Employees make assumptions about what they owe their employers and what their employers owe them in return. This is called a psychological contract. According to research (Ng, Feldman, & Lam, 2010), when employees think this psychological contract is being violated, they may feel less organizational commitment and become less innovative.
RESPONSE TO PSYCHOLOGICAL CONTRACT BREACH
What happens when employees feel that psychological contracts have been violated? According to the authors, two things happen. First, employees will naturally begin to feel less emotional attachment to the company. This is not revenge; it’s just an inevitable emotional reaction. Secondly, employees will have some interest in getting back at the employer, as long as they can keep their jobs.
In practice, “getting back” at employers means the employees become less creative. The authors explain that there are two ways an employee can be creative on the job. Employees can solve problems and they can implement ideas. Problem solving is difficult to measure, so instead the authors measured idea implementation. They defined this as any time an employee shared a new idea with a colleague or superior, or any time an employee either worked to implement those new ideas or helped others to implement them. When employees perceived psychological breaches, they ended up engaging in less of these innovative behaviors. Because the study included employees from a wide variety of jobs, the authors concluded that the complexity of the job makes no difference, and innovation will always suffer.
PRACTICAL IMPLICATIONS FOR ORGANIZATIONS
A key finding of this study is that the aforementioned decrease in workplace innovation continued over time. Employers may mistakenly think that breaking psychological contracts won’t have lasting consequences and that employees will eventually forgive and forget. This is a mistake. Because the authors were able to identify the role psychological contract breaches have in reducing organizational commitment, or the overall attitude employees have towards their employers, it is easy to understand how innovation will continue to decrease over the long run. Employers should be warned of these consequences, and should be encouraged to fix the situation and give employees what they believe they are owed.
Ng, T.W.H., & Feldman, D.C., & Lam, S.S.K. (2010). Psychological Contract Breaches, Organizational Commitment, and Innovation-Related Behaviors: A Latent Growth Modeling Approach. Journal of Applied Psychology, 95(4), 744-751.