The relative impact of attribute, severity, and timing of psychological contract breach on behavioral and attitudinal outcomes

A psychological contract defines the perceived reciprocal obligations that characterize a relationship between an individual and organizational entity. Breach of a psychological contract can negatively affect work behaviors and attitudinal perceptions, and may also elicit an emotional response (violation) which can help to explain these negative consequences. This research focuses on the role of psychological contracts in a supply chain setting. We explore when and how three conditions of psychological contract breach – attribute, severity, and timing – negatively impact outcomes, and assess the mediating role of psychological contract violation in this relationship. To evaluate our hypotheses, we employ a laboratory experiment in which participants assume the role of a purchasing manager. We impose various breach factors and observe their relative impact on the decision-making behavior and fairness perceptions of the participant. We show that while the breach factors significantly impact task behavior, these relationships are not explained by psychological contract violation. However, violation is useful in explaining, in part, the results pertaining to fairness perceptions.