Psychological contract assessment after a major organizational change

Abstract

PurposeThis study aims to identify specific changes in the content of the psychological contract during mergers and acquisitions (M&As), looking into both the “previous” and the “current” psychological contract.Design/methodology/approachA total of 255 non‐managerial employees who had recently gone through a MorA, participated in the study. They were asked to evaluate both their previous psychological contract (prior to the MorA) and their current psychological contract (after the MorA). Paired t‐tests provided support for the propositions stated.FindingsStatistical analysis revealed that employee perceptions of both organizational obligations and contributions change after a MorA. Furthermore, employees with limited coping with changes ability are more likely to consider that their contract has changed after a MorA.Research limitations/implicationsThe cross‐sectional character of this study may have increased common method bias. Still, no other option existed in this organizational setting.Practical implicationsThese findings suggest that major organizational changes, such as MorA significantly impact on individuals' view of their employment relationship. In fact, employees that feel confident in handling organizational changes are more prone to believe that their psychological contract has replaced by a new, subordinate one. Consequently, it is important that organizational agents shield employees against M&As negative impact by fostering coping with changes ability.Originality/valueThe paper offers insights into psychological contracts after a major organizational change.