A Discrepancy Model of Psychological Contract Violations

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 article 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.     

Communicating the psychological contract: an employer perspective

The concept of the psychological contract, with its focus on the exchange of perceived promises and commitments, is increasingly used as a framework to study the employment relationship. Yet research has predominantly focused on employee views and has largely neglected the organisational perspective and the management of the psychological contract. This article begins to redress the balance by reporting a study, based on a survey of 1,306 senior HR managers, that explores the management of the psychological contract and in particular the role of organisational communication. Three distinct and relevant aspects of organisational communication are identified, concerned with initial entry, day‐to‐day work and more future‐oriented, top‐down communication. Effective use of these forms of communication is associated with what managers judge to be a clearer and less frequently breached set of organisational promises and commitments, as well as with a fairer exchange and a more positive impact of policies and practices on employee attitudes and behaviour. The findings are discussed within the context of the wider literature on psychological contracts, organisational culture and HRM. The study confirms that the psychological contract offers managers a useful framework within which to consider and manage the employment relationship.     

Creating Psychological and Legal Contracts Through HRM Practices: A Strength of Signals Perspective

We integrate the concept of signaling theory to propose that organizations create psychological and legal contracts through their human resource management practices (HRM). Focusing on the strength of the signal generated by HRM practices, we develop a framework for contract creation. Specifically, we define and outline how weak signals generate psychological contracts and strong signals develop legally binding contracts. We provide several examples of HRM hiring practices, the weak and strong signals which they emit and the psychological and legal contracts which they create. Our key contribution is to provide a precise model for understanding the distinction between a psychological and legal contract.     

Mind the Intended‐Implemented Gap: Understanding Employees’ Perceptions of HRM

This study aims to shed light on the implementation of HR practices as a key piece of the human resource management (HRM)–performance puzzle. Although the literature suggests that discrepancies between the organization's intended and implemented HR practices are essential to understanding employees’ perceptions of and reactions to HRM, little attention has been devoted to this issue. Drawing upon a multiple‐case study of German health and social services organizations, we therefore explore the linkages (and potential gaps) between intended, implemented, and perceived HR practices. Our study provides new insights into the underlying mechanisms of this relationship, highlighting an organization's ability to leverage its resources as playing a crucial moderating role in implementing intended HR practices, while employees’ expectations of HRM moderate the link between implemented and perceived HR practices. We advance a set of propositions that contributes to a more nuanced, multilevel understanding of the complex phenomenon of HRM implementation. © 2014 Wiley Periodicals, Inc.     

Human resource management practices and psychological contracts in Swiss firms: an employer perspective

This article investigates the relationship between HRM practices and organisational performance, considering the fulfilment of the psychological contract as an intermediate variable. Apart from testing the influences of a high-investment HRM system index on the psychological contract, the influence of individual HRM practices and their interaction was examined. The sample consisted of HR managers of 92 firms in Switzerland and the data were collected for the Cranfield Network project. The results showed that the high-investment HRM system index predicted the fulfilment of the psychological contract, and some of the individual HRM practices were correlated with the fulfilment of the psychological contract. The interaction effect of performance appraisal and performance-based pay on the fulfilment of the psychological contract showed that performance appraisal is only effective in combination with a tangible consequence in the form of performance-based pay. We neither found a mediation effect for the psychological contract nor an association with organisational performance. This might be due to the fact that the questionnaire was filled in during the financial crisis in 2008 and that the organisational performance was assessed in an economic crisis. Our study sheds light on the relationship between HRM practices and the psychological contract and contributes to the body of research on psychological contracts from a macro level perspective.     

From HRM to psychological contracting - the case of Finnish mobile content producing companies

The paper explores how human resource management (HRM) is currently intended, used and experienced in 10 Finnish companies operating in the field of telecommunications. Our specific focus is on direct and indirect forms of managerial control and the psychological contract. We examine how psychological contracts are created and maintained, and study their relationship with HRM as a means of either direct or indirect control. Our findings indicate that employees are voluntarily assuming the obligation to exercise organizational control as a part of their psychological contract in exchange for the freedom and autonomy that they enjoy. Recruitment emerges as a top employer priority. However, not many other human resource (HR) techniques are used. Rather, carefully selected workers are allowed the autonomy and freedom to define what constitutes their psychological contract, with a duty to control its attractiveness from the employers' point of view.     

The Interactive Effects of Psychological Contract Breach and Organizational Politics on Perceived Organizational Support: Evidence from Two Longitudinal Studies

We explore the effects of the social context on the relationship between psychological contract breach (PCB) and perceived organizational support (POS) in two studies. We build on the premise that psychological contract breach (i.e. the organization's failure to fulfil the obligations employees believe they are owed) signals to employees that they are not cared for and valued by the organization (i.e. reduces POS). In support, a longitudinal study of 310 employees shows that PCB at Time 1 explains significant variance in POS at Time 2 (beyond that explained by POS at Time 1). Building on this result, we advance the argument that employees' perceptions of organizational politics serve as a heuristic for the overall benevolent or malevolent character of the organization and its agents. Accordingly, we expect that when employees perceive PCB and high levels of organizational politics, they will be more likely to hold the organization responsible for PCB and thus report lower levels of POS in response to breach. This line of reasoning received support in a second study of 146 employees which showed that perceptions of organizational politics moderate the PCB–POS relationship. Our results suggest that the social context in which psychological contract breaches occur matters and that managers should consider the organization's perceived political landscape when anticipating how employees will respond to broken promises.     

Committed to the organization or the job? Effects of perceived HRM practices on employees' behavioral outcomes in the Japanese healthcare industry

This paper attempts to document how employees' perceptions of organizations' human resource management (HRM) practices influence their work behavior and outcomes, including the level of turnover intentions and job quality improvement, in a Japanese organizational and management context. In particular, an examination was made to clarify the mediating role of person–environment (P–E) fit and multiple aspects of work commitment to reach possible explanations of the relationships between perceived HRM practices and employees' behavioral outcomes, following recent work that studied the above linkages. The results of structural equation modeling using a sample of 1052 healthcare service employees in Japan provided basic support for the idea that the effects of HRM practices and employees' behavioral outcomes are neither direct nor unconditional. Moreover, employees' evaluations of their fit and commitment to their organizations were found to be the important mediators of the relationships between perceived HRM practices, while their evaluations of their fit to and involvement in their jobs were not. The findings are used to discuss why the specific forms of P–E fit and work commitment appear salient in Japanese organizations. The generalizability of the findings and the limitations of the study are discussed.     

The impact of human resource management practices on intention to leave of employees in the service industry in India: the mediating role of organizational commitment

The purpose of this study was to investigate the impact of a bundle of eight human resource management practices on intention to leave, and to examine the mediating effect of organizational commitment on the relationship between the HRM practices and intention to leave of employees of a service organization in India. Most of the prior HRM practices–employee turnover studies have been from the HR manager's point of view. This study took a different approach and studied this relationship from an employee's point of view. Internet survey questionnaires were used to collect the data from 183 employees working in a service company in India. Multiple linear regression and hierarchical linear regression analysis were conducted to test the hypotheses. The study found not only that the HRM practices lower employee intentions to leave, but also that this relationship is partially mediated by organizational commitment. The results of the study not only supported that organizations should focus on employee perceptions of the organizations' HRM practices but also indicated that human resources should go beyond establishing policies and procedures to providing an employee-friendly work environment (Biswas and Varma 2007).     

Variability in HRM implementation among line managers and its effect on performance: a 2-1-2 mediational multilevel approach

Over the last few decades, a substantial body of research has examined the relationship between human resource management (HRM) and performance. However, little attention has been given to the implementation of HRM, although an HR policy can be implemented in various ways within an organization. In addressing recent calls in the literature to examine this issue more closely, we study the role of line managers in implementing HRM and the influence of employees' perceptions of HRM. In a multilevel study of 315 employees and 41 line managers drawn from various work-units of a Dutch municipality, we tested whether HR practices, as implemented by line managers, affect employees' perceptions of HRM and whether these perceptions in turn relate to perceived unit performance. The analysis shows that implemented HR practices differed between work-units. More specifically, our study shows that these differences can be explained by a line manager's leadership style. Moreover, our findings indicate that employees' perceptions of the HR practices implemented mediate the relationship between the HR practices implemented by line managers and perceived unit performance. These findings contribute to our understanding of how HRM affects performance.     

Sustainability and ideology-infused psychological contracts: An organizational- and employee-level perspective

In this paper we explore sustainability-based ideology-infused psychological contracts (IPCs) from both organizational and individual-level perspectives. Better knowledge about how and when IPCs operate and the role of the organization's human resource management in that process is beneficial to firms that wish to capitalize on the positive outcomes resulting from IPCs while avoiding the creation of ideological obligations that they are unable or unwilling to meet (Rousseau & McLean Parks, 1993; Thompson & Bunderson, 2003). Organizations may show they care, through sustainable HRM strategies, and encourage ideological currency exchange in order to recruit and retain quality employees, increase organizational commitment, increase citizenship behaviors, strengthen identity, increase job satisfaction, and maintain a positive public perception and reputation. On the other hand, if an organization fails to fulfill an IPC it may lead to negative behaviors and consequences. We extended our arguments beyond the individual-level focus common to psychological contract theory, to include firm-level context. In doing so, we explain how an organization's efforts towards being more sustainable can connect employees to the organization through their IPCs, and moreover, through their IPCs, employees can connect to corporate goals. Finally, we advance current theory by exploring the underlying motivations that drive organizations and individuals to develop IPCs.     

Associations between perceived employability,employee well-being,and its contribution to organizational success: a matter of psychological contracts?

We investigated interactions between perceived employability and employees' perceptions about psychological contract obligations made by the employer in relation to life and job satisfaction, self-rated performance, and turnover intention. We hypothesized that perceived employability relates positively to job satisfaction, life satisfaction, and self-rated performance and negatively to turnover intention under the condition of many promises. Conversely, perceived employability relates negatively to job satisfaction, life satisfaction, and self-rated performance and positively to turnover intention under the condition of few promises. Analyses using a sample of 463 workers from seven Belgian organizations showed that perceived employability was positively related to all outcomes except job satisfaction. The number of promises was positively related to job and life satisfaction, and to self-rated performance, and negatively to turnover intention. Contradictory to our expectations, with the exception of turnover intention, the relationships between perceived employability and the outcomes were relatively stronger and positive under the condition of few promises compared with many promises.     

Organizational and environmental factors related to HRM practices in Hong Kong: a cross-cultural expanded replication

Data were collected from 151 Hong Kong organizations to determine the relationship between culture, firm size, level of unionization and presence of an HRM department, and human resource management (HR) practices. Culture was a relatively weak predictor of HR practices. Existence of an HRM department and level of unionization were moderate predictors while firm size and the existence of a specialized training unit within the HRM department were the strongest predictors of HR practices.     

Women-friendly HRM good for QWL? The case of Hong Kong based companies

Organizations in Hong Kong were surveyed to gauge how women-friendly they were and how their human resource managers viewed the effect of women-friendly HRM policies and practices on employees' quality of work life. It was found that only about half of the policies mentioned in the questionnaire were practised by less than 10 per cent of the organizations. Principal component analysis conducted showed that organizational women-friendliness was multi-facet in nature. Using these facets - women friendly dimensions (WFDs) - as criteria and controlling for size, the study found that firms with American and European origins were more women-friendly than Hong Kong firms. Furthermore, when American companies were compared to Hong Kong companies, it was on the WFD of career development that the former were significantly higher than the latter. In contrast, when comparing European organizations with Hong Kong organizations, it was the WFD of flexibility on which the two differed most markedly.     

Linking strategy and human resource practices: How employee and customer contracts are created

Organizations implement their business strategies through the human resource (HR) practices they use. These practices are major determinants of employees' psychological contracts. How employees interpret the terms of their employment impacts motivation, innovation, and customer service. This article describes four common types of psychological contracts in US firms and the HR practices that create them. It develops a framework for understanding how each contract shapes employee performance, retention, cooperation with fellow employees and customer responsiveness. It presents recommendations for more effectively managing the link between business strategy and the psychological contract of employees. © 1994 by John Wiley & Sons, Inc.     

The impact of employment equity regulations on psychological contracts in South Africa

This article will show the impact of employment equity legislation on the psychological employment contracts of the three main employee groupings in South African society. This study is important in that it fills the gap in the literature that identifies labour market regulations as an important shaping influence on the psychological contract. More than 500 managers from across South African industry and from all ethnic groups were surveyed to identify differences in psychological contracts and attitudes towards the social transformation regulations. We found that the legislation has impacted differentially on the three groupings mainly in terms of their loyalty to stay with their organizations, the focus on their career development in terms of the external labour market and the degree to which they felt they had been affected by the legislation. Additionally we find that the perceived linkage between job satisfaction and labour turnover is significantly weakened by labour market legislation in the case of the beneficiaries of the legislation, but that this may not be the case for those negatively affected by the legislation. The findings have significant implications for the HRM practices of multinationals operating in societies with significant labour market regulatory interventions.     

Psychological Contract Breach in a Chinese Context: An Integrative Approach

ABSTRACT    This study examined the antecedents and outcomes of psychological contract breach as well as why and how psychological contract breach is related to these outcomes. Respondents were Hong Kong Chinese employees (N=152). Results showed organizational change and history of contract breach to be related to psychological contract breach which, in turn, was related to turnover intentions, psychological withdrawal behaviour, and civic virtue. Further, trust in employer fully mediated the relationship between psychological contract breach and the work outcomes of psychological withdrawal behaviour and civic virtue but partially mediated the psychological contract breach–turnover intentions relationship. Lastly, interactional justice failed to moderate the relationship between psychological contract breach and the work outcomes.     

Balancing psychological contracts: Validation of a typology

In this study, a psychological contract typology based on both content and exchange balance was developed. Content was defined along the transactional-relational dimension. Balance was assessed by comparing employees' perceptions on the number of employees' obligations relative to employer's obligations. Furthermore, the typology was related to type of employment contract (temporary versus permanent) as perhaps the most important antecedent of psychological contracts, and to various psychological consequences (job satisfaction, life satisfaction, organizational commitment, and psychological contract violation). Results were based on Belgian and German data (N = 1267). Latent Class Analyses suggested four psychological contract types which are clearly distinct with regard to content terms and exchange balance: mutual high obligations, employee over-obligation, employee under-obligation and mutual low obligations. Temporary workers were more likely to hold psychological contracts with few employer obligations, such as the mutual low obligations and the employee over-obligation type. Finally, the mutual high obligations type was most beneficial in terms of psychological outcomes. Implications for future research are discussed.     

Change and development in pluralistic settings: an exploration of HR practices in Chinese township and village enterprises

Very few systematic studies have been conducted on the managerial practices of Chinese Township and Village Enterprises (TVEs) despite their increasing contributions to China's economic development. Focusing on the HRM practices in ten different TVE organizations in a new city in Southeastern China, this study aims at filling a gap in the literature by exploring the general HRM practices in those organizations. Results show that HRM practices in TVEs, although still relatively primitive compared to those in state-owned enterprises (SOEs), have been much more formalized recently. Employees are now mostly selected rather than referred by existing employees or ' guanxi ' as they were previously. New employees in many large TVEs are now trained through formal procedures rather than through apprenticeships, and pay is tightly linked to performance and skill levels. However, in smaller TVEs, HR practices are less formalized. The study points out that the firm size may be an institutional factor affecting the implementation of formal HRM practices. Yet, regardless of the form of personnel management, HRM practices are shown to be a very important factor in the economic success of TVE firms. Further studies are necessary to understand HRM and other managerial practices in TVEs and to test the relationships between HRM practices and firm performance among the TVEs.     

Inducements,contributions, and fulfillment in new employee psychological contracts

This longitudinal study of newly hired Chinese college graduates (N = 143) investigates the effects of contract fulfillment, employee reports of company inducements (organizational support and job rewards), and supervisory reports of individual contributions (job performance and extra‐role citizenship behavior) upon changes in the graduates' psychological contracts. Three survey waves were administered a year apart, starting with the recruits' job offer acceptance. Analyses revealed that employee fulfillment and perceived contributions predicted particular changes in employer psychological contract obligations, whereas employer fulfillment and perceived inducements predicted changes in employee obligations. The effects of inducements on employee obligation changes and contributions on employer obligation changes were mediated by their respective fulfillment measures. Changes in obligations were greater in the first year of employment than in the second. This study yields implications for managing newcomers and researching the initial phase of employment. ©2011 Wiley Periodicals, Inc.