娀 Academy of Management Journal

2004, Vol. 47, No. 3, 350–367.

THE IMPACT OF PERSONALITY ON PSYCHOLOGICAL

CONTRACTS
USMAN RAJA
GARY JOHNS
FILOTHEOS NTALIANIS
Concordia University

This research examined the relationship between employee personality and psycho-
logical contract type, perceptions of contract breach, and feelings of contract violation.
In general, personality characteristics (extraversion, conscientiousness, neuroticism,
self-esteem, equity sensitivity, and locus of control) were related to reported contract
type. They also tended to predict perceptions of contract breach and to moderate the
relationship between those perceptions and feelings of contract violation. Both con-
tract type and feelings of violation were associated with job satisfaction, organizational
commitment, and intentions to quit.

Recent years have seen a renewal of interest in
two phenomena with histories of research in organ-
izational behavior—personality, and psychological
contracts. In this article, we examine the relation-
ship between these two phenomena to address im-
portant research omissions in both domains.
Despite renewed interest in personality, spurred
in part by convergence among researchers on the
utility of the five-factor model of personality (Gold-
berg, 1990), and despite growing evidence of asso-
ciations between personality and work attitudes
and behavior (e.g., Barrick & Mount, 1991; Judge &
Bono, 2001), the exact mechanisms by which per-
sonality affects organizational behavior have not
been well specified. This is a serious omission in
light of the fact that the failure to specify the mech-
anisms linking particular personality traits or di-
mensions to criteria was in part responsible for the
earlier demise of research on personality in the
workplace (Hough & Schneider, 1996). At the same
time, despite growing agreement among research-
ers that psychological contracts are personal and
idiosyncratic (Rousseau, 1989), research has not
systematically examined dispositional contributors
to contracts. This omission is curious, given that
such contracts are self-constructed. In what fol-
lows, we offer theoretical arguments that predict
This research was supported by grant 00-ER-0506 from
Quebec’s Fonds pour la Formation de Chercheurs et
l’Aide à la Recherche and grants 410-99-1491, 410-2003-
0630, and 410-2003-1014 from the Social Sciences and
Humanities Research Council of Canada. The first author
also received support from the International Council for
Canadian Studies under their Canadian Commonwealth
Scholarship and Fellowship Program.
350
what kinds of contracts people with certain person-
ality traits will establish, as well as the likelihood
that they will perceive contract breaches and report
feelings of violation. In addition, we consider how
contract type and violation are associated with im-
portant personal and organizational outcomes.
Psychological contracts are defined as a person’s
perceptions and expectations about the mutual ob-
ligations in an employment exchange relationship
(Rousseau, 1989). Transactional contracts are
short-term, have a purely economic or materialistic
focus, and entail limited involvement by both par-
ties. Relational contracts are long-term and broad,
as they are not restricted to purely economic ex-
change but also include terms for loyalty in ex-
change for security or growth in an organization
(Morrison & Robinson, 1997; Rousseau & McLean
Parks, 1993). Concepts that have attracted attention
in research on psychological contracts include per-
ceived breach and felt violation. According to Mor-
rison and Robinson, “Perceived breach refers to the
cognition that one’s organization has failed to meet
one or more obligations within one’s psychological
contract in a manner commensurate with one’s
contributions . . . perceived breach represents a
cognitive assessment of contract fulfillment that is
based on an employee’s perception of what each
party has promised and provided to the other”
(1997: 230). Violation, however, refers to emotional
distress and feelings of betrayal, anger, and wrong-
ful harm arising from the realization that one’s or-
ganization has not fulfilled a highly salient promise
(Morrison & Robinson, 1997; Rousseau, 1989). This
distinction clearly signifies breach as the product
of a more deliberate and cognitive search aimed at
monitoring how well one’s psychological contract
2004 Raja, Johns, and Ntalianis
is being upheld by one’s organization. Violation is,
on the other hand, a deep emotional response that
is more affective and a result of blaming one’s or-
ganization for a broken promise. Other things being
equal, a more serious breach should lead to stron-
ger feelings of violation. However, it is our conten-
tion that personality will influence the propensity
both to detect breach and to respond to breach with
feelings of violation.
PERSONALITY, CONTRACTS, AND OUTCOMES
Relating Contract Types, Perceived Breach, and
Violation to Personality
Personality might affect psychological contract
dynamics through three processes: choice, con-
strual, and enactment. Choice refers to job-seeking
behavior and is most pertinent to the type of con-
tract sought after or negotiated. The motivational
implications of personality are most relevant to
preferences for contract type. Construal refers to
perceptions of contract type, breach, and violation.
The cognitive and affective implications of person-
ality are most relevant to construal. Rousseau
(1989) has stressed the highly personal, idiosyn-
cratic, self-constructed nature of psychological
contracts. These characteristics suggest that there
are few external constraints on construal, thus al-
lowing for the influence of personality (cf. Mischel,
1968). Finally, enactment refers to the impact of
personality on organization behavior and attitudes.
Such behavior and attitudes might influence the
contract terms offered by an employer or the mod-
ification of a contract over time. We chose person-
ality variables for study and framed hypotheses
mainly on the basis of their relevance for choice
and construal. In the discussion section, we spec-
ulate about the role of enactment in the interpreta-
tion of our results.
Given our belief that personality might affect or-
ganizational behavior in part through its impact on
contracting, we chose personality variables with a
demonstrated history of relevance to behavior in
organizations. We began with the “Big Five” model
of personality (Goldberg, 1990), which has had con-
siderable impact on thinking about organizational
behavior (e.g., Barrick & Mount, 1991; Judge,
Heller, & Mount, 2002). Below, we offer specific
logic for inclusion of the Big Five variables neurot-
icism, extraversion, and conscientiousness. We
omitted from consideration the Big Five dimension
known as openness to experience in view of its
controversial structure, limited research history,
and generally weak relevance to organizational be-
havior (e.g., McCrae & Costa, 1997). Because of
351
their preference for close relationships and their
cooperative good nature, we predicted that individ-
uals high on the Big Five trait agreeableness would
report relational contracts and be less prone to ex-
periencing breach and violation. However, we were
unable to establish a reliable level of measurement
for agreeableness (␣ ⫽ .43) and thus omitted it from
our predictions and analyses.
For exploratory purposes, we were also inter-
ested in incorporating a few narrower, more spe-
cific traits. We developed a list of such traits and
eliminated those that were closely associated with
particular Big Five dimensions or with each other.
Equity sensitivity was retained in light of the prom-
issory aspect of psychological contracts and previ-
ous conjecture concerning its relevance to contract-
ing (Morrison & Robinson, 1997). Self-esteem was
incorporated because its implications for self-con-
fidence and vigilance respectively pertain to con-
tract formation and maintenance. Similarly, locus
of control was chosen because its relevance for
sensitivity to future events and vigilance respec-
tively pertain to contract formation and mainte-
nance. Narrower traits considered relevant but not
measured owing to conceptual overlap included
negative affectivity, which is highly correlated with
the Big Five neuroticism dimension (Watson &
Clark, 1997), and generalized self-efficacy, which is
highly correlated with self-esteem (e.g., Judge,
Locke, Durham, & Kluger, 1998).
Neuroticism. Neuroticism is a widely researched
personality trait from the Big Five. It is associated
with emotional instability, mistrust, anxiety, self-
pity, and lack of psychological adjustment (Gold-
berg, 1990; Judge, Higgins, Thoresen, & Barrick,
1999). Neurotics are limited in social skills and
avoid situations that demand taking control (Judge,
Locke, & Durham, 1997).
There is a negative correlation between neuroti-
cism and job satisfaction (Judge et al., 1999; Judge,
Heller, & Mount, 2002), extrinsic career success
(Judge et al., 1999), job complexity (Judge, Bono, &
Locke, 2000), and performance (Barrick & Mount,
1991) over a wide variety of jobs. High anxiety, an
important facet of neuroticism, is negatively related
to performance on complex tasks (Spector, 1982).
The characteristics associated with neuroticism
suggest that such individuals will not engage in
relationships that require long-term commitments
on their part and demand high social skills, trust in
others, and initiative. They will form psychological
contracts that are short-term and purely economic,
involving exchanges for specific aspects of perfor-
mance that do not demand high initiative and con-
fidence.
On the one hand, the low trust of neurotics in
352 Academy of Management Journal
others suggests that they would expect breach to
occur. On the other hand, neurotics are not ex-
pected to be active information seekers monitoring
how well their psychological contracts are being
maintained, because such processes can lead to the
discovery of psychologically disquieting informa-
tion. Also, being an affect-related trait, neuroticism
is more likely to influence an individual’s emo-
tional response (violation) than to influence per-
ceived breach, which is more cognitive (Morrison &
Robinson, 1997). We therefore suggest that:
Hypothesis 1a. Neurotics will tend to form
transactional contracts.
Hypothesis 1b. Neuroticism will be negatively
related to perceived breach.
Extraversion. Extroverts are highly social, talk-
ative, energetic, enthusiastic, assertive, and ambi-
tious (Costa & McCrae, 1992). They have high de-
sire for material gain, status, recognition, and
power (Costa & McCrae, 1988). The assertive com-
ponent of extraversion is associated with a desire
for increased salary and status (Cattell, 1981). Ex-
traversion is also positively related to performance
(Barrick & Mount, 1991) and job satisfaction (Judge
et al., 2002). Although extroverts actively seek eco-
nomic rewards in exchange relationships, they will
tend to form long-term psychological contracts.
The reason is that short-term, purely economic con-
tracts are very limited and restrictive. Such psycho-
logical contracts cannot offer opportunities for
gaining desired status, power, or recognition that
require central positions in social networks (Krack-
hardt, 1990). We argue that extroverts will form
relational contracts with more emphasis on mate-
rialistic terms and opportunities for gain in their
exchange relationships. Being highly assertive, en-
ergetic, ambitious, and susceptible to materialistic
influence, extroverts will be very vigilant in moni-
toring how well their contracts are being fulfilled
by their organization. Using their high social skills,
they will actively seek information to ensure that
the organization does not deny them opportunity
for gain in the short or the long term.
Hypothesis 2a. Extroverts will tend to establish
relational contracts.
Hypothesis 2b. Extraversion will be positively
related to perceived breach.
Conscientiousness. Individuals with high con-
scientiousness are methodical, dependable, and
risk averse (Goldberg, 1990). They tend to exhibit
high performance and to be satisfied with their jobs
(Barrick & Mount, 1991; Judge et al., 1999, 2002).
People rating high on this trait exhibit motivation
June
for achievement, and they are more concerned with
task accomplishment than with economic rewards
(Stewart, 1996). We argue that conscientious peo-
ple will tend to form long-term employment ex-
change relationships. They will try to choose an
environment in which they have greater opportu-
nities for achievement and success, even though
they might have to delay gratification for future
growth opportunities. Although conscientious peo-
ple will form relational contracts, they will be very
active in monitoring how well their contracts are
being maintained. Being risk averse, they will ac-
tively seek information regarding their exchange
relationships with organizations so that they do not
face any unpleasant surprises. Also, their desire for
growth and success will stimulate vigilance to
monitor their psychological contracts. We therefore
propose:
Hypothesis 3a. Employees with high conscien-
tiousness will tend to form relational contracts.
Hypothesis 3b. High conscientiousness will be
positively related to perceived breach.
Equity sensitivity. Proposed by Huseman, Hat-
field, and Miles (1987), equity sensitivity is a per-
sonality variable that explains individual differ-
ences in reactions to inequity (O’Neil & Mone,
1998). Persons high in equity sensitivity are outcome-
oriented, wanting more than others for a given level
of inputs (Sauley & Bedeian, 2000). On the other
hand, those low in equity sensitivity pay more atten-
tion to their inputs and are less sensitive to equity
issues in exchange relationships (Huseman et al.,
1987; Sauley & Bedeian, 2000). Miles, Hatfield, and
Huseman (1994) found that people high in equity
sensitivity place importance on tangible extrinsic
outcomes such as pay, status, and fringe benefits.
Employees with low equity sensitivity placed impor-
tance on intangible intrinsic outcomes such as a sense
of accomplishment, making use of one’s abilities, and
feelings of personal worth. Equity sensitivity is neg-
atively related to job satisfaction and organizational
commitment and positively related to intentions to
quit (O’Neil & Mone, 1998). Equity sensitivity is also
associated with a poor work ethic and low social
responsibility (Mudrack, Mason, & Stepanski, 1999).
In light of the above, we expect that people high
in equity sensitivity will form transactional con-
tracts. Being focused on pay, status, and material
gain, they will form contracts that provide clear
opportunity for these. Being very sensitive to eq-
uity issues, they will place less importance on re-
lationships than on extrinsic gains. As they exhibit
low social responsibility and tend to sacrifice the
work ethic to make gains (Mudrack et al., 1999),
2004 Raja, Johns, and Ntalianis 353

they will not form long-term psychological con- evaluative component of the self-concept (Rosen-
tracts that may require delay of gratification and/or berg, 1979). People high in self-esteem value them-
the exhibition of high social responsibility in their selves, exhibit confidence, and opt for occupations
organizations. Similarly, being highly concerned that match their abilities and self-perceived traits
with equity issues, they will be very vigilant in (Judge et al., 1997, 2000; Tharenou, 1979). Self-
monitoring the maintenance of their psychological esteem is positively related to job satisfaction, task
contracts. We therefore propose the following two motivation, and job performance (Erez & Judge,
hypotheses: 2001; Judge & Bono, 2001). Individuals with high
self-esteem tend to have a desire for achievement
Hypothesis 4a. People high in equity sensitivity
and are highly competitive (Brockner, 1988). Being
will tend to form transactional contracts.
strong performers and having a desire for growth,
Hypothesis 4b. Equity sensitivity will be posi- achievement, and success, they will form psycho-
tively related to perceived breach. logical contracts that promise such opportunities.
The preference for growth and achievement is un-
Locus of control. Locus of control is a variable
likely to be fulfilled through a purely economic,
reflecting how people perceive the strength of the
short-term relationship. It calls for a long-term re-
link between their own actions and the outcomes of
lationship in which economic terms are accompa-
those actions (Rotter, 1966). People with internal
nied by factors such as status and prestige being
loci of control (“internals”), as compared to those
linked to high performance. Also, as they choose
with external loci of control (“externals”), believe
jobs that match their abilities and personalities
more strongly that outcomes (such as rewards) are
(Judge et al., 2000), they will be well adjusted in
under their own control (Rotter, 1966; Spector,
their jobs, considering them to provide maximum
1982). Externals are less likely to perceive a rela-
opportunities for success. Therefore, individuals
tionship between their inputs or efforts and out-
with high self-esteem will form long-term contracts
comes. They attribute success or failure to factors
that are somewhat balanced in terms of relation-
beyond their own control, such as chance or pow-
ship and performance/rewards criteria. Their high
erful others. Internal locus of control is positively
confidence and perceptions of high self-worth will
related to affective commitment (Meyer, Stanley,
make them active and vigilant in monitoring infor-
Herscovitch, & Topolnytsky, 2002) and job satisfac-
mation pertinent to exchange relationships. In or-
tion (Judge & Bono, 2001).
der to maintain their positive self-concepts, they
Compared to internals, externals find jobs that
will exhibit high alertness to ensure that their psy-
are less well suited to them (Judge et al., 2000), are
chological contracts are being properly maintained
less satisfied and motivated, and exhibit lower job
and they are receiving what is expected from their
performance (Judge & Bono, 2001; Judge et al.,
organizations.
2000). Externals show low alertness and are not
sensitive to information related to future situations
Hypothesis 6a. People high in self-esteem will
and outcomes (Miller, Kets De Vries, & Toulouse,
tend to form relational contracts.
1982; Phares, 1976; Spector, 1982). Paying little
attention to future situations, externals will be less Hypothesis 6b. Self-esteem will be positively
concerned with long-term relationships. They will related to perceived breach.
form contracts that offer them accessible short-term
gains rather than future opportunities fraught with
uncertainty. As opposed to internals, who are bet- Contract Type and Personal and Organizational
ter adjusted in their jobs, externals will form psy- Outcomes
chological contracts that allow maximization of the
Theory provides good grounds for expecting that
short-term outcomes of their inputs. They will not
relational contracts will facilitate positive personal
vigilantly monitor their exchange environment, as
and organizational outcomes better than transac-
they believe outcomes to be under the control of
tional contracts will (Rousseau, 1995; Rousseau &
factors such as influential others or luck.
McLean Parks, 1993). Indeed, relational contracts
Hypothesis 5a. Externals will tend to form have been shown to relate positively (and transac-
transactional psychological contracts. tional contracts, negatively) to job commitment, or-
ganizational commitment, and expected job tenure
Hypothesis 5b. External locus of control will be
(Millward & Hopkins, 1998; Rousseau, 1990). How-
negatively related to perceived breach.
ever, most other evidence bearing on the differen-
Self-esteem. Self-esteem, which refers to the tial outcomes of these contract types is indirect
value one puts on the self, has been termed the (e.g., Robinson, Kraatz, & Rousseau, 1994; Shore &
354 Academy of Management Journal
Barksdale, 1998). In light of such limited but sug-
gestive evidence, we hypothesize that:
Hypothesis 7a. Relational contracts will be
negatively related to intentions to quit and pos-
itively related to job satisfaction and affective
commitment.
Hypothesis 7b. Transactional contracts will be
positively related to intentions to quit and neg-
atively related to job satisfaction and affective
commitment.
Perceived Breach, Violation, and Outcomes
Perceived breach signals an imbalance in the so-
cial exchange process in which an employee does
not receive expected outcomes from an organiza-
tion for fulfilling his or her obligations (Morrison &
Robinson, 1997). To address this imbalance, em-
ployees have the options of altering either their
own or the organization’s obligations (Robinson et
al., 1994). Available theory and some empirical
evidence justify a positive relationship between
perceived breach and undesirable outcomes such
as intentions to quit and actual turnover (Bunder-
son, 2001; Robinson, 1996). Similarly, literature
supports the idea of a negative relationship be-
tween perceived breach and desirable outcomes
such as job satisfaction, organizational commit-
ment, and performance (Bunderson, 2001; Robin-
son & Morrison, 2000).
Hypothesis 8. Perceived breach will lead to
higher intentions to quit and lower job satisfac-
tion and affective commitment.
Violation describes the feelings of anger, distress,
injustice, and mistrust arising from the realization
that one’s organization has failed to fulfill its obli-
gations (Morrison & Robinson, 1997; Rousseau,
1989). Whether perceived breach is converted into
feelings of violation depends on the size and sa-
lience of the promise or expectation the organiza-
tion failed to fulfill (Morrison & Robinson, 1997).
Violation therefore is one of the mechanisms
through which perceived breach is translated into
outcomes such as intentions to quit, low job satis-
faction, and low organizational commitment. Em-
ployees who realize that their organization has
failed to provide them something that they not only
deserved, but that is also important to them, expe-
rience feelings of anger, mistrust, and betrayal.
These feelings in turn make the employees dissat-
isfied, less committed to the organization, and
likely to quit.
June
Hypothesis 9a. Perceived breach will be posi-
tively related to violation.
Hypothesis 9b. Violation will mediate the rela-
tionship between perceived breach and inten-
tions to quit, job satisfaction, and affective
commitment.
Robinson and Morrison (2000) showed that attri-
butions and fairness perceptions interacted with
perceived breach to predict violation. We antici-
pated that personality would serve a similar mod-
erator function. Personality explains how people
differ in their social interactions, reactions to per-
ceived injustice, and attachment of importance to
various extrinsic and intrinsic outcomes. Conscien-
tious people are more concerned with task accom-
plishment than with rewards (Stewart, 1996). They
are willing to forego immediate extrinsic rewards
for future success (Goldberg, 1990). These people
are not expected to readily convert the realization
of every unmet promise into feelings of violation.
In order to maintain healthy relationships with
their employers and have optimal opportunities for
growth and achievement, they will tend to focus
more on their inputs in order to give their best.
People with high self-esteem tend to be good per-
formers and to choose professions that best fit their
abilities and strengths (Judge et al., 1997, 2000;
Tharenou, 1979). Being well adjusted, they will
trust their organizations and not show emotional
reactions to every breach they detect. Similarly,
externals are less likely to feel violated because
they attribute success and failure more to factors
such as chance (Spector, 1982). They will neither
be too excited over a success nor be too surprised if
some of their expectations are not met. Extroverts
will not exhibit very strong emotional reactions to
any detected breaches to conserve their relation-
ships with their employers and maintain social
reputation.
People high in neuroticism are anxious, lack
trust, and perceive failures in life (Judge et al.,
1999). They are expected to show stronger affective
reactions to a perceived breach, once detected, than
those who are low in neuroticism. Skarlicki, Folger,
and Tesluk’s (1999) finding that negative affectiv-
ity, which is very closely related to neuroticism
(Watson & Clark, 1997), moderated the relationship
between perceptions of fairness and retaliatory be-
haviors extends some support to this idea. Simi-
larly, people high in equity sensitivity want more
outcomes for a given level of inputs than do refer-
ent others (Huseman et al., 1987). They also view
the world as unfair, and a small breach can make
them feel that they have been treated unjustly. Be-
ing highly sensitive to equity issues, and focusing
2004 Raja, Johns, and Ntalianis
more on outcomes than on inputs, people high in
equity sensitivity are more likely to experience
feelings of violation than are those who are less
concerned with outcomes and who focus more on
their own inputs (such as internals). We therefore
suggest that personality will interact with breach in
predicting violation.
Hypothesis 10. Personality will moderate the
positive relationship between breach and vio-
lation in such a way that the relationship will
be stronger for people high in equity sensitivity
and neuroticism and weaker for persons high
in extraversion, conscientiousness, external lo-
cus of control, and self-esteem.
METHODS
Sample and Procedure
The sample consisted of employees working in
five well-established private and public sector or-
ganizations located in Pakistan. The research sites
included a branch of a private sector bank, a fertil-
izer processing and production company, an engi-
neering firm, a research lab of a semiautonomous
government research organization, and the head
office of a large multinational consumer products
organization. Research access was gained through
personal and professional contacts of the first au-
thor who made these organizational units available
for sampling.
Surveys were distributed to employees working
in secretarial, clerical, or higher-level positions
through designated, trained people in their respec-
tive organizational units. A cover letter explaining
the purpose and scope of the study assured respon-
dents of strict anonymity and that participation in
the study was voluntary. Of the 300 surveys dis-
tributed, 45 went to the bank (responses, 31; re-
sponse rate, 68%), 100 to the fertilizer company
(responses, 66; response rate, 66%), 45 to the engi-
neering company (responses, 30; response rate,
66%), 30 to the research lab (responses, 21; re-
sponse rate, 70%), and 80 went to the head office of
the multinational company (responses, 49; re-
sponse rate, 61%). Overall, from the 300 question-
naires distributed, we received 197 usable re-
sponses, representing a response rate of 66 percent.
The respondents had a mean age of 38.81 years
(s.d. ⫽ 9.86), and 94 percent were male. Mean
tenure with the organization was 12.25 years (s.d.
⫽ 9.50). Education levels ranged from high school
completion to receiving a Ph.D., with 10.2 percent
of the respondents having a high school certificate
and the remaining 89.8 percent having college or
university education. Although respondents occu-
355
pied diverse occupational levels, ranging from cler-
ical and secretarial staff to upper management,
most of the sample (76%) occupied junior and
middle-level managerial, professional, and techni-
cal positions. To partially check for sampling bias,
we compared the mean age of our respondents with
the corresponding organizational means for the fer-
tilizer (37.1 vs. 38.7, t ⫽ 1.26, n.s.) and multina-
tional (37.4 vs. 39.5, t ⫽ 1.16, n.s.) companies. A
close correspondence was observed in both cases.
Measures
All measures were obtained from a “self-report”
questionnaire. Unless otherwise noted, a response
scale anchored by 1, “strongly disagree,” and 5,
“strongly agree,” was used, and high variable
scores denote high levels of the construct in ques-
tion. In Pakistan, English is taught as a major, com-
pulsory subject beginning in grade school and is
the medium of instruction for all university educa-
tion. Except for entry-level jobs in which almost no
education is required, every person employed in
Pakistan can at least read and understand English.
Thus, given the sampling frame, we did not have to
translate the questionnaire into the native lan-
guage.
Neuroticism, extraversion, and conscientious-
ness. Neuroticism, extraversion, and conscien-
tiousness were measured with 36 items (12 items
each) taken from the NEO Five-Factor Inventory
(NEO-FFI; Costa & McCrae, 1992). The NEO-FFI
was derived from the revised NEO Personality In-
ventory (Costa & McCrae, 1992) and is an exten-
sively validated and used measure of the Big Five
personality dimensions (Costa & McCrae, 1988).
Examples of items include “I often feel inferior to
others,” for neuroticism; “I like to have a lot of
people around me,” for extraversion; and “I am
pretty good about pacing myself so as to get things
done on time,” for conscientiousness. Alpha reli-
abilities were .72 for neuroticism, .62 for extraver-
sion, and .77 for conscientiousness.
Equity sensitivity. Equity sensitivity was mea-
sured with the 16-item Equity Preference Question-
naire (EPQ) developed by Sauley and Bedeian
(2000). They presented construct validity evidence
and argued that their measure does not have prob-
lems endemic to earlier measures (e.g., see Miles et
al., 1994). Items such as “I prefer to do as little as
possible at work while getting as much as I can
from my employer” tap high equity sensitivity, or
an orientation toward outcomes. Items such as “I
feel obligated to do more than I am paid to do at
work” reflect low equity sensitivity, or orientation
toward inputs. Scores on items reflecting low eq-
356 Academy of Management Journal
uity sensitivity were reverse-coded so that a high
score on the scale reflected high equity sensitivity.
The reliability of the EPQ measure was .75.
Locus of control. We assessed locus of control
with Spector’s (1988) Work Locus of Control Scale
(WLCS). The WLCS is a 16-item measure designed
to capture employees’ beliefs about their control
over their organizational outcomes (Spector, 1988).
Eight items each are worded to reflect external ver-
sus internal locus of control. An example of an
externally worded item is “It takes a lot of luck to
be an outstanding employee on most jobs.” Con-
versely, “On most jobs, people can pretty much
accomplish whatever they set out to accomplish” is
an example of an internally worded item. Scores for
internally worded items were reversed so that a
high score reflected high external locus of control.
The WLCS demonstrated an internal consistency
reliability of .63.
Self-esteem. Self-esteem was measured with the
eight-item Rosenberg Global Self-Esteem Scale
(Rosenberg, 1965), an instrument that captures
overall perceptions of self-appreciation and self-
worth. “I feel that I’m a person of worth, at least on
an equal plane with others” is a sample item. The
internal consistency reliability for this scale was
.70.
Given that we measured 76 personality items
with 197 respondents, we assessed the discrimi-
nant validity of the six personality traits following
procedures recommended by Anderson and Gerb-
ing (1998). This assessment involved 15 confirma-
tory analyses assessing the discriminant validity of
each pair of traits in which a constrained model (a
single-factor model or a two-factor model with a
perfect correlation of one) was compared with an
unrestricted two-factor model. Discriminant valid-
ity was achieved for all personality variables, as the
chi-squares in all the comparisons were signifi-
cantly lower (p ⬍ .001) for the unconstrained
models.
Psychological contract. The reported psycholog-
ical contract was initially measured with the 31-
item Psychological Contract Scale developed by
Millward and Hopkins (1998). Two dimensions,
comprising relational (11 items) and transactional
(20 items) contracts, underpin the instrument. Prin-
cipal axis factor analysis forcing two factors did not
exactly replicate the Millward and Hopkins (1998)
solution. Five items did not “load” on either factor.
In addition, a number of Millward and Hopkins’s
transactional items (items that their own focus
group had designated as relational) cross-loaded or
loaded negatively onto our relational factor. We
considered this instability unhelpful for future re-
search and thus trimmed the measure so as to retain
June
only the items that had replicated loading patterns
in both studies. In doing so, we retained 9 of their
11 relational items and 9 of their 20 transactional
items. These items were among those also retained
in a factor analysis of contract terms by Irving,
Cawsey, and Cruikshank (2002). The shortened 18-
item scale revealed a clear two-factor solution that
accounted for 36.4 percent of the variance (see the
Appendix), with coefficient alphas of .79 for rela-
tional contract and .72 for transactional contract.
To examine the validity of our shortened scale, we
administered both it and the contract items (10
relational, 8 transactional) from Rousseau’s (2000)
Psychological Contract Inventory to an indepen-
dent sample of 103 employees attending university-
sponsored employee development programs in Pa-
kistan. Our derived measures of transactional and
relational contracts correlated .71 and .59 with the
respective Rousseau measures, thus providing evi-
dence for convergent validity.
Perceived breach. A five-item measure devel-
oped by Robinson and Morrison (2000) was used to
assess perceived contract breach. It captured em-
ployees’ perceptions of how well their employing
organizations had fulfilled their obligations to
them. Robinson and Morrison (2000) argued that
this measure was consistent with current psycho-
logical contracts literature in which breach is
viewed as an overall estimation of employer-kept
promises (Robinson, 1996; Rousseau, 1989). Items
for perceived breach included “My employer has
broken many of its promises to me even though I’ve
upheld my side of the deal.” The perceived con-
tract breach scale demonstrated an internal consis-
tency reliability of .79.
Feelings of violation. Feelings of violation were
assessed with a four-item measure developed by
Robinson and Morrison (2000). While breach has a
cognitive focus, violation is meant to capture affec-
tive reactions in the context of a contract. Respon-
dents were asked to indicate how much they agreed
with statements such as “I feel extremely frustrated
by how I have been treated by my organization.”
Coefficient alpha for feelings of violation was .81.
The high correlation between perceived breach
and violation (r ⫽ .72) and the relative newness of
the scales warranted caution in using them. We
therefore performed a confirmatory factor analysis
to see if perceived breach and violation were dis-
tinct constructs. Results revealed that a two-factor
model (␹2 ⫽ 68.43, df ⫽ 26, CFI ⫽ .94, GFI ⫽ .93,
AGFI ⫽ .88, RMSEA ⫽ .09) fitted the data slightly
better than a single-factor model (␹2 ⫽ 76.20, df ⫽
27, CFI ⫽ .92, GFI ⫽ .92, AGFI ⫽ .86, RMSEA ⫽
.10), and the difference in chi-squares was signifi-
cant (⌬␹2 ⫽ 7.77, df ⫽ 1, p ⬍ .01), Similar tests
2004 Raja, Johns, and Ntalianis 357

supported the discriminability of the contract types
from breach and violation.
Outcomes. Intentions to leave the organization
were measured with a three-item scale extracted
from the Michigan Organizational Assessment
Questionnaire (Cammann, Fichman, Jenkins, &
Klesh, 1982). Items included “I will probably look
for a new job in the next year.” The coefficient
alpha for the scale was .83. Affective commitment
was measured with the eight-item scale developed
by Allen and Meyer (1990). Items included “I enjoy
discussing my organization with people outside it.”
For this scale, the coefficient alpha was .82. Job
satisfaction was measured with Hoppock’s (1935)
scale, which comprises four multiple-choice ques-
tions, each of which offers seven answer options.
For example, for the question “Which one of the
following shows how much of the time you feel
satisfied with your job?” response options range
from 1, “never,” to 7, “all the time.” The reliability
coefficient was .75. Confirmatory factor analyses
revealed that a three-factor model best fitted the
outcome data (␹2 ⫽ 152.71, df ⫽ 87, CFI ⫽ .94,
GFI ⫽ .90, AGFI ⫽ .87, RMSEA ⫽ .06), providing
evidence for discriminant validity.
Control variables. Age, tenure with the em-
ployer, occupational level, and organization were
used as control variables. Age and tenure were
included because contract dynamics may change
over the course of an individual’s career. Occupa-
tional level was measured by reported job title and
job grade. We coded jobs in such a way that higher
numbers corresponded to higher occupational lev-
els. Thus, the lowest number (1) corresponded to
the clerical and secretarial level, and the highest
number (5) was assigned to upper management.
One-way analyses of variance were conducted to
compare occupational levels on breach, violation,
relational contract, transactional contract, job satis-
faction, affective commitment, and intentions to
quit. These tests revealed that there were differ-
ences in contract type (F ⫽ 3.26, p ⬍ .01) and
violation (F ⫽ 4.79, p ⬍ .001) across occupational
levels, with higher levels reporting more relational
contracts and less violation. Thus, we controlled
for occupational level in regression analyses. Also,
one-way analyses of variance were performed on
these same variables across organizations. Signifi-
cant differences were observed for affective com-
mitment (F ⫽ 6.77, p ⬍ .001) and job satisfaction
(F ⫽ 5.07, p ⬍ .001), and post hoc tests indicated
that they were due to the tendency for the bank
employees to be somewhat more committed and
satisfied than the balance of the sample. To con-
serve degrees of freedom, we formed a dummy-
coded variable (1 ⫽ “bank,” 0 ⫽ “other organiza-
tion”) to serve as a control variable.
RESULTS
Table 1 presents descriptive statistics and corre-
lations among the variables. All correlations above
.14 in magnitude are significant at p ⬍ .05, and
those above .17 are significant at p ⬍ .01. The mean

TABLE 1
Means, Standard Deviations, Correlations, and Reliabilitiesa, b

Variable Mean s.d. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

1. Age 38.81 9.86

2. Tenure 12.25 9.50 .80
3. Organization type 0.16 0.37 .26 .51
4. Occupational level 3.31 0.82 .31 .14 ⫺.04
5. Neuroticism 2.65 0.52 .13 .14 .13 ⫺.02 (.72)
6. Extraversion 3.47 0.42 ⫺.07 .01 .15 ⫺.04 ⫺.33 (.62)
7. Conscientiousness 3.98 0.46 .09 .10 .16 .06 ⫺.37 .36 (.77)
8. Equity sensitivity 2.25 0.45 ⫺.08 .03 ⫺.07 ⫺.29 .36 ⫺.27 ⫺.47 (.75)
9. Locus of control 2.73 0.37 .07 .10 .01 ⫺.16 .27 ⫺.27 ⫺.18 .41 (.63)
10. Self-esteem 3.93 0.48 .00 ⫺.04 .03 .21 ⫺.49 .35 .45 ⫺.53 ⫺.36 (.70)
11. Relational contracts 3.74 0.52 .29 .35 .24 .16 ⫺.26 .20 .40 ⫺.36 ⫺.31 .32 (.79)
12. Transactional 2.61 0.53 .08 .12 .07 ⫺.11 .25 ⫺.25 ⫺.18 .48 .31 ⫺.35 ⫺.15 (.72)
contracts
13. Perceived breach 2.63 0.74 ⫺.10 ⫺.11 ⫺.03 ⫺.11 .21 ⫺.13 ⫺.22 .31 .38 ⫺.25 ⫺.45 .22 (.79)
14. Violation 2.22 0.77 ⫺.07 ⫺.08 ⫺.08 ⫺.21 .20 ⫺.08 ⫺.18 .39 .29 ⫺.27 ⫺.45 .42 .72 (.81)
15. Intentions to quit 2.46 0.92 ⫺.28 ⫺.31 ⫺.17 ⫺.08 .11 ⫺.05 ⫺.17 .26 .17 ⫺.12 ⫺.57 .26 .48 .62 (.83)
16. Affective commitment 3.45 0.63 .38 .42 .35 .15 ⫺.13 .18 .32 ⫺.43 ⫺.20 .25 .65 ⫺.37 ⫺.49 ⫺.55 ⫺.66 (.82)
17. Job satisfaction 5.33 0.85 .38 .48 .31 .05 ⫺.16 .17 .36 ⫺.25 ⫺.17 .29 .57 ⫺.18 ⫺.30 ⫺.33 ⫺.49 .67 (.75)

a
n ⫽ 197; alpha reliabilities are given in parentheses. For organization type, 1, “bank”; 0, “other organization.” Occupational level
ranges from 1, “clerical and secretarial,” to 5, “upper management.”
b
For correlations greater than or equal to .14, p ⬍ .05; for correlations greater than or equal to .17, p ⬍ .01.
358 Academy of Management Journal
for transactional contract type was 2.61, and that
for relational contract was 3.74. The correlation
between the two contract types was ⫺.15. The
mean for perceived breach was 2.63 (s.d. ⫽ 0.74)
and for violation it was 2.22 (s.d. ⫽ 0.77). These
values are consistent with research by Robinson
and Morrison (2000), who reported means of 2.63
(s.d. ⫽ 0.95) for perceived breach and of 2.05 (s.d.
⫽ 0.95) for feelings of violation in a sample of
recent U.S. MBA graduates. Robinson and Morri-
son (2000) reported a correlation of .68 between
perceived breach and violation, and in the current
study this value was .72.
The bivariate associations shown in the correla-
tion matrix indicate provisional support for all
“main effect” hypotheses dealing with personality
and contract type, contract type and outcomes,
breach and outcomes, and breach and violation.
However, several hypotheses concerning personal-
ity and breach were not supported: 1b, 2b, 3b, 5b,
and 6b.
Regression Analyses
We performed several hierarchical regression
analyses to formally test the hypotheses. In all the
regressions, age, tenure, occupational level, and or-
ganization type were entered as control variables in
the first step. Because this exploratory study in-
cluded a range of broad and narrow personality
traits, a legitimate question arose as to how to an-
alyze the data. In most cases, we conducted sepa-
rate regression analyses for the broader Big Five
personality traits of neuroticism, extraversion, and
conscientiousness and the more specific, focused
traits of equity sensitivity, locus of control, and
self-esteem. This analytic technique respected the
basic taxonomic level of the personality variables
(Hough & Schneider, 1996), and it was also consis-
tent with their typical treatment in the literature.
For example, the Big Five variables or a subset of
them are frequently analyzed simultaneously,
while the same has applied to the more focused
variables under consideration here (e.g., Sauley &
Bedeian, 2000). Also, separate analyses corre-
sponded more closely to the theoretical thinking
that guided the development of the specific hy-
potheses. That is, the hypotheses were guided by
research devoted to explicating the nature of the
individual traits rather than possible higher-order
amalgamations of them (cf. Judge, Bono, Ilies, &
Gerhardt, 2002). For instance, our treatment of lo-
cus of control owes at least as much to its implica-
tions for environmental scanning and information
processing as it does to its possible higher-order
self-evaluative properties, such as core self-evalua-
June
tions (Erez & Judge, 2001; Judge & Bono, 2001).
Nevertheless, we later report three analyses that
assess the simultaneous impact of the broader
and narrower traits thought to represent core self-
evaluations.
Relational contracts. The hypotheses predict
that extraversion, conscientiousness, and self-
esteem will be positively related to relational con-
tracts. To test these predictions, we regressed con-
tract type on the Big Five traits and then on the
narrower traits (see Table 2). Conscientiousness
(␤ ⫽ .27, p ⬍ .001) was a significant predictor of
relational contract type, supporting Hypothesis 3a.
However, extraversion was not related to relational
contract type, disconfirming Hypothesis 2a. For the
narrow traits, a significant positive relationship be-
tween self-esteem (␤ ⫽ .15, p ⬍ .05) and relational
contracts confirmed Hypothesis 6a. Though not hy-
pothesized, a negative relationship with relational
contracts was found for neuroticism (␤ ⫽ ⫺ .20, p ⬍
.007), external locus of control (␤ ⫽ ⫺.21, p ⬍ .003),
and equity sensitivity (␤ ⫽ ⫺.20, p ⬍ .01).
Transactional contracts. The hypotheses predict
that neuroticism, equity sensitivity, and external
locus of control will be positively related to trans-
actional contracts. As shown in Table 2, neuroti-
cism (␤ ⫽ .15, p ⬍ .06) was related (with marginal
significance) to transactional contracts, supporting
Hypothesis 1a. Of the narrower traits, equity sensi-
tivity (␤ ⫽ .37, p ⬍ .001) showed a significant,
positive association with transactional contracts,
but locus of control did not. These findings support
Hypothesis 4a but fail to support Hypothesis 5a.
Though not hypothesized, a negative relationship
emerged for extraversion and transactional con-
tracts (␤ ⫽ ⫺ .18, p ⬍ .01)
Perceived breach. The hypotheses predict that
all six personality variables will be associated with
perceptions of breach. Results presented in Table 2
show that of the Big Five variables, neuroticism
(marginally, at ␤ ⫽ .14, p ⬍ .08) and conscientious-
ness (␤ ⫽ ⫺.17, p ⬍ .04) were related to perceived
breach, but in directions contrary to those pre-
dicted in Hypotheses 1b and 3b. Extraversion was
not significantly related to perceived breach, and
hence no support was found for Hypothesis 2b.
Among the narrow traits, external locus of control
(␤ ⫽ .34, p ⬍ .001) was a significant predictor of
perceived breach but in a direction opposite to that
predicted in Hypothesis 5b. No significant relation-
ship was found for either equity sensitivity or self-
esteem to support the predictions in Hypotheses 4b
and 6b.
Three of the traits we studied, neuroticism, locus
of control, and self-esteem, have been incorporated
in the higher-order construct core self-evaluations
2004 Raja, Johns, and Ntalianis 359

TABLE 2
Results of Regression Analyses for Transactional and Relational Contracts, Breach, and Violationa

Relational Transactional Breach Violation

Predictors ␤ R2 ⌬R2 ␤ R2 ⌬R2 ␤ R2 ⌬R2 ␤ R2 ⌬R2

Big Five personality traits

Step 1
Control variables .15 .03 .02 .04
Step 2
Neuroticism ⫺.20** .15† .14† .18*
Extraversion .01 ⫺.18** ⫺.02 .03
Conscientiousness .27*** .30 .15*** ⫺.07 .12 .09*** ⫺.17* .09 .07** ⫺.12 .10 .06**
Narrow traits
Step 1
Control variables .15 .03 .02 .04
Step 2
Equity sensitivity ⫺.20** .37*** .12 .25**
Locus of control ⫺.21** .09 .34*** .17*
Self-esteem .15* .32 .17*** ⫺.13 .25 .22*** ⫺.07 .20 .18*** ⫺.05 .17 .13***
Perceived breach
Step 1
Control variables .04
Step 2
Perceived breach .70*** .52 .48***

a
n ⫽ 197; control variables were age, tenure, organization, and occupational level.
†
p ⬍ .10
* p ⬍ .05
** p ⬍ .01
*** p ⬍ .001

(Erez & Judge, 2001; Judge & Bono, 2001). In order
to address the concerns of one reviewer about pos-
sible overlap among these traits, we regressed the
two contract types and breach on the three traits
simultaneously. For relational contracts and per-
ceived breach, all results were similar in direction,
magnitude, and significance to those reported ear-
lier. For transactional contracts, neuroticism was
no longer a significant predictor, as expected from
Hypothesis 1a. However, in this supplementary
analysis external locus of control was positively
related to transactional contracts (␤ ⫽ .16, p ⬍ .03),
providing support for Hypothesis 5a.
Violation. Violation was regressed on breach and
the control variables. Results presented in Table 2
show that breach significantly predicted violation
(␤ ⫽ .70, p ⬍ .001), lending support to Hypothesis 9a.
Outcomes. We performed regression analyses to
test contract type, perceived breach, and violation
as predictors of the outcome variables intentions to
quit, affective commitment, and job satisfaction.
Regressing each of the three outcome variables on
the two contract types simultaneously and on per-
ceived breach and violation resulted in nine regres-
sion equations. Results are presented in the upper
portion of Table 3.
Relational contracts were negatively related to
intentions to quit (␤ ⫽ ⫺.53, p ⬍ .001) and posi-
tively related to affective commitment (␤ ⫽ .49, p ⬍
.001) and job satisfaction (␤ ⫽ .43, p ⬍ .001). Trans-
actional contracts were positively related to inten-
tions to quit (␤ ⫽ .18, p ⬍ .003) and negatively
related to affective commitment (␤ ⫽ ⫺.32, p ⬍
.001) and job satisfaction (␤ ⫽ ⫺.19, p ⬍ .001).
These results provide support for Hypotheses 7a
and 7b. As predicted in Hypothesis 8, perceived
breach was significantly related to intentions to
quit (␤ ⫽ .44, p ⬍ .001), affective commitment (␤ ⫽
⫺.45, p ⬍ .001), and job satisfaction (␤ ⫽ ⫺.27, p ⬍
.001). Similarly, violation was a significant predic-
tor of intentions to quit (␤ ⫽ .60, p ⬍ .001), affective
commitment (␤ ⫽ ⫺ .53, p ⬍ .001), and job satis-
faction (␤ ⫽ ⫺.35, p ⬍ .001).
Moderator and mediator analyses. Moderated
regression analysis was used to examine the inter-
active effects of breach and personality traits on
violation. Controlling for extent of breach, this test
examined the propensity of those with particular
personality traits to react more strongly in terms of
violation. First, control variables were entered into
the model. In the second step, we entered person-
ality variables along with breach to predict viola-
tion. Then, in the last step, the interaction terms
between breach and personality were entered.
360 Academy of Management Journal June

TABLE 3
Results of Regression Analyses for Outcomesa

Intentions to Quit Affective Commitment Job Satisfaction

Predictors ␤ R2 ⌬R2 ␤ R2 ⌬R2 ␤ R2 ⌬R2

Main effects: Contract type

Step 1
Control variables .11 .23 .23

Step 2
Relational ⫺.53*** .49*** .43***
Transactional .18*** .41 .30*** ⫺.32*** .59 .36*** ⫺.19*** .45 .22***

Main effects: Perceived

breach

Step 1
Control variables .11 .23 .23

Step 2
Perceived breach .44*** .30 .19*** ⫺.45*** .43 .20*** ⫺.27*** .30 .07***

Mediation: Violation

Step 1
Control variables .11 .23 .23

Step 2
Violation .60*** .46 .35*** ⫺.53*** .50 .27*** ⫺.35*** .35 .12***

Step 3
Perceived breach .04 .46 .001 ⫺.15* .51 .01* ⫺.05 .35 .001

Main effects: Personality

Step 1
Control variables .11 .23 .23

Step 2
Six personality traits .20 .09** .38 .15*** .37 .14***

Mediation: Contracts

Step 1
Control variables .11 .23 .23

Step 2
Contract types .41 .30*** .59 .36*** .45 .22***

Step 3
Six personality traits .44 .02 .61 .02 .48 .03

a
n ⫽ 197; control variables are age, tenure, organization type, and occupational level.
* p ⬍ .05
** p ⬍ .01
*** p ⬍ .001

Altogether, two regression equations (involving
the two sets of personality traits) yielded two sig-
nificant (one marginally so) interactions. The re-
sults, presented in Table 4, show that interaction
terms for equity sensitivity (␤ ⫽ .77, p ⬍ .07) and
external locus of control (␤ ⫽ ⫺1.34, p ⬍ .009) had
effects on violation indicating that perceived
breach had a stronger, positive relationship for
higher values of equity sensitivity and lower values
of external locus of control. In other words, people
2004 Raja, Johns, and Ntalianis 361

who were sensitive to equity issues were prone to TABLE 4

convert breach into feelings of violation, as were Results of Moderator and Mediator Regression
those who were more internal. These results lend Analyses for Violationa
partial support to Hypothesis 10, which predicts
Violation
significant interactions for all personality variables.
Hypothesis 9b states that violation will mediate
Predictors ␤ R2 ⌬R2
the relationship between breach and the three out-
comes. Results of regressions shown in Tables 2 Moderator analyses
and 3 reveal breach as a significant predictor of
violation as well as of the three outcome variables. Big Five traits
Step 1
In order to check for the mediation effects of viola- Control variables .04
tion, we regressed the three outcome variables on
breach and violation together. As shown in the Step 2
lower portion of Table 3, with violation in the Neuroticism 0.08
Extraversion 0.05
equation, considerable reduction in the effect size Conscientiousness ⫺0.01
of perceived breach was observed for intentions to Perceived breach 0.69*** .53 .49***
quit (from ␤ ⫽ .44, p ⬍ .001 to ␤ ⫽ .04, p ⬍ .65),
affective commitment (from ␤ ⫽ ⫺.45, p ⬍ .001 to Step 3
Breach ⫻ neuroticism 0.38
␤ ⫽ ⫺.15, p ⬍ .04), and job satisfaction (from ␤ ⫽ Breach ⫻ extraversion ⫺0.10
⫺.27, p ⬍ .001 to ␤ ⫽ ⫺.05, p ⬍ .55). These results Breach ⫻ conscientiousness 0.17 .54 .01
confirm Hypothesis 9b, indicating that the negative
outcomes of breach are substantially a function of Narrow traits
Step 1
the degree of felt violation. Control variables .04
We decided to perform two more sets of analyses
to test for additional mediation effects. One analy- Step 2
sis was conducted to assess whether contract type Equity sensitivity 0.17**
Locus of control ⫺0.06
mediated the relationship between personality and Self-esteem 0.00
the outcomes, and the other was to test whether Perceived breach 0.68*** .55 .50***
perceived breach mediated the relationship be-
tween personality and violation. In these tests, we Step 3
Breach ⫻ equity sensitivity 0.77†
employed all six personality variables as a block. Breach ⫻ locus of control ⫺1.34**
As shown in the lower portion of Table 3, with Breach ⫻ self-esteem ⫺0.13 .57 .02*
contract type controlled, the variance explained by
personality was reduced from .09 (F ⫽ 3.24, p ⬍ Mediator analyses
.05) to .02 (F ⫽ 1.18, n.s.) for intentions to quit;
from .15 (F ⫽ 7.27, p ⬍ .05) to .02 (F ⫽ 1.11, n.s.) for Main effects: Personality
affective commitment; and from .14 (F ⫽ 6.43, p ⬍ Step 1
Control variables .04
.05) to .03 (F ⫽ 1.56, n.s.) for job satisfaction. The
reduced variance supported the mediating role of Step 2:
contract type in the personality-outcome relation- Six personality traits .18 .14***
ship. Similarly, results in the lower portion of Ta-
ble 4 show that, with perceived breach controlled, Mediation: Perceived breach
the variance in violation explained by personality
Step 1
decreased from .14 (F ⫽ 5.10, p ⬍ .001) to .03 (F ⫽ Control variables .04
1.74, n.s.), again providing evidence for mediation.
Step 2
Perceived breach 0.70*** .53 .48***
Summary of Results
Step 3
To summarize our results, Hypotheses 1a, 4a, Six personality traits .55 .03
and 5a respectively predict a positive relationship
between transactional contracts and neuroticism,
a
n ⫽ 197; control variables are age, tenure, organization type,
and occupational level.
equity sensitivity, and external locus of control. †
p ⬍ .10
Although Hypotheses 1a and 4a were confirmed, * p ⬍ .05
we found no support for Hypothesis 5a, as locus of ** p ⬍ .01
control was not related to reports of a transactional *** p ⬍ .001
contract. Hypotheses 2a, 3a, and 6a respectively
362 Academy of Management Journal
predict a positive relationship between relational
contracts and extraversion, conscientiousness, and
self-esteem. Results confirmed Hypotheses 3a and
6a but failed to support the predicted association
between extraversion and relational contracts.
Hypotheses 1b, 2b, 3b, 4b, 5b, and 6b predict
relationships between personality traits and per-
ceived breach. No relationship existed between
perceived breach and extraversion, equity sensitiv-
ity, and self-esteem. Thus, Hypotheses 2b, 4b, and
6b were not supported. Although neuroticism, con-
scientiousness, and locus of control were signifi-
cantly related to perceived breach (neuroticism was
marginally so), the directions were opposite to
those predicted in Hypotheses 1b, 3b, and 5b. Un-
expectedly, individuals with high neuroticism, low
conscientiousness, and high external locus of con-
trol were the most likely to perceive breach.
Hypothesis 7a proposes relationships between
relational contracts and the outcomes. This hypoth-
esis was supported in all respects, as relational
contracts were negatively related to intentions to
quit and positively related to job satisfaction and
affective commitment. Similarly, full support was
observed for Hypothesis 7b, which predicts that
transactional contracts will be positively related to
intentions to quit and negatively related to job sat-
isfaction and affective commitment.
Breach was positively related to feelings of vio-
lation and intentions to quit and negatively related
to satisfaction and commitment, thus supporting
Hypotheses 8 and 9a. Violation mediated the rela-
tionship between perceived breach and all out-
comes, supporting Hypothesis 9b. Hypothesis 10
proposes that all six personality traits will moder-
ate the relationship between perceived breach and
felt violation. It was partially supported, in that
moderator effects in the predicted direction were
found for equity sensitivity and locus of control.
DISCUSSION
In general, we found reasonably good support for
many of the hypotheses. In particular, four of the
six predictions concerning personality and contract
type were confirmed, with “equity sensitives” and
neurotics reporting transactional contracts, while
people with high conscientiousness and self-
esteem reported relational contracts. Although no
support was found for the prediction that extro-
verts would form relational contracts, extraversion
was negatively associated with transactional con-
tract terms. In addition, consistent support was ob-
tained for the favorable impact of a relational con-
tract on job satisfaction, affective commitment, and
intentions to quit and the unfavorable impact of a
June
transactional contract and breach of contract on
these same outcomes. Some support was found for
the prediction that personality would moderate the
translation of breach into violation—as predicted,
equity sensitives were more inclined, and externals
were less inclined, to respond to breach with feel-
ings of violation.
The data did not bear out our hypotheses con-
cerning the personality predictors of perceived
breach. In particular, extraversion, equity sensitiv-
ity, and self-esteem were unrelated to breach. More
worrisome, neuroticism was positively related to
breach (at p ⬍ .08), as was external locus of control,
while conscientiousness was negatively related to
breach, all directionally counter to expectations.
The hypothesized relationships were predicated on
Morrison and Robinson’s (1997) portrayal of breach
as an essentially cognitive estimation. Thus, our
predictions were based on the implications of the
various personality dimensions for vigilance and
information processing. If breach is a “hotter” con-
struct than the cool calculation Morrison and Rob-
inson described, our findings make sense, on the
basis of the more emotive implications of the stud-
ied traits. For instance, neurotic personalities often
lack trust, and such individuals might be inclined
to see breach more easily than the less neurotic.
There are, however, two other plausible reasons
for our results for breach. First, it is possible that
breach and violation are more easily separable con-
cepts for employees new to their jobs (cf. Rousseau,
2001) than for our sample, whose members aver-
aged over 12 years of tenure. New employees are
more likely have explicitly reasoned contracts
based on fresh pre-employment expectations and
are more likely to respond to breach queries as if
they were filling out a checklist. On the other hand,
when seasoned employees are queried about
breach, they may aggregate instances over consid-
erable time, on the basis of the salience of these
instances, which is surely a function of felt viola-
tion. In this case, the personality correlates of
breach and violation would be similar. Conceptu-
ally, this argument implies a breach by tenure
interaction when violation is being predicted, an
interaction that we could not support with the cur-
rent data. Second, our breach hypotheses were
founded on the expected impact of personality on
the perception or detection of breach, not on its
actual occurrence. However, conscientious indi-
viduals might have engaged in more careful and
diligent job search, thus reducing the probability of
breach. Also, organizations might be less likely to
breach the contracts of satisfied, productive em-
ployees. Thus, the salutary consequences of consci-
entiousness, low neuroticism, internality, and self-
2004 Raja, Johns, and Ntalianis
esteem for both satisfaction and performance
(Barrick & Mount, 1991; Judge & Bono, 2001; Judge
et al., 2002) might account for our findings that
neurotics and externals perceived breach but the
conscientious did not, as well as for our null find-
ings for self-esteem. This pattern of findings sug-
gests a reciprocal relationship between breach and
related organizational behavior, and it illustrates
the role of enactment—the conversion of personal-
ity into job behavior and attitudes.
We believe that this study contributes to both
research on personality and research on contracts.
In the domain of personality, the study joins a
small but growing body of research that opens the
black box to explain how personality affects or-
ganizational behavior. Barrick, Stewart, and Pi-
otrowski (2002) showed how motivation mediated
the relationship between personality and job per-
formance, and Judge and his colleagues (1998) il-
lustrated how perceptions of core job characteris-
tics mediated the relationship between personality
and job satisfaction. We contribute to this stream of
research by showing that contract dynamics also
mediate the relationship between personality and
personal and organizational outcomes. From the
standpoint of contracts research, we contribute ev-
idence that suggests an explanation for one of the
most interesting phenomena in organizational be-
havior— how employees facing ostensibly identical
job conditions self-construct either disappointing
or rewarding relationships with their employers. A
tentative explanation is that personality influences
contract terms, breach perception, and feelings of
violation.
Three aspects of our research warrant caution in
interpretation. First, we interpreted our findings
concerning personality and contract type in terms
of employee choice and construal of contracts.
However, one of our reviewers suggested that con-
scientious individuals and those with high self-
esteem might be offered more encompassing and
enduring relational contract terms because of their
proclivity for high performance and job satisfac-
tion. Conversely, more dispensable externals and
neurotics might be held to less committing transac-
tional contracts. This explanation, which is based
on enactment, while complementary to ours, illus-
trates the need to view contracts dynamically.
Second, our use of cross-sectional data dictated
that we examine two essentially parallel models,
one pertaining to contract type (personality 3 con-
tract 3 outcomes) and the other to contract breach
(personality 3 breach 3 outcomes). However,
breach was moderately related to both relational
contracts (r ⫽ ⫺.45) and transactional contracts
(r ⫽ .22), and Robinson and her coauthors (1994)
363
reported that breach led to a shift from relational to
transactional contracts. This background raised
questions about how much independent informa-
tion our results contained. Thus, we retested our
hypotheses pertaining to personality and contract
type, controlling for breach. In all cases, the results
paralleled those for the uncontrolled tests. Simi-
larly, controlling for breach did not materially af-
fect any of the reported relationships between con-
tract type and outcomes. All in all, these results
indicate that there is utility in discriminating be-
tween breach and contract type. However, they do
not obviate the need for process-oriented longitu-
dinal designs that better capture the true dynamics
of personality, contract type, breach, and violation
over time.
A third concern was the potential for common
method variance, since all variables were measured
in the same questionnaire. However, self-reports
are the conventional way to assess both personality
and aspects of psychological contracts. Although
researchers have sometimes used observers or clin-
ical interviews to assess personality, such tactics
are rare and hard to execute in the workplace. Ini-
tially, we intended to separate the measurement of
personality in time from that of the other variables,
but our firsthand experience at the research sites
convinced us that doing this would badly damage
our response rates. Nevertheless, several factors
mitigate some concern about common method vari-
ance. First, having people describe themselves in
general and then report their work experiences
would seem much less prone to common method
variance than having people both describe and
evaluate their work in the same questionnaire. In
our study, the link between breach or violation and
work outcomes would seem to be most prone to
common method variance, but this link was not the
major focus of the research, and it has been dem-
onstrated through use of independent methods
(Kickul, 2001). Also, we proposed and found some
evidence for the operation of personality as a mod-
erator of the effects of breach on violation, and
method variance, if present, would work against
the detection of moderators. Finally, Judge and co-
authors (1998) found similar patterns of correla-
tions between personality and satisfaction (life and
job) even when predictor and criteria were mea-
sured with independent methods. Thus, all in all,
we are confident that our primary findings con-
cerning personality were not seriously affected by
common method variance.
Conducting the reported study in Pakistan was a
decision predicated on access to the research sites.
In planning the study, we considered but did not
find any reason to expect that our predictions,
364 Academy of Management Journal
based on Western research, would not apply in
Pakistan. Having conducted the study, we had no
specific experiences that violated this expectation.
However, it is possible that the marginal reliabili-
ties for extraversion and locus of control and the
unacceptable reliability for agreeableness partly re-
flect subtleties of linguistic comprehension or cul-
tural values. For example, our questionnaire ad-
ministrators reported more than one query about
the colloquial NEO item “I am not a worrier.” Also,
the negative implication of not being agreeable in a
collective culture might have prompted socially
desirable responses among some employees. We
were unable to find normative personality data for
Pakistan to illuminate these conjectures.
Like the samples used in most extant research on
psychological contracts, our sample consisted
mostly of managers, professionals, and technical
people, an occupational elite with similar if not
identical education and training across cultures.
Below this elite, transactional contract dynamics
might dominate, especially in less economically
developed countries. Studying these occupations
in Pakistan resulted in a sample that was almost
totally male. However, the implications of this pre-
dominance of men are unclear given that very little
research has examined the impact of gender on
contract matters (Millward & Brewerton, 2000). We
can only observe that the Pakistan locale and the
mostly male sample did not appear to constrain
variance in reported contract type, perceived
breach, or experienced violation (cf. Johns, 1991).
Two suggestions for future research pertain to
organizational context. Except for the implication
that contract breaches might have occurred, contex-
tual factors were not examined in this exploratory
study. Clearly, a person by situation perspective
would further illuminate the conditions under
which personality might be more or less relevant to
contract dynamics. For example, people with par-
ticular personality traits might be more susceptible
to the breach of particular contract terms or to the
manner in which a breach occurred (for instance, to
perceived degree of procedural justice). Time is
frequently a surrogate for changes in context
(Johns, 2001), and the role of time also merits scru-
tiny. In exploratory analyses, we found significant
tenure by personality interactions in predicting
breach for four of the six studied traits (extraver-
sion, equity sensitivity, self-esteem, and locus of
control). In each case, the relationship between per-
sonality and perceived breach was weaker for em-
ployees with lower tenure. This pattern of findings
raises the possibility that newer employees face
“strong situations” (Mischel, 1968) that constrain
the impact of personality on perceived breach. On
June
the other hand, long-tenured employees might have
experienced a series of contractual ambiguities that
stimulate “eye of the beholder” effects, shaped by
personality.
A third suggestion for future research that would
also address the relevance of time concerns our
earlier contention that personality might affect con-
tract dynamics via choice of employment, percep-
tual construal of one’s contract, or personality-
related attitudes and behaviors enacted on a job.
Longitudinally, this formulation implies a se-
quence— choice, construal, enactment, construal—
that merits attention. Particularly interesting is the
possibility that certain personality traits are differ-
entially relevant to the various events in this con-
tract cycle. More basically, the impact of enactment
merits future attention, since extant contract theory
is mainly silent on how work behavior and atti-
tudes on the part of employees affect changes in
contracts over time. Although contracts may in-
deed be “psychological” (that is, construed), per-
sonality has been shown to affect important work
attitudes and behaviors that should influence the
actual terms offered by an employer.
To conclude, a number of authors have mused
about the likely importance of individual differ-
ences in matters concerning psychological con-
tracts. We have provided some tentative empirical
evidence for the merits of this idea. At the same
time, we have illustrated that contractual mecha-
nisms are one likely path by which personality
affects organizational behavior.
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2004 Raja, Johns, and Ntalianis 367

APPENDIX
Results of Factor Analysisa

Factor
Psychological Contract Items Loadings

Transactional contracts (␣ ⫽ .72)

I work only the hours set out in my contract and no more. .61
My commitment to this organization is defined by my contract. .59
My loyalty to the organization is contract specific. .51
I prefer to work a strictly defined set of working hours. .51
I only carry out what is necessary to get the job done. .47
I do not identify with the organization’s goals. .45
I work to achieve the purely short-term goals of my job. .41
My job means more to me than just a means of paying the bills. (reverse-coded) .35
It is important to be flexible and to work irregular hours if necessary. (reverse-coded) .33

Relational contracts (␣ ⫽ .79)

I expect to grow in this organization. .71
I feel part of a team in this organization. .71
I have a reasonable chance of promotion if I work hard. .67
To me working for this organization is like being a member of a family. .56
The organization develops/rewards employees who work hard and exert themselves. .55
I expect to gain promotion in this company with length of service and effort to achieve goals. .47
I feel this company reciprocates the effort put in by its employees. .47
My career path in the organization is clearly mapped out. .43
I am motivated to contribute 100% to this company in return for future employment benefits. .41

a
These items are from Millward and Hopkins (1998).

psychology from Wayne State University. His research

Usman Raja (uraja@jmsb.concordia.ca) is a Ph.D. candi-
date in the John Molson School of Business, Concordia
University, Montreal. He received his MBA from the
International Islamic University, Islamabad, Pakistan.
His research interests include personality, psychological
contracts, job design, and organizational justice.
Gary Johns (garyj@vax2.concordia.ca) holds the Concor-
dia University Research Chair in Management in the John
Molson School of Business, Concordia University, Mon-
treal. He received his Ph.D. in industrial-organizational
interests include personality, absenteeism, self-serving
behavior, research methodology, and the impact of con-
text on organizational behavior.
Filotheos Ntalianis (filotheo@vax2.concordia.ca) is a
Ph.D. candidate in the John Molson School of Business,
Concordia University, Montreal. He received his M.Sc. in
economics from Florida Atlantic University. His research
interests include psychological contracts, personality,
and religiosity.