Psychological contracts in enterprises.

Jackson, William T. ; Elenkov, Detelin ; Wright, Peter 等

INTRODUCTION

The separation of ownership and control has been recognized from different perspectives as a potential major organizational problem (Berle & Means, 1932; McLean Parks & Schmedemann, 1994; Rousseau & Shperling, 2003; Veblen, 1923). From an economic perspective, it has been argued that the alignment of owners' and agents' interests via the nexus of formal contracts requires attempts in the resolution of the conflicts between the interests of the principals and their agents (Berle & Means, 1932; Jensen & Meckling, 1976). The problem of the separation of owners' and agents' interests refers to agents promoting their personal interests at the expense of principals whose interests are best served when their wealth is maximized through the efforts of the agents. For the principals, therefore, benefits are primarily relevant in economic terms. The agents, however, not only prefer enhancements of their wealth, but also enhancements of their non-economic utilities at the expense of principals. Note that agents' wealth may be enhanced with their employment rewards. Their non-economic benefits may encompass "the physical appointments of the office, the attractiveness of the secretarial staff, the level of employee discipline, the kind and amount of charitable contributions ... etc." (Jensen & Meckling, 1976: 486). Effort reduction on the job may also increase the non-financial utilities of agents at the expense of principals. Both the economic and the non-economic benefits of agents are conceived to be driven by self-interest, and self-interest is anticipated to be promoted deceitfully. Hence according to economic scholars, in the absence of inducements or monitoring/intervention, managers or employees will deliberately and guilefully violate the terms of their formal employment contract (Alchian & Demsetz, 1972; Jensen & Meckling, 1976).

From an organizational behavior perspective, it has alternatively been contended what economists interpret as agents' propensity to enhance their economic and non-economic benefits at the expense of principals may actually occur because of limited information, misunderstanding, or miscommunication (Morrison & Robinson, 1997; Rousseau & Shperling, 2003). Consequently, the problems that evolve from the separation of ownership and control can be traced to gaps in what employers expect and what employees perceive they should contribute. Rather than deliberately violating the terms of their employment agreements, organization behavior scholars propose executives and workers will honor their employment agreements, as they understand them. Accordingly, enhancing communication and mutual understanding among shareholders, managers, and employees may resolve the problem of the separation of ownership and control of corporate assets. Therefore, mutual benefits may be expected as mutual understanding is achieved among these stakeholders (Pierce, Rubenfeld, & Morgan, 1991; Rosen, Klein, & Young, 1986; Rousseau, 1995). What is recognized in the behavioral view is that individuals at the outset may seek jobs with organizations for an economic reason. Although economic exchange may initially characterize the relationship between the employee and the enterprise, behaviors of employees within the enterprise are motivated by more than an economic agenda. Hence, a person's decision to offer contributions to the firm cannot be explained by economics alone.

Whereas the economic perspective emphasizes the formal contract and the expectation that agents will seek selfish interests beyond the provisions of the formal contract, organization behavior theorists clearly emphasize the informal contract. More specifically, their argument is that the alignment of shareholders' interests with those of the firm's executives and workers may require a shared understanding of the informal psychological agreement that prevails in the employment relationship (McLean Parks & Schmedemann, 1994; Morrison & Robinson, 1997; Rousseau & Shperling, 2003). The psychological agreement or contract consists of employees' perceptions of the unwritten reciprocal promises and obligations between themselves and their employer (Robinson, 1996; Turnley & Feldman, 1999). In this vein, organization members' contributions and rewards exchanged in a psychological contract have pecuniary and non-pecuniary currency components. Specifically, managers or employees provide effort on the job not only in exchange for economic and socioemotional currencies (Macneil, 1985; Rousseau, & McLean Parks, 1993), but also for the ideological currency (Blau, 1964; Thompson & Bunderson, 2003).

Contrary to the economic perspective, which recognizes both the financial and nonfinancial components of agents' exchanges to be selfishly driven, the psychological perspective only recognizes the financial component of exchanges as self-interested in nature. The financial component is considered to be self-interested because each organizational member is expected to contribute efforts in exchange for receiving monetary or tangible rewards. The socioemotional component, however, is considered to be group-interested and based on reciprocity norms. Employees are expected to contribute loyalty and organizational citizenship to the enterprise in exchange for security, human capital development, and membership in a desirable work group. The ideological component is understood as collective- or community-interested (i.e., finding a purpose in work that is meant to address a worthwhile cause). The perceived obligations within the psychological contract are more crucial to work-related behavior than the obligations specified in the formal contract in the view of organization behavior scholars (Rousseau & Tijoriwala, 1998; Thompson & Bunderson, 2003).

We suggest that the informal psychological contract, as a unit of analysis, provides a more useful theoretical framework for our understanding of the employment relationship than the formal contract and the stipulations emphasized by economists. The premise of related research has been that contributions and rewards exchanged in a psychological contract may be perceived as economic, socioemotional (Macneil, 1985; McLean Parks & Schmedemann, 1994), or ideological currencies (Blau, 1964; Thompson & Bunderson, 2003). Hence, the ramification is that different currencies may be associated with various responses to the perception that the contract has been upheld or breached (Robinson & Morrison, 2000; Rousseau & McLean Parks, 1993). In effect, although the psychological contract may possibly contain a combination of these distinct currencies, the currencies have often been considered independently of one another. In this work, we further elaborate on the independence of each currency by considering the possibility that for some individuals one currency may substitute for the others. Moreover, it has been argued that the potential interdependencies among these currencies have remained under-explored, and therefore, not well understood (Thompson & Bunderson, 2003). Consequently, we also strive to shed more light on this issue as we attempt to address some of the possible interdependencies among the currencies of the psychological contract.

The remainder of the paper captures our contributions that are organized as follows. First, by resorting to concepts of identity orientations and forms of social exchange, we will discuss the notion that some corporate members may particularly value one currency of the psychological contract over the others. For these members, our contention is that satisfied promises on the currency they value may compensate for limitations of the other currencies. Hence, we suggest a higher level of the currency they value may substitute for a lower level of the other currencies associated with the job. The substitution possibility is indicative of the potential independence of each currency. Second, we elaborate on breaches of the psychological contract that can occur when employees believe the currency they especially value is not supported by the employer. In Table 1 simple linkages are presented that will be discussed subsequently.

Our discussion is also broadened to encompass the possibility that other corporate members may adopt multiple identity orientations or prefer several forms of social exchange, thereby valuing more than one currency of the psychological contract. In this case, the currencies may be interdependent as they coexist in the psychological contract. Valuing several currencies, the organization could be perceived by employees as offering a means for receiving financial rewards, an environment for relational satisfaction, and a setting within which efforts could be made toward a worthy ideal. For these individuals the psychological contract may also be breached, as will be discussed.

SUBSTITUTION OF CURRENCIES RENDERED BY IDENTITIES AND EXCHANGES

Depending on the individual, our contention is that any one currency of the psychological contract may serve as a substitute for the others. Hence, satisfied promises on one currency of the psychological contract might compensate for shortcomings in the other currencies. We suggest substitution among currencies may be subject to identity orientations of individuals and their desired forms of social exchange in the organization. A number of scholars have argued that identity orientations assist employees in defining themselves relative to others (Alpert, Ashforth, & Dutton, 2000; Brewer & Gardner, 1996) and in preferring a particular form of social exchange (Flynn, 2005). Consequently, the implication is that employees tend to have specific identity orientations, and, therefore, may adopt distinct forms of social exchange. Emphasis should be made that identity orientation theory elaborates on how the need to maintain positive self-representation affects our perceptions of interactions with others (Hogg & Terry, 2000). Social exchange theory describes how we educe valued resources via interactions with others (Homans, 1958). To further clarify, we discuss below substitution of currencies rendered by identity orientations of people and their preferences for various forms of social exchange. It has been contended that organization members differently relate to one another (i.e., prefer different exchange forms--negotiated, reciprocal, or generalized), depending on their identity orientations that may be personal, relational, or collective (Brewer & Gardner, 1996; Flynn, 2005).

Personal orientation eliciting negotiated exchange and the dominance of the economic currency

Executives and workers who have a personal identity orientation perceive themselves as unique individuals and derive their gratification from the evaluation of their own characteristics, such as superior abilities relative to others. Possessing "a personal identity orientation suggests the focal individual is motivated to act solely on behalf of his or her own interests rather than on behalf of others' interests" (Flynn, 2005: 739). Corporate members with personal orientations not only may prefer competition over cooperation, but might also find competition at work motivating. They may believe that self-improvement is more likely if they attempt to outperform one another. Consistent with this premise, Fama and Jensen (1983) have proposed that some individuals in seeking employment choose among firms partly on the basis of the potential for further development of professional skills in response to intra-firm competition. These organization members may likewise assume that job performance improves with more intense rivalry among peers.

Because people with personal orientations value self-serving exchanges, their concern is with gaining tangible benefits for themselves as they interact with others. If these individuals need to cooperate with colleagues on the job, their preferred mode is explicit negotiated social exchanges (e.g., "I assist you in your job if you assist me with mine"). In negotiated exchanges, individuals selfishly concentrate on the concrete value of the exchange, rather than relational benefits, positive affects, or ideological contentments. The promotion of selfish interests not only may encompass gaining convenience or utility via negotiated exchanges, but also potentially gaining further economically on the job (Guth & Tagiuri, 1965; Wright, Kroll, Lado, & Elenkov, 2005). Consequently, such individuals may value their employment primarily for obtaining higher economic currency. Put in other words, since these employees are not expected to be enticed by socioemotional or ideological currencies associated with the organization, they may instead be anticipated to be motivated by financial rewards or the economic currency.

Moreover, our contention is that for organization members with a personal orientation the economic currency may extend beyond gaining material well-being into augmented dimensions of the psychological domain. Indeed, if human beings are more satisfied with self-improvement or betterment (Whitehead, 1929), then receiving higher economic currency may promote further satisfaction by implicitly serving as a proxy for having been judged more productive or promotable relative to peers in the enterprise (Rosenbaum, 1984; Wright, et al., 2005). In effect, receiving greater economic currency may be interpreted by an individual with a personal orientation as having accomplished more and attained bolstered status or power in employment. Hence, ego satisfactions associated with financial rewards may be additional sources of motivation.

Receiving higher economic rewards may also be indicative of how organization members are evaluated in relation to their external counterparts in the relevant labor market. We recognize that financial rewards offered to the personnel of one firm, relative to competing enterprises, may lead, match, or lag the market (Milkovich & Newman, 2002). A firm that leads the market in the economic currency, or offers higher than average financial compensation of the relevant labor market, may be signaling to its members that they are more valued than their external counterparts. Consequently, employees who receive higher pay may interpret such generous rewards as organizational expressions of further respect and worth for them, responding with superior levels of performance. Presumably, individuals with personal orientations expect that, by increasing their levels of performance, they are more likely to continue to receive greater future economic currency relative to their counterparts.

As noted, employees with personal orientations, preferring negotiated social exchanges, are less concerned with relational benefits, positive affects, or ideological contentments. Thus, for these employees, a higher level of economic currency may substitute for a lower level of socioemotional or ideological currencies associated with the job. The reason is, with respect to their employment, these individuals tend to derive satisfaction in promoting their own self-interests rather than group interests or collective interests. We do recognize, however, that human aspirations are not fulfilled by economic rewards alone. But non-economic aspirations need not be fulfilled within the enterprise as their fulfillment may take place outside of employment. Notwithstanding the latter consideration that is external to employment, we offer the following proposition.

Proposition 1: The economic currency will substitute for socioemotional or ideological currencies for organization members who have a personal identity orientation, preferring negotiated exchanges.

Relational orientation eliciting reciprocal exchange and the dominance of the socioemotional currency

Organization members with a relational identity orientation alternatively prefer implicit reciprocal social exchanges because they derive their satisfaction from return-in-kind exchanges. Implicit reciprocity in a relational setting normally consists of repayment of a good deed by the recipient to the provider. The dyadic exchange relations offer the means for individuals to enhance interactions within or across work groups in the absence of formal hierarchical authority. Furthermore, dyadic exchanges can spill over and encompass networks of reciprocities within or across groups. While concerned with their own needs, those with a relational orientation are likewise concerned with the needs of others (Brewer & Gardner, 1996; Markus & Kitayama, 1991). Therefore, such persons ordinarily are motivated to act on behalf of mutual interests.

Managers and workers with a relational orientation tend to develop affective bonds (or emotional attachments) in their place of employment. These bonds are formed as individuals seek mutual acceptance and camaraderie in the workplace (Alpert, et al., 2000). Affective bonding often enhances social harmony and cohesiveness (Blau, 1964; Deutsch, 1985). Moreover, organization members with relational orientations are prone to prefer cooperation over competition at work. Cooperation among these individuals could prevail beyond what is expected of their task assignments. Because for employees with relational orientations cooperation ordinarily is directed at increasing both self-interests and the interests of others (Brewer & Gardner, 1996), they may experience symbiotic interdependence (Barnett & Miner, 1992).

Having relational identity orientations and desiring reciprocal exchanges, such individuals may be predisposed to particularly value the socioemotional currency of the psychological contract. Rousseau and Shperling have proposed "workers with relational agreements demand less pay than their nonrelational counterparts, effectively giving that wealth premium to the firm and its investors" (2003: 563). The implication of this proposal is that organization members who have a dominant relational orientation may have a higher interest in the socioemotional currency, but a lower concern for the economic currency. Likewise, the employees who have a dominant relational orientation may have a lesser interest in striving for a cause. In this instance, the implication is that individuals with a higher interest in the socioemotional currency may have a lower concern for the ideological currency. Therefore, for individuals with relational orientations, preferring reciprocal social exchanges, a higher level of the socioemotional currency may substitute for a lower level of economic or ideological currencies associated with their employment.

Proposition 2: The socioemotional currency will substitute for economic or ideological currencies for organization members who have a relational identity orientation, preferring reciprocal exchanges.

Collective orientation eliciting generalized exchange and the dominance of the ideological currency

Executives and workers with collective identity orientations also desire implicit reciprocal exchanges but in a generalized manner. That is, reciprocity may consist of repayment of a good deed, but not axiomatically by the recipient to the provider (Yamagishi & Cook, 1993). Indeed, "reciprocation is indirect so that Paul may receive a benefit from Heather but may reciprocate by giving to Eric, rather than to Heather. Eventually, Heather can expect reciprocation from someone other than Paul" (Flynn, 2005: 740). Evidently, implicit reciprocity in a collective setting takes place among three or more people. Organization members with collective orientations have a general interest in others' welfare (Bearman, 1997; Sahlins, 1972). They frequently prefer cooperation over competition at work and are predisposed to sacrifice their own interests for the welfare of the collective. These individuals subscribe to the notion of giving, without direct reciprocation, although they may expect indirect reciprocation in the future.

For individuals with a collective identity orientation, however, sacrificing their own interests for the benefit of the collective may occur even without anticipation of direct or even indirect reciprocation. These individuals might thrive by enhancing their usefulness to the collectivity (Spranger, 1928). Hence, they may be content with the role of primarily benefiting others in the organization or the broader community. Emphasis should be made that a collective identity orientation may correspond to various levels of abstraction, including the group, department, organization, profession, industry, nation, or the world (Flynn, 2005). Ordinarily, organization members with collective identity orientations tend to view their contributions to colleagues and the community as a reason for their employment (Conger, 1994; Thompson & Bunderson, 2003). Rather than concentrating on economic or socioemotional rewards, the focal employees may cherish ideological rewards. For these employees, pursuing a cause and advancing ideals are intrinsically rewarding (Blau, 1964; Conger, 1994). The ideological currency, therefore, may serve as a stronger inducement to elicit these employees' contributions than the other currencies. "When this is the case, employee perceptions about the organization's obligations are not grounded solely in personal entitlements but also in the promotion of a cause they highly value" (Thompson & Bunderson, 2003: 571). Organization members with collective identity orientations, preferring generalized exchanges, may have a greater value for the ideological currency relative to the economic or socioemotional currencies. Consequently, for such organization members, the former currency may substitute for the latter currencies.

Proposition 3: The ideological currency will substitute for economic or socioemotional currencies for organization members who have a collective identity orientation, preferring generalized exchanges.

SUBSTITUTION OF CURRENCIES RENDERED BY EXCHANGES AND IDENTITIES

Although identity orientations are rather stable and enduring, they are not permanently fixed. In the prior discussion, our understanding has been that identity orientations determine preferences for differing forms of social exchange. In this section, we alternatively discuss the premise that the form of social exchange may determine the adoption of an identity orientation. In effect, we elaborate on the notion that individuals may conceivably define themselves differently vis-a-vis others as circumstances vary (Flynn, 2005; Gardner, Gabriel, & Hochschild, 2002). Hence, people might not hold immutable identities, but rather their identity orientations could change with the situation. As discussed next, the reciprocity of identity orientation and exchange also has ramifications for the substitution of currencies of the psychological contract.

Negotiated exchange eliciting personal orientation and the enhancement of the economic currency

Employees of the same organization may begin to have social exchange without having a history of interaction. These members of the organization are unlikely to immediately adopt a relational or collective identity orientation (Flynn, 2005), although they ordinarily may be predisposed to the adoption of either of such identity orientations. Because they are unfamiliar with one another or because they may have uncommon social categories other than common employment (Chatman, Polzer, Barsade, & Neale, 1998), they may initially adopt negotiated exchanges, and correspondingly, personal identity orientations. Unfamiliarity refers to not knowing the others involved in the interaction. Uncommon social category refers to the dearth of knowledge regarding potential commonality of interests, and hence, lack of perception of mutualism.

Evidently, what initially triggers the adoption of negotiated exchanges and personal identity orientation is the presence of unfamiliarity or the status of uncommonality of social categories. In such cases, there may be limited motivation to be responsive to others' needs; therefore, individuals may focus on their own needs. Thus, the presence of unfamiliarity or the status of uncommon social category, triggering negotiated exchanges and personal identity orientations, promotes interactions on behalf of one's own interests rather than others' interests. Given these considerations, select members of the organization might value the concrete dimension of the interaction, instead of valuing social utilities, positive affects, or ideological benefits. Presumably, rather than cooperation, competition could prevail in these circumstances. If necessary, however, employees may cooperate with each other but probably by way of negotiated exchanges.

Given our discussion, we anticipate the presence of unfamiliarity or the status of uncommonality of social categories, triggering negotiated exchanges and personal orientations, might enhance the value of the economic currency, but not the value of socioemotional or ideological currencies for employees.

Proposition 4: The presence of unfamiliarity or the status of uncommonality of social categories, triggering negotiated exchanges and personal orientations, will render the substitution of the economic currency for socioemotional or ideological currencies for organization members.

Reciprocal exchange eliciting relational orientation and the enhancement of the socioemotional currency

Employees may change their identity orientation from personal to relational as circumstances change. Note that settings of unfamiliarity or uncommonality of social categories may change into circumstances of familiarity or commonality of social categories with the initiation of ongoing interactions. Moreover, a greater frequency of social exchanges may culminate in enhancements of familiarity or recognition of commonality of social categories. On the one hand, in response to ongoing interactions, organization members may broaden their conception of worth as individuals to worth as members of relationships (Brewer & Gardner, 1996; Markus & Kitayama, 1991). Hence, they might begin to perceive themselves less as unique individuals and more as persons fulfilling roles in valuable reciprocal exchange relationships (Flynn, 2005). In this case, adoptions of reciprocal exchanges and relational identity orientations are due to increased familiarity and the potential development of extending positive affects. On the other hand, employees may adopt reciprocal exchanges and relational identity orientations with the development of common identity and congruencies of interests. In effect, repeated social exchanges may work to further align the interests of those involved (Lawler & Yoon, 1993; Sheriff, Harvey, White, Hood, & Sheriff, 1954), promoting a perception of mutualism.

Ordinarily, instead of competition, cooperation may prevail in these settings. That is because individuals tend to cooperate where they find relationships composed of familiarity and positive affects (Markus & Kitayama, 1991) or relationships with congruencies of interests (Lawler & Yoon, 1993). Our elaboration indicates that, with the initiation of ongoing interactions, circumstances may change to those of familiarity or commonality of social categories, triggering reciprocal exchanges and relational orientations. Hence, the value of the socioemotional currency may rise, but not necessarily the value of the economic or ideological currencies.

Proposition 5: Contexts of familiarity or commonality of social categories, triggering reciprocal exchanges and relational orientations, will render the substitution of the socioemotional currency for economic or ideological currencies for organization members.

Generalized exchange eliciting collective orientation and the enhancement of the ideological currency

As circumstances change with the initiation of ongoing relationships, organization members alternatively may adopt generalized exchanges, and correspondingly, collective identity orientations. Given ongoing relationships, employees may develop common identities and alignments of interests, striving toward the achievement of something that benefits a broader collectivity than the intra-organization group or even the enterprise. In this case, individuals might broaden their perception of worth as members of intra-organizational relationships to worth as corporate contributors to an ideology or something truly worthwhile (e.g., as corporate members of a biotechnology firm whose mission is: "To improve the health of the world's citizens").

The desire to be a corporate contributor to an ideology is not only a theoretical notion. "Practitioners and the practitioner literature often explicitly invoke ideology in describing a fulfilling employment exchange" (Thompson & Bunderson, 2003: 572). The formation of a commonality of a cause should limit intra-firm competition, but further promote intra-organizational cooperation. Put in other words, "high ideals are the basis for the persistence of cooperation" (Barnard, 1938: 282). Circumstances that facilitate the formation of a commitment to an ideal bring forth altruistic roles. That is, individuals tend to value the role of benefiting others within the firm or in the broader community without necessarily an anticipation of reciprocation. The reason is that advancing a cause or an ideal is intrinsically rewarding.

Proposition 6: Contexts facilitating the development of common identities and alignments of interests, triggering generalized exchanges and collective identity orientations, will render the substitution of the ideological currency for economic or socioemotional currencies for organization members.

BREACH OF THE PSYCHOLOGICAL CONTRACT

Our discussion on the substitution of the currencies of the psychological contract revolved around the notion that individuals with distinct identity orientations, or in particular social exchange contexts, may value one currency over the other currencies. In this section of the paper, we elaborate on the possible breaches of the psychological contract that can occur when employees believe that the currency they especially value is not supported by the organization.

Breach due to lack of support for the economic currency

Evidently, employees who have a personal identity orientation, or in negotiated social exchange contexts, may value the economic currency. Consequently, these employees are likely to consider that the psychological contract is upheld, if they perceive their pecuniary rewards as satisfactory, compensating for possible shortcomings or limitations in the socioemotional or ideological aspects of the contract. In contrast, the psychological contract could be breached if they view their financial rewards as unsatisfactory. More specifically, an enterprise that begins to lag the external labor market in pay policies, or commences to offer lower than average compensation of the relevant external labor market, may be viewed by the employees with personal orientations as breaching the psychological contract. These employees might believe that they are progressively less valued by the employer than their external counterparts.

Individuals with personal orientations may also consider their psychological agreement as breached if they begin to be paid less than their counterparts in the relevant internal labor market. We shall remember when organization members perceive their inputs relative to rewards are similar to those of peers, they recognize that equity exists (Adams, 1965). In contrast, if employees perceive that for the same level of input their peers are rewarded more, they will believe inequity exists. Nevertheless, individuals have greatly exaggerated perceptions of their own inputs relative to others. Put in other words, individual inputs are subject to self-enhancing perceptual biases that influence employees to give themselves more credit than is warranted, and others less than deserved (Cook & Yamagishi, 1983; Cowherd & Levine, 1992). With exaggerated self-assessments and discounted assessments of others, any higher reward given to peers might be related to inequity and possible breach of the psychological contract.

It has been argued that a breach of the psychological contract may lead to feelings of violation, promoting negative attitudes, reductions in employee contributions, or greater turnover (Robinson & Morrison, 2000; Rousseau & McLean Parks, 1993; Turnley & Feldman, 2000). We agree, but speculate that feelings of violation may promote greater turnover of individuals with personal orientations, preferring negotiated exchanges, if their levels of financial rewards are less than the reward levels of the relevant external labor market. In contrast, our conjecture is that for these individuals feelings of violation may promote negative attitudes or reduction in contributions, rather than turnover, if their compensation remains more than the relevant external labor market, but lags the relevant internal labor market.

Proposition [7.sub.a]: For individuals with a personal orientation, preferring negotiated exchanges, the psychological contract will be breached if their compensation begins to lag the relevant external labor market. This will lead to feelings of violation, promoting higher turnover rates.

Proposition [7.sub.b]: For individuals with a personal orientation, preferring negotiated exchanges, the psychological contract will be breached if their compensation begins to lag the relevant internal labor market, even if their compensation remains more than the relevant external labor market. This will lead to feelings of violation, promoting negative attitudes or reduced employee contributions.

Breach due to lack of support for the socioemotional currency

Our anticipation is that organization members who have relational identity orientations, or in reciprocal social exchange contexts, tend to value the socioemotional currency. Hence, these individuals are likely to perceive that the psychological contract is upheld, if their socioemotional needs are satisfied, compensating for possible shortcomings in the economic or ideological currency components of the contract. The psychological agreement could be breached if they alternatively view that their socioemotional needs are not supported. Presumably, compared to transactional contract breach (involving the economic currency), relational contract breach (encompassing the socioemotional currency) may be more sensitive to subjective judgments (McLean Parks & Kidder, 1994; Thompson & Bunderson, 2003).

A number of scholars have concluded that psychological contracts change from relational to transactional, after the agreement is breached in response to lack of support in the socioemotional domain (Herriott & Pemberton, 1996; Rousseau & McLean Parks, 1993). This conclusion is intuitively appealing to us. Moreover, we suggest a changed psychological contract that begins to emphasize a transaction aspect (provision of employee effort in exchange for pecuniary rewards), rather than a return-in-kind aspect of the agreement, is unlikely to remain motivational for individuals with relational identity orientations, preferring reciprocal exchanges. Instead, such individuals may become dissatisfied with their employment in response to the changed contract. Therefore, we anticipate for these corporate members, the psychological contract may be breached, as their socioemotional needs are no longer supported. This may lead to feelings of violation, promoting negative attitudes, reduced contributions, and higher turnover.

Proposition 8: For individuals with a relational orientation, preferring reciprocal exchanges, the psychological contract will be breached in response to lack of support for the socioemotional domain. With the breach, the agreement changes from relational (an emphasis on socioemotional currency) to transactional (an emphasis on economic currency). This will lead to feelings of violation, promoting negative attitudes, reduced contributions, and higher turnover.

Breach due to lack of support for the ideological currency

We have discussed the proposition that corporate members who have a collective identity orientation, or in generalized social exchange contexts, may value the ideological currency. Consequently, they could consider the psychological contract as upheld if their pursuit of a cause is in congruence with the activities of the enterprise. Moreover, even if the enterprise pursues the relevant ideological goals, but with few realized victories, these corporate members might still be satisfied with the psychological agreement (Thompson & Bunderson, 2003). The reason is that pursuing ideals is itself intrinsically rewarding. The satisfaction of such corporate members with the ideological currency may compensate for possible limitations in the economic or socioemotional currencies. This may explain why some individuals continue to be loyal to the enterprise despite shortcomings in the economic and socioemotional currencies of the psychological agreement.

In contrast, for employees who value the ideological currency, the employment agreement could be breached if the firm shifts its actions away from ideological pursuits. The breach of the psychological contract is more likely if the redirection of activities is not forced upon the enterprise by macroenvironmental trends (political-legal, economic, social, technological) or industry forces (customers, suppliers, rivals, substitute products, threat of new entrants). For instance, if redirection of energies away from the pursuit of ideals is not forced upon the organization by economic necessities (Morrison & Robinson, 1997) or customer demands (Thompson & Bunderson, 2003), a breach of the psychological employment agreement becomes more probable. Axiomatically, the potential for breach is not due to personal mistreatments of employees, but rather due to abandonments of ideological obligations. It will be recalled that breaches of the psychological contract, because of lack of support for the economic or socioemotional currencies, led to feelings of violation, promoting negative attitudes, reduced contributions, or high turnover rates. These are reactive responses. A breach of the psychological agreement due to lack of support for the ideological currency, however, is anticipated to lead to feelings of violation, promoting more proactive responses (Thompson & Bunderson, 2003). Indeed, such responses may be in the form of attempts to rectify the breach via organizational dissent.

Proposition 9: For individuals with a collective orientation, preferring generalized exchanges, the psychological contract will be breached if the enterprise redirects its activities away from ideological pursuits. This will lead to feelings of violation, promoting attempts to rectify the breach via organizational dissent.

MULTIPLE IDENTITIES, EXCHANGES, AND CURRENCIES

Up to this point we have anticipated for individuals with personal orientations, or in contexts of negotiated exchanges, that values of socioemotional or ideological currencies may be of lesser concern, yielding prominence to the value of the economic currency. Thus, fulfilled obligations on the economic component of the psychological contract may compensate for possible unfulfilled obligations on the socioemotional or ideological currency components. In contrast, we have anticipated that the socioemotional currency may be important for people with relational orientations or in circumstances of reciprocal exchanges. In this case, fulfilled obligations on the socioemotional currency might compensate for unfulfilled obligations on the economic and ideological currency components. Alternatively, we have anticipated the ideological currency may be crucial for organization members with collective orientations or in settings of generalized exchanges. Here, fulfilled obligations on the ideological currency may compensate for unfulfilled obligations on economic and socioemotional currency components. Our anticipations are consistent with the possibility that some individuals might adopt one identity orientation and prefer one form of social exchange. For these individuals a currency of the psychological contract ordinarily assumes high value. In this setting, the psychological contract may be breached if the currency valued by the individual is not acted upon or supported by the organization. Similar to Thompson, we realize that "organizations only act as the result of action taken by their members" (1967: ix).

The theme of our paper is that identity orientations and forms of social exchange can be conceived narrowly or more broadly with corresponding currency valuations. Some organization members may narrowly focus on themselves, adopting personal identity orientations, preferring negotiated exchanges, and valuing the economic currency. Here, the psychological contract can be characterized as transactional. Others may more broadly focus on themselves as well as their peers. They may adopt relational identity orientations, prefer reciprocal exchanges, and value the socioemotional currency. In this case, the psychological contract can be characterized as relational. Yet other employees may focus still more broadly on an aggregation of people involving a cause. Such employees may adopt collective identity orientations, prefer generalized exchanges, and value the ideological currency. In this instance, the psychological agreement is principled in nature. Expectably, a narrow focus on the individual himself or herself may be associated with the economic currency, whereas broader foci may be progressively associated with socioemotional or ideological currencies.

The prior elaborations, however, do not rule out the possibility that other organization members may adopt more than one identity orientation or prefer several forms of social exchange. Perhaps these employees in addition to being associated with the firm economically and with colleagues relationally are also inclined to associate themselves by way of the enterprise with the broader collectivity ideologically (Guth & Tagiuri, 1965). This implies that more than one currency of the psychological contract may be valued by them. For such employees the enterprise may provide a means for deriving financial benefits, a setting for relational fulfillment, or a context in which contributions can be made to a worthy cause. Moreover, as stated subsequently, there may be interdependencies among the currencies.

Considering various possibilities that encompass organization members adopting multiple identity orientations, preferring more than one form of social exchange, and valuing several currencies of the psychological contract that may be interdependent is beyond the scope of our work. We only focus on the possibility of an interdependency that encompasses the economic currency activating the socioemotional currency, and the activated socioemotional currency triggering the ideological currency. Given these possibilities, the psychological contract also may be subject to breach, as discussed in a forthcoming section. Our approach is exploratory in nature as we attempt to address the issues of plurality and interdependency.

The psychological contract and interdependencies of currencies

We mentioned that defining the self as a unique being reflects a personal identity orientation and a self-interested predisposition (i.e., a predisposition of seeking self-interest in isolation of others' interests). This identity orientation tends to be especially compatible with receiving the economic currency based on individual effort. Here, the financial rewards of employees would be independent of one another. The economic currency, however, instead could involve receiving group commissions or group bonuses, based on group effort (Deutsch, 1949). In this case, corporate members' self-interests and group-interests become congruent. Congruencies of interests due to group rewards may promote ongoing interactions and a spirit of cooperation (Lawler & Yoon, 1993; Sheriff, et al., 1954). Ongoing interactions and a spirit of cooperation may correspondingly be associated with recognition of commonality of social categories and enhancements of familiarity (Flynn, 2005). Our discussion indicates that the economic currency could activate the socioemotional currency where pecuniary rewards consist of group financial rewards. In effect, group compensation might serve as an impetus for employees to broaden their conception of self-interests to group interests.

Additionally, in some firms the economic currency may encompass ownership stakes (e.g., grants of options, restricted stock, matching of company stock in retirement plans). It has been proposed that grants of ownership stakes can extend beyond employees gaining economically into augmented dimensions of the psychological sphere (Pierce, et al., 1991; Rousseau & Shperling, 2003). The reason is that ownership not only denotes possession of wealth but also the right to gain information and influence decisions about what is owned. The rights of gaining access to information and participation in decision-making may encourage further interactions among employees. Interactions among employees because of ownership stakes may also culminate in enhancements of familiarity and recognition of commonality of social categories (Brewer & Gardner, 1996; Flynn, 2005). Hence, what might be stated is that "ownership operates from both a formal and a psychological experience platform" (Pierce, et al., 1991: 126). Consequently, the economic currency in the form of ownership stakes could activate the socioemotional currency.

Viewed from another perspective, what may contribute to the activation of the socioemotional currency are the multiple roles that employees play in some enterprises due to holding ownership stakes. Playing multiple roles blurs the boundaries among shareholders, managers, and workers (Rousseau & Shperling, 2003). Approximately 40% of members of publicly traded corporations are holders of equity stakes in their employer (Rosen, Case, & Staubus, 2005). Accordingly, these organization members not only play the role of an employee, but also a shareholder. Furthermore, decentralized work practices within many of such enterprises have resulted in self-management. Because members of these organizations can self-manage, and since both executives and workers hold equity stakes, these individuals frequently assume multiple roles, potentially promoting recognition of commonality of social categories. In addition to group bonuses or group commissions, therefore, the economic currency, in the form of ownership stakes, may likewise activate the socioemotional currency.

Enhancements of familiarity or recognition of commonality of social categories, associated with intra-firm interactions and the activated socioemotional currency, may further broaden organization members' conceptions of worth as group members to worth as contributors to something truly worthwhile. Our statement is compatible with the proposal that some firms as organized groups of interacting people, by design or informally, socially also evolve to stand for certain moral values or causes (Barnard, 1938; Blau, 1964; Selznick, 1957). Apparently, within the business community, many successful enterprises tend to explicitly and by design subscribe to cause-driven missions in order to capture the moral imagination of their members (Collins & Porras, 1996; Thompson & Bunderson, 2003). In this setting, corporate members may enjoy relational as well as collective pursuits in their employment.

Moreover, we suggest that it is possible for the socioemotional currency to informally trigger the ideological currency because the viability of the former may be enhanced with the presence of the latter. We shall remember that identity orientation theory addresses how the need to maintain positive self-representation affects perceptions of interacting people. It is easier to positively convey one's own self-image if interactions with others are perceived to be in congruence with norms of reciprocity as well as with moral values. Also, conflicts between two individuals or among several people are less likely in the presence of reciprocity and moral values. Presumably, the integrity of interactions of socioemotionally related employees could be safeguarded with continued reciprocity and the prevalence of moral values. Indeed, actions of interacting employees that contradict moral values may pose a threat to interacting associates' self-concepts, reducing their desire to participate, thereby devaluing the socioemotional currency. Alternatively, actions that demonstrate moral values improve the interacting employees' mutually conveyed self-representations, enhancing the value of the socioemotional currency.

Additionally, it may be said that the good will and feelings of socioemotionally related employees represent the perceived reciprocal acts of these persons and the imputed intentions behind the acts. The augmentation of broader cause-related moral intentions that are imputed to the related acts of interacting employees may support the value of the socioemotional currency because the presence of moral values could be perceived as assurance that the quality of implicit reciprocation in the present and in the future will be maintained. This contention is based on the argument that people evaluate facts as well as render intentions to the others involved in any interaction (LaFave, 2000; O'Toole, 1993). Furthermore, the relevant facts of the interaction and the imputed intentions between two or among several persons are often more positively perceived if they are presumed congruent with moral or ideological concerns (Goffman, 1997).

Proposition 10: The economic currency will activate the socioemotional currency, and the activated socioemotional currency will trigger the ideological currency for organization members subject to group rewards or corporate ownership stakes. These organization members will have multiple identity orientations, preferring several forms of social exchange, and valuing more than one currency of the psychological contract.

Breach of the psychological contract and interdependencies of currencies

We have suggested that the economic currency in forms of group financial rewards and grants of ownership stakes might activate the socioemotional currency. Moreover, our contention has been that the activated socioemotional currency could trigger the ideological currency. The psychological contract may be considered as upheld if these currencies are consistently supported by the enterprise. In contrast, the psychological contract may be breached if the firm begins to reduce its support of the currencies. Our expectation, however, is that, if organization members value more than one currency of the psychological contract, the ideological component may play a particularly crucial role with respect to possible breach of the employment agreement.

Following the tradition of common law, we suggest for breach of the psychological agreement to occur, it is necessary for a bad act and a bad mind to be present. A bad act may constitute a conduct that represents an infraction of an obligation. However, a bad act may not immediately lead to a breach, unless a bad mind is also presumed (Khanna, 1999; LaFave, 2000). The presumption that a breach may require a bad act and a bad mind is likewise in conformance with Aristotle's (1941) view that a bad act and a bad desire must coexist in order to constitute a breach. In contrast, a good act and a good mind are necessary to constitute virtue. We recognize that organizations are social or legal constructions (Jensen & Meckling, 1976; Ouchi, 1981; Weick & Roberts, 1993) and have no minds per se. They are, as fiction, conceived by people to better understand their arenas. But organizations do create volitions that can be construed as good or bad acts and intentions (Khanna, 1999; Werhane, 1985). Perhaps for a breach to occur, bad acts may need to be accompanied by bad intentions.

We shall remember enterprises that are prominently cause-driven may capture the moral imagination of their members (Collins & Porras, 1996; Thompson & Bunderson, 2003), amalgamating significant moral capital. Moral capital may provide some protection for possible breach of the psychological contract due to commencements of lack of significant support for the currencies. That is, for a period of time an enterprise with moral capital may be forgiven by its members for less than fully supporting the currencies of the psychological agreement. In this case it may be reasonable to assume, where the currencies are not fully supported, the employees may invoke the cognitive template that the lack of support is not due to bad intentions for firms with moral capital. In effect, moral capital might guard against a breach, or at least, postpone a breach of the psychological contract. In contrast, the psychological agreement may be immediately breached in response to bad corporate acts involving the currencies, if a bad corporate mind is simultaneously perceived by enterprise members.

Proposition 11: The psychological contract will be immediately breached in response to bad corporate acts (involving the currencies), if a bad corporate mind is also perceived by employees. In contrast, the presence of the ideological currency and moral capital will mollify the effects of bad corporate acts because of a presumption of an absence of a bad corporate mind, guarding against a breach, or at least, postponing a breach of the psychological agreement.

CONCLUDING REMARKS

We began this paper with the observation that from different perspectives the separation of ownership and control is recognized as a potential major organizational problem. From an economic perspective, the problem consists of employees promoting their personal interests at the expense of relevant others and the enterprise. In contrast, from the perspective of organization behavior scholars, the problem can be traced to gaps in what employers expect and what employees perceive they should contribute. The economists have emphasized the formal employment contract, whereas the behavioral scholars have focused on the informal psychological agreement. Our contention has been that the informal psychological contract proposed by behavioral scholars provides a more useful framework for our understanding of the employment relationship, or its problems, than the formal contract and the stipulations stressed by economists. In this final section of the paper, justifications are provided for our contention.

Agency theory within the economic framework holds that employment relationships can be studied as an interaction of a principal and an agent (Jensen & Meckling, 1976). The principal delegates authority to the agent to perform a function on behalf of the principal. The focus of analysis is on the individual. What is assumed in the economic paradigm is that agents or employees seek selfish personal utilities, but are effort-averse, similar to the anticipation of Theory X (McGregor, 1960). Hence, employees are considered to be opportunistic because, if possible, they attempt to maximize their utilities, but minimize their effort on the job.

The notion that agents shirk is inconsistent with the possibility that employees could be prone toward productivity because efficient job performance may lead to increases in the economic currency. Indeed, some employees may substantially exert themselves on the job in order to improve their economic status (Guth & Taguiri, 1965). Nor does the notion of shirking allow for the possibility that human beings are naturally happier with betterment (Whitehead, 1929). Thus, with improved productivity at work and the garnering of higher compensation, employees may perceive they are better off. In this view, if individuals are more satisfied with self-improvement, then receiving higher economic currency in response to efficient job performance may also be interpreted by them as having achieved more professionally (Rosenbaum, 1984; Wright, et al., 2005). Receiving an increased economic currency for greater effort on the job is also compatible with the reality that some organization members may exert themselves because they find their tasks intrinsically satisfying (McGregor, 1960). The economic perspective does not recognize these possibilities, but the organization behavior view allows for them.

The focus on the individual is also problematic regarding an economic analysis of the employment relationship. The reason is that only some employment relationships lend themselves to an association between one principal and one agent, in isolation of other employees. These relationships consist of the agent performing a task for the principal and receiving pecuniary compensation. The behavioral view allows for this possibility by recognizing that for some enterprise members the psychological agreement is transactional. That is, the employee performs a job for a supervisor and receives the economic currency. The economic perspective, however, is silent on the relevance of the socioemotional and ideological currencies that could induce employee contributions. In contrast, the psychological contract, proposed by behaviorists, explicitly encompasses the reality that for some organization members the socioemotional and the ideological currencies may be especially prominent. Consequently, the employment contract not only may be transactional (with the focus on the individual agent or the principal), but also relational and principled in nature (with foci on a plurality).

Approached from a broader psychological contract perspective, it may be argued that, although firms purchase the employees' time, the more relevant factor for job performance may be the extent of effort expended by the employees. The amount of effort put forth may hinge on appealing to pecuniary as well as nonpecuniary rewards (Etzioni, 1988; Thompson & Bunderson, 2003). Moreover, organizational efficiency achieved through increased employees' efforts is not an end in itself, but the satisfaction of corporate members' aspirations may be interdependent with that efficiency (Barnard, 1938; Whitehead, 1929). In effect, corporate efficiency may be related to betterment of employees since efficiency may facilitate the achievement of economic, socioemotional, and ideological goals of firm members.

A significant vulnerability of the economic perspective continues to be its emphasis on self-interest and the expectation of zero-sum outcomes. Thus the separation of ownership and control, as an organizational problem, is not subject to resolution (Jensen & Meckling, 1976). The promise of the behavioral view is that it allows for self-interest as well as mutual interests and the possibility of nonzero-sum outcomes. Therefore, the resolution of the problem of the separation of ownership and control remains a hopeful possibility. In this work our attempt has been to further enrich the concept of the psychological agreement, as research continues on this vital topic.

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William T. Jackson, University of South Florida St. Petersburg

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Table 1: Identity Orientations, Forms of Exchange,
Valuation of Currencies, Breach, and Responses to Violation

Personal     Negotiated       Economic      Transactional

Relational   Reciprocal    Socioemotional    Relational

Collective   Generalized    Ideological      Principled

Personal     Lack of Support for the   Negative Attitudes,
                Economic Currency            Reduced
                                        Contributions, or
                                            Turnover

Relational   Lack of Support for the   Negative Attitudes,
                 Socioemotional              Reduced
                    Currency            Contributions, or
                                            Turnover

Collective   Lack of Support for the     Organizational
              Ideological Currency           Dissent