Psychological contract and organizational justice: the role of normative contract

Abstract

Purpose The purpose of this paper is to examine perceptions of the psychological contract (PC) simultaneously at the individual level (fulfillment of obligations by the organization and PC violation) and the organizational level (normative contract), and their relationship with employees’ evaluations of organizational justice. Based on justice and information processing approaches, the hypothesis is that normative contract has an effect on employees’ perceptions of organizational justice, and also moderates the relationship between PC violation and organizational justice. Design/methodology/approach Multilevel modeling was employed with a multinational sample of 5,338 employees nested in 214 companies. Findings Findings showed that beyond the positive effect of fulfillment of obligations by the organization, PC violation has a strong negative effect on organizational justice. In addition, normative contract has a positive effect on organizational justice, showing that when shared perceptions of normative contract are higher, then the organizational justice perceptions of employees are also higher. Furthermore, the normative contract moderated the relationship between PC violation and organizational justice, showing that the negative relationship of PC violation with organizational justice was stronger when the normative contract was higher. Practical implications Findings suggest that normative contract has effects on organizational justice, and that PC violation had more negative effects on employees’ perceptions of organizational justice perceptions when colleagues’ shared perceptions of fulfillment were higher. This means that social context (shared perceptions in an organization about the PC) has effects on individual perceptions of organizational justice. Companies need to pay attention to detrimental effects on employees who perceive a worse PC than their colleagues do. Originality/value The study extends the current research by demonstrating that employee–employer exchanges are not limited to individual level effects because shared perceptions of PC fulfillment (normative contract) also have relevant effects on employees’ perceptions of organizational justice.