Effect of Psychological Contract Violation on Organizational Essay

Effect of Psychological Contract Violation on Organizational Commitment, Trust and Turnover Intention in Private and Public Sector Indian Organizations - Essay Example Shahnawaz and Goswami (2011) basically outline the negative outcomes of psychological contract breaches on employers and employees in an organization. Epitropaki (2013: 67) describes an employment contract as a document which can control the activities of employees in an organization, and help them to realize the business goals. Such a contract details what employees are expected of by their employer and the gains that they are entitled to as payment for their effort. On the other hand, Wei and Si (2013: 544) concurs with Shahnawaz and Goswami on the definition of the less formal psychological contract as the beliefs of an individual employee as influenced by the business conditions guiding the interaction between employees and the employer. Alternatively, psychological contract can be construed to mean the perception of individual employees of their duty to their employer and their entitlements (Chiang et al 2012:81). Although, many people view the formal contract as more important to the success of an organization, Shahnawaz and Goswami’s assertion that psychological contract is a mutual commitment which plays an equally pivotal role in forging organizational commitment and the greater productivity is based on scientific evidence (Kraft & Kwantes 2013: 139; (Randmann 2013: 134). But Shahnawaz and Goswami’s argument that it is obvious for either party to fulfill their duty such contracts fails the implementation test. Notably, Zribi and Souaà ¯ (2013: 11) say the understanding of the psychological contract terms between an employee and the organization may be different because both parties have diverse interests and the practice is massively perceptual. Liang and Liu (2014: 56) also note these conflicting understandings of the mutual duties may create an understanding that the other party has reneged on the contractual terms. In addition, employees’ beliefs about of the duti es set up at the