Fairness Perceptions of Job Displacement Due to Automation and Outsourcing

Abstract

Automation is a critical and timely source of job displacement, but little is known about how observers react to automation-driven layoffs. In a series of six studies, we contrast reactions to automation with reactions to outsourcing, a conceptually similar organizational decision. Studies 1a-1b demonstrate that people find layoffs caused by automation to be fairer than those caused by outsourcing. Studies 2a-2b find a similar pattern when the issue of technology is moot: respondents find replacement of a worker to be fairer when a more productive worker is hired as a replacement (analogous to automation) than when a cheaper worker is hired (analogous to outsourcing). Study 3 considers mediating mechanisms for these effects; potential for long-term progress, worker devaluation and disenfranchisement, and perceived motivation emerged as significant mediators. Study 4 examines how motivation framing and layoff cause interact to shape fairness perceptions. We discuss these findings’ implications for theory and practice.