Academic journal article Journal of Managerial Issues

Psychological Contract Breach, Perceived Discrimination, and Ethnic Identification in Hispanic Business Professionals

Academic journal article Journal of Managerial Issues

Psychological Contract Breach, Perceived Discrimination, and Ethnic Identification in Hispanic Business Professionals

Article excerpt

Rousseau (1995) defines the psychological contract as the individual's beliefs about mutual obligations in the context of the relationship between employee and employer. The psychological contract focuses less on traditional compensation issues and more on the entire relationship between an employee and employer (Rousseau, 1995). The terms of the psychological contract are obligations specifically based on perceived promises by the other party (Rousseau, 1989; Robinson, 1996). Whether implicit or explicit, the perceived promises create obligations that must be fulfilled for the contract to be upheld (Rousseau, 2001). For example, the organization or manager utilizing a relational psychological contract is obligated to treat the individual justly, provide safe working conditions, allow employees reasonable vacation time, and provide proper resources to complete their tasks. On the other hand, the employee is obligated to complete requested tasks, demonstrate a good attitude, promote the image of the company, and obey corporate policy.

The maintenance of the relational psychological contract is paramount to a healthy and enduring work relationship. What sets a relational psychological contract apart from other psychological contracts (i.e., balanced, transactional, transitional) is the long-term focus that requires mutual satisfaction in both socio-emotional and economic relations rather than certain performance-reward contingencies (Hui et al., 2004). Over the past two decades a changing business environment (e.g., globalization, downsizing) has required constant renegotiation of the mutual obligations of employers and employees, leaving more room for the misunderstandings and misalignments that result in psychological contract breach (Robinson, 1996).

In order to maintain a proper working relationship this specific type of contract must remain fulfilled. This becomes particularly challenging because psychological contracts are based on the perceptions of each party, and the perceptions are not necessarily shared (Robinson, 1996). A psychological contract is considered breached when one party believes that the other has failed to follow through on a promise or commitment (Rousseau, 1989). The party that deems the contract breached may take action to change the relationship. Empirical research suggests that breach of a psychological contract is negatively related to employee loyalty, job performance, efficiency, trust, and effectiveness, and positively related to filing grievances and seeking alternative employment (Masterson, 2001; Coyle-Shapiro and Kessler, 2000; Cavanaugh and Noe, 1999; Turnley and Feldman, 1999; Lewis-McClear and Taylor, 1997; Rousseau and McLean Parks, 1993; Rousseau and Anton, 1991, 1988). Conversely, fulfilled contracts lead to increased job satisfaction and productivity (Rousseau, 1995). Therefore, it is imperative to assess and manage psychological contracts within organizations. The current study seeks to highlight the role of the relational psychological contract with perceptions of Hispanic business professionals.

Employees tend to enter an organization expecting treatment free from discrimination, regardless of demographic differences; therefore, a relationship may exist between psychological contract breach and an employee's perception of discrimination. More specifically, if an employee feels they have been discriminated against, they may also perceive their psychological contract to have been breached. Robinson and Rousseau (1994) found that more than one-half (54.8%) of all employees studied reported their psychological contract as breached. Although Robinson and Rousseau (1994) reported a very high rate of psychological contract breach, they did not examine potentially influential individual differences of their respondents. In order to study the relationship between psychological contract breach and perception of discrimination, the investigation might be most fruitful in examining minority groups, as they are more likely to perceive that they are discriminated against than majority group members (McKay et al. …

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