EUROPEAN JOURNAL OF WORK AND ORGANIZATIONAL PSYCHOLOGY 2009, 18 (4), 442463

Enough is enough? Threshold models for the relationship between psychological contract breach and job-related attitudes
Thomas Rigotti
Universitat Leipzig, Leipzig, Germany

Psychological contracts are a powerful concept in research on organizational behaviour. Substantial negative reactions towards perceived breaches to the psychological contract have been reported in many studies. There are sound theoretical arguments for the existence of a point in the continuous perception of contract breach, where sudden changes in attitudes occur in the relationship between breach and outcomes (i.e., thresholds). Using questionnaire data from 592 employees working in more than 30 dierent organizations across Germany, segmented regression models were tested against curvilinear eects for the relationship between breach of the psychological contract and job satisfaction, aective organizational commitment, intention to quit, violation, and trust. This study provides empirical evidence for threshold models of psychological contract breach. The results imply that prior studies have underestimated the impact of psychological contract breach. Keywords: Psychological contracts; Segmented regression; Breach; Violation.

Psychological contracts have become a prominent concept for studying the employment relationship between employees and employers, as well as for predicting and explaining organizational behaviour. Psychological contracts can be dened as an individuals belief in mutual obligations between that person and another party such as an employer (either a rm or another person). This belief is predicated on the perception that a promise has been made and a consideration oered in exchange for it, binding the parties to
Correspondence should be addressed to Thomas Rigotti, Universitat Leipzig, Institute of Psychology II, Work and Organizational Psychology, Seeburgstr. 14-20, 04103 Leipzig, Germany. E-mail: rigotti@uni-leipzig.de This research is part of the Psycones-project (PSYchological CONtracts across Employment Situations) supported by a grant from the EUs fth framework programme (HPSE-CT-2002 00121). Further information about the project is available at www.uv.es/*psycon 2008 Psychology Press, an imprint of the Taylor & Francis Group, an Informa business http://www.psypress.com/ejwop DOI: 10.1080/13594320802402039

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some set of reciprocal obligations (Rousseau & Tijoriwala, 1998, p. 679). Within this framework, psychological contract breach and its consequences are the most common phenomena under study. Breach is the individual perception that promise-based obligations in the social exchange between employee and employer have not been met (cf. Rousseau, 1995). A plethora of studies have reported on the substantial relationship between perceived breaches and diverse outcomes, such as lowered job satisfaction (e.g., Gakovic & Tetrick, 2003; Raja, Johns, & Ntalianis, 2004; Robinson & Rousseau, 1994; Tekleab, Takeuchi, & Taylor, 2005), organizational commitment (e.g., Conway & Briner, 2002; Coyle-Shapiro & Kessler, 2000; Raja et al., 2004), or health and well-being of employees (e.g., Cantisano & Dominguez, 2005; Gakovic & Tetrick, 2003; Isaksson, Josephson, & Vingard, 2003; Johnson & OLeary-Kelly, 2003), as well as increased turnover intentions (e.g., Huiskamp & Schalk, 2002; Robinson & Rousseau, 1994; Tekleab et al., 2005). Hence, it comes as no surprise that the rst published meta-analysis on psychological contracts systematically summarized the relationship between psychological contract breach and a set of outcomes, based upon 51 studies (Zhao, Wayne, Glibowski, & Bravo, 2007). Job satisfaction and organizational commitment are important individual attitudes that shape an employees performance. Turnover is related to high costs for organizations (and turnover intention can be seen as an antecedent). Hence, explaining changes in these attitudes is crucial for organizational performance. In addition to these attitudes, trust towards management and leaders, as well as violation, which is considered a proximal emotional reaction towards breaches to the psychological contract, will be included as outcomes in this study. In the majority of studies, a linear relationship between perceptions of breach to the psychological contract, and attitudes, or behavioural intentions has been tested. But do our moods and attitudes towards the job really change in a linear fashion dependent on the extent to which we perceive the promises made by the employer to be broken? Several authors argued for the existence of thresholds, either for perceiving breaches (e.g., Morrison & Robinson, 1997) or for reactions towards breaches (e.g., Guzzo, Noonan, & Elron, 1994; Rousseau, 1995; Schalk & Roe, 2007). The aim of this study is to test threshold models for the relationship between perceived breaches to the psychological contract and work-related attitudes. The idea of a threshold implies that sudden changes in attitudes in relation to perceived breaches to the psychological contract only occur when a certain level of breach has been reached. Because curvilinear models can be seen as an alternative way of understanding how levels of breach and attitudes are linked, they will serve as a comparison. Curvilinear models imply that there is a positive acceleration eect: With every step in the level of perceived breach, attitudinal reactions become more pronounced.

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PSYCHOLOGICAL CONTRACT BREACH: ARGUMENTS FOR A THRESHOLD MODEL

The referent cognitions theory (Folger, 1987, 1993), as well as social exchange theories, such as Adams equity theory (Adams, 1965), suggest that people evaluate their state of being either in relation to a desired reference or in comparison to signicant others. Both models imply that reactions towards changes in a social exchange relationship include a threshold. Within the referent cognition theory, the threshold would be reached when actions from others fall outside of the realm of expectations. Within equity theory, a threshold is surpassed when the equation own contributions in relation to own outcomes results in a higher value than the equation others contributions in relation to their outcomes. With respect to psychological contracts, evaluative processes were also proposed as preceding perceptions of breaches (e.g., Morrison & Robinson, 1997; Turnley & Feldman, 1999). Morrison and Robinson (1997) point out, however: Whereas equity is evaluated by considering ratios of inputs and outcomes, breach of contract is determined by comparing inputs and outcomes relative to what was promised (p. 242). Hence, a psychological contract should be seen as a referent cognition, although (given a shared environment) the comparison with the situation of colleagues may also play a role. Referring to concepts initially introduced in the context of social exchange theories, Rousseau (1995) used the term zone of acceptance (p. 148) for gradual changes in mutual obligations that may still be accepted or tolerated. A similar idea was recently adopted by Schalk and Roe (2007): The psychological contract seems to include a standard for evaluating whether changes are, or are not, important enough to respond to (p. 171). Schalk and Roe introduced a further distinction between an acceptance band and a tolerance band. Their theoretical propositions include the assertion that breaches of the psychological contract falling outside of the acceptance band may result in the balancing (i.e., withdrawing from own commitments towards the employer) or in the revising of the psychological contract. Breaches that fall outside of the range of tolerance should lead to desertion, that is, to the abandonment of the relationship. We may conclude that two thresholds in the perception and reaction of changes in the social exchange process between employer and employee appear to exist. A rst threshold is reached when employees perceive that promises they think their employer has made have not been met. However, the idea of breach as a continuous variable includes the idea that promise keeping is not evaluated on the basis of a yes or no decision. Rather, promises can be partly kept, partly broken. An employee may, for example perceive his or her employer as having promised to allow participation in

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decision making. This (implicit) promise might have been kept when new software was introduced, but may have been broken when vacations were being planned in the work team. If the rst case is assessed as being more important than the latter case, the employee may perceive a moderate breach regarding the participation in decision making. The overall situation might still fall within her/his zone of acceptance and may not result in a change of attitudes towards the work or the employer in terms of, for example, job satisfaction, organizational commitment, or trust. However, if this employee is not allowed to participate in the planning of a new product that his/her work team will be responsible for in the future, he or she may perceive a higher level of breach, where her/his zone of acceptance has been surpassed and where further reactions on the part of the employee are likely to ensue. Another line of argument for the existence of thresholds is provided by those researchers who stress the event-based character of psychological contract formation. The main proposition is that psychological contracts are maintained until some triggering event occurs (e.g., Conway & Briner, 2005; Guzzo et al., 1994). As perfect delivery of perceived promise-based obligations is more the exception than the norm (cf. Robinson & Rousseau, 1994), deviations from a perfect fullment are likely to be tolerated. There are further arguments for the threshold model proposed here: First, most of the outcomes considered in psychological contract research can be seen as relatively stable over time and multidetermined (e.g., for job satisfaction, see Dormann & Zapf, 2001), at least within the same employment relationship, which is likely to lessen their sensitivity to slight underfullment of perceived promises. Second, contextual and individual moderators may play a crucial role, especially at low levels of breach. It could be shown, for instance, that psychological contracts are sensitive to the culture, and to labour market conditions (e.g., Rigotti, Otto, & Mohr, 2007), as well as to dierences in personality traits (e.g., Raja et al., 2004). Hence, reactions towards perceiving the rst signs of employers not fully delivering what they have promised might be easily masked by other circumstances. The threshold model can be seen as an alternative to a monotonic linear relationship between the degree of promise breaking and attitudes. The assertion in an assumed monotonic linear relationship is that every further step in perceptions ranging from promises perfectly kept to promises not fullled at all results in the same amount of change in attitudes. In spite of the cited propositions, the majority of prior empirical research on the impact of perceived psychological contract breaches used statistical methods that were based on the assumption of a monotonic linear relationship between variables. One exception can be found in the expanded view on psychological contracts proposed by Lambert, Edwards, and Cable (2003).

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They operationalized breach by using a combination of perceived promises and ratings on their fullment, assessed 10 weeks later. They then used polynomial regression models that allow for the drawing of a threedimensional surface. Because curvilinear models can be seen as an alternative way of understanding how breach and attitudes are linked (e.g., Lambert et al., 2003), threshold models should be tested against curvilinear models. Curvilinear models imply that changes in attitudes are constantly more pronounced with every perceived step of breach. Thus, a curvilinear relationship models a positive acceleration of reactions towards breaches. Given that job satisfaction, organizational commitment, and turnover intentions are the most heavily researched correlates of psychological contracts, these variables were chosen as work-related attitudes (cf. Conway & Briner, 2005; Zhao et al., 2007). Many scholars did not make a distinction between breach and violation of the psychological contract until Morrison and Robinson (1997) proposed a useful conceptual dierentiation. They dened breach as a rational, mental calculation of what individuals have or have not received; a violation of the psychological contract is dened as an emotional and aective state that may follow from the belief that ones organization has failed to adequately maintain the psychological contract (Morrison & Robinson 1997, p. 230). Violation includes feelings of disappointment, frustration, and distress, in combination with feelings of anger, resentment, bitterness, indignation, and outrage, resulting in perceptions of betrayal. Betrayal will thus be treated as a proximal response to breaches in this study. Finally, trust in the organization was chosen as a further outcome, as it is possibly one of the most important prerequisites of fruitful social relationships (e.g., Guest & Conway, 2002; Robinson, 1996). Although trust has been shown to inuence and moderate future perceptions of psychological contract breaches, it can also be framed as an outcome. Psychological contract breach is based upon an evaluation of the prior activities and actions of the employer. Trust, on the other hand, includes a prospective component regarding employees beliefs concerning the extent to which promises made by the employer will be kept in the future. In line with the aforementioned considerations, the relationship between perceived breach and the chosen outcomes is proposed to be as follows: Hypothesis 1. Breach has a discontinuous linear relationship to (a) job satisfaction, (b) organizational commitment, (c) turnover intentions, (d) violation, and (e) trust. There is a threshold, at which point the relationship between breach and these outcomes gets stronger. Hypothesis 2. The threshold models explain more variance in (a) job satisfaction, (b) organizational commitment, (c) turnover intentions, (d) violation, and (e) trust than curvilinear models.

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METHODS Sample
In order to establish enough variation in the psychological contract (e.g., Turnley & Feldman, 1999), data were gathered from 34 organizations across Germany in 2004. Fourteen (n 226) organizations were selected from the educational sector (organizations providing vocational education), 11 organizations (n 202) were from the retail sector (shops, banks), and 9 organizations (n 215) were from the food sector (production plants). The goal was to have an approximately equal amount of respondents within the three sectors involved, and a nal sample with a minimum of 600 individual respondents. To full this goal, we contacted as many organizations as necessary. All organizations willing to participate were included. On average these organizations employed 187 employees (median 86, SD 210), with a range of 20822 employees. In order to reduce a potential bias by having too many respondents in larger companies, the maximum number of questionnaires given to HR managers was 60. On average, data from 19 employees from each rm was gathered (with a range of 350, which equals a maximum of 8% of data from one company). Response rates within organizations varied between 18%, and 100%, and was on average above 60%. A special eort was made to sample temporary workers to broaden the variance in psychological contracts. Temporary employees are more likely to hold narrower, more transactional psychological contracts, and permanent employees more relational psychological contracts (e.g., De Cuyper et al., 2008a; McLean Parks, Kidder, & Gallagher, 1998). Questionnaires were distributed by HR-managers, and respondents could ll them out either during work or at home. The questionnaires were either collected in a closed urn or could be sent to the researchers directly (postage stamps were provided). Participation was voluntary and anonymity was guaranteed.

Respondents
Overall, we gathered data from 643 employees. As it is necessary for our assessment of breach of psychological contracts that respondents indicate that at least one promise had been given, we had to exclude n 51 persons (7.9%) from further analyses because they had perceived none of the promises as having been given. To test whether the exclusion of these participants may have an impact on our further analyses, we performed t-tests, testing for dierences in the dependent variables between the included and excluded subjects. With the exception of the variable violation, t 3.53, p 5 .01, none of the other mean dierences reached

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statistical signicance. Furthermore, t-tests were performed between the excluded and included respondents on age, t 1.28, p .20, educational level, t 0.71, p .48, and weekly working hours, t 1.18, p .24, and chi-square tests on type of contract, w2 .00, p 1.00, and sex, w2 1.82, p .19. The nal sample for analyses consisted of 592 employees, including 51% females. Respondents represented the three sectors almost equally (n 194 from food industry, 32.8%; n 187 from retail stores, 31.6%; and n 211 from education, 35.6%). Concerning qualications, 12.7% of the respondents in the sample had a lower secondary level educational background, 33.8% an upper secondary level, 5.4% postsecondary level, 42.1% a rst stage of tertiary education, and 2.5% a second stage of tertiary education (3.5% missing answers). The average age was 37 years (SD 12 years), with a range of 1672 years. Almost half of the sample (45%) held a temporary employment contract. All of the (temporary) employees were directly hired by the organization. Temporary employees had an average tenure of 2.20 years (SD 2.99) with the organization. Permanent employees worked on average 10.38 years for the current employer (SD 8.59).

Instruments
Controls. Gender was used as a dichotomous variable: 0 (women), 1 (men). Age was used as a continuous variable. Educational level was assessed by using a combination of school and vocational education, which was then transformed into one of the six levels of the international standard scheme ISCED (Organisation for Economic Cooperation and Development [OECD], 1999). As is commonly done, this measure was considered to be metric. Dummy coding was used for type of employment contract: 0 (temporary employment contract), 1 (permanent employment contract). For the three sectors involved, two dummies were computed, using the educational sector as the reference group. Breach of the psychological contract. There have been several attempts to use combined measures in psychological contract research. Examples are simple (Robinson, 1995), and squared dierences (Bunderson, 2001) between expectations, and fullment; dierence scores of promised and fullled obligations (Lester & Kickul, 2001), and a multiplicative combination of importance of certain aspects and their breach (Bocchino, Hartmann, & Foley, 2003). In this study, a global and continuous measure of breach will be used, as the focus is not on which processes lead to the perception of a breach to the psychological contract, but on the relationship between breach and work-related attitudes. Hence, for this

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research question a direct assessment of breach seemed to be the preferable strategy. A set of 15 items was formulated, based on factor analyses of earlier studies and on a literature review of the contents of the psychological contract (e.g., De Jong, 2001; Huiskamp & Schalk, 2002; Robinson, Kraatz, & Rousseau, 1994). Seven topics were covered: content of the job, employment relationship, compensation, advancement, participation, social relationship, and workfamily balance. We asked our respondents to answer the items after having been given the following instruction: Has your organization promised or committed itself to . . ., e.g., provide you with a reasonably secure job?. Answers could be rated with a 0 (no), if employees perceived the promise as not having been given at all, or range from 1 (yes, but promise not kept at all) to 5 (yes, and promise fully kept) to rate the fullment of the promise. Factor analyses based on tetrachoric correlations were performed on items coded as 0 (no) and 1(including all answers from 1 to 5) (see e.g., McLeod, Swygert, & Thissen, 2001), using the program Testfact (Bock et al., 2003). Although there was some evidence for a two- or even threefactor solution (Eigenvalues: 8.86, 1.46, 0.93), a single factor explained 56% of the variance. The ratios of chi-squared and degrees of freedom dropped only slightly from 2.52, w2 1544.42/df 612 for one factor, to 2.15, w2 1282.73/df 598 for two factors, to 2.04, w2 1192.10/df 585 for three factors, applying 100 iterations. Nevertheless, even after rotation of factor loadings, there were many cross-loadings of items. For the onefactor solution, all loadings were greater than .60. Hence, for the purpose of this study, the use of the measure assuming only one underlying latent construct seems to be justied. Breach was operationalized by computing the mean of recoded items with values ranging from 1 to 5. As the rating is idiosyncratic, i.e., dependent on which promises were rated as being given, no reliability analysis can be performed. A similar approach was taken by Kickul, Lester, and Finkl (2002; see also Conway & Briner, 2005). Violation. Violation was measured by asking respondents to rate three positive moods (e.g., pleased) and three negative moods (e.g., angry) on a 5-point scale, ranging from 1 (not at all) to 5 (very), after having been given the following instruction: Considering the extent to which this organization has or has not, on the whole, kept its promises and commitments, to what extent do you feel . . . (cf. De Cuyper, Rigotti, De Witte, & Mohr, 2008b). Items reecting positive moods were recoded to reect violation. The scale yielded an alpha of .79. Job satisfaction was measured using four items reported by Price (1997; e.g., I nd enjoyment in my job, Brayeld & Rothe, 1951). Responses

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could vary from 1 (strongly disagree) to 5 (strongly agree). The scale yielded an alpha of .75. To assess aective commitment towards the organization, we used four items out of the commitment scale from Cook and Wall (1980, e.g., I am quite proud to be able to tell people who it is I work for). Answer format ranged from 1 (strongly disagree) to 5 (strongly agree). Cronbachs alpha of the scale in our sample was .68. The intention to quit scale indicates an individuals willingness to voluntarily change employment conditionseither to change from one organization to another, to become self-employed, or even to become unemployed (Baillod & Semmer, 1994). Four items were taken from Sjoberg and Sverke (2000), as well as Price (1997), and modied to ensure conceptual equivalence for both permanent and nonpermanent employees (e.g., If I could, I would quit today.). Response format was a 5-point Likert-type scale, ranging from 1 (strongly disagree) to 5 (strongly agree). The scale yielded an alpha of .79. Trust. To measure trust, we used a subset of three items from Guest and Conway (2002, e.g., In general, how much do you trust your organization to keep its promises or commitments to you and other employees?). Answers could be given on a 5-point scale ranging from 1 (not at all) to 5 (totally). The scale yielded an alpha of .80. A correlation matrix including information on Cronbachs alphas, means, and standard deviations is presented in Table 1. The correlations between breach and job satisfaction, r .38, p 5 .01, aective organizational commitment, r .33, p 5 .01, and intention to quit, r .28, p 5 .01, are comparable to the average correlations from up to 17 dierent studies reported by Conway and Briner (2005, p. 73; r .46 for job satisfaction, r .32 for commitment, and r .33 for intention to quit), which supports the validity of the measures.

TABLE 1 Intercorrelations, Cronbachs alphas, means, and standard deviations of study variables 1 1. 2. 3. 4. 5. 6. Breach of employers obligations Job satisfaction AOC Intention to quit Violation Trust () 7.38* 7.33* .28* .54* 7.49* (.75) .57* 7.52* 7.48* .32* 2 3 4 5 6 M 2.43 4.11 3.87 1.46 2.12 3.40 SD 0.77 0.68 0.70 0.69 0.70 0.95

(.68) 7.45* 7.41* .41*

(.79) .44* 7.32*

(.79) 7.59*

(.80)

*p 5 .01. N 584592. AOC aective organizational commitment.

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Conrmatory factor analysis, and nested data structure

To justify the inclusion of ve dierent dependent variables in subsequent analyses, a conrmatory factor analysis with a ve-factor model was performed on all items, allowing all latent factors to correlate and including correlations of error variances for recoded items. The results of this vefactor model provided an acceptable t to the data, w2(543) 655.19, CFI .90, AGFI .85, RMSEA .07. Furthermore, to test whether analyses on the individual level are appropriate, considering the fact that individuals are nested within organizations and that responses from employees within one organization cannot be seen as independent, the intraclass correlation (ICC) was calculated for all variables under study. The ICC indicates the amount of variance of a variable that is due to dierences between organizations. Using HLM 6.04, null models were tested for all variables. Although the intercept reached signicance for all variables, indicating mean dierences between organizations, the ICCs were between .01 for organizational commitment and .08 for breach, which seems to justify analyses based only on individual level data.

Analyses
To test the hypotheses two regression techniques were used, namely multiple hierarchical regression analyses with quadratic terms, as well as segmented regression analyses. The rst approach models a curvilinear relationship between breach and job-related attitudes (acceleration), and the second method tests for a threshold dividing two linear regimes in the relationship between breach and outcomes. For all ve dependent variables under study, a quadratic eect of psychological contract breach was tested (Step 2), after controlling for the simple linear eect in Step 1.The t of the obtained regression models is then compared with partial F-tests. For the hierarchical regression analyses, independent variables were centred by the mean (Aiken & West, 1991). Segmented regression analyses. In segmented regression (also: spline regression or piecewise regression), the slope of the regression line changes for dierent ranges of the independent variable (here: x breach). The values at which this change happens are referred to as break-points, changepoints, transition points, switch-points, thresholds (see Muggeo, 2003), and also as knots or joinpoints in spline regression models (e.g., Seber & Wild, 2003). In the most general cases, the regression models for dierent segments might be nonlinear (e.g., quadratic) and describe complex relationships. In this case, we will limit our scope to linear relationships within dierent segments, where the slopes change at certain values within the range of the independent variable.

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A segmented regression model that assumes linearity within the segments and one change-point can be written as follows (for simplicity, error-terms are left aside, cf. Seber & Wild, 2003, p. 435): Ey j x b10 b11 x b20 b21 x for x a; 1

for x > a:

In principle, two strategies can be dierentiated: either xing the knots a priori or estimating the knot(s). For the rst strategy, the researcher can consult the scatter smooth plot and simply look for sudden changes in the cluster of points (e.g., Kunst, Looman, & Mackenbach, 1993), or refer to theoretically signicant thresholds where the regression model is supposed to change. Several methods have been suggested for the estimation of knots from the data. Their application can be found in a wide range of disciplines, including epidemiology, computer science, chemistry, and biology. Segmented regression can also be found in logistic regression, where the dependent variable is dichotomous (e.g., in epidemiological studies dead vs. alive). I was not able to nd any applications in the eld of Applied Psychology, however. For the analyses, the nonlinear regression function of SPSS 14.0 (see Appendix for the syntax) was used. The specied regression model is similar to a moderated regression analysis and includes an intercept (ba0), plus the direct eect of breach on the dependent variable (ba1*breach), plus the interaction eect (bb1*(breach-knot1)*(breach ! knot1)). If there is a signicant change of the slope of the regression line, then bb1 should become a signicant parameter in the model. This iterative nonlinear regression method performs several regression analyses by constantly changing the parameters of the regression model. The algorithm looks for a minimization of the sum of squares of residuals (i.e., unexplained variance) and quits when no further improvement of the model can be obtained. The unstandardized betas from the hierarchical regression analysis have been used as start values for the intercept (ba0) and direct eect (ba1) of the independent variable. The parameter bb1 was set at bb1 4 as start value. Each model was run with dierent start values for the knot, ranging from 1.5 to 3.5 in 0.5 steps. Whenever two dierent analyses led to a dierent estimation of the knot, the model with the lowest correlation of the parameters ba1 and bb1 was chosen, as high correlations indicate that it is not necessary to include both parameters in the model. The graphical representations were made by scatterplots, plotting values of breach against the predicted values from the obtained parameter estimates of the regression model.

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RESULTS Noncontinuous-linear relationships between breach and attitudes

Table 2 shows the results for the hierarchic regression analyses modelling a curvilinear relationship between breach and outcomes. The incremental variance explained by the second step is signicant for all variables but organizational commitment. The curvilinear relation between breach and outcomes explained 1% (job satisfaction, and trust), 3% (intention to quit), and 6% (violation) additional variance compared to a simple linear model. All hierarchical regression analyses were also run with the inclusion of the following sociodemographic variables as controls (in a rst step, preceding the inclusion of breach): sex, age, education, type of employment contract, and sector. In general, the pattern of results was the same, with one exception: In the case of organizational commitment, the curvilinear eect (quadratic term of breach) became signicant with the inclusion of controls, b .08, DR2 .007, p 5 .05. The inclusion of control variables in the segmented regression models is not as straightforward, because the betas would need to be specied beforehand. Given that a further goal was to compare the two principle models (rather than providing exact gures of explained variance), the comparison of the two regression models was based on the presented results, which did not include sociodemographic controls. Table 3 presents the parameters obtained from segmented regression analyses. Again, for four of the ve dependent variables (excepting commitment), the inclusion of a knot (change-point) led to an improvement of the t of the regression model to the empirical data. Compared to a linear continuous relationship, the gain in explained variance when comparing the segmented models with the linear regression models was 2% for job satisfaction, 3% for intention to quit, 7% for violation, and 1% for trust. As can be seen in Table 4, which shows the results of a partial F-test between the segmented regression models and the simple linear model in the rst row, the segmented regression models show a statistically better t to the data. Furthermore, in the second row of Table 4, the results of a partial F-test comparing the segmented regression models with the quadratic eect of breach are shown. The threshold models obtained with the segmented regression procedure proved to t the data signicantly better for job satisfaction, violation (p 5 .05), and intention to quit (p 5 .10). Hence, Hypothesis 2 could partly be conrmed. For the other variables, none of the regression models t the data better than the other. The signicant segmented regression models are plotted against the linear models in Figures 1 to 4.

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Intention to quit b DR .08 .32** .01 .17** .11 36.98** 33.93** .10 3.31 .03 17.94** .24** .35 158.24** .60** .06 50.57** 7.08* .25 97.16** 48.53** .30 DF DR
2

TABLE 2 Results of (moderated) regression analyses of breach on outcomes (and breadth of psychological contract as moderator) Violation b
2

Job satisfaction b DR .11 70.37** DF

2

Aective organizational commitment DF

Trust b DR2 DF

DR

DF

.14

97.63**

245.11** 7.51**

.24 .01

187.89** 5.11*

7.40**

7.34**

.01

4.70*

7.09*

7.07

Step 1 Breach Step 2 Breach2 Adj. R2 F

.15

51.47**

N 589591 after listwise deletion. Standardized regression coecients are reported for the step indicated. *p 5 .05, **p 5 .01.

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TABLE 3 Estimated parameters for segmented regression models (breach as independent variable) Dependent variable Job satisfaction AOC Intention to quit Violation Trust ba0 4.28 4.46 1.13 1.39 4.67 ba1 .13 7.22 .10 .22 7.48 bb1 7.60 7.25 .68 .85 7.53 knot 1.73 2.60 2.84 2.64 2.78 95% condence interval for the knot 1.302.17 1.863.34 2.593.09 2.462.82 2.373.19 Sum of squares (residuals) 224.30 260.17 255.98 178.57 403.03 R2 .16 .11 .11 .36 .25

AOC aective organizational commitment.

TABLE 4 Comparison of segmented regression models with the linear model and quadratic model with the partial F-test Comparison of regression models Job satisfaction AOC Turnover intention Violation Trust

Segmented regression vs. linear regression DR2 .017 .005 DF (df1, df2) 3.95 (3, 586) 1.20 (3, 586) p .008 .309 Segmented regression vs. quadratic regression DR2 .010 .000 DF (df1, df2) 3.56 (2, 586) 0.16 (2, 586) p .029 .852 DF

.035 7.69 (3, 586) .000

.065 19.68 (3, 581) .000

.012 3.07 (3, 585) .027

.008 2.52 (2, 586) .081

.009 3.97 (2, 581) .019

.005 2.05 (2, 585) .130

R2 R2 =df1 df2 1 2 . AOC affective organizational commitment. 1R2 =ndf1 1 1

DISCUSSION
This study aimed to empirically test a threshold model of psychological contract breach on a range of attitudinal and emotional outcomes. This was done by employing segmented regression analyses and testing them against curvilinear models. The presented results show that most prior research has underestimated the impact of psychological contract breaches on workrelated attitudes. Both, the threshold models, as well as the curvilinear models were able to explain more variance in work-related attitudes (except for commitment), and in a sense of violation than a monotonic linear model. The results indicate that, for high levels of breach, the predicted loss of job satisfaction and trust, and the increase in sense of violation and intention to quit are higher than one would expect from a monotonic linear regression model.

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Figure 1. Predicted relationships between breach and job satisfaction Figure 2. Predicted relationships between breach and intention to quit based on a linear and segmented regression model. based on a linear and segmented regression model.

Figure 3. Predicted relationships between breach and violation based on a linear and segmented regression model.

Figure 4. Predicted relationships between breach and trust based on a linear and segmented regression model.

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More specically, the threshold models could be shown to t the data better than a curvilinear function for job satisfaction, violation, and intention to quit, and t the data equally well for trust. The choice between the two types of models might not necessarily be based upon statistical signicance alone, but also on theoretical considerations. The existence of thresholds in detecting and responding to psychological contract breaches has been proposed by several authors (e.g., Guzzo et al., 1994; Morrison & Robinson, 1997; Schalk & Roe, 2007). Prior theorizing on possible thresholds was mainly limited to employees organizational commitment as outcome (Guzzo et al., 1994; Schalk & Roe, 2007), but it could be shown that attitude changes related to job satisfaction, turnover intentions, and trust, as well as emotional reactions following psychological contract breaches, seem also to include a zone of acceptance. The fact that commitment was the only variable that did not show a threshold may be related to the relatively low reliability of the measure employed, as well as to the neglect of possible confounding variables in the segmented regression analysis (the curvilinear model for the relationship between breach and organizational commitment reached signicance only after inclusion of controls). Although the rst signs of a nonperfect fullment of perceived employers obligations and promises do not seem to be related to severe dierences in attitudes, a kick in of responses seems to take place when a threshold is reached. This might be the straw that broke the camels back. The dierences in predicting attitude change in linear, as opposed to threshold models, can best be depicted in the provided gures. These dierences stress the importance of psychological contracts for shaping employees attitudes and behaviour. The thresholds presented here are more likely indicating that the zone of acceptance has been surpassed, as a surpassing of the zone of tolerance is likely to lead to an abandonment of the relationship (cf. Schalk & Roe, 2007). The presented analyses not only make a theoretical contribution, but also oer relevance for organizational practice. The assessment of psychological contracts within organizational diagnosis, especially during restructuring, enables managers and the workforce to detect discrepancies between perceived promises and their fullment. Knowing about thresholds can help to understand dierences in individual reactions. Given the importance of psychological contracts for shaping employees work-related attitudes and involvement, managing the psychological contract of employees should be a promising organizational strategy. Breaches to the psychological contract can be regarded as distributive injustice. Organizational justice literature has shown that procedural and interactional fairness can buer negative eects related to unfavourable outcomes (e.g., Lind, 2001). Regularly updating the set of mutual obligations, and providing explanations and

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justications for changes, should help to revise the psychological contract and reduce the likelihood of breaches. Recently, Lester, Kickul, and Bergmann (2007) provided empirical support for the relevance of perceived adequacy of social accounts (i.e., explaining and justifying organizational decisions). They concluded that organizations should not assume that once they have succeeded in getting their employees to perceive a relational psychological contract, they no longer have to worry about providing additional explanations for managerial decision making (p. 202). If they do not, employees are likely to either seek a new balance in the employment relationship by reducing own eorts and commitments towards the organization, or leave the relationship (cf. Schalk & Roe, 2007). In cases were breaches to the psychological contract are unavoidable, employers can prot from knowing about a threshold eect. As the impact of broken promises on certain aspects can be buered by fullling others, employers should carefully explain their reasons, give employees a voice (procedural justice), and oer compensations for losses, so that the threshold in overall breach is not surpassed.

Limitations, strengths, and outlook

To begin with, in this rst study using segmented regression models to observe the relationship between breach of the psychological contract and outcomes, only a global measure of breach was used. This measure does not dierentiate between dierent contents, even though the set of promises underlying the breach evaluation varies between individuals. It might be fruitful for future research to explore dierent contents, such as breaches to transactional versus relational terms (e.g., Coyle-Shapiro & Kessler, 2000), extrinsic versus intrinsic terms (Kickul et al., 2002), or multidimensional approaches (e.g., Cassar, 2001). Second, only promises from the employer were included in this study, which neglects the mutual promise making inherent in psychological contract denitions. Third, a cross-sectional design does not allow us to draw any causal conclusions, and using questionnaire data as a single source may lead to an overestimation of eects (Podsako, MacKenzie, Lee, & Podsako, 2003). Furthermore, the cross-sectional design leads to models explaining dierences between individuals, and not dierences within individuals across time. For this reason, tests exploring whether individuals reactions towards psychological contract breaches include thresholds should use longitudinal designs in the future. The sample for this study was drawn from dierent organizations. Hence, it cannot be assumed that individual reports are independent of each other, as some of the variance in the dependent variables may be due to dierences on the rm level. The presented ICCs, however, seem to justify the use of individual data, without controlling for rm-level eects in multilevel analyses.

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Nevertheless, the impact of the organizational context should be further explored in future studies. Last, neglecting possible confounding variables on the individual level within the segmented regression analyses can be seen as problematic. However, patterns of results did not change for the curvilinear regression models, when the control variables were included (eects were even more pronounced). The investigation of thresholds is likely to further our knowledge and understanding of why individuals react to the same set of environmental factors dierently. Some of the included variables (e.g., violation and trust) were more closely linked to breach than others (e.g., job satisfaction, commitment, turnover, intention), if we consider the variance explained and also the relative thresholds found in segmented regressions. This suggests that there are more proximal and more distal reactions to perceived breaches, and that the former may mediate the latter. Prior studies revealed several moderators for the psychological contract breachattitudes relationship. It may be assumed that moderators not only inuence the strength of responses to breaches, but may also impact the position of the threshold. Overall, segmented regression analyses may give a deeper insight into how variables are linked and might therefore be a fruitful tool to consider in other elds within Applied Psychology.

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APPENDIX SPSS syntax for parameter estimation of segmented regressions

MODEL PROGRAM ba0 4.91 ba1 7.61 bb1 74 knot1 1.5. COMPUTE predex1 ba0 ba1*breach bb1*(breach-knot1)*(breach ge knot1). CNLR trust /PRED predex1 /SAVE pred resid (residex1) /BOOTSTRAP.

GRAPH /SCATTERPLOT(BIVAR) breach WITH predex1 /MISSING LISTWISE.