When the Past and the Present Collide: Contrast Effect of Sequential Psychological Contract Breaches on Employee Outcomes

Abstract

Although it is common that employees can experience multiple psychological contract (PC) breaches with their employer over time, it is unclear how a past PC breach serves as a temporal context factor in shaping the impact of a present PC breach on employee outcomes. Integrating contrast effect theory and conservation of resources theory (COR), this research develops and tests hypotheses concerning how a past PC breach alters employees’ reaction intensity to a present PC breach. Three studies were conducted to investigate the hypotheses. In Study 1, findings from 168 employee-supervisor dyads of a building supply company supported the contrast effect of past and present PC breaches. Specifically, when a past PC breach was low, a present PC breach had a stronger negative influence on employee organizational citizenship behavior (OCB). Results of Study 2, comprised of 412 full-time working adults, found that burnout mediated the contrast effect of past and present PC breaches on OCB. Specifically, the negative indirect effects of a present PC breach on OCB through burnout were stronger when a past PC breach was low. In Study 3, 154 subjects participated in a scenario-based experiment in which past and present PC breaches were manipulated. Results supported the contrast effect of past and present PC breaches on anticipated future breach. Implications of these results for future PC breach research and management practice are discussed.