Psychological contract breach and work performance

Abstract

PurposeThe aim of this paper is to investigate how social exchanges modify the relationship between psychological contract breach and work performance. It aims to present two concurrent hypotheses, based on theoretical interaction effects of social exchanges (conceptualized as social exchange relationships, POS, and trust).Design/methodology/approachData were collected from a sample of 266 employees in a service sector company in the USA. Regression analysis was used to explore the moderating effects of social exchanges on the relationships between psychological contract breach and work performance (operationalized as in‐role behaviors and organizational citizenship behaviors).FindingsIt was found that the negative relationship between psychological contract breach and work performance was moderated by social exchanges, such that the relationship was stronger for employees with high social exchange relationship, perceived organizational support, and trust.Research limitations/implicationsThe data were collected cross‐sectionally, and thus causal inferences have to be made with caution. Moreover, the data were collected from a single source. The study shows that the relations between contract breach and outcomes are moderated by the existing relationship between employee and organization.Practical implicationsAlthough organizations may invest in long‐term relationships with their employees, psychological contract breaches have a profound impact on work performance. Therefore, organizations should diminish perceptions of contract breach; for instance by providing realistic expectations.Originality/valueThe paper provides new theoretical insights on how social exchange can have two distinct effects on the breach‐outcomes relations. It shows that social exchanges moderate the relations between contract breach and work performance.