The psychological contract violations and modifications
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The Psychological Contract: Violations and Modifications. Article written by: Denise M. Rousseau Presented by: Katrina Keller. Denise M. Rousseau. Professor: Organizational Behavior and Public Policy – Heinz School of Public Policy and Management

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The psychological contract violations and modifications

The Psychological Contract: Violations and Modifications

Article written by: Denise M. Rousseau

Presented by: Katrina Keller


Denise m rousseau

Denise M. Rousseau

  • Professor:

    • Organizational Behavior and Public Policy – Heinz School of Public Policy and Management

    • Tepper School of Business, Carnegie Mellon University

  • Degrees earned from the University of California at Berkeley

    • A.B. in Psychology and Anthropology (1973)

    • M.A. in Psychology (1975)

    • Ph.D. in Psychology (1977)


Denise m rousseau1

Denise M. Rousseau

  • Subjects of study:

    • Psychological contracts between employees and employers

    • Human Resource Management

    • Organizational culture, behavior, and theory

  • Books:

    • Psychological Contracts in Employment: Cross-national Perspectives (2000 with Rene Schalk)

    • Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements (1995)

    • Author or co-author of more than 10 books and 100 articles

  • Editor-in-Chief:

    • Journal of Organizational Behavior from 1998-2007


  • What is a psychological contract

    What is a “psychological contract?”

    • Exchange agreement between employees and organization

      • Promises

      • Perceptions

    • Mutual expectations

      • Employee performance

      • Employee treatment


    Violations to the psychological contract

    Violations to the psychological contract

    • Definition – Failure to comply with contract terms

    • Variable nature of psychological contract and violations

      • Employee interpretations

      • Employer interpretations

    • Basic facts of contract violation

      • Commonplace

      • Adverse reactions by the injured party

      • Does not have to lead to break in relationship


    Forms of contract violation

    Forms of contract violation

    • Inadvertent violation

      • Able and willing

    • Disruption

      • Willing but unable

    • Breach of contract

      • Able but unwilling


    Increased risk of violation

    Increased risk of violation

    • Low trust and history of conflict

    • Different lenses

    • External pattern of violations

    • High incentives to breach and lack of alternatives

    • Different value placed on the relationship


    Responses to contract violation

    Responses to contract violation

    • Exit

      • Resignation

      • Termination

    • Remain

      • Voice/Complaint

      • Loyalty/ Silence

      • Destruction/Neglect


    Responses continued

    Responses continued…

    • Low value on the relationship by the victim

      • Exit

      • Destruction

    • High value on the relationship by the victim

      • Voice/Complaints

      • Loyalty/Silence

    • Shaped by organizational culture

      • Complaint vs. constructive criticism

      • Supervisor/Manager relationships


    Exit response

    Exit Response

    • Active response

    • Break in the relationship

      • Termination

      • Resignation

    • Most likely

      • Transactional contract

      • Other potential jobs or potential employees available

      • Brief relationship

      • Other employees exiting

      • Previous violations go unresolved or failed solutions


    Voice response

    Voice Response

    • Active response

    • Attempts to remedy the violation

    • Focus

      • Restore trust

      • Minimize losses

    • Most likely

      • Positive relationship and existence of trust

      • Voice channels exist

      • Other employees using “voice” response

      • Employees belief they can influence compliance

    • What happens to unresolved voice?


    Loyalty response

    Loyalty Response

    • Passive response or no response

      • Avoidance

      • Loyalty

      • Willingness to endure or accept circumstances

    • Pessimistic vs. Optimistic loyalty response

    • Most likely

      • Ineffective voice channels

      • No voice channels or established ways to communicate

      • Lack of alternative opportunities


    Destruction neglect response

    Destruction/Neglect Response

    • Active response

      • Destruction

    • Passive response

      • Neglect

    • Erosion of the relationship


    Violations end of contract

    Violations = End of contract?

    • Pattern vs. Isolated event

    • Violator’s motives

    • Violator behavior

    • Losses incurred

    • Treatment following violation


    Reference 1

    Reference 1

    • Suazo, M. M., Turnley, W. H., Mai-Dalton, R. R. (2005). The Role of Perceived Violation in Determining Employees’ Reactions to Pyschological Contact Breach. Journal of Leadership and Organizational Studies, 12 (1), 24-36.

      • Referencing:

        • Morrison, E. W., Robinson, S. L. (1997). When employees feel betrayed: A model of how psychological contract violation develops. Academy of Management Review, 22, 226-256.


    Psychological contract breach vs violation

    Psychological ContractBreach vs. Violation

    • Breach

      • Employee’s cognition that he/she has received less than promised (Morrison & Robinson, 1997)

    • Violation

      • Emotional state that may (but not always) result from the perception of the psychological contract breach (Morrison & Robinson, 1997)


    Survey

    Survey

    • 234 full-time employees

      • 108 employees of a New Mexico County Government

      • 126 professional participants of a PhD Project Conference (not PhD students)

      • 41% Male, 59% Female

      • 46% Hispanic-American, 40% African-American, 14% White-American

      • Mean age = 37

      • Average organization tenure = 4.5 years

      • Average job tenure = 2 years

      • Seven point scale with 1 = Strongly Disagree and 7 = Strongly Agree


    Survey hypotheses breach

    Survey Hypotheses - Breach

    • Positively related to intent to quit

    • Negatively related to professional commitment

    • Negatively related to in-role job performance

    • Negatively related to the performance of helping behavior

    • Positively related to psychological contract violation


    Survey hypotheses violation

    Survey Hypotheses - Violation

    • Mediate the relationship between psychological contract breach and intent to quit

    • Mediate the relationship between psychological contract breach and professional commitment

    • Mediate the relationship between psychological contract breach and in-role job performance

    • Mediate the relationship between psychological contract breach and helping behavior


    Survey results

    Survey Results

    • All hypotheses supported except:

      • Mediate the relationship between psychological contract breach and in-role job performance

      • Mediate the relationship between psychological contract breach and helping behavior

    • Breach drives the in-role job performance and helping behavior

    • Feelings/violation less important

    • Perception of breach itself more important for behavioral responses


    The psychological contract violations and modifications

    Note

    • Suazo, Turnley, and Mai-Dalton researched:

      • Exit response

      • Destruction/Neglect response


    Reference 2

    Reference 2

    • Turnley, W.H., Feldman, D. C. (1999). The Impact of Psychological Contract Violations on Exit, Voice, Loyalty, and Neglect. Human Relations, 52 (7), 895-922.

      • Referencing

        • Morrison, E. W., Robinson, S. L. (1997). When employees feel betrayed: A model of how psychological contract violation develops. Academy of Management Review, 22, 226-256.

        • Rousseau, D. M. (1995). Psychological contracts in organizations: Understanding written and unwritten ten agreements. Thousand Oaks, CA: Sage Publications.


    Psychological contract violation responses

    Psychological Contract Violation Responses

    • Exit

    • Voice

    • Neglect

    • Loyalty

    • Do violations increase or decrease each behavior?

    • Do situational factors moderate employee responses?


    Situational factors studied

    Situational Factors Studied

    • Availability of attractive employment alternatives

      • Job market

      • Other options

    • Justification sufficiency of the violation

      • Voluntary violation

      • Involuntary violation

    • Degree of procedural justice in the organization’s decision-making process

      • Is the organization fair to all employees?


    Causes of contract violations

    Causes of Contract Violations

    • Reneging

    • Incongruence


    Survey1

    Survey

    • 804 managerial-level personnel

      • 55% Male, 45% Female

      • Mean age = 35

      • Average organization tenure = 7 years

      • Average job tenure = 3 years

      • Average salary = $49,000

      • All were U.S. citizens

      • Response rate = 33%


    Survey continued

    Survey Continued

    • 4 samples:

      • 213 recent MBA graduates

      • 263 international business managers and graduates of international business programs

      • 223 managers and executives from a Fortune 500 bank

        • Recently undergone mergers and acquisition

        • Widespread layoffs

      • 105 employees from a state agency

        • Restructured and reorganized in previous 2 years

    • 16 specific elements of the psychological contract

      • Personal ranking - Scale ranging from 1 (Not Important) to 10 (Extremely Important)

      • Organizational compliance – Scale ranging from -2 (Received much less than promised) to +2 (Received much more than promised)


    Survey hypotheses violations

    Survey Hypotheses - Violations

    • Exit

      • Positively related to job search behaviors

    • Voice

      • Positively related to the amount of employee voice behaviors

    • Loyalty

      • Negatively related to an employee’s willingness to defend the organization to outsiders

    • Neglect

      • Positively related to neglect behaviors


    Survey hypotheses situational moderators

    Survey Hypotheses – Situational Moderators

    • Availability of Attractive Employment Alternatives

      • Will moderate the relationships between violations and employee responses

      • Exit, Voice, Neglect will be more likely

      • Loyalty will be less likely

    • Justification for Violation

      • Will moderate the relationships between violations and employee responses

      • Exit, Voice, Neglect will be more likely

      • Loyalty will be less likely


    Survey hypotheses situational moderators cont

    Survey Hypotheses- Situational Moderators *Cont.

    • Procedural Justice

      • Will moderate the relationships between violations and employee responses

      • Exit, Voice, Neglect will be more likely

      • Loyalty will be less likely


    Survey results1

    Survey Results

    • All violation hypotheses supported

    • All situational moderators hypotheses partially supported

      • Exit & Loyalty supported

      • Voice & Neglect – Not fully supported


    Survey results continued

    Survey Results Continued

    • Sample differences

      • Bank managers

        • Lack of job security

        • Compensation

        • Experienced greatest levels of violations (with State agency employees)

      • State agency employees

        • Compensation

        • Experienced greatest levels of violations (with Bank managers)


    Survey results continued1

    Survey Results Continued

    • Sample differences

      • Recent MBA graduates

        • Lack of job challenge (misrepresented amount of responsibility, authority, or major tasks of job)

        • Experienced lower levels of violations

    • International business managers

      • Delays in obtaining promised overseas assignments

      • Employers failed to keep committed level of support they would receive when out of their home country

  • Most significant violations where restructuring and mergers had taken place


  • Survey results continued2

    Survey Results Continued

    • Violations were strongly related to:

      • Exit

      • Loyalty

        • Less likely to experience negative consequences

        • Typically occur outside of employment organization


    Survey results continued3

    Survey Results Continued

    • Violations were less strongly related to:

      • Voice

      • Neglect

      • Why?

        • Increased likelihood of negative consequences

        • Occur at work

    • Exit is most consistently predicted response


    Notes

    Notes

    • Refercence 2 used psychological contract violation for all definitions.

    • No distinction made between breach versus violation.


    Reference 3

    Reference 3

    • Pate, J., Martin, G., McGoldrick, J. (2003). The impact of psychological contract violation on employee attitudes and behaviour. Employee Relations, 25 (6), 557-573.


    Research items

    Research Items

    • “To what extent does psychological contract violation impact both attitude and behavior?”

    • Psychological breach vs. psychological violation

    • Psychological violation responses

      • Disappointment

      • Frustration

      • Anger


    Organizational justice

    Organizational Justice

    • “Fairness”

    • Types of violations

      • Distributive violation

        • Perceptions of unfair outcomes

      • Procedural violation

        • Perception of unfair procedure application

      • Interactional violation

        • Perception of trust towards managers and organization


    Attitudinal responses

    Attitudinal Responses

    • Reduced organizational commitment

    • Reduced job satisfaction

    • Increased cynicism

    • Break down in relationships


    Behavioral responses

    Behavioral Responses

    • Absenteesism

    • Reduced organizational citizenship

    • Reduced effort


    Company information

    Company information

    • Collected over 3 years

    • Mid-sized textile company in Britain

    • Company over 200 years old

    • Significant company changes from 1996-2000

      • Reduced workforce from 660 to 600 and looking to further reduce to 500 over 2 year period

      • New culture based on customer service

      • Increased focus on specialized training

      • Plans to relocate 2 of the 4 facilities

      • Sale of 80% of company shares to Greek family-owned company


    Survey hypotheses

    Survey Hypotheses

    • Triggers of psychological contract violation will result in a change in employee attitude

      • Lower job satisfaction

      • Lower organizational commitment

    • Triggers of psychological contract violation will result in a change in employee behavior

      • Reduced effort

      • Withdrawal of citizenship

    • Psychological contract violation will result in increased absenteeism


    Research method

    Research Method

    • Three areas

      • Quantitative attitude survey

        • Mailed to each employee at home address

        • Response rate = 52%

      • Analysis of absentee information

      • Qualitative interviews

        • Random sample

        • 50 employees

        • 45 minutes – 90 minutes in duration


    Research results attitudes

    Research Results - Attitudes

    • Job satisfaction linked to

      • Distributive justice

      • Procedural justice

      • Overall enjoyment related to fair outcomes and procedures

    • Employee commitment linked to

      • Distributive justice

      • Employee/Management relationship

    • Loyalty linked to

      • Procedural justice


    Research results behaviors

    Research Results - Behaviors

    • Effort was not affected by any of the 3 defined triggers

    • No direct relationship between absenteeism and violations

      • Exception in November 1998 – Psychological contract breach occurred with sale of the organization

    • Only behavior linked was organizational citizenship (reduced initiative by employees to work “beyond the written contract”)


    Overall analysis

    Overall Analysis

    • Attitudes were effected by violations

    • Attitudes do not necessarily equate to behavior changes especially when

      • High job insecurity

      • Strong relationships between coworkers

      • Strong sense of pride of work

      • Employees see the organization and job as separate


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