Violations of Psychological Contract

1
Violations of Psychological Contract

• Training/Development
• Absence of training opportunities.
• Example, when a new computer system was
  installed, employees expected to go through
  formal training to use it. No training program
  was launched.
• Compensation
• Discrepancies between expected and actual pay,
  benefits, and bonuses.
• Example, Clark Griswold expected to receive a big
  Christmas bonus that he could use to build his
  new pool. So, he was very upset when the company
  decided to get rid of the bonus and substitute it
  with the Jelly of the Month Club.

2
Violations of the Psychological Contract

• Promotion
• Expected promotion not received.
• Example, an employee has been waiting for a
  position to open thinking that he or she is next
  in line. When the position does open, the
  employee is bypassed for a younger, less
  experienced protégé.
• Job Security
• Job security threatened or removed.
• Example, a company has a strong belief in a no
  layoff policy. However, when a recession hits,
  they let people go.
• Feedback
• Performance feedback inadequate.
• Example, annual performance reviews are not
  conducted as they should be.

3
Factors that Determine Employees Reactions to
Violations

• Transactional vs. relational contract
• Transactional short term, specific agreements,
  often focused on money, very self-interested.
• Relational long term, ambiguous obligations,
  often including a social component (loyalty,
  affiliation)
• Violations of transactional contracts usually
  less severe due to their less personal nature.
• Example Temporary employees at a company are
  passed over during the feedback phase of the
  annual performance evaluation. They feel less
  betrayed due the short-term, transactional nature
  of their employment.

4
Factors that Determine Employees Reactions to
Violations

• Severity of Violation
• For minor violations, the employee may forgive
  the transgression.
• However, the more serious the violation (e.g.,
  loss of job, public humiliation) the greater the
  chance of retaliation.
• Perceived Accountability - how voluntary was the
  transgression?
• Example, employees less likely to feel violated
  when they think company had no choice but to
  reduce the workforce.
• Procedural Justice - how is the violation
  handled.
• Example, employees more likely to feel violated
  when downsizing efforts are not announced with
  adequate notice.

5
Effects of Violations

• Moral outrage/ feelings of betrayal (relational)
• Transition from relational to transactional -
  increased psychological distance and less
  commitment.
• Five responses to violation
• Voice concern is expressed, frequently there is
  reluctance to use formal processes,
  whistleblowers may get reprisals from
  management
• Silence compliance but not commitment
• Retreat passivity, negligence, shirking
• Destruction retaliation theft, threats,
  sabotage, violence - in the most severe cases,
  the worker goes postal.
• Exit quit or provoke the organization to fire
  them

6
Downsizing

• Downsizing is a common violation
• Terminated Personnel
• psychological and physical strain
• learned helplessness
• lowered self-esteem
• depression
• Surviving personnel
• reduced trust
• reduced commitment to organization
• stress due to increased workload
• guilt
• Negative effects not as bad as they once were
  employees dont expect lifelong employment.

7
Mergers Acquisitions

• Merger joining of 2 equal organizations.
• Acquisition purchasing of one organization by
  another organization. Purchaser has more dominant
  role
• Parent vs. target
• Parent organization acquires target
• Important factors include parents culture and
  arrogance toward target. Impose new culture or
  allow transition? Can be interpersonal, cultural,
  managerial
• Outcomes
• Organizational culture change
• Employee Stress (sense of loss, grief can
  influence how react to change)
• Turnover (both voluntary and involuntary)

8
Antisocial Behavior

• Range of employee behaviors aimed at exacting
  revenge for perceived injustice (insults to
  violence)
• Process
• Perceived injustice betrayal of psychological
  contract. Supervisors are often the targets of
  aggressive behavior by subordinates who receive
  negative performance evaluations.
• Escalation - injustice countered with a
  retaliatory act.
• Implication role of communication
• Many conflicts can be avoided by discussing the
  initial injustice rather than escalating.
• Treat employees with dignity and respect and
  sensitivity, will then tolerate organizational
  justice violations that would normally cause
  retaliation.

9
Antisocial Behavior

• Spiraling effect refers to workplace incivility
  escalating into intense aggressive behavior.
• Thermodynamics of revenge based on the violation
  of psychological contract and organizational
  justice
• Event occurs and employee heats up
• Venting occurs when employee talks to friends to
  blow off steam, no intention of causing harm
• Dissipation occurs when employee gives harm-doer
  benefit of the doubt, searches for explanations
  of behavior
• Fatigue occurs when employee maintains negative
  feelings for extended periods, obsesses, want to
  get even with harm-doer
• Explosion occurs when employee active seeks to
  prove harm-doer wrong, mobilize opposition,
  engages in physical violence. Going postal

10
Workplace Violence

• Escalating nationwide, number of employees who
  killed their managers has doubled in last 10
  years.
• Disgruntled is the term heard most.
• Key factors Employee sees organization as
  violating psychological contract, accept no
  responsibility for their behavior, maladaptive
  personalities, experienced interpersonal conflict
• Aggression product of individual and situational
  factors
• Density noise, heat, alcohol use

11
Workplace Violence

• Organizational strategies to deal with workplace
  violence
• Preventative strategies recognize issues before
  they arise
• Reactive strategies emergency plans to help
  recognize and deal with situations when they
  occur.
• Rehabilitative strategies help employees cope
  and recover from problems.
• Especially important to have interventions during
  organizational downsizing.

12
Attitudes in a Context

• Strong vs. Weak Situations
• In a weak situation, individual differences
  (attitudes) control peoples behaviors.
• In strong situations, situational characteristics
  control behavior.
• Person-Organization Fit
• The match between the individuals
  characteristics and the characteristics of the
  organization.
• Example, if an organization has a social climate
  and an employee is introverted the P-O fit is
  low.
• Outcomes
• Job satisfaction
• OCBs
• Lowered Turnover