Article written by: Denise M. RousseauPresented by: Katrina Keller

Denise M. RousseauProfessor:

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 BerkeleyA.B. in Psychology and Anthropology (1973)M.A. in Psychology (1975)Ph.D. in Psychology (1977)

Denise M. RousseauSubjects 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?”Exchange agreement between employees and

organizationPromisesPerceptions

Mutual expectationsEmployee performanceEmployee treatment

Violations to the psychological contractDefinition – Failure to comply with contract

termsVariable nature of psychological contract and

violationsEmployee interpretationsEmployer interpretations

Basic facts of contract violationCommonplaceAdverse reactions by the injured partyDoes not have to lead to break in relationship

Forms of contract violationInadvertent violation

Able and willing

DisruptionWilling but unable

Breach of contractAble but unwilling

Increased risk of violationLow trust and history of conflictDifferent lensesExternal pattern of violationsHigh incentives to breach and lack of

alternativesDifferent value placed on the relationship

Responses to contract violation

ExitResignationTermination

RemainVoice/Complaint Loyalty/ SilenceDestruction/Neglect

Responses continued…Low value on the relationship by the victim

ExitDestruction

High value on the relationship by the victimVoice/ComplaintsLoyalty/Silence

Shaped by organizational cultureComplaint vs. constructive criticismSupervisor/Manager relationships

Exit ResponseActive responseBreak in the relationship

TerminationResignation

Most likely Transactional contractOther potential jobs or potential employees availableBrief relationshipOther employees exitingPrevious violations go unresolved or failed solutions

Voice ResponseActive responseAttempts to remedy the violationFocus

Restore trustMinimize losses

Most likelyPositive relationship and existence of trustVoice channels existOther employees using “voice” responseEmployees belief they can influence compliance

What happens to unresolved voice?

Loyalty ResponsePassive response or no response

AvoidanceLoyaltyWillingness to endure or accept circumstances

Pessimistic vs. Optimistic loyalty responseMost likely

Ineffective voice channelsNo voice channels or established ways to

communicateLack of alternative opportunities

Destruction/Neglect ResponseActive response

DestructionPassive response

NeglectErosion of the relationship

Violations = End of contract?Pattern vs. Isolated eventViolator’s motivesViolator behaviorLosses incurredTreatment following violation

Reference 1Suazo, 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 ContractBreach vs. ViolationBreach

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

ViolationEmotional state that may (but not always)

result from the perception of the psychological contract breach (Morrison & Robinson, 1997)

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% Female46% Hispanic-American, 40% African-American,

14% White-AmericanMean age = 37Average organization tenure = 4.5 yearsAverage job tenure = 2 yearsSeven point scale with 1 = Strongly Disagree

and 7 = Strongly Agree

Survey Hypotheses - BreachPositively related to intent to quitNegatively related to professional

commitmentNegatively related to in-role job performanceNegatively related to the performance of

helping behaviorPositively related to psychological contract

violation

Survey Hypotheses - ViolationMediate the relationship between psychological

contract breach and intent to quitMediate the relationship between psychological

contract breach and professional commitmentMediate the relationship between psychological

contract breach and in-role job performanceMediate the relationship between psychological

contract breach and helping behavior

Survey ResultsAll 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 importantPerception of breach itself more important for

behavioral responses

NoteSuazo, Turnley, and Mai-Dalton researched:

Exit response Destruction/Neglect response

Reference 2Turnley, 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 ResponsesExitVoiceNeglectLoyaltyDo violations increase or decrease each

behavior?Do situational factors moderate employee

responses?

Situational Factors StudiedAvailability of attractive employment

alternativesJob marketOther options

Justification sufficiency of the violationVoluntary violationInvoluntary violation

Degree of procedural justice in the organization’s decision-making processIs the organization fair to all employees?

Causes of Contract ViolationsReneging

Incongruence

Survey804 managerial-level personnel

55% Male, 45% FemaleMean age = 35Average organization tenure = 7 yearsAverage job tenure = 3 yearsAverage salary = $49,000All were U.S. citizensResponse rate = 33%

Survey Continued4 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 - ViolationsExit

Positively related to job search behaviorsVoice

Positively related to the amount of employee voice behaviors

LoyaltyNegatively related to an employee’s

willingness to defend the organization to outsiders

NeglectPositively related to neglect behaviors

Survey Hypotheses – Situational ModeratorsAvailability of Attractive Employment

AlternativesWill moderate the relationships between

violations and employee responsesExit, Voice, Neglect will be more likelyLoyalty will be less likely

Justification for ViolationWill moderate the relationships between

violations and employee responsesExit, Voice, Neglect will be more likely Loyalty will be less likely

Survey Hypotheses- Situational Moderators *Cont.Procedural Justice

Will moderate the relationships between violations and employee responses

Exit, Voice, Neglect will be more likelyLoyalty will be less likely

Survey ResultsAll violation hypotheses supportedAll situational moderators hypotheses

partially supportedExit & Loyalty supportedVoice & Neglect – Not fully supported

Survey Results ContinuedSample 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 ContinuedSample 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 ContinuedViolations were strongly related to:

ExitLoyalty

Less likely to experience negative consequences Typically occur outside of employment organization

Survey Results ContinuedViolations were less strongly related to:

Voice NeglectWhy?

Increased likelihood of negative consequences Occur at work

Exit is most consistently predicted response

NotesRefercence 2 used psychological contract

violation for all definitions. No distinction made between breach versus

violation.

Reference 3Pate, 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“To what extent does psychological contract

violation impact both attitude and behavior?”Psychological breach vs. psychological

violationPsychological violation responses

DisappointmentFrustrationAnger

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 ResponsesReduced organizational commitmentReduced job satisfactionIncreased cynicism Break down in relationships

Behavioral ResponsesAbsenteesismReduced organizational citizenshipReduced effort

Company informationCollected over 3 yearsMid-sized textile company in BritainCompany over 200 years oldSignificant 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 serviceIncreased focus on specialized trainingPlans to relocate 2 of the 4 facilitiesSale of 80% of company shares to Greek

family-owned company

Survey HypothesesTriggers of psychological contract violation

will result in a change in employee attitudeLower job satisfactionLower organizational commitment

Triggers of psychological contract violation will result in a change in employee behaviorReduced effortWithdrawal of citizenship

Psychological contract violation will result in increased absenteeism

Research MethodThree areas

Quantitative attitude survey Mailed to each employee at home address Response rate = 52%

Analysis of absentee informationQualitative interviews

Random sample 50 employees 45 minutes – 90 minutes in duration

Research Results - AttitudesJob satisfaction linked to

Distributive justice Procedural justice Overall enjoyment related to fair outcomes and

proceduresEmployee commitment linked to

Distributive justiceEmployee/Management relationship

Loyalty linked toProcedural justice

Research Results - BehaviorsEffort was not affected by any of the 3

defined triggersNo direct relationship between absenteeism

and violationsException 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 AnalysisAttitudes were effected by violationsAttitudes do not necessarily equate to

behavior changes especially whenHigh job insecurityStrong relationships between coworkers Strong sense of pride of workEmployees see the organization and job as

separate