Reducing the Negative Effects of Psychological Contract Breach during Management-Imposed Change: A Trickle-Down Model of Management Practices

Reducing the Negative Effects of Psychological Contract Breach during Management-Imposed Change: A Trickle-Down Model of Management Practices

Melanie De Ruiter (Nyenrode Business Universiteit, The Netherlands & Tilburg University, The Netherlands), Robert J. Blomme (Nyenrode Business Universiteit, The Netherlands) and René Schalk (Tilburg University, The Netherlands & North West University, South Africa)
Copyright: © 2016 |Pages: 21
DOI: 10.4018/978-1-4666-9533-7.ch007
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Employees' experiences of psychological contract breach (PCB) contribute substantially to the failure of change initiatives. Consequently, if organizational leaders want to successfully implement change efforts, it is imperative that they attend to these negative perceptions. Managers can provide different types of support to employees who have experienced PCB. However, during management-imposed change, direct managers at the mid-level of the organization face a number of challenges that may impede their ability or willingness to provide this support. Existing approaches to managing top-down change initiatives offer recommendations regarding leadership, communication and interpersonal and informational justice. Yet, by failing to consider the negative effect middle managers' competing roles have on their inclination or ability to address employee experiences of PCB, these suggestions are limited in scope. Drawing upon the literature on trickle-down effects, it is suggested that senior managers play an important, albeit indirect role in reducing the negative effects of PCB.
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The widespread failure of organizational change initiatives is frequently ascribed to employees’ negative attitudes and behaviors toward change (e.g., Georgalis, Samaratunge, Kimberley, & Lu, 2014; Hill, Seo, Kang, & Taylor, 2012; Shin, Taylor, & Seo, 2012). More specifically, employees who experience negative change-related attitudes and behaviors are likely to become antagonistic toward change and unwilling to employ behaviors in support of accomplishing the new strategic goals set out by top management (Shin et al., 2012). Moreover, employees’ negative responses to change initiatives are harmful for organizations as they are generally related to negative outcomes including diminished performance and withdrawal behaviors (Peus, Frey, Fischer, Gerkhardt, & Traut-Mattausch, 2009). Considering that unsuccessful change initiatives lead to substantial losses for organizations in terms of money and resources (Georgalis et al., 2014), it is essential to determine why employees experience negative attitudes and behaviors in the context of organizational change and, more importantly, how these unfavorable responses can be attenuated.

Several scholars have drawn upon the psychological contract framework to explain why employees experience negative attitudes and behaviors in response to organizational change. Empirical research (e.g., Freese, Schalk, & Croon, 2011; Pate, Martins, & Staines, 2000; Turnley & Feldman, 1998) shows that as a result of organizational change initiatives, employees often experience psychological contract breach (PCB) or the “perception that the organization has failed to fulfill promised obligations” (Bordia, Restubog, Bordia, & Tang, 2010, p. 1579). The negative effects of PCB on employee outcomes, including satisfaction, commitment and turnover intentions, are well documented (e.g., Zhao, Wayne, Glibkowski, & Bravo, 2007) and are likely to contribute considerably to the high failure rate of organizational change initiatives. Surprisingly, however, there is a lack of theory and research on how organizations undertaking change exercises should attend to employee experiences of PCB.

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