From Security to Uncertainty: Psychological Contract Violations in the Wake of Layoffs and The Moderating Role of Distributive Justice

Irfan, Hadya Layla Aretha and Silva van der Meer, Carmem Anneke da and Uszko, Hanna and Ferstl, Christina and Sokolov, David (2024) From Security to Uncertainty: Psychological Contract Violations in the Wake of Layoffs and The Moderating Role of Distributive Justice. Bachelor thesis, Psychology.

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Abstract

Layoffs are a universally distressing experience in today’s competitive economy. It threatens employees’ implicit employment expectations known as psychological contracts that cause significant stress, and have adverse implications for laid-off employees’ (i.e. victims) psychological health and wellbeing. However, there is a lack of research on the negative implications of layoffs, and how it violates employees’ psychological contracts. Hence, this research aims to empirically investigate the influence of layoff encounters on victims’ self-perceptions as measured by Psychological Contract Violations (PCV). The negative effects of layoffs were suggested to be mitigated by distributive justice perceptions, therefore we also looked into the incremental value of employees’ performance levels in this relationship. We employed a 1x2 Experimental Vignette Study (EVS) design in which a sample of 145 employees were randomly allocated to one out of two performance levels who then read a hypothetical layoff scenario, and had their feelings of violations assessed. We found that layoff indeed increases employees’ PCV which is further strengthened by an above-average performance level, implying that performing layoffs may actually bring more harm than good to the overall organizational function in the long run. To our knowledge, our study is the first to investigate the influence of layoff and performance levels on victims’ PCV in the same research design; thus several limitations were discussed, and suggestions for future research were made. This study highlighted the psychological conditions and workplace dynamics that are often overlooked that managers should take into account when considering to perform layoffs.

Item Type:	Thesis (Bachelor)
Supervisor name:	Kitz, C.C. and Heihal, T.I.
Degree programme:	Psychology
Differentiation route:	None [Bachelor Psychology]
Date Deposited:	02 Jul 2024 12:26
Last Modified:	02 Jul 2024 12:26
URI:	http://gmwpublic.studenttheses.ub.rug.nl/id/eprint/3621

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