I thought we had an agreement… How to deal with psychological contract breach at work

Yannick Griep, PhD

Yannick Griep is an Assistant Professor at the University of Calgary and the Directory of the Mutuality and Reciprocity Lab. In this entry, he writes about the importance of psychological contracts between employees and organizations, and how this can impact attitudes and behaviors.

Samantha, a star real estate agent at the number 1 producing team in town, was told last year that she will get a promotion if she keeps up the hard work. Despite this promise, Samantha’s supervisor Tim just told her that they will not be able to promote her this   year, despite having met all performance requirements and just having sold a million-dollar property. At the same time, Samantha   noticed that her colleague Matthias received a bonus for selling a similar listing. Since then, Samantha has decided that she is going   to quit and is looking for a new position.

The situation that I am describing above forms the cornerstone of my field of research; psychological contracts and the experience of   psychological contract breach. How employers relate to their employees forms the bedrock of organizational success. However,   developing and maintaining a positive employer-employee relationship teeters between Tim’s need to fulfill his obligation to   Samantha (i.e. a promotion in return for fulfilling her obligations to sell a million-dollar property), and adapting to external factors such as the economic situation and limited resources. Understanding the role of the psychological contract is essential to balancing these conflicting realities.

What are psychological contracts and who cares?

Psychological contracts comprise an unwritten set of beliefs, separate from formal job contracts or descriptions, that reflect employees' perceptions of their own and their employer's obligations . For example, employees perceive that their employer owes them a competitive salary and a supportive work environment in return for them being loyal and committed to the organization. When employers fail to fulfill their obligations, also labelled psychological contract breach, employees traditionally develop a wide range of negative emotions toward their employer, including anger, frustration, disappointment, and outrage . These negative emotional reactions are believed to result in reduced performance, commitment, job satisfaction, organizational citizenship behavior, intentions to remain, innovative work behavior, and increased counterproductive work behavior, theft, withdrawal, workplace mistreatment, turnover intentions and actual turnover  . Despite these repercussions for employers, literature reveals that 55% of all employees feel that their employer breached the psychological contract within the first two years of employment , 65% of employees have experienced a psychological contract breach at least once during their career , and obligations are breached on a weekly, daily, and even hourly basis  . So when it is bound to happen, what can an employer or employee do about it?

What to do as an employer

It seems obvious that employers should strive to fulfil their obligations and commitments to employees to as great an extent as possible to prevent perceptions of psychological contract breach from occurring, given the substantial empirical evidence demonstrating that perceptions of psychological contract breach result in a wide range of negative emotional, attitudinal, and behavioral reactions. Moreover, a lot of my own work has demonstrated that once these reactions are set into motion, they tend to be self-sustaining and even negatively influence the way employees think about their employer. This implies that, for example, once employees have decided to engage in counterproductive work behavior in response to perceptions of psychological contract breach, they are likely to continue to behave counterproductive for several weeks.

A lot of the research conducted in my lab deals with the factors that contribute to the re-establishment of a positive employee-employer relationship. Across a series of studies, we have demonstrated that by offering social support, caring for one’s well-being, valuing and recognizing one’s efforts, listening to one’s complaints, and speaking up on behalf of the employee, the employer plays an important role in minimizing the negative emotional, attitudinal, and behavioral consequences of psychological contract breach. Specifically, we found that employees who perceive that their employer recognizes the existence of a breached obligation, provides a clarification for the breached obligation, and takes corrective actions, will have more positive emotions and attitudes toward their employer and will be more satisfied with the process of trying to achieve resolution. Sadly, we also found that waiting for your employer to take action is as pointless as hoping for rain in the dessert; there is only a very small chance that your employer will take the first step toward resolving a psychological contract breach.

What to do as an employee

In our work we found that employees need to step up and take the initiative in their own hands if they want to resolve a psychological contract breach. Based on the findings of some studies we have conducted, we would advise employees to speak up (e.g., express anger or raise concerns), show their dissatisfaction to their employer, or seek advice or instrumental support from their peers (e.g., opportunities to vent, discuss the problem, craft a solution), make their needs explicit to their employer, and ask for acknowledgement and/or corrective action. We found that employees who do actively engage in these actions are more likely to perceive that the psychological contract breach can be resolved and, as a consequence, will be more satisfied with the resolution process than those employees who sat around waiting for their employer to take the first step.

Yannick Griep is Assistant Professor of Psychology at the University of Calgary (Mutuality and Reciprocity Lab) and is Affiliated to the Stress Research Institute (Division of Epidemiology) of Stockholm University. For more information on the research described above, please visit www.mutualityreciprocitylab.com

References

Rousseau, D. M. (1989). Psychological and implied contracts in organizations. Employee Responsibilities and Rights Journal, 2(2),121-139.

Morrison, E. W., & Robinson, S. L. (1997). When employees feel betrayed: A model of how psychological contract violation develops. Academy of Management Review, 22(1), 226–256.

Zhao, H., Wayne, S. J., Glibkowski, B. C., & Bravo, J. (2007). Impact of psychological contract breach on work-related outcomes: A meta- analysis. Personnel Psychology, 60(3), 647–680.

Bal, P. M., De Lange, A. H., Jansen, P. G. W., & Van der Velde, M. E. G. (2008). Psychological contract breach and job attitudes: A meta-analysis of age as a moderator. Journal of Vocational Behavior, 72(1), 143–158.

Robinson, S. L. & Rousseau, D. M. (1994). Violating the psychological contract: Not the exception but the norm. Journal of Organizational Behavior, 15(3), 245–259.

Tomprou, M., Rousseau, D. M., & Griep, Y. (2016, August). The aftermath of psychological contract violation and its implications for resolution. Paper presented at the 76th Annual Meeting of the Academy of Management, Anaheim, CA.

Vantilborgh, T., Bidee, J., Pepermans, R., Griep, Y., & Hofmans, J. (2016). Antecedents of psychological contract breach: The role of job demands, resources and affect. PlosOne, 11(5), e0154696.

Griep, Y., Vantilborgh, T., Baillien, E., & Pepermans, R. (2016). The mitigating role of leader-member exchange in reaction to psychological contract violation: A diary study among volunteers. European Journal of Work and Organizational Psychology, 25(2), 254–271.