The notion that job insecurity may produce negative individual-level effects is well established. The feeling of insecurity in job often leads to lower productivity, coupled with absenteeism and low motivation levels in the workplace. Therefore for the bosses or for the managers, it is very crucial to ensure that their employees are in a good state of mind and they feel secure at work. How to do that? There may be various ways to turn the negative factors around. Here are a few.
Create good communication channels

It's very important to establish effective communication channels within an organization. It may be employee to employee or boss to employee, but what it can do is taking away the "gossip" and "rumors", resulting from a poor communication in a workplace. Utilizing the communication channels employees will be able to put forward the issues they are facing. It can also prove effective in eradicating misconceptions as well.
Tell what your expectations are

If the job is not described to an employee properly and high expectations are made from him, chances are there that the employee will soon become a victim of job insecurity. A constant fear that he is not fulfilling the company's expectations and can be terminated at any point of time will haunt his mind. So, clearly defining your expectations and creating a fair method of evaluating these expectations are very crucial.
Give a pat on their back

Appreciation always leads to better productivity and productivity reflects the morale of the employees. Too often managers miss the opportunity to recognize their employees for the work that they do and the contributions they make to the company. Unintentionally, managers assume that the paycheck received by their employees is recognition enough, which is not usually the case. They should appreciate the employees when they deserve and make them feel wanted.
Be a decisive leader

Generally, employees are unable to make decisions themselves and may look to their leader or manager, expecting a decisive action when needed. Being a leader, if you are unable to make decisive actions, it can lead to negative performances and absenteeism.
A feedback can serve better

It may not be a positive one, but a genuine and timely feedback can be a real booster in employees' morale. Don't make needless praise or rebuke, but ponder over how the feedback can be beneficial for the employees and then write a formal feedback letter. It will help them graph their future actions accordingly.