Nonstandard Employment and Organizational Effectiveness: The Transition from Nonstandard to Standard Employment in South Korea

Abstract

To address the insecure work conditions of nonstandard employment, South Korea’s government is transitioning nonstandard employment to standard employment in public organizations. Despite this policy’s normative adequacy, previous studies have rarely focused on the impact of these employment practices on organizational effectiveness. To fill this gap, we examine how the rates of nonstandard employment and transition, and the interaction between them, affect organizational effectiveness. Using longitudinal data from public organizations in South Korea and the generalized method of moments analysis, the results show that the transition policy has conflicting consequences depending on employment type. Direct nonstandard employment transitions negatively impact organizational effectiveness, contrary to indirect nonstandard employment’s positive impact. We suggest that a transition policy should be implemented to improve nonstandard employees’ work conditions and their relationship with their initial standard employment.