Psychological Contract Breach/Violation

If either member of the psychological contract dyad (e.g., employee–employer, leader–follower, team members, etc.) perceives that the other has reneged on the deal in some way, it can lead to a perceived psychological contract breach, sometimes called a psychological contract violation.

Because of the presence of trust in the relationship, individuals perceiving a breach of a relational contract will have an emotional reaction far exceeding the negative reaction of someone who feels that their transactional contract has been violated. The consequences of a contract violation can range from lower morale and increased levels of cynicism to counterproductive behaviors, including rule breaking and violence. 

Thus, trust is a double-edged sword: The presence of trust can enhance the relationship and increase performance but may also lead to more negative outcomes than might occur in the absence of trust (Litzky, Eddleston, & Kidder, 2006). In Video 1.1 Dr. Denise Rousseau discusses trust as it pertains to the psychological contract.

Video 1.1. Changes in the Psychological Employment Contract