Study of Indian bank shows psychological contract breach (PCB) during restructuring has impact on stress

Abstract

PurposeRestructuring is a common strategy to increase competitiveness, but a lot of the time it is unsuccessful. The author believes this is likely to be because of “psychological contract breach” (PCB), but says the phenomenon has not been studied much. Another factor, he says, is the high level of stress caused by the restructuring. Therefore, the researcher wanted to study the impact of both the psychological contract breach and stress on employee job outcomes during restructuring.Design/methodology/approachData was collected from bank employees using a questionnaire. A total of 322 completed questionnaires were used in the analysis. There were also 30 interviews with native employees of SBI to find out their opinions of working with bank associate employees. There were 17 questions covering PCB, job stress, job involvement and organizational citizenship behaviour (OCB).FindingsThe results confirmed Hypothesis 1, Hypothesis 2 and Hypothesis 3. Therefore, the author’s research proved a positive relationship between PCB and employee stress, a significant negative relationship between employee stress and job involvement, and a significant positive relationship between job involvement and OCB. However, analysis rejected three other hypotheses. Although there was a change in stress, job involvement and OCB after the merger, it was not significant.Originality/valueThe study was a significant contribution to research because few previous studies have dealt with the impact of organizational restructuring on stress and job outcomes in India.