Determinants of psychological contract breach: an empirical study of Vietnamese employees

Purpose - This study aims to verify the entire process of psychological contract breach (PCB). It investigates organizational variables such as organizational performance, previous employee performance, participative performance appraisal systems and leader power as the antecedents of perceived unfulfilled promises. It then examines whether perceived failure to fulfill contracts leads to the perception of PCB, and the possible moderating impacts of perceived self-fulfillment and individual differences on the relationship. Design/methodology/approach - The current study uses cross-sectional design. Data have been collected from 364 full-time employees who enrolled in evening MBA courses in Vietnamese universities. Multiple regression and moderation analyses were used. Findings - Participative performance appraisal, past performance, perception of leader’s power and overall organizational performance influenced perceived failure to fulfill promises, which contributed to contract breach. Furthermore, perceived self-fulfillment, equity sensitivity and self-esteem moderated the relationship between perceived failure to fulfill promises and PCB. Research limitations/implications - The limitations of the study include a sampling technique which only focuses on MBA students, and cross-sectional research design. Practical implications - The study confirms the role of individual traits in the PCB development. Vietnamese companies should collect information concerning employees’ personalities to focus on fulfilling promises that matter most to each type of employees. Originality/value - The study distinguishes between perception of unmet promises and PCB. Furthermore, the moderating impacts of perceived self-fulfillment on the relationship between unmet promises and breach were examined.