Academic journal article Journal of Organizational Culture, Communications and Conflict

When Does Breach of the Organizational-Consumer Psychological Contract Affect the Employee's Desire to Stay?

Academic journal article Journal of Organizational Culture, Communications and Conflict

When Does Breach of the Organizational-Consumer Psychological Contract Affect the Employee's Desire to Stay?

Article excerpt


A search of the PsychInfo database reveals that over the last twenty-five years approximately two hundred articles have been written with an explicit focus on the notion of psychological contract. This indicates a great deal of interest on the part of social scientists in this construct notion. In fact, this idea of a psychological contract existing between employee and employer has an intellectual heritage dating back to Rousseau's early work in 1989, and can be conceptually traced even further back to Schein in 1965.

This body of work is impressive and has contributed greatly to our understanding of how employees perceive their work circumstances. However, this vast work has been limited to what we will call the direct psychological contract, or that psychological contract which develops between the employing organization and the employee. Absent in this literature is a recognition of indirect contracting by which obligations to other stakeholders (e.g., customers) may influence the work experience and intentions of employees. We believe that the breach of such indirect obligations on the part of the organization (the consumer psychological contract) may be as important as the breach of the implicit psychological contract between employer and employee.

This vicarious perception of psychological contracting parallels findings in other areas of the organizational behavior literature. For instance, Greenberg (1996) determined that individuals vicariously develop a sense of organizational justice. Similarly, Butterfield, Trevino and Weaver (2000) demonstrated that one develops an understanding of the organization's ethical culture vicariously. We believe capacity to extrapolate vicarious experience will prove equally important to the psychological contracting literature.

As such, the main purpose of this study is to examine the relative influence of direct and indirect breaches of psychological contract as perceived by employees on organizational commitment and job satisfaction. Although there is a large and growing literature that examines the effects of perceived psychological contract breach (Robinson, 1996; Robinson and Morrison, 1995; Robinson and Morrison, 1998; Robinson and Rousseau, 1994), this is the first empirical study of the direct versus consumer psychological contract breach. It is our hope that this study will accomplish three ends: 1) demonstrate the importance of consumer psychological contract breach on employees; 2) encourage the field to begin a search for other such stakeholder forms of psychological contracting; and 3) help researchers further mitigate the destructive consequences of perceived breaches to both direct and consumer psychological contracting.


For centuries scholars have emphasized the importance of fulfilling commitments, particularly one's promises. In fact, notable philosophers have declared it our duty to fulfill the commitments we make to others (Kant, Ross). Indeed, they have argued, that the loss of trust ensuing in a world in which promises mean nothing, make it virtually impossible to live out an orderly life. In recent decades, the changing workplace relationships have muddled what individuals can expect from their affiliation with an organization. As a result, an extensive amount of research has been directed toward these expectations that form in the nature of a psychological contract.

The psychological contract is comprised of the implicit and explicit promises that have been shaped by the organization in terms of the exchange agreement between individuals and the firm (Rousseau, 1995, 2001, 2004). Unlike "social" contracts, which are comprised by broadly based beliefs about the obligations of those within a culture, or the "normative" contract, which is a sharing of beliefs among more than one person about the organization's commitments, the psychological contract is crafted at the individual level of analysis involving one's personal beliefs regarding the promises that have been made. …

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