An interactionist perspective on employee performance as a response to psychological contract breach

What is it about?

Research has shown that psychological contract breach (PC breach), individual perception regarding the extent to which the organisation has failed to fulfill its promises or obligations (Robinson and Rousseau, 1994), leads to a host of negative employee outcomes such as poor job satisfaction, lower levels of performance, fewer displays of organisational citizenship behaviour and increased turnover intentions. Our research focuses on situational as well as individual factors that can mitigate the adverse effects of PC breach, thereby reducing damages to the bottom line of the organizations. Our findings suggest that organisations should have employment practices in place that ensure employees feel supported and valued by the organization through fair treatment, supervisory support, and favorable job conditions. Further, organizations should promote and communicate how favorable the job conditions are compared to what employees contribute to the organisation, thus being better able to manage employees’ perceptions regarding their reciprocal relationships (e.g. giving vs. receiving). Finally, in cases of PC breach, management and supervisors should pay special attention to their employees (through one-on-one conversation) who have a high exchange ideology and who also perceive less support from the organization. Our interactionist approach to PC breach can help identifying and effectively managing a specific group of employees whose performance will be deteriorated more severely than others after PC breach. Finally, given the significant role of exchange ideology, organizations may consider job applicants’ levels of exchange ideology, individual differences in endorsement of the norm of reciprocity, among other criteria in employment selection if other qualifications are equivalent.

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Why is it important?

Since PC breach is considered a norm and not an exception, it is critical that researchers investigate this issue in depth so as to help organizations to formulate solutions to mitigate its adverse effects of PC breach on employee work behaviors. Unfortunately, researchers have taken a simple perspective by placing an emphasis on either situational or individual factors, neglecting a rather complicated reality of the workplace where multiple factors come into play. Our study is first of its kind that looks at both by introducing the interactionist approach, cognitive psychology, and exchange ideology. It highlights the importance of simultaneously examining both a situational and an individual variable in predicting employee performance after PC breach.

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