The concept of a psychological contract is a relatively new phenomenon in the world of employment. A psychological contract is an implicit agreement between an employer and an employee about mutual expectations, obligations, and promises in the workplace. Unlike a written contract, a psychological contract is an unwritten and informal agreement that is based on trust, mutual understanding, and shared values.
When a psychological contract is breached, it can have significant effects on job outcomes. Research has shown that psychological contract breach can lead to a decrease in employee job satisfaction, commitment, and loyalty. In extreme cases, it can result in the departure of employees from the organization.
One of the primary effects of psychological contract breach on job outcomes is reduced job satisfaction. When an employee feels that their employer has failed to meet their expectations or has not fulfilled their promises, it can lead to a decline in job satisfaction. This may lead to a decrease in motivation and an increase in turnover rates. Additionally, it may result in a lack of engagement and effort on the job, which can have a negative impact on productivity and performance.
Another effect of psychological contract breach is reduced commitment to the organization. If an employee perceives that their employer has not lived up to their promises, they may feel less committed to the organization. This can result in reduced loyalty and increased turnover rates. Employees who feel that their employer has breached their psychological contract may also be less likely to engage in discretionary behaviors, such as going above and beyond their job duties.
Lastly, psychological contract breach can negatively impact job security. If an employee feels that their employer has not fulfilled their promises, they may feel that their job security is threatened. This can lead to anxiety and stress, which can affect productivity and performance in the workplace. Additionally, if an employee feels that their employer has breached their psychological contract, they may be more likely to look for other job opportunities in the future.
In conclusion, psychological contract breach can have a significant impact on job outcomes. It can lead to reduced job satisfaction, commitment, and loyalty, as well as increased turnover rates and decreased productivity. As such, employers should strive to create an environment that fosters trust, mutual understanding, and shared values to prevent psychological contract breach. By fulfilling their promises and meeting employee expectations, organizations can create a positive and productive workplace culture.