The impact of psychological contract violation and generation difference in the workplace: An empirical study of China

Abstract

BACKGROUND:

Financial rewards might not the only way to keep employees’ stay and to have high performance. We attempt to introduce the perspective of psychological contract (PC) to study the employment relationship.

OBJECTIVE:

This study is based on the Chinese private enterprise context to explore the effect of psychological contract violation (PCV) and explore whether there are generational differences in the organization.

METHODS:

We adopt PLS-SEM for empirical research evaluation. A total of 313 valid sample questionnaires were taken.

RESULTS:

The statistical analysis results show that the psychological contract violation has a significant positive impact on turnover intentions. Psychological contract violation also has significant negative effects on in-role performance and organizational citizenship behavior. In the analysis of generational differences for generation Y employees and generation X employees, when facing psychological contract violations, generation Y employees are more likely to have a stronger turnover intention, lower in-role performance, and less organizational citizenship behavior than generation X employees.

CONCLUSIONS:

The revised psychological contract violation model is confirmed in the Chinese context. There are significant differences in the influence of generational factors on the psychological contract violation model.

Keywords

Psychological contract violation turnover intention generational difference job performance OCB

Chao-Hsing Lee is an Associate Professor of Economics and Management School at Shangrao Normal University, Shangrao 334001, Jiangxi Province, China. His research interests include human resource management, strategic management, and performance management. He got his PhD in business at Feng Chia University in 2015.

Chien-Wen Chen is a Professor of Business Administration Department at Feng Chia University, Taichung 40724, Taiwan. Prof. Chen has lots of articles published in Information Management, Statistical Analysis Method, and Electronic Commerce areas.

1 Introduction

The core of an enterprise is the employee, which is a dynamic resource, as employees are needed in all processes of an enterprise, such as manufacturing products and offering services; hence, employees are the most important asset of a company [1]. Human resource management is one of the key issues in sustainable business organizations [2]. A good human resource management strategy can reinforce the core competence [3]. For enterprises, talents are extremely rare and precious resources, therefore, how to show concern for employees, enhance their loyalty and commitment, motivate their joint efforts, and give full play to their potentials to generate overall effects are essential topics regarding the human resources management of enterprises. To fulfill the objectives, enterprises invest massive resources in the selection and retention of appropriate talents and offer training to motivate such talents. Both policies and practices of human resources management have a significant impact on the competitiveness of enterprises. Meanwhile, employees would become alert that enterprises may no long ensure them a life-time job or have different thinking because of their expectations or career aspiration. The employment relationship must be reconsidered.

Once a person enters an organization and becomes its employee, an employment relationship would take shape. An employment contract is a kind of reciprocal duty, which links an organization with its employees and adjusts the behavior of the two to fulfill the goals of the enterprise. Employees receive their payment according to the contract, which is an indispensable element in the employment relationship between laborers and managers. A psychological contract is some implicit expectation between an organization and its employees, which indicates employees’ expectations for benefits, training, promotion, and development. Correspondingly, an organization has expectations regarding employees’ performance, teamwork, and objective fulfillment. Exploring a psychological contract will inform us of any changes to the employment relationship and show us the impacts of this relationship on the organization-employ relationship [4]. By reaching and implementing a psychological contract between an organization and its employees, the organization’s promises and employees’ expectations will be better sorted out, misunderstandings will be avoided, and employees will be convinced that the organization will reward them and satisfy their demands. Meanwhile, an enterprise can adopt a psychological contract to deepen its understanding of its employees and encourage them to honor their commitment to the organization [5]. From the perspective of an organization, efforts must be made to ensure that its employees can feel its support, and then, show positive organizational behavior. If they feel the concern, trust, and support from the organization, they will be ready to devote themselves to the organization, and thus, enhance the overall efficacy of the organization [6]. Moreover, this will urge employees to develop a strong sense of attachment to the organization, become willing to serve it, make promises to it, and hope to stay in it [7].

When employees perceive that their organizations have failed to honor their promise, a psychological state of cognition and emotion is generated. It is called psychological contract default. Psychological contract default can be distinguished into two stages: psychological contract breach and psychological contract violation. Psychological contract breach is perception, meaning the personal evaluation of the desired resources; the emotional response caused by a psychological contract breach is a psychological contract violation, which is a component of emotion [8]. In response to psychological contract violations of employees, Turnley & Feldman [9] believed that they are influenced by individual differences, including personal sentiment, sensitivity, and sense of responsibility. The second influencing factor refers to the practices of the organization, such as the fairness of procedures and interactions, the degree of compensation from the organization, and the relationship in the workplace. The last influencing factor is the labor market, which involves exit costs, substitutability, and the attraction of choice. Turnley& Feldman [9] categorized employees’ behavioral responses to psychological contract violation into four types: (1) demission, (2) lower job performance, (3) lower non-job performance, and (4) anti-society behavior. However, this was only verified in European and American society, and especially on a high-level manager.

Ma [10] studied the psychological contract and found it could predict turnover intention. Salin & Notelaers [11] had discussed the relationship between perceived psychological contract violation and turnover intention. Trybou & Gemmel [12] found that psychological violation could mediate psychological contract breach and employees’ organizational behaviors. The above only discussed one or two facets. Guerrero & Naulleau [13] explored the result in psychological contract violation, but only mentioned that the employment relationship was changed. Many studies on the organizational behavior and human resources management of European and American enterprises have been conducted according to psychological contract theory to analyze the employment relationship, and abundant achievements have been attained. However, only in recent years have studies shifted their attention to the Chinese context [14]; for example, there is a study on the employment relationship between Chinese managers or organizations and employees [15].

From above, those studies focus on the piecemeal results of the psychological violation, such as turnover or job performance relationship, or high-level manager on European and American enterprises. These inspire us to synthesize the research of psychological contract breach and psychological contract violation as a causal relationship. We derive and modify from the conclusion of Turnley& Feldman [9] to build a psychological contract violation model. Then we try to verify the model by collecting Chinese private enterprise employees as a sample.

Since its reform implementation, meaning the open-up policy from 40 years ago, China has witnessed fast economic growth. During this period, different generations, ranging from the Cultural Revolution generation to the new generation [16], have entered their work one by one. Since the new generation stepped into their professional roles, there have been employees of different generations within an organization, which has indeed resulted in generational differences. Chinese scholars have begun to analyze the different professional values and generational differences of the Post-1980 and Post-1990 generations [17]. From the academic perspective, there has been an increasing number of researches conducted on the human resources management of the generational differences among new generation Chinese employees [18]. Nevertheless, the concept of delving into the organizational behavior of new generation employees and the generational differences within an organization from the perspective of the psychological contract is relatively new [19], thus, its demonstration remains to be improved.

The second part of this research is going to discuss whether there exists a generational difference after facing psychological contract violation in the Chinese context.

This research focuses on the employees’ attitudes and behaviors on an organization when they have a subjective perception of psychological contract breach and resulted in psychological contract violation. The employees’ attitudes and behaviors are reflected in turnover intentions, in-role performance, and organizational citizenship behavior. This study also explores whether there are generational differences when an organization has different generations of employees, concludes, and offers suggestions.

2 Literature review

2.1 Psychological contract

Once an individual enters an enterprise and becomes its employee, an employment relationship takes shape. An enterprise and its employees maintain their relationship through a contract. The majority of the content in a contract for an employment relationship is about the liabilities, duties, rights, and interests of the enterprise and employees. Such contracts can be divided into two types. The first type is a written work contract, which specifies organizational structure, job description, liability and right, reward, and relevant benefits. The focus of this contract is to restrain the behaviors of the signing parties and standardize the agreed-upon items. This contract is designed to reduce uncertainty and risk, and lead enterprises and employees to achieve consistency between expectation and reality. The contents of a work contract are specific, but they may not meet employees’ expectations in some aspects. This results in the second type of contract, meaning the psychological contract. Both enterprises and employees have expectations of each other, and while they know the existence of their expectations, the contents are not written in the contract. This kind of contract is called a “psychological contract” [20]. A psychological contract shares the same purpose as a work contract, and the former fills the gaps left by the latter. Kotter [21] offered a clear definition of a psychological contract: it is an implicit agreement between an individual and his/her organization; it includes what one party does for the other and what the party is offered for doing that. According to this definition, a psychological contract is regarded as an unwritten implicit contract or the expectation in an employment relationship.

Rousseau [22] specified employees as the main body of a psychological contract because an organization is abstract, which makes it hard to confirm who the representative is. For him, the organization is merely a circumstance under which one party of the contracted relationship creates a psychological contract, and employees can feel the implementation of the contract. However, an organization is an abstract noun and cannot be perceived. He emphasized that a psychological contract is the employees’ understanding of mutual duties in an employment relationship, as well as their personal belief of the exchange agreement between themselves and the organization [23]. From his perspective, a psychological contract is employees’ understanding and belief of the duties of both parties in an employment relationship.

With Rousseau’s theoretical framework of the psychological contract, this study delves into the psychological contract from the perspective of employees. As a contract is in essence a kind of reciprocal responsibility, a psychological contract is mainly about the employment relationship between an organization and its employees. However, if employees violate the psychological contract, and fail to meet the organization’s expectations, the worst outcome for them is to be dismissed. If they have found a better job, getting dismissed under the situation would not necessarily cause any loss to them. If the organization violates the psychological contract, the employees will have less job satisfaction and lower job performance, which causes brain drain and imposes negative impacts on the organization. Therefore, getting to know employees’ expectations, carrying out their psychological contract, and reducing the impacts of psychological contract default on their attitudes and behaviors, will have a direct beneficial influence on the human resources management of enterprises.

2.2 Psychological contract breach and psychological contract violation

Whether a psychological contract is implemented has significant impacts on the attitudes and behaviors of employees. Getting to know employees’ understanding can help an organization manage its employees, and they can take actions beneficial to it. However, if employees realize that the psychological contract has defaulted, they will change their attitudes and behaviors, which may impose negative effects on the organization. For enterprises and researchers, how to alleviate the impacts of psychological contract default on the attitudes and behaviors of employees is an essential issue.

Psychological contract default is a general term. According to Morrison and Robinson [8], employees’ psychological contract includes the belief of mutual obligations between employees and their organizations; breach means employees’ understanding of organizations’ obligation performance; violation indicates that employees feel angry and betrayed when they believe that their organizations will never be able to perform one or more obligations, and a model of the psychological response of employees before their feeling psychological contract violation was proposed. According to Morrison and Robinson [8], the psychological state of employees after they realize that their organizations have failed to honor their promise can be divided into two parts –perception and emotion. Psychological contract breach is perception, meaning the personal evaluation of the desired resources; the emotional response caused by a psychological contract breach is a psychological contract violation, which is a component of emotion.

According to the concepts of Morrison and Robinson [8] and Suazo and Stone-Rpmero [24], a psychological contract breach is defined as the perception of the organization’s failure to honor its promises, and psychological contract violation is interpreted as the negative emotion that follows a psychological contract breach. Morrison and Robinson found that, if organizational performance and employee performance in self-reports are low, the employee is likely to perceive a contract breach if he/she has not experienced official socialization, interacted with the organization proxy before employment, experienced a psychological contract breach with previous employers, or had other job offers during the employment. When an employee attributes a contract breach to the employer’s intentional betrayal and feels he/she has been treated unfairly, the perception of the contract breach will become connected with the strong emotion of contract violation.

According to the above argument, there is a causal relationship between psychological contract breach and violation. This study made the following hypothesis:

H1: Psychological contract breach has a positive effect on psychological contract violation.

2.3 Response to psychological contract violation

Rousseau provided research directions for the psychological contract theory. With his research achievement, Robinson and Morrison explored the psychological contract default and defined both psychological contract breach and psychological contract violation. Turnley and Feldman carried out a series of researches on employees’ responses to psychological contract violation. In their study, Turnley and Feldman [25] found that psychological contract violation results in low job satisfaction, low organization commitment, low job performance, less organizational citizenship behavior by organizational employees, and a high rate of demission. The study by Turnley and Feldman [26] revealed that psychological contract violation has a positive correlation with the demission tendency and neglect of employees and a negative correlation with employees’ intention of showing the behaviors required of an organization member. Turnley et al. [27] found that psychological contract violation has a negative correlation with the job performance and organizational citizenship behavior of employees and that the correlation between psychological contract violation and employees’ organizational citizenship behavior is stronger than that between employees and psychological contract violation and employees’ citizenship behavior for other organization members.

Turnley and Feldman [9] put forward a different model of psychological contract violation to explore when employees would perceive a failed promise as a psychological contract violation, and how they would respond to such contract violation. They believed that employees’ response to psychological contract violation is influenced by individual differences, including personal sentiment, sensitivity, and sense of responsibility. The second influencing factor refers to the practices of the organization, such as the fairness of procedures and interactions, the degree of compensation from the organization, and the relationship in the workplace. The last influencing factor is the labor market, which involves exit costs, substitutability, and the attraction of choice. Turnley and Feldman [9] categorized employees’ behavioral responses to psychological contract violation into four types: (1) demission, (2) lower job performance, (3) lower non-job performance (meaning organizational citizenship behavior, such as being reluctant to accept more duties, work overtime, and help colleagues), and (4) anti-society behaviors (including revenge, sabotage, theft, and attack). Taking Turnley and Feldman’s model of employees’ response to psychological contract violation as the basis, this study made some changes to categorization, especially the fourth type –anti-society behaviors. This study aims to offer appropriate measures for human resources management, as well as some suggestions for enterprises, while the social dimension is excluded from this study.

Demission means that employees terminate their contracts with their organizations. It comprises implicit turnover intention –the idea of leaving the organization and explicit demission behavior –meaning actual demission. Mobley [28] argued that employees would have turnover intention after suffering job dissatisfaction; turnover intention comes after several other steps (such as developing the idea of demission, seeking new job opportunities, and evaluating other job opportunities), and is the last step before actual demission. The direct outcome variable of turnover intention is demission behavior. Compared with work behavior, a psychological contract is more effective in predicting turnover intention [10]. Therefore, this study assumes that employees’ first response to psychological contract violation is to strengthen their turnover intention. Given the above mentioned, the following hypothesis is proposed:

H2: Psychological contract violation has a positive effect on turnover intention

Turnley and Feldman [9] argued that employees’ response to psychological contract violation will be lower job performance. Employees’ behaviors can be divided into in-role performance and extra-role behaviors. In-role performance is normally called job performance. Job performance refers to employees’ observation of the behavioral norms and work rules made by the organization; in other words, it is the employees’ work performance. Employees may not choose to leave the organization after a psychological contract violation, but the violation would likely have enormous negative impacts on their job performance. For the organization, work performance is an indicator of employees’ work performance, and performance is a combination of efficiency, efficacy, and effectiveness. According to the above mentioned, psychological contract violation would lower in-role performance; hence, the following hypothesis is made:

H3: Psychological contract violation has a negative effect on in-role performance.

Extra-role behavior is also called organizational citizenship behavior (OCB), which includes helping colleagues who face a heavy workload, assisting new employees in adapting to the workplace, promoting the development of the organization in communities, and offering constructive ideas and these extra-role behaviors can improve individual and organizational performance [29]. The third outcome in the model of employees’ response to psychological contract violation is lower non-job performance, which is employee behavior that is beneficial to the operation of the organization, as well as organizational citizenship behavior. While organizational citizenship behavior is not the duty of employees, as required by an organization, it can influence organizational efficacy. The most direct employees’ response to psychological contract violation is not to show or passively show organizational citizenship behavior.

According to Robinson and Morrison [30], understanding the employment relationship in the psychological contract can help us understand organizational citizenship behavior. The psychological contract underscores the reciprocal property of the employment relationship, while organizational citizenship behavior focuses on the possibility that employees exceed their official obligations. From the perspective of a contract, organizational citizenship behavior highlights the obligations and behaviors of both parties of the employment relationship, and thus, expands the scope of organizational citizenship behavior. To be more specific, Robinson and Morrison [30] believed that the performance of a contract would have direct effects on organizational citizenship behavior; once the trust in the organization is broken, the restraint from the organization will be reduced. Hence, employees would have reasons to doubt if they would get rewarded for their extra-role contributions, and thus, become less likely to show organizational citizenship behavior.

Organizational citizenship behavior can be divided into two groups [31, 32] –the organizational citizenship behavior for the organization (OCB_O) and that for individuals (OCB_I). OCB_O brings direct benefits to the organization, such as providing suggestions for the development of the organization, while OCB_I benefits colleagues, leaders, and the organization in an indirect manner. OCB_I is embodied in altruism and politeness, such as helping new employees finish tasks. The psychological contract is about the obligations of the organization. If employees realize that the organization has violated the contract, they would reduce their contribution to the organization, thus, reducing their direct organizational citizenship behavior for the organization. According to the above mentioned, psychological contract violation would result in lower non-job performance or less organizational citizenship behavior. Hence, this study proposed the following hypotheses:

H4: Psychological contract violation has a negative effect on organizational citizenship behavior for the organization (OCB_O).

H5: Psychological contract violation has a negative effect on organizational citizenship behavior for individuals (OCB_I).

2.4 Generational difference

Generation refers to a group of people who live in the same era. Of similar age, they experience political, social, economic, and cultural activities together, and have similar life experiences; hence, they share similar attitudes and values. Mannhein [33] defined a generation as a group of people who share a common location in social and historical development, and because of this location, people of the same generation are confined to specific experiences, thinking experience models, and unique actions. For Kupperschmidt [34], generation refers to a recognizable group consisting of individuals who are born in the same year, stay in the same temporal and spatial environment, and experience major life events in personal growth together. The generation has two properties: (1) natural property: a generation that takes shape naturally due to age difference; (2) social property: a generation that is based on social and cultural features, basic demands, values, thinking, emotions, and behaviors. As people of different generations grow at different times and places, and experience different cultural, social, and economic events, the values, thinking, beliefs, preferences, and attitudes of a generation are noticeably different from that of other generations. Such a difference is called “generational difference”.

Different researchers may define generations in different ways. Most Western scholars divide generations according to the year of birth [35]; for them, the so-called “New Generation” refers to “generation Y” (those who were born after 1980). The people of this generation enjoy a stable financial life created by the endeavors of the Baby Boom Generation, possess generation X’s creativity and courage to express ideas, and grew up in the era of the Internet and digital media. Also, they have strong self-awareness, adore their idols, and pursue excitement, enjoyment, and diverse values. In the current enterprises in China, Post-1980 generation Y has been playing a dominant role, and some of them even work as middle managers or even take a higher position. There is indeed a significant difference in values among different generations, which is due to the historical background of growth; the elder generations focus on work, believing that it would guarantee a stable life; the younger generations, especially generation Y and the generations following generation Y, hope to maintain a balance between work and life, and give priority to personal growth and learning in work.

Against such a backdrop, increasing attention has been paid to generational differences in the academic community in recent years. According to the study by Twenge and Campbell [36], generation Y has stronger self-esteem and suffers more anxiety, depression, and lower social acceptance. Lub et al. [37] studied employees in the workplace and found that the younger generations underscore development, challenge, change, opportunity, and responsibility. Generation X emphasizes initiative and job security, and there is no difference in their attitudes towards work atmosphere, salary, or tasks; while generation Y features less commitment and a stronger intention to seek a new employer. There have been many research papers about generational differences; however, the number of those that explored the differences from the perspective of the psychological contract remains small. Bal et al. [38] probed into the differences between psychological contract breach and work achievements and that between psychological contract breach and age and found that elder workers do not show a strong reaction to psychological contract breach in terms of job satisfaction and performance. According to the results of Lub et al. [39], generation X may be more motivated by the social atmosphere, while generation Y may be more inspired by job content and career development.

From the perspective of the psychological contract, this study explores the response of employees to work or an enterprise, as well as the generational differences in private Chinese enterprises, when employees understand psychological contract default.

With social development, generational alternation, and the change to values, young workers, especially generation Y, have changed their work attitude to one of working for life. They have stronger independence, less organizational commitment, and stronger turnover intention [40]. Lub et al. [39] found that different generations respond differently to different aspects of psychological contract fulfillment, such as career development, job content, organizational policies, social atmosphere, and rewards. However, their verification adopted the employees’ sample was from Dutch. Eyoun et al. [41] studied U.S. hotel employees and found that the positive relationship between administrative performance appraisal purpose and the psychological contract was significantly for Generation Y employees than for Baby Boomers and Generation Xers. Magni & Manzoni [42] found that Millennial workers expect more than their non-Millennial colleagues by adopting Italian samples. From the above, there exists a generational difference in the psychological contract. However, they were in European and American contexts and psychological contract fulfillment. Thus, in the Chinese context, employees’ response to psychological contract violation is expressed through their stronger turnover intention, lower work performance, less organizational citizenship behavior, and there exists a generational difference. Therefore, this study offers the following hypotheses:

H6a: There is a difference in the effect of generational difference on a stronger turnover intention caused by psychological contract violation.

H6b: There is a difference in the effect of generational difference on lower in-role performance caused by psychological contract violation.

H6c: There is a difference in the effect of generational difference on lower organizational citizenship behavior for the organization (OCB_O) caused by psychological contract violation.

H6d: There is a difference in the effect of generational difference on lower organizational citizenship behavior for individuals (OCB_I) caused by psychological contract violation.

3 Research method

The study is shown in Fig. 1, in which generational difference is a moderator variable.

Fig. 1

The psychological contract violation model.

This study probes into the employment relationship between enterprises and employees, and analyzes the differences in employees’ responses to psychological contract violation in an organization where there are employees of different generations, and thus, generational differences. Therefore, the in-service and off-service activities of employees in private Chinese enterprises who have work experience were chosen as the subjects of this study. Meanwhile, generation X (1965-1979) workers with rich experience and generation Y (after 1980) workers who are gradually becoming the backbone workers in their organizations, were selected by this study. While the profession category, occupational nature, position, duration of service, educational background, and income were not main indicators, they were used for other analyses.

This questionnaire contains psychological contract breach, psychological contract violation, turnover intention, in-role performance, organizational citizenship behavior (OCB_O for organization and OCB_I for individuals), and demographics (e. g. region, gender, generation, industry, occupational nature, position, duration of service, educational background, and salary).

The psychological contract breach dimension is measured using the 5-item scale developed by Robinson and Morrison [43]. The psychological contract violation dimension is measured using the 5-item scale developed by Coyle-Shapiro et al. [44] and Robinson& Morrison [43]. The measurement of turnover intention focused on the degree of employees’ intention to leave the current organization. We use a 7-item scale to measure turnover intention, the scale is retrieved from Cammann et al. [45], Rusbult et al. [46], Becker [47], and Chang et al. [48]. In-role performance is measured using six items retrieved from Williams & Anderson [31] and Becker et al. [49]. Finally, organizational citizenship behavior –organization (OCB_O) is measured by five items adapted from Podsakoff et al. [50] and Farh et al. [51]. Organizational citizenship behavior –individuals (OCB_I) is measured by five items adapted from Podsakoff et al. [50] and Farh et al. [51]. Appendix 1 lists all of the questionnaire items.

A web-based questionnaire was sent to the respondents who had experience using online apparel websites. By the time the survey was concluded, 313 valid questionnaires were collected for further analysis. Table 1 shows the result of sample demographics. Among these usable samples, 50.8% of the respondents were female, 49.2% were male, and 57.8% is Generation X. A total of 68.0% of the respondents were marketing or administrative departments. A total of 34.5% and 38.7% had earned a high school or bachelor’s degree respectively. The ranks for job tenure are “5∼10” and “more than 10”, accounting for 24.9% and 47.9%, respectively. The descriptive statistics are shown in Table 1.

Table 1

Respondent demographics (N = 313)

Measure	Items	Frequency	Percentage (%)
Gender	Male	154	49.2
	Female	159	50.8
Age	Generation X (1965-1979)	181	57.8
	Generation Y (after 1980)	132	42.2
Education	Junior high school or less	36	11.5
	High school	108	34.5
	University	121	38.7
	Graduate school or above	48	15.3
Working department	Manufacture	51	16.3
	Marketing	94	30.0
	R&D	49	15.7
	Administrative	119	38.0
Industry	Manufacturing	140	44.7
	Service industry	98	31.3
	Non-private enterprise	11	3.5
	Others	64	20.4
Job tenure	Less than 2years	31	9.9
	2∼5 years	54	17.3
	5∼10 years	78	24.9
	More than 10years	150	47.9

4 Research results

4.1 Assessment of the measurement model

Data analysis uses the partial least squares (PLS) method, which [52] allows researchers to specify the relationships among the factors of conceptual interest and the measures underlying each construct, and PLS does not have rigorous restrictions on variable distributions [53]. Moreover, this study uses a two-step approach to conduct data analysis. First, reliability and construct validity are assessed by conducting confirmation factor analysis (CFA). Second, the structural equation model analysis is used to empirically test the research hypothesis. The respondents were requested to rate each item on a seven-point Likert scale, with 1 signifying strongly disagree and 7, strongly agree. To evaluate construct reliability, we assessed the composite reliabilities (CR) of all constructs. In Table 2, the Cronbach’s alpha of all constructs was above 0.7 and exceeded the threshold values suggested by Fornell and Larcker [54] and Hair et al. [55], indicating that the proposed model measures possess sufficient construct reliability. Tables 2 show that the standardized factor loadings for different measurement items were above 0.70 and AVEs for all constructs were above 0.50 (range from 0.691195 to 0.882986); these suggest that the proposed model possesses sufficient convergent validity [56]. Moreover, the results presented in Table 3 demonstrate satisfactory discriminant validity, which means that all of the constructs differ from each other [57].

Table 2
Construct on reliability and validity

Constructs Items Loadings Composite Reliability Cronbach’s Alpha Average Variance Extracted

Psychological Contract PCB1 0.887 0. 944552 0.926464 0.773238

Breach PCB2 0.899

PCB3 0.911

PCB4 0.841

PCB5 0.857

Psychological Contract PCV1 0.823 0.920651 0.884658 0.743595

Violation PCV2 0.891

PCV3 0.885

PCV4 0.849

Turnover Intention TI1 0.851 0.927629 0.902282 0.719725

TI2 0.811

TI3 0.902

TI4 0.865

TI5 0.810

In-Role Performance IRP1 0.856 0.942831 0.923674 0.768005

IRP2 0.921

IRP3 0.923

IRP4 0.781

IRP5 0.893

Organizational Citizenship Behavior - Organization OCBO1 0.879 0.899368 0.852878 0.691195

OCBO2 0.780

OCBO4 0.837

OCBO5 0.827

Organizational Citizenship Behavior - Individuals OCBI1 0.947 0.957693 0.933767 0.882986

OCBI2 0.941

OCBI3 0.931

Constructs	Items	Loadings	Composite Reliability	Cronbach’s Alpha	Average Variance Extracted
Psychological Contract	PCB1	0.887	0. 944552	0.926464	0.773238
Breach	PCB2	0.899
	PCB3	0.911
	PCB4	0.841
	PCB5	0.857
Psychological Contract	PCV1	0.823	0.920651	0.884658	0.743595
Violation	PCV2	0.891
	PCV3	0.885
	PCV4	0.849
Turnover Intention	TI1	0.851	0.927629	0.902282	0.719725
	TI2	0.811
	TI3	0.902
	TI4	0.865
	TI5	0.810
In-Role Performance	IRP1	0.856	0.942831	0.923674	0.768005
	IRP2	0.921
	IRP3	0.923
	IRP4	0.781
	IRP5	0.893
Organizational Citizenship Behavior - Organization	OCBO1	0.879	0.899368	0.852878	0.691195
	OCBO2	0.780
	OCBO4	0.837
	OCBO5	0.827
Organizational Citizenship Behavior - Individuals	OCBI1	0.947	0.957693	0.933767	0.882986
	OCBI2	0.941
	OCBI3	0.931

•PCV 5, OCBI4, OCBI5, OCBO_3, and TI6 were dropped due to low factor loading.

Table 3

Discriminant validity

	PCB	PCV	TI	IRP	OCB_O	OCB_I
Psychological Contract Breach	0.87934
Psychological Contract Violation	0.62056	0.86232
Turnover Intention	0.44897	0.60041	0.84837
In-Role Performance	–0.42195	–0.30062	–0.19023	0.87636
Organizational Citizenship Behaviors - Organization	–0.43654	–0.33831	–0.18965	0.80625	0.83138
Organizational Citizenship Behaviors - Individuals	–0.42420	–0.33263	–0.19465	0.77655	0.81380	0.93967

Note: ^*Diagonal elements (in bold) are the square root values of the average variance extracted (AVE). Off-diagonal elements are the correlations among constructs; PCB = Psychological Contract Breach; PCV = Psychological Contract Violation; TI = Turnover Intention; IRP = In-Role Performance; OCB_O = Organizational Citizenship Behaviors - Organization; OCB_I = Organizational Citizenship Behaviors –Individuals.

4.2 Analysis of structural model

The study utilized SmartPLS for testing the structural model where different research Hypotheses were examined based on both magnitudes as well as the significance level of the structural path. The results of the structural path analysis are presented in Table 4 and Fig. 2. The structural model suggests that psychological contract breach (path coefficient = 0.621, p < 0.001) is positively related to psychological contract violation (H1 is supported). Psychological contract violation (path coefficient = 0.600, p < 0.001) positively related to turnover intention (H2 is supported). Psychological contract violation (path coefficient=–0.301, p < 0.001) negatively related to in-role performance (H3 is supported). Psychological contract violation (path coefficient=–0.338, p < 0.001) negatively related to organizational citizenship behavior for organization (OCB-O) (H4 is supported). Psychological contract violation (path coefficient=–0.333, p < 0.001) negatively related to organizational citizenship behavior for individuals (OCB-I) (H5 is supported).

Table 4
Test of hypothesized relationships

Path Coefficient t Value Result

Hypothesis One: Psychological Contract Breach –>Psychological Contract Violation 0.621 13.653^* support

Hypothesis Two: Psychological Contract Violation –>Turnover Intention 0.600 14.646^* support

Hypothesis Three: Psychological Contract Violation –>In-Role Performance –0.301 5.171^* support

Hypothesis Four: Psychological Contract Violation –>Organizational Citizenship Behavior-Organization –0.338 6.104^* support

Hypothesis Five: Psychological Contract Violation –>Organizational Citizenship Behavior-Individuals –0.333 5.594^*** support

	Path Coefficient	t Value	Result
Hypothesis One: Psychological Contract Breach –>Psychological Contract Violation	0.621	13.653^***	support
Hypothesis Two: Psychological Contract Violation –>Turnover Intention	0.600	14.646^***	support
Hypothesis Three: Psychological Contract Violation –>In-Role Performance	–0.301	5.171^***	support
Hypothesis Four: Psychological Contract Violation –>Organizational Citizenship Behavior-Organization	–0.338	6.104^***	support
Hypothesis Five: Psychological Contract Violation –>Organizational Citizenship Behavior-Individuals	–0.333	5.594^***	support

Note: ^* denotes P < 0.1; ^** denotes P < 0.05; ^*** denotes P < 0.01.

Fig. 2

The results for the hypothesis test. (^***P < 0.001, ^**P < 0.01, ^*P < 0.05).

The R² value refers to the percentage with which the exogenous variables explain the variation in the endogenous variables, which is used as an indicator of the overall predictive power of the model. Falk and Miller [57] recommended that the value of R² for exogenous variables should be more than 0.10 to be statistically viable. Figure 2 shows the path coefficients between the exogenous and endogenous variables for the model, as well as the R² and path coefficient. As shown in Fig. 2, the explained variance is 38.5% for psychological contract violation, 36.0% for turnover intention, 9.0% for in-role performance, 11.4% for organizational citizenship behavior - organization, and 11.1% for organizational citizenship behavior - individuals.

4.3 Generational difference analysis

To analyze whether there is a generational difference between generation X and generation Y, this study separated the samples by ages. We separated two groups, generation X (1965-1979) for 181 samples and generation Y (after 1980) for 132 samples. The study utilized SmartPLS for testing the structural model where different research hypotheses were examined based on both magnitudes as well as the significance level of the structural path. The results of the structural path analysis are presented in Table 5 for generation X and Table 6 for generation Y.

Table 5
Test of hypothesized relationships for generation X

Path Coefficient t Value Result

Hypothesis One: Psychological Contract Breach –>Psychological Contract Violation 0.632 13.266^* support

Hypothesis Two: Psychological Contract Violation –>Turnover Intention 0.609 15.056^* support

Hypothesis Three: Psychological Contract Violation –>In-Role Performance –0.142 1.724 not support

Hypothesis Four: Psychological Contract Violation –>Organizational Citizenship Behavior-Organization –0.217 3.655^* support

Hypothesis Five: Psychological Contract Violation –>Organizational Citizenship Behavior-Individuals –0.216 3.672^* support

	Path Coefficient	t Value	Result
Hypothesis One: Psychological Contract Breach –>Psychological Contract Violation	0.632	13.266^***	support
Hypothesis Two: Psychological Contract Violation –>Turnover Intention	0.609	15.056^***	support
Hypothesis Three: Psychological Contract Violation –>In-Role Performance	–0.142	1.724	not support
Hypothesis Four: Psychological Contract Violation –>Organizational Citizenship Behavior-Organization	–0.217	3.655^***	support
Hypothesis Five: Psychological Contract Violation –>Organizational Citizenship Behavior-Individuals	–0.216	3.672^***	support

Note: ^* denotes P < 0.1; ^** denotes P < 0.05; ^* ^* ^* denotes P < 0.01.

Table 6

Test of hypothesized relationships for generation Y

	Path Coefficient	t Value	Result
Hypothesis One: Psychological Contract Breach –>Psychological Contract Violation	0.612	15.090^***	support
Hypothesis Two: Psychological Contract Violation –>Turnover Intention	0.691	14.283^***	support
Hypothesis Three: Psychological Contract Violation –>In-Role Performance	–0.478	9.725^***	support
Hypothesis Four: Psychological Contract Violation –>Organizational Citizenship Behavior-Organization	–0.457	8.718^***	support
Hypothesis Five: Psychological Contract Violation –>Organizational Citizenship Behavior-Individuals	–0.510	10.976^***	support

Note: ^* denotes P < 0.1; ^** denotes P < 0.05; ^*** denotes P < 0.01.

For generation X, as shown in Table 5, the structural model suggests that psychological contract breach (path coefficient = 0.632, p < 0.001) positively related to psychological contract violation (H1 is supported). Psychological contract violation (path coefficient = 0.609, p < 0.001) positively related to turnover intention (H2 is supported). Psychological contract violation (path coefficient=–0.142) is not related to in-role performance (H3 is not supported). Psychological contract violation (path coefficient=–0.217, p < 0.001) negatively related to organizational citizenship behavior for organization (OCB-O) (H4 is supported). Psychological contract violation (path coefficient=–0.216, p < 0.001) negatively related to organizational citizenship behavior for individuals (OCB-I) (H5 is supported).

For generation Y, as shown in Table 6, the structural model suggests that psychological contract breach (path coefficient = 0.612, p < 0.001) positively related to psychological contract violation (H1 is supported). Psychological contract violation (path coefficient = 0.591, p < 0.001) positively related to turnover intention (H2 is supported). Psychological contract violation (path coefficient=–0.478, p < 0.001) negatively related to in-role performance (H3 is supported). Psychological contract violation (path coefficient=–0.457, p < 0.001) negatively related to organizational citizenship behavior for organization (OCB-O) (H4 is supported). Psychological contract violation (path coefficient=–0.510, p < 0.001) negatively related to organizational citizenship behavior for individuals (OCB-I) (H5 is supported).

To verify the generation difference, generation X and generation Y is set as an interference variable, which is represented by various data. This study grouped data according to the interference variables, and then, conducted t-testing through the estimated values generated by Smart PLS to calculate the significance of the interference-effect. Also, this study referred to the t-test method put forward by Keil et al. [58] to perform significance testing.

In this study, we hypothesize that H6a: there is a difference in the effect of generational difference on a stronger turnover intention caused by psychological contract violation. Generation X and Generation Y are interference variables, psychological contract violations are corresponding exogenous variables, and turnover intentions are endogenous variables. Then, we discuss the impact of psychological contract violations on turnover intentions of generational differences among Chinese private enterprise employees. In verifying the interference effects of different types of samples of generation X and generation Y, the analysis results are shown in Table 7. H6a received significant support (t value of 17.85, ^***), which is the impact of generational differences among employees of Chinese private enterprises. The effect is significantly different. In the face of psychological contract violations, generation Y employees are more likely to generate turnover intentions than generation X employees. That is, generation Y employees are easier to have turnover intention than generation X employees when facing psychological contract violation. This has a greater impact on the organization.

Table 7

Verification of the research hypothesis

		Samples	Standard Deviation	Path Coefficient	T-Test for Comparing Two Groups	Significant Test
Turnover Intention	Y Generation	132	0.0397	0.691	17.85	^***
	X Generation	181	0.0405	0.609
In-Role Performance	Y Generation	132	0.0491	–0.478	–41.80	^***
	X Generation	181	0.0822	–0.142
Organizational Citizenship Behavior-Organization	Y Generation	132	0.0525	–0.457	–37.12	^***
	X Generation	181	0.0592	–0.217
Organizational Citizenship Behavior-Individuals	Y Generation	132	0.0464	–0.510	–47.60	^***
	X Generation	181	0.0588	–0.216

Note: ^* denotes P < 0.1; ^**denotes P < 0.05; ^***denotes P < 0.01.

In H6b, there is a difference in the effect of generational difference on lower job performance caused by psychological contract violation; in H6c, there is a difference in the effect of generational difference on lower organizational citizenship behavior for the organization (OCB_O) caused by psychological contract violation; in H6d, There is a difference in the effect of generational difference on lower organizational citizenship behavior for individuals (OCB_I) caused by psychological contract violation. The generation difference is an interference variable, which verifies the interference effects of different types of samples of generation X and generation Y. The analysis results are shown in Table 6. H6b, H6c, and H6d are significantly supported (t values are –41.80, –37.12, –47.60, respectively, ^***), which means that the generation factor has a different impact on psychological contract violation models. That is, in the face of psychological contract violation, generation Y employees are easier than generation X employees in reducing in-role performance, generation Y employees are easier than generation X employees in decreasing organizational citizenship behavior for the organization (OCB_O), and generation Y employees are easier than generation X employees in decreasing organizational citizenship behavior for individuals (OCB_I). There are significant differences in the influence of generational factors on the psychological contract violation model.

Regarding this result, we have the general impression that due to generational differences, the new generation has stronger self-awareness and lower commitments [39], and their work attitude has changed from working for life to living for work [59]. Generation Y employees have a stronger reaction to psychological contract violation.

In this study, we verify that generational difference is the interference variable on increasing turnover intention, reducing in-role performance, decreasing organizational citizenship behavior for the organization (OCB_O), and decreasing organizational citizenship behavior for individuals (OCB_I).

5 Conclusion and suggestions

5.1 Implications for research

In this study, we mainly adopted the theories of Morrison and Robinson [7] and Turnley and Feldman [8], made some modification, and then we proposed the psychological contract violation model. We verified this model under Chinese context.

The results show that the psychological contract breach has a positive effect and high-path coefficients on psychological contract violation, there is a causal relationship between psychological contract breach and violation. Psychological contract violation has a significant positive effect on the turnover intention with high-path coefficients. If employees have a stronger sense of psychological contract violation by employers, they will have stronger turnover intentions. If employees perceive the psychological contract violation by employers, they will show lower in-role performance and fewer organizational citizenship behavior for the organization (OCB_O) and organizational citizenship behavior for the individuals (OCB_I).

Therefore, this study proposes a revised psychological contract violation model and has been verified in the Chinese context. And this has contributed to the psychological contract theory.

According to the interference verification results of the generational differences between generation Y and generation X, in the face of psychological contract violation, generation Y employees show stronger turnover intention, lower in-role performance, and fewer organizational citizenship behavior for the organization (OCB_O) and the organizational citizenship behavior for individuals (OCB_I) than generation X employees. In other words, generation Y had a stronger response to psychological contract violation and a greater effect on the organization than generation X in the Chinese context.

5.2 Implications for practice

In the psychological contract violation model of this study, there is a causal relationship between psychological contract breach and violation, with the former being the cause and the latter being the result. The behaviors triggered by psychological contract violation are the features of resultant behaviors. The human resources departments of enterprises must understand the causal relationship of the psychological contract violation model, and eliminate the behaviors of psychological contract violation by starting with the root causes.

According to the above-mentioned results, generation Y employees show a high direct response to enterprises. If they realize that the organization fails to honor its promises, they will regard the failure as a psychological contract breach, and then, as a psychological contract violation. Moreover, they will show a noticeably stronger turnover intention, obviously lower in-role performance, and less organizational citizenship behavior. To manage generation Y employees, enterprises should not adopt the traditional management method that features the pressure of authority; instead, they must listen to the employees, pay attention to employees’ career planning and development, help employees realize their potentials, and apply other employee-oriented human resources management methods. Only in this way will they be able to become accustomed to the organizational management of an increasing proportion of generation Y employees.

5.3 Limitations and future research

This study employed the cross-sectional method to simultaneously collect and analyze different subjects. However, whether the subjects hold the same view as in the past will have different temporal and spatial circumstances in the future, or whether they would change their mind due to an event, remains to be explored. From the common perception in the past, the turnover phenomenon of Chinese private enterprise employees is particularly obvious around the China Lunar Year. To focus on the impact of psychological contract violations, this study specifically avoided the China Lunar Year period when conducting investigations. This is the limitation of this research and the future expansion of this research. Moreover, future studies can focus on two research directions. The first one is the forward extension, which means exploring when or under what circumstances employees of different generations would perceive psychological contract breach, and examine the causes in advance. The second is the backward extension, which indicates probing into compensation models or decision-changing factors when employees of different generations are confronted with psychological contract violation.

Footnotes

Acknowledgments

The authors have no acknowledgments.

Author contributions

CONCEPTION: Chien-Wen Chen

INTERPRETATION OR ANALYSIS OF DATA: Chao-Hsing Lee

PREPARATION OF THE MANUSCRIPT: Chao-Hsing Lee

REVISION FOR IMPORTANT INTELECTUAL CONTENT: Chao-Hsing Lee

SUPERVISION: Chien-Wen Chen

Appendix 1

Psychological Contract Breach [43]

PCB1 Almost all the promises made by my employer during recruitment have been kept so far.

PCB2 I feel that my employer has come through in fulfilling the promises made to me when I was hired.

PCB3 So far my employer has done an excellent job of fulfilling its promises to me.

PCB4 I have received everything promised to me in exchange for my contributions.

PCB5 My employer has kept its promises to me when I’ve upheld my side of the deal.

Psycholological Contract Violation [43, 44]

PCV1 I feel a great deal of anger toward my organization.

PCV2 I feel betrayed by my organization.

PCV3 I feel that my organization has violated the contract between us.

PCV4 I feel extremely frustrated by how I have been treated by my organization.

PCV5 I have poor pay compared to staff doing similar work in other organizations.

Turnover Intention [45 –48]

TI1 I would think about quitting my job.

TI2 I would accept my alternative job offer.

TI3 I would quit my current job.

TI4 I will probably look for a new job within the next year.

TI5 It would take very little change in my present circumstances to cause me to leave this organization.

TI6 If I may choose again, I will choose to work for another organization.

In-Role Performance [31, 49]

IRP1 I will fulfill all the responsibilities specified in his/her job description.

IRP2 I consistently meet the formal performance requirements of my job.

IRP3 I conscientiously perform tasks that are expected of mine.

IRP4 I adequately complete all of his/her assigned duties.

IRP5 I will follow aspects of the job that he/she is obligated to perform.

OCB_O [50, 51]

OCBO1 I am willing to stand up to protect the reputation of the company.

OCBO2 I will make constructive suggestions that can improve the operation of the company.

OCBO3 I will actively participate in company events.

OCBO4 I will compile with company rules and procedures even when nobody watches and no evidence can be traced.

OCBO5 I am willing to accept new or challenging assignments.

OCB_I [50, 51]

OCBI1 I am willing to help my colleagues solve work-related problems.

OCBI2 I am willing to cover work assignments for colleagues when needed.

OCBI3 I am willing to share their expertise with other members of the crew.

OCBI4 I will not fight fiercely for personal gain.

OCBI5 I don’t speak ill of the supervisor or colleagues behind their backs.

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