1

Introduction
This paper will discuss why sales manager, Jim Reed, failed to properly motivate topsalesman, Fred Maiorino to continue
and advance in his achievements at Schering-Plough. Indoing so, it will examine Reed's role in promoting Fred's sense of
psychological contractbreachand ultimately, violationand Reed's contributions to the injustices done to Fred. Itwill explore
the misuse of psychological appraisals and goal-setting and discuss Reed'scounterproductive leadership style, leading to
his ultimate de-motivation of Fred. This paper willthen recommend alternative behaviors for Reed regarding the psychological
contract,performance appraisal, goal-setting, and development of an effective leadership style, suggestingspecific actions Reed
should have taken to inspire Fred to remain a loyal and valued employee of the company.
Psychological Contract Breach/Violation and Procedural/Distributive/Interactional Justice
At the onset of their relationship, Jim Reed told Fred Maiorino, You're one of the seniormen here. I'll need your help. (Buller
& Schuler, 2003, p. 242-243). This remark stuck withFred because, for older workers, [p]rotecting self-concept seems to be
one of the leadingdeterminants (Kanfer & Ackerman, 2004, p. 447). Many older workers tend to prefercollaborative (versus
competitive) tasks (Kanfer & Ackerman, 2004, p. 441) since they oftenview social interactions as a means of obtaining
affective rewards (emotional satisfaction) andsupporting ones identity (Kanfer & Ackerman, 2004, p. 444). The difference of
five-ten yearsbetween Fred's age, 59, and Jim Reed's age, in his sixties (Buller & Schuler, 2003, p. 233, 236)may have
contributed to the difference of emphasis the two men placed on Reed's remark.Kanfer and Ackerman (2004) found that
...younger and older adults express and display le


2evidence of generativity (e.g., providing emotional support to others) than do middle-agedadults, and midlife workers may
respond more positively to managerial strategies thatemphasize cooperation rather than competition (p. 445). Reed possibly
made the remark in anoffhanded manner; whereas, Fred took it to heart, as shown in his ability to recall the commentyears
later. The case indicates that at no time did Reed ask Fred's advice regarding ways to trainor motivate younger salespersons; nor
did Reed solicit Fred's help to mentor new recruits. Thisis akin to asking for input from an operational-level worker and then
ignoring it, whichHumphreys (2003) described as deflating, and as he observed, such neglect misses theopportunity to
garner the motivational benefits inherent in bottom-up empowerment and cancause an enormous decline in morale (p.
96).In Fred's eyes, Reed reneged on his psychological promise to let Fred help him by usinghis proven competencies as a
senior salesman. As Robinson and Morrison (2000) observed, ...the relationship between perceived contract breach and
violation will be stronger to the extentthat the employee attributes the situation to reneging (p. 532). To create a positive
workplaceenvironment where employees are motivated to do their best, leaders must be role models forethics, integrity,
values and trust (Pryor, Singleton, Taneja, & Humphreys, 2010, p. 298). Reedfailed as such a role model in that he not only
refused to engage Fred as a valued senior memberof the sales team, but he devalued Fred in comparison with more novice
salespersons.Agents may make promises that they have no intention of keeping, or they may renegeon promises that they had
originally intended to keep. One situation where the latter may occur iswhen the employee is not meeting performance
expectations (Robinson & Morrison, 2000, p.529). Reed may have felt justified in reneging on his statement to Fred because
of Fred's

3subsequent lack of performance. Of course, it is conceivable that causality runs the other way:that employees reduce their
performance in response to a perceived breach (Robinson &Morrison, 2000, p. 541) As DelCampo (2007)
observed, Conscientiousness is negativelyrelated to reports of psychological contract violation. (p. 48), which could partially
account forFred's decline. Reed initiated a downward spiral of events by giving Fred a reason to mistrusthim, and he increased
Fred's downhill speed and momentum by constant failure to communicateand motivate, as will be shown later.Reed's initial
deceit heightened Fred's state of vigilance, that is, the extent to which theemployee actively monitors how well the
organization is meeting the terms of his or herpsychological contract, which is related to the amount of trust underlying the
employee-organization relationship (Robinson & Morrison, 2000, p. 528, 531). As a result of thisheightened vigilance,
employees will be more likely to perceive a breach of their psychologicalcontract (Robinson & Morrison, 2000, p. 530-
531). DelCampo (2007) defined thepsychological contract as the unwritten agreement that exists between the employee
andemployer that contains a set of mutual expectations (p. 44). Fred had devoted more than threedecades of effort and
achievement to Schering-Plough with the expectation of a comfortableretirement in old age, only to discover the company all
too ready to prematurely label him asobsolete. Having been approached with the company's offer of early retirement, aware
that thecompany had hired an excessive number of young salespersons to supposedly replace him andothers like him, and
being condemned as foolish by his district manager for not taking the earlyretirement plan, Fred no longer had confidence in
the company's intention to uphold theirpsychological contract.

4Fred's perception of this breach of contract intensified when he also perceived that he wastreated with little consideration
or respect (Robinson & Morrison, 2000, p. 532). Reed'ssubsequent behavior toward Fredthe performance evaluation,
spying which resulted in thetwo-day suspension without pay, singling him out for especially difficult and punitive goal-
settingonly served to increase Fred's vigilance and intensify his feelings of violation. AsZagenczyk, Gibney, Kiewitz, and
Restubog (2009) found, ...the extent to which supervisors aresupportive/not supportive weakens/strengthens the negative
relationship between breach andPOS (p. 254); that is, Reed greatly undermined Fred's perception of organizational
support.Since breach of the psychological contract also prompts behaviors that undermineorganizational effectiveness and
efficiency (Lemire & Rouillard, 2005, p. 160), Fred gave back to Jim Reed and the company the same lack of support he felt
he had received from them. AsSuazo (2009) stated, Psychological contract breach (PCB) has been found to be
negativelyrelated to a wide variety of employee workplace attitudes and behaviors (p. 137).Fred Maiorino and Jim Reed held
different ideas about Fred's overall performance and itsmeasurement, the productivity of goal-setting, the meaning of flexibility
in scheduling, thepurpose and practice of coaching, and what constituted equitable treatment of subordinates. AsRobinson and
Morrison (2000) defined it, these differences exemplified incongruence and thethree primary factors causing it: the degree to
which the employee and agents of theorganization hold divergent cognitive schemata regarding employment obligations,
thecomplexity and ambiguity of the perceived obligations between them, and lack of sufficientcommunication regarding
obligations (p. 529). Especially complex and ambiguous, theperformance evaluation and matching market share goals
contributed greatly to incongruence