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Psychological contracts are dynamic, but few studies explore the processes driving change and how employees influence them. By adopting a process approach with a teleological change lens, and drawing upon the sensemaking and coping literatures, this study positions individuals as active and adaptive agents driving contract change. Employing a mixed methodology, with a four-wave longitudinal survey (n = 107 graduate newcomers) and qualitative interviews (n = 26 graduate newcomers), the study focuses on unfolding events and develops an “adaptive remediation” process model aimed at unraveling contract dynamics. The model demonstrates how breach or violation events trigger sensemaking, resulting in initially negative employee reactions and a “withdrawal” of perceived contributions, before individuals exercise their agency and enact coping strategies to make sense of, and adapt and respond to, these discrepancies. A process of contract “repair” could then occur if the coping actions (termed “remediation effects”) were effective, with individuals returning to positive exchange perceptions. These actions either directly addressed the breach and repaired both it and the psychological contract (termed “remedies”) or involved cognitive reappraisal of the broader work environment and repaired the contract but not the breach (termed “buffers”). The results highlight the unfolding, processual nature of psychological contracting.

Organizations may fail to keep their commitments to their employees, at times leading to psychological contract violation. Although many victims of violation remain with their employer despite such adverse experiences, little research exists on their responses in the aftermath of violation. This paper develops a post-violation model to explain systematically how violation victims respond to and cope with violation and the effects this process has on their subsequent psychological contract. Central to post-violation are the victims’ beliefs regarding the likelihood of violation resolution and the factors affecting it. The model specifies how the victim engages in a self-regulation process that results in an array of potential psychological contract outcomes. Possible outcomes include reactivation of the original pre-violation contract, the formation of a new contract that may be more or less attractive than the original, or a state of dissolution wherein the victim fails to form a functional psychological contract with the employer. The research and practical implications of this model are discussed.

Research has emphasized the negative effects of organizations’ broken promises and failed obligations on employee attitudes and behaviors. However, not all employees respond in the same manner. This paper integrates research on psychological contracts and psychological entitlement to examine how individuals with exceedingly high demands and expectations react to a perceived letdown by the organization. Drawing on conservation of resources theory, we argue that a psychological contract violation is associated with employee depressive mood states, which, in turn, influence the amount of citizenship behavior displayed. We further posit that psychological entitlement moderates the link between contract violation and depressive mood states. Using Hayes’ PROCESS macro to assess a moderated mediation model, findings from a multisource field study support our predictions. This research contributes to the work on psychological contracts and psychological entitlement on multiple fronts. Suggestions for future research and practical implications for managers are discussed.

PurposeLeadership has been known for its tremendous impact on employees' outcomes in any organisation. Constructive leadership positively impacts employees, while destructive leadership causes counterproductive work behaviours (CWB). This study aims to investigate the effect of toxic leadership on employees' CWB via the role of turnover intention by employing the psychological contract theory.Design/methodology/approachThe participants were recruited using various recruitment methods such as online recruitment and alumni networks. After dropping some participants who failed to complete the three-wave data collection procedure, 457 responses were used for the final data analysis. The participants came from various public organisations in Indonesia (e.g. hospitals).FindingsThe results found that the effect of toxic leadership on employees' CWB was mediated by the role of turnover intention. Under a toxic leader, employees might intend to leave the organisations and commit CWB as the employees perceived the psychological contract breach.Practical implicationsFirstly, public organisations should implement some strategies to reduce the emergence of toxic behaviours. Secondly, public organisations should evaluate and examine how leadership is exercised within public organisations. Lastly, the organisations must ensure that their leaders do not breach employees' psychological contracts.Originality/valueThis study has highlighted the effect of toxic leadership on CWB in public service organisations by employing a psychological contract theory and a power distance perspective.

This study investigated ways an organization might mitigate the negative effects of psychological contract breach. Drawing on the trust repair literature and organizational justice theory, we examined six general repair tactics (i.e., full penance, partial penance, denials, apologies, excuses, and combined apology/excuse) in terms of whether they improve trust and diminish the negative emotions following a breach. Data were obtained via two experimental studies employing 918 participants, including both college students and working adults. All of the repair tactics were effective at enhancing trust and easing negative emotions, except for denying that the breach occurred. Full penance (i.e., offering full reparation) was the most effective, with the next best option depending upon what outcome was being addressed and the population studied. The type of contract and magnitude of breach did not play a significant role in the effectiveness of repair tactics. The results of this study show that companies can do something to “fix” breaches. We extend the trust repair research to the context of breach and show that the effectiveness of repair tactics differs across outcomes. Practically, based upon our results, we advise companies to use these repair tactics (except denial) when breaches occur. This study is the first to empirically examine how companies might address breaches to avoid their negative consequences. It is also among only a few studies on trust repair to include emotions, initial trust, more than three repair tactics, and a sample of working adults.

A psychological contract is a set of individual beliefs that a person has about the reciprocal obligations and benefits established in an exchange relationship, such as an employment relationship in an organizational setting. A psychological contract breach is a subjective experience referred to the perception of one of the parties that the other has failed to adequately fulfill its obligations and promises. Breaches have been systematically connected to employees’ attitudes and behaviors that hamper the employment relationship. Despite its apparent clarity, some relevant topics about psychological contract breach, psychological contract fulfillment and the relationships with their consequences still remain unclear. The main objective of this review of reviews is to conduct a review of reviews on psychological contract breaches, considering both systematic reviews and metanalytical papers with the purpose of synthesizing the evidence to date under the psychological contract theory. Using the SPIDER tool, our systematic review of reviews focuses on: (a) Sample; (b) Phenomenon of Interest; (c) Design; (d) Evaluation; and (e) Research type. Finally, only eight systematic reviews and meta-analyses met the inclusion criteria. Of the eight reviews included, seven were meta-analyses while the other was a systematic quantitative review. This study describes the available empirical research on psychological contract breaches and fulfillment and summarizes the meta-analytical evidence on their relationships with attitudinal and behavioral outcomes, as well as the role of potential moderator variables. Due to the methodological caveats of the reviews themselves and of the primary studies they were based on, our conclusions about the impact of psychological contract breaches on outcomes still remain tentative.

The contemporary business environment, characterised by hyper-competition and rapid technological advancement, presents critical challenges for sustaining employee engagement. This study investigates the influence of psychological contract types on innovative work behaviour (IWB) among service sector employees, with leader-member exchange (LMX) and work engagement examined as key motivational mechanisms. Data from 398 respondents, Structural Equation Modelling (SEM) was conducted through SPSS and SmartPLS to test the proposed relationships. The findings confirm that LMX and work engagement significantly mediate the association between psychological contracts and IWB. Anchored in the Job Demand-Resource model, the study highlights the importance of providing organisational resources and leadership support to facilitate workplace innovation. Drawing on the Broaden-and-Build theory, results demonstrate that supportive leadership and meaningful work experiences foster positive emotions, which in turn promote innovative behaviour. The study emphasises that cultivating relational contracts through people-centric policies-such as career development initiatives, skill enhancement, competency building, and job rotation-is critical for sustaining an innovative climate. The research contributes to theory and practice by reinforcing the role of leadership and organisational culture in shaping innovation outcomes. Limitations and directions for future inquiry are outlined, with particular emphasis on examining these dynamics across Asian contexts, including India.

The aim of this article is to identify the relationship between the fulfilment of relational and transactional psychological contracts and work results, taking into account the mediation effect expressed in organisational identification. The empirical research was conducted on a group of 402 HR professionals responsible for designing and implementing HR practices in one of the leading companies of the Polish energy sector. Hypotheses were tested using the partial least squares structural equation modelling technique (PLS-SEM). Based on our research, we found that the implementation of both relational and transactional psychological contracts positively influenced the results achieved by HR professionals, both directly and indirectly, through the mediating role of organisational identification. The results indicate that the relationship between the psychological contract and work results is stronger when mediated by organisational identification. It plays an important role, especially in relation to the transactional contract. The collected results lead to the conclusion that organisations, wishing to increase the level of work results achieved by HR professionals, should as much as possible fulfil the expectations of employees and meet the commitments made to them within the framework of the established psychological contract. The study makes an important contribution to the understanding of the “priority” importance of organisational identification in enhancing the efforts of HR professionals to deliver work results that benefit both employees and the organisation.

Drawing on the perceived organizational membership theoretical framework and the social identity view of dissonance theory, I examined in this study the dynamics of the relationship between psychological contract breach and organizational identification. I included group-level transformational and transactional leadership as well as procedural justice in the hypothesized model as key antecedents for organizational membership processes. I further explored the mediating role of psychological contract breach in the relationship between leadership, procedural justice climate, and organizational identification and proposed separateness—connectedness self-schema as an important moderator of the above mediated relationship. Hierarchical linear modeling results from a sample of 864 employees from 162 work units in 10 Greek organizations indicated that employees' perception of psychological contract breach negatively affected their organizational identification. I also found psychological contract breach to mediate the impact of transformational and transactional leadership on organizational identification. Results further provided support for moderated mediation and showed that the indirect effects of transformational and transactional leadership on identification through psychological contract breach were stronger for employees with a low connectedness self-schema.

PurposeBased on signaling and motivation theories, this study investigates the impact of organizational practices on the formation and development of expatriates' psychological contracts in three stages. Stage 1: the impact of the selection process on psychological contract formation with the mediating role of perceived organizational justice. Stage 2: the impact of pre-departure training on psychological contract formation with the mediating role of individual absorptive capacity. Stage 3: the impact of perceived organizational support on psychological contract development with the mediating role of expatriates' adjustment.Design/methodology/approachBy using a purposive sampling technique, the respondents were approached via e-mails and personal visits in three waves, each wave had 45 days gap. After three waves, a total of 402 complete questionnaires were received back. To test the hypotheses, the partial least squares-based structural equation modeling (PLS-SEM) approach was used.FindingsStage 1: effective selection process and perceived organizational justice positively support the psychological contract formation. Stage 2: the pre-departure training and individual absorptive capacity have a positive influence on the psychological contract formation of expatriates. Stage 3: the perceived organizational support and psychological contract development have a positive direct association. However, expatriates' adjustment does not mediate the association between perceived organizational support and the psychological contract development of expatriates.Practical implicationsThe implications of this study are supportive to the organizations that deal with expatriates. The organizations should adopt practices (i.e. effective selection process, pre-departure training and perceived organizational support) for effective formation of psychological contract formation and development. In addition, perceived organizational justice, individual absorptive capacity and expatriates' adjustment can help out in the formation and development of the psychological contract of expatriates.Originality/valueThis study highlights the role of organizational best practices in the formation and development of the psychological contract of expatriates.