Are “outsiders” in? Exploring the impact of outsourced workers’ perceived insider status and job value status on job performance

INTRODUCTION: Outsourcing, one of the nonstandard employment forms, has been increasingly popular with a wide variety of industries and employers. However, much less is known about its consequences at the employee level, especially relative to standard-employed colleagues. Drawing on social categorization theory and the human resource architecture model, the study was to investigate how outsourced (vs. standard) employment form impacts employees’ perceived insider status and then job performance, as well as the moderating role of job value status. METHODS: To examine these effects, we collected two-wave and multi-source questionnaires from a sample of 147 outsourced employees, 279 standard employees, and their immediate supervisors. And interviews with 31 employees, their supervisors, and human resources personnel provided further support for our findings. RESULTS: The results showed that relative to standard employees, outsourced employees were lower in perceived insider status and indirectly worse in job performance. Furthermore, both the comparative effects were stronger among core-status than peripheral-status employees. DISCUSSION: Our study contributes to outsourcing and widely nonstandard employment literature, bringing the research focus from employers to outsourced employees’ psychological and behavioral consequences. Also, we extended literature on the human resource architecture, through a deeper investigation on the issue of employment form-job value status (mis)matching as well as its impacts on employees.