Financial insecurity forms a big part of employees’ life. Even though its origin can often be found in the private environment, employees take their financial insecurity with them to work, where it affects the organizational outcomes. Financial insecurity instigates strong emotional responses, which in turn lead to specific behavioral reactions. Drawing on Lazarus’ appraisal theory of emotion, the current study attempts to investigate the emotional mechanisms that underly the consequences of financial insecurity at the moment it occurs. Shame and hostility were included as mediators, due to their clear theoretical distinctions, with shame internalizing blame and hostility externalizing it. We adopted a within-person design to examine how shame and hostility mediated the effects of financial insecurity on work effort and counterproductive work behavior. Bi-weekly diary data was collected over three time points from 427 employees (Nwithin = 1111). We analyzed the data using multilevel path analysis and multilevel mediation analysis in Mplus 8.7. As predicted, we found that shame would mediate the effects on work effort, and we found limited evidence that hostility mediated the effects of financial insecurity on counterproductive work behavior. We discuss implications for theory, research, and practice.
