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Psychological Contract Breach & Violation. Dr. David McGuire Napier University Business School. Agenda. Rousseau Model of Psychological Breach/Violation Distinguishing Breach and Violation Pate et al. Psychological Contract Violation Model Response to Psychological Contract Violation

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psychological contract breach violation

Psychological Contract Breach & Violation

Dr. David McGuire

Napier University Business School

agenda
Agenda
  • Rousseau Model of Psychological Breach/Violation
  • Distinguishing Breach and Violation
  • Pate et al. Psychological Contract Violation Model
  • Response to Psychological Contract Violation
  • Role of Trust
  • Outcomes of Psychological Contract Breach/Violation
  • Layoffs & Psychological Contract
  • Expatriate Psychological Contract
  • Psychological Contract Drift
rousseau s 1995 model of contract breach violation
Rousseau’s (1995) model of contract breach/violation

Relationship

Strength

Monitoring

Contract

Outcome

Dependency

Perceived

Size of Loss

Violation

sources of contract violation
Sources of Contract Violation
  • Inadvertent
    • Able and willing
      • Divergent interpretations made in good faith
  • Disruption
    • Willing but unable
      • Inability to fulfil contract
  • Breach of Contract
    • Able but unwilling
      • Reneging
failure to keep commitments
Failure to keep commitments
  • Opportunism
    • Active, self-serving behaviour by one party at the expense of another (e.g. quitting an employer with whom there is an agreement to stay)
  • Negligence
    • Passive: Failure to perform specified responsibilities (e.g.mentors who fail to follow through on support to those they counsel)
  • Failure to cooperate
    • Behaviour that undermines ability of parties to maintain their relationship (e.g. refusing to participate in attempts to resolve disputes)
types of violation
Types of Violation
  • Absence of training, training not as promised 65%
  • Discrepancy between promised and actual pay 61%
  • Promotion schedule not as promised 59%
  • Misrepresentation of the nature of the job 40%
  • Promises regarding job security not met 37%
  • Feedback inadequate compared to promised 35%
  • Ees not asked for change input or told about it 29%
  • Ees given less responsibility than promised 27%
psychological contract breach
Psychological Contract Breach
  • Psychological Contract Breach is relatively common
  • Morrison & Robinson (1997): Breach is “the cognition that one’s organisation has failed to meet one or more obligations within one’s psychological contract”
  • May be a relatively short-term phenomenon
  • May result in an individual returning to returning to a relatively stable psychological contract state
psychological contract violation
Psychological Contract Violation
  • Morrison & Robinson (1997): Violation is “an emotional and affective state that may follow from the belief that one’s organisation has failed to adequately maintain the psychological contract”
  • Violation response more intense than breach as respect and codes of conduct are called into question as a “promise” has been broken and it is more personalised
guest conway psychological contract
Guest & Conway Psychological Contract

Background

Factors

Policy

Influences

The Outcomes

Attitudinal

Consequences:

Org. commit

Work & Life sat.

Job Security

Motivation

Individual

Age

Gender

Union Member

Level in Org.

Type of work

Hours worked

Marital Status

Children

Organisational

Sector

Org. size

Location

HR Policy &

Practice

Direct

Participation

Job Alternatives

Organisational

Support

Work Centrality

Surveillance

Org. Change

Suitably qualified

Promises made

State of

Psychological

Contract

Fairness

Trust

Delivery of

the Deal

Behavioural

Consequences:

Intention to stay

or quit

Knowledge

Sharing

pate et al psychological contract violation model
Pate et al. Psychological Contract Violation Model

Organisational

Justice Triggers

Distributive

Justice Issues

Procedural

Justice Issues

Interactional

Justice Issues

Attitudinal Outcomes

Lower Job Satisfaction

Lower Org. Commit

Increased Cynicism

Behavioural Outcomes

Lower Org. Citizenship

Lower effort

understanding psychological contract violation
Understanding Psychological Contract Violation

Violation is most likely when:

  • There is a history of conflict and low trust
  • Social distance exists between the parties
  • Incentives to breach contracts are high
  • One party places little value in the relationship

Factors that cause resistance to violation include:

  • Strong relationships
  • Frequent interactions
  • Sacrifice and previous investments
responses to psychological contract violation
Responses to PsychologicalContract Violation

Nature of Ee Response

Constructive Destructive

Voice Neglect

Destruction

Loyalty Exit

Silence

Active

Type of Ee Response

Passive

exit neglect destruction
Exit & Neglect/Destruction
  • Exit is most likely following violation when:
    • Contract is transactional
    • Many other potential jobs or potential employees exist
    • Relationship is brief
    • Other people are leaving
    • Attempts to address issues have failed
  • Neglect/Destruction is most likely when:
    • History of conflict, mistrust and violation
    • No voice channels exist
    • Other people demonstrate neglect and destruction
voice loyalty silence
Voice & Loyalty/Silence
  • Voice is most likely when
    • A positive relationship and trust exists
    • Voice channels exist
    • Other people are using voice
    • People believe they can exercise influence
  • Loyalty/Silence is most likely when:
    • There are no voice channels or ways of complaining
    • No alternative opportunities exist elsewhere
role of trust in environmental turbulence
Role of Trust in Environmental Turbulence
  • Trust influences the likelihood that an action would be perceived as a psychological breach
  • Trust acts as a mediator of the relationship between the psychological contract and employee’s subsequent contribution
  • Employees with low initial trust will experience a greater decline in their trust following a perceived breach
types of trust
Types of Trust
  • Calculus Based Trust: Individual rationally weighs up the value of sustaining the relationship. Usually economically based
  • Knowledge Based Trust: This concerns the predictability of the other party’s behaviour and their likely future course of action
  • Identification Based Trust: Involves identification with other party’s values, desires and intentions. Violation of this form of trust engenders strongest reaction
outcomes of psychological contract breach
Outcomes of Psychological Contract Breach
  • After a breach Employees are motivated to reduce their commitment to the organisation or to contribute less to the organisation in terms of in-role of extra-role performance (Turnley et al. 2003)
  • Negatively influences employee attitudes towards organisations and their jobs (Lester et al. 2002)
  • Leads employees to believe that organisation does not care about their well-being & cannot be trusted (Robinson 1996)
  • Negatively related to affective commitment & positively related to intention to quit (Raja et al. 2004)
outcomes of psychological contract breach18
Outcomes of Psychological Contract Breach
  • Less motivated to restore balance to the employment relationship in some way (Lester et al. 2002)
  • Organisational Citizenship Behaviour (OCB)– discretionary, extra-role behaviour intended to benefit the organisation not formally recognised or rewarded during performance review
  • In cases of breach, employees will reduce OCB, because it is discretionary and likely to go unpunished (Robinson & Morrison 1995)
outcomes of psychological contract violation
Outcomes of Psychological Contract Violation
  • Psychological Contract Violation will be a key intervening variable that will explain (mediate) when psychological contract breach will influence intention to quit (Suazo et al. 2005; Turnley & Feldman 2000)
  • Psychological Contract Violation will mediate the relationship between psychological contract breach and professional commitment (Suazo et al. 2005)
layoffs psychological contract
Layoffs & Psychological Contract
  • Edwards et al. (2003): Organisations with Ee ideology of self-reliance perceived less of a breach of contract following a layoff
  • High levels of work ethic and self-esteem influence reactions of survivors to layoffs (Brockner et al. 1985; 1988)
  • Astrachen (1995): Layoff announcement induces separation anxiety and degree of this depends on size of layoffs
  • Mone (1997): Trust decreases following a layoff
layoffs psychological contract21
Layoffs & Psychological Contract
  • Leana et al. (1992; 1987): Victims experience overwhelming pessimism, anger, stress and feelings of learned helplessness
  • Interpersonal Treatment/Interactional Justice accords layoff victims increased perceived justice (Naumann et al. 1998; Bennett et al. 1995)
  • Marks & Mirvis (1998): The way in which a merger is handled by top mgt. affects Ees feelings about their jobs and sense of personal stability.
psychological contract change
Psychological Contract Change
  • Internal Change
    • Contract Drift: Changes to the contract without any formal effort to change the terms
  • External Change
    • Accommodation: Mutually acceptable adjustments within the existing contract
    • “We must adjust to changing times and still hold to underlying principles”
    • Transformation: Redefinition and renegotiation of the contract
psychological contract drift
Psychological Contract Drift

Gradual External Change

Zone of Acceptance

Cognitive

Tendencies

Working

Contract

Model

Maturation

Contract

Schema

managing psychological contract drift
Managing Psychological Contract Drift
  • Periodic Conferences: Discussions and reminders of contract terms can prevent erosion or expansion of contract terms due to drift
  • Training & Development Exercises: Identifies manager and subordinate expectations and allows highlighting of differences/similarities
  • Updates: Resigning of contract on a regular basis allows renewal and re-examination of terms and conditions as well as reciprocal expectations