A Longitudinal Study of the Impact of Organizational Change on Transactional, Relational, and Balanced Psychological Contracts

Abstract

Workplace transitions are thought to result in a fundamental shift in the employment relationship. This study used sensemaking theory to examine when and how organizational change affects employees’ psychological contracts (PCs). The authors suggest that employees interpret organizational change through contextual and cognitive factors related to the change. These factors, in turn, influence whether employees revise their PCs. Results of our longitudinal study suggest that the extent to which contextual and cognitive factors affect employees’ PCs depends on the type of PC. Transactional and balanced PCs were unaffected by the contextual and cognitive factors related to the change, while changes occurred in relational PCs.