Employees are often promised more in job interviews than is later delivered: Promotion opportunities, co-determination, freedom. This is not contractually stipulated and things often turn out differently in everyday life. These psychological breaches of contract cause resentment and, in the worst case, lead to dismissal. In order to reduce employee turnover, companies have an interest in managing psychological breaches of contract. An international study involving Dortmund University of Applied Sciences and Arts shows how.
Dortmund/Germany, February 7, 2025. ‘We were able to prove that a company’s social commitment as part of its corporate social responsibility (CSR), i.e. the voluntary social, ecological and ethical standards in its business strategy, can act as a kind of insurance against the negative consequences of a psychological breach of contract,’ explains Prof. Dr Sabrina Scheidler. She teaches at the Faculty of Business at Dortmund University of Applied Sciences and Arts and conducts research into corporate sustainability management, among other things. Together with professors from France and the USA, she has published her study in the renowned ‘Journal of Management Studies’ (Nov 2024).
In several waves of the survey, the researchers were able to empirically prove that CSR commitment generates moral capital. ‘Companies that get involved and contribute to society, for example by supporting local associations, environmental initiatives or volunteer work, generate this moral capital and thus form a kind of ‘account of good deeds’,’ explains Professor Scheidler. This can lead to employees evaluating a psychological breach of contract less negatively, as they do not assume that the company has ‘bad intentions’. However, the researcher cautions: ‘Not every CSR commitment generates equal moral capital. It is crucial for companies to communicate transparently internally which values are behind their commitment and to live them authentically.’ Moreover, moral capital cannot prevent all negative reactions.
Nevertheless, the results emphasise the role of CSR not only as value-creating (e.g. reputation, awareness), but also as value-protecting. ‘Strengthening employees‘ trust in the company and promoting their loyalty is extremely important, especially in view of the shortage of skilled workers,’ emphasises Professor Scheidler.
The international research team’s study is the first to provide empirical data showing that psychological breaches of contract lead to hypocritical attitudes towards the employer. This was to be expected, but has not yet been proven. ‘Situations in which employees perceive that their employer is not honouring important implicit promises cannot be completely avoided,’ says Professor Scheidler. ‘These are often based on unspoken personal expectations rather than concrete promises.’ It is therefore important for companies to counteract these ruptures in the job relationship.
Further information
The study ‘Giving the Benefit of the Doubt: Investigating the Insurance-Like Effect of CSR in Mitigating Negative Employee Reactions to Psychological Contract Breach’ was published by Prof Dr Kenneth De Roeck, SKEMA Business School (France), Prof Dr Nicolas Raineri, ICN Business School (France), Prof Dr David A. Jones, University of Vermont (USA), and Prof Dr Sabrina Scheidler, Dortmund University of Applied Sciences and Arts (Germany), Journal of Management Studies, issue 61 from November 2024.
DOI: 10.1111/joms.13006
Translated with DeepL_com
Originalpublication:
(https://onlinelibrary.wiley.com/doi/abs/10.1111/joms.13006)
ImageSource
Florian Freimuth, FH Dortmund, Prof. Dr Sabrina Scheidler teaches at the Faculty of Business at FH Dortmund.