Does the relationship between psychological contract breach and
turnover intentions differ between employees within the same
organisation?
Author Adriaan Klinkenberg (6008720) University of Amsterdam Faculty Economics and Business Master Business Studies Date 8th of august 2014 Supervisor S.T. Mol
Table of contents
Abstract
3
Introduction
4
Problem statement
7
Hypotheses
8
Type of research
13
Method
14
Results
18
Hypotheses testing
20
Conclusion and discussion
29
Abstract
The research will be conducted at a.s.r., a Dutch insurance company. The central theme in this research is the psychological contact between employer and employees. The goal of this research is to create insight in the expectations of both employer and employee from the psychological contract. When a.s.r. as an organisation has this insight it will be able to conduct a more efficient and effective human resource policy. This will result in fewer cases of psychological contract breach and therefore also fewer cases of psychological contract violation. This in turn is expected to lead to a higher score on organizational commitment and a lower score on turnover intentions.
To achieve this result this research started with an intensive literature study on the subjects of the psychological contract, the employment relationship and organizational commitment. In order to be able to deliver valuable analysis to a.s.r. a survey was conducted among employees of a.s.r. At this moment a.s.r. has over 4.000 employees. For this study an e-mail was sent containing a link to the online questionnaire. This e-mail has been sent towards 427 employees of a.s.r. Resulting in 120 respondents of which 97 questionnaires were usable. This study shows that psychological contract breach and turnover intentions are positively related. Both psychological contract violation and organisation commitment have a serial mediating effect on the relationship between psychological contract breach and turnover intentions. Tenure, level of education and age has no significant moderating effect on the relationship between psychological contract breach and psychological contract violation.
Introduction
The employment relationship refers to the relationship between an employee and employer in relation to the labour that the employee has to deliver and the rewards the employee will receive from the employer for this labour (Nauta, Oeij, Huiskamp & Goudswaard, 2007). Kluijtmans (2008) identifies different dimensions within the employment relationship. There is an authority relationship, a cooperative relationship, and a trade relationship. The authority relationship arises from the right of the employer to give directions which employees are expected to follow up. This relationship is usually documented in the employment contract which contains a number of agreements between employer and employee. The cooperative relationship affects the
cooperation between employer and employee and also between different employees. The trade relationship consists of the labour an employee delivers and the financial rewards the employee will receive in exchange for this (Kluijtmans, 2008). Because of different trends in our society the nature of the employment relationship is also changing. Trends that influence the
employment relationship are the internationalisation of organisations, but also mergers and acquisitions as well as technological progression and ever increasing competition (Evers & Wilthagen, 2007). Knowledge intensive labour is becoming more and more important (Turnley, Bolino, Lester & Goodblood, 2003). This leads towards an increasing demand for agility, flexibility and responsibility for both employer and employee (Evers & Wilthagen, 2007). This increased demand for agility, flexibility, and responsibility will result in a change of interests of both employee and employer (Nauta, Oeij, Huiskamp & Goudswaard, 2007). So, it is clear that the employment relationship between the employer and employee is changing
As an illustration of the challenges a.s.r. faces, it is helpful to describe the problems the talent management division is experiencing. The Talent Management division of a.s.r. is not yet performing to its full capability. Each year a carefully selected group of around 10 young,
enthusiastic, highly talented, and motivated persons starts in the talent development program. The main goal of this program is to be able to fill in future job vacancies at higher levels within the organisation with graduated trainees.
Within two years a large percentage of this group has lost a great deal of their enthusiasm and motivation. This is illustrated by the fact that 70% of the trainees that started in 2011 left the organisation in 2013. This effect increases as time goes by and in around the third year at least a third of the original group is looking for a job outside a.s.r. or has already left the organisation. Of course it also plays a role that trainees become more attractive to other employers as they gain valuable experience. However most of the departing (former) trainees leave a.s.r. to work at another organisation in a similar function with similar terms of employment. This is clearly not the effect that a.s.r. had in mind when starting the talent development program.
The loss of motivation and enthusiasm can (partially) be explained using psychological contract theory. The importance of the psychological contract became even more obvious while talking to former trainees about the reasons for them to decide to leave a.s.r. None of them made the decision to leave the organisation because they were dissatisfied with the terms of
employment, such as salary. So the research question will be: “What effect does psychological contract breach have on the employees of a.s.r.? How will the experience of psychological contract breach differ between employees of a.s.r. on different variables such as age, level of education, gender, and tenure and how will they react to psychological contract breach. When a.s.r. has a clear view on this subject the organisation will be able to reduce the risk of
psychological contract breach, be able to anticipate the effect of psychological contract breach, and prevent psychological contract breach from occurring in the first place. Psychological contract breach, psychological contract violation, and turnover intentions are things an
hand, is a variable you want employees of the organisation to score high on. Therefore, this study will focus on the relationship between psychological contract breach and, psychological contract violation, organizational commitment and turnover intentions. Psychological contract breach reflects employees’ feeling and will impact work engagement through its impact of job satisfaction (Rayton & Yalabnik, 2014). The employee and employer expectations, which comprise the psychological contract, may differ from one another (Guest, 1998). An employer may very well have different expectations on various areas from an employee and vice versa. Those expectations not only differ on the explicit part of the relationship, such as the exchange of money for a certain amount of labour, but they also cover implicit mutual expectations (Nauta et al., 2007). The term for these implicit expectations in the relationship between employer and employee is psychological contract, a term that was first introduced by Argyris (1960).
Now that it is clear what the relationship is between the employment contract and the psychological contract is, it is time to take a closer look at the psychological contact. The psychological contact has been defined as “…individual beliefs, shaped by the organization, regarding terms of exchange agreement between individuals and their organization” (Rousseau, 1995: p.9). The psychological contract is a complex concept. It contains at least two
stakeholders, with their own interests and perceptions (Guest, 1998). From the employee perspective the employer has a human identity and the employee has a psychological contract with the total organisation or employer. However all the employees of the organisation cannot be seen as “the employee” and the different representatives of the organisation cannot be seen as “the organisation”. The organisation consists of individuals that act on behalf of the organisation. Those individuals, managers, or agents, each have their own vision of the psychological contract (Morrison & Robinson, 1997).
Problem statement
The problem a.s.r. faces is that the organisation seems to be unable to retain young talented employees. Many large organisations have programmes put together to make sure that there is enough in-house talent to guarantee the succession of departing higher management. But the time between hiring a young, ambitious, eager, and talented person and the succession can take as much as ten years, during which it could be argued on the aforementioned findings, it is critical to manage the psychological contract. When talent is leaving within the first five years, there is a lot of money being lost and the goals of the programme are not met. So it is critical to find out where expectations of the psychological contract are different between employee and employer. When this is clear, perhaps a.s.r. will be able to improve the match between those expectations. The goal of the a.s.r. trainee programme is to produce highly competent employees who are able to successfully contribute to the long term success of a.s.r. It is essential to find out what the psychological contract consists of for this particular group of employees, what actually is desired by them. It is not only important to find out what actually is desired by this particular group of employees, but also what will lead to psychological contract breach for the different groups of employees when looking at age, educational level and tenure.
Hypothesis development
Robinson and Morrison (1997) define psychological contact breach as the employee perception that the employer has failed to meet one or more obligations. A gap has arisen between what the employee felt was promised by the employer and what was actually delivered by the employer (Turnley et al., 2003; Zhao, Wayne, Glibkowski & Bravo, 2007). The emotional reaction to psychological contact breach is called psychological contract violation (Robinson & Morrison, 1997). Research shows that psychological contract violation in many cases is a direct
consequence of psychological contract breach (Morrison & Rousseau, 1997).
Hypothesis 1: There is a positive relationship between psychological contract breach and
psychological contract violation.
Tenure is closely related to age. But it is very interesting to see if there are differences between the variables age and tenure. Does a 59 year old employee that worked his entire carrier at the same organisation, responds identical on psychological contract breach in comparison with a 59 year old employee that for instance had 14 different employers during his carrier. There are a few studies that examined the relationship between tenure and the psychological contract. Bellou (2007) found that employees with a shorter tenure are less demanding. On the other hand Rousseau (1998) argued that employees with long tenure placed greater emphasis on relational contracts. So the literature does provide insight, however it is not crystal clear what the direction of the relationship between psychological contract breach, psychological contract violation, and tenure is. Tenure may very well have a moderating role on the relationship between
psychological contract breach and psychological contract violation.
Hypothesis 1a: Tenure moderates the relationship between psychological contract breach
Level of education is one of the variables that influence the perceptions of an employee about the psychological contract (Bellou, 2009). Guest (2004) identified the level of education as one of the individual’s factors that influence the formation of the psychological contract. Sels, Janssens & Van den Brande (2004) found that as the educational level increases there is a move from loyal psychological contracts to instrumental, weak, investing, and finally unattached ones, suggesting clearly that individuals’ view of their employment relationship changes based on their level of education. Indicating that employees with a higher level of education are less forgiving towards their employer when they experience psychological contract violation. So when the level of education of an employee increases, the expectations of the psychological contract will also increase. All else being equal, an employee with a lower level of education is less likely to experience psychological contract violation when there is a case of psychological contract breach. So the relationship between psychological contract breach and psychological contract violation gets stronger when the level of education of an employee rises, all else being equal. A lower level of education indicates a higher level of loyalty towards the employer, so in case of psychological contract breach this will translate less directly into psychological contract violation for employees with a lower level of education (Sels et al., 2004).
Hypothesis 1b: The level of education of an employee moderates the relationship
between Psychological Contract Breach and Psychological Contract Violation, so that this relationship becomes stronger for employees with a higher level of education. Studies on organizational commitment and talent retention across generations show that there are major differences between the different generations (Zhao et al., 2007). A meta-analysis (Bal, De Lange, Jansen & Van der Velde, 2010) showed that the higher the age of an employee is, the lower the expectations of this employee are towards the organisation he or she is working at. The
psychological contract breach. It may very well be that the psychological contract will also differ between the various generations of employees within large organizations. When psychological contract breach occurs, employees are less likely to identify with the organization and maintain their commitment (Zhao et al., 2007). Younger employees are less willing than older employees to remain working for the same organization and also score lower on organizational commitment (D’Amoto & Herzfeldt, 2008). Studies indicate that there is an age related difference (Bal et al., 2010) when it comes down to believing in loyalty, the importance of career development, and employer loyalty (Brousseau et al.,1996; de Muse et al., 2001; Putnam, 2000; Robinson and Jackson, 2001; Valcour and Tobert, 2003). Age is an important factor in psychological contract violation. Different generations will respond more or less emotionally in case of psychological contract breach, where younger generations are likely to respond more emotional (Bellou, 2009). Older generations of employees believe more in employee loyalty. They feel their loyalty and hard work will be rewarded by the employer with job security and gradual salary increases. Younger employees feel more that it is quite risky to depend on employer loyalty. So younger employees are more likely to take matters into their own hands by taking responsibility for their own career and will more easily leave the employer when an opportunity arises at another organization (Brousseau et al., 1996; Hirsch and Shanley, 1996; Klein et al., 2006; Solomon, 1992). Older employees have more realistic expectations about what to expect from the employer, due to their experience. Older employees also realise that the period towards their pension is rapidly declining. Those insights result in a more calm response in cases such as psychological contract breach (Kanfer & Ackerman, 2004).
Hypothesis 1c: The higher the age of an employee the weaker the relationship between
Tett and Meyer (1993) defined turnover intentions as a conscious desire to seek out a job with a new organisation. Turnover intention is understood to have a very negative impact on
organisational effectiveness (Chen, Ployhart, Thomas, Anderson, & Bliese, 2011; Pitts, Marvel, & Fernandez, 2011; Valentine, Godkin, Fleischman, & Kidwell, 2011) and job satisfaction (Dickter, Roznowski, & Harrison, 1996; Lee & Mitchell, 1994; Mobley, Horner, & Hollingsworth, 1978; Price & Mueller, 1986; Williams & Hazer, 1986).
When an employee feels their psychological contract is breached this influences the labour relationship between the employer and the employee (Morrison & Robinson, 1997). How much the labour relationship is affected depends on the nature of the breach and on which party is responsible for this specific breach of the psychological contract (Morrison & Robinson, 1997). Promise fulfilment is the opposite of psychological contact breach. Psychological contract violation is an antecedent of loss of trust in the organisation as well as a decrease in
organizational commitment and a higher intention to leave the organisation (Guerrero, 2005). A meta-analysis showed that psychological contract breach affected psychological contract violation and organizational commitment; however this meta-analysis could not directly relate psychological contract breach with turnover intentions (Zhao et al, 2007). A longitudinal study (Bal, De Cooman & Mol, 2013) showed that there is a significant relationship between psychological contract fulfilment, higher work engagement and lower turnover intentions. However the relationship between psychological contract fulfilment, work engagement and turnover intentions is only significant for employees with low tenure. Employees with high tenure showed more stability in work engagement, turnover intentions and psychological contract breach. The relationship between psychological contract breach and turnover intentions was stronger for employees with a low tenure. Psychological contract violation is also related to
employee turnover, organizational citizenship behaviour, and in-role performance (D’Amoto & Herzfeldt, 2008).
Hypothesis 2a: A high score on Psychological contract breach results in a high turnover
intentions.
Cassar & Briner (2011) conducted a study among 103 sales employees. The study investigated, among other things, the mediating role of violation in the relationship between psychological contract breach and both affective commitment and continuance commitment. The outcome of this study suggests that psychological contract violation had a mediating effect on the
relationship between psychological contract breach and both affective commitment and continuance commitment. Blau & Boal (1989) investigated 129 field office employees from an insurance company and confirmed that highly job involved and organizationally committed employees had significantly less voluntary turnover than employees scoring low on involvement and commitment. Other studies (Elliot & Hall, 1994; Huselid & Day, 1991) showed similar results. Therefore it is worth investigating if psychological contract violation and organizational commitment have a serial mediating effect on the relationship between psychological contract violation and turnover intentions.
Hypothesis 2b: Psychological contract violation and organizational commitment have a
serial mediating effect the relationship between Psychological Contract Breach and Turnover Intentions.
Type of research
It is relevant to understand what to change to achieve the set goals of talent management. Different organisations have different HR policies, so it is not particularly useful to find out what works in other organisations, to find a solution for the problem a.s.r. is facing. For this study a questionnaire was developed which was used to collect the required data to answer the research question. This questionnaire was filled out by employees of a.s.r. The data was analysed by means of SPSS. Below you can see the conceptual model. Psychological contract breach results in psychological contract violation, with tenure (years with the organisation), level of education and employee age acting as moderators. Psychological contract breach can directly lead to turnover intentions as well as through increasing psychological contract violation and decreasing organizational commitment, where psychological contract violation and organizational have a serial mediating effect on the relationship between psychological contract breach and turnover intentions.
Organization
Commitmen
Psychological
Contract
Violation
Psychological
Contract
Breach
Employee
Age
Tenure
Level
Of
Education
1
2
1c
1
1
2
2
Organiza
tional
Psycholo
gical
Turnove
r
Psycholo
gical
Employe
e
Tenure
Level
Of
1
2
1
1
1
2
2
Method
In the hypotheses development chapter of this research, hypotheses were formed. These hypotheses were formed in order to study the psychological contract of employees working for a.s.r. As well as to find out if and what relationship there is between psychological contract breach and turnover intentions and how much of this the flow between those two can be explained by psychological contract violation and organizational commitment. Furthermore this study researches the effect of tenure, level of education and age on the relationship between psychological contract breach and psychological contract violation. The sample and data-collection will be described in the following paragraph.
Sample and data-collection
The respondents for this research are employees of a.s.r. There are 61 male respondents and 35 female respondents that provided a useable, completely filled in questionnaire. More precisely 62.9% of the respondents are of the male gender. The average age of the respondents is 42 years, with a standard deviation of 11 years. The tenure mean is 165 months, with a standard deviation of 107 months. Of the respondents 57.7% successfully finished a higher vocational level education and 37.8% successfully finished a university level education. The majority of respondents are working in the marketing department, sales department or the department that services mandated insurance brokers, those are the departments were the e-mail containing the questionnaire was distributed. In total 427 e-mails were sent containing the link to the
questionnaire. This resulted in 120 respondents with eventually 97 useful questionnaires. So the response was 28.1%, with a response rate of 22.7% when strictly looking at fully filled in questionnaires. This also means that 19.2% of the filled in questionnaires was not usable for this study, due to missing data caused by unanswered questions. The questionnaire was sent to 23
team managers and members of the management team. They were asked to fill in the
questionnaire themselves and sent the questionnaire by e-mail to the employees in the teams they direct. This route was chose to give more importance to this study. A request from a manager is more likely to be followed up then a random mail from a colleague.
The data was collected using a self-administered questionnaire. This questionnaire was developed by a research team of the HRM-OB group of the University of Amsterdam. The majority of items used to measure the various constructs in the questionnaire we obtained from earlier research. For this research the questionnaire is used that has been earlier developed for the research of dr. S.T. Mol. The questionnaire was first drafted in English. Then respondents pre-tested the questionnaire and some items were revised. After this was complete the questionnaire was translated into Dutch following procedures of Brislin (1970): first, one member of the research staff translated all items from English to Dutch. Then, a second member of the research staff translated the items back from Dutch into English. When comparing the latest version with the original one, the two members of the research staff discussed and resolved differences between items that were not identical in the twice translated and original version. Finally a pilot questionnaire was used to test the questionnaire. The questionnaire was sent to 4 colleagues, they filled in the questionnaire, gave feedback on how they experienced it and what should be done to make it better. Their input was adapted in the final version.
The questionnaire consisted of 129 questions. The following constructs were measured, namely psychological contract obligation (employee), psychological contract fulfilment (employee), psychological contract breach (employee), job satisfaction, psychological contract violation (employee), turnover intentions and organizational commitment. These are also the constructs that are used in this study to answer the hypothesis.
Besides the constructs mentioned above the questionnaire also consisted of several situational variables (Turnley & Feldman, 1999). Consisting of, among others, the following question: “Forces outside my organization’s control (such as general economic conditions, government regulations, or mergers) caused my organization to change the commitments it made to me.” This was in Dutch translated as: “De machten buiten mijn organisatie's controle (zoals algemene economische toestand, overheidsreglementen of fusies) veroorzaken mijn organisatie om gemaakte verbintenissen met mij te veranderen.” Also the respondents were asked to indicate there gross annual salary. The number of contract hours was also asked, using the following question: “Please indicate the number of hours worked per week according to your contract.” Which in Dutch translated as: “Geef aan hoeveel uur je volgens jouw contract per week werkt.” This question used a dropdown list showing all options from 40 hours and downwards.
Furthermore questions were included asking about actual worked hours, type of contract, contract prospect, number of promotions and number of subordinates.
Tenure was measured using a question that could be only answered by selecting the actual numbers of years and months working at a.s.r. and its predecessors. At the end of the questionnaire several control variables were included. These were country of residence, gender, age, marital status and level of education.
The constructs psychological contract obligation and psychological contract fulfilment were measured using 37 different questions (Revell, 2011). All of those 37 questions consisted of two levels to first measure psychological contract obligation and immediately afterwards
psychological contract fulfilment. At the top of the page the following information was shown so that the questions were correctly interpreted, in Dutch: “ In hoeverre je vindt dat a.s.r. verplicht is om aan het onderdeel te voldoen. Je kunt kiezen uit 'niet verplicht', 'neutraal' of 'verplicht'.” And: “In hoeverre je vindt dat a.s.r. het onderdeel in werkelijkheid vervult. Dit doe je door deze te
beoordelen op de mate waarin je het eens bent met elke stelling. De scores reiken van 'zeer oneens' tot 'zeer eens'. Als je op de eerste vraag hebt aangegeven dat a.s.r. niet verplicht is tot het vervullen van een bepaald onderdeel, dan kan je deze vraag beantwoorden met 'niet van
toepassing'.” An example of a question is, in Dutch: “Laat waardering blijken voor het door mij geleverde werk.”. All those 37 questions required two answers, one for psychological contract obligation and one for psychological contract fulfilment.
Psychological contract obligation was measured using a three point Likert type scale, ranging from “niet verplicht, neutraal, verplicht”. Following, psychological contract fulfilment was measured using a five point Likert type scale. This question also included a sixt option, namely: “niet van toepassing”. The other options ranged from “zeer oneens” till “zeer eens”.
The construct psychological contract breach (Robinson & Morrison, 2000) was measured using five items. All five items were measured using a five point Likert type scale ranging from “ strongly disagree” till “strongly agree”. An example is: “I feel that my employer has come through in fulfilling the promises made to me when I was hired”
The construct psychological contract violation (Robinson & Morrison, 2000) was measured using four items. All items were measured using a five point Likert type scale ranging from “ strongly disagree” till “strongly agree”. An example is: “I feel extremely frustrated by how I have been treated by my organization”
The following construct is turnover intentions (Kelloway, Gottlieb & Barham, 1999). This constructs consists of 4 items which were measured using a five point Likert type scale. An example of a question in this construct: “I intend to ask people about new job opportunities.”
The construct organizational commitment (Meyer, Allen& Smith, 1993) consists of six items, all being measured with a five point Likert type scale. An example of a question used to
measure this construct: “I would be very happy to spend the rest of my career with this organization.”
Results
In this part, the performed analysis and associated results that test the hypotheses of this study are described. In the first paragraph the data is investigated with the help of factor analysis. In the second paragraph each of the hypotheses is tested.
First the variable age is transformed into a new variable so that the actual age filled in by the respondent is shown in the data file. Furthermore the six variables that needed to be recoded, were recoded. The variables that were recoded were three items of the construct psychological contract breach. Item 1: “Almost all the promises made by my employer during recruitment have been kept so far”. Item 2: “I feel that my employer has come through in fulfilling the promises made to me when I was hired”. And Item 3: “So far my employer has done an excellent job of fulfilling its promises to me”. Also three items of the construct organizational commitment needed to be recoded. Item 1: “I do not feel like ‘part of the family’ at my organization”. Item 2: “I do not feel ‘emotionally attached’ to this organization”. And Item 3: “I do not feel a strong sense of belonging to my organization”. The survey question: “I don’t plan to be working for a.s.r. much longer” is replaced from organizational commitment to turnover intentions. The Cronbach’s Alpha of turnover intentions increased from .925 to .936 and the Cronbach’s Alpha of organizational commitment showed an increase towards .941 from the original .911.
Within the variable level of education 92.8% of the respondents filled in higher vocational or university. Therefore the variable is split is those two levels of education instead of the whole range of options.
A factor analysis using the Oblimin Rotation Method showed that 81% of the total variance is explained by 19 items with 4 factors. Those 4 factors or constructs are psychological contract breach, psychological contract violation, turnover intentions, and organizational commitment; those are the construct that will be used for this study. Starting with psychological contract breach, see table 1. The 5 items are tested on their reliability or internal consistency. The Cronbach’s Alpha score for psychological contract breach is .942. The second construct to test is psychological contract violation. With 4 items the Cronbach’s Alpha is .822. The third construct to test on reliability is turnover intentions. With 4 items the Cronbach’s Alpha score is .925. The fourth and last construct to test for reliability is organizational commitment. The Cronbach’s Alpha score is .911 based on 6 items.
Table 1: Means, standard deviations and correlations
Mean St. dev (1) (2) (3) (4) (5) (6) (7) (8) (1) Breach 3.08 .78 (.94) (2) Violation 2.05 .66 .71** (.82) (3) Turnover 2.68 .80 .66** .69** (.93) (4) Commitment 3.15 .59 -.57** -.67** -.61** (.91) (5) Age 42.37 11.09 -.59** -.53** -.76** .58** - (6) Tenure 165.43 107.32 -.54** -.53** -.72** .60** .89** - (7) Gender 1=M, 2=V 1.36 .48 .19 .20 .19 -.16 -.34 ** -.25* - (8) Educational Level 1=WO, 0=HBO .38 .49 .22 * .21* .26* -.20 -.30** -.22* -.06 -
**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).
Hypotheses testing
In this part the hypothesis are tested.
Hypotheses 1 (table 2): There is a positive relationship between psychological contract breach and psychological contract violation. As shown in table (2) the direct effect of X, psychological contract breach on psychological contract violation results in a LLCI value of .47 and a UCLI of .72, where b=0 would indicate no effect. Therefore, the fact that het confidence level does not contain zero means that there is a significant relationship between psychological contract breach and psychological contract violation. When an employee experiences psychological contract breach the possibility that this employee also experiences psychological contract violation has increased. Hypothesis 1 is supported.
Table 2: Model = 6 Y = Turnover Intentions X = Breach M1 = Violation M2 = Commitment Sample size 97 ************************************************************************** Outcome: Violation Model Summary R R-sq F df1 df2 p .7069 .4997 94.8733 1.0000 95.0000 .0000 Model
coeff se t p LLCI ULCI constant 2.0515 .0473 43.3539 .0000 1.9576 2.1455 Breach .5949 .0611 9.7403 .0000 .4737 .7162
**************************************************************************
Model Summary R R-sq F df1 df2 p .6817 .4647 40.7966 2.0000 94.0000 .0000 Model
coeff se t p LLCI ULCI constant 4.1374 .2015 20.5301 .0000 3.7373 4.5376 Violation -.4816 .0958 -5.0246 .0000 -.6719 -.2913 Breach -.1418 .0807 -1.7579 .0820 -.3020 .0184 ************************************************************************** Outcome: Turnover Model Summary R R-sq F df1 df2 p .7464 .5571 38.9920 3.0000 93.0000 .0000 Model
coeff se t p LLCI ULCI constant 2.7298 .5877 4.6446 .0000 1.5626 3.8969 Violation .4131 .1344 3.0727 .0028 .1461 .6800 Commitment -.2854 .1284 -2.2219 .0287 -.5405 -.0303 Breach .3090 .1021 3.0264 .0032 .1062 .5117
******************** DIRECT AND INDIRECT EFFECTS *************************
Direct effect of X on Y
Effect SE t p LLCI ULCI
.3090 .1021 3.0264 .0032 .1062 .5117
Indirect effect(s) of X on Y
Effect Boot SE BootLLCI BootULCI
Total: .3680 .0780 .2392 .5536
Ind1 : .2458 .0838 .1091 .4437
Ind2 : .0818 .0422 .0120 .1743
Ind3 : .0405 .0290 -.0006 .1216
Indirect effect key
Ind1 : Breach -> Violation -> Turnover
Ind2 : Breach -> Violation -> Commitment -> Turnover
Number of bootstrap samples for bias corrected bootstrap confidence intervals:
1000
Level of confidence for all confidence intervals in output:
95.00
For the following hypotheses process model 1 for the testing of moderating effect is used, process does not offer the possibility to test for moderated mediation with 2 mediators operating in serial.
Hypothesis 1a (table 3): Tenure moderates the relationship between psychological contract breach and violation, so that this relationship is weaker for those employees with a longer tenure. Tenure has no significant moderating effect on the relationship between psychological contract breach and psychological contract violation. The R2 change of .0022 means that only 2.2% of the change of psychological contract violation can be explained by the interaction of tenure and, psychological contract breach. For the significance of the interaction effect, p=.52 and for the direct effect of tenure on psychological contract violation, p=.94. To be significant, p=<.05. So hypothesis 1a cannot be supported.
Table 3: Model = 1 Y = Violation X = Breach M = Tenure Sample size 92 ************************************************************************** Outcome: Violation Model Summary
R R-sq F df1 df2 p .7345 .5395 34.3627 3.0000 88.0000 .0000
Model
coeff se t p LLCI ULCI constant .5004 .4238 1.1808 .2409 -.3418 1.3427 Tenure .0002 .0021 .0717 .9430 -.0040 .0043 Breach .5607 .1235 4.5386 .0000 .3152 .8062 int_1 -.0005 .0007 -.6512 .5166 -.0019 .0009 Interactions:
int_1 Breach X Tenure
R-square increase due to interaction(s):
R2-chng F df1 df2 p int_1 .0022 .4241 1.0000 88.0000 .5166
*************************************************************************
Conditional effect of X on Y at values of the moderator(s):
Tenure Effect se t p LLCI ULCI 58.1168 .5340 .0929 5.7492 .0000 .3494 .7186 165.4348 .4847 .0722 6.7155 .0000 .3413 .6282 272.7528 .4354 .1151 3.7822 .0003 .2066 .6642
Values for quantitative moderators are the mean and plus/minus one SD from mean. Values for dichotomous moderators are the two values of the moderator.
******************** ANALYSIS NOTES AND WARNINGS *************************
Level of confidence for all confidence intervals in output: 95.00
NOTE: Some cases were deleted due to missing data. The number of such cases was:
5
Hypothesis 1b (table 4): The level of education of an employee moderates the relationship between psychological contract breach and psychological contract violation, so that this relationship becomes stronger for employees when the level education rises. Because 92.8% of
level education, those are the values used in the analyses. Higher vocational uses the value “0” and university uses the value “1”.
Level of education has no significant moderating effect on the relationship between
psychological contract breach and psychological contract violation. The R2 change of .0041 means that only 4.1% of the change of psychological contract violation can be explained by the moderating effect of level of education. For the significance of the interaction effect, p=.4 and for the direct effect of level of education on psychological contract violation, p=.51. To be significant, p=<.05. So hypothesis 1b cannot be supported. However, when looking at the conditional effect of X, psychological contract breach on Y, psychological contract violation a small effect can be seen. The data shows that a higher score on level of education results in a higher confidence interval. This indicates that the relationship between psychological contract breach and psychological contract violation is stronger for employees with a higher level of education. However in this study the variable level of education was limited due to the very narrow range of level of education of the respondents, there were only respondents participating that finished a higher level education.
Table 4: Model = 1 Y = Violation X = Breach M = Education level Sample size 90 ************************************************************************** Outcome: Violation Model Summary R R-sq F df1 df2 p .7156 .5121 30.0900 3.0000 86.0000 .0000
Model
coeff se t p LLCI ULCI constant .3679 .2684 1.3706 .1741 -.1657 .9014 Education -.2844 .4311 -.6597 .5112 -1.1413 .5725 Breach .5446 .0880 6.1863 .0000 .3696 .7196 int_1 .1129 .1323 .8534 .3958 -.1501 .3758
Interactions:
int_1 Breach X Education
R-square increase due to interaction(s):
R2-chng F df1 df2 p int_1 .0041 .7283 1.0000 86.0000 .3958
*************************************************************************
Conditional effect of X on Y at values of the moderator(s):
Education Effect se t p LLCI ULCI .0000 .5446 .0880 6.1863 .0000 .3696 .7196 1.0000 .6575 .0987 6.6594 .0000 .4612 .8537
Values for quantitative moderators are the mean and plus/minus one SD from mean. Values for dichotomous moderators are the two values of the moderator.
******************** ANALYSIS NOTES AND WARNINGS *************************
Level of confidence for all confidence intervals in output: 95.00
NOTE: Some cases were deleted due to missing data. The number of such cases was: 7. Those 7 respondents did not fill in the question about level of education.
Hypothesis 1c (table 5): The higher the age, in months, of an employee the weaker the relationship between psychological contract breach and psychological contract violation becomes. Age has no significant moderating effect on the relationship between psychological contract breach and psychological contract violation. The R2 change of .0009 means that only .9% of the change of psychological contract violation can be explained by the moderating effect of age. For the significance of the interaction effect, p=.67 and for the direct effect of age on psychological contract violation, p=.92. To be significant, p=<.05. So hypothesis 1c cannot be supported. Table 5: Model = 1 Y = Violation X = Breach M = Age in months Sample size 97 ************************************************************************** Outcome: Violation Model Summary R R-sq F df1 df2 p .7231 .5229 33.9726 3.0000 93.0000 .0000 Model
coeff se t p LLCI ULCI constant .5879 .9538 .6164 .5392 -1.3061 2.4819 Age -.0021 .0212 -.0987 .9216 -.0442 .0400 Breach .6210 .2826 2.1979 .0304 .0599 1.1821 int_1 -.0029 .0067 -.4279 .6697 -.0163 .0105
Interactions:
R-square increase due to interaction(s):
R2-chng F df1 df2 p int_1 .0009 .1831 1.0000 93.0000 .6697
*************************************************************************
Conditional effect of X on Y at values of the moderator(s):
Age Effect se t p LLCI ULCI 31.2841 .5309 .0967 5.4894 .0000 .3388 .7229 42.3711 .4989 .0754 6.6152 .0000 .3491 .6487 53.4582 .4669 .1148 4.0674 .0001 .2390 .6949
Values for quantitative moderators are the mean and plus/minus one SD from mean. Values for dichotomous moderators are the two values of the moderator.
******************** ANALYSIS NOTES AND WARNINGS *************************
Level of confidence for all confidence intervals in output: 95.00
Hypothesis 2a (table 2): A high score on psychological contract breach results in a high turnover intentions. As shown in table 2 the direct effect of X, psychological breach on Y turnover intentions results in a LLCI value of .11 and an UCLI of .51. b=0 would indicate no effect whatsoever. Also shown in table 2 are the indirect effects of X, psychological contract breach on Y turnover intentions results in a LLCI of .24 and an UCLI of .55. Both direct and indirect effects do not contain b=0. Therefore, the fact that the confidence intervals do not contain zero means that there is a significant relationship between psychological contract breach and turnover intentions. In other words, when an employee experiences more psychological contract breach, the chance that this particular employee will develop turnover intentions will increase. Therefore, hypothesis 2a is supported.
Hypothesis 2b (table 2): psychological contact violation and organizational commitment mediate the relationship between psychological contract breach and turnover intentions. For this
hypothesis the indirect effect shown in table 2 is important. Indirect effect 1 measures the effect of psychological contract violation as a mediator between psychological contract breach and turnover intentions. Resulting in the following confidence interval levels, Boot LLCI =.11 and Boot UCLI=.44. The value “0” , b=0, lies not between those values, so there is a significant mediating effect of psychological contract violation.
The effect of organizational commitment as mediator is shown in table 2 as indirect effect 3. The value “0” does lie between the Boot LLCI of -.0006 and the Boot UCLI of .12. So b=0 lies in the confidence interval, therefore there is no significant mediating effect of organizational
commitment on the relationship between psychological contract breach and turnover intentions. The serial mediation effect of both psychological contract violation and organizational
commitment on the relationship between psychological contract breach and turnover intentions is shown in table 2 as indirect effect 2. Indirect effect 2 shows a Boot LLCI of .1 and a Boot UCLI of .17. So the confidence interval does not contain b=0. There is a significant serial mediating effect of psychological contract violation and organizational commitment on the relationship between psychological contract breach and turnover intentions. So the serial mediation effect is significant. So hypothesis 2b can be supported. There is a significant serial mediating effect measured of psychological contract violation and organizational commitment on the relationship between psychological contract breach and turnover intentions.
Conclusion and discussion
This study had several purposes. The most important one was to create insight in the
psychological contract that exists between a.s.r. and its employees. More specifically the group of employees younger than 35 years old, with a high level of education that participated in the talent development program. It is very valuable for an organisation such as a.s.r. to get a better understanding in the differences in expectations of the psychological contract between segmented groups of employees. This study also researched the relationship between
psychological contract breach, psychological contract violation, organizational commitment, and turnover intentions. Goal was to get a clear picture on how those variables relate to one another. Furthermore the moderating influence of tenure, level of education and age on the relationship between psychological contract breach and psychological contract violation was explored.
Psychological contract breach and psychological contract violation
The hypothesis was that there was a positive relationship between psychological contract breach and psychological contract violation. The results show that this hypothesis is supported, such as expected. This outcome is in line with the study of Morrison and Rousseau (1997) and the meta-analysis Zhao et al. (2007). However the moderating effect of the variables tenure, level of education and age on the relationship between psychological contract breach and psychological contract violation did not turn out to be significant. An experienced respondent seems less likely to experience psychological contract violation compared to a less experienced respondent, but the differences are small when looking at both the direct effect and interaction effect. A massive 92.8% of the respondents is higher educated, meaning they completed a study on higher vocational or university level. So the range of educational levels is quite small. Nevertheless a university level educated respondent is more likely to experience psychological contract breach
in comparison to a higher vocational educated respondent, when looking at the conditional effect of level of education on the relationship between psychological contract breach and
psychological contract violation. Sels, Janssens & Van den Brande (2004) found that as the educational level increases there is a move from loyal psychological contracts to instrumental, weak, investing, and finally unattached ones, suggesting clearly that individuals’ view of their employment relationship changes based on their level of education. So the findings of this study match up with the findings of Sels et al. (2004). It seems that with an increase of the level of education of an employee there is also an increase in expectations towards the psychological contract between employee and employer.
This study shows that when the age of an employee increases, the possibility that this employee will experience psychological contract violation decreases. Older generations of employees believe more in employee loyalty. They feel their loyalty and hard work will be rewarded by the employer with job security and gradual salary increases (Brousseau et al., 1996). This also seems to be the case is this study, however the relationship between psychological contract breach and psychological contract violation is not significantly moderated by the variables age and tenure. What probably also plays a very large role in this case is income. The employees that have been working at a.s.r. and its predecessors, for instance more than twenty five years, have received steady salary increases. This has resulted in a very high income. An income that they would not be able to earn outside of a.s.r. This group of employees also benefits from a range of employee benefits. Employee benefits such as a reduction on mortgage interest rates, a very convenient pension and deductions on insurance premiums. This creates the so called golden handcuffs. And those golden handcuffs are the strongest for older employees, in the organizational layers beneath the management levels. Another way to look at it, is that the employees that are by
violation have already left the organization in for instance the first five years of employment at a.s.r. So the employees that still work at the organization after more than twenty years are perhaps less likely to experience psychological contract breach and psychological contract violation due to reasons not yet investigated. This also seems to be the case when looking at tenure. This study shows that an experienced respondent is less likely to experience
psychological contract violation compared to a less experienced respondent, but the differences are small. This study also showed that psychological contract breach had a significant positive effect on the turnover intentions of an employee. A meta-analysis (Zhao et al., 2007) showed that psychological contract violation affected organizational commitment, job satisfaction, and turnover intent. This study showed a significant serial mediating effect of psychological contract violation and organizational commitment on the relationship between psychological contract breach and turnover intentions. This is in line with the hypothesis. So if an employee experiences psychological contract breach, this will increase the probability that this employee will
experience psychological contract violation, which will increase the probability that the organizational commitment of this employee will decrease which will lead to an increased probability that this employee will develop turnover intentions.
Managerial implications
This study can give the a.s.r. management several insights. The most important one is that for the future of the organisation it is essential to focus on the psychological contract fulfilment of the high potential employees aged under thirty five. This specific group of employees must be the engine that powers the transformation a.s.r. needs to add another three centuries to its history. In order to achieve this, the organisation has to take a new path where the customer actually is placed central in the way a.s.r. operates. So for the long term survival of a.s.r. human resources have to bind the right employees to the organisation in a non financial manner. Every year an
engagement scan is held with a.s.r. It is far more interesting to measure another variable, in an earlier stadium. For instance psychological contract breach. By doing so, there is more time left for the employer to make the necessary adjustments to make sure employees will less likely experience psychological contract breach. With an engagement scan you get to know to what level a certain employee is engaged. But it is far more interesting to know what causes
employees to become disengaged. So by making sure that the employees that are valuable to the organization experience psychological contract fulfilment and also measuring this component, human resources managers will be able to make adjustments to the policy and can be more efficient and achieve better results. For future research for a.s.r. it is valuable to get a better insight in the various components of the psychological contract of the employees. What do the employees that are valuable for the future of the organization find important in a psychological contract. What do they expect of a.s.r. and when do they experience psychological contract fulfilment.
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