You have a source for "fear of layoffs increases productivity"?
That hasn't really been my experience at companies I've worked at which experience layoffs. There's a huge morale hit from the layoff and survivors soldier on, but certainly not with renewed pep.
From my experience it's quite obvious that people with families amidst layoffs and a difficult job market will work harder (or look like they are) to ensure they keep their jobs.
This is no longer a worker's market, meaning your labor has been devalued and competition has increased. Increased globalization and rising unemployment rates (latest report has a .5% increase) will spell disaster for those of us who keep the same attitudes we enjoyed the last couple decades. I'm just a worker like most people on here, but I'm really steeling myself for what's to come. I don't think now is the time to sit on your laurels and hope that your tenure is enough to keep your job around.
That hasn't really been my experience at companies I've worked at which experience layoffs. There's a huge morale hit from the layoff and survivors soldier on, but certainly not with renewed pep.