Trust and breach of the psychological contract

Administrative Science Quarterly,  Dec, 1996  by Sandra L. Robinson

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Effects of Psychological Contract Breach

Psychological contract breach was found to be negatively related to three forms of employee contributions: performance, civic virtue behavior, and intentions to remain with the organization. The results reported here are surprisingly strong when one considers several facts. First, the reports of employee contributions were obtained one year after the occurrence of the psychological contract breach. Thus, the effects of psychological contract breach may be enduring. Second, employees reported their contributions to their firm in the same survey that they reported the number of promotions and pay raises they had received since joining the firm. Despite the fact that they were required to contemplate and report on pay, promotions, and contributions at the same time, and despite the fact that pay and promotion are central motivators of performance, neither the absolute number of pay raises or promotions obtained explained as much variance in employee contributions as did psychological contract breach one year earlier.

These findings both confirm and extend the few prior studies that have found negative relationships between psychological contract breach and employee behaviors, such as citizenship behavior (Robinson and Morrison, 1995), intentions to remain (Robinson and Rousseau, 1994), and decreases in employees' perceived obligations to their employer (Robinson, Kraatz, and Rousseau, 1994). This study, however, has several significant unique strengths. It entailed a more comprehensive examination of the relationship between psychological contract breach and employee contributions because it considered three different facets of employee contributions. Second, this study used a validated, multi-item measure of psychological contract breach, whereas most prior studies have relied on a single-item, global measure. Finally, it was longitudinal, rather than cross sectional, and it statistically controlled for alternative explanatory variables. This study thus provides stronger evidence than prior works that psychological contract breach causes decreases in the full range of employee contributions to the firm.

Trust as a Cause of Psychological Contract Breach

The primary contribution this study makes is that it explicates and empirically examines the roles of trust in the psychological contract breach experience. Much of the theoretical literature on psychological contracts mentions trust as an important related construct, yet virtually no attention has been devoted to understanding the relationship between trust and psychological contract breach. The first role of trust identified in this study was as a factor influencing the likelihood that psychological contract breach would be perceived. Initial trust in one's employer was found to be negatively related to psychological contract breach one year later. A simple explanation for this observed relationship is that employers who are not trustworthy are both less likely to be trusted by their employees and more likely actually to breach an employee's contract. An alternative explanation, however, is that this relationship is due to the bias of selective attention. A large stream of research demonstrates that people tend to seek out and recall information that confirms their prior beliefs and attitudes while ignoring, overlooking, or forgetting evidence that disconfirms them (Fiske and Taylor, 1984; Eagly and Chaiken, 1993). Employees with high initial trust in their employers may have overlooked or forgotten actual breaches by their employer, whereas employees with low initial trust may have actively searched for or remembered incidents of breach, even when no actual breach occurred.