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The relationship between psychological contract breach and organizational commitment: Exchange imbalance as a moderator of the mediating role of violation
Journal of Vocational Behavior 78 (2011) 283–289
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Journal of Vocational Behavior j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / j v b
The relationship between psychological contract breach and organizational commitment: Exchange imbalance as a moderator of the mediating role of violation Vincent Cassar ⁎, Rob B. Briner Department of Organizational Psychology, Birkbeck College, University of London, Malet Street, Bloomsbury, London WC1E 7HX, UK
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Article history: Received 10 March 2010 Available online 16 September 2010 Keywords: Psychological contract Violation Breach Organizational commitment Social exchange Exchange imbalance Moderated mediation
a b s t r a c t This study tested the mediating role of violation in the relationship between breach and both affective and continuance commitment and the extent to which this mediating role is moderated by exchange imbalance amongst a sample of 103 sales personnel. Results suggest that violation mediated the relationship between breach and commitment. Also, results suggest that perceived exchange imbalance moderates this mediating pathway: Low exchange imbalance increases the mediating role of violation in the case of affective commitment. On the other hand, exchange imbalance failed to moderate the mediating influence of violation in the case of continuance commitment. Results are discussed in view of the importance of a) including both measures of violation and breach in future studies and b) the role of social exchange in explaining psychological contract violation. © 2010 Elsevier Inc. All rights reserved.
Introduction Three main features of psychological contract theory continue to capture the interest of researchers (Conway & Briner, 2009). First, is its role as a general framework for understanding the employment relationship and its evolution over time. Second, is the insight it provides into individual reactions to organizational change. And, third, is its role in helping to understand how employees react when promises are breached. The present study contributes to the body of research on the last of these features elaborating our understanding of some of the mechanisms through which breach affects employee affective and continuance commitment. Moreover, its implications suggest the need to take account of distinctions between breach and violation and the role of measurement in understanding breach–violation mechanisms.
Psychological contract breach and violation For Rousseau (1989) “the workings of the psychological contract are perhaps best understood by examining what happens when a psychological contract is unfulfilled” (p. 128). Psychological contract breach, that is the cognitive state that a discrepancy exists (Morrison & Robinson, 1997), is thought to lead to intense emotional reactions (i.e. violation) and affect one's belief in the reciprocal employment relationship (Robinson, Kraatz, & Rousseau, 1994; Robinson & Rousseau, 1994; Rousseau, 1995). It is argued here that while a discrepancy (breach) may link to outcomes, it is fundamentally the strong negative emotions (violation)
⁎ Corresponding author. Fax: +44 356 2189 6930. E-mail addresses: [email protected] (V. Cassar), [email protected] (R.B. Briner). 0001-8791/$ – see front matter © 2010 Elsevier Inc. All rights reserved. doi:10.1016/j.jvb.2010.09.007
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arising as a consequence of the discrepancy that elicit direct changes in outcomes. For example, a meta analysis by Zhao, Wayne, Glibkowski, and Bravo (2007) revealed that on average breach explained approximately 12% of the variance in several attitudinal and behavioral outcomes while violation explained over 22%. Therefore both theory and previous empirical findings suggest that violation mediates the relationship between breach and outcomes.
Violation as a mediator of the relationship between breach and organizational commitment Meyer and Allen (1997) argue that organizational commitment is an important aspect of organizational life and has implications for the life cycle of an organization. Meyer and Allen's (1991) three component model of organizational commitment is one of the most cited models of commitment (Meyer, 1997). This current study examines two of the three components of commitment: affective commitment (linked to a person's emotional attachment to an organization) and continuance commitment (linked to a person's perception of the investment costs and risks associated with leaving an organization). Studies suggest that these dimensions are relatively independent of each other but can also co-exist (Meyer, Allen, & Smith, 1993). Psychological contracts help facilitate the exchange process as they generate individual anticipations of one's inducements and obligations (Rousseau, 1995). This continuous reciprocal cycle enhances a person's relationship with the organization (Meyer, 1997), and reinforces one's organizational and personal goals (Shore & Tetrick, 1994). Hence, contract breach is likely to reduce levels of trust in the employment relationship and identification with the organization leading individuals to put their interests before those of the organization (Robinson, 1996). Thus, continuance commitment is likely to increase or remain unchanged while affective commitment is likely to decrease, following breach. Continuance commitment generally reflects two features of an individual's circumstances: the personal sacrifice that leaving would involve and a lack of available alternatives. Meta analyses indicate that continuance commitment either correlates negatively or not at all with variables such as job performance (Meyer, Stanley, Herscovitch, & Topolnytsky, 2002). It is likely that breach constitutes a rupture in the trust relationship and reasons for staying with the organization are related to lack of alternatives. Previous studies reveal a relationship between assessments of commitment and assessments of psychological contract breach. For example, Coyle-Shapiro and Kessler (2000) showed that employees who reported breach of employer obligations were also likely to report lower scores on affective commitment. Similar results have been found in other studies (e.g. Cassar, 2001; Guzzo, Noonan, & Elron, 1994). In a longitudinal study, Bunderson (2001) found a negative relationship between professional breach and affective commitment. Likewise, Conway (1999, unpublished PhD dissertation), using cross-sectional data, found a positive correlation between affective commitment and contract fulfillment (i.e. the absence of reported breach). On the other hand there is hardly any research relating breach and continuance commitment though Conway (1999, unpublished PhD dissertation) found a negative correlation between continuance commitment and fulfillment. We suggest that while breach and commitment are related, this relationship is strengthened as a function of the mediating function of violation because the negative emotions that follow breach impact commitment far more than breach alone. Hence, it is hypothesized that psychological contract violation will fully mediate the negative relationship between breach and affective commitment (hypothesis 1a) and psychological contract violation will fully mediate the positive relationship between breach and continuance commitment (hypothesis 1b).
Exchange imbalance as a moderator of the relationship between violation and commitment At the core of the psychological contract is the idea of a reciprocal process of ‘give and take’ (Millward & Brewerton, 2000; Parks & Kidder, 1994; Rousseau, 1989, 1998, 2001) based on the notion of social exchange theory (Blau, 1964). Put simply, the employer and the employee exchange contributions and inducements over the life span of their employment relationship (see e.g. Coyle-Shapiro, 2002; Coyle-Shapiro & Kessler, 2002). This creates automatic processes such that once an agreement is established it creates enduring patterns of trust (Orbell, van de Kragt, & Dawes, 1988; Rousseau, 1995, 2001) which improves predictability and control over the work environment. Rousseau (1989) emphasizes perceived reciprocity and the current emphasis is clearly more on the perceived exchange that exists between the individual and the organization and thus is psychological in this sense. Consistent with this position, we argue that the degree of perceived exchange imbalance (ExI) will moderate the relationship between violation and commitment in the following manner: ExI will exacerbate the mediating role of violation between breach and affective commitment such that lower levels of ExI will increase the mediating effect compared to higher levels. The tendency to think the company is unfair in its dealings (i.e. high ExI) is less likely to generate changes in one's affective bond with the organization following feelings of discrepancy compared to a higher tendency to think about the company as fair (i.e. low ExI) which generates surprise and disappointment upon breach (hypothesis 2a). In the case of continuance commitment, a moderated relationship is expected but in the opposite direction. High ExI is more likely to increase continuance commitment following negative reactions from breach compared to low ExI (hypothesis 2b). The tendency to consider the company as generally unfair (High ExI) is more likely to accentuate one's belief to look after his/her personal interest (rather than those of the organization) following breach and considering staying with the organization as far as no better alternatives exist (i.e. higher continuance commitment). Fig. 1 presents the interrelationships between the variables in this study.
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Psychological contract Violation
285
ExI
(Hypothesis 2)
(Hypothesis 1)
Psychological contract Breach
Affective / Continuance commitment
Fig. 1. ExI as a moderator in the mediating pathway of violation between breach and commitment.
Method Participants and measures 103 sales personnel of a major commercial retail outlet took part in the study. 85 (82.5%) were female and the average age was 30 years (SD = 3.4 years). The average tenure was 6 years (SD = 2.3 years).
Measures Psychological contract breach and violation were measured using the 5-item and 4-item scales, respectively, of Robinson and Morrison (2000). The breach measure assesses a continuum from fulfillment to no fulfillment and some items were reverse scored to reflect breach. On the other hand, the violation measure assesses the extent people feel angry, frustrated and betrayed by their company in the course of their deal with the organization. These two measures reflect the conceptual distinction between breach (cognition) and violation (affect). Affective and continuance commitment were measured using Meyer et al.'s (1993) 6-item measures. And finally, perception of exchange imbalance (reciprocity) was measured by asking participants “Given what you give in general to the organization, to what extent are you giving far more than what you are getting back in return?” followed by a series of six work obligations (resource support, job security, job quality, benefits, pay, and opportunities for advancement). All six were obtained by interviewing a small group of the sample prior to designing the measure. All scales were scored on a five point scale (1 = strongly disagree to 5 = strongly agree). Global scores were obtained by summing all item scores and then averaging, with higher scores representing more of a particular variable. Descriptive statistics, internal reliabilities and correlations are in Table 1.
Data analyses Data were analyzed using the strategy suggested by Preacher and Hayes (2004) in the case of mediator analyses and Preacher, Rucker, and Hayes (2007) in the case of moderated mediation. Since regression analyses often require relatively substantial samples (Tabachnick & Fidell, 2001), this study, like others (e.g. Cole, Walter, & Bruch, 2008), adopted bootstrapping to derive better estimates (Efron & Tibshirani, 1993). The application of bootstrapped confidence intervals avoids power problems of asymmetry and non-normal sampling distributions of an indirect effect (c.f. MacKinnon, Lockwood, & Williams, 2004). In addition, Preacher and Hayes (2004) advocate the Sobel Z test for assessing indirect (mediating) effects. This is a more powerful test than the Baron and Kenny (1986) approach. However, the Sobel test assumes normality of the product terms ab (X➔Me and Me➔Y) and this is a tenuous assumption, especially in a small sample. Hence bootstrapping techniques also counteracted this possibility. In addition, moderated mediation (Fig. 1) was tested through the conditional indirect effects using the SPSS macro created by Preacher et al. (2007).
Table 1 Descriptive statistics and correlations for study variables. Variable
Mean
SD
α
1
1. 2. 3. 4. 5.
13.4 10.1 18.8 18.5 19.0
4.5 4.9 6.8 4.9 3.1
.86 .96 .91 .80 .74
−
Breach Violation ExI Affective comm. Continuance comm.
N = 103. ⁎⁎ p b .01. ⁎ p b .05.
.62 ⁎⁎ .57 ⁎⁎ − .47 ⁎⁎ .25 ⁎⁎
2
3
4
5
− − .37 ⁎⁎ .20 ⁎
− − .42 ⁎⁎
–
−
.62 ⁎⁎ − .54 ⁎⁎ .41 ⁎⁎
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Table 2 Mediator analyses for affective and continuance commitment with bootstrap re-sampling. a Aff. comm.
B coeff 1 B coeff 2 B coeff 3 B coeff 4 Sobel's Z (indirect effect) LL 95% CI UL 95% CI B B B B
Cont. comm.
Beta
t-test
Beta
t-test
− .43 ⁎⁎⁎ .57 ⁎⁎⁎ − .41 ⁎⁎⁎ − .20 ⁎⁎⁎
− 5.3 7.9 − 3.89 − 2.05
.21 ⁎ .57 ⁎⁎⁎ .39 ⁎⁎⁎ − .02 (n.s.) .22 (Z = 3.25 ⁎⁎) .10 .36
2.5 7.9 3.6 − 0.1
− .23 (Z = − 3.47 ⁎⁎⁎) − .36 − .10
coeff 1 = breach on outcome. coeff 2 = breach on violation. coeff 3 = violation on outcome controlling for breach. coeff 4 = breach on outcome controlling for violation. a Bootstrap re-sampling = 5000; N = 103. ⁎⁎⁎ p b .001. ⁎ p b .05. ⁎⁎ p b .01.
Results Mediator analyses Results for hypotheses 1a and 1b are in Table 2. Breach correlated significantly with affective commitment (B = −.43, p b .001). However, after controlling for the mediator (violation), the coefficient fell to −.20 (p b .001). This is a case of partial mediation such that breach exerts its influence both through violation (B = −.23, Sobel Z test = − 3.47, p b .001) and directly. In the case of continuance commitment, breach also explained significantly this outcome (B = .23, p b .05) but violation explained it better (Beta = .39, p b .001). In fact, after controlling for the mediator (violation) breach failed to predict continuance commitment (B = −.02, p = n.s.) (i.e. full mediation) and the indirect effect was significant (B = .22, Sobel Z = 3.25, p b .01). Hence hypothesis 1a was partially upheld while hypothesis 1b was supported by these results. Moderated mediation The results for hypotheses 2a and 2b are presented in Table 3. In the case of affective commitment, perceived ExI moderated the relationship between the mediator (violation) and the
Table 3 Moderated-mediation analyses of exchange imbalance on the violation mediating pathway between breach and commitment. Predictor
B
SE
t
B
Contract violation Constant Breach
− .01 .57
17.7 − .25 − .48 .08 .04
t
.38 .07
− .02 (n.s) 7.97 ⁎⁎⁎
.38 .07
− 0.02 (n.s) 7.97 ⁎⁎⁎
− .01 .57
.47 .10 .11 .08 .01
37.4 ⁎⁎⁎ − 2.54 ⁎ − 4.28 ⁎⁎⁎
19.57 .04 .47 − .10 − .03
.50 .11 .12 .08 .01
− 1.20 (n.s.) − 1.85 (n.s.)
Aff. commitment Constant Breach Violation (V) ExI (E) V xE
SE
Contract violation
Cont. commitment
1.03 (n.s.) 2.96 ⁎⁎
38.82 ⁎⁎⁎ 0.41 (n.s.) 3.89 ⁎⁎⁎
Conditional indirect bootstrap estimates for exchange imbalance Boot ind. effect − 1 SD (− 6.77) M (0.003) + 1 SD (6.78)
− .43 − .28 − .13
Boot SE
Boot z
Boot ind. effect
Boot SE
Boot z
.12 .08 .08
− 3.42 ⁎⁎⁎ − 3.32 ⁎⁎⁎
.37 .27 .17
.10 .07 .08
3.62 ⁎⁎⁎ 3.99 ⁎⁎⁎ 2.11 ⁎
− 1.58 (n.s.)
Bootstrap sample size = 5000 (N = 103); Unstandardised regression coefficients are reported and bootstrap p-values assume normal bootstrap distribution. ⁎⁎⁎ p b .001. ⁎ p b .05. ⁎⁎ p b .01.
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287
5
affective commitment
4.5 4 3.5 3 2.5 2 1.5 1 Low Contract Violation Low ExI
High Contract Violation High ExI
Fig. 2. Affective commitment predicted by violation moderated by low (− 1 SD) and high (+ 1 SD) exchange imbalance.
outcome. In other words, while breach leads to violation which in turn leads to decreased affective commitment, the degree of ExI accentuates this latter relationship. Fig. 2 indicates that low ExI is more likely to moderate the relationship between violation and affective commitment. Hence hypothesis 2a was supported by these data. In the case of continuance commitment, the interaction effect was insignificant (Beta = −.03, t = −1.18, p = n.s.). Hence hypothesis 2b was not supported in this case. Discussion This study found that breach and violation both predicted commitment although violation mediated the relationship between breach and commitment, at least partially. Affective commitment is more likely to decrease, and continuance commitment is more likely to increase following feelings of violations resulting from breach (Rousseau, 1995). The data seems to indicate that the presence of breach and violation may account for more variance in the outcome than breach alone and that the relationship between breach and outcome is mediated by the emotional reactions that follow breach. On the basis of these results one wonders whether researchers should employ measures of both breach and violation in order to explain variance in outcomes following breach. These results suggest two further considerations. Firstly is the importance of separating both conceptually and empirically breach from violation by acknowledging their distinct characteristics. In fact, Zhao et al. (2007) found that breach and violation correlated modestly at .52 indicating their relationship but not their singularity or redundancy. Unfortunately this has not always been the case. For example, some previous studies (e.g. Turnley & Feldman, 2000) have used a measure of fulfillment as an index of violation and validated it by correlating it with a single item from Robinson and Rousseau's (1994) measure of contract fulfillment. Such practice inevitably confounds the distinctiveness and the importance of each construct and seriously limits our understanding about how each construct contributes specifically to outcomes. This rationale also underlines the premise that breach may not necessarily become a violation but depends on whether discrepancies are viewed as trivial or as a serious act of betrayal (Rousseau, 1995). Psychological contract terms that are idiosyncratically salient to individuals are more likely to produce intense emotional reactions when they are unfulfilled (Morrison & Robinson, 1997). Greater perceived discrepancies in breach are a consequence of the term's saliency (Rousseau, 1995; Turnley & Feldman, 1999a). After all, “the vividness of the violations reported suggests their salience to employees” (Robinson & Rousseau, 1994, p. 258). Indeed, some studies (e.g. Coyle-Shapiro, 2002; Turnley & Feldman, 1999b) have incorporated a weighting of saliency into their measure and then multiplied this to each term's degree of fulfillment. Secondly, observed relationships between breach–violation–outcomes depend to a large degree on the way violation and breach have generally been measured. Most measures assess breach on a continuum from breach to fulfillment (e.g. Chen, Tsui, & Zhong, 2008; Lester, Kickul, & Bergmann, 2007; Robinson & Morrison, 1995). The present study employed a similar measure though it should be noted that using a reversed measure of fulfillment as an index of breach is problematic in two ways. First, such a measure is not only a measure of breach but is also tapping fulfillment and the results of studies that measure breach in this way, including the current study, need to be interpreted in this light. Therefore just as scores on the unfulfillment side of the scale of a fulfillment-breach measure may relate to increased reporting of violation, likewise, decreased reporting of violation may effectively be due to higher scores on the fulfillment side of the scale (that is more fulfillment), rather than merely “low” breach. Hence, it would be more appropriate to acknowledge the influence of a fulfilled contract rather than the impact of just a nonbreached one. Unfortunately, previous research has ignored this fact leading to some confusion about whether results of breach results, assessed on a continuum of fulfillment, simply indicate the relationship or influence of “breach” on outcomes or whether it
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is fulfillment that impacts increased desirable outcomes, such that part of the measure that assesses fulfillment would certainly correspond to particular desirable aspects of employment like affective commitment; A second concern with using fulfillment measures to indicate breach is as follows: If a simple dichotomous breach/no breach measure was used to assess breach (rather than a measure of extent of fulfillment) it is likely that the strength of the relationship between breach and violation would be somewhat reduced. In other words the usual ways in which breach is measured may over-estimate the strength of the relationship between breach and violation as these measures also capture degree of fulfillment. Clearly the magnitude of the relationship between breach and violation will depend on the measure of breach used. Perhaps ideally fulfillment measures of breach should be interpreted as measures of fulfillment and breach measured using measures of breach. The second part of the study showed that perception of ExI tends to moderate the mediating influence of violation between breach and affective commitment (see also Tekleab, Takeuchi, & Taylor, 2005) but not continuance commitment. In the case of affective commitment, people who feel the organization to be generally fair in the exchange relationship will report a greater dip in affective commitment as a result of the negative emotions following breach than those who more generally feel the company to be less fair. The sense of surprise and feeling that a sense of fairness prevailed in the past may leave a bigger impact on affective commitment than those who somehow consider breach to be the norm. Indeed, such individuals may be more initially trustworthy of their organization (c.f. Robinson, 1996), having most probably joined the organization out of their own free will and developed a bond through repeated cycles of personal fulfillment (c.f. Meyer & Allen, 1997). On the other hand, in the case of continuance commitment, no significant relationship was found. Hence whether people perceive the organization is treating them fairly or not has no or little impact on whether people's perceptions of breach lead to negative reactions and hence a change in continuance commitment. One plausible explanation is that continuance commitment develops outside of a typical exchange relationship, unlike affective commitment. Continuance commitment evolves as a function of two, though not necessarily mutually exclusive, forces: investments and alternatives (Meyer & Allen, 1997). The longer one works in an organization, the more the person indulges in course of actions that bring him/her rewards and benefits. Investments could also be in the form of personal sacrifices made in order to work with a particular organization. Such investments will have to be forfeited should the person leave. On the other hand, low employment alternatives either intrinsically (e.g. having low skills) or extrinsically (e.g. low employment rates) could impede people from moving away from their current organization. In both instances (i.e. high investments and low alternatives), continuance commitment is high and breach may trigger mechanisms that mean people either become more egoistic and think primarily about themselves and the costs of their loss and/or hold on more tightly to what they have. In both cases, however, the role of reciprocal relationship does not play a part and hence ExI fails to make an impact. As Meyer and Allen (1997) state: “Conceptually, the development of continuance commitment is fairly straightforward. Continuance commitment can develop as a result of any action or event that increases the costs of leaving the organization” (p. 56). Indeed, the correlation between ExI and continuance commitment was very small in this study. In general, the second set of results hints towards the importance of exploring the role of important moderators in the breach– violation–outcome pathways. Both Robinson and Morrison (1995) and Rousseau (1995) indicate a series of moderators that affect whether breach becomes a violation and the nature of links with outcomes. Including such moderators can enhance our understanding of breach–violation–outcome relations. More specifically, these results suggest the need to explore the role of social exchange and the importance of fairness. As hinted by Coyle-Shapiro and Conway (2004): “empirical work assumes but never explicitly measures exchange” (p. 19). Limitations and future research Although the proposed model is implicitly one of cause and effect the cross-sectional design of the study does not permit causal inferences to be made. In addition, self-reported measures are prone to common method variance. Ideally such model should be tested in a longitudinal design. In addition, the measure of ExI simply asked participants to consider in general whether they were giving more than receiving but we do not know what participants had in mind as contributions. Perhaps building on the work of Coyle-Shapiro and Kessler (2002) and knowing better what is exchanged for what and using the ‘fit’ approach to derive a measure of ExI, as suggested by Edwards, Cable, Williamson, Lambert, and Shipp (2006), may lead to clearer conclusions (c.f. Coyle-Shapiro & Conway, 2004 for a review). Conclusion These results indicate that violation has a role in the breach process as it mediated the link between breach and commitment. Hence both terms together explain more variance. Also, ExI moderated this mediation through violation. More effort should be made in future research to view violation as an integral part of breach measures (e.g. through saliency weights) rather than keeping them separate. 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Journal of Vocational Behavior j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / j v b
The relationship between psychological contract breach and organizational commitment: Exchange imbalance as a moderator of the mediating role of violation Vincent Cassar ⁎, Rob B. Briner Department of Organizational Psychology, Birkbeck College, University of London, Malet Street, Bloomsbury, London WC1E 7HX, UK
a r t i c l e
i n f o
Article history: Received 10 March 2010 Available online 16 September 2010 Keywords: Psychological contract Violation Breach Organizational commitment Social exchange Exchange imbalance Moderated mediation
a b s t r a c t This study tested the mediating role of violation in the relationship between breach and both affective and continuance commitment and the extent to which this mediating role is moderated by exchange imbalance amongst a sample of 103 sales personnel. Results suggest that violation mediated the relationship between breach and commitment. Also, results suggest that perceived exchange imbalance moderates this mediating pathway: Low exchange imbalance increases the mediating role of violation in the case of affective commitment. On the other hand, exchange imbalance failed to moderate the mediating influence of violation in the case of continuance commitment. Results are discussed in view of the importance of a) including both measures of violation and breach in future studies and b) the role of social exchange in explaining psychological contract violation. © 2010 Elsevier Inc. All rights reserved.
Introduction Three main features of psychological contract theory continue to capture the interest of researchers (Conway & Briner, 2009). First, is its role as a general framework for understanding the employment relationship and its evolution over time. Second, is the insight it provides into individual reactions to organizational change. And, third, is its role in helping to understand how employees react when promises are breached. The present study contributes to the body of research on the last of these features elaborating our understanding of some of the mechanisms through which breach affects employee affective and continuance commitment. Moreover, its implications suggest the need to take account of distinctions between breach and violation and the role of measurement in understanding breach–violation mechanisms.
Psychological contract breach and violation For Rousseau (1989) “the workings of the psychological contract are perhaps best understood by examining what happens when a psychological contract is unfulfilled” (p. 128). Psychological contract breach, that is the cognitive state that a discrepancy exists (Morrison & Robinson, 1997), is thought to lead to intense emotional reactions (i.e. violation) and affect one's belief in the reciprocal employment relationship (Robinson, Kraatz, & Rousseau, 1994; Robinson & Rousseau, 1994; Rousseau, 1995). It is argued here that while a discrepancy (breach) may link to outcomes, it is fundamentally the strong negative emotions (violation)
⁎ Corresponding author. Fax: +44 356 2189 6930. E-mail addresses: [email protected] (V. Cassar), [email protected] (R.B. Briner). 0001-8791/$ – see front matter © 2010 Elsevier Inc. All rights reserved. doi:10.1016/j.jvb.2010.09.007
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arising as a consequence of the discrepancy that elicit direct changes in outcomes. For example, a meta analysis by Zhao, Wayne, Glibkowski, and Bravo (2007) revealed that on average breach explained approximately 12% of the variance in several attitudinal and behavioral outcomes while violation explained over 22%. Therefore both theory and previous empirical findings suggest that violation mediates the relationship between breach and outcomes.
Violation as a mediator of the relationship between breach and organizational commitment Meyer and Allen (1997) argue that organizational commitment is an important aspect of organizational life and has implications for the life cycle of an organization. Meyer and Allen's (1991) three component model of organizational commitment is one of the most cited models of commitment (Meyer, 1997). This current study examines two of the three components of commitment: affective commitment (linked to a person's emotional attachment to an organization) and continuance commitment (linked to a person's perception of the investment costs and risks associated with leaving an organization). Studies suggest that these dimensions are relatively independent of each other but can also co-exist (Meyer, Allen, & Smith, 1993). Psychological contracts help facilitate the exchange process as they generate individual anticipations of one's inducements and obligations (Rousseau, 1995). This continuous reciprocal cycle enhances a person's relationship with the organization (Meyer, 1997), and reinforces one's organizational and personal goals (Shore & Tetrick, 1994). Hence, contract breach is likely to reduce levels of trust in the employment relationship and identification with the organization leading individuals to put their interests before those of the organization (Robinson, 1996). Thus, continuance commitment is likely to increase or remain unchanged while affective commitment is likely to decrease, following breach. Continuance commitment generally reflects two features of an individual's circumstances: the personal sacrifice that leaving would involve and a lack of available alternatives. Meta analyses indicate that continuance commitment either correlates negatively or not at all with variables such as job performance (Meyer, Stanley, Herscovitch, & Topolnytsky, 2002). It is likely that breach constitutes a rupture in the trust relationship and reasons for staying with the organization are related to lack of alternatives. Previous studies reveal a relationship between assessments of commitment and assessments of psychological contract breach. For example, Coyle-Shapiro and Kessler (2000) showed that employees who reported breach of employer obligations were also likely to report lower scores on affective commitment. Similar results have been found in other studies (e.g. Cassar, 2001; Guzzo, Noonan, & Elron, 1994). In a longitudinal study, Bunderson (2001) found a negative relationship between professional breach and affective commitment. Likewise, Conway (1999, unpublished PhD dissertation), using cross-sectional data, found a positive correlation between affective commitment and contract fulfillment (i.e. the absence of reported breach). On the other hand there is hardly any research relating breach and continuance commitment though Conway (1999, unpublished PhD dissertation) found a negative correlation between continuance commitment and fulfillment. We suggest that while breach and commitment are related, this relationship is strengthened as a function of the mediating function of violation because the negative emotions that follow breach impact commitment far more than breach alone. Hence, it is hypothesized that psychological contract violation will fully mediate the negative relationship between breach and affective commitment (hypothesis 1a) and psychological contract violation will fully mediate the positive relationship between breach and continuance commitment (hypothesis 1b).
Exchange imbalance as a moderator of the relationship between violation and commitment At the core of the psychological contract is the idea of a reciprocal process of ‘give and take’ (Millward & Brewerton, 2000; Parks & Kidder, 1994; Rousseau, 1989, 1998, 2001) based on the notion of social exchange theory (Blau, 1964). Put simply, the employer and the employee exchange contributions and inducements over the life span of their employment relationship (see e.g. Coyle-Shapiro, 2002; Coyle-Shapiro & Kessler, 2002). This creates automatic processes such that once an agreement is established it creates enduring patterns of trust (Orbell, van de Kragt, & Dawes, 1988; Rousseau, 1995, 2001) which improves predictability and control over the work environment. Rousseau (1989) emphasizes perceived reciprocity and the current emphasis is clearly more on the perceived exchange that exists between the individual and the organization and thus is psychological in this sense. Consistent with this position, we argue that the degree of perceived exchange imbalance (ExI) will moderate the relationship between violation and commitment in the following manner: ExI will exacerbate the mediating role of violation between breach and affective commitment such that lower levels of ExI will increase the mediating effect compared to higher levels. The tendency to think the company is unfair in its dealings (i.e. high ExI) is less likely to generate changes in one's affective bond with the organization following feelings of discrepancy compared to a higher tendency to think about the company as fair (i.e. low ExI) which generates surprise and disappointment upon breach (hypothesis 2a). In the case of continuance commitment, a moderated relationship is expected but in the opposite direction. High ExI is more likely to increase continuance commitment following negative reactions from breach compared to low ExI (hypothesis 2b). The tendency to consider the company as generally unfair (High ExI) is more likely to accentuate one's belief to look after his/her personal interest (rather than those of the organization) following breach and considering staying with the organization as far as no better alternatives exist (i.e. higher continuance commitment). Fig. 1 presents the interrelationships between the variables in this study.
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Psychological contract Violation
285
ExI
(Hypothesis 2)
(Hypothesis 1)
Psychological contract Breach
Affective / Continuance commitment
Fig. 1. ExI as a moderator in the mediating pathway of violation between breach and commitment.
Method Participants and measures 103 sales personnel of a major commercial retail outlet took part in the study. 85 (82.5%) were female and the average age was 30 years (SD = 3.4 years). The average tenure was 6 years (SD = 2.3 years).
Measures Psychological contract breach and violation were measured using the 5-item and 4-item scales, respectively, of Robinson and Morrison (2000). The breach measure assesses a continuum from fulfillment to no fulfillment and some items were reverse scored to reflect breach. On the other hand, the violation measure assesses the extent people feel angry, frustrated and betrayed by their company in the course of their deal with the organization. These two measures reflect the conceptual distinction between breach (cognition) and violation (affect). Affective and continuance commitment were measured using Meyer et al.'s (1993) 6-item measures. And finally, perception of exchange imbalance (reciprocity) was measured by asking participants “Given what you give in general to the organization, to what extent are you giving far more than what you are getting back in return?” followed by a series of six work obligations (resource support, job security, job quality, benefits, pay, and opportunities for advancement). All six were obtained by interviewing a small group of the sample prior to designing the measure. All scales were scored on a five point scale (1 = strongly disagree to 5 = strongly agree). Global scores were obtained by summing all item scores and then averaging, with higher scores representing more of a particular variable. Descriptive statistics, internal reliabilities and correlations are in Table 1.
Data analyses Data were analyzed using the strategy suggested by Preacher and Hayes (2004) in the case of mediator analyses and Preacher, Rucker, and Hayes (2007) in the case of moderated mediation. Since regression analyses often require relatively substantial samples (Tabachnick & Fidell, 2001), this study, like others (e.g. Cole, Walter, & Bruch, 2008), adopted bootstrapping to derive better estimates (Efron & Tibshirani, 1993). The application of bootstrapped confidence intervals avoids power problems of asymmetry and non-normal sampling distributions of an indirect effect (c.f. MacKinnon, Lockwood, & Williams, 2004). In addition, Preacher and Hayes (2004) advocate the Sobel Z test for assessing indirect (mediating) effects. This is a more powerful test than the Baron and Kenny (1986) approach. However, the Sobel test assumes normality of the product terms ab (X➔Me and Me➔Y) and this is a tenuous assumption, especially in a small sample. Hence bootstrapping techniques also counteracted this possibility. In addition, moderated mediation (Fig. 1) was tested through the conditional indirect effects using the SPSS macro created by Preacher et al. (2007).
Table 1 Descriptive statistics and correlations for study variables. Variable
Mean
SD
α
1
1. 2. 3. 4. 5.
13.4 10.1 18.8 18.5 19.0
4.5 4.9 6.8 4.9 3.1
.86 .96 .91 .80 .74
−
Breach Violation ExI Affective comm. Continuance comm.
N = 103. ⁎⁎ p b .01. ⁎ p b .05.
.62 ⁎⁎ .57 ⁎⁎ − .47 ⁎⁎ .25 ⁎⁎
2
3
4
5
− − .37 ⁎⁎ .20 ⁎
− − .42 ⁎⁎
–
−
.62 ⁎⁎ − .54 ⁎⁎ .41 ⁎⁎
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Table 2 Mediator analyses for affective and continuance commitment with bootstrap re-sampling. a Aff. comm.
B coeff 1 B coeff 2 B coeff 3 B coeff 4 Sobel's Z (indirect effect) LL 95% CI UL 95% CI B B B B
Cont. comm.
Beta
t-test
Beta
t-test
− .43 ⁎⁎⁎ .57 ⁎⁎⁎ − .41 ⁎⁎⁎ − .20 ⁎⁎⁎
− 5.3 7.9 − 3.89 − 2.05
.21 ⁎ .57 ⁎⁎⁎ .39 ⁎⁎⁎ − .02 (n.s.) .22 (Z = 3.25 ⁎⁎) .10 .36
2.5 7.9 3.6 − 0.1
− .23 (Z = − 3.47 ⁎⁎⁎) − .36 − .10
coeff 1 = breach on outcome. coeff 2 = breach on violation. coeff 3 = violation on outcome controlling for breach. coeff 4 = breach on outcome controlling for violation. a Bootstrap re-sampling = 5000; N = 103. ⁎⁎⁎ p b .001. ⁎ p b .05. ⁎⁎ p b .01.
Results Mediator analyses Results for hypotheses 1a and 1b are in Table 2. Breach correlated significantly with affective commitment (B = −.43, p b .001). However, after controlling for the mediator (violation), the coefficient fell to −.20 (p b .001). This is a case of partial mediation such that breach exerts its influence both through violation (B = −.23, Sobel Z test = − 3.47, p b .001) and directly. In the case of continuance commitment, breach also explained significantly this outcome (B = .23, p b .05) but violation explained it better (Beta = .39, p b .001). In fact, after controlling for the mediator (violation) breach failed to predict continuance commitment (B = −.02, p = n.s.) (i.e. full mediation) and the indirect effect was significant (B = .22, Sobel Z = 3.25, p b .01). Hence hypothesis 1a was partially upheld while hypothesis 1b was supported by these results. Moderated mediation The results for hypotheses 2a and 2b are presented in Table 3. In the case of affective commitment, perceived ExI moderated the relationship between the mediator (violation) and the
Table 3 Moderated-mediation analyses of exchange imbalance on the violation mediating pathway between breach and commitment. Predictor
B
SE
t
B
Contract violation Constant Breach
− .01 .57
17.7 − .25 − .48 .08 .04
t
.38 .07
− .02 (n.s) 7.97 ⁎⁎⁎
.38 .07
− 0.02 (n.s) 7.97 ⁎⁎⁎
− .01 .57
.47 .10 .11 .08 .01
37.4 ⁎⁎⁎ − 2.54 ⁎ − 4.28 ⁎⁎⁎
19.57 .04 .47 − .10 − .03
.50 .11 .12 .08 .01
− 1.20 (n.s.) − 1.85 (n.s.)
Aff. commitment Constant Breach Violation (V) ExI (E) V xE
SE
Contract violation
Cont. commitment
1.03 (n.s.) 2.96 ⁎⁎
38.82 ⁎⁎⁎ 0.41 (n.s.) 3.89 ⁎⁎⁎
Conditional indirect bootstrap estimates for exchange imbalance Boot ind. effect − 1 SD (− 6.77) M (0.003) + 1 SD (6.78)
− .43 − .28 − .13
Boot SE
Boot z
Boot ind. effect
Boot SE
Boot z
.12 .08 .08
− 3.42 ⁎⁎⁎ − 3.32 ⁎⁎⁎
.37 .27 .17
.10 .07 .08
3.62 ⁎⁎⁎ 3.99 ⁎⁎⁎ 2.11 ⁎
− 1.58 (n.s.)
Bootstrap sample size = 5000 (N = 103); Unstandardised regression coefficients are reported and bootstrap p-values assume normal bootstrap distribution. ⁎⁎⁎ p b .001. ⁎ p b .05. ⁎⁎ p b .01.
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287
5
affective commitment
4.5 4 3.5 3 2.5 2 1.5 1 Low Contract Violation Low ExI
High Contract Violation High ExI
Fig. 2. Affective commitment predicted by violation moderated by low (− 1 SD) and high (+ 1 SD) exchange imbalance.
outcome. In other words, while breach leads to violation which in turn leads to decreased affective commitment, the degree of ExI accentuates this latter relationship. Fig. 2 indicates that low ExI is more likely to moderate the relationship between violation and affective commitment. Hence hypothesis 2a was supported by these data. In the case of continuance commitment, the interaction effect was insignificant (Beta = −.03, t = −1.18, p = n.s.). Hence hypothesis 2b was not supported in this case. Discussion This study found that breach and violation both predicted commitment although violation mediated the relationship between breach and commitment, at least partially. Affective commitment is more likely to decrease, and continuance commitment is more likely to increase following feelings of violations resulting from breach (Rousseau, 1995). The data seems to indicate that the presence of breach and violation may account for more variance in the outcome than breach alone and that the relationship between breach and outcome is mediated by the emotional reactions that follow breach. On the basis of these results one wonders whether researchers should employ measures of both breach and violation in order to explain variance in outcomes following breach. These results suggest two further considerations. Firstly is the importance of separating both conceptually and empirically breach from violation by acknowledging their distinct characteristics. In fact, Zhao et al. (2007) found that breach and violation correlated modestly at .52 indicating their relationship but not their singularity or redundancy. Unfortunately this has not always been the case. For example, some previous studies (e.g. Turnley & Feldman, 2000) have used a measure of fulfillment as an index of violation and validated it by correlating it with a single item from Robinson and Rousseau's (1994) measure of contract fulfillment. Such practice inevitably confounds the distinctiveness and the importance of each construct and seriously limits our understanding about how each construct contributes specifically to outcomes. This rationale also underlines the premise that breach may not necessarily become a violation but depends on whether discrepancies are viewed as trivial or as a serious act of betrayal (Rousseau, 1995). Psychological contract terms that are idiosyncratically salient to individuals are more likely to produce intense emotional reactions when they are unfulfilled (Morrison & Robinson, 1997). Greater perceived discrepancies in breach are a consequence of the term's saliency (Rousseau, 1995; Turnley & Feldman, 1999a). After all, “the vividness of the violations reported suggests their salience to employees” (Robinson & Rousseau, 1994, p. 258). Indeed, some studies (e.g. Coyle-Shapiro, 2002; Turnley & Feldman, 1999b) have incorporated a weighting of saliency into their measure and then multiplied this to each term's degree of fulfillment. Secondly, observed relationships between breach–violation–outcomes depend to a large degree on the way violation and breach have generally been measured. Most measures assess breach on a continuum from breach to fulfillment (e.g. Chen, Tsui, & Zhong, 2008; Lester, Kickul, & Bergmann, 2007; Robinson & Morrison, 1995). The present study employed a similar measure though it should be noted that using a reversed measure of fulfillment as an index of breach is problematic in two ways. First, such a measure is not only a measure of breach but is also tapping fulfillment and the results of studies that measure breach in this way, including the current study, need to be interpreted in this light. Therefore just as scores on the unfulfillment side of the scale of a fulfillment-breach measure may relate to increased reporting of violation, likewise, decreased reporting of violation may effectively be due to higher scores on the fulfillment side of the scale (that is more fulfillment), rather than merely “low” breach. Hence, it would be more appropriate to acknowledge the influence of a fulfilled contract rather than the impact of just a nonbreached one. Unfortunately, previous research has ignored this fact leading to some confusion about whether results of breach results, assessed on a continuum of fulfillment, simply indicate the relationship or influence of “breach” on outcomes or whether it
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is fulfillment that impacts increased desirable outcomes, such that part of the measure that assesses fulfillment would certainly correspond to particular desirable aspects of employment like affective commitment; A second concern with using fulfillment measures to indicate breach is as follows: If a simple dichotomous breach/no breach measure was used to assess breach (rather than a measure of extent of fulfillment) it is likely that the strength of the relationship between breach and violation would be somewhat reduced. In other words the usual ways in which breach is measured may over-estimate the strength of the relationship between breach and violation as these measures also capture degree of fulfillment. Clearly the magnitude of the relationship between breach and violation will depend on the measure of breach used. Perhaps ideally fulfillment measures of breach should be interpreted as measures of fulfillment and breach measured using measures of breach. The second part of the study showed that perception of ExI tends to moderate the mediating influence of violation between breach and affective commitment (see also Tekleab, Takeuchi, & Taylor, 2005) but not continuance commitment. In the case of affective commitment, people who feel the organization to be generally fair in the exchange relationship will report a greater dip in affective commitment as a result of the negative emotions following breach than those who more generally feel the company to be less fair. The sense of surprise and feeling that a sense of fairness prevailed in the past may leave a bigger impact on affective commitment than those who somehow consider breach to be the norm. Indeed, such individuals may be more initially trustworthy of their organization (c.f. Robinson, 1996), having most probably joined the organization out of their own free will and developed a bond through repeated cycles of personal fulfillment (c.f. Meyer & Allen, 1997). On the other hand, in the case of continuance commitment, no significant relationship was found. Hence whether people perceive the organization is treating them fairly or not has no or little impact on whether people's perceptions of breach lead to negative reactions and hence a change in continuance commitment. One plausible explanation is that continuance commitment develops outside of a typical exchange relationship, unlike affective commitment. Continuance commitment evolves as a function of two, though not necessarily mutually exclusive, forces: investments and alternatives (Meyer & Allen, 1997). The longer one works in an organization, the more the person indulges in course of actions that bring him/her rewards and benefits. Investments could also be in the form of personal sacrifices made in order to work with a particular organization. Such investments will have to be forfeited should the person leave. On the other hand, low employment alternatives either intrinsically (e.g. having low skills) or extrinsically (e.g. low employment rates) could impede people from moving away from their current organization. In both instances (i.e. high investments and low alternatives), continuance commitment is high and breach may trigger mechanisms that mean people either become more egoistic and think primarily about themselves and the costs of their loss and/or hold on more tightly to what they have. In both cases, however, the role of reciprocal relationship does not play a part and hence ExI fails to make an impact. As Meyer and Allen (1997) state: “Conceptually, the development of continuance commitment is fairly straightforward. Continuance commitment can develop as a result of any action or event that increases the costs of leaving the organization” (p. 56). Indeed, the correlation between ExI and continuance commitment was very small in this study. In general, the second set of results hints towards the importance of exploring the role of important moderators in the breach– violation–outcome pathways. Both Robinson and Morrison (1995) and Rousseau (1995) indicate a series of moderators that affect whether breach becomes a violation and the nature of links with outcomes. Including such moderators can enhance our understanding of breach–violation–outcome relations. More specifically, these results suggest the need to explore the role of social exchange and the importance of fairness. As hinted by Coyle-Shapiro and Conway (2004): “empirical work assumes but never explicitly measures exchange” (p. 19). Limitations and future research Although the proposed model is implicitly one of cause and effect the cross-sectional design of the study does not permit causal inferences to be made. In addition, self-reported measures are prone to common method variance. Ideally such model should be tested in a longitudinal design. In addition, the measure of ExI simply asked participants to consider in general whether they were giving more than receiving but we do not know what participants had in mind as contributions. Perhaps building on the work of Coyle-Shapiro and Kessler (2002) and knowing better what is exchanged for what and using the ‘fit’ approach to derive a measure of ExI, as suggested by Edwards, Cable, Williamson, Lambert, and Shipp (2006), may lead to clearer conclusions (c.f. Coyle-Shapiro & Conway, 2004 for a review). Conclusion These results indicate that violation has a role in the breach process as it mediated the link between breach and commitment. Hence both terms together explain more variance. Also, ExI moderated this mediation through violation. More effort should be made in future research to view violation as an integral part of breach measures (e.g. through saliency weights) rather than keeping them separate. 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