As we discussed in this chapter, there is an inherent psychological contract in many organizations. Supervisors and upper managers are supposed to treat employees with respect, provide sound working conditions, and communicate expectations and feedback clearly. In exchange, employees work hard and remain loyal to the organization. Mutual expectations are established through psychological contracts. Yet because the psychological contract is an informal rather than a formal agreement, there may be no repercussions when an employer or an employee violates that agreement.

There are many situations where violating the psychological contract between an employer and employee may seem appealing. Managers can save money if they provide employees with less desirable working conditions, or if they lay off employees that have been loyal to the organization. Employees can violate the contract by not working hard or leaving the organization. It may also be unclear whether the psychological contract has been violated at all because employer and employee expectations may have not been clearly communicated. Nonetheless, when one party does not hold up her or his end of the deal, there may still be consequences. If managers do not provide fair working conditions, employees may shirk their job responsibilities. On the other hand, if an employee does not do good work, managers may withhold privileges from the employee.

Questions

1. Is it ever ethical for a manager or subordinate to violate a psychological contract? What if violating a psychological contract may have negative consequences for some employees but benefit other employees? 

2. Are there situations where an employer may think an employee has violated a psychological contract but that employee does not believe they have done anything wrong? Are there situations where an employee may feel that his or her employer has violated a psychological contract, but the employer feels that she or he has done nothing wrong?

3. Employees may react to psychological contract violations in a variety of ways. Not all of these reactions may be ethical. What is an ethical way for an employee to react? What is an unethical way for an employee to react?