A Study Of Psychological Contract Violation, Organizational Trust, Intention To Leave Work

Abstract

The everyday situations of business life and the experiences of the employees reflect in their attitudes and behaviours and create a base for the new studies. In particular, the psychological effects of the situations that emerge after the employees had signed the contract and started to work for a firm can cause them to lose their trust in the organisation and lead them to search for new job opportunities. Furthermore, the psychological effects can also negatively affect the operation of the organisations. Because, one of the main objectives of businesses is to achieve sustainability and it depends on the performances of the employees, as well as the profit to be used in productive investments. At the same time, if the qualified and specialized staff, who have been working for the organisation for many years, experience psychological violations and leave the organisation, this can cause significant loss of power and also loss of the investment in the development of the employees. In the increasingly competitive environment, the businesses should keep the employee turnover at minimum level and attract the talented employees in order to reach their long-term objectives. In the study, a survey was conducted on the white collar employees using 5-point Likert scale and the hypotheses were developed about the effects of psychological contract violations on the organizational trust and intention to leave and the data were analysed using SPSS 23 statistical program.

Keywords: Psychological Contract ViolationOrganizational TrustIntention to LeaveOrganizationTrustContract Violation

Introduction

In today’s world, the increasing competitive conditions force businesses to value the human factor and establish a system focusing on the employees in order to be successful. If the employees feel appreciated, they would embrace the objectives of the organisation and will do their best to reach the objectives (Özler and Ünver 2012). The concept of psychological contract refers to understanding the employees' expectations from the organization. Psychological contract violations consist of the perceptions about the obligations of the organization and the employees (Robinson, 1996; Pate and Malone, 2000). Psychological contracts are non-written contracts in the minds of individuals generated by the perceptions. There is a mutual obligational relationship between the parties of the psychological contract, which is unstable and can change depending on the person and time (Dikili and Bayraktaroğlu, 2013). Studies have shown that psychological contract violations can cause a number of changes in the attitudes and behaviours of the employees (McDonald and Peter, 2000). If the employees believe that they are subject to psychological contract violations, their organizational commitment and job satisfaction decreases while employee absenteeism and intention to leave increases (Pate and Malone, 2000). Psychological contract includes some psychological and social elements depending on the perceptions of the individual. Organizational trust is not only among these psychological factors but also plays an important role in the perception of psychological contract violations. It is one of the most important elements of organizational life because human relations are not precise and predictable (Nooteboom, Berger and Niels, 1997). Depending on the level of organisational trust of the employee, his/her attitudes and behaviours may change. For example, if the employee’s level of organizational trust is low, he/she can perceive a behaviour as a psychological violation although it cannot be considered as violation. In the opposite case, the employee may not notice any psychological violations or turn a blind eye. In such cases, it is understood that the organizational trust has a great effect on the employees’ perception of the situation for psychological contract violation. In addition, the studies have shown that organizational trust affects the employee’s contribution to the organisation when he considers himself to be subjected to psychological contract violation (Pate and Malone, 2000).

Literature Review and Theoretical Framework

Psychological Contract Violation

The concept of psychological contract was first introduced by Argyris (1960) who tried to explain the relationship between the employees and the organization. As a result of his interviews and observations, he pointed out the existence of the informal relations and how these relations affects the employee performance. In later studies, psychological contract violation was defined as non-written contracts between employees and organisations, which is composed of the mutual expectations between employees and organizations. (Levinson et al.,1962). Besides, Rousseau (1989) defined the psychological contract as the beliefs of the individuals about the unwritten conditions and circumstances between the employees and organisations. According to Kotter (1973), the psychological contract is a non-verbal agreement that the parties are expected to receive and give to each other within the context of business relations (Ozgen and Ozgen, 2010). When we asses all of these definitions, we can define the psychological contract as the unwritten expectations of the parties, which is based on the mutual trust and depends on the perceptions of the individuals and can change over time. In addition to written contracts maintained between the employee and the employer, there are unwritten expectations of both parties from each other. On one hand, these expectations include honesty, reliability, commitment, complying with business ethics, completing the tasks accurately and on time, and on the other hand, the expectations consist of demands such as fair evaluation of the employees, having opportunities for self- improvement, respect for ideas of the employees, and a good working environment (Celik and Peker, 2010). What is important in the psychological contract violations is that the person is to believe that there is a psychological contract. This belief can also be shaped over time by the changing organizational dynamics (Rousseau, 1995). Failure of the realization of the employee expectations creates disappointment in the workforce and breaks the contract created in the employee's mind (Robinson and Rousseau, 1994; Rousseau, 1995). Although previous studies deal with psychological contract violation from organization and employee point of view, the recent studies have narrowed this term and address it mostly from employee’s perception (Boss, 1985). Rousseau (1990) interprets psychological contract within the framework of perceptions of the employee and conducts his studies on perceived violation rather than actual violation. The studies show that if the employees think that they are subject to psychological contract violations, their job satisfaction, organizational commitment and business relations are negatively affected. At the same time, it was seen that the employees who declare psychological contract violation have higher tendency to leave the work (Robinson and Rousseau, 1994; Robinson, 1996). As we have seen in these conclusions, it is crucial to determine the content and consequences of the psychological contract violations for the future of the organisations (Granrose and Baccili, 2006). The psychological contract is also very important in determining the attitude and performance of the employees and the examination of the psychological contract violation will provide an important input in the organizational relations between employees and employer.

Organisational Trust

In today’s world, the contemporary management shares the authority and responsibilities with its employees and builds more collaboration within the organisation and gives more value to the employees, instead of relying on traditional bureaucratic management practices (Costa et..al., 2001). In this context, the organizational trust emerges as an important phenomenon. Organizational trust has many definitions in the literature. Organizational trust is the level of trust of employees towards organizational management and organizational statements (Sashkin, 1990). Dirks and Ferrin (2001) defined the organizational trust as the employee’s belief in the actions which enable employees to cooperate with each other and the organization. According to the definition of Shockley-Zalabak et al., (2000), organisational trust is positive expectations and beliefs of the employees about the attitudes and behaviours of the people in the organisation. The studies show that the organizational trust is effective in ensuring long-term cooperation in organizations, increasing competitiveness, increasing the satisfaction of employees and ensure their responsive work (Mayer et al., 1995; Dirks and Ferrin, 2001: Kursunoglu, 2009). In addition, organizational trust reduces employee’s concerns about the future, helps both parties to work in harmony and creates more efficient and effective working conditions, reduces bureaucratic environment and encourages employees to adopt the goals of the organization (Yılmaz and Kabadayı, 2002; Solomon and Flores, 2001). As a result of evaluations, it was found that the organisations with high organizational trust were more innovative and more compatible with the business environment than those with low organizational trust (Shockley-Zalabak et al., 2000). The organization must be extremely careful in protecting the interests of employees in order to ensure trust. The trust is founded on the both sides to care each other, to protect ethical values and to exhibit ethical behaviours. Managements need to protect employees’ interests, demonstrate exemplary behaviours and always be open and sincere in business relations in order to maintain trust (Strasser, 1995). In the literature, the organizational trust is divided into sub-dimensions such as managerial trust and organizational (institutional) trust. Managerial trust is very important in order to lead the employees to focus on a specific purpose and gain organizational trust. In general, the literature shows that the trust for the manager is usually attributed to whole organisation (Whitener et al., 1998). Mayer and colleagues stated that the managerial trust can be gained if the managers act responsibly towards employees and therefore manager's behaviours hold critical importance (Mayer et al., 1995). It is necessary for the manager to be honest, respectful, reliable and responsive and to share tasks of inspection, to adopt effective communication ways in order to increase the level of trust (Whitener et al., 1998). Amit and Schoemaker have described organisational trust as a tool of social capital that provides implicit knowledge which cannot be imitated. The studies state that organisational trust brings important contribution to the companies, such as causing selfless and voluntary behaviours, increasing the compliance with organizational rules and procedures and reducing the operation costs and co-operation (Kramer, 1999). Organizational trust has been studied as a variable, not as dimensions in our work.

Intention to Leave

In today's competitive market, if trained personnel leave the work or if the company cannot keep continuity of the employment, this situation can create serious costs for the organization. It is known that an employee to become expert in his/her job at a certain level, requires time and effort. The companies lose an important investment if a qualified employee leaves his/her job. Therefore, researchers from different disciplines study the employee’s intentions to leave the work and how to avoid it. It has been determined that intention to leave is a significant predictor of behaviour of leaving work (Tett and Meyer, 1993). Cho et al. (2009) identify the intent to leave work as a step prior to leaving work and describe it as a desire to leave his work in the near future (Hwang and Kou, 2006). As a result of the literature screening of 23 studies, a positive relationship was found between the intention to leave and the actual behaviour of leaving (Bluedorn, 1982). The literature examines the issues that lead to leaving work in two separate headings; direct and indirect factors. Direct factors cause the employee to leave the work even though there are no other job opportunities, however, indirect factors cause the employee to look for a new job (Mowday et al., 1982). In order to protect organizations from negative impacts of employees leaving work, it is important to determine the employees' intention to leave and the reasons for this. Organizations can take various precautions by determining the precursors of intention to leave. These measures can include eliminating the reasons for intention to leave, bringing alternative solutions, increasing wages, preparing trainings or making fundamental changes in the structure. We have already mentioned how important is the level of organizational trust for the organization, in order to be innovative, sustainable, collaborative and to act in harmony with the environment. At the same time, it has been determined that employees with high levels of organizational trust embrace their organisation well and have a good relationship with their colleagues (Shockley-Zalabak et al., 2000). Another important concept for the organization is the examination of the relationship between psychological contract and organizational trust. The studies on organizational trust and psychological contracts have examined the effects of existence of the psychological contract and its results after the violation. These studies have shown that there is a negative and significant relationship between psychological contract violation and trust. It has been stated that psychological contract violations negatively affects the organizational trust (Robinson and Rousseau 1994; Robinson 1996; Ozgen and Ozgen, 2010). At the same time, these results also showed that loss of organizational trust played a decisive role in psychological contract violation and employee contribution. The studies have shown that there is a positive relationship between psychological contract and trust. (Kingshott and Pecotich, 2007; Atkinson, 2007). In our study, we will examine the impact of violations of psychological contracts on organizational trust in a sample of different companies.

Hypothesis 1: Psychological contract violation has an associated on organizational trust.

Meeting the demands and expectations of the employees in the workplace will cause positive emotions and the opposite case will cause some negative situations. The studies that examine the relationship between psychological contract violations and intention to leave show that there is a positive relationship between these two concepts (Rousseau, 1995; Robinson, 1996). Studies of violations of psychological contracts have shown that employees think of leaving their jobs, if they are not noticed, if the promises were not kept and if they have a conflict in the workplace, and if they cannot express their own thoughts (Turnley and Feldman, 2000). We see that employees try to escape from the disturbing environment where the promises were violated. In the present study, the effects of psychological contract violations on the intention to leave will be examined.

Hypothesis 2: Psychological contract violation has an associated on intention to leave.

Employees' positive opinions towards the organization can affect their attitudes and their intention to leave (Linhartová, 2011). It has been proven that the employees’ intention to leave is influenced by some psychological factors, as well as the material factors. Employees are willing trust their organisations, but if they cannot trust, they can consider leaving the company. For this reason, it is extremely important to examine the relationship between organizational trust and intention to leave. Previous research in this field indicate that there is significant relationship between organizational trust and intention to leave (Carbery et al., 2003). Brashear et al. (2003) carried out interviews with the employees and they found that there is a relationship between organisational trust and intention to leave. If the employee leaves work, it will cause a lot of financial and moral loss in the organisation. For this reason, it is very important to measure the relationship between organizational trust and intention to leave and we hypothesize that:

Hypothesis 3: Organizational Trust has an associated on intention to leave.

Organizational trust has an important role in interpreting the behaviours of individuals within the organization. As we mentioned before, measuring the violation of psychological contract is a process that analyses the perceptions of the individual (Gezen and Boz, 2013). The studies show that the employees who have high levels of organizational trust, do not dismiss or ignore even if there is psychological contracts violations; however the employees who have low levels of organizational trust can even perceive normal behaviours as a violation (Nooteboom et al., 1997). In our study, we will examine the moderator effect of organizational trust on the intention to leave, which is closely related to the violation of the psychological contract.

Hypothesis 4: The organizational trust has a moderatorr associated on the relationship between psychological contract violation and intention to leave.

Research Method

Sample and Data Collection

A survey was conducted with 237 white collar employees from public and private sectors and the data was evaluated using SPSS 23.00 Statistical Package Program. 113 questionnaires were collected from the public sector and 124 questionnaires were collected from the private sector. Demographic information was subjected to descriptive analysis. The questions were formed with Likert scale and subjected to factor and reliability analysis. Correlation analysis was used to examine the relationships between the variables and regression analysis was conducted to test the hypotheses.

Analyses

The questionnaire consist of two parts; the first part includes questions about the demographic information of the participants, the second part contains scales related to psychological contract violation, organizational trust and intention to leave. Psychological Contract Violation was measured with 7-item scale developed by Robinson and Rousseau (1994); Organizational Trust perception was measured with the 12-item organizational trust inventory developed by Nyhan and Marlowe (1997); Intention to leave was measured by the 4-item scale developed by Schwepker (2001). We translated the scales from English to Turkish. Afterwards, the validity and reliability studies of the scales were made by us.

Findings

In our Likert-scale survey, the sample consist of 237 white-collar workers working in various departments of different companies. The survey was participated by 85 women, 152 male white-collar employees. 31.6% of the participants were between the ages of 20-30 (75 participants), 45.9% of them were between the ages of 31-40 (109 participants), 8.4% were between the ages of 41-50 (20 participants) and 13.9% of them were 51 and over (33 Participants). 48.2% of the employees work in public sector (114 employees) and 51.8% of them work in the private sector (123 employees). Furthermore, 34.5% of the employees have been working for the organisation between 1-5 years (82 employees), 21.5% of them between 6-10 years (51 employees), 17.7% of them between 11-15 years (42 employees), 26.1% of them 16 years and over (62 employees). 2.1% of the participants were graduated from High School (5 Participants), 2.1% of them were graduated from Vocational School (5 Participants), 16.4% of them have university bachelor’s degree (39 participants), 75.9% of them have master degree (180 participants) and 3.3%’ of them have doctorate degree (8 participants). Distribution of survey respondents (total of 237) according to their departments as follows; 13.9% in the Marketing Department (33 employees), 8.4% in the IT (Information Technology) Department (20 employees), 9.2% in the Accounting / Finance Department (22 employees), 8.8% in the Human Resources Department (21 employees), 15.1% in the Production Department (36 employees), 5% in the Import / Export Department (12 employees), 18.5% in the R & D Department (44 employees), 9.7% in management (23 employees) and 10.9 in other departments (26 employees).

Figure 1: Research Model
Research Model
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In our study, the variables were prepared according to the 5 point Likert scale and measured by a questionnaire of 23 questions. The independent variable (psychological contract violation), the intervening variable (organizational trust) and the dependent variable (intention to leave) were subjected to factor analysis. As a result of the factor analysis, 7 questions did not show necessary factor distribution and were subtracted from the scale because they decrease the reliability and indicate different factors. The remaining 16 questions were divided into 3 factors. The questions representing the variables were supported by factor analysis and Our variables which were subjected to factor analysis are shown in the following table together with their factor loadings:

Table 1 -
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The suitability of the data for factor analysis was examined by the Kaiser-Meyer-Olkin (KMO) coefficient and the Barlett Sphericity test. The value of KMO (0.96) was higher than 0.60 and when the Barlett test was examined, the obtained chi-square (χ2 = 9286,445, sd = 351, p = 0,000) value was found to be suitable for factor analysis. Questions that do not fall below 0.50 as a result of factor analysis represent variables (Çokluk, Sekercioglu, & Buyukozturk, 2012).

Table 2 -
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Reliability Analysis

Reliability analysis is defined as the internal consistency of the measurements of the average relations between the questions. In the literature, the Cronbach's alpha coefficient of 0.50 and above is considered to be sufficient, as defined by Nunnally (1978) (Nunnally, 1978; Hair et al., 2000; Buyukozturk, 2007).

Table 3 -
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Table 4 -
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Correlation Analysis

As seen in Table 6 . one-to-one relations between Psychological Contract Violation, Organizational Trust and Intention to Leave was analysed. As we have already mentioned, the analyses (factor analysis, reliability analysis, descriptive analysis) were conducted on 237 questionnaires obtained from the organisations. Table 5 and Table 6 includes the averages of the variables, standard deviation values and correlation coefficients and the correlation coefficients of the measurement variables are shown in the upper diagonal of the matrices.

Table 5 -
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Table 6 -
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Psychological Contract Violation variable has a significant relationship with all variables (Organisational Trust and Intention to Leave) at the level of p<0.01. Organizational Trust has a significant relationship with all variables (Psychological Contract Violation and Intention to Leave) at the level of p<0.01. Organizational Trust variable has a significant relationship with all variables (Psychological Contract Violation and Organizational Trust) at the level of p <0.01.

Acceptance and Rejection of the Hypotheses According to Regression Analysis Results

Regression analysis was used to test the research hypotheses and three supported hypotheses are shown in the table 7 except the effect of the intervening variable.

Table 7 -
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As a result of the hypothesis tests conducted on the variables of our research model, with the exception of the effect of intervening variable, the hypotheses are supported as revealed by the regression analysis. Relations between variables are statistically significant as a result of regression analysis. According to the first regression analysis, H1 hypothesis is supported (β=,239***; p<0.001), which describes the relationship between Psychological Contract Violation and Organizational Trust as shown in Table 7 . As a result of the regression analysis, H2 hypothesis is supported (β=,820***; p<0.001), which is about the effect of independent variable of Psychological Contract Violation on dependent variable of Intention to Leave. Finally, H3 hypothesis is supported (β=,203***; p<0.05); which is about the effect of independent variable of Organisational Trust on the dependent variable of Intention to Leave. The psychological contract violation affects the employees’ trust to their organisations and causes problems or makes the problems more apparent. Particularly, in the case of psychological contracts violations, the employees’ level of intention to leave gets higher, and this situation leads to constant employee turnover. Therefore, it would be unlikely for these organisations to hold on to expert and professional staff. It is supported by our hypothesis that the employees who do not have trust in their organisations search for new job opportunities and leave their work.

Determination of the Effect of Intervening Variables in The Research Model

In our research model, the effect and the role of the intervening variable (Organisational Trust) on the relationship between Psychological Contract Violation and Intention to Leave was examined and the hypotheses were established accordingly.

Analysis of Relationship Between Independent Variable of Psychological Contract Violation and Dependent Variable Intention to Leave by Intervening Variable of Organizational Trust

Table 8 -
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Table 9 -
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In the organizations where psychological contract violations exist, intervening variable of Organizational Trust does not affect the dependent variable of Intention to Leave. It is shown that in the case of the violations of psychological contracts in the organisations, providing an environment of organisational trust has no effect on the employees and they continue to look for other job opportunities to leave the work.

Conclusion and Discussions

According to our study, the analysis of the data obtained from white collar employees working in public and private sectors show the relationships between the variables of Psychological Contract Violation, Organizational Trust and Intention to Leave on the employees. It was found that psychological contract violations emerge over time when employees are exposed to the negative situations in their organisations (Rousseau, 1995). Analyses results show that if the employees experience psychological contract violations, their level of organisational trust decreases. It is caused by the difference between the weight of the negative thoughts before and after starting working for the organisation. Because, the psychological contracts violation causes negative perceptions if the expectations of the employees are not met and they feel disappointed (Robinson, Kraatz and Rousseau, 1994; Rousseau, 1995). The other negative outcome of the psychological contract violation is that the employees consider leaving work, this situation can cause high employee turnover in the organisation. It is understood that when the employees were subjected to psychological contract violations, their intention to find a new job and leave the organisation becomes more intense and visible (Robinson and Rousseau, 1994; Robinson, 1996). When we look at the studies in the literature, it is seen that if the organisational trust exists, the employee turnover decreases and organisation performance starts to increase. This situation is important for the organisations to gain advantage in the competitive environment. Because, if the organisations spend more time and energy for the employee turnover, they cannot focus on their essential activities in competitive environment and lose power. However, if the employees are satisfied with their duties and responsibilities and work harmoniously with the team, the organisations gain competitive advantage (Mayer et al. 1995; Kramer 1999; Dirks and Ferrin 2001; Lane and Bachmann, 1998; Kursunoglu, 2009). Our study shows that the organisations should provide an environment of trust and select right personnel for the right job and implement procedures to minimise intention to leave and aim to ensure long-term employee portfolio.

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Publisher

Future Academy

First Online

18.12.2019

Doi

10.15405/epsbs.2017.12.02.22

Online ISSN

2357-1330