The interplay of psychological contract breach, stress and job outcomes during organizational restructuring

Abstract

Purpose This paper aims to study the impact of psychological contract breach and employee stress on job outcomes such as job involvement and organizational citizenship behaviour in the Indian banking sector, with special reference to State Bank of India. Design/methodology/approach A questionnaire survey was administered. Data was collected from employees of a bank, which has undergone a merger. Validity tests were carried out to confirm the accuracy of the measurement variables. Regression analysis was used to test the stated hypotheses. A paired t-test was used to compare the level of job outcomes experienced by the employees before and after the merger. Findings The study has shown that psychological contract breach has an impact on job stress. Results also show that the merger has made a positive impact on the employees. Job involvement and engagement were found to be improved after the merger. Employees were also found to be more committed to the organization and exhibit high organizational citizenship behaviour. Practical implications The organizational restructuring has been long thought to play a crucial role in affecting the job outcomes of employees. This study reconfirms those concepts and provides implications for researchers and managers. Originality/value This study makes a significant theoretical contribution to the literature as this is one of the very few studies to deal with the impact of organizational restructuring on employee stress and job outcomes in the Indian Scenario.