Outsourcing and Organizational Performance: The Employee Perspective

Abstract

We develop a conceptual framework that integrates and extends existing explanations of outsourcing’s effects on the government workforce and organizational performance. We then test our logic using 5 years of panel data (2010-2014) from U.S. federal agencies. The evidence presents modest negative effects of outsourcing on organizational performance as perceived by employees. The analysis also reveals that outsourcing affects perceived performance through its influence on job satisfaction.