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Psychological Contracts (Breach: cognition that org has failed to fulfil…
Psychological Contracts
PC: individual's beliefs regarding reciprocal exchange between them and the org (Rousseau, 1989)
- PC is a social exchange
- based on perception
- conditional
- subjective (i.e. content is unspecified, based on prev. experience, vicarious learning, & other factors)
Types of PC
TRANSACTIONAL
- tangible
- economic
- static terms and condition
- limited timeframe
- narrow scope
RELATIONAL
- tangible and intangible
- social
- dynamic terms and conditions
- longterm, broad scope
Type Influenced by
Individual
- High neuroticism, high equity sensitivity --> transactional
- High conscientiousness, high self-esteem --> relational (more trusting, willing to wait)
Org factors
- general schema (beliefs about employment relationship)
- socialization (implicit/explicit) e.g. training, contact with mgr/mentor
- once contract is fully formed, highly resistant to change
Types of Exchange
ECONOMIC
- obligations are specified
- dependent on formal contract
- timeframe is limited
SOCIAL
- obligations are unspecified
- dependent on trust
- timeframe is ongoing
Social Exchange Theory (Blau, 1964)
- individuals pursue relationships in which perceived benefits exceed perceived costs
- parties must trust that contribution will be reciprocated
- comparison of contributions and inducements
linked to
Norm of Reciprocity
- don't take without giving back
- strength to repay is based on perceived benefit received
Breach: cognition that org has failed to fulfil one or more obligations
Violation: affective state that may follow PC breach
Causes
Incongruence: parties have differing opinions of content of PC (usually happens w/ mismanaged expectations/ lack of socialization)
Reneging: when one party is unwilling or unable to fulfill promises (usually happens in poor economic states)
MODEL
Incongruence/Reneging --> Discrepancy --> Breach --> Violation
- salience/imp to EE, vigilance impacts discrepancy
- self-esteem, equity sensitivity, comparison of contract maintenance b/w EE and org impacts perceptions of breach
- attribution, outcome assessment, process (justice) impacts violation #
-
COSTS
Attitudinal
- lower trust in org
- lower commitment to org
- lower job sat.
- higher intentions to quit
Behavioural
- lower in-role perf
- lower OCB
- higher likelihood of retaliation
RECOVERY
(*SOLINGER et al, 2016)
- personal factors (emotional salience) and org factors (POS) impact breach resolution success (e.g. when ER offers compensation, compelling promises or sincere apologies, odds of successful resolution increase)
- successful resolution: return to state of commitment --> PC reactivation, sometime thrives
- unsuccessful resolution: contract dissolution --> commitment depreciates, or EE readjusts and lowers commitment level
PREVENTION
(*ROBINSON & MORRISON, 2000)
- be clear, promise only what you can deliver
- increase pre-hire contact to provide accurate preview
- ensure high quality relationships
Breach most likely to occur when:
- org perf + self-reported EE perf is low
- no formal socialization
- EE has little interaction with org agents prior to hire
- EE has prev. experience of PC breach
- EE had more alternatives at the time of hire
- perceived breach --> more intense feelings of violation when EE attribute breach to purposeful reneging and felt unfairly treated
(*CONWAY & COYLE-SHAPIRO, 2012)
- reciprocal nature b/w PC fulfillment and EE perf where perf predicts PC fulfillment, and in turn predicts EE perf
- POS mitigates levels of breach
- strength of ^ relationship increases over time (moderating role of POS)
- tenure may strengthen association b/c longer tenure leads to closer agreement/clearer understanding b/w EEs and ERs
CHALLENGES
- hard to delineate boundaries of promise
(where did promise come from? who is the org? who rec'd the promise?)
(*CONWAY & BRINER, 2005)
6 challenges
- 3 types of beliefs: promises, obligations and expectations
- meaning of implicit promise --> open to interpretation
- who shapes PC? current org? hard to know if promise originates from sources inside org or other factors
- link in the reciprocal exchange --> need to specify exchange (exchange resources: love, services, goods, money, info, status)
- Who does EE perceive to be the org?
- How EEs anthromorphize the org
- researchers should not neglect these challenges else they will inherit these limitations