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Psychological Aspects Of Contract Breach

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When an individual joined an association, many papers has to signed by both of the employee and company and employee create desire for each other. On the same day they are additionally shaping another contract which is not visible and does not composed any paper. It is known as Psychological contract. (Rousseau, 2000) has defined psychological contract as “the terms of an exchange agreement between individuals and their organizations”. A psychological contract plays an important role for understanding how employee perceives their organizations. Thus, organizations need to be aware about the psychological contract for the employee job satisfaction and company’s outcomes. However, research on this psychological contract are useful to know the effect of its on organizations.

A psychological contract breach is defined as an employee perception that his or her organization has failed to fulfil one or more obligations associated with perceived mutual promises (Gakovic and Tetrick, 2003). When an organization has failed to fulfil the desire of employee who is aspect a lot than breach may occur on them. The psychological contract is only on the mind of employee it does not have any concerned with organization. It is very complex to figure out on the employee having breach. This contract might occur in every organizations. Therefore, study of psychological contract breach can help organization to be ready for finding solution on such breaches which could be occur in future.

When the employee experienced a psychological contract breach they can experienced a changes on their behaviour and attitude towards their company (Kickul and Lester, 2001). A psychological breach occurs between them due to broken trust of employee on organizations. The most studied attitudinal job outcomes of psychological contract breach can be seen on job satisfaction. Research has found that, lower the job satisfaction lead to psychological contract breach (Gakovic and Tetric, 2003). Employee with psychological contract breach are more likely to quite their job. Some of the research has also found that contract breaches might influence by the different age of group. Younger employee loose their sense of trust and commitment whereas older lose their sense of job satisfaction. It shows negative impact on team and negative impact on customer engagement and retention.

If you smile and are positive around someone, they will feel happy most likely carry that positivity to the next place they go, which can create a ripple effect. It is amazing when you realize how powerful a small positive can be. The same effect can occur projecting negativity. Take a moment and think about whether you feel good or bad around a positive person or negative person. It is all occur because of a phenomenon called emotional contagion which is very simple concept (Dr. Nicole Lipkin). Sigal Barsade, a professor at Wharton Business School, studied emotional contagion and observed that “People are walking mood inductor, continuously influencing the mood and then the judgement and behaviours of others”. In her research she has found out that when participated are cheer up positively the group behave more cheerful., But when the participated were acting on a angry way, the group become angrier. Positive emotions created more cooperation, negative can create conflict and decrease cooperate. The result is in every type of organization, small or large industry these effects are seen.

The breach of Psychological contract can lead employee to have an intention to leave the organizations, which is another widely researched attitudinal job outcome (Hess & Jepsen, 2009). Where workers are most absent, does not show up in the work. It can affect higher level staff to lower. In the working environment it could affect all the member of team as well as cause an issue on the organization. In addition, research has also found that employees with a relational psychological contract had a significant and positive relationship with intention to quit (Alcover et al., 2012).

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An attitudinal job output of psychological contract breach is not research and find on most of the organizations. They don’t know about the employee satisfaction degree on their work. When the employee are looking for support from the company but the organization lack to give a time and does not focus on their deed it could be breach on employee. Examining, this effect organizational support to employee is important.

Organizational citizenship behaviour is one of the top researched behavioural job outcomes of psychological contract breach (Hess & Jepsen, 2009). When a psychological contract breach is face by employee they are not really surrounded by organizational behaviour and shows negative impact on organization. They are less likely to engage in organizational behaviour. Once employees feel that a psychological contract has not been fulfilled, they may become less satisfied with their jobs, may experience cognitive manipulation of the perceived inequities, and may change their behaviours by decreasing the amount of extra-role behaviours they perform (Jensen, Opland, & Ryan, 2009).

As the present study. The theory of Social exchange by (Blau, 1964; Robinson and Morrison, 1995) means that employee relationships which consist not only of economic exchanges but also of more diffuse social obligations. These obligations change over time, but research has shown that individuals feel most comfortable when they are in a balanced exchange environment (Gouldner, 1960; Wayne, Shore and Liden, 1997), an environment where they feel that there is a fair equilibrium between what they offer the organization and what they receive in return. It is important to understand because this breach can happen in anytime with anyone. Because employees are signed with different types on contract which could lead to psychological contract breach.

When the organization fails to fulfilled its promises, employees might feel that there is inequality in the employment relationship (Lester, Turnley, Bloodgood and Bolino, 2003) and might as a result be inclined to take actions to rebalance their work situation, by for example reducing their contribution to the organization (Rousseau, 1995). It is necessary to further examine job outcomes including job satisfaction, intention to remain with the organization, perceived organizational support, and organizational citizenship behaviours because these are the reactions organizations want their employees to positively experience. By understanding the outcomes of a psychological contract breach, organizations may be able to better understand how to avoid breaching employees’ psychological contracts and improve job outcomes. With that being said, the purpose of this research is to examine the relationship between psychological contract breach and job outcomes including job satisfaction, intention to remain with the organization, perceived organizational support, and organizational citizenship behaviours. This research will also examine whether the aforementioned job outcomes vary depending on the type of psychological contract an employee may have.

In the conclusion, the focal point of past research has for the most part been on mental contract satisfaction. The present examination analyzed whether the impacts of mental contract rupture on occupation results was subject to mental contract type. In spite of the fact that the present examination offered help for past investigations' discoveries, new discoveries were made featuring the significance of associations satisfying the underlying guarantees made to representatives. The results of a ruptured mental contract can hurt an association to such an extent that workers may turn out to be less happy with their employments, may need to leave their association, may feel less bolstered by their association, and may diminish their hierarchical citizenship practices. It is particularly significant for associations to know about the distinctions in how workers respond to a break of their mental contract contingent upon the kind of mental contract workers have on the grounds that the responses can change drastically and influence the association fundamentally.


  1. Gakovic, A. & Tetrick, L. E. (2003). Psychological contract breach as a source of strain for employees. Journal of Business and Psychology, 18, 235-246.
  2. Rousseau DM. (2000). Psychological contracts in the United States: Diversity, individualism, and associability in the marketplace. In Rousseau DM, Schalk R (Eds.), Psychological contracts in employment: Cross-national perspectives (pp. 250-282). Thousand Oaks, CA: Sage
  3. Kickul, J. & Lester, S. W. (2001). Broken promises: Equity sensitivity as a moderator between psychological contract breach and employee attitudes and behavior. Journal of Business and Psychology, 16, 191-217. doi: 0889-3268/01/1200-0191
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Psychological Aspects Of Contract Breach. (2021, October 01). Edubirdie. Retrieved December 3, 2023, from
“Psychological Aspects Of Contract Breach.” Edubirdie, 01 Oct. 2021,
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Psychological Aspects Of Contract Breach [Internet]. Edubirdie. 2021 Oct 01 [cited 2023 Dec 3]. Available from:
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