Journal of Managerial Psychology

Making sense of psychological contract breach

Marjo-Riitta Parzefall Jacqueline A-M. Coyle-Shapiro

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Marjo-Riitta Parzefall Jacqueline A-M. Coyle-Shapiro, (2011),"Making sense of psychological contract
breach", Journal of Managerial Psychology, Vol. 26 Iss 1 pp. 12 - 27
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JMP
26,1

Making sense of psychological

contract breach
Marjo-Riitta Parzefall
Department of Strategy, Management and Leadership,
European Business School, Wiesbaden, Germany, and

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12
Received June 2009
Revised April 2010
May 2010
Accepted June 2010

Jacqueline A-M. Coyle-Shapiro

Department of Management, London School of Economics and Political Science,
London, UK
Abstract
Purpose A small number of psychological contract studies have explored the cognitive processes
that influence employees evaluation and reactions to perceived contract breach. The aim of this paper
is to extend this reseaerch with a qualitative study on breach using a sense making perspective.
Design/methodology/approach In total, 15 interviews employing critical incident technique to
examine employee sense making processes were carried out.
Findings The findings highlight the variety of ways employees perceive contract breach and the
processual nature of the experience. Emotions and actions were intertwined in the process of
attributing responsibility and finding an explanation for the breach.
Research limitations/implications Contract breach is not necessarily a discrete event and
reciprocity is integral to the sense making process. The findings provide a basis for future research
that could explore the role of time, contextual factors and various employer representatives as
sense-givers in psychological contract evaluations.
Practical implications Employer representatives can aid employees to make sense of critical
events that occur in organizations to minimize the effects of breach.
Originality/value The paper provides an under-researched sense making-perspective on
psychological contract breach. Through a qualitative inquiry, the complex nature of the employees
experience of and reaction to breach, is highlighted.
Keywords Psychological contracts, Breach of contract, Critical incident technique, Interviews,
Employees, Finland
Paper type Research paper

Journal of Managerial Psychology

Vol. 26 No. 1, 2011
pp. 12-27
q Emerald Group Publishing Limited
0268-3946
DOI 10.1108/02683941111099592

Psychological contract breach captures employees perceptions of the extent to which the
employer has failed to fulfill one or more of its obligations (Conway and Briner, 2005).
The beauty of the concept is in the simple idea that breach has a straightforward
negative relationship with outcomes (Conway and Briner, 2009, p. 101). Empirical
studies have demonstrated the downward adjustments in various employee emotions,
attitudes and behaviours, including organizational commitment (Lester et al., 2002),
increased turnover (Maertz and Griffeth, 2004), reduced organizational citizenship
behaviors and in-role behaviors (Hui et al., 2004; Turnley et al., 2003), and increased
deviant behaviors (Kickul, 2001) following the experience of breach.
A smaller strand of research emphasizing the role of cognitive processes in
influencing breach perceptions and their outcomes highlights the importance of
attribution for the breach (Morrison and Robinson, 1997; Turnley and Feldman, 1999;
Robinson and Morrison, 2000). How employees respond to contract breach is also

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influenced by the quality of the relationship that the employee has with the
organization and its agents. For example, employee trust in the employer, the level of
perceived organizational support (Dulac et al., 2008), and support from supervisors and
mentors (Zagenczyk et al., 2009) help mitigate the negative outcomes of breach. In
addition, recent evidence supports the view that employees have a certain zone of
acceptance for employer behaviour that violates their expectations (Rigotti, 2009).
Researchers have thus begun to unravel the complexity of cognitive processes in
understanding how individuals respond to perceived employer breach. However, to
date empirical studies have not given voice to employees in terms of letting them
explain how they experience breach. Researchers have suggested that sense making
may provide a useful basis (Morrison and Robinson, 1997; Chaudhry et al., 2009) to
advance understanding of the potentially complex intraindividual cognitive processes
that are triggered by contract breach. Theorizing on sense making posits that when
something out of the ordinary happens, it triggers sense making processes (Louis,
1980; Weick, 1995). As contract breach represents an unexpected event that disturbs
the exchange relationship, sense making is particularly well suited for illuminating
what takes place in the eye of the beholder.
Our aim in this interview study is to address this gap and examine how employees
explain their experience of psychological contract breach. Our specific research
questions are as follows: what constitutes a breach from an employees perspective?;
How do employees make sense of the event of breach?; And how do they explain their
own responses to the breach? We make three contributions to the literature on
psychological contracts. First, by examining breach from the sense making perspective
in a qualitative study, we extend prior research by shedding light onto what takes place
in the eye of the beholder. Prior empirical work has not examined the assertions
(Morrison and Robinson, 1997, Chaudhry et al., 2009) that sense making is triggered by
contract breach perceptions. Furthermore, previous studies exploring the cognitive
processes in psychological contract evaluations have been quantitative (e.g. Turnley and
Feldman, 1999; Robinson and Morrison, 2000). It is our view that the use of qualitative
interviews can extend our understanding of the nature and experience of breach. Second,
although previous literature (Rousseau, 1995; Morrison and Robinson, 1997; Conway and
Briner, 2005) has acknowledged that promises can be broken in a variety of ways and
contract breach can take on a number of forms, little attention has been given to the
nature of a broken promise or the ways in which it can be broken. We examine the
different experiences employees label as breach and therefore shed light onto what
constitutes breach in the minds of employees. Finally, we advance understanding of
employees emotional, attitudinal and behavioral reciprocation as an integral part of the
complex sense making and thereby complement the traditional view of reciprocity as a
balancing act that concludes a transaction in the exchange relationship.
Psychological contract breach
Psychological contract breach is the cognition that the organization has failed to fulfill
one or more of its obligations (Morrison and Robinson, 1997) and has been
distinguished from violation, which captures the emotional response that may arise
from breach (Morrison and Robinson, 1997; Zhao et al., 2007; Bordia et al., 2008; Dulac
et al., 2008). Although the negative consequences of contract breach have received the
greatest empirical attention (Conway and Briner, 2009), an increasing number of

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studies are beginning to acknowledge the role of employee interpretations and the
subjective nature of the experience of breach. A few studies have explicitly focused on
the role of attribution in breach perceptions arguing that a breach that is believed to be
intentional has more severe outcomes than a breach that is believed to be caused by
environmental factors, or by an honest misunderstanding (Rousseau, 1995; Morrison
and Robinson, 1997; Chaudhry et al., 2009). Empirical support for these propositions, is
provided, by Robinson and Morrison (2000), Turnley and Feldman (1999), and Conway
and Briner (2002).
Indirectly recognizing the importance of cognitive processes, another strand of
research has drawn attention to the contextual factors that influence employees
evaluation of employer breach. Robinson (1996), Dulac et al. (2008) and Bal et al. (2010)
have demonstrated that the quality and level of trust in the social exchange
relationship have an effect on how employees evaluate contract breach and the extent
to which they reciprocate. Similarly, Zagenczyk et al. (2009) argue that supportive
supervisors and mentors play a role in psychological contract evaluations.
We extend this line of research on cognitive processes that shape how employees
interpret and respond to contract breach by drawing on sense making theory to give
voice to how contract breach is experienced and explained.
Sense making perspective to psychological contract breach
As one of the key applications of sense making theory is to advance understanding of
organizational life from the employee perspective, it is especially well suited for the
study of psychological contracts (Chaudhry et al., 2009). Sense making concerns the
ways in which individuals understand, interpret, and create meaning based on
information available to them (Weick, 1995). Sense making theory posits that when
something out of the ordinary happens, an explanation is needed (Weick, 1995).
Therefore, discrepant events trigger sense making through which interpretations are
developed (Louis, 1980). As breach represent an unexpected event that disrupts the
exchange relationship, it is likely to necessitate sense-making processes (Morrison and
Robinson, 1997).
Weick (1995) identifies seven key properties of sense making that are useful for
illustrating how employees may experience and explain an employers failure to fulfill
its obligations. First, individuals attempt to maintain a coherent self-identity through
sense making. Contract breach is likely to constitute a threat to an individuals identity
as an employee (Rousseau, 1995; Conway and Briner, 2005) and attempts to make sense
of the employers behavior are likely to serve to protect employees self-identity
(Rousseau, 1995; Morrison and Robinson, 1997). Second, sense making is retrospective
and it is influenced by what people notice, how far they look back and what they
remember. When a breach occurs, employees look back to potential triggering events,
trying to understand what happened, and why. Third, sense making involves
enactment whereby individuals make sense of their environment through action
(Weick, 1995). In the case of breach, employees may try to understand the event
through action whether this is through negative reciprocity or asking questions in
order to find an explanation. Fourth, sense making is social and sensible explanations
tend to be those for which there is social support. Employees are thus likely to observe
others, make comparisons and discuss the breach with relevant others in order to
understand what has happened (Rousseau, 1995; Morrison and Robinson, 1997).

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Fifth, sense making takes place amid the ongoing flow of events and the interruption
to the flow provides the opportunity to sense make about the previous flow (Weick, 1995).
In this respect, breach can be viewed as an interruption to the ongoing fulfillment of
promises, prompting sense making which subsequently influences future behavior. Sixth,
the sense-maker selects cues from the previous flow of previous events that may include
pertinent pieces of information to help form coherent stories about what has happened.
When an individual experiences contract breach, the cues become contradictory which
makes it difficult to maintain a coherent picture of the employment relationship
(Rousseau, 1995). Therefore, breach might activate employees conscious information
search. Finally, sense making is more concerned with the construction of an account of
events that serve the interest of the sense-maker, are pragmatic and persuasive rather
than necessarily accurate (Weick, 1995). For the employee, the key is thus to maintain a
coherent understanding of the employment relationship even if this understanding is
only partial or contradicts that of the employer.
Adopting the view that contract breach is an event that disrupts the ongoing
reciprocal exchange relationship and triggers a sense making process (Rousseau, 1995;
Chaudhry et al., 2009), we move on to study our research questions: What do employees
interpret as psychological contract breach? How do they make sense of the event of
breach? and How do they explain their responses to contract breach?
Method
The context of the study
We carried out our study in a Finnish company that provides integrated information
and communication solutions for a variety of customers, ranging from public sector
organizations to international enterprises and associations. At the time of the study,
the company employed a total of 250 people, of which approximately 25 per cent were
women and about 40 per cent had a university degree.
The interviews
A representative pool of potential interviewees were selected by the HRM manager of
the company. We contacted 20 employees and conducted 15 semi-structured interviews
using a critical incidence technique (CIT). CIT is a qualitative interview procedure that
is particularly suited for the investigation of significant events or processes as
identified and experienced by the respondents (Chell, 1998). As CIT facilitates the
understanding of the details of the processes and behaviors in the phenomenon under
examination, it is suitable to understanding how employees interpret and respond to
contract breach.
Each interview lasted approximately an hour, with an exception of one interview
with an employee with the shortest tenure, which lasted only 30 minutes. The length of
tenure ranged from six months to six years with the average being two years seven
months. Apart from two older employees, the participants were around 30-35 years old
and had university degrees. The interviews took place in meeting rooms at the
employers premises during working hours and they were conducted in Finnish by a
native Finnish speaker. Of the 15 interviews, 14 were audio-recorded and transcribed.
Notes were taken for the interview that was not audio-recorded. The selected
quotations for the analysis were later translated into English and double-checked by
another researcher in order to confirm the accuracy of the translations.

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Our interview guide was developed drawing on the seven properties of sense making
(Weick, 1995) and the existing psychological contract research (e.g. Morrison and
Robinson, 1997; Conway and Briner, 2002). At the beginning of each interview, the
participant was told about the purpose of the study and assured of confidentiality. The
interviews began with a few general questions that both provided demographic and
background information and served to establish a relaxed atmosphere. The interviewees
were then asked to describe an incident when they thought their employer had failed to
fulfill an obligation towards them and to clarify when this had happened. Interviewees
were probed with questions such as who had been involved in the incident, who they had
held responsible, why they believed the incident had happened, what had happened prior
to the incident, how they had felt about it, what had it meant for them, how and why they
had responded, and what had happened after the incident.
Data analysis
The analysis procedure followed template analysis, which combines elements of
grounded theory approach and of content analysis (King, 1998). Grounded theory
assumes that the explanatory framework is developed through the process of analysis
without a priori definition of codes, whereas content analysis assumes a coding frame
based on a set of preconceived categories for which evidence is sought in the data.
Template analysis in turn consists of some initial codes, which are revised
over-and-over-again during the analysis (Chell, 1998). It is more appropriate here as the
questions and theoretical background provided an initial set of codes but the
idiosyncratic nature of breach experiences discussed by participants demanded
refinement of the coding frame. As the number of interviews was rather small, the
analysis was carried out by hand, using colour coding and notes.
The template is a collection of codes that are organized hierarchically, with groups of
similar codes grouped together to produce more general, higher order codes. The initial
template was developed on the basis of the interview guide (e.g. relating to the type of
obligation breached, attribution of responsibility, timeframe within which the incident
occurred and emotional, attitudinal and behavioral responses) and each transcription was
marked with the appropriate codes. The further development of the template proceeded
hand-in-hand with further reading and analysis of the text (King, 1998). When we found a
relevant issue that did not match any of the existing codes, we added a new code, which
added detail to our overall analysis (e.g. a codes relating to reframing the events,
self-identity and attempts to actively disconfirm the breach). The central higher-order
codes remained the same throughout the coding process the lower-order codes went
through fine-tuning. For example, breached obligations constituted a higher-level code
in the initial template. It was then extended to cover different types of breaches (e.g. minor
breaches and a secondary breach) in line with the participants accounts.
Findings
The triggering event(s) for breach
The identification of an event that triggered contract breach fell into four categories:
breach of a specific obligation (single event), chains of breaches (connected events),
secondary-breaches (secondary event), and everyday breaches (minor event). Figure 1
presents examples of representative quotations for each category of events.

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Figure 1.
Events that triggered
sensemaking

Specific obligation. For most individuals (n 13), a breach was interpreted as the
violation of specific obligation at a single point in time. The obligations most
frequently mentioned as breached were related to salary/remuneration (n 3), benefits
(n 2), the employment contract (n 2), and temporary layoffs (n 2). As
transactional benefits such as salary and benefits are more narrowly defined and
usually more clearly observable than relational obligations (Morrison and Robinson,
1997), a failure to fulfill these may be more likely to challenge the psychological
contract and demand an explanation. It was also typical that interviewees who focused
on a specific obligation were able to pinpoint a specific discussion or negotiation with
an employer representative during which a clear discrepancy between what they had
expected and what happened. Furthermore, when an explicit specific promise was
violated, participants mentioned immediate strong emotional responses, such as anger
and rage. The immediate emotional response - both demanded and aided the sense
making process and forced the individual to face the question what did I expect and
further clarify the situation (Weick et al., 2005).
Connected events. Often the triggering event was embedded in a chain of connected
events (n 5), which had taken place over a long period-of-time. The shock or surprise
caused by an unfilled expectation set in motion a process during which the employees
attempted to clarify whats the story here (Weick et al., 2005). Typically, the
employees started by simply noticing the discrepancy, which was quickly followed by
clarifying actions. When these actions failed to restore order, they evaluated the actions

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18

and counter-actions again before assigning the actual label of breach to the original
event, or to the chain of events.
Secondary breach. Two of the respondents focused on the knock-on-effect of a
breach in which a secondary breach occurred. Morrison and Robinson (1997) call these
knock-on-effects as second-order outcomes and suggest that the experience of
contractual violation is intensified the more varied the second-order outcomes. A
breach that is accompanied by a number of second-order outcomes is thus likely to lead
stronger outcomes than a breach with no, or limited, secondary outcomes. For example,
one participant perceived that the employer had deliberately lied about travel time
compensation and breached its obligation to compensate the time needed for traveling
to a customer site. As the travel was not compensated, the employee drove too fast and
dangerously in order to minimize the time loss. Although lying and the lack of travel
time compensation was the triggering event, it simultaneously caused second-order
outcomes in terms of the breaching an obligation to provide occupational safety.
Everyday breaches. Although for the majority of participants recalling a single
triggering event was easy, two participants referred to everyday breaches of which
none stood out as especially significant. These interviewees described how their
nearly daily negative experiences accumulated and eventually led them to believe
that the employer is not keeping its part of the deal. That is, a single small discrepancy
experienced between what was promised and what was received was not salient
enough to stand out as a psychological contract breach. However, when such minor
discrepancies occurred frequently and the negative experiences accumulated, a limit
was reached in terms of the straw that broke the camels back.
Labelling of breach
Critical to evaluating a disruptive event is an attempt to find a plausible explanation of
why the event has occurred (Louis and Sutton, 1991; Weick, 1995). Consistent with
Morrison and Robinsons (1997) model, our findings suggest that the attribution of
responsibility is central to the sense making process. Respondents attempted to clarify
whether there was initially a misunderstanding, who they could hold responsible for
the event and why, and whether there were contextual factors that would help explain
the event (see Figure 2).
Attempt to clarify. It is worth noting that those employees who experienced an
immediate emotional reaction were also ready to take action, which is a crucial part of
sense making (Weick, 1995; Weick et al., 2005). Typically, employees described their
first action as an attempt to reconfirm or clarify whether the breach had really occurred
and whether there was a misunderstanding or misinterpretation. That is, the initial
emotional responses gave rise to sense making aided by action, which can be described
in Hirschmans (1970) terms as voice. Employees saw their voice as an invitation to
the employer to justify its behavior, to aid in finding a plausible explanation and to
take corrective action. When voice was ignored or did not bring about an acceptable
explanation, employees were unable to continue as if nothing had happened.
Consequently, the sense making process evolved with time and was influenced by the
cycle of reactions between the employee and the employer. As Weick (1995) points out,
identification of any given action or event is subject to infinite revisions and depends
on its context, which can be expanded into the future and the past. Hence, the anchor

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19

Figure 2.
Making sense of the
breach

point for a label of breach appeared to rely on a network of interdependent and

modifiable interpretations.
Attribution of responsibility. In the interviewee accounts, immediate managers
emerged as the main party to the psychological contract and held responsible for the
perceived breach. Statements such as As I said I hold my immediate manager at the
time totally responsible for this or He (the immediate manager) . . . is putting his own
good before ours were provided by several interviewees. Interestingly, these
statements reflect what Knobe and Male (2002) describe as trait and reason
explanations of behavior. Trait explanations focus on that is how he/she is, and
therefore somewhat paradoxically imply unintentional behavior (e.g. my manager
treated me badly because he is so career-driven and he cannot change this). In a case of
trait explanation, the breach was solved for example, if the immediate was replaced by
somebody else. To some extent, a trait explanation thus allowed the employee to isolate
the event and attribute it to a disturbance caused by one person who is just like that
while maintaining a workable relationship with the organization on the whole.
On other hand, reason explanations try to understand the reasoning of the exchange
party and view the behavior of the actor as intentional (Knobe and Male, 2002). For
example, the interviewees often explained that their immediate managers were forced
to behave in the way did due to a reason beyond their control. While intentional, this
type of reasoning freed the immediate managers from the ultimate responsibility as
they had a justified reason for what they did. A reason explanation often served as a
mechanism to maintain an exchange relationship with the immediate manager yet at
the same time questioned the behavior of the employer representatives above the
immediate manager, or the organization, on-the-whole. In such cases, employees

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expected higher-level managers to do something about the situation, or blamed them

for putting pressure on the lower-level managers. Sometimes, it was unclear who could
be held responsible for the breach causing frustration and hindering the sense making
process.
Contextual explanations. The interviewees consistently painted a picture of the
organization as one in which employees were resources and everything was decided on
the basis of shareholder value. Employees interpretation of the organization and its
culture thus reflected the principle of balanced reciprocity; the employer carefully
counts potential employee contributions to the exchange before committing anything
other than what is necessary to maintain the relationship. Hence, employees explained
the breach through the perception that the employer/organization was not committed
to a social exchange relationship in the way the employees expected. This highlights
the importance of context and the overall meta-psychological contract or social
contract in psychological contract evaluations (Morrison and Robinson, 1997; Ho and
Levesque, 2005).
In addition, interviewees frequently referred to the IT sector and to the context of
knowledge work in order to externalize and to some extent normalize their breach
perceptions. By explaining that all employers were similar, or that shareholders drove
the employers to behave in such ways, the employees freed their employer from the
final responsibility. References to contextual factors often reflected the
acknowledgement of the so-called new psychological contract, which in turn
mirrored the changing realities of the current labor market (Roehling et al., 2000) but
also protected the employee-employer exchange relationship.
Reactions to breach
The explanations that the interviewees provided for their responses to breach
concerned their emotional reactions, adjustments in reciprocity or by attempts to
reframe the event (see Figure 3).

Figure 3.
Explaining reactions to
the breach

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Emotions. Although the participants recalled strong emotional responses immediately

following breach, they also recalled further strong emotions when the breach was not
disconfirmed after their attempts to find a justification for employer behavior. This
emotional response both demanded and aided the sense making process and forced the
individual to face the question what did I expect (Weick et al., 2005) rather than a
discrete emotional reaction to breach. Nonetheless, individuals who recalled
particularly intense emotional responses had typically been quick to name an event
of breach at the beginning of the interview, highlighting the role of emotions in the
experience of breach (Dulac et al., 2008). All in all, the breaches that had triggered
intense emotional reactions also had enduring effects; these were the events to be
remembered.
Changes in reciprocity. Several interviewees mentioned that they had lost trust in
the organization or the manager which made it difficult for them to switch back to
the pre-breach mode of exchange. The employee accounts demonstrated what Hallier
and James (1997) call calculative acceptance of the breach irrespective of the
employees seeming adherence to the norm of reciprocity, they were more wary of the
balance in the exchange relationship. One could argue that the quality of the exchange
relationship had changed even if the exchange relationship appeared to continue as
before. Others reported changes in their work-related attitudes and behaviours such as
reduced commitment to the organization and lack of motivation to go beyond their
formal duties. Although almost all the interviewees discussed the possibility of exit,
only one of the interviewees was actually leaving the organization. For this employee,
the experience of breach had evolved over time as a result of everyday
disappointments, combined with the employees unsuccessful attempts to address
these issues.
Reframing the event. When failing to pay back the employer, some employees
dealt with the inconsistency between how they should have behaved and how they
actually behaved by reframing or rationalizing the event of breach (Festinger, 1957;
Dulac et al., 2008). These employees thus achieved cognitive consistency by selectively
interpreting and reframing information (Rousseau, 1995, 2001; Dulac et al., 2008) the
overall positive evaluation of the employer or the job helped some employees to
maintain a positive psychological contract even if a breach had occurred. The initial
saliency of the breach was thus reduced by taking into account a number of other
factors that diminished the negative meaning of the breach, placed it in a context of
other events, and emphasized the positive aspects of the job.
Some employees responded to breach in a way that was consistent with their image
of themselves. For example, two interviewees portrayed themselves as professionals
who were not influenced by such experiences. For an older employee, age, and
experience helped to create consistency between the breach and their failure or decision
not to reciprocate the breach. He explained the lack of reciprocity by contrasting his
self-image as an experienced, even heroic worker with the images he had of younger
colleagues, always complaining about the smallest issue.
Discussion
We began our study by asking what employees perceived as psychological contract
breach, how they made sense of and reacted to the breach. Our findings support and
extend prior work by offering a more complete albeit complex understanding of the

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Figure 4.
The process of making
sense of psychological
contract breach

experience of psychological contract breach (see Figure 4). Our study highlights the
variety of meanings ascribed to a breach, ranging from a breach of a singular
obligation to repeated daily failure to live up to an expected standard. Second,
employees needed to make sense of the incongruous event in the exchange they
wanted to understand, explain, and construct an account of what happened and why.
By searching for a culprit and trying to understand the reasons, the interviewees
attempted to construct a plausible story of the employers failure to fulfill its
obligations, and their own reactions to this failure. Finally, our study highlights the
interplay between cognition, emotion, and action in understanding individual
responses to breach.
Our study contributes to the psychological contract literature by providing evidence
that contract breach is not necessarily a discrete event as operationalized in the
majority of psychological contract studies but supports the idea that there are a
number of ways in which promises can be broken (Conway and Briner, 2005). Breach is
thus more complex than an employee balancing the lack of inducements with a
reduction in subsequent contributions. Employees may arrive at a verdict of breach
as-a-result of continuous minor events that alone are insufficient to trigger breach
perceptions however, the accumulation may lead to perceptions of breach. This
supports the assertion of Morrison and Robinson (1997) and the empirical work of
Rigotti (2009) that suggest that employees have a certain zone for tolerating negative
behaviors. That said, if breach consists of connected events, it may escalate following
employees attempts to actively find a reason for the initial employer behavior. Breach
of one obligation may also imply breach of another obligation, thereby making the
situation more severe (Morrison and Robinson, 1997). Our study thus highlights the
importance of extending the current view of contract breach as an isolated exchange
event to one that triggers a subjective employee interpretation. Such sense making
entails attributions and explanations that extend over time and highlights how the
schema-basis of the psychological contract helps to capture what takes place in the eye
of the beholder.
Our study confirms the key elements in the process through which employees
attempt to make sense of breach. Central to sense making is attribution (Weick, 1995)
and finding a culprit. Previous research has suggested that intentional breach has more
severe outcomes than a breach that is perceived to be a result of external factors or

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misunderstanding (Rousseau, 1995; Morrison and Robinson, 1997). In our study,

employees viewed intentional breach as reflecting unchangeable manager
characteristics. This allowed them to protect their overall employee-employer
relationship and to isolate the cause of the breach to one person. Alternatively,
employees explained their managers behavior through the culture of reciprocity in the
organization, which was characterized as tit-for-tat. Furthermore, references to
contextual factors provided justification for the employer behavior and reflected
acknowledgement of the so-called new psychological contract, or changing
psychological contract, which in turn mirrored the changing realities of the current
labor market (Roehling et al., 2000). This indicates the central role of
meta-psychological contract as setting the tone for what is an appropriate exchange
relationship (Rousseau, 1995) and the social nature of sense making processes (Weick,
1995).
A final contribution to psychological contract theory is the consideration of
employee reciprocity as integral to sense making. While the questions what happened
and why? bring an event into existence, they are followed by another question
regarding what the individual should do next (Weick et al., 2005). Our study suggests
that employees emotional, attitudinal and behavioural responses do not necessarily
complete an unsuccessful transaction in the exchange relationship as balancing
actions, but that they evolved as a part of a sense making process. Therefore, changes
in attitudes and behaviors are intertwined and an integral part of sense making during
which the meaning assigned to the breach is still subject to negotiation in the mind of
employees. Above all, employees actively engage in attempts to clarify what in fact
happened in the exchange relationship. This somewhat challenges Morrison and
Robinsons (1997) view that sense making occurs after the occurrence of breach but
before employees reactions to it. Rather, in line with sense making literature (Weick,
1995), our study suggests that cognitive acknowledgement, emotions and action were
all intertwined: employees often remembered initial affective responses that triggered
the sense making, which was supported and aided by further employee action and
emotions. Possible adjustments in reciprocity thus appear to occur over time, partially
integral to the sense making process but, also, as its outcome once the individual has
reached a plausible explanation for what has taken place.
It was also interesting to note that although employees labeled employer behavior
as a breach, they did not always reciprocate. This lack of tit for tat created a need to
explain the non-adherence to the norm of reciprocity. Often these explanations were
influenced by the schemas employees had about themselves and their self-identity. For
example, comparisons to colleagues or to professionalism may enable employees to
reframe the event of breach. Similarly, and as indicated by previous research (Turnley
and Feldman, 1999, Dulac et al., 2008), if overall working conditions are satisfactory,
employees can downplay their breach perceptions. This illustrates how working
conditions may buffer and rationalize the absence of matching the employers breach
with a counterbalancing employee breach.
Limitations
First, the number of interviews we carried out is small, although comparable to other
qualitative psychological contract research (Dick, 2006). Our findings may also reflect a
particular organizational setting in which we carried out our study. Future studies

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24

should treat our findings as preliminary, and explore sense making in an event of
breach across different organizational contexts. Second, one disadvantage of critical
incident technique is that the accounts are always retrospective. At the same time, the
criticality of the event means that the individual remembers its occurrence well.
Furthermore, sense making is always retrospective and it is not about telling an
accurate account of events, but about a plausible explanation for an event (Weick et al.,
2005).
Finally, critical incident technique may overlook some of the mundane day-to-day
activities in the exchange relationship (Conway and Briner, 2005). By focusing on a
negative event (i.e. breach), our study has admittedly failed to give a comprehensive
picture of exchange relationships. This bias was also noted by the participants, some
of who mentioned that it is not always like this or that there is so much good in this
employer, too, but if we now have to focus on these negative events . . . . However, any
investigation of an unusual event is likely to give the best access to sense making
processes (see Louis and Sutton, 1991).
Implications for future research, practice and society
Future research should recognize that employer-provided inducements (or lack thereof)
should not only be seen as objects to which employees react rather they are
partially what employees make of them, at times through more conscious sense
making. Therefore, future research should consider the role of time, contextual factors,
various employer representatives and their role as sense-givers in the exchange
relationship. Above all, future empirical work needs to recognize the processual nature
of the employee-employer exchange relationship and think of alternative study designs
to move beyond exploring one-time transactions.
Although the participants to our study made very few explicit comparisons to
significant others, an interesting and important area of future research is to explore
how individuals align their psychological contracts with those of other members in
their organization. As Louis and Sutton (1991) point out, members of the same social
system share cognitive structures that guide their interpretation and behavior. In fact,
it is in the interest of the members of a social system to establish common meanings
and shared schemas, as this makes the social reality more predictable (Harris, 1994).
While research has explored the influence of socialization processes (De Vos et al.,
2003) on psychological contracts, it would be interesting to investigate the sense
making processes involved in the process of adjusting ones schemas to a particular
organizational context.
As sense making typically occurs over time and evolves as a process, employers
should take care to assist employees in sense making in the aftermath of a breach. In
particular, at times of organizational change or an economic downturn when breach
perceptions are more likely, employer representatives should recognize their role as
sense-givers (Rousseau, 1995; Maitlis, 2005). By providing a justification for its
behavior or proving employee suspicions of breach at least partially unfounded, the
employer may enable the employee to cognitively recast the event in such a way that it
does not harm the exchange relationship (Harris, 1994). Even if the label of breach is
unavoidable, the employers honest explanation for its behavior can help employees to
make sense of the breach and to resume their exchange relationship with minimum
alterations to their psychological contract.

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Conclusions
This study has examined employee sense making of an incongruous event in the
employee-employer relationship and paints a complex picture of how employees
interpret contract breach and create meaning to it. Such sense making entails
attributions and explanations that extend over time; cognitive processes, emotions and
action are intertwined in the search for a plausible reconstruction of what happened
and why.
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Further reading
Pugh, S.D., Skarlicki, D.P. and Passell, B.S. (2003), After the fall: layoff victims trust and
cynicism in re-employment, Journal of Occupational and Organizational Psychology,
Vol. 76, pp. 201-12.
Restubog, S.L.D., Hornsey, M., Bordia, P. and Esposo, S. (2008), Effects of psychological contract
breach on organizational citizenship behaviour: insights from the group value model,
Journal of Management Studies, Vol. 45, pp. 1377-400.
About the authors
Marjo-Riitta Parzefall (PhD) is an Assistant Professor in the Department of Strategy,
Organization and Leadership at the European Business School in Germany. Her research
interests include social exchange theory based concepts, innovation and employee
innovativeness. Her work has appeared in both Finnish and international journals, including
International Journal of Human Resource Management, Creativity and Innovation Management
and Journal of Managerial Psychology. Marjo-Riitta Parzefall is the corresponding author and can
be contacted at: marjo-riitta.parzefall@ebs.edu
Jacqueline A-M. Coyle-Shapiro is a Professor in Organizational Behaviour in the Department
of Management at the London School of Economics and Political Science. Her research interests
include psychological contracts, perceived organizational support, justice and communal
relationships. She has published in journals such as Journal of Applied Psychology, Academy of
Management Journal, Journal of Organizational Behaviour, Journal of Vocational Behaviour and
Journal of Management Studies and is currently Senior Editor at the Journal of Organizational
Behavior.

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