Psychological contract breach and employee innovation: A conservation of resources perspective

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Drawing on conservation of resources (COR) theory, this study examines conditions under which psychological contract breach relates to employees’ use of work‐role innovation as a means to acquire or conserve resources. Specifically, we used the organizational embeddedness dimensions of links, person–organization (P–O) fit, and sacrifices (Mitchell et al., , Academy of Management Journal, 44, 1102) to capture the kinds of resources that are likely to determine whether breach relates to more (resource acquisition) or less (resource conservation) innovation. We expected breach to relate to more innovation among employees with more links, better P–O fit, or fewer sacrifices. Using survey data from 90 university professionals and alumni in Australia, we found that links, P–O fit, and sacrifices moderated the breach–innovation relationship as hypothesized. Specifically, breach was related to more innovation after 6 months among employees with more links, better P–O fit, or fewer perceived sacrifices, as compared to those with fewer links, lower P–O fit, or greater perceived sacrifices. Implications of these findings for theory and practice are discussed.Practitioner points To promote constructive employee responses to resource loss, organizations should find ways to increase employees’ instrumental social and psychological resources. Employees’ social resources (links) can be increased through social events, mentoring programmes, or the use of role models during on‐the‐job socialization. Building employees’ psychological resources (P–O fit) starts with recruitment and selection. Realistic information about the organization's values should be provided to job candidates, so they can make informed choices about their compatibility with this value system. Binding employees to the organization with material and psychological job benefits (e.g., bonuses and interesting projects) might not encourage constructive employee responses to resource loss.