A Discrepancy Model of Psychological Con
A DISCREPANCY MODEL OF PSYCHOLOGICAL
CONTRACT VIOLATIONS
William H. Turnley
Kansas State University, Manhattan, KS, USA
Daniel C. Feldman
University of South Carolina, Columbia, SC, USA
While previous research suggests that employees rarely believe organizations keep all of the commitments made to them, only in some cases do
employees perceive these unfulfilled commitments as psychological
contract violations and make active attempts to ``get even'' with their
employers for the betrayal. This paper presents a discrepancy model for
understanding when employees will perceive unfulfilled commitments as
psychological contract violations and for understanding when employees
will respond in a hostile manner to those violations. Among other factors,
the sources of employees' expectations, the specific contract elements on
which discrepancies occur, and the magnitude and timing of the unfulfilled
commitments are all posited as important contributors to perceptions of
psychological contract violations. Then, individual differences, organizational practices, and labor market factors are examined as important
moderators of how strongly employees respond to perceived psychological
contract violations. The article concludes with directions for future
theoretical and empirical research on psychological contract violations
and employees' reactions to them.
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
The topic of psychological contracts between employees and organizations has
received renewed attention over the past 10 years. While the earliest work on
this topic defined psychological contracts as the shared perceptions between
employees and employers regarding what each party owed the other in the
employment relationship (cf., Argyris, 1960; Schein, 1965; Kotter, 1973), more
recent work has defined the psychological contract as an individual's perception of what he/she owes the employer and the inducements the individual
Direct all correspondence to: William H. Turnley, Department of Management, College of Business
Administration, Kansas State University, Manhattan, KS 66506, USA. E-mail: turnley@ksu.edu
Human Resource Management Review,
Volume 9, Number 3, 1999, pages 367 ± 386
All rights of reproduction in any form reserved.
Copyright # 1999
by Elsevier Science Inc.
ISSN : 1053 ± 4822
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VOLUME 9, NUMBER 3, 1999
believes that he/she is owed in return (Rousseau, 1989). As currently conceptualized, then, the psychological contract is an inherently subjective perception; each individual possesses a unique psychological contract based upon
his / her own understanding of the reciprocal obligations in the employment
relationship between the individual and the organization.
In line with this recent conceptualization, research has examined two
questions in particular. First, there has been considerable work conducted
on the changing nature of the psychological contract and the general
decline of mutual loyalty between employees and employers (Hall & Moss,
1998; Martin, Staines, & Pate, 1998; Parks & Kidder, 1994). Second, a
great deal of attention has been given to the aversive consequences of
psychological contract violations on employees' job attitudes, work behaviors, and turnover (Robinson, 1996; Robinson & Rousseau, 1994; Turnley
& Feldman, 1999).
Although it is clear that many employees (especially new hires and
employees in downsizing organizations) feel their psychological contracts
have not been fully met, the research also suggests that not all
unfulfilled commitments are perceived as psychological contract violations
and not all employees respond in a hostile manner even when they
perceive their psychological contracts have been violated (Rousseau, 1995;
Turnley & Feldman, 1998). The present article addresses these two
phenomena in particular.
In the first section of the paper, a discrepancy framework for understanding psychological contract violations is presented. This framework
examines when unfulfilled commitments will reach the threshold of being
perceived as psychological contract violations. Here, the focus is on the
sources of employees' expectations, the specific contract elements on which
discrepancies occur, and the nature of the discrepancy itself. Then, in the
second section of the paper, we examine when employees will respond
negatively to those psychological contract violations they do experience.
Specifically, we examine the individual differences, organizational practices,
and labor market factors, which moderate employees' reactions to psychological contract violations. The article concludes with directions for future
theoretical and empirical research on psychological contract violations and
employee responses to them.
WHEN WILL UNFULFILLED COMMITMENTS BE PERCEIVED AS
PSYCHOLOGICAL CONTRACT VIOLATIONS?
As noted above, several researchers have found that employees do not always
perceive instances in which they receive less than they were promised as
psychological contract violations. In an attempt to clarify the definition of
psychological contract violation, Morrison and Robinson (1997) separated
employees' cognitive perception that they have received less than promised
from their affective response to such a situation. Specifically, Morrison and
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369
Robinson (1997:230) define psychological contract breach as the cognition ``that
one's organization has failed to meet one or more obligations within one's
psychological contract in a manner commensurate with one's contributions.''
They reserve the term psychological contract violation to refer to the emotional
and affective state, characterized by disappointment and anger, that sometimes
results from the belief that the organization has failed to adequately maintain
the psychological contract. According to this perspective, then, psychological
contract violation refers only to those instances when employees feel betrayed by their organization's failure to live up to the commitments it made
to them.
Prior research has yielded somewhat inconsistent results regarding the
extent to which employees experience psychological contract violations. On
one hand, Robinson and Rousseau (1994) reported that approximately 55% of
a sample of recent MBA graduates indicated that their psychological contract
had been violated within the first two years of employment. In addition,
many recent discussions of the changes taking place in the employment
relationship suggest that psychological contract violations are ubiquitous in
today's workplace (e.g., Herriot, Manning, & Kidd, 1997; Kissler, 1994; Parks
& Kidder, 1994; Singh, 1998). In contrast, Turnley and Feldman (1998)
reported a much lower incidence of perceived psychological contract violation.
In their study, only 25% of respondents reported significant violations of their
psychological contracts.
A large part of this discrepancy may be explained by the way that
psychological contract violation is conceptualized and measured. According
to prior research, most employees report receiving less than they were
promised on at least one element of the psychological contract. In the strictest
sense of the term, then, most employees have experienced a violation of their
psychological contract. However, when asked about the overall extent to which
their organization has kept its promises and obligations, most employees are
more positive.
Specifically, in a study of over 800 managers, Turnley (1996) found that 81%
of respondents reported receiving less (or much less) than promised on at least
one of the job factors comprising the psychological contract. However, when
asked to assess the overall extent to which their organization had kept its
promises, only 24% of respondents said that they received less (or much less)
than promised. Thus, the extent of reported psychological contract violation
(and possibly the magnitude of the problem it represents in the workplace
today) appears to be largely dependent on the way that psychological contract
violations are measured.
What most employees encounter, then, when they receive less than they
were promised or expected is really a psychological contract ``breach'' (Morrison & Robinson, 1997). In this next section, we examine when employees will
interpret such discrepancies or breaches as psychological contract violations.
The model presented in Fig. 1 suggests the three main factors in this regard
are sources of employees' expectations, the specific elements of the psychological contract breached, and the characteristics of the discrepancy itself.
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Figure 1. Discrepancy Model of Phychological Contract Violation.
Sources of Employees' Expectations
Individuals develop the expectations that comprise their psychological
contracts from three main sources: the specific promises made to them by
organizational representatives, their perceptions of the organization's culture
and common practices, and their idiosyncratic (and often idealized) expectations of how the organization operates.
First, numerous individuals act as organizational agents or representatives.
Recruiters, human resource specialists, direct supervisors, and upper-level
managers may make specific promises about what employees can expect to
receive from the organization. For example, a supervisor may tell a new
employee that a raise and promotion will be forthcoming if the employee
performs well during his or her first year on the job. Additionally, statements
made in organizational personnel manuals may generate expectations that
become a part of the psychological contract ( Rousseau & Greller, 1994). For
example, personnel manuals that specify a certain level of benefits or which
outline policies to be used regarding compensation, advancement, or discipline
are commonly perceived as obligating the organization to provide the benefits
described or to follow the policies that have been prescribed. These explicit
statements, whether made verbally by organizational agents or conveyed in
writing within personnel manuals, are likely to be among the most salient
sources of employees' expectations.
Second, employees' perceptions of the organization's culture or standard
operating practices are also likely to shape the beliefs that make up the
psychological contract (Guzzo & Noonan, 1994; Sims, 1994). These beliefs
are likely to be formed by early socialization experiences that help to crystallize and define the expectations of employees regarding the way that they will
be treated by the organization and what they can reasonably expect to receive
(Feldman, 1976; Thomas & Anderson, 1998). Similarly, employees are likely to
develop expectations from observing typical organizational practices and from
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371
interpreting historical patterns of organizational practice as part of the
unwritten agreement that exists between employees and their organizations
(Rousseau, 1989). Thus, although the expectations arising from individuals'
perceptions of their organization's culture may never be explicitly discussed,
these expectations are likely to form a substantial part of the psychological
contract as well.
Third, the content of the psychological contract is also likely to be shaped by
the idiosyncratic ways in which individuals process information and by
individuals' idealized notions of how organizations operate. For example,
faculty members who are relatively weak in research may define their
psychological contracts as substituting superior teaching and service as alternative forms of contribution, even when that compromise has never been
explicitly agreed to by their department head or dean. This does not imply
that psychological contracts simply reflect individuals' desires regarding the
terms of the employment relationship. However, due to self-serving biases that
are common in individual perceptions, it is likely that individuals will interpret the terms of the psychological contract in ways that tend to benefit
themselves (Shore & Tetrick, 1994).
Organizational Agents. While psychological contracts exist between individuals and organizations, a number of different organizational representatives
make the promises that form the psychological contract, including supervisors,
top management, and HR professionals. Moreover, many employees' expectations come from written recruiting material or from word-of-mouth about the
corporation in the business community. Thus, not all the perceptions of the
organization's expected contributions come from one source, and not all
sources are equally weighted or equally credible in the formation of the
employees' expectations.
Proposition 1 suggests that employees are more likely to perceive a
discrepancy as a psychological contract violation when the expectation is
based on the commitments made to them by their direct supervisors. In
contrast, individuals are less likely to perceive a discrepancy as a psychological contract violation when the expectation is based on promises made by
HR professionals or other organizational members who are not direct supervisors. For example, potential employees may view it as a part of the
recruiter's job to ``sell'' them on the organization. Thus, they may expect
recruiters to be overly optimistic in highlighting the positive benefits of
working for the organization. Similarly, individuals may not perceive the
statements made by human resource specialists to be as binding as statements made by their direct supervisor. When a member of the human
resources department talks about promotional opportunities, for instance,
the new employee may interpret these statements as generally representative of the organization's practices or as the idealized vision of how human
resource representatives think the organization operates. In contrast, individuals are more likely to assume that the statements made by their supervisor apply directly to them and their careers.
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Proposition 1. Discrepancies arising on commitments made by
supervisors or members of top management are more likely to be
interpreted as psychological contract violations than discrepancies
arising on commitments made by recruiters, human resource specialists, or coworkers.
Supervisory Changes. When administrative changes take place or reporting
relationships are altered, the psychological contract is likely to be renegotiated
to some extent (Rousseau, 1995). More specifically, when a change in supervision occurs, employees are more likely to accept Ð and may even expect Ð
some degree of change in their psychological contracts. Thus, employees may
be less likely to interpret discrepancies as violations if such discrepancies arise
after a change in reporting relationships. Such a change may occur either when
the employee gets a new supervisor or when the employee changes jobs within
the organization.
Proposition 2. Discrepancies are less likely to be interpreted as a
violation of the psychological contract if the commitments that created
the obligation were made by a supervisor to whom the employee no
longer reports.
Explicitness of Promise. The perceived obligations that make up the psychological contract may be conveyed explicitly or implicitly (Rousseau, 1989).
However, when discrepancies occur, the explicitness of the promise may
influence how likely the employee is to perceive that the psychological contract
has been violated. When promises that were conveyed implicitly go unfulfilled,
individuals may be more likely to make the attribution that they misunderstood what was being offered (Morrison & Robinson, 1997). In such cases,
employees may be more likely to come to the conclusion that the perceived
obligation was actually nothing more than wishful thinking on their part. In
contrast, promises that are made explicitly (either verbally or in writing) are
likely to carry more weight both legally and in terms of firmly establishing
employees' expectations.
Proposition 3. Discrepancies are more likely to be interpreted as a
violation of the psychological contract when they arise on obligations
that were conveyed explicitly than when they arise on obligations that
were conveyed implicitly.
Specific Elements Violated
While no list of potential psychological contract elements can be fully
complete, there is actually a great deal of agreement regarding the types of
items that most frequently comprise the psychological contract between
employees and their organizations. Thus, although research suggests that
subordinates and managers often disagree on the extent to which organizations
are obligated to provide particular inducements (Herriot et al., 1997, Porter,
Pearce, Tripoli, & Lewis, 1998), both employees and employers tend to agree
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373
on the basic inducements that make up the psychological contract. Here we
focus on those elements most frequently studied in previous research: amount
of pay, merit pay, fringe benefits, job security, training and development,
advancement opportunities, and the work itself.
We hypothesize that, in general, discrepancies between expected and
received compensation (amount of pay, merit pay, fringe benefits) will be most
likely to be perceived as psychological contract violations. First, employees
may simply view these elements as more important; the amount of compensation received directly influences employees' standard of living, feelings of
equity toward coworkers, and sense of self-esteem and self-worth. Second,
compensation issues are more likely to be explicitly discussed, and thus are
more tangible and observable. As a result, the organization's failure to fulfill
its obligations with regard to compensation issues may be more readily
apparent to employees. For these reasons, then, discrepancies on compensation elements are more likely to be perceived as psychological contract violations than discrepancies on other psychological contract elements.
Proposition 4. Discrepancies on compensation elements (amount of
pay, merit pay, and fringe benefits) are more likely to be perceived as
psychological contract violations than discrepancies on other elements.
There may also be differences across groups of employees in terms of which
discrepancies are most likely to be interpreted as psychological contract
violations. For older workers, in particular, discrepancies involving job security
are likely to be highly salient and the consequences of reduced job security are
likely to be especially negative. Moreover, job security is a particularly
important issue for older workers as the likelihood of losing one's job through
downsizing increases with age (Leana & Feldman, 1992). In contrast, while
younger workers also appreciate job security, they usually have lower expectations of spending their whole careers with one organization and have less
trepidation about finding new jobs even if they are laid off (Dopson &
Neumann, 1998). As Proposition 5 suggests, then, discrepancies involving job
security are more likely to be perceived as psychological contract violations by
older workers than by younger workers.
Proposition 5. Discrepancies involving job security are more likely to
be perceived as psychological contract violations by older workers than
by younger workers.
In contrast, Proposition 6 suggests that younger workers are more likely to
perceive that their psychological contracts have been violated when discrepancies involve issues related to training and development, advancement
opportunities, and work challenge. As Rousseau (1995) and Turnley and
Feldman (1999) suggest, younger workers often take new positions where
they may be trading off long work weeks and temporarily lower salaries in
exchange for training and development opportunities, quick advancement,
and challenging work. When there are discrepancies on those elements, in
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particular, younger workers are particularly likely to perceive their psychological contracts as violated. In contrast, for older workers towards the end of
their careers, such discrepancies Ð while disappointing Ð may be less salient
and frustrating.
Proposition 6. Discrepancies involving training and development
opportunities, advancement opportunities, and work challenge are more
likely to be perceived as psychological contract violations by younger
workers than by older workers.
Characteristics of the Discrepancy
Several characteristics of the perceived discrepancy may make it more likely
that an individual will interpret the breach as a psychological contract
violation. These characteristics include the magnitude of the discrepancy,
over-reward and under-reward tradeoffs, amount of time between promise
and discrepancy, and perceived cause of discrepancy.
Magnitude of Discrepancy. Morrison and Robinson (1997) suggest that the
greater the size of the discrepancy between what was promised and what is
actually received, the more salient the discrepancy becomes. Thus, they
argue that the greater the magnitude of the discrepancy, the more likely
individuals are to notice that their psychological contract has not been kept.
Closer to the argument being made here, Rousseau (1995) notes that the
greater the size of the loss the employee incurs as a result of the discrepancy,
the more likely the individual is to interpret the discrepancy as a violation of
the psychological contract. Moreover, not only are larger discrepancies more
likely to be noticed than smaller ones, but large discrepancies are likely to be
interpreted and responded to differently than smaller ones as well. Fiske and
Taylor (1984) suggest that the greater the amount of harm done, the more
likely individuals are to make negative attributions towards the target that
caused the damage. Drawing on these arguments, it is suggested that
individuals will be more likely to interpret larger discrepancies as a violation
of their psychological contract.
Proposition 7. The greater the magnitude of the discrepancy between
promised and actual inducements, the more likely the employee is to
perceive the discrepancy as a violation of the psychological contract.
Over-reward and Under-reward Tradeoffs. Previous research has generally
ignored the fact that psychological contracts can be over-fulfilled as well as
under-fulfilled (Turnley & Feldman, 1999). More specifically, employees who
receive more than they were promised in one area may be less likely to view
getting less than they were promised in another area as a violation of the
psychological contract. For example, if a smaller organization is acquired by a
larger corporation, it may no longer be possible for the employee to have the
flexibility in scheduling and personal support once taken for granted. How-
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
375
ever, the larger corporation may provide workers with a more comprehensive,
generous fringe benefits package than the original employer. The degree of
discrepancy is likely to be lower in this case, since employees may implicitly
acknowledge that getting more than they were promised in one area can
make up for getting less than they were promised in another.
Proposition 8. The more over-rewarded an employee is on some
elements of the psychological contract, the less likely he/she is to
perceive being under-reward on other elements as violations of the
psychological contract.
Amount of Time Between Promise and Discrepancy. Another discrepancy
characteristic that has generally been overlooked in previous research is the
amount of time that has passed between when a promise was made and when a
discrepancy occurs. A number of researchers (e.g., Rousseau, 1996; Schein,
1978) have noted that the psychological contract is dynamic and that it
naturally changes over time. Furthermore, previous research suggests that
employees tend to recognize and accept this impermanence in the terms of
their psychological contract (Turnley & Feldman, 1998). Thus, employees are
not only likely to accept, but may actually expect, some changes in the
psychological contract over time. Accordingly, the greater the amount of time
between the initial promise and the employee's perception of a discrepancy, the
less likely the employee will be to perceive the discrepancy as a violation of the
psychological contract.
Proposition 9. The greater the amount of time between when the
promise was made and when the discrepancy occurs, the less likely the
employee will be to perceive the discrepancy as a violation of the
psychological contract.
Perceived Cause of Discrepancy. Both Rousseau (1995) and Morrison and
Robinson (1997) suggest that there are three perceived main causes of
psychological contract discrepancies. First, discrepancies may occur because
the employee and the agent representing the organization have an honest
difference of opinion regarding what the organization is obligated to provide.
In such instances, while employees perceive that they are not getting all
that they were promised, they recognize that those acting on behalf of the
organization honestly believe that the organization is living up to its end of
the agreement.
Second, discrepancies may arise when an organization is unable to live
up to the commitments it made. Such instances are especially likely when
the organization is suffering through a time of financial hardship. In such
cases, it may be impossible for the organization to actually keep all of its
promises to employees.
Third, discrepancies may also arise when an organization is simply
unwilling to live up to the commitments it made to its employees. For
example, even when profits are sizable, organizations may decide to
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engage in layoffs or may limit raises in an attempt to pass along higher
returns to shareholders.
Any of the three circumstances above can give rise to an employee's
perception that the psychological contract has been violated. However, previous research suggests that some circumstances are more likely to result in
perceived psychological contract violations than others. When individuals
perceive that they have not received all they were promised, they commonly
seek some explanation for why this is the case (Kahneman, Knetsch, & Thaler,
1986). In those cases where the individual perceives the organization's action
to be insufficiently justified, the employee is likely to be especially resentful
(Turnley & Feldman, 1998).
Thus, as Proposition 10 suggests, when employees believe that organizations are simply unwilling to live up to commitments they made without
external justification (the third condition above), they are more likely to
interpret these discrepancies as psychological contract violations. In contrast,
as Proposition 11 suggests, individuals are less likely to interpret discrepancies as psychological contract violations when there are honest misunderstandings over commitments or when external factors leave organizations little
choice but to break commitments.
Proposition 10. Employees are more likely to interpret discrepancies
as psychological contract violations when they attribute such discrepancies to the organization's unwillingness to keep its promises.
Proposition 11. Employees are less likely to interpret discrepancies
as psychological contract violations when they attribute such discrepancies to honest misunderstandings or to external factors outside the
organization's control.
THE IMPACT OF PSYCHOLOGICAL CONTRACT VIOLATIONS ON
EMPLOYEES' BEHAVIORS
Prior research is consistent in its findings that psychological contract violations can have a negative impact on employees' attitudes and behaviors. For
example, in a longitudinal study, Robinson, Kraatz, and Rousseau (1994) found
that psychological contract violations negatively influenced employee perceptions of how much they owe their organizations. Using the same sample of
respondents, Robinson and her colleagues (Robinson, 1996; Robinson & Morrison, 1995; Robinson & Rousseau, 1994) found that employees' perceptions
that their psychological contracts had been violated were related to undesirable employee behaviors (increased turnover, reduced work performance, and
reduced willingness to engage in organizational citizenship behaviors). Similarly, Guzzo, Noonan, and Elron (1994) found that psychological contract
violations were related to reduced organizational commitment and increased
turnover. In addition, Turnley and Feldman (1998, 1999) found that psychological contract violations resulted in reduced job satisfaction and organiza-
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
377
Figure 2. Employee Reactions to Psychological Contract Violation.
tional commitment, reduced performance on both in-role and extra-role behaviors, and an increased intent to leave the organization.
However, while the direct effects of psychological contract violations on
individuals' attitudes and behaviors have been frequently studied, psychological contract violations do not always lead to adverse reactions among
employees. Indeed, several researchers have recently examined situational
moderators that impact the strength of the relationships between psychological contract violations and negative employee attitudes and behaviors. For
example, Robinson and Rousseau (1994) found that careerism moderated the
relationship between psychological contract violations and subsequent trust in
the organization. Similarly, Turnley and Feldman (1998) found that employees
responded less strongly to psychological contract violations when they perceived the organization had been procedurally just in how it handled changes
in job security, compensation, and promotion policies.
In this section, we examine possible moderators of the relationships
between psychological contract violations and employees' behaviors. In other
words, here we investigate those variables that might influence whether
perceptions of psychological contract violations get translated into concrete
behaviors destructive to the organization. As Fig. 2 suggests, the factors
posited as important moderators are individual differences, organizational
practices, and labor market circumstances.
Individual Differences
Affectivity. Individuals differ in the extent to which they typically experience
positive or negative affective states (Cropanzano, James, & Konovsky, 1993).
Individuals demonstrating high positive affect tend to have a general sense of
well-being and to most often view their circumstances in an optimistic light. In
contrast, individuals demonstrating high negative affect tend to view their
circumstances less favorably and to experience more negative emotional
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states. In addition, individuals high on negative affectivity also tend to
interpret ambiguous stimuli more pessimistically ( Watson & Clark, 1984).
Thus, when discrepancies between promised and actual inducements arise,
individuals with high negative affect are likely to inflate the size of the
perceived loss and to make an unfavorable attribution for why the discrepancy
occurred. In addition, individuals with high negative affect will be more likely
to focus attention on those aspects of the psychological contract where they
have received less than promised than on those aspects where they have
received more than promised.
Proposition 12. The relationship between psychological contract
violations and employee responses will be moderated by affectivity;
individuals with high negative affectivity will respond more negatively
to perceived psychological contract violations.
Equity Sensitivity. Equity sensitivity refers to an individual's general preference for the degree of balance in a relationship. In contrast to traditional
equity theory (Adams, 1965), which implies that all individuals seek equity in
their exchange relationships, equity sensitivity research suggests that individuals differ in their need and desire to be in a state of equity (Huseman,
Hatfield, & Miles, 1987; Miles, Hatfield, & Huseman, 1989).
Proposition 13 hypothesizes that the relationship between psychological
contract violations and employees' responses to them will be moderated by
equity sensitivity. Equity-sensitive employees are much more likely to
perceive small discrepancies as significant and to try restore equity by
withdrawing their own contributions to the firm. Consequently, the
strength of the relationship between psychological contract violations and
employee responses is likely to be greater for those individuals who are
highly equity sensitive.
Proposition 13. Equity sensitivity will moderate the relationship
between psychological contract violations and employee responses to
those violations; individuals who are highly equity sensitive will
respond more negatively to perceived psychological contract violations.
Conscientiousness. Another potential individual difference moderator is conscientiousness. Conscientiousness refers to an individual's tendency to be
dependable, persistent, organized, and goal-directed (McCrae & Costa, 1987).
Prior research suggests that individuals who are highly conscientious tend to
be better performers in most work situations (Barrick & Mount, 1991) and that
they also tend to engage in higher levels of organizational citizenship behavior
(Konovsky & Organ, 1996).
Individuals who are highly conscientious may feel compelled to continue
working hard even if they perceive that their psychological contract has been
violated. Thus, as Proposition 14 suggests, conscientiousness is likely to
moderate the relationship between psychological contract violations and
employees' behaviors.
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379
Proposition 14. Conscientiousness will moderate the relationship
between psychological contract violations and employee responses to
those violations; individuals who are highly conscientious will respond
less negatively to perceived psychological contract violations.
Organizational Practices
Procedural and Interactional Justice. Since discrepancies arise when employees perceive that they receive less than the organization promised them, it is
not surprising that these discrepancies lead to perceptions of distributive
injustice (a condition in which the individual believes the outcomes that he or
she received were unfair). However, prior research suggests that individuals'
interpretations of and responses to unfavorable outcomes are also strongly
influenced by perceptions of procedural and interactional justice. Specifically,
recent research (Brockner & Wiesenfeld, 1996; Moorman, 1991; Skarlicki &
Folger, 1997) suggests that individuals' responses to unfavorable actions will
be less severe when they perceive the decision-making process to be fair
(procedural justice) and when they perceive the interpersonal treatment they
receive as courteous and respectful (interactional justice). In addition, Turnley and Feldman (1998) suggest that fairness perceptions are likely to be
important in determining how employees respond to perceived psychological
contract violations.
Proposition 15. Procedural justice will moderate the relationship
between psychological contract violations and employee responses to
those violations; the relationships will be weaker when employees
perceive procedural justice surrounding the discrepancy.
Proposition 16. Interactional justice will moderate the relationship
between psychological contract violations and employee responses to
those violations; the relationships will be weaker when employees
perceive interactional justice surrounding the discrepancy.
Remediation. When the organization recognizes that it has not fully lived up
to the commitments it made to its employees in one area, the organization
may attempt to make it up to the employees by offering them different
inducements. Remediation involves substituting one outcome for another in
an effort to reduce the size of the loss experienced by the employee
(Rousseau, 1995). For example, when a particular type of job becomes
obsolete or redundant, the organization may offer to retrain employees so
that they can find work elsewhere in the company or with another firm.
Thus, remediation helps an organization live up to the spirit of the psychological contract when they are not willing or able to live up to the letter of the
agreement (Rousseau, 1995). The closer the attempt at remediation comes to
providing the employee with the overall level of inducements they were
promised, the less likely the employee is to respond aggressively to psychological contract violations.
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Proposition 17. Offers of remediation will moderate the relationship between psychological contract violations and employee responses to those violations; the relationships will be weaker when
organizations have offered to remediate the psychological contract
violation in some way.
Quality of Working Relationships. Employees who have positive working relationships with their boss and/or coworkers may respond less negatively to
violations of their psychological contract than employees who have poor
working relationships (Turnley & Feldman, 1998). The potential loss of
rewarding personal relationships is likely to act as an indirect exit cost, which
encourages employees to remain with their organizations. Furthermore, employees should be less likely to neglect in-role performance or reduce extra-role
contributions if such actions will negatively impact those to whom the employee feels close. For these reasons, then, employees' reactions to psychological contract violations are likely to be less severe when they have high quality
working relationships with their supervisors or colleagues.
Proposition 18. The quality of the employee's working relationships
will moderate the relationship between psychological contract violations
and employee responses to those violations; employees will respond less
negatively when the quality of the working relationships with supervisors and coworkers is high.
Labor Market Circumstances
Exit Costs. Resources that are directly associated with continuity in the same
job or organization, such as non-portable training or non-vested retirement
funds, may restrict the options that an employee perceives in the face of
psychological contract violations ( Rusbult, Farrell, Rogers, & Mainus, 1988).
In a very real sense, high exit costs bind an employee to the organization by
providing rewards for continued employment. When faced with high exit costs,
employees may not only be less likely to exit but may also be less likely to
engage in behaviors (like neglecting in-role performance or decreasing organizational citizenship behaviors) that could lead to the termination of their
employment. Thus, employees with high exit costs are likely to remain loyal to
their organizations even during periods in which their expectations are not
being met.
Proposition 19. Exit costs will moderate the relationship between
psychological contract violations and employee responses to those
violations; employees will respond less strongly when exit costs
are high.
Employee Replaceability. Employees who feel that they are performing a
critical task may believe that the organization would have a very hard
time replacing them. Other employees may perceive themselves as difficult
to replace for additional reasons: unusually high performance levels,
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
381
political connections, or critical relationships with important customers,
suppliers, or regulators. Employees who see themselves as having a great
deal of job security, for whatever reason, may be more inclined to respond
strongly to psychological contract violations. Because they feel their current jobs are safe, they may be more likely to speak out against the
organization, more likely to shirk some of their job duties in an attempt to
restore equity, and more inclined to let it be known that they are actively
searching for other employment.
Proposition 20. Employee replaceability will moderate the relationship between psychological contract violations and employee responses
to those violations; negative responses will be more likely when the
difficulty of replacing the employee is high.
Availability of Attractive Job Alternatives. An individual's response to psychological contract violation is also likely to be affected by the quality of the
alternative jobs available. Individuals who can easily find similar employment elsewhere may be less willing to continue working hard in support of
an organization that cannot be trusted to keep its promises (Turnley &
Feldman, 1999). Moreover, the presence of attractive alternatives is likely to
make individuals feel less dependent on their current organizations. Therefore, the availability of attractive alternatives is likely to increase the
employees' inclination to attempt to get even with the organization they
feel has betrayed them.
Proposition 21. The availability of attractive job alternatives will
moderate the relationship between psychological contract violations and
employee responses to those violations; negative responses will be more
likely when attractive job alternatives are available.
IMPLICATIONS FOR FUTURE RESEARCH
In this review, we have focused primarily on two questions: (1) Why aren't all
breaches of psychological contracts interpreted as psychological contract violations? and (2) Why don't employees respond negatively and strongly to all
psychological contract violations? In this next section, we suggest some
avenues for future research on these issues.
Perhaps one of the greatest needs in future research in this area is an
increased focus on tangible employee behaviors that change as a result of
psychological contract violations. Most previous research has focused on
employee attitudes and psychological well-being. Also, the limited empirical
research that has examined employees' behavioral responses to psychological
contract violations has largely been based on self-report data. There are at
least three behavioral indicators worthy of further attention in future research
on the outcomes of psychological contract violations: in-role performance,
organizational citizenship behaviors, and antisocial behaviors.
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In-role performance refers to employees' fulfillment of formally prescribed
job duties and responsibilities ( Williams & Anderson, 1991). A reasonable
indicator of employees' behavioral response to psychological contract violation
is some measure of employees' thoroughness and attentiveness in completing
basic job duties; lower quantity or lower quality performance in the aftermath
of psychological contract violations might be a tangible indicator of employee
retaliation for those violations (Robinson, 1996).
As noted above, though, employees may not always feel free to act consistently with their attitudes in the face of psychological contract violations. That
is, there are situational constraints on individuals' abilities to withdraw effort
or lower performance after psychological contract violations (Herman, 1973).
For example, if there are few available job alternatives, employees would not
want to put themselves at risk with their present employers by decreasing
their in-role performance. However, individuals have more control over the
extent to which they engage in organizational citizenship behaviors for the
good of their employers (Parks & Kidder, 1994; Organ, 1988). While employees
may be forced by circumstances to sustain high levels of performance on in-role
behaviors, they are less closely monitored as to how often they voluntarily take
on additional responsibilities, work longer hours to help colleagues, and
promote the organization's reputation in the business community at large.
When psychological contracts are violated, then, we would expect the level of
their organizational citizenship behaviors to decline as well.
Other potentially fruitful dependent variables in this context are so-called
``antisocial behaviors'' (Giacalone & Greenberg, 1996; Robinson & Bennett,
1995). While on-the-job homicides are the most extreme example of such
actions, other antisocial workplace behaviors include theft, vandalism, sabotage, arson, and physical threats and assaults (Neuman & Baron, 1996). While
these behaviors are fortunately relatively uncommon, they generally result
from individuals' frustration at not getting what they feel they deserve from
the organization. Indeed, several recent and highly-publicized acts of violence
in organizations have been linked to the firings of the perpetrators. In general,
we would expect these antisocial behaviors to be most likely when psychological contract violations are surrounded by both procedural and interactional
injustice (Bies, Tripp, & Kramer, 1996).
Another important direction for future research is moving away from
examining relationships among global constructs and moving toward examining more tightly specified models. As previous research suggests, global
perceptions of psychological contract violations lead to globally negative job
attitudes. However, to move this research area forward, more attention must
be given to examining these processes in greater detail. Unfortunately, at this
point in the research stream, there is no single agreed-upon measure of
psychological contract violation, moderating variables are rarely investigated,
and little empirical research has been conducted on the sources of employee
expectations comprising the psychological contract. Until models are more
tightly specified and empirically tested, there will continue to be a lack of
information about when unfulfilled expectations will be interpreted as psy-
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
383
chological contract violations and when psychological contract violations will
result in lower performance.
Also, like much of the research in the organizational sciences, the
research on psychological contracts relies heavily on self-report, cross-sectional data. Inferences of causality are particularly important in this
research stream, because employees could be using perceptions of psychological contract violations as post-hoc justifications for their hostile or
anti-organizational behaviors. Clearly, then, longitudinal designs and
archival data are very important in mitigating against common-method
variance and inflated relationships among constructs ( particularly the
global constructs discussed above).
Even more critical here, though, is the issue of sampling. A disproportionate share of the research in this area has examined the transition of
predominantly white, upper-middle-class males graduating from top-tier
MBA programs into large, prestigious corporations. The experiences of others
who face frequent psychological contract violations Ðexpatriates and repatriates, employees who have lost their jobs, blue collar workers, unionized
employees Ðhave been much less frequently explored (Guzzo et al., 1994;
Turnley & Feldman, 1997, 1998). Thus, research on psychological contract
violations needs to aggressively expand its sample base lest it be reduced to
the investigation of the disappointments and perceived entitlements of
highly-paid new MBAs simply experiencing ``entry shock'' as they make the
transition from school to work.
CONCLUSION
Prior research suggests that psychological contract violations not only have a
deleterious impact on the employees who experience them, but may also have
negative consequences for organizational effectiveness. For example, psychological contract violations are likely to result in increased turnover, increased
neglect of in-role job duties, and a reduced willingness among employees to
represent the organization positively to outsiders. Thus, the hurt feelings and
sense of betrayal experienced by the employees are only half the story.
Psychological contract violations also frequently result in behaviors that are
likely to be harmful to organizations.
The increased frequency with which corporations have recently initiated
downsizings, reorganizations, and mergers in an attempt to improve financial performance have led to the experience of psychological contract violations among the employees involved (Turnley & Feldman, 1998). In
response, many of the employees who have survived the layoffs and
reorganizations now report that they are less committed to their organizations. Thus, while organizations are now asking their employees to work
even harder and to be even more flexible, many employees are less willing
than ever to be good organizational citizens (Parks & Kidder, 1994). In fact,
employees whose psychological contracts have been violated are more likely
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to become careerist in their orientation to work and less inclined to look out
for the interests of their organizations (Feldman & Weitz, 1991; Robinson &
Rousseau, 1994).
As the current employment relationship continues to undergo a major
transformation, the importance of understanding both when employees are
likely to interpret discrepancies as psychological contract violations and
under what circumstances employees will respond strongly to such violations will remain compelling issues for researchers and practitioners alike.
Only when we learn more about these phenomena will we be in a position
to really understand all of the ways in which
CONTRACT VIOLATIONS
William H. Turnley
Kansas State University, Manhattan, KS, USA
Daniel C. Feldman
University of South Carolina, Columbia, SC, USA
While previous research suggests that employees rarely believe organizations keep all of the commitments made to them, only in some cases do
employees perceive these unfulfilled commitments as psychological
contract violations and make active attempts to ``get even'' with their
employers for the betrayal. This paper presents a discrepancy model for
understanding when employees will perceive unfulfilled commitments as
psychological contract violations and for understanding when employees
will respond in a hostile manner to those violations. Among other factors,
the sources of employees' expectations, the specific contract elements on
which discrepancies occur, and the magnitude and timing of the unfulfilled
commitments are all posited as important contributors to perceptions of
psychological contract violations. Then, individual differences, organizational practices, and labor market factors are examined as important
moderators of how strongly employees respond to perceived psychological
contract violations. The article concludes with directions for future
theoretical and empirical research on psychological contract violations
and employees' reactions to them.
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
The topic of psychological contracts between employees and organizations has
received renewed attention over the past 10 years. While the earliest work on
this topic defined psychological contracts as the shared perceptions between
employees and employers regarding what each party owed the other in the
employment relationship (cf., Argyris, 1960; Schein, 1965; Kotter, 1973), more
recent work has defined the psychological contract as an individual's perception of what he/she owes the employer and the inducements the individual
Direct all correspondence to: William H. Turnley, Department of Management, College of Business
Administration, Kansas State University, Manhattan, KS 66506, USA. E-mail: turnley@ksu.edu
Human Resource Management Review,
Volume 9, Number 3, 1999, pages 367 ± 386
All rights of reproduction in any form reserved.
Copyright # 1999
by Elsevier Science Inc.
ISSN : 1053 ± 4822
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VOLUME 9, NUMBER 3, 1999
believes that he/she is owed in return (Rousseau, 1989). As currently conceptualized, then, the psychological contract is an inherently subjective perception; each individual possesses a unique psychological contract based upon
his / her own understanding of the reciprocal obligations in the employment
relationship between the individual and the organization.
In line with this recent conceptualization, research has examined two
questions in particular. First, there has been considerable work conducted
on the changing nature of the psychological contract and the general
decline of mutual loyalty between employees and employers (Hall & Moss,
1998; Martin, Staines, & Pate, 1998; Parks & Kidder, 1994). Second, a
great deal of attention has been given to the aversive consequences of
psychological contract violations on employees' job attitudes, work behaviors, and turnover (Robinson, 1996; Robinson & Rousseau, 1994; Turnley
& Feldman, 1999).
Although it is clear that many employees (especially new hires and
employees in downsizing organizations) feel their psychological contracts
have not been fully met, the research also suggests that not all
unfulfilled commitments are perceived as psychological contract violations
and not all employees respond in a hostile manner even when they
perceive their psychological contracts have been violated (Rousseau, 1995;
Turnley & Feldman, 1998). The present article addresses these two
phenomena in particular.
In the first section of the paper, a discrepancy framework for understanding psychological contract violations is presented. This framework
examines when unfulfilled commitments will reach the threshold of being
perceived as psychological contract violations. Here, the focus is on the
sources of employees' expectations, the specific contract elements on which
discrepancies occur, and the nature of the discrepancy itself. Then, in the
second section of the paper, we examine when employees will respond
negatively to those psychological contract violations they do experience.
Specifically, we examine the individual differences, organizational practices,
and labor market factors, which moderate employees' reactions to psychological contract violations. The article concludes with directions for future
theoretical and empirical research on psychological contract violations and
employee responses to them.
WHEN WILL UNFULFILLED COMMITMENTS BE PERCEIVED AS
PSYCHOLOGICAL CONTRACT VIOLATIONS?
As noted above, several researchers have found that employees do not always
perceive instances in which they receive less than they were promised as
psychological contract violations. In an attempt to clarify the definition of
psychological contract violation, Morrison and Robinson (1997) separated
employees' cognitive perception that they have received less than promised
from their affective response to such a situation. Specifically, Morrison and
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
369
Robinson (1997:230) define psychological contract breach as the cognition ``that
one's organization has failed to meet one or more obligations within one's
psychological contract in a manner commensurate with one's contributions.''
They reserve the term psychological contract violation to refer to the emotional
and affective state, characterized by disappointment and anger, that sometimes
results from the belief that the organization has failed to adequately maintain
the psychological contract. According to this perspective, then, psychological
contract violation refers only to those instances when employees feel betrayed by their organization's failure to live up to the commitments it made
to them.
Prior research has yielded somewhat inconsistent results regarding the
extent to which employees experience psychological contract violations. On
one hand, Robinson and Rousseau (1994) reported that approximately 55% of
a sample of recent MBA graduates indicated that their psychological contract
had been violated within the first two years of employment. In addition,
many recent discussions of the changes taking place in the employment
relationship suggest that psychological contract violations are ubiquitous in
today's workplace (e.g., Herriot, Manning, & Kidd, 1997; Kissler, 1994; Parks
& Kidder, 1994; Singh, 1998). In contrast, Turnley and Feldman (1998)
reported a much lower incidence of perceived psychological contract violation.
In their study, only 25% of respondents reported significant violations of their
psychological contracts.
A large part of this discrepancy may be explained by the way that
psychological contract violation is conceptualized and measured. According
to prior research, most employees report receiving less than they were
promised on at least one element of the psychological contract. In the strictest
sense of the term, then, most employees have experienced a violation of their
psychological contract. However, when asked about the overall extent to which
their organization has kept its promises and obligations, most employees are
more positive.
Specifically, in a study of over 800 managers, Turnley (1996) found that 81%
of respondents reported receiving less (or much less) than promised on at least
one of the job factors comprising the psychological contract. However, when
asked to assess the overall extent to which their organization had kept its
promises, only 24% of respondents said that they received less (or much less)
than promised. Thus, the extent of reported psychological contract violation
(and possibly the magnitude of the problem it represents in the workplace
today) appears to be largely dependent on the way that psychological contract
violations are measured.
What most employees encounter, then, when they receive less than they
were promised or expected is really a psychological contract ``breach'' (Morrison & Robinson, 1997). In this next section, we examine when employees will
interpret such discrepancies or breaches as psychological contract violations.
The model presented in Fig. 1 suggests the three main factors in this regard
are sources of employees' expectations, the specific elements of the psychological contract breached, and the characteristics of the discrepancy itself.
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Figure 1. Discrepancy Model of Phychological Contract Violation.
Sources of Employees' Expectations
Individuals develop the expectations that comprise their psychological
contracts from three main sources: the specific promises made to them by
organizational representatives, their perceptions of the organization's culture
and common practices, and their idiosyncratic (and often idealized) expectations of how the organization operates.
First, numerous individuals act as organizational agents or representatives.
Recruiters, human resource specialists, direct supervisors, and upper-level
managers may make specific promises about what employees can expect to
receive from the organization. For example, a supervisor may tell a new
employee that a raise and promotion will be forthcoming if the employee
performs well during his or her first year on the job. Additionally, statements
made in organizational personnel manuals may generate expectations that
become a part of the psychological contract ( Rousseau & Greller, 1994). For
example, personnel manuals that specify a certain level of benefits or which
outline policies to be used regarding compensation, advancement, or discipline
are commonly perceived as obligating the organization to provide the benefits
described or to follow the policies that have been prescribed. These explicit
statements, whether made verbally by organizational agents or conveyed in
writing within personnel manuals, are likely to be among the most salient
sources of employees' expectations.
Second, employees' perceptions of the organization's culture or standard
operating practices are also likely to shape the beliefs that make up the
psychological contract (Guzzo & Noonan, 1994; Sims, 1994). These beliefs
are likely to be formed by early socialization experiences that help to crystallize and define the expectations of employees regarding the way that they will
be treated by the organization and what they can reasonably expect to receive
(Feldman, 1976; Thomas & Anderson, 1998). Similarly, employees are likely to
develop expectations from observing typical organizational practices and from
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
371
interpreting historical patterns of organizational practice as part of the
unwritten agreement that exists between employees and their organizations
(Rousseau, 1989). Thus, although the expectations arising from individuals'
perceptions of their organization's culture may never be explicitly discussed,
these expectations are likely to form a substantial part of the psychological
contract as well.
Third, the content of the psychological contract is also likely to be shaped by
the idiosyncratic ways in which individuals process information and by
individuals' idealized notions of how organizations operate. For example,
faculty members who are relatively weak in research may define their
psychological contracts as substituting superior teaching and service as alternative forms of contribution, even when that compromise has never been
explicitly agreed to by their department head or dean. This does not imply
that psychological contracts simply reflect individuals' desires regarding the
terms of the employment relationship. However, due to self-serving biases that
are common in individual perceptions, it is likely that individuals will interpret the terms of the psychological contract in ways that tend to benefit
themselves (Shore & Tetrick, 1994).
Organizational Agents. While psychological contracts exist between individuals and organizations, a number of different organizational representatives
make the promises that form the psychological contract, including supervisors,
top management, and HR professionals. Moreover, many employees' expectations come from written recruiting material or from word-of-mouth about the
corporation in the business community. Thus, not all the perceptions of the
organization's expected contributions come from one source, and not all
sources are equally weighted or equally credible in the formation of the
employees' expectations.
Proposition 1 suggests that employees are more likely to perceive a
discrepancy as a psychological contract violation when the expectation is
based on the commitments made to them by their direct supervisors. In
contrast, individuals are less likely to perceive a discrepancy as a psychological contract violation when the expectation is based on promises made by
HR professionals or other organizational members who are not direct supervisors. For example, potential employees may view it as a part of the
recruiter's job to ``sell'' them on the organization. Thus, they may expect
recruiters to be overly optimistic in highlighting the positive benefits of
working for the organization. Similarly, individuals may not perceive the
statements made by human resource specialists to be as binding as statements made by their direct supervisor. When a member of the human
resources department talks about promotional opportunities, for instance,
the new employee may interpret these statements as generally representative of the organization's practices or as the idealized vision of how human
resource representatives think the organization operates. In contrast, individuals are more likely to assume that the statements made by their supervisor apply directly to them and their careers.
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Proposition 1. Discrepancies arising on commitments made by
supervisors or members of top management are more likely to be
interpreted as psychological contract violations than discrepancies
arising on commitments made by recruiters, human resource specialists, or coworkers.
Supervisory Changes. When administrative changes take place or reporting
relationships are altered, the psychological contract is likely to be renegotiated
to some extent (Rousseau, 1995). More specifically, when a change in supervision occurs, employees are more likely to accept Ð and may even expect Ð
some degree of change in their psychological contracts. Thus, employees may
be less likely to interpret discrepancies as violations if such discrepancies arise
after a change in reporting relationships. Such a change may occur either when
the employee gets a new supervisor or when the employee changes jobs within
the organization.
Proposition 2. Discrepancies are less likely to be interpreted as a
violation of the psychological contract if the commitments that created
the obligation were made by a supervisor to whom the employee no
longer reports.
Explicitness of Promise. The perceived obligations that make up the psychological contract may be conveyed explicitly or implicitly (Rousseau, 1989).
However, when discrepancies occur, the explicitness of the promise may
influence how likely the employee is to perceive that the psychological contract
has been violated. When promises that were conveyed implicitly go unfulfilled,
individuals may be more likely to make the attribution that they misunderstood what was being offered (Morrison & Robinson, 1997). In such cases,
employees may be more likely to come to the conclusion that the perceived
obligation was actually nothing more than wishful thinking on their part. In
contrast, promises that are made explicitly (either verbally or in writing) are
likely to carry more weight both legally and in terms of firmly establishing
employees' expectations.
Proposition 3. Discrepancies are more likely to be interpreted as a
violation of the psychological contract when they arise on obligations
that were conveyed explicitly than when they arise on obligations that
were conveyed implicitly.
Specific Elements Violated
While no list of potential psychological contract elements can be fully
complete, there is actually a great deal of agreement regarding the types of
items that most frequently comprise the psychological contract between
employees and their organizations. Thus, although research suggests that
subordinates and managers often disagree on the extent to which organizations
are obligated to provide particular inducements (Herriot et al., 1997, Porter,
Pearce, Tripoli, & Lewis, 1998), both employees and employers tend to agree
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
373
on the basic inducements that make up the psychological contract. Here we
focus on those elements most frequently studied in previous research: amount
of pay, merit pay, fringe benefits, job security, training and development,
advancement opportunities, and the work itself.
We hypothesize that, in general, discrepancies between expected and
received compensation (amount of pay, merit pay, fringe benefits) will be most
likely to be perceived as psychological contract violations. First, employees
may simply view these elements as more important; the amount of compensation received directly influences employees' standard of living, feelings of
equity toward coworkers, and sense of self-esteem and self-worth. Second,
compensation issues are more likely to be explicitly discussed, and thus are
more tangible and observable. As a result, the organization's failure to fulfill
its obligations with regard to compensation issues may be more readily
apparent to employees. For these reasons, then, discrepancies on compensation elements are more likely to be perceived as psychological contract violations than discrepancies on other psychological contract elements.
Proposition 4. Discrepancies on compensation elements (amount of
pay, merit pay, and fringe benefits) are more likely to be perceived as
psychological contract violations than discrepancies on other elements.
There may also be differences across groups of employees in terms of which
discrepancies are most likely to be interpreted as psychological contract
violations. For older workers, in particular, discrepancies involving job security
are likely to be highly salient and the consequences of reduced job security are
likely to be especially negative. Moreover, job security is a particularly
important issue for older workers as the likelihood of losing one's job through
downsizing increases with age (Leana & Feldman, 1992). In contrast, while
younger workers also appreciate job security, they usually have lower expectations of spending their whole careers with one organization and have less
trepidation about finding new jobs even if they are laid off (Dopson &
Neumann, 1998). As Proposition 5 suggests, then, discrepancies involving job
security are more likely to be perceived as psychological contract violations by
older workers than by younger workers.
Proposition 5. Discrepancies involving job security are more likely to
be perceived as psychological contract violations by older workers than
by younger workers.
In contrast, Proposition 6 suggests that younger workers are more likely to
perceive that their psychological contracts have been violated when discrepancies involve issues related to training and development, advancement
opportunities, and work challenge. As Rousseau (1995) and Turnley and
Feldman (1999) suggest, younger workers often take new positions where
they may be trading off long work weeks and temporarily lower salaries in
exchange for training and development opportunities, quick advancement,
and challenging work. When there are discrepancies on those elements, in
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particular, younger workers are particularly likely to perceive their psychological contracts as violated. In contrast, for older workers towards the end of
their careers, such discrepancies Ð while disappointing Ð may be less salient
and frustrating.
Proposition 6. Discrepancies involving training and development
opportunities, advancement opportunities, and work challenge are more
likely to be perceived as psychological contract violations by younger
workers than by older workers.
Characteristics of the Discrepancy
Several characteristics of the perceived discrepancy may make it more likely
that an individual will interpret the breach as a psychological contract
violation. These characteristics include the magnitude of the discrepancy,
over-reward and under-reward tradeoffs, amount of time between promise
and discrepancy, and perceived cause of discrepancy.
Magnitude of Discrepancy. Morrison and Robinson (1997) suggest that the
greater the size of the discrepancy between what was promised and what is
actually received, the more salient the discrepancy becomes. Thus, they
argue that the greater the magnitude of the discrepancy, the more likely
individuals are to notice that their psychological contract has not been kept.
Closer to the argument being made here, Rousseau (1995) notes that the
greater the size of the loss the employee incurs as a result of the discrepancy,
the more likely the individual is to interpret the discrepancy as a violation of
the psychological contract. Moreover, not only are larger discrepancies more
likely to be noticed than smaller ones, but large discrepancies are likely to be
interpreted and responded to differently than smaller ones as well. Fiske and
Taylor (1984) suggest that the greater the amount of harm done, the more
likely individuals are to make negative attributions towards the target that
caused the damage. Drawing on these arguments, it is suggested that
individuals will be more likely to interpret larger discrepancies as a violation
of their psychological contract.
Proposition 7. The greater the magnitude of the discrepancy between
promised and actual inducements, the more likely the employee is to
perceive the discrepancy as a violation of the psychological contract.
Over-reward and Under-reward Tradeoffs. Previous research has generally
ignored the fact that psychological contracts can be over-fulfilled as well as
under-fulfilled (Turnley & Feldman, 1999). More specifically, employees who
receive more than they were promised in one area may be less likely to view
getting less than they were promised in another area as a violation of the
psychological contract. For example, if a smaller organization is acquired by a
larger corporation, it may no longer be possible for the employee to have the
flexibility in scheduling and personal support once taken for granted. How-
A DISCREPANCY MODEL OF PSYCHOLOGICAL CONTRACT VIOLATIONS
375
ever, the larger corporation may provide workers with a more comprehensive,
generous fringe benefits package than the original employer. The degree of
discrepancy is likely to be lower in this case, since employees may implicitly
acknowledge that getting more than they were promised in one area can
make up for getting less than they were promised in another.
Proposition 8. The more over-rewarded an employee is on some
elements of the psychological contract, the less likely he/she is to
perceive being under-reward on other elements as violations of the
psychological contract.
Amount of Time Between Promise and Discrepancy. Another discrepancy
characteristic that has generally been overlooked in previous research is the
amount of time that has passed between when a promise was made and when a
discrepancy occurs. A number of researchers (e.g., Rousseau, 1996; Schein,
1978) have noted that the psychological contract is dynamic and that it
naturally changes over time. Furthermore, previous research suggests that
employees tend to recognize and accept this impermanence in the terms of
their psychological contract (Turnley & Feldman, 1998). Thus, employees are
not only likely to accept, but may actually expect, some changes in the
psychological contract over time. Accordingly, the greater the amount of time
between the initial promise and the employee's perception of a discrepancy, the
less likely the employee will be to perceive the discrepancy as a violation of the
psychological contract.
Proposition 9. The greater the amount of time between when the
promise was made and when the discrepancy occurs, the less likely the
employee will be to perceive the discrepancy as a violation of the
psychological contract.
Perceived Cause of Discrepancy. Both Rousseau (1995) and Morrison and
Robinson (1997) suggest that there are three perceived main causes of
psychological contract discrepancies. First, discrepancies may occur because
the employee and the agent representing the organization have an honest
difference of opinion regarding what the organization is obligated to provide.
In such instances, while employees perceive that they are not getting all
that they were promised, they recognize that those acting on behalf of the
organization honestly believe that the organization is living up to its end of
the agreement.
Second, discrepancies may arise when an organization is unable to live
up to the commitments it made. Such instances are especially likely when
the organization is suffering through a time of financial hardship. In such
cases, it may be impossible for the organization to actually keep all of its
promises to employees.
Third, discrepancies may also arise when an organization is simply
unwilling to live up to the commitments it made to its employees. For
example, even when profits are sizable, organizations may decide to
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engage in layoffs or may limit raises in an attempt to pass along higher
returns to shareholders.
Any of the three circumstances above can give rise to an employee's
perception that the psychological contract has been violated. However, previous research suggests that some circumstances are more likely to result in
perceived psychological contract violations than others. When individuals
perceive that they have not received all they were promised, they commonly
seek some explanation for why this is the case (Kahneman, Knetsch, & Thaler,
1986). In those cases where the individual perceives the organization's action
to be insufficiently justified, the employee is likely to be especially resentful
(Turnley & Feldman, 1998).
Thus, as Proposition 10 suggests, when employees believe that organizations are simply unwilling to live up to commitments they made without
external justification (the third condition above), they are more likely to
interpret these discrepancies as psychological contract violations. In contrast,
as Proposition 11 suggests, individuals are less likely to interpret discrepancies as psychological contract violations when there are honest misunderstandings over commitments or when external factors leave organizations little
choice but to break commitments.
Proposition 10. Employees are more likely to interpret discrepancies
as psychological contract violations when they attribute such discrepancies to the organization's unwillingness to keep its promises.
Proposition 11. Employees are less likely to interpret discrepancies
as psychological contract violations when they attribute such discrepancies to honest misunderstandings or to external factors outside the
organization's control.
THE IMPACT OF PSYCHOLOGICAL CONTRACT VIOLATIONS ON
EMPLOYEES' BEHAVIORS
Prior research is consistent in its findings that psychological contract violations can have a negative impact on employees' attitudes and behaviors. For
example, in a longitudinal study, Robinson, Kraatz, and Rousseau (1994) found
that psychological contract violations negatively influenced employee perceptions of how much they owe their organizations. Using the same sample of
respondents, Robinson and her colleagues (Robinson, 1996; Robinson & Morrison, 1995; Robinson & Rousseau, 1994) found that employees' perceptions
that their psychological contracts had been violated were related to undesirable employee behaviors (increased turnover, reduced work performance, and
reduced willingness to engage in organizational citizenship behaviors). Similarly, Guzzo, Noonan, and Elron (1994) found that psychological contract
violations were related to reduced organizational commitment and increased
turnover. In addition, Turnley and Feldman (1998, 1999) found that psychological contract violations resulted in reduced job satisfaction and organiza-
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377
Figure 2. Employee Reactions to Psychological Contract Violation.
tional commitment, reduced performance on both in-role and extra-role behaviors, and an increased intent to leave the organization.
However, while the direct effects of psychological contract violations on
individuals' attitudes and behaviors have been frequently studied, psychological contract violations do not always lead to adverse reactions among
employees. Indeed, several researchers have recently examined situational
moderators that impact the strength of the relationships between psychological contract violations and negative employee attitudes and behaviors. For
example, Robinson and Rousseau (1994) found that careerism moderated the
relationship between psychological contract violations and subsequent trust in
the organization. Similarly, Turnley and Feldman (1998) found that employees
responded less strongly to psychological contract violations when they perceived the organization had been procedurally just in how it handled changes
in job security, compensation, and promotion policies.
In this section, we examine possible moderators of the relationships
between psychological contract violations and employees' behaviors. In other
words, here we investigate those variables that might influence whether
perceptions of psychological contract violations get translated into concrete
behaviors destructive to the organization. As Fig. 2 suggests, the factors
posited as important moderators are individual differences, organizational
practices, and labor market circumstances.
Individual Differences
Affectivity. Individuals differ in the extent to which they typically experience
positive or negative affective states (Cropanzano, James, & Konovsky, 1993).
Individuals demonstrating high positive affect tend to have a general sense of
well-being and to most often view their circumstances in an optimistic light. In
contrast, individuals demonstrating high negative affect tend to view their
circumstances less favorably and to experience more negative emotional
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states. In addition, individuals high on negative affectivity also tend to
interpret ambiguous stimuli more pessimistically ( Watson & Clark, 1984).
Thus, when discrepancies between promised and actual inducements arise,
individuals with high negative affect are likely to inflate the size of the
perceived loss and to make an unfavorable attribution for why the discrepancy
occurred. In addition, individuals with high negative affect will be more likely
to focus attention on those aspects of the psychological contract where they
have received less than promised than on those aspects where they have
received more than promised.
Proposition 12. The relationship between psychological contract
violations and employee responses will be moderated by affectivity;
individuals with high negative affectivity will respond more negatively
to perceived psychological contract violations.
Equity Sensitivity. Equity sensitivity refers to an individual's general preference for the degree of balance in a relationship. In contrast to traditional
equity theory (Adams, 1965), which implies that all individuals seek equity in
their exchange relationships, equity sensitivity research suggests that individuals differ in their need and desire to be in a state of equity (Huseman,
Hatfield, & Miles, 1987; Miles, Hatfield, & Huseman, 1989).
Proposition 13 hypothesizes that the relationship between psychological
contract violations and employees' responses to them will be moderated by
equity sensitivity. Equity-sensitive employees are much more likely to
perceive small discrepancies as significant and to try restore equity by
withdrawing their own contributions to the firm. Consequently, the
strength of the relationship between psychological contract violations and
employee responses is likely to be greater for those individuals who are
highly equity sensitive.
Proposition 13. Equity sensitivity will moderate the relationship
between psychological contract violations and employee responses to
those violations; individuals who are highly equity sensitive will
respond more negatively to perceived psychological contract violations.
Conscientiousness. Another potential individual difference moderator is conscientiousness. Conscientiousness refers to an individual's tendency to be
dependable, persistent, organized, and goal-directed (McCrae & Costa, 1987).
Prior research suggests that individuals who are highly conscientious tend to
be better performers in most work situations (Barrick & Mount, 1991) and that
they also tend to engage in higher levels of organizational citizenship behavior
(Konovsky & Organ, 1996).
Individuals who are highly conscientious may feel compelled to continue
working hard even if they perceive that their psychological contract has been
violated. Thus, as Proposition 14 suggests, conscientiousness is likely to
moderate the relationship between psychological contract violations and
employees' behaviors.
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379
Proposition 14. Conscientiousness will moderate the relationship
between psychological contract violations and employee responses to
those violations; individuals who are highly conscientious will respond
less negatively to perceived psychological contract violations.
Organizational Practices
Procedural and Interactional Justice. Since discrepancies arise when employees perceive that they receive less than the organization promised them, it is
not surprising that these discrepancies lead to perceptions of distributive
injustice (a condition in which the individual believes the outcomes that he or
she received were unfair). However, prior research suggests that individuals'
interpretations of and responses to unfavorable outcomes are also strongly
influenced by perceptions of procedural and interactional justice. Specifically,
recent research (Brockner & Wiesenfeld, 1996; Moorman, 1991; Skarlicki &
Folger, 1997) suggests that individuals' responses to unfavorable actions will
be less severe when they perceive the decision-making process to be fair
(procedural justice) and when they perceive the interpersonal treatment they
receive as courteous and respectful (interactional justice). In addition, Turnley and Feldman (1998) suggest that fairness perceptions are likely to be
important in determining how employees respond to perceived psychological
contract violations.
Proposition 15. Procedural justice will moderate the relationship
between psychological contract violations and employee responses to
those violations; the relationships will be weaker when employees
perceive procedural justice surrounding the discrepancy.
Proposition 16. Interactional justice will moderate the relationship
between psychological contract violations and employee responses to
those violations; the relationships will be weaker when employees
perceive interactional justice surrounding the discrepancy.
Remediation. When the organization recognizes that it has not fully lived up
to the commitments it made to its employees in one area, the organization
may attempt to make it up to the employees by offering them different
inducements. Remediation involves substituting one outcome for another in
an effort to reduce the size of the loss experienced by the employee
(Rousseau, 1995). For example, when a particular type of job becomes
obsolete or redundant, the organization may offer to retrain employees so
that they can find work elsewhere in the company or with another firm.
Thus, remediation helps an organization live up to the spirit of the psychological contract when they are not willing or able to live up to the letter of the
agreement (Rousseau, 1995). The closer the attempt at remediation comes to
providing the employee with the overall level of inducements they were
promised, the less likely the employee is to respond aggressively to psychological contract violations.
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Proposition 17. Offers of remediation will moderate the relationship between psychological contract violations and employee responses to those violations; the relationships will be weaker when
organizations have offered to remediate the psychological contract
violation in some way.
Quality of Working Relationships. Employees who have positive working relationships with their boss and/or coworkers may respond less negatively to
violations of their psychological contract than employees who have poor
working relationships (Turnley & Feldman, 1998). The potential loss of
rewarding personal relationships is likely to act as an indirect exit cost, which
encourages employees to remain with their organizations. Furthermore, employees should be less likely to neglect in-role performance or reduce extra-role
contributions if such actions will negatively impact those to whom the employee feels close. For these reasons, then, employees' reactions to psychological contract violations are likely to be less severe when they have high quality
working relationships with their supervisors or colleagues.
Proposition 18. The quality of the employee's working relationships
will moderate the relationship between psychological contract violations
and employee responses to those violations; employees will respond less
negatively when the quality of the working relationships with supervisors and coworkers is high.
Labor Market Circumstances
Exit Costs. Resources that are directly associated with continuity in the same
job or organization, such as non-portable training or non-vested retirement
funds, may restrict the options that an employee perceives in the face of
psychological contract violations ( Rusbult, Farrell, Rogers, & Mainus, 1988).
In a very real sense, high exit costs bind an employee to the organization by
providing rewards for continued employment. When faced with high exit costs,
employees may not only be less likely to exit but may also be less likely to
engage in behaviors (like neglecting in-role performance or decreasing organizational citizenship behaviors) that could lead to the termination of their
employment. Thus, employees with high exit costs are likely to remain loyal to
their organizations even during periods in which their expectations are not
being met.
Proposition 19. Exit costs will moderate the relationship between
psychological contract violations and employee responses to those
violations; employees will respond less strongly when exit costs
are high.
Employee Replaceability. Employees who feel that they are performing a
critical task may believe that the organization would have a very hard
time replacing them. Other employees may perceive themselves as difficult
to replace for additional reasons: unusually high performance levels,
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381
political connections, or critical relationships with important customers,
suppliers, or regulators. Employees who see themselves as having a great
deal of job security, for whatever reason, may be more inclined to respond
strongly to psychological contract violations. Because they feel their current jobs are safe, they may be more likely to speak out against the
organization, more likely to shirk some of their job duties in an attempt to
restore equity, and more inclined to let it be known that they are actively
searching for other employment.
Proposition 20. Employee replaceability will moderate the relationship between psychological contract violations and employee responses
to those violations; negative responses will be more likely when the
difficulty of replacing the employee is high.
Availability of Attractive Job Alternatives. An individual's response to psychological contract violation is also likely to be affected by the quality of the
alternative jobs available. Individuals who can easily find similar employment elsewhere may be less willing to continue working hard in support of
an organization that cannot be trusted to keep its promises (Turnley &
Feldman, 1999). Moreover, the presence of attractive alternatives is likely to
make individuals feel less dependent on their current organizations. Therefore, the availability of attractive alternatives is likely to increase the
employees' inclination to attempt to get even with the organization they
feel has betrayed them.
Proposition 21. The availability of attractive job alternatives will
moderate the relationship between psychological contract violations and
employee responses to those violations; negative responses will be more
likely when attractive job alternatives are available.
IMPLICATIONS FOR FUTURE RESEARCH
In this review, we have focused primarily on two questions: (1) Why aren't all
breaches of psychological contracts interpreted as psychological contract violations? and (2) Why don't employees respond negatively and strongly to all
psychological contract violations? In this next section, we suggest some
avenues for future research on these issues.
Perhaps one of the greatest needs in future research in this area is an
increased focus on tangible employee behaviors that change as a result of
psychological contract violations. Most previous research has focused on
employee attitudes and psychological well-being. Also, the limited empirical
research that has examined employees' behavioral responses to psychological
contract violations has largely been based on self-report data. There are at
least three behavioral indicators worthy of further attention in future research
on the outcomes of psychological contract violations: in-role performance,
organizational citizenship behaviors, and antisocial behaviors.
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In-role performance refers to employees' fulfillment of formally prescribed
job duties and responsibilities ( Williams & Anderson, 1991). A reasonable
indicator of employees' behavioral response to psychological contract violation
is some measure of employees' thoroughness and attentiveness in completing
basic job duties; lower quantity or lower quality performance in the aftermath
of psychological contract violations might be a tangible indicator of employee
retaliation for those violations (Robinson, 1996).
As noted above, though, employees may not always feel free to act consistently with their attitudes in the face of psychological contract violations. That
is, there are situational constraints on individuals' abilities to withdraw effort
or lower performance after psychological contract violations (Herman, 1973).
For example, if there are few available job alternatives, employees would not
want to put themselves at risk with their present employers by decreasing
their in-role performance. However, individuals have more control over the
extent to which they engage in organizational citizenship behaviors for the
good of their employers (Parks & Kidder, 1994; Organ, 1988). While employees
may be forced by circumstances to sustain high levels of performance on in-role
behaviors, they are less closely monitored as to how often they voluntarily take
on additional responsibilities, work longer hours to help colleagues, and
promote the organization's reputation in the business community at large.
When psychological contracts are violated, then, we would expect the level of
their organizational citizenship behaviors to decline as well.
Other potentially fruitful dependent variables in this context are so-called
``antisocial behaviors'' (Giacalone & Greenberg, 1996; Robinson & Bennett,
1995). While on-the-job homicides are the most extreme example of such
actions, other antisocial workplace behaviors include theft, vandalism, sabotage, arson, and physical threats and assaults (Neuman & Baron, 1996). While
these behaviors are fortunately relatively uncommon, they generally result
from individuals' frustration at not getting what they feel they deserve from
the organization. Indeed, several recent and highly-publicized acts of violence
in organizations have been linked to the firings of the perpetrators. In general,
we would expect these antisocial behaviors to be most likely when psychological contract violations are surrounded by both procedural and interactional
injustice (Bies, Tripp, & Kramer, 1996).
Another important direction for future research is moving away from
examining relationships among global constructs and moving toward examining more tightly specified models. As previous research suggests, global
perceptions of psychological contract violations lead to globally negative job
attitudes. However, to move this research area forward, more attention must
be given to examining these processes in greater detail. Unfortunately, at this
point in the research stream, there is no single agreed-upon measure of
psychological contract violation, moderating variables are rarely investigated,
and little empirical research has been conducted on the sources of employee
expectations comprising the psychological contract. Until models are more
tightly specified and empirically tested, there will continue to be a lack of
information about when unfulfilled expectations will be interpreted as psy-
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383
chological contract violations and when psychological contract violations will
result in lower performance.
Also, like much of the research in the organizational sciences, the
research on psychological contracts relies heavily on self-report, cross-sectional data. Inferences of causality are particularly important in this
research stream, because employees could be using perceptions of psychological contract violations as post-hoc justifications for their hostile or
anti-organizational behaviors. Clearly, then, longitudinal designs and
archival data are very important in mitigating against common-method
variance and inflated relationships among constructs ( particularly the
global constructs discussed above).
Even more critical here, though, is the issue of sampling. A disproportionate share of the research in this area has examined the transition of
predominantly white, upper-middle-class males graduating from top-tier
MBA programs into large, prestigious corporations. The experiences of others
who face frequent psychological contract violations Ðexpatriates and repatriates, employees who have lost their jobs, blue collar workers, unionized
employees Ðhave been much less frequently explored (Guzzo et al., 1994;
Turnley & Feldman, 1997, 1998). Thus, research on psychological contract
violations needs to aggressively expand its sample base lest it be reduced to
the investigation of the disappointments and perceived entitlements of
highly-paid new MBAs simply experiencing ``entry shock'' as they make the
transition from school to work.
CONCLUSION
Prior research suggests that psychological contract violations not only have a
deleterious impact on the employees who experience them, but may also have
negative consequences for organizational effectiveness. For example, psychological contract violations are likely to result in increased turnover, increased
neglect of in-role job duties, and a reduced willingness among employees to
represent the organization positively to outsiders. Thus, the hurt feelings and
sense of betrayal experienced by the employees are only half the story.
Psychological contract violations also frequently result in behaviors that are
likely to be harmful to organizations.
The increased frequency with which corporations have recently initiated
downsizings, reorganizations, and mergers in an attempt to improve financial performance have led to the experience of psychological contract violations among the employees involved (Turnley & Feldman, 1998). In
response, many of the employees who have survived the layoffs and
reorganizations now report that they are less committed to their organizations. Thus, while organizations are now asking their employees to work
even harder and to be even more flexible, many employees are less willing
than ever to be good organizational citizens (Parks & Kidder, 1994). In fact,
employees whose psychological contracts have been violated are more likely
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to become careerist in their orientation to work and less inclined to look out
for the interests of their organizations (Feldman & Weitz, 1991; Robinson &
Rousseau, 1994).
As the current employment relationship continues to undergo a major
transformation, the importance of understanding both when employees are
likely to interpret discrepancies as psychological contract violations and
under what circumstances employees will respond strongly to such violations will remain compelling issues for researchers and practitioners alike.
Only when we learn more about these phenomena will we be in a position
to really understand all of the ways in which