Expatriate employees’ reactions to psychological contract breach: an empirical test of affective events theory

Purpose - This study draws on affective events theory (AET) to propose and examine a sequential process in which expatriate employees’ perceptions of psychological contract (PC) breaches impact their emotions (feelings of violation), which in turn influence their attitudes and ultimately their behaviors. Design/methodology/approach - Expatriate employees (n = 228) working in the United Arab Emirates participated in an experiment with four employment scenarios created by manipulating transactional and relational PC promises. Participants, randomly assigned to each scenario, responded as if in a real job situation. Data analysis was performed using MANCOVA and structural equation modeling (SEM). Findings - Employing an experimental design, the findings offer causal evidence that supervisors’ failure to fulfill employment promises adversely impacts expatriate employees’ perceptions of PC breaches, emotions, job satisfaction, organizational commitment, turnover intentions and performance. Consistent with the AET, the findings demonstrate that PC breaches impact expatriate employees’ emotions, which subsequently influence their attitudes and ultimately affect their behaviors. Practical implications - The study provides recommendations for organizations and managers to improve relationships with expatriate employees and suggests actions to lessen the adverse effects of PC breaches. Originality/value - To our knowledge, this is the first study that examined the sequential process suggested by the AET in the context of PC and expatriation, establishing that PC breaches impact expatriate employees’ emotions, which in turn affect their attitudes and ultimately their behaviors.