A process perspective on psychological contract change: Making sense of, and repairing, psychological contract breach and violation through employee coping actions

• Author: Sarah Bankins
• Date: 01 November 2015
• Published date: 01 November 2015
• DOI: http://doi.org/10.1002/job.2007

A process perspective on psychological contract

change: Making sense of, and repairing,

psychological contract breach and violation

through employee coping actions

SARAH BANKINS*

Newcastle Business School, University of Newcastle, NSW, Australia

Summary Psychological contracts are dynamic, but few studies explore the processes driving change and how em-

ployees influence them. By adopting a process approach with a teleological change lens, and drawing upon

the sensemaking and coping literatures, this study positions individuals as active and adaptive agents driving

contract change. Employing a mixed methodology, with a four-wave longitudinal survey (n= 107 graduate

newcomers) and qualitative interviews (n= 26 graduate newcomers), the study focuses on unfolding events

and develops an “adaptive remediation”process model aimed at unraveling contract dynamics. The model

demonstrates how breach or violation events trigger sensemaking, resulting in initially negative employee

reactions and a “withdrawal”of perceived contributions, before individuals exercise their agency and enact

coping strategies to make sense of, and adapt and respond to, these discrepancies. A process of contract

“repair”could then occur if the coping actions (termed “remediation effects”) were effective, with individuals

returning to positive exchange perceptions. These actions either directly addressed the breach and repaired

both it and the psychological contract (termed “remedies”) or involved cognitive reappraisal of the broader

work environment and repaired the contract but not the breach (termed “buffers”). The results highlight the

unfolding, processual nature of psychological contracting. Copyright © 2015 John Wiley & Sons, Ltd.

Keywords: psychological contract change; sensemaking of psychological contract breach and violation;

stress and coping; psychological contract repair; process research

The psychological contract consists of the perceived implicit reciprocal obligations that exist between an employee

and his or her employer (Conway & Briner, 2005). The contract is theorized to unfold via a dynamic process,

through ongoing cycles of negotiation, breach and fulfillment (Conway & Briner, 2009), and influences outcomes

such as job satisfaction and turnover intentions (Rousseau, 1995). But our understanding of how and why the

contract changes remains limited. Few studies utilize the “tools”of process research to explore contract dynamics

(Conway & Briner, 2005), despite these frameworks and methodologies allowing researchers to deeply explore

events and “generative mechanisms”driving contract content change (or “contract change”) (Van de Ven & Poole,

1995, p. 511).

Breach and violation events are often cited as triggers for contract change. Breach refers to employees perceiving

unmet employer obligations and violation refers to the negative affective responses that may ensue (Morrison &

Robinson, 1997). However, predominantly cross-sectional quantitative studies of these events offer a largely static

view by focusing on resultant negative employee attitudes and behaviors (Conway & Briner, 2002). This is despite

recent, particularly qualitative, work identifying that employees can engage in constructive responses to episodes of

breach and violation (e.g., Parzefall & Coyle-Shapiro, 2011; Pate, 2006). This suggests that individuals ultimately

find ways to manage these situations as active exchange participants (Seeck & Parzefall, 2008) and over time are

*Correspondence to: Sarah Bankins, Newcastle Business School, University of Newcastle, Ourimbah Campus, NSW, Australia, 2258. E-mail:

sarah.bankins@newcastle.edu.au

Copyright © 2015 John Wiley & Sons, Ltd.

Received 29 July 2013

Revised 23 February 2015, Accepted 04 March 2015

Journal of Organizational Behavior, J. Organiz. Behav. 36, 1071–1095 (2015)

Published online 10 April 2015 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/job.2007

Research Article

unlikely to only passivelyreciprocate negative employer behavior (Parzefall & Coyle-Shapiro,2011). The complexity

of employees’responses to breach and violation events requires further study to better understand psychological

contract dynamics (Pate, 2006).

This mixed methods (quant->qual) study adopts a process approach to explore contract change. Rousseau’s

(2000) relational-balanced-transactional typology of employee and employer obligations is used to model contract

content. Relational contracts involve long-term employment arrangements and high affective commitment, with

two sub-dimensions of mutual loyalty and long-term stability (Dabos & Rousseau, 2004). Balanced contracts blend

the features of relational exchanges with the flexibility to alter the contract as circumstances dictate (Dabos &

Rousseau, 2004). These dimensions involve offering performance support,development activities and growing

externally marketable skills (Dabos & Rousseau, 2004). Transactional contracts have limited duration and often

result in turnover and low organizational commitment, with dimensions of narrow involvement in the organization

and short-term employment (Dabos & Rousseau, 2004).

To explore the contracting process a teleological change “motor”is applied, which assumes individuals generate

change through purposeful and adaptive actions aimed at meeting a chosen end-state (Van de Ven & Poole, 1995,

p. 511). Two literatures are then drawn upon to form an analytical framework supporting this change perspective.

Weick’s (1995) notion of sensemaking is first utilized to focus on individuals’interpretations and actions following

discrepant events, such as contract breaches or violations. The coping literature then provides an avenue for exploring

individuals’actions to manage the stressof breach or violation events and the influenceon the contracting process. This

framework allows a “process story”(Van de Ven & Huber,1990, p. 214), a narrative outlining the sequence of events

generating the change, to be developed and explored. This narrative focuses on the interplay between employees’

reactions to breach or violation events, their active sensemaking of them through employing coping strategies and

how these events unfold and iterate to change the psychological contract. The longitudinal mixed methodology then

allows the process story to be expanded into a detailed process model of contract change. Study 1 consists of a four-

wave quantitativesurvey to analyze individuals’contract change trajectoriesover time. Study 2 then utilizes qualitative

interviews, with a purposive sample of Study 1 participants with varying degrees of contract change, to more deeply

explore how the posited events in the process story unfold and influence contract dynamics.

The study makes a number of contributions to the literature. Process research is novel in the contract field, with

this being one of the few studies to empirically unearth the theorized evolving nature of the contract by creating

dynamic theory through the development of a rich and detailed process model. By focusing on unfolding and ongoing

sequences of events, this study moves the literature beyond examining change through variance theories focused on

causal relationships between variables (Mohr, 1982). Focusing on cycles of interpretation and action following a

breach or violation event also allows for the exploration of positive employee responses to these events, such as

individual adaptation and contract repair, counter-balancing the literature’s predominant focus on employees’imme-

diate negative reactions to these events. Further, in contrast to much of the contract literature, by theorizing a

teleological change motor (Van de Ven & Poole, 1995) this study centrally positions employees as active and pur-

poseful agents in the exchange process who deliberately shape, manage, and change their psychological contracts.

Understanding the role of agency and its enactment in the contracting process is sorely lacking (Seeck & Parzefall,

2008), with a disproportionate focus on employees as relatively passive reciprocators of employer behavior. The

sensemaking and coping frameworks also allow us to explore how individuals exercise their agency in the ongoing

exchange by interpreting and acting upon discrepant events through implementing various coping responses in order

to manage, and potentially repair, their psychological contracts following breach or violation events.

Theory and Research Questions

Process research involves “understanding how things evolve over time and why they evolve in this way”(Langley,

1999, p. 692), generating theories that can provide rich explanations of changing phenomena by focusing on

1072 S. BANKINS

Copyright © 2015 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 1071–1095 (2015)

DOI: 10.1002/job