Organizational context and employee reactions to psychological contract breach: A multilevel test of competing theories

This study examines how organizational context affects employee reactions to perceived psychological contract breach. Using Conservation of Resources and Social Comparison theories, the authors develop competing hypotheses regarding the potential exacerbating vs. buffering effects of organizational context on the relationships between psychological contract breach and job security satisfaction, job satisfaction, work-family conflict, and burnout. They collected a multi-source, multilevel data set composed of faculty and departmental administrators at a university experiencing repeated budget reductions. It was found that psychological contract breach was related to detrimental job outcomes (i.e., decreased job security satisfaction and job satisfaction, increased work-family conflict, and burnout). However, this relationship was stronger among faculty in departments reporting low rather than high departmental budget cuts, thus supporting Social Comparison theory rather than Conservation of Resources theory. Social comparison matters when it comes to psychological contract breach.