Psychology at the workplace (Comparative Analysis)

Table of Contents
Psychological Contract breach............................................................................2
Effect on Employees........................................................................................... 2
Employee Job performance................................................................................. 2
Organization citizenship behaviour....................................................................3
Organizational commitment............................................................................... 3
Perceive Organizational Support.........................................................................3
Intention to quit.................................................................................................. 4
Job Satisfaction................................................................................................... 4
Effect upon employee attitude and Job outcome................................................4
Herzberg Motivation-Hygiene Theory (Two factors theory..................................4
Equity Theory..................................................................................................... 5
Goal Setting Theory............................................................................................ 6
Big Five Model.................................................................................................... 6

Implications of the study.................................................................................. 7

References.......................................................................................................... 8

Psychology at the workplace (Comparative Analysis)

Psychological Contract breach

A psychological contract breach is defined as, an employee perception that his
organization has failed to meet the obligations connected with mutual promises. Employer
actions that is contradictory with employee expectations has the potential to develop a
perception of contract breach. Disappointment arises as a result of breaking expectations. A
psychological contract infers that an employer fulfills all the needs of an employee i.e.
favorable environment, good remuneration, and good working conditions. It is the
responsibility of the employer to ensure that employee contributes within the organization
effectively. If the employee feels that the obligations are not fulfilled according to the
psychological contract employee starts thinking negatively about the employer, management,
and the organization, these negative feeling will reflect in the productivity of an employee.
Negative feeling arises from the psychological contract breach may influence loyalty and
trust of the employee. The psychological contract is a mutual obligation and promise, which
needs to be followed by employees and their organization to maintain a healthy relationship.
The purpose of the report is to critically examine the factors which forces an employee to
experience psychological contract breach and crtically analyze the relationship between
theories of organizational behavior and psychological contract breach (Buyukyilmaz & F.
Cakmak, 2013).
Effect on Employees
Employee Job performance
A psychological contract breach has an attitudinal effect on an employee because a
trusting relationship between organization and employee has broken. Psychological contract
breach and Job performance of an employee are negatively associated with each other.
According to the norm of respiratory , when employers failed to fulfill their commitments ,

Psychology at the workplace (Comparative Analysis)

obligations and promises , the employee reciprocates by changing his/her contribution to the
organization (Bal, S. Chiaburu, & G.W. Jansen, 2008). When a Psychological breach occurs ,
an employee start reducing their contribution to the organization as employee perceive that
organization has failed in fulfilling their commitments and promises (Ul Haq, Ahmad Jam,
Umer Azeem, & Ahmad Ali, 2011).
Organization citizenship behavior
A breach in psychological contract may affect organizational citizenship behavior of an
employee. Several types of research indicate a negative effect of contract breach on
organization citizenship behavior. An employee seeks to imbalance their relationship with the
organization through a willingness to engage in Organizational Citizenship behavior and
reduction of their commitment (Jafri, 2011) Employees are less likely to engage in
Organizational citizenship behavior when they experience Psychological contract breach. An
employee who perceives that their company failed to meet the commitments will not
contribute in organizational activities positively (Xuan & Soo Park, 2012).
Organizational commitment
Organizational commitment is considered as an employee willingness to stay and work
hard for the organization. When employee perceives any outcome as unfair , they are engaged
in negative behaviors which are unproductive and costly for an organization such as
resistance ,compliance, and voice. Low level of commitments is also associated with
decreased morale and low level of motivation. Non-committed employees explain the
organization to outsiders in negative term and reduce the organization ability to hire new
employees.

Psychology at the workplace (Comparative Analysis)

Perceive Organizational Support

Perceived organizational support is defined as an employee belief that organization
cares about their interests and gives value to their contribution. Employees with high perceive
organizational support may result in disloyalty because the support by the employer was not
fulfilling the commitments of psychological contracts. As a result, employees restore the
imbalance by reducing efforts for the organization. When employees experienced a negative
perception, employees decrease their identification and trust level within the organization
(Antonaki & Trivellas, 2016).
Intention to quit
When psychological contract balance between employee and employer is destroyed,
for instance, the working environment of the organization is unsatisfactory or due to some
reasons psychological breach contract is shattered, the employee starts behave in a way to
restore a balanced state; in these circumstances, the employee starts thinking about quitting
the job. Psychological contract breach creates lower job satisfaction and trust, and employees
who experience breaches are more likely to have turnovers. As there is no trust and loyalty
relationship maintained after a state of psychological contract exists the employee will prefer
to quit the job (Ul Haq, Ahmad Jam, Umer Azeem, & Ahmad Ali, 2011).
Job Satisfaction
Job satisfaction is considered as an attitudinal variable that demonstrates how people
feel about their jobs. When an employee perceives an inconsistency between what was
received and what was expected, the dissatisfaction level of the employee increases The
theoretical model of psychological contract proposes that when an employee feels a
discrepancy in the reciprocal promises made in between the employee and employer, a state
of job dissatisfaction develops. If dissatisfied employees remain in the organization, they may

Psychology at the workplace (Comparative Analysis)

involve in counterproductive behaviors such as destructive rumors, poor services, sabotage,

and theft of organization equipment. Higher Absenteeism and turnover results in financial
burden to the organization (Anna Knights & Jean Kennedy, 2005)

Effect upon employee attitude and Job outcome

Herzberg Motivation-Hygiene Theory (Two factors theory)
Herzberg theory concludes that factors leading to job satisfaction are different from
factors leading to dissatisfaction. The factor involved in dissatisfaction of the employees
includes company policy, supervision, working conditions, relationship with boss,
relationship with peers and salary. Psychological contract acts in the same way as Herzberg
Hygiene factors. A contract will not necessarily guarantee employee performance and
engagement; however, violation of the contract will lead to high absenteeism, poor
performance and lower level of commitment (McCoy & Elwood, 2016). Kickul & Lester
(2001). in his research concludes two-dimensional structure includes intrinsic and extrinsic
contracts. Extrinsic contracts involved employers promise to the employee which includes
competitive bonus and perks, safe working environment and flexible working hours. The
intrinsic contract involved employer commitment with the employee regarding nature of the
work such as decision making, support from the organization, participation in decision
making, chances of growth and development and so on. A state of psychological breach
begins when an employee perceives that both intrinsic and extrinsic needs are not fulfilled.
Equity Theory
Theory of equity is supported the main theme of the psychological contract explained as
reciprocal exchange of agreement between employee and employer. When the expectation of
an employee is not fulfilled, employee entered into the state of psychological contract breach.

Psychology at the workplace (Comparative Analysis)

For instance, an employee working for long hours and give efficient productivity to the
organization may demand high perks (Sharif, Abdul Wahab, & Sarip, 2016). An organization
first goal is to make sure that the employee feels that the relationship is equitable. Equity
theory is concerned with the fair and equal distribution of rewards and benefits. If an
employee feels that the relationship and distribution of reward are unfair and inequitable, it
will affect the performance, motivation and organizational commitment of an employee.
According to equity theory employees are expected to be rewarded on the basis of
performance, if the employee thinks that the rewards are distributed by unfair means
employee will take action (Shi-bin & Yong, 2014).
Goal Setting Theory
Organizations focus on setting clear goals and a positive working environment so that
the employees do not become a victim of psychological breach, In order to explain a
relationship between psychological reaction and goal achievement failure Moi (2009)
research concludes that, an employee failing to complete targets can lead to employees
experiencing a feeling of psychological cost and worthless. These negative feeling in an
employee induced by failure may cause an employee to act in ways that are considered
unethical, immoral, unprofessional and illegal. These negative feelings may push an
employee towards practices such as lying and cheating to meet the expectations of the
organization. The desire to reach a set goal combined with negative feelings push people
towards perceiving a breach in their psychological contract (E. SCHWEITZER and
DOUMA, 2004).
Big Five Model
Personality is considered as one of the most important factors in explaining several
aspects of employee and employer relations. Employees with introvert personality

Psychology at the workplace (Comparative Analysis)

characteristics do not stand up for their rights like extroverts , therefore a psychological
breach occurs in employees with introverts personality characteristics which may lead to
higher job dissatisfaction. Extroverts, on the other hand, exchange their views regarding the
job satisfaction with senior management of the organization; hence they perceive a decrease
in job dissatisfaction. However, the feelings of disappointment and injustice in extroverts
may results in a decrease in emotional attachment and may react with a stronger intention to
leave the job. (R.J.Tallman & S. Bruning, 2008).
However employees with extrovert personality characteristic
Implications of the study
The study has significant implications for the employee and organization regarding
buffering the psychological contract breach perception. Employee demands for expectations
and obligations, these demands and expectations should be fulfilled by the employers during
organizational change. When an organization goes for acquisition and merger employers
usually failed to meet the obligations and promises. The study concludes that psychological
contract breach has a negative impact on employee job satisfaction, organization citizenship
behavior, motivation, work performance and organizational commitment. Employees want
fairness and equality within the procedures adopted by the organization. It is the
responsibility of the employer to develop trust within their subordinates with their positive
attitude. Any miss commitment experienced by an employee will lead to a state of
psychological contract breach (Man, 2013). If the psychological contract among employers
increases due to organizational policies , it will effect the work perfromacne and organization
citizenship behavior of an employer negatively as a result employer motivation level, attitude
towards the work and organizational commitment hurts.

Psychology at the workplace (Comparative Analysis)

It is the responsibility of an employer to provide job security to an employee. If the

turover rate of employees within an organization is high , the employer needs to hire new
employees. An employer needs time to understand the attitude and behavior of a new
employee, which will effect the overall performance of an employer and employee as well. In
my opinion if an employee reached to a stage of psychological contract breach , trust level
between employer and employee is not effiecently maintained and as a result an employee
can not communicate with employer effectively, the information reached to the employer may
not be accurate and authentic. It is not only an employee who survives in psychological
breach but the employer as well (Shapiro, 2000).
The three main functions of psychological contract breach are;

Reduce the insecurity concerns between employees and the organization

It can easily shape the behavior of the employee

Feels his influence within the organization

If the employee did not experience these functions it indicates, the organization has
failed in maintaining their psychological contract with the employee. The employees adjust
their behavior and feeling on the basis of these functions.
In my point of view , employees choose organizations on the basis of the commitment,
work environment, flexibility and financial benefits. If an organization is failed to facilitate
an employee according to psychological contract, employee reactions are contradictory with
organizations rules and procedures. In my point of view, employees who perceive that
organization has failed to meet the obligations and commitment will not perform actions
which are beneficial for the organization. Employees are engaged in workplace deviant
behavior, voluntary behavior, and work against organizational rules and procedures.
Employees are engaged in conflicts and rumors which are affecting the well-being and
productivity of their co-employees. I think that the personality of an employee is another

Psychology at the workplace (Comparative Analysis)

factor which affects the psychological contract breach. Different personality traits of an
employee affect psychological contract differently. According to the study, introverts are
more likely to have higher job dissatisfaction as compared to extroverts, when there is a state
of psychological contract breach. If an employee perceives negative thoughts about the
organization the employee will act negatively (Man, 2013).
I think the performance of an employee is based on the behavior and relationship
maintained by the employer. If a negative perception is generated it will affect not only the
performance of the organization but the performance of the employee in terms of his
communication with colleagues, productivity, trust level on the organization, working
performance and satisfaction. Ultimately, the only option left with an employee is either to
face the changes in the psychological contract or to leave the organization. Employee prefers
to work in an environment in which employer fulfills his commitments and maintains a
relationship according to the contract signed between them at the time of employment (De
Witte, 2008).
The study examined the effect of psychological contract breach on job outcomes. The
organitions must be aware of the factors which results in Physical contract breach. A state of
Physical contract breach effect both employees and the organization negatively. Employers
have to pay attention to the work expectation of employees for instance, Working
environment, perks and other facilities (B. Avey, 2010).
References
Bal, P., S. Chiaburu, D., & G.W. Jansen, P. (2008). Psychological contract breach and work
performance Is social exchange a buffer or an intensifier?. Journal Of Managerial
Psychology, 25(3).
Jafri, M. (2011). Influence of Psychological Contract Breach on Organizational Citizenship
Behaviour and Trust. Journal Of Psychological Studies.

Psychology at the workplace (Comparative Analysis)

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McCoy, J. & Elwood, A. (2016). HUMAN FACTORS IN ORGANISATIONAL

RESILIENCE IMPLICATIONS OF BREAKING THE PSYCHOLOGICAL
CONTRACT. Business Continuity Journal.
Sharif, I., Abdul Wahab, S., & Sarip, A. (2016). PSYCHOLOGICAL CONTRACT BREACH
AND FEELINGS OF VIOLATION: MODERATING ROLE OF AGE-RELATED
DIFFERENCE. International Journal Of Asian Social Science.
E. SCHWEITZER, M. and DOUMA, B. (2004). GOAL SETTING AS A MOTIVATOR OF
UNETHICAL BEHAVIOR. Academy of management journal, 47(3).
Anna Knights, J. & Jean Kennedy, B. (2005). Psychological Contract Violation: Impacts on
Job Satisfaction and Organizational Commitment Among Australian Senior Public
Servants.
Antonaki, X. & Trivellas, P. (2016). Psychological Contract Breach and Organizational
Commitment in the Greek Banking Sector: The mediation effect of Job
satisfaction. Journal Of Social And Behavioral Sciences.
Li,, J. & Dai, L. (2015). A Review of Psychological Contract. Journal Of Psychology.
Man, K. (2016). The Effects of Psychological Contract Breach on Employee Work Behaviors
in the Airline Industry: Employee Cynicism as Mediator. International Journal Of
Business And Social Science,4(12).
Ul Haq, I., Ahmad Jam, F., Umer Azeem, M., & Ahmad Ali, M. (2011). Psychological
contract and job outcomes: mediating role of affective commitment. African Journal of
Business Management, 5,
Shi-bin, Z., & Yong, Z. (2014). Influences of psychological contract breach on oversea
employees behaviors in Chinese transnational corporations. Journal of Chemical and
Pharmaceutical Research

Psychology at the workplace (Comparative Analysis)

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R.J.Tallman, R., & S. Bruning, N. (2008). Relating employees psychological contracts to

their personality. Journal of Managerial Psycholog
Buyukyilmaz, O., & F. Cakmak, A. (2013). DIRECT AND INDIRECT EFFECTS OF
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INTENTION IN TURKEY1. Journal of Business, Economics and Finance, 4(2),
De Witte, H. (2008). Job Insecurity, Union Support and Intentions to Resign Membership: A
Psychological Contract Perspective. European Journal Of Industrial Relations, 14(1)
.Xuan, J., & Soo Park, D. (2012). Effects of psychological contract on organizational
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B. Avey, J. (2010). Impact of Positive Psychological Capital on Employee Well-Being Over
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Shapiro, J. (2000). Critically discuss the meaning of psychological contract breach and its
effects on employees (8 marks - see marking guide below - Information/ 4 marks;
Critique/ 4 marks). The Journal Of Management Studies.