The Interactive Effects of Psychological Contract ...

Journal of Management Studies 46:5 July 2009 doi: 10.1111/j.1467-6486.2008.00816.x

The Interactive Effects of Psychological Contract Breach and Organizational Politics on Perceived Organizational Support: Evidence from Two Longitudinal Studies joms_816

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Christian Kiewitz, Simon Lloyd D. Restubog, Thomas Zagenczyk and Wayne Hochwarter University of Dayton; University of New South Wales; Clemson University; Florida State University abstract We explore the effects of the social context on the relationship between psychological contract breach (PCB) and perceived organizational support (POS) in two studies. We build on the premise that psychological contract breach (i.e. the organization’s failure to fulfil the obligations employees believe they are owed) signals to employees that they are not cared for and valued by the organization (i.e. reduces POS). In support, a longitudinal study of 310 employees shows that PCB at Time 1 explains significant variance in POS at Time 2 (beyond that explained by POS at Time 1). Building on this result, we advance the argument that employees’ perceptions of organizational politics serve as a heuristic for the overall benevolent or malevolent character of the organization and its agents. Accordingly, we expect that when employees perceive PCB and high levels of organizational politics, they will be more likely to hold the organization responsible for PCB and thus report lower levels of POS in response to breach. This line of reasoning received support in a second study of 146 employees which showed that perceptions of organizational politics moderate the PCB–POS relationship. Our results suggest that the social context in which psychological contract breaches occur matters and that managers should consider the organization’s perceived political landscape when anticipating how employees will respond to broken promises.

INTRODUCTION To create competitive advantages and long-term success, current thinking by academics (Pfeffer, 2005) and practitioners (Cohen et al., 2005) alike speaks to the value of providing a supportive work environment to employees. These notions are corroborated by empirical studies showing that employees who perceive their organization as supportive reciprocate by increasing their organizational commitment and by voluntarily ‘going beyond the call of duty’, thereby contributing to the organization’s effectiveness (e.g. Address for reprints: Christian Kiewitz, University of Dayton, Management/Marketing Department, 300 College Park, Dayton, OH 45469-2271, USA ([email protected]). © Blackwell Publishing Ltd 2009. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

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Coyle-Shapiro and Kessler, 2000). Research in this tradition often invokes organizational support theory (Rhoades and Eisenberger, 2002) as a theoretical basis and has primarily examined the positive consequences that occur when perceived organizational support (POS) is high, that is, when employees believe that their organization values their contributions and well-being (Eisenberger et al., 1986). However, the wealth of studies examining the (positive) outcomes of POS stands in contrast to the dearth of research investigating antecedents to POS, especially negative ones that might lead to a decrease in employees’ support perceptions. With organizations aiming to gain competitive advantage by attracting and retaining valuable employees (Pfeffer, 2005), studying the role of negative experiences at work is not only important from a practical standpoint, but also important theoretically as research indicates that individuals’ attitudes and behaviours at work are impacted significantly more by negative work experiences than by positive ones (cf. Baumeister et al., 2001; Kiewitz, 2002; Weiss and Cropanzano, 1996). In the current paper, we explore two negatively-valenced factors in conjunction with POS, that is, perceptions of psychological contract breach and of organizational politicking. Psychological contract research centres on employees’ specific notions of the mutual obligations that govern the relationship with their organization (Rousseau, 1995). Remarkably, related empirical studies have shown that the majority of UK and US employees perceive their organization as having failed to fulfil its promises, referred to as psychological contract breach (Coyle-Shapiro and Kessler, 2000; Robinson and Rousseau, 1994). As a consequence, much psychological contract research has aimed at identifying factors likely to minimize the adverse consequences of breach; for example, by examining the role of such buffers as justice perceptions in the psychological contract dynamics (Kickul and Lester, 2001). Paralleling similar developments in the POS literature, however, there is a lack of empirical analyses that investigate the role of negative contextual factors in aggravating responses to perceived psychological contract breach. In the present paper, we examine a negatively-valenced contextual factor that is pervasive in UK and US organizations (e.g. Buchanan, 2008): namely, perceptions of organizational politicking which tap employees’ beliefs about the prevalence of self-serving behaviour in their work environment (Ferris et al., 2002). Building on these suppositions, we present two empirical studies aimed at furthering our insights into the relationship between psychological contracts and POS. In Study 1, we examine employees’ assessments of organizational support when perceiving psychological contract breach (PCB). Our rationale is that an organization’s perceived failure to fulfil its promised obligations towards employees will result in reduced perceptions of organizational support (cf. Aselage and Eisenberger, 2003). Notably, our study extends the literature by assessing this relationship longitudinally with a sample drawn from the working adult population. We further argue that the negative effect of PCB should be even more pronounced when employees believe that organizational processes are wilfully and unduly influenced by political rather than substantive, business-related factors (cf. Eisenberger et al., 1986; Rhoades and Eisenberger, 2002). In Study 2, we present theoretical arguments to support this notion, which we then subject to empirical scrutiny by examining the moderating role of organizational politics on the PCB–POS relationship. © Blackwell Publishing Ltd 2009

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STUDY 1 Literature Review and Hypothesis Development Organizational support theory and POS. The theoretical foundation of perceived organizational support (POS) is organizational support theory (Aselage and Eisenberger, 2003; Eisenberger et al., 1986), which itself builds on social exchange and attribution processes (e.g. Blau, 1964). Organizational support researchers contend that individuals monitor their environments and make attributions for the organization’s benevolent or malevolent motives and behaviours (Eisenberger et al., 1986). In this regard, employees habitually view the actions of organizational agents as indications of the organization’s intent rather than the agents’ personal motives (Eisenberger et al., 1986). In other words, employees tend to anthropomorphize their work organizations and regard the favourable or unfavourable treatments that they receive from organizational agents as indicative of whether they are favoured or disfavoured by the organization (Rhoades and Eisenberger, 2002). This personification process occurs in a larger context in which employment is viewed as a social exchange where effort and loyalty are traded for tangible and social rewards (Eisenberger et al., 1986; Levinson, 1965). Against this backdrop, organizational support theory posits that employees develop global beliefs – tapped by the POS construct – about ‘the extent to which the organization values their contributions and cares about their well-being’ (Eisenberger et al., 1986, p. 501). Referencing the norm of reciprocity (Gouldner, 1960), the theory further suggests that employees reciprocate with commitment, effort and performance when they perceive high levels of support (Eisenberger et al., 2001) – a notion that has received empirical support in numerous studies and meta-analytic reviews (Aselage and Eisenberger, 2003; Rhoades and Eisenberger, 2002; Riggle et al., in press). Whereas the (beneficial) effects of POS are well established in the literature (e.g. Eder and Eisenberger, 2008), the antecedents to POS have received much less attention from management scholars (Coyle-Shapiro and Kessler, 2000). In addition, past research has predominantly investigated positive antecedents, such as fairness, supervisor support, and job rewards (Aselage and Eisenberger, 2003), whereas few studies have explicitly sought to examine the impact of negative antecedents. Although one might conceive of several negative factors influencing POS, we identify two factors that are particularly apt for empirical scrutiny due to their pervasiveness in UK and US organizations: that is, organizations failing to fulfil their promises made to employees (i.e. psychological contract breach) and organizational politicking (e.g. Buchanan, 2008; Coyle-Shapiro and Kessler, 2000). The first negative factor, perceived psychological contract breach, is the focus of Study 1, which is then complimented with an analysis of the interactive influence with organizational politics perceptions in Study 2. We currently proceed by discussing theoretical and empirical aspects of psychological contracts and their relationship to POS. Psychological contract theory and contract breach. Paralleling the theoretical strands of POS, psychological contract theory also draws heavily from social exchange and attribution processes (Coyle-Shapiro and Conway, 2005). Specifically, the theory posits (a) that employees[1] hold specific beliefs about the mutual obligations governing the exchange © Blackwell Publishing Ltd 2009

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relationship with their organization, and (b) that these beliefs are encapsulated in employees’ psychological contracts, which extend beyond any formal, written agreements (Rousseau, 1995). Psychological contracts are central to the employee– organization relationship, giving it its inherent meaning (Rousseau, 1995) by comprising employees’ beliefs about what ‘they are entitled to receive, or should receive, because they perceive that their employer conveyed promises to provide those things’ in exchange for their contributions (Robinson, 1996, p. 575). As an important theoretical distinction, psychological contracts have been conceptualized as a higher-order construct comprising two related, yet distinct dimensions: transactional and relational (Rousseau, 1995; Turnley et al., 2003). In the transactional dimension, the primary unit of exchange is monetary resources, thus fostering a shortterm, inflexible psychological contract with clear economic boundaries, limited time duration and little investment on the part of the organization (Rousseau, 1995). Examples include an organization’s provision of short-term employment (emphasizing pay-for-performance) and of reasonable working conditions (in exchange for employee completion of specific role obligations). In contrast, the relational dimension is less focused on specific exchanges, instead emphasizing a relationship-focused, open-ended arrangement with the organization that lacks a fixed termination date (Rousseau, 1995). Examples include training and development opportunities, job security and fair treatment. In our studies, we assess both transactional and relational contract dimensions, thus accounting for this important theoretical and empirical distinction (e.g. Restubog and Bordia, 2006; Restubog et al., 2008; Rousseau, 1995; Turnley et al., 2003). Linking psychological contract breach and perceived organizational support. Despite sharing social exchange (Blau, 1964) as a common theoretical underpinning, the literatures on psychological contracts and organizational support have developed independently and tend to not reference each other (Aselage and Eisenberger, 2003). Indeed, efforts to theoretically integrate the two theories or empirically investigate their links are a rather recent phenomenon (e.g. Coyle-Shapiro and Conway, 2005), with the most comprehensive model so far being presented by Aselage and Eisenberger in 2003. Given the dearth of previous work, we first discuss theoretical similarities and differences between the two theories before presenting a rationale linking perceptions of psychological contract breach and organizational support. We begin our discussion by highlighting key differences in the theories’ foci and scopes. Regarding their theoretical focus, a key distinction between psychological contract and organizational support theories lies with the differential role of ‘promised and felt obligations’. In the former theory, a crucial issue is whether an organization fulfils its promises, as a failure to do so – termed psychological contract breach (Morrison and Robinson, 1997) – is likely to result in negative outcomes (e.g. Zhao et al., 2007). Consequently, psychological contract theory focuses heavily on the extent to which employees believe that the organization has fulfilled promises that were made to them. In contrast, organizational support theory emphasizes employees’ overall evaluations of the treatment that has been provided by the organization – irrespective of whether such treatment was or was not based on organizational promises (Aselage and Eisenberger, 2003; Rousseau and Tijoriwala, 1998). Moreover, the theories differ in their conceptu© Blackwell Publishing Ltd 2009

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alizations of how employees reciprocate organizational treatment (Aselage and Eisenberger, 2003). Research on organizational support theory shows that POS creates a broader felt obligation within employees to reciprocate favourable treatment by helping the organization at their own discretion (Eisenberger et al., 2001). This aggregate approach to employee obligations contrasts with the more relative approach posited by psychological contract theory, which suggests that employees determine their own set of obligations (especially during socialization into the organization), with which they are expected to reciprocate when the organization fulfils its promises. Altogether, then, organizational support theory has a more aggregate and absolute focus (i.e. is based on employees’ overall evaluation of perceived treatment by the organization), whereas psychological contract theory is more specific and relative, focusing on whether what the organization (or those who represent it) delivers is perceived as adequate based on what employees believe was promised to them.[2] These theoretical differences are particularly significant for the present research as we assess the impact of more specific breach perceptions on broader perceptions of organizational support. Specifically, it highlights that the theories not only have different foci, but also emphasize different aspects of the employer–employee relationship and hence differ substantially in scope. Consequently, management scholars (Aselage and Eisenberger, 2003; Coyle-Shapiro and Conway, 2005; Shore et al., 2004) conceive of these theories as tapping two different phenomena, such that one theory does not simply represent a special case of the other. In support of this perspective, a number of studies have empirically demonstrated the distinctiveness of constructs related to psychological contracts and POS (e.g. Coyle-Shapiro and Kessler, 2000; Tekleab et al., 2005). Yet despite these findings, one could still question whether psychological contract breach and POS are indeed distinct. For instance, few empirical studies to date[3] have subjected these constructs to confirmatory factor analyses and/or examined links between them longitudinally, thus raising concerns about discriminant validity. Besides such empirical issues, theoretical ones remain, too, given that considerable conceptual parallels exist and that theorizing about the linkages between the two constructs is still in the early stages of theory development (see Reichers and Schneider, 1990). In order to shed more light on these issues, we subject the notion of construct distinctiveness to empirical scrutiny in Study 1. Specifically, we first conduct confirmatory factor analyses and then assess longitudinally whether employee reports of perceived psychological contract breach at Time 1 predict POS at Time 2 (i.e. three months later). Our rationale for why we expect psychological contract breach to predict POS builds on the integrative theoretical model proposed by Aselage and Eisenberger (2003). These authors theorized that employees interpret the extent to which their organization fulfils or fails to fulfil psychological contract promises as a reflection of how much the organization values their contributions and well-being. Accordingly, fulfilment signals to employees that they are valued, thus increasing POS. Consistent with this idea, empirical studies document a positive relationship between contract fulfilment (and inducements) and employee perceptions of organizational support (Coyle-Shapiro and Conway, 2005; Coyle-Shapiro and Kessler, 2000). This relationship is expected to be even stronger when the (non)fulfilment is viewed as discretionary rather than something the organization was obligated to provide or had little control over (Aselage and Eisenberger, 2003). © Blackwell Publishing Ltd 2009

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In contrast, a decrease in POS is expected when organizations do not live up to their promises, because failure to fulfil the terms of the psychological contract signals to employees that the organization does not value or care for them (Aselage and Eisenberger, 2003). For example, employees who were told when they were hired that they would receive annual merit increases but instead were given annual lump-sum bonuses had lower POS than employees who believed that they would receive lump-sum bonuses when hired (Rousseau and Tijoriwala, 1998). In other words, perceptions of organizational support are driven by the extent to which employees believe that the organization fulfils or fails to fulfil its obligations/psychological contracts. Based on this rationale and the available empirical evidence, we therefore hypothesize: Hypothesis 1: Perceptions of psychological contract breach (relational and transactional dimensions) will be negatively related to perceived organizational support. Method Participants and procedure. Data were collected from full-time employees via a two-wave, on-line survey. Research suggests that using on-line surveys is generally acceptable to survey participants and does not impact data quality when compared with paper-andpencil surveys (Church, 2001). Consistent with procedures in previous research (Gettman and Gelfand, 2007; Piccolo and Colquitt, 2006), we recruited respondents through MarketTools.com, an organization which maintains a large opt-in database of individuals willing to participate in on-line surveys. Initially, MarketTools.com sent a link to our survey (i.e. URL) via e-mail to 1,000 full-time, white-collar employees[4] who volunteered to participate in the study. Our rationale for using such a sampling frame is in line with recommendations from psychological contract researchers to collect data from populations other than MBA students (Guest, 1998; Turnley and Feldman, 1999). These employees accessed the survey via a secure internet address and submitted responses to a secure internet database. The questionnaire assessed demographic variables, transactional and relational dimensions of psychological contract breach and perceptions of organizational support. From this first wave, we received 497 completed surveys, yielding a response rate of 49.7 per cent. We complemented this first data gathering with a second wave in order to address the issue of common method variance. This bias can pose a problem when using self-reports because it potentially inflates the observed relationships among study variables. We hence followed a procedure recommended by Podsakoff and Organ (1986) and collected a second wave of data (i.e. Time 2, three months after the first survey was distributed). At both Time 1 and Time 2, we employed the same procedures to collect data on demographics and the outcome variable in our model (i.e. perceived organizational support). The second on-line survey was administered to all 497 participants who completed the Time 1 survey. A total of 310 respondents completed the Time 2 surveys for a response rate of 62 per cent. Participants were 66 per cent female and 88 per cent Caucasian. Respondents’ age ranged between 24 and 72 years (mean 45 years). Mean organization tenure was 10.0 years. Respondents were employed in a wide variety of occupations, including 22 per cent in business and financial operations occupations, 19 © Blackwell Publishing Ltd 2009

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per cent in office and administrative support occupations, 14 per cent in management occupations, 12 per cent in computer and mathematical occupations, 12 per cent in education, training, and library, 3 per cent in production occupations, 2 per cent in architecture and engineering, 2 per cent in healthcare support, 1 per cent in life, physical and social science occupations, 1 per cent in community and social services, 1 per cent in legal occupations, 1 per cent in healthcare practitioner and technical occupations, 1 per cent in protective services, and 1 per cent in food preparation and serving related occupations. In order to assess the representativeness of the sample, we compared the distribution across occupations with the most recently available data on the US labour force (i.e. May 2006 data obtained from the US Department of Labor; see Bureau of Labor Statistics, 2006). With the exception of management occupations, computer and mathematical occupations, education, training and library occupations, our sample is relatively similar to the US workforce at large. Furthermore, we examined a potential sampling bias by comparing participants who responded to both Time 1 and Time 2 surveys (n = 497) and individuals who responded only to the Time 1 survey (n = 310). ANOVA results showed no significant differences between the two groups across demographic variables. Measures. Psychological contract breach. At Time 1, employees completed Robinson and Morrison’s (1995) psychological contract breach measure. As opposed to other global measures of psychological contract breach which measure employees’ global perceptions of breach, this measure assesses specific aspects of relational and transactional psychological contracts. Sample items for the relational dimension are: ‘a job that has high responsibility’ and ‘being treated with respect’. Some items for the transactional dimension are: ‘a competitive salary’ and ‘overall benefits package provided’. Participants responded to the five items of each dimension on a five-point Likert-type scale ranging from 1 (I am receiving much less than I expect) to 5 (I am receiving much more than I expect). All items were reverse-scored to operate as an index of psychological contract breach. Cronbach’s alphas for the transactional and relational contract breach scales were 0.82 and 0.80, respectively. Perceived organizational support. POS was measured using a six-item version of the Survey of Perceived Organizational Support (Eisenberger et al., 2001) in the initial survey (Time 1) and in the follow-up survey three months later (Time 2). Sample items from the scale include: ‘My organization values my contributions to its well-being’ and ‘My organization strongly considers my goals and values.’ Employees answered all POS questions using a seven-point Likert-type scale (1 = strongly disagree to 7 = strongly agree). The reliability of the scale was 0.93 at Time 1 and 0.94 at Time 2. Control variables. Consistent with past research on POS, we controlled for tenure (number of years with current organization), gender (dummy coded 0 = male and 1 = female), and age (in years). Tenure was used a control variable because employees with greater tenure tend to have higher levels of POS, as employees with low POS are more likely to quit (Rhoades and Eisenberger, 2002). We controlled for gender in an acknowledgement of © Blackwell Publishing Ltd 2009

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Rhoades and Eisenberger’s (2002) observation that most studies control for gender to account for the possibility that it influences POS. Finally, Rhoades and Eisenberger (2002) found a significant correlation between age and POS, so we included it as a control variable as well. Results and Discussion Prior to analysing the data, we conducted a confirmatory factor analysis to test the construct independence of psychological contract breach (PCB) and perceived organizational support (POS).[5] In line with theory and previous research (Restubog and Bordia, 2006; Rousseau, 1995; Turnley et al., 2003), we first specified two separate constructs: one first-order factor for POS and one second-order factor for PCB, which subsumed the transactional and relational dimensions. The model fit statistics were acceptable: c2 (99) = 225.62, p < 0.01; TLI = 0.95; CFI = 0.96; RMSEA = 0.06. In contrast, the model that had all items load onto one factor fit the data significantly worse (c2 (102) = 792.89), as indicated by chi-square difference test: Dc2 (3) = 567.27, p < 0.01 and various fit indices: TLI = 0.74; CFI = 0.78; RMSEA = 0.15. Overall, these results suggest that PCB and POS represent separate constructs. Descriptive statistics and inter-correlations for Study 1 variables are presented in Table I. We tested Hypothesis 1, which posited that psychological contract breach would be related to POS. Consistent with past research (e.g. Restubog and Bordia, 2006; Turnley et al., 2003), we ran separate hierarchical multiple regressions for each dimension of psychological contract breach. Control variables (gender, age, and tenure) and POS (Time 1) were entered in step 1. In the second step, a psychological contract dimension was entered. As shown in Tables II and III, Hypothesis 1 was supported: both relational psychological contract breach (b = -0.20, p < 0.01) and transactional breach Table I. Means, standard deviations and bivariate correlations for variables in Study 1 Variable

Mean

SD

1

1. 2. 3. 4.

n.a. 45.5 9.38 5.33

n.a. 1.43 8.39 0.63

– -0.24* -0.13 -0.06

5.09

0.70

-0.05

4.37

1.44

4.86

1.43

Gender Age Organizational tenure Psychological contract breach (transactional) 5. Psychological contract breach (relational) 6. Perceived organizational support – POS (Time 1) 7. Perceived organizational support – POS (Time 2)

2

3

– 0.41** 0.05

4

5

6

– 0.01

–

-0.01

0.03

0.52**

0.04

-0.05

-0.03

-0.51**

-0.61**

–

0.00

0.08

-0.05

-0.41**

-0.48**

0.58**

7

–

–

Notes: N = 310. * p < 0.05; ** p < 0.01. © Blackwell Publishing Ltd 2009

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Table II. Hierarchical regression analysis predicting perceived organizational support (T2) from relational psychological contract breach (T1) while controlling for perceived organizational support at Time 1 in Study 1 Variable and step

Perceived organizational support (Time 2) b

R2

DR2

Step 1: Demographics and controls Gender Age Organizational tenure Perceived organizational support (Time 1)

0.00 0.14** -0.09 0.58***

0.35**

0.35**

Step 2: Relational breach Gender Age Organizational tenure Perceived organizational support (Time 1) Relational psychological contract breach

-0.01 0.13* -0.08 0.46** -0.20**

0.38**

0.03**

Notes: N = 310. Standardized beta coefficients are reported for all steps. * p < 0.05; ** p < 0.01.

Table III. Hierarchical regression analysis predicting perceived organizational support (T2) from transactional psychological contract breach (T1) while controlling for perceived organizational support at Time 1 in Study 1 Variable and step

Perceived organizational support (Time 2) b

R2

DR2

Step 1: Demographics and controls Gender Age Organizational tenure Perceived organizational support (Time 1)

0.00 0.14** -0.09 0.58***

0.34**

0.34**

Step 2: Transactional breach Gender Age Organizational tenure Perceived organizational support (Time 1) Transactional psychological contract breach

-0.01 0.15** -0.09 0.50** -0.16**

0.36**

0.02**

Notes: N = 310. Standardized beta coefficients are reported. * p < 0.05; ** p < 0.01.

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(b = -0.16, p < 0.01) were significantly and negatively related to POS (Time 2) in step two after controlling for the effects of demographic variables and Time 1 POS. Factor-analytic results from Study 1 corroborate theoretical arguments and empirical findings from prior research which suggest that perceptions of psychological contract breach and organizational support (POS) constitute distinct constructs. Furthermore, our results indicate that employee perceptions of psychological contract breach are predictive of POS. Specifically, we found both relational and transactional psychological contract breach (at Time 1) to be negatively related to POS at Time 2 three months later, even when controlling for Time 1 POS. These findings suggest (1) that there is value in examining both psychological contract breach and POS, as both relational and transactional psychological contracts explain significant variance in POS over time, and (2) that POS changes in response to relational and transactional contract breach. Overall, then, Study 1 provides some evidence that perceptions of psychological contract breach reduce employees’ beliefs that the organization cares for their well-being and values their contributions, as posited in Hypothesis 1. Our discussion now turns to Study 2, in which we seek to replicate and extend the findings reported in Study 1. Despite their documented rarity, replications continue to perform a fundamental role (Hubbard et al., 1998) as a necessary precursor to genuine scientific knowledge (Rosenthal and Rosnow, 1984; Tsang and Kwan, 1999). Approximately 50 years ago, Popper (1959) unyieldingly encouraged the development of multistudy research designs because ‘only by such repetitions can we convince ourselves that we are not dealing with a mere isolated “coincidence” ’ (p. 45). Building on this perspective, it has been suggested that replication studies are more apt to generate knowledge development when coupled with theoretically-relevant extensions (Hubbard et al., 1998). Further, Lindsay and Ehrenberg (1993) confirmed that the cumulative effect of replication and extension is the key to generalization such that findings not subjected to replication are ‘virtually meaningless and useless’ (p. 219). In response, Study 2 was developed to both replicate and extend the objectives of Study 1. Specifically, we aimed to critically re-examine the PCB–POS relationship to determine whether a consistent pattern of results existed. We then extended Study 1 by investigating the anxiety-provoking influence of politics perceptions on this relationship. Acknowledging that replications and extensions cannot definitively verify or falsify theories, we contend that their use can build evidence to either call into question or support the basic tenets outlined in Study 1 (Ferris et al., 2006; Tsang and Kwan, 1999).

STUDY 2 Literature Review and Hypothesis Development Psychological contract research to date has been predominantly focused on identifying factors likely to ameliorate the adverse consequences of perceived breach, yet, at the same time, has neglected to investigate contextual factors that might aggravate employees’ responses to such breaches. In Study 2, we address this research gap in the literature by examining the role of organizational politics, a negative contextual factor that is widespread in UK and US work settings (e.g. Buchanan, 2008; Ferris et al., 2002, © Blackwell Publishing Ltd 2009

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respectively). Our second study thus extends Study 1 in that we assess the potential of organizational politics perceptions to exacerbate the negative relationship between psychological contract breach and perceived organizational support (POS). In brief, our rationale for the negative effect of organizational politics builds on attributional processes that – we posit – influence employees’ interpretation of their work environment when they perceive psychological contract breach. We begin by discussing the processes that impact employees’ assessments of the state of their psychological contract and their organization’s supportiveness. Perceived organizational support, psychological contract breach and attributions. Drawing from social exchange theory (Blau, 1964), organizational support theory proposes that employees monitor whether their organization provides them with resources on a discretionary or mandated basis (Aselage and Eisenberger, 2003; Eisenberger et al., 1997). The attributions resulting from this monitoring process have been typically invoked in the literature to explain the development and strengthening of POS. For instance, Eisenberger et al. (1997) found that only discretionary organizational actions, or actions that employees believe the organization controlled (including provision of quality working conditions, rewards for good work, training, and fringe benefits), influenced POS, while factors beyond the control of the organization (e.g. relationships with co-workers, variety and adventure in work) did not. Conceivably, the reverse holds true as well. That is, when receiving discretionary but unfavourable treatment or resources, employees are likely to make an attribution of organizational disregard, which in turn should diminish POS. In addition, the negative impact on POS should be even stronger when employees perceive the decisions of the organization or its agents are driven by self-interested motives unrelated to business fundamentals or principles (cf. Hochwarter et al., 2003a). The role of attributions in employees’ assessments of their standing with the organization is not confined to perceptions of organizational support, however, as a similar rationale exists in the psychological contract literature. Generally speaking, the research accompanying this literature has shown that employees’ perceptions of psychological contract breach can trigger a wide spectrum of negative responses ranging from anger, lowered trust, job dissatisfaction and diminished in-role and extra-role performance to intended and actual turnover (e.g. Kiewitz, 2002; Restubog and Bordia, 2006; Restubog et al., 2006, 2007; Robinson and Morrison, 2000). Yet importantly, this literature has also demonstrated (1) that employees search for underlying causes when their psychological contracts are breached (Morrison and Robinson, 1997), and (2) that the attributions employees make regarding their organization’s reasons moderate the impact of the perceived breach on the employees’ reactions and reactivity (Lester et al., 2002; Robinson and Morrison, 2000; Turnley et al., 2003). For instance, Robinson and Morrison (2000) found that employees responded more strongly and emotionally when they believed that the organization intentionally breached their psychological contract (termed reneging) as compared to situations in which breach was attributed to factors beyond the organization’s control (see also Turnley et al., 2003). At surface level, the processes outlined above clearly indicate that attributions play a fundamental role in employees’ perceptions of psychological contract breach, their © Blackwell Publishing Ltd 2009

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organization’s supportiveness, and furthermore, that employees make discrete attributions regarding the behaviour of organizations and their agents with relative ease. Although seemingly straightforward, the above reasoning is complicated by the fact that organizations constitute complex social environments where agents’ true intentions are often hard to decipher (Martinko and Gardner, 1987). This renders the ascription of blame to specific targets difficult, potentially tempting employees to make ‘broad brushstroke’ attributions – especially when lacking important information about the organization’s supposedly ‘cruel intentions’ or when overlooking other situational factors (cf. Morrison and Robinson, 1997). In support, research in cognitive psychology suggests that individuals who attempt to make attributions with inadequate information take shortcuts in their reasoning processes, frequently overestimating the role of internal/ dispositional factors and underestimating the effects of external/situational factors (for an extensive review, see Gilbert and Malone, 1995). For example, Lester et al. (2002) found that employees were more inclined to classify psychological contract breaches broadly as either intentional or unintentional rather than conduct a rigorous, fine-grained analysis of the events and circumstances that might have contributed to a certain incident (see also Turnley et al., 2003). Applying these arguments in the context of our study, we argue that employees are likely to search their organizational environment for additional clues to decipher intentionality in their organization’s breach of their psychological contract (Morrison and Robinson, 1997; Turnley et al., 2003). In so doing, employees monitor salient features of their work environments ( James and James, 1989), such as whether important decisions are typically derived in a fair or self-interested manner (cf. Ferris and King, 1996). One prominent indicator of perceived fairness at work is the extent of perceived politicking within an organization (Ferris et al., 1995). Notably, past research has found organizational politics to constitute a pervasive feature of UK and US work environments (e.g. Buchanan, 2008; Cropanzano and Kacmar, 1995; Ferris et al., 2002), with empirical studies confirming the theoretical notion ‘that the perception of organizational politics is truly a significant dimension of individuals’ perception of their work environment’ (Parker et al., 1995, pp. 891–2). Given its pervasiveness, we now discuss the function of organizational politics perceptions in relation to psychological contract breach and POS. The Role of Perceived Organizational Politics in the Relationship between Perceptions of Psychological Contract Breach and Organizational Support Given its conceptual underpinnings (reviews in Ferris et al., 2002; Kacmar and Baron, 1999) and links to procedural injustice and distrust (Hochwarter et al., 2003b), it is hardly surprising that politics perceptions have been found to typically entail negative consequences for organizations and their employees in general and POS in particular (e.g. Cropanzano et al., 1997). More precisely, organizational politics can be defined as employees’ subjective beliefs regarding the extent to which the work environment is influenced by co-workers and supervisors engaging in self-serving behaviour (Ferris et al., 2002; see also Fedor et al., 2008). A severe consequence arising from such political behaviour is the potential to undermine the reciprocal exchange relationship between an employee and the organization (Keeley, 1988). © Blackwell Publishing Ltd 2009

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Building on this research and further arguments presented above, we contend that employees experiencing psychological contract breach will pay stricter attention to existing levels of organizational politics because it serves as a heuristic for the (supposedly) overall benevolent or malevolent character of the organization and its agents (cf. Hochwarter et al., 2003a, 2003b; Kiewitz et al., 2002). Specifically, because a fundamental assumption of mutual obligations at work is trust (Rousseau, 1995), political activity in the presence of psychological contract breach is expected to result in stronger attitudinal, emotional and behavioural reactions than would be the case for perceptions of contract breach alone. Importantly, employees’ beliefs about organizational politics are in and of themselves a salient heuristic that employees use to make attributions for the manner in which they are treated by the organization. Therefore, we argue that employees who perceive high levels of politicking in their organizations are more likely to believe that psychological contract breach (PCB) is a reflection of the organization’s malevolent nature. In such cases, PCB will serve as a signal to employees that the organization does not care for their well-being or value their contributions. Accordingly, the exchange relationship between employer and employee will be damaged, thereby reducing POS. However, when political activity is low, we expect that employees will be more apt to attribute PCB to factors beyond the control of the organization rather than the intent of the organization itself. These beliefs will preserve the employment relationship, and PCB will not serve as such a strong signal to employees that the organization does not care for and value them. We therefore hypothesize as follows: Hypothesis 2: Perceptions of psychological contract breach and politicking will interact to predict perceived organizational support. Specifically, the adverse relationship between PCB (relational and transactional dimensions)[6] and POS will be strongest when politics perceptions are high. Method Participants and procedure. In order to administer surveys to working participants, the fourth author recruited students attending various business courses at a large American university in the southern USA. In exchange for extra credit, students administered two self-report questionnaires to individuals who had at least five years of full-time work experience.[7] Similar to Study 1, surveys were administered at two points in time, three months apart. The first survey measured demographic characteristics, personality (i.e. positive and negative affectivity), psychological contract breach (i.e. transactional and relational dimensions) and perceived organizational politics. POS information was collected in the second survey three months later. Surveys were matched using a nonidentifying code. The two waves of data collection yielded 204 potential survey pairs, with 163 surveys matching due to the fact that either the first (n = 11) or second survey (n = 30) was missing for certain individuals. In order to check for sampling bias, we ran univariate ANOVAs comparing key variables for which data from both surveys were available from individuals who did versus those who did not complete the second survey. No significant differences emerged between these two groups in terms of gender, age and tenure. We © Blackwell Publishing Ltd 2009

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also dropped all survey pairs from individuals who: (a) had less than five years of work experience (n = 9), (b) were less than 21 years old (n = 1), and (c) were organizational agents directly involved in the creation and management of employees’ psychological contracts (e.g. CEO, HR Managers, n = 7), thus retaining 146 survey pairs for our analyses. One hundred and forty six full-time employees participated in the study (43 per cent female). In order to obtain a rough assessment of the representativeness of the sample, we compared the sample’s demographic information to available census statistics for a southern state in the USA. Specifically, we chose Alabama because the vast majority of students at the university comes from households in this state. In comparing sample demographics with the latest census data available, we found that participants’ age in the sample ranged from 24 to 64 years and had a mean of 44 years, which corresponds to the age group distribution of the population in Alabama (US Census Bureau, 2002). Furthermore, participants came from a wide range of occupations (e.g. accountant, sales representative and human resource professional), which also overlaps with the occupational clusters identified in the Census profile for the state of Alabama (US Census Bureau, 2002). Finally, although we had not collected any data on racial or ethnic background, informal student feedback leads us to believe that the vast majority of participants are Caucasians, thus mirroring the racial distribution in Alabama where the majority of the population is Caucasian (US Census Bureau, 2002). Despite these limited comparisons, these data provide some tentative indication that our sample is, at least, a representative sample of working adults drawn from a southern region of the United States. In addition to the above information, we asked respondents to indicate the highest level of education that they had attained. Accordingly, 12.3 per cent of respondents had earned a graduate degree (n = 18), 7.5 per cent had completed some graduate work (n = 11), 32.3 per cent had earned a college degree (n = 47), 25.3 per cent had completed some college courses (n = 37), and 22.6 per cent had completed high school (n = 33). Participants also reported an average tenure of 8.3 years with their respective organization, with 10 per cent (n = 15) belonging to upper management, 24 per cent (n = 34) to middle management, 40 per cent (n = 58) being professional staff, and 19 per cent (n = 27) having no managerial responsibilities (ten participants provided no information). Measures. Psychological contract breach. As in Study 1, we assessed the relational and transactional dimensions of psychological contract breach in the Time 1 survey using Robinson and Morrison’s (1995) scale (Cronbach’s alphas were 0.75 and 0.84, respectively). Perceptions of organizational politics. At Time 1, we assessed employees’ politics perceptions using Kacmar and Carlson’s (1997) revised version of the Perceptions of Organizational Politics Scale. Example items are: ‘People in this organization attempt to build themselves up by tearing others down’ and ‘It is best not to rock the boat in this organization’. Items were scored using a seven-point scale ranging from 1 (strongly disagree) to 7 (strongly agree). Coefficient alpha reliability for the overall scale was 0.82, which concurs with reliability indices reported in previous studies (e.g. Hochwarter et al., 1999). © Blackwell Publishing Ltd 2009

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Perceived organizational support. As in Study 1, we assessed perceived organizational support using the scale developed by Eisenberger et al. (1997). The internal consistency reliability for the scale – administered at Time 2 – was 0.90, which is similar to the Cronbach’s alpha value reported by Eisenberger et al. (1997). Control variables. Similar to Study 1, we controlled for demographic variables including gender, age, and tenure. Additionally, we controlled for employees’ level of affectivity using the 20-item Positive and Negative Affectivity Schedule (PANAS; Watson et al., 1988), as research suggests that individuals either low on positive or high on negative affectivity are more likely to perceive negative work situations (e.g. Hochwarter et al., 2003b). Participants were asked to indicate how they generally feel by rating ten items each that tap either positive affectivity (PA: interested, proud, active, etc) or negative affectivity (NA: distressed, afraid, hostile, etc). Response options varied from 1 (very slightly or not at all) to 5 (extremely). Cronbach’s alpha estimates for both PA (0.90) and NA (0.86) were acceptable and consistent with the normative data reported by Watson et al. (1988). Results and Discussion Before analysing the data, we conducted a confirmatory factor analysis to test the construct independence of the study variables.[4] Because of the large number of parameters to be estimated, two separate confirmatory factor analyses were performed in order to maintain adequate parameter-to-subject ratio (Tabachnick and Fidell, 2001). The first set of analyses specified one first-order factor for perceived organizational support and one second-order factor for psychological contract breach (i.e. transactional and relational dimensions). The model fit statistics were acceptable: c2 (130) = 194.64, p < 0.01; TLI = 0.95; CFI = 0.96; RMSEA = 0.059. The alternative one-factor model fit the data significantly worse: c2 (133) = 694.96, with Dc2 (3) = 500.32, p < 0.01, TLI = 0.58; CFI = 0.63; RMSEA = 0.17. Overall, these analyses provided further empirical evidence for the theoretical argument that psychological contract breach and POS are distinct constructs. The second set of confirmatory factor analyses tested the independence of POS and organizational politics, because of the notable correlation between the two (r = -0.60, p < 0.01). The model showed acceptable fit: c2 (205) = 343.41, p < 0.01; TLI = 0.90; CFI = 0.90, RMSEA = 0.068. Supplementary analysis also showed that this two-factor model had a better fit than the one-factor model: c2 (206) = 448.26, with Dc2 (1) = 104.85, p < 0.01; TLI = 79; CFI = 0.81; RMSEA = 0.09. In sum, these analyses corroborated the distinctiveness of the POS, psychological contract breach and organizational politics constructs. Descriptive statistics and inter-correlations for Study 2 variables are reported in Table IV. Zero-order correlations were in the predicted direction. Scrutiny of the correlational patterns supported our rationale for including positive affectivity (PA) and negative affectivity (NA) as control variables. The overall pattern of correlations demonstrates that employees with higher levels of NA tend to perceive more incidents of psychological contract breach and organizational politicking, whereas employees with higher levels of PA perceive a more benign work environment. These results parallel past research findings in that high-NA individuals tend to focus on the negative aspects of © Blackwell Publishing Ltd 2009

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Table IV. Means, standard deviations and bivariate correlations for variables in Study 2 Variable

Mean SD

1

2

3

4

5

6

7

8

1. Gender – – – 2. Age 43.99 9.07 -0.04 – 3. Organizational 8.27 7.49 -0.08 0.30** – tenure 4. Positive affectivity 3.60 0.70 -0.02 0.05 -0.07 – 5. Negative 1.57 0.50 0.05 -0.02 0.10 -0.35** – affectivity 6. Transactional 3.26 0.79 0.03 0.13 -0.03 -0.21** 0.09 – breach (Time 1) 7. Relational breach 2.82 0.70 0.19* 0.00 0.05 -0.41** 0.18* 0.40** – (Time 1) 3.77 0.95 0.06 -0.07 0.07 -0.33** 0.33** 0.28** 0.40** – 8. Organizational politics (Time 1) 9. Perceived 4.63 1.29 -0.08 0.03 -0.02 0.33** -0.20* -0.27** -0.36** -0.60** organizational support (Time 2) Notes: N = 146. * p < 0.05; ** p < 0.01.

their jobs, themselves and other people, while high-PA persons are inclined to view the world in a more positive light (e.g. Judge et al., 1999). In contrast, organizational tenure was not found to be significantly correlated with any dependent or independent variable. Next, we ran separate hierarchical multiple regressions for each dimension of psychological contract breach in conjunction with organizational politics. Following the procedures prescribed by Aiken and West (1991), demographic characteristics (i.e. age and gender) were entered in the first step of the regression equation. In the second step, we entered control variables (i.e. organizational tenure, positive and negative affectivity). In the third step, we entered a specific dimension of psychological contract breach. In the fourth step, we entered organizational politics. In the fifth and final step, a multiplicative, centred term was computed between organizational politics and each dimension of psychological contract breach to test for two-way interaction effects. Hypothesis 1 posited that psychological contract breach would be negatively related to perceived organizational support (POS). As shown in Tables IV and V, the hypothesis was supported as both perceived transactional (b = -0.26, p < 0.01) and relational (b = -0.22, p < 0.01) breach were significantly related to POS. Hypothesis 2 predicted that organizational politics would moderate the relationship between psychological contract breach (relational and transactional dimensions) and POS. Results for the hierarchical moderated regression are shown in Tables V and VI. Accordingly, the cross-product term relational breach ¥ organizational politics explained incremental criterion variance (b = -0.23, DR2 = 0.05, p < 0.01), after controlling for control and main variables. The interaction accounted for an additional 2 per cent of criterion variance above the control and main variables, thus falling into the typical range (i.e. © Blackwell Publishing Ltd 2009

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Table V. Hierarchical moderated regression predicting perceived organizational support (T2) from perceptions of relational breach (T1) and organizational politics (T1) in Study 2 Variable and step

Perceived organizational support (Time 2) b

Step 1: Demographics Gender Age Step 2: Controls Positive affectivity Negative affectivity Organizational tenure Step 3: Main effects of IV Relational breach (RB) Step 4: Main effects of moderator Organizational politics (OP) Final step: Interaction term (centred) RB ¥ OP

R2

DR2

Step 1

Step 2

Step 3

Step 4

Final

-0.08 0.03

-0.07 0.02

-0.03 0.02

-0.03 0.02

0.00 0.02

0.01

0.01

0.30** -0.10 0.01

0.25* -0.09 -0.01

0.13 0.03 0.04

0.14 0.04 0.04

0.12**

0.12**

-0.26**

-0.10

-0.11

0.18**

0.06**

-0.53**

-0.52**

0.39**

0.21**

-0.15*

0.41*

0.02*

Notes: N = 146. Standardized coefficients are reported. * p < 0.05; ** p < 0.01.

0.01 ⱕ R2 ⱕ 0.03) reported for moderator effects in non-experimental studies (Champoux and Peters, 1987). To illustrate the relationship, we plotted POS scores at low (i.e. one standard deviation below the mean) and high (i.e. one standard deviation above the mean) levels of organizational politics perceptions (Aiken and West, 1991). Figure 1 shows a stronger negative relationship between relational breach and POS for those who perceived their organization to have high levels of organizational politics, t(134) = -2.32, p < 0.05, relative to low levels, t(134) = 0.21, ns. Similarly, entry of the cross-product term transactional breach ¥ organizational politics explained additional variance in predicting POS (b = -0.19, DR2 = 0.03, p < 0.01), after accounting for control and main variables. We again plotted the effect of transactional contract breach on POS at low and high levels of perceived politicking. The slope for high organizational politics was significant, t(134) = -2.95, p < 0.01, while the slope for low politics was not: t(134) = 0.42, ns. Figure 2 shows a stronger negative relationship between transactional breach and POS under conditions of high organizational politics. Overall, then, Hypothesis 2 was supported. Results of Study 2 suggest that organizational politics perceptions play an important role in how psychological contract breach affects employee perceptions of the quality of their social exchange relationship with the organization. As expected, when perceptions of politics were high and employees experienced high levels of relational or transactional psychological contract breach, they reported lower levels of organizational support © Blackwell Publishing Ltd 2009

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Table VI. Hierarchical moderated regression predicting perceived organizational support (T2) from perceptions of transactional breach (T1) and organizational politics (T1) in Study 2 Variable and step

Perceived organizational support (Time 2) R2

DR2

0.01 0.03

0.01

0.01

0.15* 0.03 0.02

0.12**

0.09**

b

Step 1: Demographics Gender Age Step 2: Controls Positive affectivity Negative affectivity Organizational tenure Step 3: Main effects of IV Transactional breach (TB) Step 4: Main effects of moderator Organizational politics (OP) Final step: Interaction term (centred) TB ¥ OP

Step 1

Step 2

Step 3

Step 4

-0.08 0.03

-0.07 0.02

-0.07 0.05

-0.05 0.00

0.30** -0.10 0.01

0.25** -0.09 -0.02 -0.22**

Final

0.15* 0.03 0.03 -0.09

-0.14

0.17**

0.13**

-0.54**

-0.52**

0.39**

0.36**

-0.19**

0.42**

0.03**

Notes: N = 146. Standardized coefficients are reported. * p < 0.05; ** p < 0.01.

compared to when psychological contract breach was high and perceptions of politics were low. This suggests that the negative effects of psychological contract breach are exacerbated when employees believe that their organizational environment is characterized by high levels of politicking. GENERAL DISCUSSION With much prior research focused on the benefits an organization can reap by supporting its employees (e.g. Kuvaas, 2008; Rhoades and Eisenberger, 2002), we were interested in factors that might harm the relationship between an organization and its employees. As such, we examined the interactive effect of perceived psychological contract breach and organizational politics on employees’ perceptions of organizational support (POS). The results of our two longitudinal studies demonstrate not only that employees who experience psychological contract breach judge their organization to be less supportive three months later (Studies 1 and 2), but also that this negative effect is enhanced when employees perceive moderate to high levels of politicking in their organization (Study 2). Implications, Contributions and Future Research The present research touches upon a number of theoretical and empirical issues, in particular with regard to (1) the significance of contextual factors and attributions in © Blackwell Publishing Ltd 2009

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C. Kiewitz et al. Low organizational politics High organizational politics 5.0 4.5 4.0

T2 POS

3.5 3.0 2.5 2.0 1.5 1.0 Low

High T1 Transactional breach

Figure 1. The interactive effects of perceived transactional breach and organizational politics on perceived organizational support Low organizational politics High organizational politics 5.0 4.5 4.0

T2 POS

3.5 3.0 2.5 2.0 1.5 1.0 Low

High T1 Relational breach

Figure 2. The interactive effects of perceived relational breach and organizational politics on perceived organizational support © Blackwell Publishing Ltd 2009

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social exchange processes and (2) the lack of a larger nomological net to guide future research efforts involving social exchange relationships. Our study addresses Emerson’s (1976) longstanding call for research that explicitly addresses the role of contextual factors in social exchange theory. Emerson criticizes the theory for representing an under-socialized view of exchange because it ignores the perceived or potential influence of others in social exchange relationships. As an example, Blau’s (1964) conception of exchange involves only two actors and ignores the role others play in how these actors evaluate social exchange outcomes (cf. Zagenczyk et al., 2008). Yet, as Emerson (1976) contends, by failing to consider social factors beyond primary dyadic relationships, there is little that is social in social exchange theory. Our study addresses this critique by examining the role that employees’ perceptions of others’ political motives and actions play in responding to perceived psychological contract breach, therefore presenting a more socialized conceptualization of the employee– organization relationship. Specifically, we advance the theoretical arguments that (1) politics perceptions tap an important contextual factor by functioning as a heuristic that employees evoke when assessing the overall malevolent or benevolent nature of the organization, and that (2) attributions ensuing from such heuristic assessments play a critical role in how employees construe psychological contract breach and ultimately the quality of the social exchange relationship with their organization. The latter point is particularly important in the present context and deserves further elaboration. From a theoretical standpoint, invoking attribution theory (Davis and Gardner, 2004; Lester et al., 2002; Martinko et al., 2006) allows us to suggest that our findings speak strongly to the relevance of employees’ attributions about how political their organization’s environment is – in our case demonstrated by the significant impact of perceived politicking on the psychological contract breach–POS relationship. From a broader perspective, then, our theoretical notions and empirical results highlight the relevance of attributional processes for social exchange relationships in organizational settings. To date, however, research has neglected to better capture theoretically and assess empirically the role that attributions play for the study’s three constructs (i.e. perceived psychological contract breach, organizational politics and organizational support) in the context of social exchanges. This stands in contrast to the general acknowledgment in the pertaining literatures (e.g. Ferris et al., 2002; Rhoades and Eisenberger, 2002) that these constructs draw from a common theoretical basis and to the particular significance that concomitant research has bestowed on attributions: namely the typically invoked rationale that employees make attributions about a firm’s alleged motives in social exchange situations by observing the (non)actions of its agents and that such attributions in turn impact relevant work outcomes (e.g. Eisenberger et al., 1986, 2001). Yet despite the appealing logic, investigations into the exact nature and content of such attributions, the way these attributions are made or their specific effects remain rare in the literature. An exception to this gap is Davis and Gardner’s (2004) work that presents a theoretical model outlining how attributional processes within leader–member relationships impact perceptions of politics. Building on this model, we believe that future research would benefit from an examination of attributional processes in all three organizational phenomena (cf. Martinko et al., 2006), especially in terms of theoretically delineating the © Blackwell Publishing Ltd 2009

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perceived politics and POS constructs (Ferris et al., 2002) and of empirically investigating the impact of biases in the perception of political and other organizational processes (e.g. Fedor and Maslyn, 2002). With regard to the latter point, one interesting future extension would be to consider the role of individual differences: for example, individuals who are prone to making hostile attributions may blame their organizations for psychological contract breach to a higher degree than those who do not hold such a hostile bias (Martinko and Gardner, 1987). Yet perhaps highest priority should be given to a thorough exploration of how attributions for psychological contract breach impact subsequent work outcomes, as past research has yielded very mixed results – potentially due to the use of divergent scales (cf. Robinson and Morrison, 2000; Turnley et al., 2003). Nonetheless, we deem further research in this area relevant because it promises to provide organizations with a better understanding of the relationship between attributions and psychological contract breach, which in turn could provide helpful insights for reducing the negative fallout from perceived breaches. The arguments presented so far suggest that it is worthwhile to more explicitly consider the role of attributions and attribution theory in future research efforts involving social exchange relationships. In a similar vein, we believe it beneficial to conduct more research exploring the interplay between psychological contracts and POS in order to arrive at a greater understanding of the employee–organization relationship. Thus far, extant research presents differing perspectives on how these constructs relate to one another. Our results suggest that attribution theory may present a useful foundation to theoretically integrate psychological contracts and POS. Specifically, applying arguments from attribution theory to organizational support and psychological contract theory would suggest that only contract breach (or fulfilment) for which employees make ‘dispositional’ attributions (i.e. perceiving deliberate intent on behalf of the organization) impacts outcomes because it increases/decreases POS. That is, when employees come to believe that a breach of the psychological contract was committed intentionally, they will perceive this as a strong signal that the organization does not value their contributions or care about them. As a consequence, POS is likely to decrease. In contrast, when psychological contract breach is attributed to external, situational factors, breach will not influence POS because employees will perceive such reneging as being caused by factors outside of the organization’s control. Breach attributed to situational factors, then, will be much less likely to influence employees’ beliefs about the state of their exchange relationship with the organization. It should be noted, however, that our perspective contrasts with those of other researchers and that – as our reviewers pointed out – alternatives to our examined model are plausible. For example, POS has been posited to act as a buffer for psychological contract breach in a longitudinal study by Tekleab et al. (2005). Their results indicate that perceived psychological contract breach (at Time 2) partially mediates the link between POS (at Time 1) and job satisfaction (at Time 2). Building on arguments by Rousseau (1995), Tekleab et al. (2005) contend that when the employer–employee relationship is strong (i.e. POS is high), employees will overlook minor discrepancies between what they believe was promised and what was actually received. At the same time, Coyle-Shapiro and Conway (2005) conceptualized the psychological contract breach– POS relationship as being a reciprocal one, yet found little support for this perspective. © Blackwell Publishing Ltd 2009

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Consequently, they pursued an alternative approach for which they split psychological contract perceptions into perceived employer obligations and employer inducements. According to their results, employer inducements signal to employees that the organization cares for them/values their contributions, which in turn motivates them to reduce feelings of indebtedness by reducing the employer’s perceived obligations to them. In comparing those two studies with our own, it seems as if the results of the CoyleShapiro and Conway (2005) study are consistent with our view that psychological contract breach leads to lower levels of POS, whereas the Tekleab et al. (2005) study proposes an entirely different conceptualization of the breach–POS link. Of course, the reader might wonder how one reconciles these seemingly incongruent approaches. We think that drawing from advances in social exchange theory might help us addressing this conundrum. As Cropanzano and Mitchell (2005) point out in their review, one of the major problems in research using social exchange theory (SET) is the confusion about what constitutes a resource and what constitutes an outcome at what point in a social exchange relationship: Usual tests of SET focus on relatively discrete sets of contingent transactions. But, when researchers study a transaction series within work settings, the possibility exists that the transaction series has gone on for some time and/or could continue into the future. As a result of this continuity, the output from a past transaction can be the resource exchanged in a future transaction. Researchers must necessarily snip a small number of exchanges out of their context . . . This is necessary for empirical study, but these scholars certainly do not claim that real-world exchanges are necessarily so discrete. Therefore, relationship development is not a matter of a single stimulus– response. It is more analogous to climbing a ladder. As one ascends, the rung for which one was originally reaching becomes a foothold for one’s next step. The goal achieved at one step (successfully grasping the next rung) provides the foundation for an even higher climb. (Cropanzano and Mitchell, 2005, pp. 889–90) Against this theoretical backdrop, one could speculate that what our and the previous studies (e.g. Coyle-Shapiro and Conway, 2005; Tekleab et al., 2005) have examined are all valid reflections of what actually occurs in work settings – yet by capturing different moments in ongoing social exchange relationships, we arrived at a different conceptualization of how psychological contract breach and POS are related to one another. It follows, of course, that if this reasoning holds true, a prime objective for researchers should be developing theoretical models that are better capable of capturing such constellations over time. Indeed, on a broader theoretical level, we think that these divergent perspectives point to the fact that what is missing in the literature are efforts to develop a more precise nomological net which helps management researchers to better conceptualize the links and functions of psychological contracts, POS, organizational politics and other social exchange constructs in relation to one another (cf. Shore et al., 2004). Such theory-development efforts could also prove valuable to better demarcate the content adequacy and thus validity (Schriesheim et al., 1993) of the psychological contract breach and POS constructs. As discussed in the introduction and pointed out by our reviewers, concerns remain as to whether psychological contract breach and POS are © Blackwell Publishing Ltd 2009

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indeed distinct constructs. Within the limits of our study, our results speak to the value of treating psychological contract breach and POS as separate constructs by demonstrating that relational and transactional psychological contract breaches at Time 1 are negatively related to POS at Time 2. Indeed, our longitudinal examination in conjunction with our confirmatory factor analyses strongly suggests that perceptions of psychological contract breach and organizational support constitute distinct constructs. To this effect, we consider our findings to empirically corroborate the theoretical claims advanced by management researchers who have argued the case of sufficient discriminant validity between the two constructs (e.g. Aselage and Eisenberger, 2003). At the same time, however, we are aware that our claim is subject to the limitations of the current investigation and hence should be regarded with the appropriate caution; a point that brings us to discussing further limitations of our study. Limitations Our study is not without limitations. First, our research has focused on psychological contract breach involving predominantly white-collar employees. Thus, our findings may not generalize to populations comprising only few or no white-collar workers. A second limitation concerns our reliance on a single-source research methodology that is vulnerable to the effects of common method variance, thus raising concerns about the validity of our findings and conclusions. Although it cannot be entirely ruled out that our results are influenced by common method variance, research has shown that the temporal separation of the measures’ administration is a valid approach to reduce its effects – especially when the time lag exceeds a one-month period (Podsakoff and Organ, 1986), as is the case in both our studies. Moreover, scrutiny of Tables I and IV shows that the magnitude of zero-order correlations does not provide undue concerns about multicollinearity (cf. Tabachnick and Fidell, 2001). Further, confirmatory factor analyses consistently indicated that employees distinguished between relational and transactional psychological contract breach, POS and perceived politics. Finally, the observed moderating effects of organizational politics between psychological contract breach and perceived organizational support are complex interactions that could not easily be explained by common method variance (cf. Brown et al., 2001). CONCLUSION The current research offers several insights and prompts some thoughts for the future. One aspect of our study can be captured with the phrase ‘context matters’, thereby highlighting the importance of (1) considering contextual factors in management research ( Johns, 2006), (2) the significant impact that perceptions of contextual factors play in organizational behaviour (e.g. Ferris et al., 2002) and (3) providing a positive work environment characterized by low levels of organizational politicking. Regarding the first point, our study clearly demonstrates that it is beneficial to contextualize examinations of social exchange relationships, as called for by Emerson (1976) decades ago. Specifically, we show that employees consider the wider social context in which specific events such as psychological contract breaches occur when evaluating the state of the exchange relationship with their organization: that is, if they perceive the presence © Blackwell Publishing Ltd 2009

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of high levels of politicking when things go wrong from their perspective, they are more likely to come to believe that their organization does not care for them or value their well-being. Furthermore, by highlighting that much work behaviour is driven by our perceptions of the intentions and actions of organizational agents, our findings suggest that managers are well advised to: in general, actively manage their employees’ perceptions of organizational events (cf. Greenberg, 1990), and in particular, take their organization’s political landscape into account when attempting to address employee responses to perceived psychological contract breach. To this effect, our research corroborates the notion that organizations which establish a positive work climate are in a better position to not only attract valuable employees (e.g. Pfeffer, 2005), but also retain them because the overall positive environment is likely to offset organizational actions that are perceived as infractions of an employee’s psychological contract. The latter remark points to another contribution of the current study: that is, examining the impact of negative antecedents onto POS. With research showing that individuals are significantly influenced by negative work experiences (e.g. Kiewitz, 2002), our investigation contributes to a literature that has overwhelmingly examined the beneficial outcomes of POS, while neglecting the study of negatively-valenced antecedents to POS. Moreover, we were able to shed some light on the association between psychological contract breach and POS. In particular, by undertaking two longitudinal studies using independent samples, we provide strong empirical evidence for the distinctiveness of psychological contract breach and POS as well as for the proposed causal relationship between the two constructs. It should be noted, however, that our conceptualization of the psychological contract breach–POS link is definitely not the last word on the matter. Instead, our study is better characterized as representing a piece in a puzzle that many might not consider a puzzle (yet). What we mean by that is the current state of affairs in which social exchange theory provides the underlying theoretical foundation for many important constructs in management studies, yet no unifying perspective exists that capitalizes on this fact and brings these constructs together in more precisely defined ways. We hope that by highlighting the role and potential of contextual factors and attributions in social exchange processes, this study makes a contribution towards future research progress in this direction. NOTES [1] Although psychological contracts imply a two-way exchange, the vast majority of research has examined psychological contracts from the employees’ perspective (for exceptions, see Coyle-Shapiro and Kessler, 2000; Tekleab and Taylor, 2003). [2] We thank Professor Colin Hales for suggesting this juxtaposition. [3] An exception is the study by Tekleab et al. (2005). However, these researchers factor-analytically and longitudinally analysed the distinctiveness of POS and psychological contract violation, with the latter construct tapping the emotions associated with psychological contract breach, such as feeling angry, betrayed, and resentful (Morrison and Robinson, 1997). [4] In order to establish the number of participants who constituted the initial sampling frame for Study 1, we relied on Markettools’ experiences with previous surveys of a similar nature. More precisely, Markettools uses as input (1) the average response rate to past surveys they administered and (2) the number of responses required by researchers, which then determined the number of employees they initially sampled. Based on our request for 300 responses at Time 1 and an average response rate of 30 per cent, Markettools hence distributed the survey to 1,000 employees. © Blackwell Publishing Ltd 2009

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[5] We also employed confirmatory factor analysis to test the independence of the dimensions of the psychological contract breach construct in Study 1 and Study 2. As can be seen from the results reported in Table AII in the Appendix, the analyses supported the two-factor model posited by theory and previous research for both studies (e.g. Rousseau, 1995; Turnley et al., 2003). In addition, we report standardized factor loadings for the items reflecting the two psychological contract breach dimensions for both studies in Table AI in the Appendix. [6] We expect the rationale put forth in Hypothesis 2 to hold for both transactional and relational PCB although these dimensions are theoretically and empirically distinct from each other. For instance, one may suspect that relational psychological contract breach would show a stronger association with POS given that most relational contract elements are discretionary in nature and that organizational actions that create perceptions of support are discretionary as well (cf. Eisenberger et al., 2001). On the other hand, it is likely that an organization that fails to pay an employee what she/he was promised (transactional contract breach) sends a strong signal that the employee is not valued and that the organization does not care for his/her well-being. Prior research and our own thinking provide us with little reason to believe that transactional and relational psychological contract breach would have differential effects on POS. Yet because we cannot completely rule out divergent effects in conjunction with contextual variables such as organizational politics perceptions, we separately examine relationships for transactional and relational PCB in the present study. [7] We assessed the integrity of the gathered data by scanning each survey for signs of response bias (e.g. always checking the same answer choices) and inconsistencies (e.g. same handwriting on the two surveys returned by the same student). This check resulted in deleting one case from the data set because the person reported being 20 years old yet having 10 years of work experience. We also contacted 20 randomly chosen participants using the optional e-mail information we had solicited in the survey. We asked unobtrusive questions to verify whether the respondent had actually completed the survey. For example, we asked about the survey’s length and whether they deemed the questions appropriate for their line of work. Of the 20 participants contacted, 19 replied and provided information supporting the integrity of the data. Scrutiny of the survey data from the person who never replied to follow-up requests did not reveal anything suspicious; we hence decided to retain that data for analysis. In addition, the follow-up with participants also corroborated our notion that the majority of respondents came from the state of Alabama, USA.

APPENDIX Table AI. Standardized confirmatory factor analysis factor loadings for the transactional and relational dimensions of psychological contract breach in Study 1 and Study 2 Dimensions of psychological contract breach

Transactional dimension items The overall benefits package provided The health care benefits provided A competitive salary A fair salary Pay tied to my level of performance Relational dimension items A job that is challenging A job that has high responsibility Being treated with respect The quality of working conditions Being treated fairly Notes: Study 1: N = 310; Study 2: N = 146. * p < 0.05; ** p < 0.01. © Blackwell Publishing Ltd 2009

Standardized factor loadings for Study 1

Standardized factor loadings for Study 2

0.57** 0.40** 0.85** 0.83** 0.75**

0.48** 0.37** 0.89** 0.91** 0.78**

0.37** 0.86** 0.86** 0.78** 0.91**

0.27** 0.21** 0.89** 0.64** 0.94**

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Table AII. Comparisons of hypothesized two-factor model of psychological contract breach construct with alternative one-factor model for Study 1 and Study 2 Study

Model/comparison

Model c2/Dc2

TLI

CFI

RMSEA

Study 1

One-factor model Two-factor model Comparison

c2 (33) = 353.48, p < 0.01 c2 (32) = 64.83, p < 0.01 Dc2 (1) = 288.65, p < 0.01

0.70 0.97

0.78 0.98

0.18 0.05

Study 2

One-factor model Two-factor model Comparison

c2 (33) = 257.73, p < 0.01 c2 (32) = 38.61, ns Dc2 (1) = 219.12, p < 0.01

0.65 0.99

0.74 0.99

0.21 0.037

Notes: Study 1: N = 310; Study 2: N = 146.

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