When an employee joins an organisation, there are various paper formalities which are performed between employee and employer with respect to developing expectations towards each other. Apart from these formal contracts, employees also enter into a psychological contract which is not in black and white. Psychological contract defines what an employee perceives about organisation and how will they perform. Understanding the affect of psychological contract breach can help employees to know when breach of the contract occurs. The breach of psychological contract of an employee is a clear cut intention of the employee to leave the company which is further attitudinal outcome of the job (Hess & Jepsen, 2009). However, the scenario changes when
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Psychological contracts are built on employee’s beliefs and trust towards organisation for their commitment. It reflects individual expectations between an employee and organisation (Rousseau, 1995). Psychological contract reflects mutual exchange relationship between organisation and employee that considers expectations of both parties (Schein, 1990). It is not only a contract regarding expectations but also possesses commitment towards obligations. Various researchers have studies psychological contract as an informal and implicit contract which is subjective in nature and is merely a faith possessed only by employees. As discussed above, psychological contract is an employee’s expectation regarding the reciprocal obligation between organisation and the employee. When these expectations are not fulfilled, it leads to breach of psychological contract which affects the job outcomes. It is quite obvious that the employees will feel dissatisfied if their expectations are not met by the organisation. As psychological contract breach can have negative effects on employees, it becomes essential to study how psychological contract breach can affect the employees. Any action that acts as inconsistent to employee’s expectations towards obligations will be considered as an act of contract breach by him. An example of psychological contract breach was seen in the movie, National Lampoon’s Christmas Vacation” (Hughes, Simmons, & Chechik, 1989), where Clark Griswold, the protagonist father, was expecting a bonus as a Christmas gift. He believed and expected that if he works hard all the year for organisation with full commitment and loyalty, he would get a cash bonus with which he will build a pool at his home. However, when Christmas arrived, he only got a membership of the jelly of the month club as Christmas gift instead of any cash bonus. This surprise lead to
Psychological contracts are built on employee’s beliefs and trust towards organisation for their commitment. It reflects individual expectations between an employee and organisation (Rousseau, 1995). Psychological contract reflects mutual exchange relationship between organisation and employee that considers expectations of both parties (Schein, 1990). It is not only a contract regarding expectations but also possesses commitment towards obligations. Various researchers have studies psychological contract as an informal and implicit contract which is subjective in nature and is merely a faith possessed only by employees. As discussed above, psychological contract is an employee’s expectation regarding the reciprocal obligation between organisation and the employee. When these expectations are not fulfilled, it leads to breach of psychological contract which affects the job outcomes. It is quite obvious that the employees will feel dissatisfied if their expectations are not met by the organisation. As psychological contract breach can have negative effects on employees, it becomes essential to study how psychological contract breach can affect the employees. Any action that acts as inconsistent to employee’s expectations towards obligations will be considered as an act of contract breach by him. An example of psychological contract breach was seen in the movie, National Lampoon’s Christmas Vacation” (Hughes, Simmons, & Chechik, 1989), where Clark Griswold, the protagonist father, was expecting a bonus as a Christmas gift. He believed and expected that if he works hard all the year for organisation with full commitment and loyalty, he would get a cash bonus with which he will build a pool at his home. However, when Christmas arrived, he only got a membership of the jelly of the month club as Christmas gift instead of any cash bonus. This surprise lead to