Perception of Fairness in Psychological Contracts by Hispanic Business Professionals: An Empirical Study in the United States

Article excerpt

This paper reports on a large scale survey of Hispanic Business Professionals working in the United States. While the Hispanic population is the fastest growing group in the United States, little research has attempted to decipher the idiosyncrasies of this unique group of workers. The present study evaluates psychological contract fairness perceptions of Hispanic Business Professions (Hispanic individuals in 'white collar' jobs). The results show that almost two-thirds of the Hispanic Business Professionals surveyed find their psychological contract to be 'unfair'. Additional results are presented surrounding perceptions of discrimination and age.

The Hispanic1 population is well documented as the fastest growing minority group in the United States. As noted in the Census 2000 data, Hispanics are the largest minority group in the United States and have grown much faster than predicted in the past decade and now are equal in size to the African-American population. Currently, there are approximately 33 million Hispanics, comprising approximately 12% of the population and it is projected to be over 50 million by 2020. This group has accounted for 40% of the population growth in the United States in the past decade, growing at 60% - ten times the rate of non-Hispanics ( While growing at a staggering rate, little managerial research has focused on this component of the workforce. This dearth of work is now more important than ever seeing as how the projected statistics for 2050 are even more explosive and, according to Census projections, Hispanics will then be 25% of the total United States population (Blancero & Blancero, 2001). This projected rise in the number of Hispanics poses challenges for researchers and practitioners and has important implications for organizations, especially considering the lack of scholarly work on this minority. Moreover, business researchers have almost completely ignored Hispanic Business Professionals (white-collar workers with a minimum of an undergraduate college degree) who are examined in the present study.

As with any minority group, issues of great importance surround perceptions of discrimination and fairness. While these issues are of increasing interest in relation to Hispanic professionals (Foley, Kidder & Powell, 2002), most academic research has ignored the potential differences in the workplace that this increasingly large segment of the population faces. Through this lens, the following analysis focuses on issues of the Hispanic professional's perception of psychological contract fairness, perceptions of discrimination and the changing nature of these relationships. Of particular interest are the implications for further research on Hispanics' psychological contract development and evaluation of their specific contracts with employers. While some psychological contract scholars have called for efforts into the nature of psychological contracts for different population segments (Rousseau & Schalk, 2001), there has yet to be an extensive look into the rich research potential created by the unique nature of the Hispanic professional. Thus, this research will not only further organizational research in the area of psychological contracts, but Hispanic research also, as we attempt to explain perceptual differences in Hispanic professional's interpretation of their work agreements.

This work will contribute to the literature by taking a new approach to the psychological contract in looking at new explanatory constructs of the phenomenon of violation. Numerous scholars have stated that future directions in psychological contract research should focus on addressing the major criticisms that exist in the research landscape (measurement, definition, dynamics/outcomes) but maybe more importantly the added value of the construct; this would include identification of clear relationships with other more solidly defined organizational behavior constructs (Guest 1998) as well as the testing of these alternative or "explanatory constructs" (Anderson & Schalk, 1998).

While most criticism of psychological contract work has focused on its inability to incorporate these other, more established 'explanatory constructs' such as perceptions of discrimination or job design into contemporary models of psychological contract formation and evaluation a growing interest in cross-cultural placations and perceptions of psychological contract content and formulation has emerged (Rousseau & Tinsley, 1997; Rousseau, 2001). While these differences are not yet fully understood (Rousseau & Tijoriwala, 1998) and are yet to be adequately tested empirically (the proposed differences are largely theoretical differences), it seems a logical extension of these propositions would be to frame psychological contract violation around individual differences such as culture or ethnic origin.

Psychological Contracts

Many scholars have pontificated the exploits and drawbacks of the psychological contract, but it is generally agreed that the psychological contract plays an important, if not crucial role in shaping employee behavior in the workplace (Anderson & Schalk, 1998). However, as a relatively new development in organizational research, many facets of the psychological contract have come under much scrutiny and have been subject of debate. As a result, what authors mean when they discuss a 'psychological contract' is still, to some extent, nebulous. While research in the area of psychological contracts has become more and more prevalent over the past several years, the concept of the psychological contract dates back to Argyris (1960) who mentions the concept in passing and Levinson et al. (1962) who describe the psychological contract as the 'unwritten (work) agreement (and the) sum of the mutual (work) expectations'. These definitions remain problematic at best and have given rise to several revisions over the years (Schein, 1965, 1980; Herriot & Pemberton, 1995). To this end, any discussion of the psychological contract must specifically outline what is intended to comprise the contract (Rousseau, 1998). To date, the most widely accepted definition has emerged from Rousseau (1995) who attempted to remove levels issues associated with an agreement reached between an organization and an individual by defining the psychological contract as: the individual's beliefs about mutual obligations, in the context of the relationship between employer and employee. After eliminating multi-level concerns by placing the construct in a unilateral individual level of analysis (logical, since most of the dependent variables of interest are individual level outcomes) questions of operationalization for empirical study has become the greatest issue of concern. Moreover, data reported on in all previous studies has been examined without attention to the potential for cultural differences in interpretation of the psychological contract. As evident in other realms of organizational research, cultures differ in their behavior, interpretations and attitudes of work (Trice & Beyer, 1993).

Increasingly, scholars have investigated the impact of contract violation as well as the benefit derived from the intact psychological contract. Violations of the psychological contract, or perceptions of an unfair psychological contract, have been shown to afford many adverse results. Violation of the psychological contract occurs when an employee perceives that the organization has failed to fulfill one or more of its 'contractual obligations'. Psychological contract violations come in two forms: reneging or incongruence. Reneging occurs when the organization knowingly breaks a promise to the employee, either on purpose or because of unforeseen circumstances. In contrast, incongruence is marked by the difference in perceptions of the individual and the organization, for example the organization might believe that it has lived up to its commitments, but the individual perceives the organization has failed to meet their expectations (Rousseau, 1995). In this paper, we examine the overall 'fairness' of the psychological contract. By so doing, we acknowledge that reports will include varying degrees of contract violation corresponding to the levels of contract fairness. In these cases, the contract has not necessarily been broken, yet negative outcomes of violation can still be evident (Morrison & Robinson, 1997). The results of psychological contract violation range from outcomes such as negative impact on employees' work behaviors and attitudes to voluntary turnover. Conversely, the intact psychological contract has predicted many potential benefits. Researchers have shown that individuals with intact contracts have high levels of organizational commitment, extra-role behavior that promotes effective functioning of the organization (Organizational Citizenship Behavior-OCB), productivity, and job satisfaction (Robinson & Rousseau, 1994; Coyle-Shapiro & Kessler, 2000).

Focus on Evaluation

Research in the area of psychological contracts is possibly the most emergent area for organizational research in the current landscape. In light of this development it seems that attention should now focus this stream of research away from the traditional area of focus on outcomes (positive attributes of the intact psychological contract) and content-based evaluation (the content of the psychological contract) but focus itself on other influences on the evaluation of the contract, such as the potential for cultural influences on the evaluation of work agreements.

Robinson & Rousseau (1994) report that half of all employees in their study report their psychological contract as 'violated'. In our examination of Hispanic professionals, over two-thirds (67.7%) of respondents reported violation of the psychological contract; such disparity in evaluation leads us to the conclusion that further examination of this phenomenon will be invaluable to the corpus of knowledge in organizational and Hispanic research. In this vein, we will explore the potential sources of these differences first in the nature of psychological contract work and then by searching for cultural explanations.

Perhaps less problematic, but also of interest is the stream of psychological contract research surrounding features of the psychological contract. While this area is perhaps the least developed of the three facets, its importance and (unfortunate) ambiguity are of note. Feature-oriented measures capture the 'properties' associated with particular contracts; Macneil (1985) enumerates a variety of properties of the psychological contract including: narrow/wide scope, explicit/implicit, static/dynamic, certain/ uncertain, written/unwritten. Features are especially important in our understanding of the processes whereby means of communicating the psychological contract affect its content and likelihood of fulfillment/violation, for example, we might assume that a more explicit or 'written' a contract might result in more agreement (in terms of content) and decrease the likelihood that it will be violated (as has been observed in legal contracts, Stolle & Slain, 1997). Parks & Van Dyne (1995), developed several measures of facets with high reliabilities, including scope (extent to which the contract spills over into the individual's personal life) and emergence (static/dynamic) among others (short/long-term, economic/socioemotional focus). Almost simultaneously, Lusch & Brown (1996) evaluated ratings of informality and explicitness to assess attributes of contracts in marketing channels - explicitness was associated with greater supplier dependence while informality was associated with mutual interdependence between buyer and supplier. Research points to the potential influence of the nature of the relationship linking to specific features of the contract - however, these measures are underdeveloped and are a ripe area for future research and development. It seems only logical that in order to evaluate content (see above) one must first understand features of the psychological contract. Also of use might be the creation of content measures based on the 'type' (e.g., characteristic of implicit psychological contracts are A, B and C; characteristic of explicit psychological contracts are X, Y and Z, etc.) of psychological contract. In terms of our examination of Hispanic professional psychological contracts, we attempted to explain the difference in fairness perceptions based on some features of the work relationship, namely the ethnicity of supervisors and proportion of Hispanics in workgroups. This examination was to no avail as there was no significant relationship between psychological contract fairness based on supervisor ethnicity (Hispanic versus Non-Hispanic - F(l,726)=.028, ns). Additionally, features of the workgroup (proportion of Hispanics in the work group) also had no effect on fairness of the psychological contract (F(32, 673)=1.162, ns).

With the lack of results based on features of the work environment (supervisor ethnicity and work group make-up), we now shift our focus on the final category of psychological contract measures set forth by Rousseau & Tijoriwala (1998). Evaluation-oriented measures of psychological contracts have been the most empirically successful avenue for most psychological contract work, and it turn afford us the opportunity to reframe our explanation of Hispanic professional psychological contract fairness around potential differences in perception based on the unique nature of Latino culture. Evaluation-oriented research has been primarily operationalized via two-methods. First, a measure of contract fulfillment (1 to 5, ranging from not at all to a very great extent) has been employed as a more of a global measure of overall contract fulfillment (as opposed to a discrete event or singular 'violation' of the psychological contract). Alternatively, a dichotomous index of violation (yes/no, Robinson & Rousseau, 1994) has been used to reflect a single event or a particular episode within the employment relationship. Questions about the validity of these measures persist with the central tenant surrounding a conceptual rift regarding the exact definition of 'violation'. Scholars disagree as to whether 'violation' of the psychological contract is a discrete event (Robinson & Rousseau, 1994; Rousseau, 1995) or an emotional response (Wolfe Morrison & Robinson 1997). This controversy also surrounds the idea that if a discrete violation occurs, does this in turn generate all of the negative outcomes associated with violation? Research shows more conclusive results in terms of global fulfillment compared with discrete event violation; thus it seems a foregone conclusion that the psychological contract is incredibly dynamic and the influence of alpha-, beta- and gamma-change are huge issues in terms of longitudinal content-oriented research. While overcoming these issues is not impossible, it seems instead that more immediate value could be derived from longitudinal research focusing on how 'intact' or 'fair' the contract is over time, rather than evaluating what comprises the contract from time to time. For example, dynamism of the contract is not evident to the employee experiencing and 'living' the contract everyday, however they are cognizant of when the contract is violated, these employees cannot specify what contents of the contract are stable, but can report violation. Thus, it seems more fruitful to compare employees generally in terms of contextual differences driving the more 'intact' or 'fair' contracts (such as Individual differences, country of origin, ethnic background, organizational culture, occupations, level of professionalization, nature of relationships, self-efficacy, work-space layout, embeddedness issues, etc.) and the outcomes of the violated contract (reduction in OCBs, absenteeism, turnover, reduced levels of organizational commitment, interpersonal issues). In this study we have chosen to evaluate the global contract fulfillment or 'fairness' of the psychological work agreement as the literature finds this to be a robust predictor of relevant dependent variables (Coyle-Shapiro & Kessler, 2000). Given the possibility of individual differences explaining the perceptual differences of Hispanic professional's psychological contract, we chose to frame our contribution on the potential influence of ethnicity on perception of the work agreement.

Evaluating the Psychological Contract Cross-culturally

The most recent wave of psychological contract research has called for 'cross-cultural issues' related to the psychological contract (Rousseau & Schalk, 2001). The focus of this research has too been on content of the psychological contract, but in this case, across cultures. However, of more interest seems to be the perceptions (evaluation) of violation/fairness cross-culturally. Perhaps less developed countries or traditionally repressed groups are less (or possibly more likely due to hypersensitivity) likely to report their contract as violated/unfair. It seems immeasurably interesting to examine the perceptions of individuals cross-culturally. Through this line of research evidence of lingering bias, bigotry or feelings of inferiority in the workplace may too be uncovered or brought to the surface. Recently, Foley, Kidder & Powell (2002) examined perceptions of the 'glass ceiling', promotional fairness and perceptions of discrimination. This study resulted in evidence of a lingering 'glass ceiling' or level above which minorities (in this case Hispanics' 'adobe ceiling') could not rise above. They found that this omnipresent shadow was significantly related to perceptions of fairness and discrimination.

While the psychological contract can be difficult to grasp, many scholars have still done meaningful empirical and theoretical work in psychological contracts that support the thesis of this argument. Robinson & Morrison (2000) examine psychological contract violation through the lens of contextual influences; they find a significant increase in violation reports in instances of low organizational performance, lack of formal socialization process, lack of or inappropriate job previews, increased number of job options/offers (before choosing the job studied) and in instances where the employee has a history of psychological contract violation in previous employments. The two latter findings of Robinson & Morrisson suggest that individual differences do in fact predict psychological contract violation, in this case where difference individual circumstances predict such behavior. Cavanaugh & Noe (1999) examine the importance of differing interpretations of the relational component of the psychological contract, finding significant results in terms of fairness/violation reports. Additionally, Turnley & Feldman (2000) show that job dissatisfaction leads to reports of psychological contract violation reports. Next, in an examination of note, Morrisson & Robinson (1997) present a model of determinants and characteristics of psychological contract violations, which at first glance seems similar to the present study. Unfortunately the study identified contextual influences and supervisor behaviors ignoring the potential influence of individual difference variables; this study attempts to view the psychological contract from the viewpoint of the organizational/contextual influences ignoring the initial theoretical constraints placed by Rousseau who states that psychological contracts can only be evaluated from the side of the individual (1995, 1998). Thus, an examination such as this is not only warranted but lends itself to a more elementary theoretical extension of the original intent of psychological contract theory.

The Study

Specifically, we sought to examine how and why Hispanics evaluate their psychological contracts. Our hypothesis centered around the tenant that based on perceptions of discrimination, Hispanics would perceive their contracts to be less fair than the general population. Evidence for our hypothesis was extracted from a national study of Hispanic business professionals. With the cooperation of the National Society of Hispanic MBAs, we surveyed almost 800 Hispanics with a minimum of a Bachelor's degree (84% held MBA degrees). Additionally, we conducted in-depth, follow-up telephone interviews with 100 individuals from this larger group. In our sample, the mean (1999) salary is $64,000 and job titles include Vice Presidents, Directors, Managers, Consultants, and Analysts; industries are also varied, including high tech, banking, retail, aerospace and others.

Our study addressed many topics, including career success from the perspective of Hispanics who are considered 'successful' by most measures (salary, education). In fact, the study revealed that 75 percent our sample perceived their status 'higher' than average both within the population of Hispanics as well as the general population. In essence, our sample is not grappling with the traditional barriers to career progress faced by many members of their demographic group (i.e., language difficulty, insufficient education). The importance of this group is that they are commonly overlooked as this is not the typical minority group studied by most, these professionals are in the best position to provide information about the experiences of Hispanics in the workplace as they are in positions to be the corporate leaders of tomorrow. This sample for this study includes the following:

* All of the 757 participants in the survey are Hispanic.

* All participants are employed on a full time basis

* The average age is 34, with a range from 24-68 years of age. While 30 percent are younger than 30 years of age, 10 percent are over 45 years; thus, 60 percent are between 30-45 years old.

* Sixty-one percent are male, Thirty-nine percent are female

* All of the participants live in the United States; however, most individuals grew up only in the United States [53 percent] while 13 percent grew up only outside of the United States. Almost one-third spent their childhood both inside and outside the United States, but 61 percent were born in the United States

* The majority of individuals speak Spanish at least 'conversationally', with only 12 percent speaking no Spanish at all; 7 percent of the sample felt more comfortable in Spanish, additionally, the remainder were equally comfortable in both languages

* Eighty-two percent of professionals hold an MBA or equivalent degree, 2 percent possess a Ph.D. or Law Degree, and the remaining 16 percent have undergraduate degrees [most of these individuals are currently working toward their MBA]. More than half of these individuals have had their MBA degree for 5 years or less; 20 percent have their MBA degree for more than 10 years.

* Approximately 50 percent are employed with their current organization for 2 years or less and overall the average is 4 years. They are working in their industry, on average, for a little over 6 years, while 50 percent report being in the same industry for 4 years or less


Several questions queried these professionals on issues of discrimination. In sum, our measure of discrimination (alpha=.902) indicated that 38.8 percent of respondents felt discriminated against. Specifically, over 76 percent felt that their ethnic background did not exclude them from work activities nor did they perceive their ethnicity as a limitation (52 percent). While more than half of the participants (54 percent) felt that their co-workers neither had stereotypes about their culture nor treated them as if such stereotypes were true, there was a sizable number that felt differently. In other words, almost one-third of individuals felt that others [at work] treated them differently as a result of being Hispanic. What is of concern here is the occupational group that we are studying. As stated, our sample consists of highly educated individuals in professional positions moving up the corporate ladder. If these highly skilled professionals perceive this, one can speculate that those who are in less 'prestigious' jobs may be exposed to higher levels of such treatment.

As our discussion of the psychological contract was formulated, it seemed prudent to test the impact of perceived psychological contract fairness on the perception of discrimination of the employee. Our results show that individual's perception of discrimination was a significant predictor of psychological contract fairness (p<.001). On average those reporting discrimination had an average psychological contract scale score of 3.69 (106 respondents), while those with a report of no discrimination averaged 4.90 (322 respondents). Those with no opinion on discrimination average psychological contract fairness score was 4.34 (97 respondents).

In other words, those individuals who reported a fair psychological contract also reported a lack of perceived discrimination. This finding is incredibly intriguing. It seems perhaps that the level of discrimination within organizations might indicate the Hispanic professional's belief in the psychological contract, or by extension, belief of fair treatment. Future research might compare the strength of this relationship among other races and ethnicities to explore this phenomenon more completely.

Age Effect

While these results are compelling, it seemed interesting to test the impact of other demographic differences among the Hispanic respondents. Interestingly, there was no significant difference between genders in relation to psychological contract fairness (F(1,629) = .021, ns); however, there was a significant difference in fairness scores due to age group (24-29 vs. 30-34 vs. 35-39, etc.) of the respondent (F(7, 622)=2.596, p<.05). Further, there is evidence of a linear trend of fairness score by age (F(I, 592)=5.078, p<.05); or in other words, as Hispanics got older they reported lower levels of fairness of the psychological contract. This finding is incredibly intriguing and may be due to the changing view employers have of the Hispanic workforce. As this younger crop of Hispanic Professionals enters the workforce, it is quite possible that managers are becoming increasingly more accepting and grateful for this new influence on the labor force. Higher fairness scores for the psychological contract by younger members could be viewed as an important triumph for the Hispanic worker, demonstrating that attitudes towards mem are shifting to a more positive and valued perspective.

To synthesize the results of our age analysis and compelling relationship between psychological contract scores and perceived discrimination returns a hopeful result. It seems that younger Hispanic workers believe their psychological contract is increasingly fair; by expansion it is increasingly possible that discrimination is slowly being erased in today's professional work environment. If perceptions of discrimination can be predicted by psychological contract fairness, then young Hispanic professionals are not as effected by ethnic and racial stereotypes and biases than their predecessors were affected. Furthering this argument is our finding that perceptions of discrimination can also be evidenced by a linear trend (F(I, 234)=8.171, p<.05) indicating that older Hispanic professional workers do, in fact perceive more discrimination than the younger Hispanic professional. The narrowing of this perceptual gap seems analogous to the narrowing gap in terms of gender-based pay. Recent results from the Employment Policy Foundation (2002) show that among young (25-34 year old) men and women make roughly the same. Hope for the future of discrimination seems equally bright as this linear trend evidences.

Implications and Conclusion

The results of this type of research should have wide-sweeping impact. While not a rigorous evaluation of specific hypotheses (by design) this exploratory research has led to the formulation of many interesting research questions and potential hypotheses. From these preliminary findings, it is quite obvious that there is a relationship between perceptions of discrimination among Hispanics and their evaluation of psychological contract fairness. This can be explained in one of two ways: Hispanics have been discriminated against so much in the past that they now have lower expectations of fairness in the workplace and are able to maintain effectiveness despite these low levels of mutual agreement and understanding; or perhaps this long period of discrimination has created hypersensitivity to fair treatment of minorities in the workplace. Future research should attempt to determine the causal ordering and more exact attributional nature of this relationship.

While promising results based on the age trend in the fairness data lend us to a more hopeful future, some doubt can be cast on our sampling of Hispanic business professionals. While these individuals are the front-runners in the evolution of the Hispanic worker it seems that their responses may not be representative of the entire Hispanic community. Questions surrounding their level of assimilation with the dominant (Anglo) culture could cloud results in that more assimilation leads to more acceptance and hence a 'fair' contract.

Finally, the recent surge of interest of the idiosyncratic work agreement can be applied to the framework created by evaluating the psychological contracts of minorities in the workplace. Rousseau (2001) and Rousseau & Schalk (2001) have begun to propose theories of the 'idiosyncratic work agreement' going as far to state that the more idiosyncratic or individualized the agreement becomes, the more positive the outcomes (such as commitment, satisfaction, OCBs, etc.) will become. In terms of Hispanics, perhaps the idiosyncratic nature of these agreements leads to their perceptions of discrimination and seemingly negative rather than positive outcomes.

Regardless, future research on minority psychological contracts should begin to focus itself more sharply on feature and evaluation-oriented measurement of the psychological contract. While Guest (1998), Rousseau (1998) and Rousseau & Tijoriwala (1998) posit that the 'greatest good' might arise from research in content-oriented research, it seems that features and moreover evaluation of the contract are the concepts of true value. The problematic idiosyncratic nature of the work agreement does not lend itself to an overarching taxonomy of psychological contract content. However, it seems to me that evaluation-oriented research can be the most intriguing source of knowledge regarding the psychological contract in that it can most easily be causally related to individual level outcomes. As an individual-level phenomenon, researchers (and managers) seek to find impact of intact/fair psychological contracts. Many scholars have previously discussed positive outcomes (Guzzo & Berman 1995, among others) of the intact psychological contract and therefore conditions in which it is deemed 'fair', 'fulfilled', or 'intact' are of interest. Further refinement of the consequences of the violated or unfulfilled contract as well as conditions under which these adjectives are more likely to be used are tremendous avenues for future research.

In sum, this study confirms the evidence that Hispanics differ in their assessments of psychological contract fairness. It seems that the unique culture, experiences, norms and values influence their perceptions of work agreements. Perhaps by understanding these unique perceptions, employers can aim to improve the quality of their communication and understanding of Hispanic employees.


For the purpose of this paper we will not enter the ongoing controversy surrounding the use of the terms 'Hispanic' and 'Latino' and be used interchangeably



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[Author Affiliation]

Donna Maria Blancero

Touro University International

Robert G. DelCampo

University of New Mexico

George F. Marron

Marist College

[Author Affiliation]

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