An interactionist perspective on employee performance as a response to psychological contract breach

Date26 August 2014
Published date26 August 2014
DOIhttps://doi.org/10.1108/PR-10-2012-0173
Pages861-880
AuthorJunghyun (Jessie) Lee,Anjali Chaudhry,Amanuel G. Tekleab
Subject MatterHR & organizational behaviour,Global HRM
An interactionist perspective on
employee performance as a
response to psychological
contract breach
Junghyun ( Jessie) Lee
Department of Management Studies, University of Michigan-Dearborn,
Dearborn, Michigan, USA
Anjali Chaudhry
Department of Management, Dominican University, Chicago,Ill inois, USA, and
Amanuel G. Tekleab
Department of Management, Wayne State University, Detroit, Michigan, USA
Abstract
Purpose –The purpose of this paper is to investigate the inter-relationships among the closely related
exchange-based constructs such as psychological contract (PC) breach, p erceived organisational
support (POS), and exchange ideology. The authors examine the effects of three-way interaction
of them on employee performance.
Design/methodology/approach – This study theoretically builds on a personality trait-based
interactionist model of performance (Tett and Burnett, 2003) and empirically tests the model using
multi-source data collected from employee-manager dyads in a non-profit organisation. Hierarchical
linear modelling was employed for analysis.
Findings – The results indicate a significant three-way interaction, such that, the negative
relationship between PC breach and task perfor mance is the strongest when employees with a high
exchange ideology perceive low levels of POS.
Practical implications – These findings suggest that organisations should ensure employees feel
supported and pay special attention to employees with a high exchange ideology to minimise the
harmful consequences of PC breach
Originality/value – The study provides new theoretical insights to PC literature by integrating
the interactionist approach, cognitive psychology, and exchange ideology research. It highlights the
importance of simultaneously examining both a situational and an individual variable in predicting
employee performance after PC breach
Keywords Quantitative, Psychological contract breach, Task performance,
Organisational citizenship behaviour, Exchange ideology, Perceived organisational support
Paper type Research p aper
Introduction
The psychological contract (PC) breach, defined as an individual’s perception of the
extent to which the organisation has failed to fulfil its promises or obligations
(Robinson and Rousseau, 1994), has been shown to be related to a host of negative
employee outcomes such as poor job satisfaction, lower levels of perfor mance, fewer
displays of organisational citizenship behaviours (OCB), and increased turnover
intentions(Lester et al., 2002; Lo and Aryee, 2003; Robinsonand Rousseau, 1994; Tekleab
et al., 2005; Turnley and Feldman, 1999; Zhao et al., 2007). Given the aforementioned
ramifications of PC breach, previousresearch has focused on examiningthe effects of PC
breach on employees’ work-related attitudes and behaviours and the moderating effects
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0048-3486.htm
Received 1 October 2012
Revised 10 June 2013
10 September 2013
Accepted 9 November 2013
Personnel Review
Vol.43 No.6, 2014
pp. 861-880
rEmeraldGroup Publishing Limited
0048-3486
DOI 10.1108/PR-10-2012-0173
861
Interactionist
perspective on
employee
performance
of variables such as employees’ exchange relationships (with their organisation or
organisational member) or their personality traits (e.g. Aselage and Eisenberger, 2003;
Bal et al., 2010; Henderson et al., 2008; Raja et al., 2004; Tekleab and Taylor, 2003) on
the above relationships. Such research attention to moderators is important because
given the prevalence and at often times, the inevitability of employee experiences of PC
breach (McLean Parks and Kidder, 1994; Robinson and Rousseau, 1994), organisations
may look for ways to buffer the harmful effects of PC breach, in particular, on employee
performance.
However, this stream of research has taken a simple perspective by placing an
emphasis on either situational or individual factors, neglectin g a rather complicated
reality of the workplace where multiple factors come into play. This is unfortunate
because a failure to simultaneously consider a situational and an individual factor in
studies of PC breach may lead researchers to draw incomplete conclusions about the
intricacies of joint effects and its consequences. We believe that a more complete,
accurate understanding of the relationship between PC breach and employee
performance can be obtained through the investigation of both situational and
individual factors that may differentially affect employee reactions to PC breach. In the
current study, therefore, we consider exchange ideology (i.e. individual differences in
endorsement of the norm of reciprocity, Aselage and Eisenberger, 2003; Witt, 1992) as an
individual difference variable, along with a contextual factor, perceived organisational
support (POS), to examine boundary conditions for predicting employee performance
after PC breach.
Our prediction for a three-way interaction of PC breac h, exchange ideology, and
POS is theoretically drawn upon a personality trait-based interactionist model of
performance (Tett and Burnett, 2003). According to this model, people vary in their
level of a trait and the trait is expressed in work behaviours as responses to cues
provided by the organisation. We argue that experiences of PC breach will activate an
individual’s trait of exchange ideology because PC breach provokes their sensitivity
to treatment they receive (e.g. failed promises) and provides opportunities to engage in
altering their reciprocation behaviours accordingly (e.g. decreased task performance).
High exchange ideology individuals are concerned and vigilant of the reciprocal
exchanges between them and the organisation and they tend to p erceive unfairness
even in an objectively fair exchange relationship (Molm et al., 2003). Fu rther, these
individuals are more likely to look for information confirming their perceptions,
such as low levels of support from the organisation (Choi et al., 2011), which provides
trait-relevant situational features influencing the individual’s reciprocation orientation.
As a result, exchange ideology employees will likely interpret the same events (e.g. PC
breach) more negatively than low exchange ideology employees (Takeuchi et al., 2011),
leading them to reduce their performance (Witt, 1991). W hile high exchange
ideology employees sensitively respond to organisational treatment by adjusting their
performance, low exchange ideology employees are less likely to alter their performance
regardless of the perceived levels of organisational support or PC breach due to their
lesser concerns about organisational treatment (Choi et al., 2011; King and Miles, 1994). This
indicates that employees’ negative reactions to PC breach will be the strongest when high
exchange ideology people perceive low levels of POS.
Our paper contributes to the PC literatu re by providing a more complete
understanding of employee perfo rmance as a response to PC breach by examining
individuals’ exchange ideology and their perceptions of support from the organisation.
This type of knowledge helps organisations and managers identify and take proactive
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