, cost saving or quality).
Informal practices – e.g. norms such as management and nonmanagement employees sitting at separate tables in the canteen; strictly formal dress, uniforms or casual dress.
Espoused values and rituals – e.g. an emphasis on cooperation and support vs. cut-and-thrust competition between teams; cards, gifts and parties for those leaving the organization; celebrations at certain times of the calendar or financial year.
Stories, jokes and jargon – e.g. commonly told stories about a particular personal success or the failings of management; jokes about the sales department; jargon or acronyms (most government departments have a lexicon of acronyms and jargon, which is often impenetrable to outsiders).
Physical environment – office space, canteens, rest rooms. Are all spaces clean, tidy and comfortable or only the areas on public display? Are there decorations, such as plants and paintings, and adequate employee facilities, such as water fountains? The meanings of all these aspects of the organization taken together tell us about its underlying culture (Schein, 1992).
There has been particular interest in how to ‘manage’ organizational culture, and considerable resources have been spent trying to create ‘a service culture’ or ‘an open culture’ or ‘a people culture’, to name but three examples.
Understanding culture
Organizational psychologists have adopted three approaches to understanding culture (Martin, 1992): integration, differentiation and fragmentation. These differing dimensions suggest that organizational culture is complex and that we can best understand it by adopting a multidimensional perspective.
1. The integration perspective Those who adopt this view believe that a ‘strong culture’ will lead to more effective organizational performance. A strong culture is consistent throughout the organization, and there is organization-wide consensus and clarity. Senior management set the values and develop a mission statement. When this is effectively communicated and implemented via managerial practices, organization-wide consensus is shaped. So employees know what they are supposed to do and agree on the value of doing it. McDonald (1991) described such a culture in the Los Angeles Olympic Organizing Committee. The employees wore attractive uniforms, developed elaborate rituals, introduced brightly coloured stadium decorations, adopted an intense working pace and told many stories about their charismatic leader, which all reinforced an organization-wide commitment around a shared set of values. However, organizational psychologists now believe that culture is more complicated than the integration perspective alone implies.
2. The differentiation perspective This view recognizes that employees or members have differing interests, task responsibilities, backgrounds, experiences and expertise, which means that work attitudes and values, as well as pay and working conditions, will vary throughout the organization. Add the differing social identities due to gender, class and ethnic background, and, according to this perspective, the concept of a unifying culture seems inappropriate. Instead, it is proposed that within the organization there are overlapping and nested sub-cultures, which co-exist in relationships of harmony, conflict or indifference. Van Maanen (1991) found just this differentiation even in the ‘strong culture’ of Disneyland. Food vendors and street cleaners were at the bottom of the status rankings whereas, among ride operators, those responsible for ‘yellow submarines’ and ‘jungle boats’ had high status. Some tension was noted between operators, supervisors and even customers as the different groups interacted. At the same time, supervisors were engaged in an endless struggle to catch operators breaking the rules. According to Van Maanen, the conflict or differentiation perspective offers a more realistic account of organizational culture than the integration perspective.
3. The fragmentation perspective Ambiguity is a defining feature of many organizations. According to the fragmentation
perspective, this ambiguity occurs because there simply is no consensus about meanings, attitudes and values of the organization. Meyerson (1991) demonstrated this approach in a study of a social work organization. Where goals were unclear, there was no consensus about appropriate ways to achieve them, and success was hard to define and to assess. In this organization, ambiguity was the salient feature of working life. As one social worker reported: ‘It just seems to me like social workers are always a little bit on the fringe; they’re part of the institution, but they’re not. You know they have to be part of the institution in order to really get what they need for their clients, but basically they’re usually at odds with the institution’ .
There is considerable debate about the types of cultures that are associated with organizational effectiveness but some researchers have gathered data from the employees of successful companies on which characteristics they associate with their companies’ success. These include emphases on customer service, quality of goods and services, involvement of employees in decision making, training for employees, teamwork and employee satisfaction.
POWER AND POLITICS
Why do people get up out of their warm beds to get to work on time on a cold winter morning? Why do they conform to the office dress code? Why do they allow the boss to talk to them in a way they would not permit from others? The explanation goes beyond the simple need for pay – it relates to issues of power and contro
l. Customer service
Strong emphasis on customer service
Company provides quality service
Customer problems corrected quickly
Delivers products/services in a timely fashion
Quality Senior management committed to quality service
Senior management demonstrates quality is a top priority
Supervisors provide service guidance
Supervisors set good examples in relation to quality
Work group quality is rated
Continuous improvement
Clear service standards are set
Quality is a priority vs. meeting deadlines
Quality is a priority vs. cost containment
Involvement
Front line staff have the authority necessary to meet customers’ needs Encouragement to be innovative Encouragement to participate in decisions
Sufficient effort to get opinions of staff
Management use employees’ good ideas
Training
Plans for training and development
Opportunities for staff to attend training
Staff given opportunities to improve skills
Staff are satisfied with training opportunities
Staff have the right training to help them improve
New employees get necessary training
Information/Knowledge
Management gives clear vision/direction
Staff have a clear understanding of goals
Staff are informed about issues
Departments keep each other informed
Enough warning about changes
Satisfaction with organizational information
Teamwork/Cooperation
Cooperation to get the job done
Management encourages teamwork
Workload divided fairly
Enough people to do the work
Problems in teams corrected quickly
Overall satisfaction
High job satisfaction
Jobs use skills and abilities
Work gives a feeling of accomplishment
Satisfaction with organization
Rate the organization as a place to work
Proud to work for the organization
Would recommend working at the organization
High job security
Not seriously considering leaving the organization
The pursuit of power
‘Power’ can be defined as the probability of someone carrying out their own will, despite resistance (Weber, 1947). It is not usually wielded nakedly in organizations because it creates resentment and resistance. Instead, those in power tend to use influence andpersuasion, which is generally effective because we know that they have the power to achieve their ends ultimately. The pursuit of power for its own ends can be very destructive. McClelland (1975) conducted an analysis of people’s needs for power and showed how those with a strong power motive may present themselves well at interview but be a disaster at work, alienating others and reducing the capacity of the organization to achieve cooperative, collaborative, concerted action. This is because they tend to interpret most situations in power terms and act in Machiavellian or manipulative ways to assert or gain power.
Power, according to French and Raven (1959), derives from five sources:
Legitimate power comes from position in the hierarchy and is imposed by authority.
Expert power results from access to knowledge and information, so the computer wizard often gains considerable power in an organization.
Reward power is illustrated by the person who allocates offices, parking spaces, pay rises, equipment or stationery –such people may have considerable power without being in a senior position in the hierarchy.
Coercive power is the power to force others into action or inaction by the threat of punishment, such as delaying the payment of expenses claims.
Referent power is wielded by someone whose persuasiveness, popularity or charisma lead others to accede to his/ her wishes or suggestions.
A pluralist view The power and politics perspective (Pfeffer, 1981) examines the way individuals and groups within organizations compete for resources and other desired ends (e.g. office space, visibility, recognition, promotion). This ‘pluralist’ view regards organizations as made up of a variety of interests and beliefs that should all be heard. It contrastswith the notion that organizations can (with appropriate management) be one ‘happy family’ with everyone in the organization believing in the same ideals as the strong leader. This latter perspective is the ‘unitarist’ view (Burrell & Morgan, 1979). The pluralist perspective is particularly relevant as businesses become more global and our societies become more multiethnic.
Organizations must reflect their societies if they are to be sensitive to the needs and desires of their customers, quite apart from the moral issues of equal opportunities. Organizational psychologists are therefore becoming increasingly concerned with managing a workforce that is diverse in terms of ethnicity, disability, age, culture and gender. Women at work A major area of research on power in organizations examines the experiences of women at work. The list of potentially relevant themes (some of which also apply to men) is long, including: bias in selection, placement, performance appraisal and promotion; sexual harassment; obstacles to achievement and advancement; conflict between work and family responsibilities. Other concerns relate to being in a non-traditional (i.e. ‘male’) job and being in the minority (worse still, a ‘token’) as a female manager (Gutek, 1993). A significant problem is stereotyping. The effects reach deep into adult employment, where 52 per cent of employed women work in occupational groups in which more than 60 per cent of their co-workers are women, such as clerical and secretarial work, service work and sales. Similarly, 54 per cent of men work in occupational groups where more than 60 per cent of their coworkers are men, including occupational groups such as managers and administrators, craft and related occupations, plant and machine operatives (Equal Opportunities Commission, 1998).
Women are also vastly over-represented in part-time work and pregnancy is still (illegally) treated by some employers as a cause for dismissal. In 1998, the UK Equal Opportunities Commission reported that 34 per cent of complainants had been dismissed or threatened with dismissal when they first announced their pregnancy; 28 per cent were told so before going on maternity leave, 18 per cent while on leave, and 3 per cent on their return to the workplace (Equal Opportunities Commission, 1998). Perhaps most revealing of the pervasive discrimination against women in the workplace is the data on pay. The gender gap in average hourly pay of full-time employees, excluding overtime, narrowed between 1998 and 2003 to its lowest value since records began. However, women’s average hourly pay was still only 82 per cent of men’s. Average gross hourly earnings, excluding overtime, of full-time women were 82 per cent of the equivalent average for men. Although women have increased their representation somewhat in the ranks of executives (from 8.9 per cent in 1991 to 18 per cent in 1998), they still account for less than 5 per cent of company directors (Equal Opportunities Commission, 2004) in the UK. In the US in 2004, only 8 of the top 500 companies were headed by a woman. One issue, which is much debated, is whether women have different managerial or leadership styles from men. The bulk of theresearch suggests there are large differences within genders as well as between them, but that women adopt a consistently more democratic and participative style of management than men do (Eagly & Johnson, 1990; Powell, 1993). Some researchers argue that women also have a more ‘transformational’ style, inspiring and encouraging their employees, whereas men tend to use a ‘transactional’ style, punishing and rewarding selectively to achieve the desired task-related behaviours (e.g. Rosener, 1990).
REDUNDANCY AND UNEMPLOYMENT
The fierce competition of globalization has led organizations to outsource parts of their operations that other companies can do less expensively. This has led to more insecurity within organizations, and to waves of downsizing as organizations cut jobs that seem to add cost but little value. Our concern here is with the effects of redundancy and unemployment on those who experience these events.
REDUNDANCY – A KIND OF BEREAVEMENT
While the beginning of an individual’s experience in an organization is a process of learning new behaviours, the end may be a process of letting go as a result of redundancy. Redundancy can come about because of downsizing. It can also be a result of skills obsolescence, as when e-mail networks reduce the need for an internal post system and the traditional mail coordinator is no longer required. Or it can be a result of outsourcing. For example, school meal services may be contracted out to private catering firms, making ‘dinner assistants’ redundant.Some employees volunteer for redundancy, and are happy to leave the organization with some financial package as compensation. Often, though, redundancy is perceived in terms of loss – loss of income, prestige, status and social identity. Those who are left behind in the organization often experience guilt, and, although they may be willing to work harder, they generally feel more insecure having witnessed the dismissal of colleagues (Daniel, 1972; Hartley et al., 1991). Redundancy has even been compared to bereavement, with associated psychological stages of shock, denial, disbelief and, later, acceptance.
PSYCHOLOGICAL EFFECTS OF UNEMPLOYMENT
Unemployment usually has very negative psychological consequences. Research from the 1930s to the present day has consistently shown that the unemployed have poorer mental health than comparable groups of employed people. Unemployed people have worse profiles on measures of anxiety, depression, life dissatisfaction, experienced stress, negative self-esteem and hopelessness about the future. They are also more likely to report social isolation and low levels of daily activity. Their physical health is poorer, and they are more likely to attempt and commit suicide (Fryer, 1992; Warr, 1987).
The average psychological wellbeing of school leavers who become unemployed diverges from those who get satisfactory jobs, even when their wellbeing before leaving school is similar. And people who move out of unemployment into satisfactory jobs show sharp improvements in mental health. These findings are striking in their consistency. The same picture emerges across studies, samples, different research groups, countries and over time. Striking, too, is the fact that the psychological effects of unemployment extend to the whole family. In a classic study of a whole village affected by unemployment, the effects were shown to spread across the whole community, lowering its spirit and functioning ( Jahoda, Lazarsfeld & Zeisel, 1972).
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