Pan-Pacific Conference XXXIV. Designing New Business Models in Developing Economies

Threshold effects of psychological contract breach
Chrysler-Fox, Pharny
University of Johannesburg
South Africa Roodt, Gerhard, +27 79 353 5798
pharnyc@uj.ac.za
ABSTRACT
There is growing interest in nonlinear modelling of
psychological contract breach and outcome
variables. This article reports on a partial replication
of a previous investigation into thresholds models.
A convenience sample (n = 549) responded to
global measures of breach, team altruism, violation
and turnover intention. Hierarchical and segmented
regressions were used to examine thresholds.
Threshold models explained more variance
compared to monotonic linear models in the
outcomes of breach. This finding pave a way for
how the psychological contract is to be examined
and understood.
INTRODUCTION
Organizations can no longer ignore the impact of
and subsequent responses to the changing global
context. Among other, innovation is prime for
organizations to create value for customers and to
remain sustainable and competitive in a global
context. These drivers could result in a review of
existing and future mutual promises and obligations
between employers and employees. These
‘exchanges’ are central to the employment
relationship and the psychological contract, the
latter which aids to predict and explain how
employees behave in organizations [1].
Psychological contract breach occurs when there is
a perception that promises made (thus an
expectation has been created) in the social
exchange, have not been honored [2].
The effects of breach have mainly been examined in
linear models despite arguments for the existence of
threshold effects. A threshold “implies that sudden
changes in attitudes in relation to perceived
breaches to the psychological contract only occur
when a certain level of breach has been reached” [1,
p. 443].
Breach has been examined with global and itemspecific
measures [3] A global approach is not as
specific compared to using specific item measures
[3], as it assesses subjects’ overall perceptions of
how an organization kept to the deal [4]. The global
approach, when compared to a composite measure,
resulted in larger effect sizes between breach and
violation, job satisfaction, organizational
commitment and OCB, but not for turnover
intention and in-role performance [4].
Therefore, this study aimed to partially replicate
Rigotti’s (2009)1 [1] study of threshold models
using global measures in a different cultural context.
1 Rigotti, T. Enough is enough? Threshold models
for the relationship between psychological contract
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OVERVIEW OF THE LITERATURE
Two theories have been advanced in support of
thresholds in social exchange relationships [1]. In
line with the referent cognitions theory [5], [6], a
“threshold would be reached when actions from
others fall outside of the realm of expectations” [1,
p. 444]. Based on equity theory [7], a threshold is
exceeded when “the equation own contributions in
relation to own outcomes results in a higher value
than the equation others’ contributions in relation to
their outcomes” [1, p. 444].
Evaluative processes precede perceptions of breach
(e.g., [8], [9]). Social exchange theory, which
underpin the psychological contract, have been
proposed in the context of gradual changes,
resulting in “zones of acceptance” [2, p. 148]. This
notion has been extended into a distinction between
a band of acceptance and a band of tolerance [10].
National culture has been explained to influence
tolerance; a high tolerance level of uncertainty is
regarded as “something that an individual will try to
keep” [11, p. 158], [12]. Collectivistic societies
have a higher tolerance when contract violation is
perceived, and will respond more intensely beyond
the threshold [13], [14].
This study examined the threshold effects of breach
on work behavior (team altruism), work attitude
(turnover intention) and affective reaction
(violation) variables. Team altruism refers to “team
members’ interdependent, voluntary actions
benefiting others (e.g., fellow team members, their
own team as a whole, those outside the team) that
involve self-sacrifice and are not mandated by
central authorities (e.g., team leaders, managers) or
formal sanctions” [15, p. 541]. Team altruism can
be understood in the context of Organizational
Citizenship Behaviour (OCB). A lack of
discretionary actions benefiting others (as in teams)
may negatively affect, “a tangible impact” [4, p.
652], the social relationships between colleagues.
This may create a negative spiral: employees
expects positive relationships between colleagues
from the employer [16], [17]. However, a
deteriorating relationship due to a lack of social
engagement may result in a perception of breach,
where the employee will be “less likely to engage in
OCB [altruistic behaviors] [4, p. 652]”.
breach and job-related attitudes. European Journal
of Work and Organizational Psychology, 2009,
18(4), 442–463.