Breach of psychological contract: impact on workforce motivation and organizational sustainability
Publication date: 2 January 2020
Abstract
Learning outcomes
This case study aims to expect the following learning outcomes. A better understanding of the nature of a psychological contract being developed by employees in non-profit organizations, especially working in the areas of social development and the impact of this contract on employee commitment. Enhanced understanding of conflict of interest (personal versus public) in social development organizations and its implications. Identification of issues of task conflict versus interpersonal conflict and its impact on organizational functions. Identification of dynamics of exclusion of internal stakeholders from organizational strategic decision-making process along with its impact on organizational performance and sustainability. Devising a mechanism to avoid such conflicts in social development organizations, in particular, and organizations in general.
Case overview/synopsis
This case highlights five issues as follows: it identifies and discusses conflict of interest between privileged class possessing decision-making positions in the board of directors and implementers working at the grassroots level at ANMOL (a non-governmental organization working for poor girls education in Baluchistan-hub of China–Pakistan Economic Corridor); it discusses the basis for formulation of psychological contracts and impact of its violation on stakeholder’s commitment and motivation; it discusses the implications of difference of opinion of both stakeholders regarding organizational vision and possible drawbacks of converting task conflict into interpersonal conflict on individuals, organization and end-users; it explores implications of exclusion of key stakeholders from organizational decision-making and its impact on organizational smooth working and sustainability; and it suggests a mechanism to avoid conversion of task conflict into interpersonal conflict and smooth functioning of an organization. Hence, this case discusses theories of conflict of interest between top-leadership and workforce, psychological contract and implications of its breach on employee motivation and organizational sustainability in the context of social development organizations.
Complexity academic level
This case provides sufficient material to be discussed at master level courses (management sciences – master of business administration (MBA) level) such as human resource management (dynamics of psychological contract and conflict resolution), leadership and change management in social development organizations (social enterprises).
Supplementary materials
Teaching Notes are available for educators only.
Subject code
CSS 7: Management Science.
Keywords
Acknowledgements
I acknowledge the great support of Mr Aleem Khan, Manager Action Research and Training Cell) of ANMOL in the development of this case study. In Pakistan, generally organizations (for profit and not for profit) are reluctant to share their real-life experiences with academics or researchers. I also acknowledge that this case contains information from two sources, namely, a series of interviews with Mr Aleem, his colleagues and one member of BoD, and organizational archives.
Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision-making. The authors may have disguised names; financial and other recognizable information to protect confidentiality.
Citation
Dogar, M.N. (2020), "Breach of psychological contract: impact on workforce motivation and organizational sustainability", , Vol. 10 No. 1. https://doi.org/10.1108/EEMCS-01-2019-0005
Publisher
:Emerald Publishing Limited
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