The Psychological Contract:Violations and Modifications

Alam KhanMGMT-6600

MTSU Spring 2012

University Professor of Organizational Behavior and Public Policy at Carnegie Melon University

Expert: Over a dozen books & 160 articles and monographs in management and psychology journals

Author: Denise M. Rousseau

WHAT is Contract Violation

Types of Responses

Violation isn’t the End of the Contract

WHEN is Violation Most Likely

When a Contract is Violated

Article discusses….

…I believe you have my stapler……..”Office Space”About some dissatisfied employees at work!! ….

Contract ViolationMental Model

Promises Acceptance Reliance

Perceptions Dissatisfaction

Lower Performance

Trust Erosion

High Turnover

… Failure to comply!

What is Contract Violation?

Example Theme: Relationship

Inadvertent Violation- Both parties at fault (an un-intentional mishap)

Disruption- Circumstances are such

(an External Factor involved)

Breach of Contract- One side refuses to (otherwise capable )

Types of Violations

Her study brings up scenarios like, “They promised me…….” “I discussed my disappointment…….” “I was assured that,………………” “They said the situation was……….” “I was given new assignments……….” “I was unhappy with……….”

- Contract violation erodes TRUST

The Psychological Contract

Types of Responses…

Voluntary termination Actions victims take Silence is a form

of Relationship… to remedy the Violation of non-response

When contract is violated…

Exit Voice Loyalty

Violation Isn’t the End of Contract…

According to Robinson and Rousseau study in 1994 ; When asked if their contract had been …

VIOLATED………………...YES………. 59%Ultimately FULFILLED….YES…..……73%

Response to Violation is a function of attributions made regarding the violators’ motives, the behavior of the violator and scope of losses.

Experience of Violation is greater…

LOSSES seem GREATEREVENT occurs in the CONTEXTVIOLATION appears to be VOLUNTEERYNO EVIDENCE of GOOD FAITH

Violation Isn’t the End of Contract…

- Situation where you thought there was a Contract Violation

- What was Your Reaction

What do you think…

Exit Voice Loyalty

Why

Results