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SPECIAL ISSUE ARTICLE
A dynamic phase model of psychological contract processes
Denise M. Rousseau
1
|Samantha D. Hansen
2
|Maria Tomprou
3
1
Carnegie Mellon University, Pittsburgh,
Pennsylvania, U.S.A.
2
Department of Management, University of
Toronto Scarborough, Toronto, Ontario,
Canada
3
Human–Computer Interaction Institute,
Carnegie Mellon University, Pittsburgh,
Pennsylvania, U.S.A.
Correspondence
Samantha D. Hansen, PhD (formerly Montes),
Department of Management, University of
Toronto Scarborough, 1265 Military Trail,
Toronto, Ontario M1C 1A4, Canada.
Email: shansen@utsc.utoronto.ca
Funding information
SSHRC Insight Grant
Summary
In formulating a dynamic model of psychological contract (PC) phases, this paper
offers new insights by incorporating a temporal perspective into the study of the
PC. Although conceptualized as a dynamic construct, little empirical attention has
been directed at how PCs evolve and change over time. Moreover, conceptualization
of the PC and its processes has undergone limited revision since the 1990s despite
challenges to some of its tenets and advances in related fields that suggest the impor-
tance of time to such processes. In this article, we address limitations in existing the-
ory, clarify the conceptualization of the PC, and bring dynamism to the forefront of
PC theory building by emphasizing dynamic processes. We propose a phase‐based
model of PC processes (intraphase and interphase) wherein the functions of key var-
iables (e.g., promises, inducements, contributions, and obligations) change over time
and context. These phases include creation, maintenance, renegotiation, and repair.
This model directs attention to the dynamic nature of the PC, drawing on contempo-
rary evidence regarding self‐regulatory mechanisms. Finally, we present the implica-
tions of this dynamic phase model for theory and research.
KEYWORDS
affect, change, dynamics, psychological contracts, self‐regulation, time
1|INTRODUCTION
The obligations individuals believe exist between themselves and
others have profound effects on what they pay attention to or disre-
gard as well as how they interpret and react to cues from the environ-
ment (Rousseau, 2001). Extending early theorizing on employee–
employer exchanges (e.g., Argyris, 1960; Schein, 1965), Rousseau's
(1989, 1995) reconceptualization of the psychological contract (PC)
as an individual's beliefs regarding an exchange relationship has
become central to understanding exchange‐related obligations. The
PC construct has garnered considerable attention over three decades
with core issues including breach, violation, and fulfillment; contract
types; content; and process mechanisms (e.g., breach attributions).
Scholars have debated whether the PC reflects promises, expecta-
tions, obligations, or a combination of these and whether the PC rep-
resents an agreement between two or more parties (e.g., Alcover, Rico,
Turnley, & Bolino, 2017; Guest, 1998; Rousseau, 1998).
A major shortcoming in PC research is a lack of attention to psy-
chological processes over time. Although proposed to be a dynamic
construct (Rousseau, 1995; Schalk & Roe, 2007), much of the research
on PCs reflects only snapshots of the employee–employer relation-
ship, ignoring the tendency for actual exchange relationships, and
the PC itself, to change over time. This limitation is shared by numer-
ous domains in organizational research, motivating broad calls for
adopting a temporal lens (e.g., Roe, 2008; Shipp & Cole, 2015). Yet
despite the critical role of time in PCs, the literature is largely silent
on whether reactions to PC breach are immediate or delayed, tempo-
rary or permanent, or whether certain factors can speed the likelihood
of recovery. Such issues are crucial to organizational research and
practice, and thus, our primary goal is to provide a theoretical founda-
tion to facilitate the study of PC dynamics.
Following Rousseau (1989), we define the PC as a cognitive
schema, or system of beliefs, representing an individual's perceptions
of his or her own and another's obligations, defined as the duties or
responsibilities one feels bound to perform. As a schema, the obliga-
tion‐based beliefs comprising the PC originate from an array of
sources, internal (e.g., recalled experiences) and external (e.g., the
employment contract), and evolve over time. To aid in understanding
Received: 30 September 2016 Revised: 9 March 2018 Accepted: 12 March 2018
DOI: 10.1002/job.2284
J Organ Behav. 2018;1–18. Copyright © 2018 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/job 1
this evolution, we propose a phase‐based model of PC processes that
explicates key self‐regulation mechanisms (e.g., goals, affect, and feed-
back) that govern PC operation over the course of an exchange
arrangement. This model builds on past PC work and integrates schol-
arly advances, permitting new insight into PC dynamics over time. Our
dynamic model proposes the operation of four distinct contract
phases, creation,maintenance,renegotiation, and repair with interphase
and intraphase processes explaining how the PC changes actively and
passively over time. Although our model focuses on PC dynamics in
the employment context, it may be applied to other exchange con-
texts as well (e.g., among team members, customers, and suppliers).
Further, although our model explores change in employee PCs, it can
be adapted to other perspectives such as employer PCs with their
employees (e.g., Tekleab & Taylor, 2003) and team member PCs with
their peers (e.g., Laulié & Tekleab, 2016).
1.1 |Dynamic phase model overview
Figure 1 presents an overview of the phases and their interrelations
over time. Figures 2, 4, and 5 depict intraphase processes specifying
how the role key variables play can differ by temporal context.
1
Figure 3 depicts factors that influence the speed of interphase
transitions.
Briefly, upon organizational entry, newcomers enter the creation
phase, a time period in which preexisting beliefs regarding their own
and the employer's obligations are fine‐tuned based on environmental
cues from observation and interaction with the organization and its
members. When novel information dwindles and fine‐tuning
slows, the PC stabilizes and the individual transitions into the mainte-
nance phase. This phase reflects ongoing reliance on the PC (i.e., a
status quo) to guide the individual's interactions with the organization
(e.g., offering employee contributions such as in‐and extra‐role
performance in exchange for inducements delivered by the organiza-
tion such as developmental opportunities and support). Indeed, people
are typically motivated to fulfill their obligations to others (Castanias &
Helfat, 1991). This phase may last days, months, or longer depending
on the nature and stability of the exchange relationship. The employee
remains in maintenance unless a disruption occurs or they decide to
terminate their relationship with the organization due to a lack of fit
(e.g., Louis, 1980).
PC breach (a perceived negative discrepancy between employer
obligations and the inducements it provides) triggers negative
employee attitudes and behaviors (see Zhao, Wayne, Glibkowski, &
Bravo, 2007). In line with Zhao et al.'s treatment of breach as an affec-
tive event, we extend PC theorizing by proposing the related but
broader concept of PC disruption. Disruption is an affective event (Beal
& Ghandour, 2011; Fiedler, 2000; Weiss & Cropanzano, 1996) associ-
ated with either a positive or negative perceived discrepancy between
the PC and actual experiences. To “disrupt”is “to cause something to be
unable to continue in the normal way; to interrupt the normal course or
activity”(Merriam‐Webster's Dictionary, n.d.). As such, a disruption to
the PC generates an emotional response when an ongoing exchange
is interrupted. The valence of the associated emotional response indi-
cates whether the disruption is considered positive or negative, rather
than whether the discrepancy itself is positive (inducements surpass
obligations) or negative (inducements fall short of obligations). Thus,
our model focuses not on PC under‐or over‐fulfillment, but on the
valence of the affect associated with disruption. Generally, under‐
fulfillment or PC breach (a negative discrepancy) is associated with neg-
ative affect (Zhao et al., 2007). However, over‐fulfillment (a positive
discrepancy) has been associated with both positive and negative affect
(e.g., Montes & Irving, 2008). It is important to recognize that PC disrup-
tion can be either positive or negative depending on its associated
affect, thus better accounting for the range of circumstances that can
prompt positive and negative reactions to both PC under‐and over‐
fulfillment (Lambert, Edwards, & Cable, 2003).
We draw on self‐regulation theory (Carver & Scheier, 2001) to
identify how disruptions can result from a single event or an accumu-
lation of experiences over time. A disruption that triggers strong pos-
itive affect will transition the PC into the renegotiation phase; one that
elicits strong negative affect will transition the PC into the repair
phase. In either case, the individual engages in cognitive effort to
reduce or manage the discrepancy, which can include modifying per-
ceived employee and employer obligations and/or actual inducements
and contributions to facilitate a return to maintenance. Individuals will
FIGURE 1 Overview of psychological contract phases and their interrelations
1
Although the relations among key PC concepts are believed to unfold over
time, the relationships depicted in intraphase figures focus on intraphase predic-
tions only and are not intended to line up with relations in subsequent phases.
2ROUSSEAU ET AL.
tend to cycle through these phases throughout their time with an
employer (e.g., due to internal job changes, promotions, or demotions).
Yet if an acceptable PC cannot be (re)established, the employee might
quit, ending the relationship.
In the following sections, we situate our conceptualization and our
treatment of PC dynamics within the existing PC literature and
advances in self‐regulation theory. We then develop our model and
offer support for its interphase processes and intraphase transitions.
Last, we discuss the implications of our model for PC research and
practice.
2|THE PC CONSTRUCT: PROMISES,
EXPECTATIONS, OR OBLIGATIONS?
Early conceptualizations of the PC centered on beliefs regarding
mutual expectations in the employment relationship (Argyris, 1960;
Levinson, Price, Munden, Mandl, & Solley, 1962; Schein, 1965).
Initial attempts (e.g., Kotter, 1973) to operationalize mutual expecta-
tions met with difficulty because organizations are represented by
numerous agents, making the capture of a two‐way exchange unfeasi-
ble (Schalk & Roe, 2007). Empirical research on the PC was limited
until Rousseau (1989, 1995, pp. 9, 27) reconceptualized it as a
cognitive structure or schema comprising “individual beliefs, shaped
by the organization, regarding terms of an exchange agreement
between individuals and their organization.”Unlike earlier
works, Rousseau underscored the promissory nature of the PC,
arguing that perceived obligations arose from the perception that a
promise had been expressed or implied. Promises refer to a commit-
ment regarding some future course of action (Rousseau, 1995), a dis-
tinction differentiating the PC construct from general expectations
(Montes & Zweig, 2009).
Given the varying conceptualizations of the PC, it is not surprising
that empirical work has adopted divergent operationalizations and
often conflates the terms expectations, obligations, and promises.
Indeed, PCs have been measured as employee beliefs about expecta-
tions (e.g., Sutton & Griffin, 2004), obligations (e.g., Bordia, Restubog,
Bordia, & Tang, 2017; Coyle‐Shapiro & Neuman, 2004), and promises
(e.g., Lambert et al., 2003; Woodrow & Guest, 2017). Although these
constructs share commonalities (e.g., each reflects a belief about a
future outcome or action, each is a potential standard against which
to judge future outcomes), not surprisingly, the PC has garnered criti-
cism of its construct validity and coherence (e.g., Anderson & Schalk,
1998; Guest, 1998; Hansen & Griep, 2016; Montes & Zweig, 2009).
In a comparative study of the three belief types, Roehling (2008)
found differences in how promises, expectations, and obligations
correlate with important employee attitudes and behaviors,
supporting their discriminant validity. For example, promises and
expectations related significantly to trust, whereas obligations were
not. Obligations related strongly to work centrality, to which prom-
ises only related weakly and expectations related insignificantly. Fur-
ther, obligation fulfillment explained significantly greater variance in
several outcomes (job satisfaction, trust, and turnover intentions)
than either expectation fulfillment or promise fulfillment. Although
Roehling stopped short of declaring which belief type the PC should
reflect, he noted that his findings favored promises or obligations
over expectations.
Several factors suggest that obligations are the core belief com-
prising the PC. A promise is “a declaration that one will do or refrain
from doing something specified”; an obligation is “something (such
as a formal contract, a promise, or the demands of conscience or cus-
tom) that obligates one to a course of action”; an expectation is “the
act or state of expecting or anticipation”(Merriam‐Webster's
Dictionary, n.d.). Early conceptualizations of PCs as expectations and
contemporary conceptualizations of PCs as promises describe PCs
as having an obligatory quality (e.g., Levinson et al., 1962; Rousseau,
1995). That is, whether the employer is expected to deliver a
particular resource because it is the norm to do so or because the
employer has promised to do so, there is a perceived obligation for
the employer to deliver it. In contrast, it is not likely that an
employee's perception of an obligation will result in an employer
promise. Thus, researchers have noted that promises and expectations
can both create obligations, which in turn regulate and direct behavior
(e.g., Roehling, 2008; Rousseau, 2001; Rubin & Brown, 1975).
Mainstream definitions also make clear that promises give rise to
obligations and not vice versa. Indeed, PCs exist where no promises
have been made (Arnold, 1996).
In the absence of promises, PC beliefs can be based on more gen-
eral expectations (Montes & Zweig, 2009). Expectations (or expectan-
cies) have received widespread study in psychology. Expectancies are
beliefs about a future state of affairs that can be categorized as either
probabilistic or normative (Olson, Roese, & Zanna, 1996). Probabilistic
expectancies refer to beliefs about the likelihood of future events or
what might happen, whereas normative expectancies refer to beliefs
about future events that should happen based on normative standards
(Higgins, 1992). This distinction has not been a focus in PC research
(Roehling, 2008). However, it is relevant to understanding how obliga-
tions and expectations are interrelated.
Employees enter the organization with normative expectations
about the experiences and resources that they will receive based on
their preexisting beliefs about employment relationships (Louis,
1980). We argue that these expectations give rise to perceived obliga-
tions. For instance, an employee may expect the new employer to pro-
vide flexible hours to accommodate parenting responsibilities because
this is a known norm in other organizations. This expectation may cre-
ate a perceived obligation for the organization to provide flexible
hours, for example, to allow the employee to start and stop work a
bit later so a child can be brought to daycare. However, it is also true
that if one holds a perceived obligation to be given something, that
individual expects to receive it. Indeed, a perceived obligation is
attached to a probabilistic expectation concerning how likely it is that
an organization will meet that obligation in the future (Roehling,
2008). Preemployment normative expectations can give rise to per-
ceived obligations, and those obligations are associated with probabi-
listic expectations of what will occur in the future.
In the context of PC creation, we recognize that promises are one
potential antecedent of perceived obligations and that the PC schema
is also influenced by normative expectations, particularly those
derived from sources external to the organization (e.g., societal norms
and previous experiences of self and others). Perceived obligations
ROUSSEAU ET AL.3
influence employees' subsequent probabilistic expectations for what
will be delivered in the future and guide employees' future actions
toward the organization. Thus, our model helps reconcile the differen-
tial operationalizations of the PC and offers a clear path forward for
future empirical investigations.
3|THE DYNAMICS OF PC PROCESSES
Scholars have recognized the dynamic nature of PCs: “Psychological
contracts are established at a certain point in time, and they are
assumed to be able to change over time. Psychological contracts can
be breached or violated, and can be abandoned or deserted”(Schalk
& Roe, 2007, p. 169). Morrison and Robinson (1997) proposed a
model of the development of feelings of violation, which begins with
a perceived unmet promise that may lead to a perceived PC breach
(i.e., the cognition that an employer has failed to meet one or more
obligations) and following from various attributions may lead to viola-
tion feelings (i.e., negative emotions including disappointment and
anger). Our model extends such work.
Unlike the approach of Morrison and Robinson (1997), our model
focuses on both positive and negative reactions to events disrupting
the employment exchange. This focus is similar to that of Schalk and
Roe (2007) who proposed a model of PC changes in response to any
employer actions that overstep the “zone of acceptance”through per-
ceptions of major discrepancies with the PC. However, these scholars
did not expect the PC to change due to minor PC discrepancies. Our
model recognizes that minor and major breaches may lead to changes
in the PC. We propose two avenues for PC change, one active and
one passive, as a function of the strength of employees' affective reac-
tions to perceived discrepancies. Passive change occurs as a result of
minor discrepancies that are assimilated effortlessly into the PC (Rous-
seau, 1989, 1995). In contrast to Schalk and Roe's model, we propose
that such change occurs as a function of both employer inducements
and employee contributions. Active changes occur as a result of major
discrepancies that constitute disruptions eliciting strong affective
responses. These active PC changes occur in renegotiation as evoked
by positive affective reactions and in repair as evoked by negative
affective reactions.
Next, we explore recent findings in PC research related to dynam-
ics not explicitly addressed in earlier work. We then draw on advances
in the study of self‐regulation to identify ways in which PC theory and
research can incorporate time‐relevant processes.
3.1 |Empirical evidence of “undertheorized”PC
dynamics
Theorizing regarding the mechanisms and time‐related processes
involved in PC change remains underdeveloped (Hansen & Griep,
2016). It has been hampered by use of methodologies (e.g., cross‐sec-
tional surveys) that preclude the examination of PC change over time.
Recent research using empirical methods that examine change in
workplace phenomena over time (i.e., repeated‐measures studies)
offers evidence of dynamism in PC functioning. In one longitudinal
study, Lee, Liu, Rousseau, Hui, and Chen (2011) demonstrated that
an overlooked variable, employee contributions, plays an important
role in changing perceptions of PC obligations over time. In another,
Conway and Coyle‐Shapiro (2012) found a reciprocal relationship
between PC fulfillment and individual performance that can
strengthen over time (Turnley, Bolino, Lester, & Bloodgood, 2003,
for similar findings). Such findings draw attention to the overly nar-
row view researchers have taken regarding certain variables in the
PC literature, where, for example, fulfillment or violation are typecast
as outcomes but seldom as antecedents of other PC‐related factors.
Other studies demonstrate that nonlinear relationships exist among
key PC variables over time (e.g., Bankins, 2015, for unmet beliefs),
some reflecting distinct trajectories in response to breach (e.g.,
Solinger, Hofmans, Bal, & Jansen, 2015). Such findings suggest that
PC processes unfold over time and are more complex than originally
recognized. To better account for such findings, we adopt a time‐
sensitive view of PC processes.
The effects of certain PC‐related constructs may not be identical
over time or in different temporal contexts as in the case where prom-
ises need not always be relevant to PC evaluations (Montes & Zweig,
2009). Recognizing the essential role of context (e.g., Johns, 2006),
such findings suggest that the employee–employer relationship may
be marked by time periods across which key variables can function dif-
ferently according to the particular PC phase represented. For exam-
ple, employer promises may be less relevant to employee beliefs or
behaviors once the PC has stabilized (i.e., in the maintenance phase)
but matter a good deal to a newly hired employee (i.e., in the creation
phase) or when remedies for contract breach are sought (i.e., in the
repair phase). To account for temporal context, we propose that the
PC has four distinct phases and the role of PC‐related constructs
changes depending on the phase.
3.2 |Dynamics of self‐regulation: Application to the
PC context
Advances in self‐regulation theory and research can help explain PC
dynamism. Self‐regulation, the sociocognitive processes of self‐influ-
ence upon cognitions and behavior (Bandura, 1991), is central to the
causal processes underlying the PC. As a general theory of moti-
vated behavior, self‐regulation theory specifies a system of hierar-
chical cognitive structures, processes, and responses to external
cues. This system allocates effort and attention over time as a func-
tion of an individual's goals and the feedback regarding goal prog-
ress (Lord, Diefendorff, Schmidt, & Hall, 2010). Feedback
mechanisms are processes for detecting discrepancies between an
environmental cue and a standard (Carver & Scheier, 1990). Two
feedback mechanisms characterize self‐regulation: discrepancy and
velocity feedback (Carver & Scheier, 1990, 2001; Chang, Johnson,
& Lord, 2009). The discrepancy feedback mechanism compares
progress relative to a standard or goal; the velocity feedback mech-
anism monitors the speed of progress toward goal attainment, com-
paring desired speed with actual speed. Both mechanisms operate
with minimal cognitive effort (Lord & Levy, 1994) unless a detected
discrepancy is large enough to trigger attention and generate affect.
Affect (especially negative) prompts conscious, systematic evaluation
of the situation. Indeed, research has demonstrated that individuals
4ROUSSEAU ET AL.
have a greater tendency to monitor situations and scrutinize infor-
mation when experiencing negative affect (Forgas, 2000; Forgas &
George, 2001; Isen, 2001). Discrepancy feedback can direct individ-
uals to modify cognitions and behavior toward goal attainment
(Carver & Scheier, 1990).
Rousseau's (1989, 1995) PC formulation incorporated some
aspects of self‐regulation theory. For instance, the process of breach
detection and reaction reflects a discrepancy feedback loop. Trivial
discrepancies between beliefs regarding obligations and inducements
were expected to evoke little attention whereas significant discrepan-
cies were likely to be perceived as a breach of the PC, triggering neg-
ative affect (e.g., feelings of violation, Morrison & Robinson, 1997) and
the pursuit of remedy (Rousseau, 1995). As noted, this discrepancy
feedback mechanism has received substantial meta‐analytic support
(Bal, Lange, Jansen, & Van Der Velde, 2008; Zhao et al., 2007).
Although discrepancy feedback is a critical PC component, a greater
appreciation of PC dynamics can be gleaned from other facets of
self‐regulation theory.
First, self‐regulation theory and research can help explicate PC
creation and change. For instance, Rousseau (1989, 1995) did not
explicitly address why and when employees would be motivated to
accept an employer's promise, making the basis on which obligations
are formed unclear. Further, although Rousseau proposed “contract
drift”to explain minor (unconscious) changes in the PC over time,
the mechanism responsible for this change was not well developed.
Self‐regulation research calls attention to how individuals' cognitions
are affected by goals and the limited capacity of working memory
(Lord & Levy, 1994). Goals are desired outcomes and can be personal,
task related, or assigned by others (Locke & Latham, 1990). For exam-
ple, personal goals may be related to fundamental needs such as
safety and achievement (e.g., Maslow, 1970; McClelland, 1985). Goals
operating at a given time influence the recall of events and attention
to, and storage of, present events (Conway & Pleydell‐Pearce, 2000;
Lord et al., 2010). As such, personal goals are likely to impact what
employees attend to and store as PC obligations, how obligations
are recalled when assessing PC fulfillment, and how obligations
change over time. Employees are likely to attend to and rely on infor-
mation that is goal consistent, and different goals can be activated
across situations, changing over time (Carver & Scheier, 1990). As
such, employees' perceptions of their own and their employer's obliga-
tions can be expected to change according to activation of particular
goals. We propose that goals are a key mechanism in understanding
how perceived obligations are created and changed.
Second, self‐regulation work informs a dynamic model of PCs by
introducing time‐based mechanisms. Specifically, a velocity feedback
mechanism can account for the effects of perceived speed (i.e., per-
ceived vs. expected speed) in various processes. Perceived speed of
promise making at the start of employment may impact how quickly
the PC stabilizes. Similarly, the perceived speed of inducement deliv-
ery may influence PC evaluation and employee reactions to it. Existing
PC work has focused on the discrepancy feedback loop in PC pro-
cesses. However, self‐regulation research shows that the perceived
rate at which a discrepancy decreases has a stronger impact on affect
than does the actual size of the discrepancy (Chang et al., 2009). It also
shows that achieving goals faster than anticipated creates optimism
and positive affect, whereas slower progress than anticipated gener-
ates negative affect (Blount & Janicik, 2001; Chang et al., 2009; Hsee,
Abelson, & Salovey, 1991; Johnson, Howe, & Chang, 2012; Lawrence,
Carver, & Scheier, 2002). Finally, velocity feedback impacts cognitions
regarding the likelihood of goal attainment as well as behaviors such
as persistence (Johnson et al., 2012). In our dynamic PC model, we
incorporate a velocity feedback mechanism to reflect these time‐sen-
sitive processes.
Third, self‐regulation research underscores the role of affect
(Schwarz & Clore, 2003). Although PC research on emotions is largely
limited to violation feelings (Conway & Briner, 2002; Robinson &
Morrison, 2000), self‐regulation research suggests that both positive
and negative affect have implications for the health of exchange rela-
tionships and pursuit of valued goals (Forgas & George, 2001; Isen,
2001). Affect influences how people respond to new information
(e.g., promises) and how they use preexisting cognitive structures
(e.g., PCs) to interpret information (Forgas & George, 2001). Positive
affect increases the use of higher order symbolic categories (e.g.,
PCs) in interpreting environmental cues, whereas negative emotions
promote reliance on lower order, data‐driven processes that foster
scrutiny of the environment (Fiedler, 2000; Schwarz & Clore, 2003).
During low‐effort monitoring, only discrepancies that produce strong
affect trigger effortful processing (Carver & Scheier, 2001). Therefore,
positive and negative affect can each serve as antecedents of
intraphase PC processes and, at strong enough magnitudes, trigger
interphase transitions.
Taken together, self‐regulation theory informs a more time‐sensi-
tive perspective of PC processes, one that recognizes changes in the
role of key variables, the effect of speed, and the expanded role of
affect. The model developed here adopts a temporal perspective and
incorporates the above issues as well as findings in the PC literature
to push the boundaries of earlier work. We now turn to our main
propositions regarding intraphase and interphase processes.
4|THEORETICAL PROPOSITIONS:
INTERPHASE AND INTRAPHASE PC
PROCESSES
4.1 |Creation phase
Creation operates at the outset of an employment arrangement, typi-
cally occupying the first few months of newcomer socialization (De
Vos, Buyens, & Schalk, 2003; Feldman, 1981). Organizational socializa-
tion refers to the “process by which individuals become part of an
organization's pattern of activities”(Ashforth, Sluss, & Harrison,
2007, p. 1). During this, time newcomers form beliefs about what their
organization owes them and what they owe it in return. We propose
that newcomers' self‐regulatory processes in this phase focus on
understanding whether and how goals are attained. The main function
of creation is to develop a PC the individual can rely on in pursuing
personal goals by regulating his or her thinking and behavior in ways
that increase the odds of goal achievement.
Organizational newcomers engage in effortful cognitive process-
ing, incorporating both their prior beliefs and newly acquired
ROUSSEAU ET AL.5
organizational information to form their PC schema (Rousseau, 2001).
Preexisting beliefs include information about societal and industry
norms, past experiences, the experiences of family and friends, and
other factors that collectively generate expectations regarding the
exchange (De Vos, De Stobbeleir, & Meganck, 2009). Organizational
information includes cues about the employer's intentions in the form
of explicit or implicit promises (Louis, 1980; Rousseau, 1995). Indeed,
exchange partners engage in a greater frequency of promise‐making
early, compared with later, in the relationship (e.g., the “anticipatory”
vs. “encounter”stages of socialization, De Vos et al., 2003; De Vos
& Freese, 2011). Perceived employer promises stem from an array of
organizational agents (e.g., managers, supervisors, owners, and team
leaders). Likewise, perceived employer promises may stem from
established norms, policies, and procedures within the organization.
We stress that only promissory cues that the employee accepts as
promises will generate perceived employer obligations. Acceptance in
this context refers to an employee's intent to rely on a promise by
reciprocating accordingly (Rousseau, 1989, 1995; Rousseau & Schalk,
2000). Thus, “accepted”employer promises motivate employees to
form obligations that allow them to reciprocate. As such, promises
provide newcomers with information that can be used to revise or
replace their a priori expectations, thereby forming more realistic
beliefs (e.g., Rousseau, 2001; Wanous, 1980).
Consistent with the function of early socialization (e.g., Woodrow
& Guest, 2017), the PC becomes further elaborated as the employee
encounters new work‐related experiences and learns about the obli-
gations involved (De Vos & Freese, 2011). The creation phase con-
tinues until the recognition of new or novel information about
obligations declines, cognitive effort tapers off, and a relatively stable
PC is formed. At this time, if newcomers perceive a poor employee–
organization fit, they may leave (Louis, 1980; Wanous, 1980). Of
those who stay, it is important to note that choosing to remain with
the organization does not mean that the employee holds a highly
desirable PC. PCs can vary in their capacity to satisfy personal goals.
Some PCs may have the potential to satisfy a great many goals
whereas the potential of others may be limited to meeting only a
few employee goals. Indeed, employees choose to remain with orga-
nizations for many reasons including lack of job alternatives (Meyer &
Allen, 1997). Some employees may remain with an organization only
to meet their basic needs. Regardless, those who stay rely on the
newly formed PC to guide their behavior and transition into
maintenance.
Our predictions regarding intraphase processes for creation are
depicted in Figure 2. During creation, employees can encounter prom-
issory cues that relate to the likelihood of goal attainment. Organiza-
tional cues relevant to goal attainment are more likely to be noticed
than are goal‐irrelevant cues; and cues that facilitate goal attainment
elicit positive affect whereas cues that interfere with goal attainment
elicit negative affect (e.g., Fiske & Taylor, 1991; Forgas & George,
2001). We suggest that goal‐consistent promissory cues tend to be
attended to and generate positive affect, making them likely to be
internalized, in contrast to cues irrelevant to personal goals. Indeed,
goal‐consistent cues elicit positive affect by signaling the employee's
value to the employer (Connelly, Certo, Ireland, & Reutzel, 2011;
Spence, 1973). In turn, this positive affect is likely to promote accep-
tance of the promise being cued such that it is considered a PC obliga-
tion. For example, newcomers with a career goal orientation are likely
to experience positive affect when the employer conveys opportuni-
ties for advancement and this affective experience is expected to
increase their acceptance of such opportunities as a promise that cre-
ates perceived obligations.
In contrast, promissory cues perceived to interfere with goal
attainment are also more likely to be noticed than are goal‐irrelevant
cues (Lord et al., 2010). However, employees are unlikely to incorpo-
rate goal‐inconsistent cues into their PC because they do not facilitate
personal goal attainment. Indeed, such cues may even generate nega-
tive affect (Lord et al., 2010). As in the example above, signals regard-
ing advancement opportunities to newcomers who view promotions
as an undesirable responsibility tend to trigger negative affect and a
failure to accept and rely on that information as a promise (i.e., they
do not generate obligations). Indeed, an employee would not develop
a sense of obligation for an employer to deliver on a resource that
FIGURE 2 Overview of intraphase propositions in creation
6ROUSSEAU ET AL.
interferes with personal goal attainment.
2
Likewise, an employee
would not develop a sense of obligation to contribute in exchange
for delivery of such a resource. Given our focus on factors that influ-
ence PC creation, we propose the following:
Proposition 1. During creation, positive affect will medi-
ate the effect of goal‐consistent promissory cues on
employer promises.
As with past work (e.g., Rousseau, 1989, 1995), our model recog-
nizes that accepted employer promises are important to establishing a
PC. However, we propose that the PC is composed of perceived
employee and employer obligations and that employer promises are
one antecedent of these beliefs. In addition to affecting perceived
employer obligations, employer promises affect the employee's own
obligations to the organization because employer promises motivate
employees to reciprocate.
Proposition 2. During creation, employer promises will
positively affect perceived (a) employer obligations and
(b) employee obligations.
In the absence of employer promissory cues, employees rely on a
priori beliefs to form their initial PC. People do not enter the organiza-
tion as blank slates (Louis, 1980); they hold employment‐related
expectations based on prior experiences, family or social background,
media, or industry norms (Rousseau, 1995). Employer promises can
influence the effects of such normative expectations on PC obliga-
tions. Indeed, one purpose of promise making during socialization is
to revise preexisting beliefs to improve predictability in the
organization (Thomas & Anderson, 1998; Wanous, 1980). Thus, estab-
lishing the interrelations among the three PC belief types examined in
the extant literature, we propose the following:
Proposition 3. During creation, employer promises will
moderate the effects of normative expectations on per-
ceived (a) employer obligations and (b) employee obliga-
tions such that the effects will be stronger when
promises are consistent with normative expectations
and weaker when inconsistent.
4.2 |Transitioning from creation to maintenance
The transition from creation to maintenance reflects a shift from data‐
driven to more symbolic information processing similar to schema for-
mation (Lord et al., 2010). Consistent with recent findings (e.g., Fiedler,
2000), the experience of positive affect allows the employee to make
a shift from data‐driven processing of organizational cues to the
higher order, schematic processing (Fredrickson, 2001) characteristic
of a stable PC. The faster the generation of positive affect, the more
quickly the PC is likely to stabilize, transitioning to maintenance. As
depicted in Figure 3, two key factors create positive affect. First, per-
sonal goals tend to be reflected in the prior beliefs individuals preserve
when they join a new environment (Eccles & Wigfield, 2002). As such,
employer promises in line with normative expectations typically signal
to the employee that they are progressing toward goal attainment,
producing or sustaining positive affect.
Second, the perceived speed by which employer promises are
made also promotes positive affect and a shift to maintenance.
Several factors may influence the speed of promise making
(e.g., power and proximity of the organizational agent and
proactivity of the employee). Similar to the operation of the
velocity feedback mechanism in self‐regulation (e.g., Carver &
Scheier, 2001), the perceived speed with which employer
2
It is worth noting that personal goals change over time. As such, it may be that
an earlier irrelevant or goal‐inconsistent promissory cue becomes a goal‐consis-
tent promissory cue at a later time. As will be discussed in relation to PC change
during maintenance, in such cases, the cue may be recalled or reintroduced,
elicit positive affect, be accepted as an employer promise, and become incorpo-
rated into the PC.
FIGURE 3 Overview of propositions regarding speed of interphase transitions. PC = psychological contract
ROUSSEAU ET AL.7
promises are made will impact positive affect, and subsequently
the transition speed into maintenance. If newcomers believe that
promise making is too slow, they are likely to be frustrated; the
development of positive affect is stunted (negative affect may be
generated), preventing a speedy and successful transition into
maintenance. In contrast, when newcomers believe that promises
are being made in a timely manner, their uncertainty will decrease,
and positive affect will develop, thus enabling a swift shift into main-
tenance. This notion is consistent with shifts in organizational social-
ization from the “encounter”stage to the “role management”stage
(Feldman, 1981).
Proposition 4. During creation, positive affect will medi-
ate the effects of (a) congruence of employer promises
and normative expectations and (b) perceived speed of
employer promises on the speed of the transition to
maintenance.
4.3 |Maintenance phase
Similar to the status quo Rousseau (1995) described, the maintenance
phase is characterized by a sustained ongoing exchange with
minimal PC‐related cognitive effort. We note that individuals may not
transition into maintenance all at once. Some contract terms may stabi-
lize early whereas others continue to develop, allowing some overlap
between the creation and maintenance phases. Below we focus on
two key processes during maintenance: PC evaluation and passive
change in perceived obligations (see Figure 4).
Fulfillment of obligations is a critical aspect in maintenance.
When employees believe that the employer is fulfilling its obligations
(i.e., delivering the goal‐consistent inducements reflected in
perceived employer obligations), they are motivated to continue
fulfilling their obligations to the employer. As established in the
study of PC evaluation, employees monitor the exchange relation-
ship for discrepancy feedback. This work has tended to focus on
the level of inducement delivery relative to obligations.
3
Extending
this, we argue that the velocity feedback (as a function of the affect
associated with the perceived speed of delivery relative to expected
speed) associated with this delivery also contributes to evaluation of
the PC. Thus, perceptions of PC fulfillment are influenced by both
velocity feedback and discrepancy feedback.
The emotions literature distinguishes between levels of affect
activation. Positive affect ranges from high‐activation feelings such
as excitement and eagerness to low‐activation feelings such as being
relaxed. Similarly, negative affect ranges from high‐activation feelings
such as being distressed to low‐activation feelings such as being
gloomy (e.g., Feldman Barrett & Russell, 1998; Russell, 2003). High‐
activation positive and negative affect motivate goal‐oriented
thoughts and action more so than low‐activation affect (Buck, 1988;
Carver, 2003). In contrast, positive affect at low to moderate activa-
tion levels (e.g., contentment) signals consistent progress toward goal
achievement with no further evaluation or action required.
We argue that varying levels of affect activation, triggered by the
velocity feedback mechanism, will influence perceptions of PC fulfill-
ment (and disruption, as will be discussed later). Specifically, when
the perceived speed of inducement delivery is congruent with the
FIGURE 4 Overview of intraphase propositions in maintenance. PC = psychological contract
3
Formal propositions concerning discrepancy feedback are not presented
because they are well established in the literature (e.g., Morrison & Robinson,
1997).
8ROUSSEAU ET AL.
expected speed, contentment (low–moderate activation of positive
affect) is experienced (e.g., Lawrence et al., 2002) and fulfillment is
perceived. In contrast, when inducement delivery is somewhat slower
than expected, low‐activation negative affect is generated, and the
employee is likely to perceive low levels of contract fulfillment
(Cassar & Briner, 2005).
Proposition 5. During maintenance, when the perceived
speed of inducement delivery is (a) congruent with the
expected speed, low‐activation positive affect will be
associated with perceived PC fulfillment, and (b) when it
is somewhat slower than the expected speed, low‐activa-
tion negative affect will be associated with low levels of
perceived PC fulfillment.
During maintenance, the PC is stable but not static. PC changes
can occur passively at low levels of cognitive effort. Our model spec-
ifies a variety of assimilation mechanisms that create low‐effort
change in the PC during maintenance. These mechanisms operate
through self‐regulation processes by which schemas are revised
with limited cognitive effort or affective response (Carver & Scheier,
2001; Lord & Levy, 1994). First, changes in personal goals can
alter individuals' beliefs about the employers' or their own obligations
(i.e., drift in Rousseau, 1995). Goal changes alter recollections of past
promissory cues (Conway & Pleydell‐Pearce, 2000; Eysenck & Keane,
2010), making employees more likely to recall promises that align
with their new goals and downplay those that are not. Further, goal
changes alter how individuals interpret environmental cues, making
more salient those cues related to new goals (e.g., a new parent
attending to the employer's family‐friendly policies; Trope &
Liberman, 2010).
Second, assimilation also occurs through learning, whereby indi-
viduals incorporate new organizational information into the PC. Per-
ceived obligations can be effortlessly modified to account for new
information if discrepancies are small. As employees come to better
understand their appropriate contributions and the inducements they
can anticipate, their obligations become more elaborated and
context specific. For example, drawing from research on customer
service, the obligation to provide “good service”to customers
might be revised to mean something quite specific to the employer
such as “creating value for customers”(Grönroos, 2008). Similarly, an
individual can observe that the way the organization fulfills its own
obligations also has particular meanings unanticipated during creation.
An individual promised flexibility might observe that only high
performers or loyal employees are granted their preferred schedule
or work location, which can lead to a low‐effort fine‐tuning of the
employer's perceived obligation.
A third assimilation mechanism concerns actual exchanges of
employee contributions and inducements via the new obligations
such exchanges create. Following findings that employees' percep-
tions of promises change as a function of the contributions they have
made and inducements received over time (De Vos et al., 2003), we
propose similar processes for perceived obligations. Increases in per-
ceived employer obligations can occur when employees make contri-
butions beyond their existing obligations to benefit the employer.
Accepting benefits can evoke expectations of reciprocity, leading
employees to believe that the employer is obligated to reciprocate
their contributions (Gouldner, 1960). Likewise, increases in perceived
employer obligations can occur when goal‐consistent inducements
are offered that were not anticipated in creation but that do not elicit
high‐activation affect. The obligation to continue to offer these addi-
tional inducements arises in part because people tend to envision a
future largely similar to the present (Goleman, 2010). Further, addi-
tional inducements may also lead to increases in perceived employee
obligations due to the norm of reciprocity (Gouldner, 1960) because
they prompt a sense of obligation on the employee's part to offer
commensurate returns (Lee et al., 2011). Finally, increases in the
employee's own perceived obligations can occur following additional
contributions made to the employer, as people have a tendency to
maintain consistent behavior over time (e.g., Heider, 1958). Again,
expanded employee obligations tend to be reinforced by the regular-
ity of these additional contributions. As maintenance continues, initial
promises may become less relevant than actual experiences in how
individuals evaluate the exchange (De Vos et al., 2003; Lambert,
2011). We posit that passive forms of PC change will occur during
maintenance as a result of the exchange of inducements and
contributions.
Proposition 6. During maintenance, goal‐consistent
inducements will positively affect perceived (a) employer
obligations and (b) employee obligations.
Proposition 7. During maintenance, employee contribu-
tions will positively affect perceived (a) employer obliga-
tions and (b) employee obligations.
4.4 |Disrupting maintenance
Disruption is a strong affective event (Beal & Ghandour, 2011; Fiedler,
2000; Weiss & Cropanzano, 1996) that generates a phase transition
from maintenance. In self‐regulation, large discrepancies yield strong
affect, positive or negative (Chang et al., 2009; Johnson et al., 2012).
As in the socialization literature, “both pleasant and unpleasant sur-
prises require adaptation”and hence motivate higher cognitive effort
(Louis, 1980, p. 238). In the context of PCs, disruption occurs when
the perception of a discrepancy between obligations and inducements,
or between perceived speed of inducement delivery and expected
speed, is sufficient to generate high‐activation affect. In turn, this
affect motivates cognitive effort that exceeds maintenance levels, trig-
gering a transition into either repair or renegotiation for PC revision,
depending on affect valence. Valence is a function of how the disrup-
tion impacts goal attainment. Disruptions that are goal consistent gen-
erate positive affect and motivate a shift to renegotiation, whereas
those that interfere with goals generate negative affect and motivate
a shift to repair.
Consistent with the existing PC literature, negative discrepancies
between employer obligations and inducements produce high‐activa-
tion negative affect (e.g., feelings of violation, Zhao et al., 2007) and
thus would constitute disruptions that trigger a shift to repair. We
extend this by recognizing that goal‐consistent inducements that
exceed existing obligations might generate high‐activation positive
affect (e.g., excitement and enthusiasm), motivating a shift to
ROUSSEAU ET AL.9
renegotiation. Because people experience strong positive affect when
they receive a goal‐consistent expected outcome sooner than antici-
pated (e.g., Blount & Janicik, 2001; Olson et al., 1996), we also suggest
that high‐activation positive affect (and a shift to renegotiation) will
result when inducement delivery occurs at perceived speeds faster
than anticipated. For example, if an employee believes that the organi-
zation is obligated to provide reskilling in the next couple of years, but
she is quickly sent for training, this positive discrepancy between
expected and perceived inducement delivery speeds is likely to elicit
excitement, causing her to revise her PC. Finally, when delivery speed
is perceived by employees as too slow, high‐activation negative affect
will result, cuing a transition to repair. We next detail the transition
out of maintenance.
Proposition 8. During maintenance, when the perceived
speed of inducement delivery is (a) faster than expected
speed, high‐activation positive affect will be associated
with disruption, and (b) when it is substantially slower
than expected speed, high‐activation negative affect will
be associated with disruption.
4.5 |Transitioning from maintenance
The strength of positive affect generated by the disruption will influ-
ence the transition speed into the renegotiation phase wherein the
employee revises his or her PC to facilitate goal achievement under
the new conditions. Negative disruptions reflect a perceived discrep-
ancy between employer obligations and inducements large enough
to impede employee goals. Such disruptions arise when inducements
fall short of perceived employer obligations or when inducements sur-
pass perceived employer obligations to the point of goal interference.
The strong negative affect associated with this disruption is likely to
manifest as frustration or anger (i.e., violation feelings), the strength
of which can affect the speed of transition into repair.
Consider a situation in which an employee is given more respon-
sibility than present in the PC. Assuming that these responsibilities
surpass the minor changes that can be assimilated during mainte-
nance, they create a disruption evoking a strong affective response.
To an employee with career‐oriented goals, the opportunity for more
responsibility can constitute a disruption that generates strong posi-
tive affect. Greater responsibilities, though attractive to the employee,
might not easily be accommodated into the existing PC (e.g., special
skills or supports might be required). Such goal‐consistent changes in
the PC can require effort to establish a revised set of obligations via
renegotiation. In contrast, another employee with a primary goal of
work–family balance might perceive increased responsibilities to inter-
fere with goal attainment. As such, the disruption will be associated
with strong negative affect followed by a transition to repair wherein
efforts can be exerted to resolve the disruption and reduce the asso-
ciated negative affect (Tomprou, Rousseau, & Hansen, 2015). Under
some circumstances, damage to the relationship is not repairable and
so the employee chooses to quit (see Figure 1), terminating the PC
(Morrison & Robinson, 1997). We propose that whether disruption
leads to renegotiation or repair depends on the valence of the affec-
tive response (a function of the employee's personal goals), the
strength of which affects how quickly the transition occurs from main-
tenance to renegotiation or repair, with larger discrepancies between
obligations and inducements producing stronger affect (Johnson
et al., 2012) and thus quicker transitions.
Proposition 9. Following a disruption in maintenance,
positive affect will positively affect the speed of transition
to renegotiation.
Proposition 10. Following a disruption in maintenance,
negative affect will positively affect the speed of transi-
tion to repair.
4.6 |Renegotiation phase
The renegotiation phase reflects a period in the employment relation-
ship wherein employees revise old or negotiate new obligations. Rene-
gotiation may occur interpersonally through discussions with the
employer (e.g., i‐deals, or individually negotiated work arrangements)
or intraindividually as the employee modifies the PC schema to reflect
understanding of the new conditions. The scope of revision during
renegotiation can vary from a single facet (e.g., specific duties) to the
entire employment arrangement (Rousseau, 2005).
Employees may experience a positive disruption and enter the
renegotiation phase for a variety of reasons. For example, this transi-
tion may occur when a stellar performance review prompts the super-
visor to offer new opportunities aligned with the employee's personal
goals. It may occur when the employer frames new circumstances as
opportunities for employee goal attainment to gain support for a
planned change. It may also occur as a result of changing circum-
stances of the employee, such as when new goals have emerged
(e.g., birth of a child; Rousseau, 2005) and the employee believes that
the employer may be willing to address them. In such cases, the
employee may proactively initiate renegotiation by requesting or
bargaining for altered employment conditions. Such positive disrup-
tions prime optimistic expectations and cooperative negotiation strat-
egies (Forgas & George, 2001; Isen, 2001).
Employee and employer promises are the key drivers of PC
change in renegotiation. Promises can help put the employment rela-
tionship on a new footing, foreshadowing future benefits not part of
the current PC. Such promises can expand the previous agreement
or replace previous PC terms (e.g., shifting from full to part time as
retirement nears). As in creation, goal consistency will determine
whether promissory cues are accepted and used to revise employer
obligations. Promises made during renegotiation are expected to moti-
vate reciprocal promises (Gouldner, 1960), generating revised
employee and employer obligations.
4
Distinct from creation, parties in renegotiation have better infor-
mation about each other and an increased likelihood of holding infor-
mation in common. This information can take the form of more
accurate employer knowledge regarding the employee's value and
employee insight into important resources the employer might offer.
This information can be shared, increasing mutual understanding,
4
Note that these relations are not formally proposed because they reflect the
same pattern of relations among these variables as predicted during creation.
10 ROUSSEAU ET AL.
which, in an existing relationship, can make promises easier to offer
and accept (Rousseau, 2001). As such, transitions from renegotiation
to maintenance are likely to occur more quickly than those from crea-
tion to maintenance.
4.7 |Transitioning from renegotiation to
maintenance
Two primary factors are expected to facilitate the transition from
renegotiation to maintenance via positive affect, the scope of PC
changes and the perceived speed of employer promises. First, the
speed of the transition from renegotiation to maintenance is likely to
be faster when PC changes are narrow rather than broad in scope. A
narrow scope indicates that changes are fewer, increasing the
likelihood that they are more focused and well defined (Weaver,
Trevino, & Cochran, 1999). This minimizes the effort needed to
accommodate changes into the PC, thus increasing positive affect. A
broad scope entails more changes, which are often less clearly expli-
cated (Weaver et al., 1999), increasing the effort required to accom-
modate them into the PC. Once again, affect will be a key
mechanism in this transition as it facilitates a move back to the sym-
bolic (as opposed to data‐driven) processing indicative of the mainte-
nance phase. Second, consistent with the self‐regulation theory
(Carver & Scheier, 1990, 2001) and similar to the process described
in creation, employer promises made in a timely manner (as opposed
to those that are delayed) will engender positive affect and, in turn,
speed transition back to maintenance.
Proposition 11. During renegotiation, positive affect
will mediate the effect of (a) scope of PC change and (b)
perceived speed of employer promises on the speed of
the transition to maintenance.
4.8 |Repair phase
Negative disruption occurs when employees encounter circumstances
at odds with their personal goals and beyond their capacity or willing-
ness to assimilate into their existing PC, thus shifting employees into
repair. This phase is characterized by high cognitive effort, including
alertness to discrepancies between employer obligations and induce-
ments and to the quality of interpersonal treatment (Rousseau,
1995). Specifically, negative affect causes the employee to scrutinize
environmental data (data‐driven cognitive processing), a vigilance that
impairs reliance on the existing PC (e.g., Forgas & George, 2001) and
delays or prevents a return to maintenance.
Employees' motivation during repair is twofold: to reduce nega-
tive affect and reestablish a functional or goal‐consistent PC. This
may be done through remedies or by revising the PC (employee
and/or employer obligations), in full or in part, to reduce the perceived
discrepancy and negative affect (Tomprou et al., 2015). We draw from
research on relationship repair (e.g., Kramer & Lewicki, 2010;
Zechmeister, Garcia, Romero, & Vas, 2004) and recent PC research
(e.g., Lambert et al., 2003; Montes & Zweig, 2009) to specify two
mechanisms that promote the reduction of negative affect to facilitate
the successful revision of perceived obligations: promise making and
delivery of goal‐consistent inducements (see Figure 5).
Promise making, particularly by the employer, is an important
mechanism in reducing negative affect, allowing the successful revi-
sion of obligations. During repair, affect signals the extent to which
the employment arrangement is functional (e.g., Dirks, Lewicki, &
Zaheer, 2009). Unless negative affect is tempered during repair,
employees tend to ruminate over negatively framed events and past
breaches (Carver & Scheier, 1990), hindering cooperation and making
it difficult to revise obligations. Importantly, promises can serve as
remedies or substitutes for the breached PC and can signal employer
goodwill (Dirks et al., 2009). As in creation, only promissory cues that
align with employee goals (i.e., employer promises) are likely to be
accepted and contribute to the revision of obligations by reducing
negative affect.
Proposition 12. During repair, negative affect will medi-
ate the effects of employer promises on (a) employer obli-
gations and (b) employee obligations.
Inducement delivery also contributes to repair by promoting a
sense of fairness and strengthening the perceived sincerity of
employer promises, thereby reducing negative affect. Goal‐consistent
inducements provided during repair offer a credible cue conveying the
employer's willingness to resolve a negative disruption (Tomlinson,
Dineen, & Lewicki, 2004; Zechmeister et al., 2004). Providing an
attractive assignment to improve skills for a future promotion can
make a promised promotion appear more credible, reducing negative
affect and restoring the exchange (Dirks et al., 2009; Tomlinson
et al., 2004). These inducements also reduce negative feelings by
FIGURE 5 Overview of intraphase propositions in repair
ROUSSEAU ET AL.11
correcting the discrepancy between employer obligations and earlier
inducements. This is achieved via their inherent value to the employee
(Isen, 2001) and by signaling the organization's concern (Desmet, De
Cremer, & van Dijk, 2011). Thus, goal‐consistent inducements will
reduce negative affect and facilitate revision of obligations.
Proposition 13. During repair, negative affect will medi-
ate the effects of goal‐consistent inducements on (a)
employer obligations and (b) employee obligations.
4.9 |Transitioning from repair to maintenance
The transition to maintenance will depend on employer responsive-
ness. Delays in addressing employees' hot feelings and sense of loss
can further undermine the employment relationship during repair
(Cassar & Briner, 2005). Repair speed depends on employer respon-
siveness to employee concerns and the efforts taken to restore a func-
tioning PC (Tomprou et al., 2015). Further, rapid rates of goal
attainment can compensate for large discrepancies, reducing negative
affect (Chang et al., 2009). As such, prompt employer actions in
addressing negative disruptions increase the likelihood of reconcilia-
tion whereas delays hamper it (Kramer & Lewicki, 2010; Tomprou
et al., 2015). Thus, transition speed to maintenance is impacted by
the perceived speed with which the employer offers promises and
goal‐consistent inducements to restore the PC (Figure 3). Delivery of
such promises and inducements in repair serves to decrease negative
affect. Given people's motivation to overcome or reduce unpleasant
feelings (Adams, 1965), promptly offered promises and goal‐consistent
inducements can decrease negative affect, facilitate obligation revi-
sion, and promote a faster return to maintenance.
Proposition 14. During repair, negative affect will medi-
ate the effect of (a) perceived speed of employer promises
and (b) perceived speed of goal‐consistent inducements
on speed of transition to maintenance.
Above we outlined the transition back to maintenance following
the restoration or revision of the PC. In cases where negative affect
cannot be mitigated, employees are likely to withdraw. In certain
cases, withdrawal can lead to turnover intentions, and ultimately exit
(e.g., Thoresen, Kaplan, Barsky, Warren, & de Chermont, 2003). How-
ever, it is also possible that employees might choose to stay with the
organization due to the costs associated with leaving (Meyer & Allen,
1997). If so, there can be a significant reduction in perceived employee
obligations. As such, the employee may enter into maintenance, per-
haps begrudgingly accepting a less goal‐consistent PC (Restubog,
Zagenczyk, Bordia, Bordia, & Chapman, 2015), with concomitant
effects in attitudes and behavior toward the organization.
5|DISCUSSION
Employment relations have changed considerably since notions of the
PC were first proposed. Economic upheaval, deregulation, and the
migration of economic risk from firms to workers have undermined
the guaranteed employment conditions that once prolonged the PC's
maintenance phase. Employees often now face pressures to shoulder
full responsibility for their careers and financial futures (Rousseau,
2011). Whereas stability and predictability had been hallmarks of
well‐managed PCs, resilience and adaptability are now perhaps more
appropriate criteria—a temporal lens in the study of PCs may be more
useful than ever.
Bringing dynamism to the forefront of PC conceptualization
strengthens our ability to accurately reflect and inform our under-
standing of employment and other forms of exchange. We sought to
bring clarity to the PC literature by positioning promises and expecta-
tions as antecedents of the perceived obligations that comprise the
PC. We have extended prior theorizing by introducing four PC phases
and detailing the dynamics of interphase and intraphase processes.
Self‐regulation theory and research are critical to these dynamics.
Although previous PC theorizing recognized the roles of goals, dis-
crepancy and affect, these self‐regulation‐related mechanisms were
not central to it. It should now be clearer how these mechanisms con-
tribute to important time‐and change‐related PC processes. Impor-
tantly, goals play a central role in the PC across phases and can
change over time. Affect is important beyond its contribution to viola-
tion feelings as we can now discern how both positive and negative
affect trigger PC change and phase shifts. Speed also plays an impor-
tant role in PC processes as reflected in promise making, inducement
delivery, and phase transitions. Finally, our model recognizes distinct
temporal periods in the employment relationship that influence how
employees perceive, process, and react to events. Within and between
PC phases, we recognize that relationships among variables need not
be unidirectional: PC constructs sometimes serve as antecedents and
other times as outcomes as the PC cycles through its phases.
From a practical perspective, our model offers guidance to
employees and managers about how goals can be attained while cre-
ating, fostering, and altering the PC. Given the dynamic nature of
PCs, both employee and employer need to be mindful that goals
change, with implications for how their “mutual”obligations are under-
stood. Both should regularly test their PC‐related beliefs to affirm
mutual understanding (Tomprou & Hansen, 2018). On the employer's
part, these efforts can take the form of regular conversations and all
hands meetings to provide shared information and understanding
and recognize the implications of changing experiences and policies.
For the employee, periodic check‐ins with one's manager and well‐
informed others help. Both parties can work to anticipate future needs
and ways to accommodate evolving goals.
An organization's culture that fosters change (Denison, 2012) is
predicated on the capacity to create PCs that promote mutual adapta-
tion and resilience. The ability to make arrangements that meet both
organizational and individual goals depends on the employer's capacity
to respect individual goals even under adverse circumstances. For
example, after budget cuts, organizations unable to provide advance-
ment or development might instead offer more cost‐effective options
for personal growth such as job rotation. Such remedies can support
adjustment to change (Tomprou & Hansen, 2018). Last, practitioners
can benefit by timely responses to employee needs; the speed
at which PCs are fulfilled, and disruptions addressed, is key to well‐
managed change. We devote the remainder of the article to discussing
the research implications of adopting a dynamic perspective of PCs
and important directions for future research.
12 ROUSSEAU ET AL.
5.1 |Research implications
PC research should systematically adopt a temporal lens consistent
with our theorizing, the obvious importance of time to employment
relationships, and repeated calls for its incorporation into organiza-
tional research (Roe, 2008; Shipp & Cole, 2015). Most PC research
reflects linear assumptions based on use of static methods (e.g.,
cross‐sectional designs) or multi‐wave designs with few measurement
points, precluding examination of PC dynamics (Hansen & Griep,
2016; Lambert et al., 2003). Nonetheless, change is not linear and
people need not change in the same way, same direction, or at the
same rate (Preacher, Wichman, MacCallum, & Briggs, 2008). Some
phenomena appear to be stable when measured over longer periods,
but are highly unstable when assessed within short periods (Roe,
2008). And, change in some variables is seen only over extended
periods, whereas in others, change is observable daily (Roe, 2008).
As with other content domains, the neglect of time in PC research
can be attributed to various factors including lack of guiding theory,
limited familiarity with time‐sensitive methods (e.g., high density, high
frequency experience sampling) and analytics (e.g., multilevel analysis,
latent growth curve analysis, and functional principal component anal-
ysis), and complex study designs that make the integration of time par-
ticularly challenging in terms of sampling and measurement (Ancona,
Goodman, Lawrence, & Tushman, 2001). Our model overcomes the
first major obstacle noted by Ancona et al. by providing a theoretical
foundation for the study of time and PCs. Future research can test
and build on our propositions to more accurately capture employment
relationships in their temporal context.
The temporal aspects of our model inspire numerous novel ques-
tions. For instance, how many times must a minor breach recur before
it is seen as a disruption? Do negative reactions cease immediately
when the employee moves from repair to maintenance, or do they lin-
ger for some time? What are the unique trajectories of outcomes that
follow disruption? Does the potential to elicit positive or negative
affect differ depending on the PC phase? In the remainder of this sec-
tion we discuss some additional challenges that lie ahead for PC
researchers as they test the relationships in our dynamic phase model
as well as other predictions the model inspires.
5.2 |Time‐sensitive methods
Future research should incorporate more time‐sensitive approaches
(e.g., Solinger, van Olffen, Roe, & Hofmans, 2013), in both laboratory
and field settings. Experimental studies (e.g., vignette studies, labora-
tory manipulations) are critical to triangulating findings from correla-
tional and qualitative studies, addressing directly issues of causality.
Such studies would be well‐suited to testing velocity feedback predic-
tions. For example, participants' expectations regarding the speed of
outcome delivery, along with the actual delivery of outcomes can be
manipulated to assess the effects of velocity feedback on affect. Like-
wise, field experiments conducted among employees in the repair
phase would be useful in assessing differential effectiveness of repair
strategies (e.g., speed of recovery).
Correlational research in field settings can better capture the
onset, duration, and change trajectories of constructs under
investigation. A movement away from between‐person designs to
within‐person repeated measure designs (i.e., longitudinal research,
Ployhart & Vandenberg, 2010) would help. High density (i.e., number
of measurement points) and long term (e.g., one or more years) longi-
tudinal studies would be useful in studying variables expected to
change slowly (e.g., recovery from a severe disruption, Tomprou
et al., 2015) and in identifying meaningful patterns as employees cycle
through transitions between maintenance, repair, and renegotiation.
In contrast, shorter term experience sampling methodologies (e.g.,
Conway & Briner, 2002; Griep, Vantilborgh, Baillien, & Pepermans,
2016) would be ideal in mapping variables with short‐lived reactions
(e.g., hot feelings) and in capturing the nuances of dynamic processes
of maintenance. In repeated measures designs, use of more measure-
ment points offers greater power to detect non‐linear change over
time (Beal & Weiss, 2003) and increased odds of capturing the full life
cycle of PC‐related phenomenon (Roe, 2008). Despite challenges
regarding participant attrition, small samples with many measurement
points can be more useful than larger ones with fewer measurement
points due to the latter's sensitivity to attrition (Roe, 2014).
Qualitative research can be particularly useful in establishing real-
istic construct timeframes to inform the appropriate time lags to apply
in subsequent longitudinal research. Indeed, organizational research is
criticized for its ad hoc approach to construct‐appropriate time lags
(Shipp & Cole, 2015). In depth interviews and self‐observation and
reporting can help refine our model to better identify the onset, dura-
tion, and patterns of change (e.g., feedback loops, spirals) characteris-
tic of PC phenomena.
Both quantitative and qualitative studies can be informed by
related areas of study. For example, the socialization literature suggests
that the creation phase (and initial development of the PC) will last
approximately three to six months (De Vos et al., 2003; Louis, 1980),
indicating that research on creation processes must be conducted on
organizational newcomers during the first few months after organiza-
tional entry. Research and theory on affect can provide the needed
foundation to effectively capture and track changes in affect over time
(e.g., see Beal, 2014 for an overview). For instance, emotions research
suggests that affect is generally event‐driven (as in the affect associ-
ated with Disruption) but that there are regularities in individuals' affect
that can be tracked over time (Beal, 2014), reflecting identifiable pat-
terns. One such example is the damped oscillatory pattern (Chow,
Ram, Boker, Fujita, & Clore, 2005), which is consistent with discrepancy
reduction as discussed in self‐regulation research (Carver & Scheier,
1982). Research on trust repair (e.g., Lewicki, 2006) suggests that
recovery from disruption should be studied over long time frames,
whereas equity research (e.g., Greenberg, 1988) suggests that changes
to obligations during renegotiation (conditions similar to overpayment
inequity) will be accommodated at a faster rate, indicating that they
should be studied over shorter time frames.
Despite the study design, researchers should be mindful to con-
trol for relevant contextual and individual difference factors that
may play a role in PC dynamics (Roe, 2014). Examples of such factors
include organizational tenure (Bal, De Cooman, & Mol, 2013), genera-
tional status (De Meuse, Bergmann, & Lester, 2001), daily/weekly
affect cycles (Trougakos, Hideg, Cheng, & Beal, 2014), and past affec-
tive states (Weiss & Cropanzano, 1996).
ROUSSEAU ET AL.13
5.3 |Construct operationalization
Although most constructs in our model have been previously
operationalized, we introduce a few new constructs and elaborate
on some existing ones, warranting attention to how they might
be assessed. For instance, given the broader role of affect in this
dynamic phase model, it is appropriate to move beyond existing
measures of affect (e.g., feelings of violation, Robinson & Morrison,
2000) to capture a broader range of positive and negative
affective reactions. Instruments that capture a wide range of
positive and negative feelings (JAWS, Van Katwyk, Fox, Spector, &
Kelloway, 2000) will be valuable in delving into the types of
discrete feelings (high, moderate, and low activation affect)
associated with PCs.
We call for greater attention to several existing constructs, partic-
ularly goal consistency as in the case of goal‐consistent promissory
cues. Because goals change over time, it is important to assess goals
and the focal construct concurrently using commensurate measures.
For example, to assess the effects of goal‐consistent delivered induce-
ments, participants would rate the extent to which each of the induce-
ment items is related to their personal goals and, on the same numeric
scale, rate the extent to which the employer delivered each of those
same inducements. The effect of the congruence of goals and induce-
ments could then be assessed using polynomial regression (e.g., see
Edwards, 1991, 2001). A similar technique could be used to assess
perceived speed of inducement delivery relative to expected speed
(Chang et al., 2009).
Several novel constructs in our model concern speed (e.g., per-
ceived speed of employer promises, perceived speed of inducement
delivery, and speed of phase transitions). Like time in general, it is
important to recognize that the speed of events can be assessed
subjectively or objectively (Shipp & Cole, 2015). Although two
employees may take the same amount of objective time
(“clock time”) in repair before returning to maintenance, they may
differ significantly in their subjective experience of the passage of
time (“psychological time”) while their PC obligations are revised.
Thus, in testing our model, subjective measures (e.g., direct
measures asking participants to indicate, on some appropriate
temporal scale, the speed of the focal construct) should be used
to assess perceived speed of employer promises and perceived
speed of inducement delivery, whereas the speed of phase transi-
tions should be assessed with appropriate objective measures of
time (i.e., actual hours, days, weeks, months, and years).
5.4 |Sampling
A final challenge to future research concerns use of appropriate
participant samples. PC onset, duration, and dynamics should
inform such choices. For example, studying the transition from
creation to maintenance requires participation of organizational
newcomers (e.g., recent graduates who have just accepted jobs).
Organizations about to experience a significant disruption (e.g.,
a planned merger) are an ideal context to study transitions from
maintenance and within‐phase PC revision processes. Sampling
challenges underscore the necessity for partnerships among
researchers and practitioners to enable the type of intensive
data collection studying dynamic aspects of phenomena requires
(Shipp & Cole, 2015).
5.5 |Future research directions
Our model's focus on interphase and intraphase dynamics offers an
array of implications for PC‐related research. First, acknowledging its
importance (Ho, 2005; Ho & Levesque, 2005; Tomprou & Nikolaou,
2013), additional work is needed to understand how social influence
affects PC dynamics. We encourage future research to explore the
roles of social networks and social information processing in PC
phases. For example, during renegotiation, employees may seek infor-
mation from higher status employees to update their PC, whereas dur-
ing repair they may seek out similar‐status peers for support and
confirmation. Social mechanisms may also influence interphase pro-
cesses. For instance, access to social information can facilitate goal
revision, affecting transition speeds. Considering social influence in
conjunction with time and PC phases can offer new insights into social
network effects.
Second, individual differences have a recognized role in the PC lit-
erature (e.g., Raja, Johns, & Ntalianis, 2004) but are omitted from our
model for parsimony. Nonetheless, individual differences likely play an
important role in interphase and intraphase PC processes. For example,
newcomers with high proactivity tend to actively seek out social cues
about employee and employer obligations (Tomprou & Nikolaou,
2011). This may result in faster phase transitions (e.g., less time spent
in repair) and longer durations of PC stability (i.e., maintenance phase)
because they have greater clarity about obligations and so are less vul-
nerable to negative disruptions due to misunderstandings or miscom-
munications. Temporal individual differences (and their interactions
with PC constructs) will also be important to recognize in future PC
research (Shipp, Edwards, & Lambert, 2009). For instance, temporal
depth (i.e., an individual's tendency to focus on a particular temporal dis-
tance in the past or future, Shipp & Cole, 2015) may influence the speed
and success of efforts during renegotiation because individuals with
longer future temporal depth are more efficient negotiators (Sondak,
Neale, & Pinkley, 1995) and less likely to experience low fulfillment as
disruption because of their long‐term focus (Das, 1987).
Third, context is an additional critical consideration (Johns, 2006).
Societal values, labor legislation, and economic and workforce con-
straints may determine effect sizes and explained variance of PC var-
iables. For instance, among certain types of labor (e.g., the spot
markets of unskilled workers), PC terms may be limited to hours and
pay, with little opportunity to pursue broader goals or to engage in
renegotiation. Perhaps one of the most important contextual factors
is whether the organization is undergoing change, a factor known to
shape both the PC and PC processes (Kickul, Lester, & Finkl, 2002).
Organizational change frequently entails a combination of losses due
to the negative disruptions (e.g., changes in company policies) and
the potential for future gains if change is implemented successfully
(e.g., personal growth over time). Future research might extend our
model by exploring “hybrid disruptions,”those that elicit positive and
negative affect in tandem because the change may be compatible with
14 ROUSSEAU ET AL.
some employee goals but undermine others. We note that change
management practices informed by PC theory and research, including
mitigating employee losses, as in PC repair, and change implementa-
tion realized via renegotiation, can facilitate employee adaptation to
change (Bridges & Bridges, 2017; Rousseau, 1996). Also, the role of
goals in repair and renegotiation offers a fresh perspective on ways
human resource personnel can engender change acceptance and sup-
port, including consistent implementation of organizational promises
in the context of change (e.g., Bowen & Ostroff, 2004). Thus, our
dynamic PC model may help advance theory and practice regarding
change implementation (Tomprou & Hansen, 2018).
Finally, although this article focused for parsimony on the
employee's perspective, our model could similarly apply to the
employer or agent perspective. Agents can hold dual roles, acting on
behalf of the employer and as employees, and can have PCs with each
employee (Dabos & Rousseau, 2004) as well as their own PC with the
organization. Each PC has its own phases from the agent's point of view
and can affect their conduct as both agent and employee. The agent's
personal goals as well as the goals associated with his or her organiza-
tional function are expected to influence the dynamics of his or her
PCs. Key factors relevant to the dynamics of the several contracts a
given agent can be party to include the agent's differential access to
status, power, and resources relative to other employees. For example,
agents may use their relative power to respond to employee breach by
firing, offering a second chance, or writing a disparaging (or develop-
mental) review. Although agents may use distinct coping strategies to
deal with breach, PC processes are expected to remain the same. Test-
ing the generalizability of our model to organizational agents is impor-
tant to extending its scholarly and practical reach.
6|CONCLUSION
The PC has proven useful in understanding and managing exchange
relationships. By updating and extending PC processes to better
account for their dynamic nature, our goal has been to broaden the
PC's explanatory power and utility. Our dynamic model can aid PC
researchers in developing a more coherent body of scholarship that
recognizes the important roles of time, goals, and affect and, in doing
so, better contribute to both scientific inquiry and practice.
ACKNOWLEDGEMENTS
This work was supported by a grant from the Social Sciences and
Humanities Research Council of Canada awarded to Samantha D.
Hansen, University of Toronto.
ORCID
Denise M. Rousseau http://orcid.org/0000-0003-0712-7189
Samantha D. Hansen http://orcid.org/0000-0002-9849-7347
Maria Tomprou http://orcid.org/0000-0003-3173-1677
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Denise M. Rousseau is the H.J. Heinz II University Professor of
Organizational Behavior and Public Policy at Heinz College and
the Tepper School of Business at Carnegie Mellon University.
She was a former president of the Academy of Management and
Chair of the Center for Evidence‐Based Management. Her work
focuses on psychological contracts, evidence‐based management,
and positive managerial practices.
Samantha D. Hansen, an associate professor in organizational
behavior and human resources at the University of Toronto,
explores ways in which organizations can create and maintain pos-
itive relationships with employees. She is on the editorial board
for the Journal of Applied Psychology and has led several initiatives
to promote the incorporation of time in the study of psychological
contracts.
Maria Tomprou is a Senior Research Fellow at the Human–Com-
puter Interaction Institute at Carnegie Mellon University. Her
research focuses on managing employment relationships such as
disruptions in psychological contracts, i‐deals, and resource
exchanges. She has published in the Journal of Organizational
Behavior among other outlets.
How to cite this article: Rousseau DM, Hansen SD, Tomprou
M. A dynamic phase model of psychological contract pro-
cesses. J Organ Behav. 2018;1‐18. https://doi.org/10.1002/
job.2284
18 ROUSSEAU ET AL.
