Psychological Contract Breach, Perceived Justice and Employee Retaliatory Behaviour in the Informal Sector

Abstract

This study examined the relationships between psychological contract breach, perceived justice and employee retaliatory behaviour and the moderating roles of religiosity and perceived psychological contract in informal organisational settings. A sample of 150 informal sector employees from ages sixteen to fifty-seven participated in the study. All participants responded to questionnaires on perceived psychological contract, psychological contract breach, perceived justice, employee retaliatory behaviour and religiosity. Four hypotheses were tested. Pearson correlation and multiple regression statistical tests were used to analyse the data. As expected, psychological contract breach had a significant positive relationship with employee retaliatory behaviour. A significant negative relationship was also observed between perceived justice and employee retaliatory behaviour. Analysis of results indicates that employees’ decision to engage in retaliatory behaviour is influenced more by their perception of justice than a breach of the psychological contract. Results also supported the prediction that religiosity will moderate the relationship between perceived justice and employee retaliatory behaviour. The prediction that perceived psychological contract will moderate between psychological contract breach and employee retaliatory behaviour was however not supported. The results are discussed within the frameworks of Social Exchange Theory and Organisational Justice Theory. The theoretical and practical implications of these findings are discussed and recommendations for future research are also given