Psychological Contract & Change


Published on

Nikolaou, Ι. & Tomprou, Μ. (2008). Dynamics of the psychological contract: Experiencing organizational change in a changing work environment. Institute of Work Psychology Conference, University of Sheffield, UK.

Published in: Business, Technology

Psychological Contract & Change

  1. 1. Experiencing organizational change: the framework of psychological contract Tomprou, M. & Nikolaou, I. Athens University of Economics and Business, Athens, Greece
  2. 2. The Impact of Social and Economical Changes <ul><li>Rapid Growth of Technology </li></ul><ul><li>Globalization </li></ul><ul><li>Information diffusion </li></ul>
  3. 3. The impact of changes on Organizations <ul><li>Mergers & Acquisitions </li></ul><ul><li>Restructuring and Downsizing </li></ul><ul><li>Changes in organizational culture </li></ul><ul><li>Business process re-engineering </li></ul><ul><li>Transitions in employment relationships </li></ul>
  4. 4. The Transition of Employment Relationships <ul><li>Is primarily perceived as the transition from the old deal to the new deal </li></ul><ul><li>Is mainly referred to the subjective concept named as psychological contract </li></ul><ul><li>The impact of the transition on the employment relationships refers to the violation of the psychological contract </li></ul>
  5. 5. For the sake of theory and research… <ul><li>Psychological contract = the perceived agreement between the employee and the organization regarding the focal person’s contributions and organization’s inducements. This perceived agreement is based on promises made by both parties. </li></ul>
  6. 6. For the sake of theory and research…(Continued) <ul><ul><li>Psychological Contract Violation ( General Definition ): Employee’s perceptions about the organization’s failure to keep up with its promises towards the focal person </li></ul></ul><ul><li>Psychological Contract Violation </li></ul><ul><ul><li>Breach = The cognitive element </li></ul></ul><ul><ul><li>Violation = The affective element </li></ul></ul>
  7. 7. Present Research Aims <ul><li>The direct effects of individual antecedents on psychological contract violation. </li></ul><ul><li>The mediating influence of trust on the relationship between psychological contract breach and attitudinal outcomes. </li></ul><ul><li>The moderating effect of careerism between psychological contract violation and attitudinal outcomes. </li></ul>
  8. 8. The Context of the Study –the Greek Banking Sector <ul><li>Since the mid 80s almost all banks have experienced </li></ul><ul><ul><li>Internal changes (e.g. re-organization, culture change, downsizing, etc.) </li></ul></ul><ul><ul><li>External changes (e.g. mergers, acquisitions). </li></ul></ul>
  9. 9. Method <ul><li>Sample =236 Employees of the Greek Banking sector. </li></ul><ul><li>Measures </li></ul><ul><ul><li>Perceived Breach (5 items) </li></ul></ul><ul><ul><li>Violated Feelings (4 items) </li></ul></ul><ul><ul><li>Psychological Contract Fulfillment (4 items) </li></ul></ul><ul><ul><li>History of perceived breach ( 4 items) </li></ul></ul><ul><ul><li>Experience of Organizational Change (8 items) </li></ul></ul><ul><ul><li>Careerism (3 items) </li></ul></ul><ul><ul><li>Trust (7 items) </li></ul></ul><ul><ul><li>Organizational Commitment (9 items) </li></ul></ul><ul><ul><li>Job Satisfaction (1 item) </li></ul></ul>
  10. 10. Results (1) <ul><li>Violated feelings are positively related with perceived breach (Hypothesis confirmed ) </li></ul><ul><li>Psychological contract fulfillment is negatively related with perceived breach and violated feelings (Hypothesis confirmed) </li></ul><ul><li>Psychological contract fulfillment is positively related with organizational commitment and job satisfaction (Hypothesis confirmed) </li></ul>
  11. 11. Results (2) <ul><li>Experiences of organizational change are positively related to violated feelings but were not related with perceived breach (Hypothesis partially confirmed ) </li></ul><ul><li>History of perceived breach is positively related with perceived breach, but is not related to violated feelings (Hypothesis partially confirmed ) </li></ul>
  12. 12. Results (3) <ul><li>Mediator Analyses </li></ul><ul><li>Violated feelings mediate the relationship between the perceived breach with job satisfaction and organizational commitment ( partial mediation ) </li></ul><ul><li>Trust mediates the relationship between perceived breach with job satisfaction and organizational commitment ( partial mediation) </li></ul><ul><li>Trust mediates the relationship between violated feelings with job satisfaction and organizational commitment ( partial mediation) </li></ul>
  13. 13. Results (4) <ul><li>Moderator Analyses </li></ul><ul><li>Careerism moderates the negative relationship of perceived breach and organizational commitment but not with job satisfaction (Hypothesis partially accepted ) </li></ul><ul><li>Careerism moderates the negative relationship of violated feelings with job satisfaction and organizational commitment (Hypothesis rejected ) </li></ul>
  14. 14. Discussion of Main Results (1) <ul><li>Emotional reactions play a pivotal role in the process of psychological contract violation acting as the intervening factor between perceptions and attitudes. </li></ul><ul><li>Findings show that psychological contract acts as a continuum with the one side of perceived breach followed by felt violation and the other side demonstrated by the perceptions of fulfillment. </li></ul>
  15. 15. Discussion of Main Results (2) <ul><li>Employees in the banking sector tend to be more familiar with organizational change but still emotionally tend to react demonstrating that way their opposition! </li></ul><ul><li>The employees with history of perceived breach: </li></ul><ul><ul><li>Vigilant on breaches </li></ul></ul><ul><ul><li>Emotionally defensive </li></ul></ul>
  16. 16. Discussion of Main Results (3) <ul><li>Careerists are less vigilant on possible breaches and express less violated feelings, but tend to demonstrate lower organizational commitment. </li></ul><ul><li>Careerism does not entail job satisfaction. </li></ul>
  17. 17. Discussion of Main Results (4) <ul><li>The Role of Trust </li></ul><ul><li>Essential Composite of Psychological Contract Management </li></ul><ul><li>Influences both Cognitions and Emotions </li></ul>
  18. 18. Limitations <ul><li>Cross-sectional Study </li></ul><ul><li>One business sector </li></ul>
  19. 19. Thank you for your attention <ul><li>For more information please contact: </li></ul>Ioannis Nikolaou ( [email_address] ) Department of Management Science & Technology Athens University of Economics & Business, Greece