Psychological contract breach and employee health: The relevance of unmet obligations for mental and physical health

Building on the assumptions put forth in social exchange theory ( Blau, 1964 ), the psychological contract approach explores the processes and contents of employment relationships. In particular, the aim of this approach is to cover the unwritten and possibly implicit elements of employment relationships that are based on individual perceptions and reciprocity expectations. Psychological contracts are basically defined as “individual beliefs, shaped by the organization, regarding terms of an exchange agreement between individuals and their organization” ( Rousseau, 1995 , p. 9). These beliefs the fact that employees expect organizations to reward their efforts because they are bound by reciprocal obligations ( Rousseau, 1989 ). The literature on different aspects of psychological contracts is extensive (for a detailed overview, see Conway & Briner, 2009 ). Some research focuses on describing differences in content, such as whether the contracts are relational or transactional ( Rousseau, 1990 ). “Content” refers to the specific reciprocal obligations that characterize an individual's psychological contract ( Rousseau & Tijoriwala, 1998 ). Theoretically, obligations in such contracts may all conceivable aspects of the employment relationship ( Rousseau, 1990 ); for example, they may involve easily quantifiable aspects (pay, working hours), social aspects (a pleasant atmosphere, social activities) and a long-term perspective (job security, career opportunities) or a short-term one (an interesting new work task). Guest (1998) argues that, in their search for a general theory, researchers should go beyond merely describing the contents of psychological contracts and seek to evaluate their status, such as determining whether obligations are being met (fulfillment) or not being met (breach).

Psychological contract breach is a subjective experience in which the employee perceives that the organization has failed to adequately fulfill one or more of the obligations d in the psychological contract ( Morrison & Robinson, 1997; Rousseau, 1989 ). According to Morrison and Robinson (1997) , PCB may be perceived to have occurred without actually having taken place; in other words, if employees believe that a breach has occurred, this perception may affect their behavior or attitudes whether or not there actually was a breach of the contract ( Robinson, 1996 ). In this study, we specifically discuss PCB as an imbalance between what the employee expects the employer to be obligated to provide and what is perceived to be actually provided by the employer, concerning either the whole psychological contract (overall imbalance) or only specific aspects.

However, the relevance of the breach goes beyond the sheer nonfulfillment of expectations. If reciprocity is a key element of social relationships ( Gouldner, 1960 ), an unfulfilled expectation of reciprocity is likely to harm the foundation of a relationship. Thus, even though PCB is often considered to be the opposite of contract fulfillment, this dichotomy is not quite so clear-cut ( Conway & Briner, 2009).

Psychological contracts provide an orientation for employee attitudes and behavior through the process of reciprocity; that is, employees respond to employers’ fulfillment or nonfulfillment of obligations by adjusting their attitudes and behaviors ( Conway & Briner, 2005). Shore and Tetrick (1994) note that psychological contracts are a factor in employees’ perception of predictability and control of the work environment and thus help alleviate uncertainty about employment conditions. However, when PCB occurs, employees are likely to experience the unmet obligations as an uncertainty within the employment relationship. Therefore, employees’ perceptions of predictability and control of the work environment would decrease in the event of PCB, eventually leading to feelings of stress ( Sutton, 1990 ). This idea is supported by the results of empirical research in which a breach of promise gave rise to a situation of unpredictability and lack of control for employees because they (in this case, soldiers) “no longer knew what to expect” ( Chambel & Oliveira-Cruz, 2010, p. 122). Gakovic and Tetrick (2003) concluded that the concept of psychological contract can be integrated–both theoretically and empirically–into the literature on workplace stress, suggesting that the employment exchange relationship plays a role in employee job strain. Following Robbins et al. (2012) , perceived unfairness within the employment relationship acts as a psychosocial stressor at work, leading to psychological stress reactions that are in turn associated with impaired mental and physical health. Basically, a stressor at work can be any condition or event that causes strain in an individual ( Kahn & Byosiere, 1992).

In line with the effort–reward imbalance (ERI) model ( Siegrist, 1996 ), the perception of PCB is proposed to be an imbalance in the employment relationship that leads to negative emotional states and perceived stress, which in turn exacerbate health problems. Similar to psychological contract theory, ERI theory builds on the key assumption that social exchange relationships between employees and employers are based on the reciprocity of “efforts” made by the employees (e.g., working hours, performance), which are then compensated for through appropriate gratifications or rewards (e.g., pay, career opportunities, job security, esteem) ( Vegchel, Jonge, Bosma, & Schaufeli, 2005 ). The ERI model suggests that work characterized by considerable efforts but small rewards represents a reciprocity deficit that defines a state of emotional distress that is associated with stress reactions, which in turn cause health problems ( Siegrist, 1996 ). ERI theory focuses on explaining employee health outcomes and has been widely used in sociological and psychological occupational health research (for overviews of empirical studies, see Tsutsumi & Kawakami, 2004; Vegchel et al., 2005 ). By comparison, psychological contract theory originally aims to explain work-related behavior and attitudes and is quite new in the context of health research. Therefore, the theory lacks the explicit theoretical mechanism between PCB and health. This black box that is left empty can be filled in by ERI, which puts the stress process between the imbalance of efforts and rewards and employee health. However, even though ERI investigates a broader reciprocity deficit and assumes a more general imbalance between efforts and rewards, unfulfilled obligations in the psychological contract can quite similar aspects of efforts and rewards. In contrast, PCB explicitly describes an imbalance in the employment relationship between employee and employer that has not been investigated in detail in employee health research. Therefore, in accordance with ERI theory, we propose that PCB is a perceived imbalance that acts as a psychosocial work stressor and affects employee health as a result of negative stress reactions, similar to the imbalance between efforts and rewards. However, this study focusses on the stressor-strain link by analyzing the relationship between PCB and mental and physical health.

Research on work and health has shown that work-related factors play a substantial role in influencing employee health. Both mental health and physical health can be negatively affected by job stressors (for meta-analyses of studies on mental and physical health outcomes, see Stansfeld & Candy, 2006, and Nixon, Mazzola, Bauer, Krueger, & Spector, 2011 , respectively). However, since individual health is considered to be a multidimensional concept ( Ware, 1987 ), possible health outcomes vary. Instead of examining specific health problems, such as burnout or physical issues, one approach is to differentiate between a comprehensive understanding of mental health and physical health as measured by basic human values of ing and emotional well-being across various different groups and times ( Ware & Sherbourne, 1992).

The connection between psychological contracts and employee health is a relatively new subject of psychological contract research (for an overview, see Conway & Briner, 2005; Zhao et al., 2007 ). Existing research has focused mainly on the association between fulfillment and health. Parzefall and Hakanen (2010) found that contract fulfillment is positively related to mental health. Higher levels of fulfillment are also associated with lower levels of emotional exhaustion ( Gakovic & Tetrick, 2003 ). As for physical health, contract fulfillment is associated with less sickness absenteeism and with fewer accidents at work, but not with general health ( Clinton & Guest, 2010).

Empirical research on the explicit association of PCB with health outcomes is still rather limited ( Gracia et al., 2007 ). However, breached obligations generally have a stronger effect on employee well-being when compared with fulfilled obligations ( Conway, Guest, & Trenberth, 2011; Jong, Clinton, Rigotti, & Bernhard-Oettel, 2015; Rousseau, 1989, 1995 ) and thus promise to be more predictive of employee health. PCB is associated with reduced psychological well-being ( Conway & Briner, 2002a ). It also predicts teacher burnout ( Topa Cantisano et al., 2007 ), as well as high levels of soldier burnout during missions ( Chambel & Oliveira-Cruz, 2010 ). Generally speaking, expectations not met by organizations are also associated with burnout ( Schaufeli & Enzmann, 1998) and emotional exhaustion (Buunk & Schaufeli, 1999 ), and broken promises are closely related to emotions of betrayal and hurt ( Conway & Briner, 2002a ) and to negative emotions such as anger, violation, and depression ( Conway & Briner, 2002b ). Concerning physical health outcomes, Clinton and Guest (2010) found that unfulfilled obligations predict increased sickness absenteeism and poorer general health. More research on physical health is currently not available. However, because negative psychological stress reactions due to perceived unmet obligations affect physical health as well ( Robbins et al., 2012 ), we suggest that PCB is also likely to be connected to employee physical health.

Thus, in line with ERI we argue that perceived PCB is negatively associated with both mental and physical health, because it is an imbalance in the employment relationship that acts as a psychosocial work stressor and affects employee mental and physical health through negative stress reactions:

Hypothesis 1. PCB is negatively associated with mental health ( H1a) and physical health (H1b).

Current research mostly measures PCB either by determining the overall extent to which the organization has fulfilled its obligations or by calculating the average score of a varying number of unmet obligations in the psychological contract ( Jong et al., 2015 ; for a detailed discussion, see Zhao et al., 2007 ). Since such comprehensive measures treat all obligations as equally important, they do not take into account the heterogeneity of the workforce and the relevance of different obligations in different work contexts. Moreover, calculations of averages are based on the assumption that fulfilled obligations are as important as breached obligations, and therefore outbalance PCB ( Jong et al., 2015). Conway and Briner (2002a) showed that a single breached obligation alone can affect an employee's daily mood. In our study, we provide a more detailed measurement of PCB by examining the relative effect of specific unmet obligations in addition to an overall imbalance of the psychological contract: PCB of good career opportunities, high pay, performance-based pay, continuing advanced training, long-term job security, flexible working hours, job autonomy, an interesting job, a pleasant social atmosphere, and social appreciation. We therefore hypothesize that even when controlling for an overall imbalance in the psychological contract, PCB of specific contents adds to the prediction of employee mental and physical health. However, the negative effects differ among the different specific contents; that means the extent of the negative impact differs depending on which contents are breached.

Hypothesis 2. PCB of specific contents is negatively associated with employee mental and physical health, but the negative effects differ among the different aspects.

With regard to the multidimensionality of individual health and the rising complexity of employment relationships alluded to earlier, it appears that empirical research should not be limited to the association of PCB with only one health outcome at a time. Rather, different health outcomes must be compared to capture the various aspects of work-related processes that influence employee health. Meta-analyses of studies comparing mental and physical health outcomes suggest that perceptions of unfairness in employment relationships are more strongly associated with emotional strain and psychological conditions than with physical health ( Robbins et al., 2012 ). These results indicate that PCB affects employee health mainly through psychological stress reactions, which are more closely connected to mental health than to physical health. Clinton and Guest (2010) conclude from their research that psychological contracts are much less able to account for variations in physical well-being than for variations in psychological well-being. Also, psychological and psychosocial factors at one's place of work are generally more closely connected to mental than to physical health ( Leijten et al., 2015 ). Therefore, with the results of existing research in mind, we argue that PCB contributes more to the prediction of mental health than of physical health.

Research on work and health has shown, though more generally, that stress in the workplace affects an employee's physical health, with mental health playing a mediating role ( Tsai & Thompson, 2015 ). It is necessary to consider that physical and mental health are reciprocally linked and even when each of these health outcomes is affected directly by perceived unfairness, the two outcomes may also interact dynamically with each other ( Robbins et al., 2012 ). Since it is also known that work-related stress tends to affect mental health initially and physical health in the long run ( Burke, Greenglas, & Schwarzer, 1996; Peterson et al., 2008 ), we argue that not only is physical health directly affected by PCB, but this effect is also mediated by mental health.

Hypothesis 3. PCB contributes to the prediction of mental health more than of physical health.

Hypothesis 4. Mental health mediates the negative relationship between PCB and physical health.

Mental and physical health (SF-12). The two outcome variables, “mental health” and “physical health,” were measured using the German Socioeconomic Panel version of the SF-12 (see Andersen et al., 2007 ). This short questionnaire on health-related quality of life consists of twelve items representing the two superordinate dimensions mental health (six items) and physical health (six items). The mental component summary (MCS) and the physical component summary (PCS) scores were generated by conducting a confirmatory factor analysis, ? 2(45) = 906.922, p < .001, RMSEA = .069, CFI = .952, TLI = .930; see Appendix, Figure A1 ) for T1 and T2. In contrast to the conventional computation of the MCS/PCS scales, the factors were allowed to correlate, which reflects the more realistic notion that these two aspects of health may influence each other ( Schunck, Sauer, & Valet, 2015; Tucker, Adams, & Wilson, 2014 ). In accordance with the original approach, both scores were standardized to a sample mean of 50 and a standard deviation of 10, where higher values indicate better health.

Psychological contract breach. PCB was measured in two ways based on a commonly used method for investigating psychological contracts ( Conway & Briner, 2009 ). First, respondents were asked to rate the overall balance between their contribution in the workplace and compensation for their contribution (the overall psychological contract) on a 5-point scale ranging from 1 = absolutely imbalanced to 5 = absolutely balanced . Second, PCB of specific contents of the psychological contract was measured for various characteristics: good career opportunities, high pay, performance-based pay, continuing advanced training, long-term job security, an interesting job, job autonomy, flexible working hours, a pleasant social atmosphere, and social appreciation. Respondents were asked to rate, again using a 5-point scale, the extent to which they expected their employers to provide these characteristics. They were then asked to use the same 5-point scale to rate the extent to which their employers actually provided these characteristics. PCB was calculated as the difference between expectation and delivery (1 = breach). A breach of the psychological contract was considered to have occurred if what was provided was less than what the employees had expected ( Morrison & Robinson, 1997; Robinson & Rousseau, 1994 ).

Employment context . Main characteristics with regard to job and occupation were d. We d actual working hours, use of flexible working hours (1 = yes), temporary vs. permanent contract (1 = temporary), and supervisory responsibilities (1 = yes). In addition, the respondents were asked how often they had to go to the limits of their physical capacity at work (1 = always; often) and if they had a second job (1 = yes). Earnings were measured as the log of monthly net earnings (in €).

Sociodemographic and control variables. We controlled for gender (1 = male), age (in years), years of education (metric), migration background (1 = not born in Germany), partnership status (1 = married or in a partnership), and number of children (metric). All these variables have been recognized as predicting variations in health and have to be considered because of possible ion effects.

All multivariate models were computed via structural equation modeling in Stata 14 (SEM package). Two dependent variables (MCS and PCS) were used in models M1 and M2. To address the issue of reverse causality, we used two waves of panel data for the analysis. All dependent and independent variables were measured at both T1 (2012) and T2 (2014). The independent variables were used from T1, and the health outcomes were used from T2. The measures of PCB were introduced stepwise to the regression analysis to assess their respective explanatory power. This was done by including all independent variables in both stepwise regression models but in M1 the PCB of specific contents variables were constrained to 0. In M2 these variables are then allowed to correlate with the dependent variables. The resulting differences in these nested models were tested for significance with a likelihood-ratio test.

Because of the restrictions imposed by two time points, the mediator in the mediation analysis (model M3, see section 4.2) was measured at the same time as the other independent variables (T1, see Figure 1 ). This specification ensured the causal ordering and time ment of the relevant link in the mediation process (mental health influencing physical health). A given indicator may be said to as a mediator to the extent that it accounts for the relation between the predictor and the dependent variable ( Baron & Kenny, 1986 ). Thus, mediation analysis tests for the direct, indirect, and total effects of PCB on PCS. To test the indirect effects, Preacher and Kelley (2011) suggest reporting the individual coefficients, the confidence intervals for population effect sizes, and how those were estimated (see Preacher & Kelley, 2011 , p. 109). We control the confidence intervals for the indirect effects by computing bias-corrected bootstrap estimates on 1,000 bootstrap samples (see MacKinnon, Lockwood, & Williams, 2004 ) and also report the ratio of the indirect effects to the total effects according to Wen and Fan (2015, p. 199) .

Figure 1

Analytical overview PCB and health.

Because the dependent variables MCS and PCS are already standardized, unstandardized coefficients were used to make the interpretation of results more plausible.