Uncertain Jobs Produce Reluctant Employees: Psychological Contract Violations and Intentions to Whistleblow

Document Type

Article

Publication Date

Summer 2020

Publication Title

Journal of Managerial Issues

Abstract

The psychology literature has identified the existence of a "psychological contract" between employees and employer, in which best results for the employer occur when the employee feels that the employer has lived up to the many implicit promises of employment. These results may include the willingness to report fraud when it is observed. This research extends the definition of the psychological contract to the employer's provision of a stable organization that is profitable and unlikely to change form. Experimentally manipulating these conditions, this research illustrates how turbulence can affect employee cooperative behavior. In short, are employees of companies that may fail or that might be merged into larger companies still willing to report fraud, and therefore act as the first line of defense? The results indicate that people perceive threats to the organization's current status as psychological contract violations. In turn, these violations are associated with a lower likelihood of fraud reporting.

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