Information asymmetry in high potential programs : A potential risk for psychological contract breach

Purpose – The purpose of this paper is to examine the implicit beliefs both high potentials and HR directors hold about the terms of the exchange relationship between high potential employees and their organizations. The paper positions the study within the framework of the psychological contract, exploring specifically whether strategic ambiguity and information asymmetries in high potential programs create a heightened risk of psychological contract breach. Design/methodology/approach – A total of 20 high potentials and 11 HR directors from nine different organizations were interviewed. Open and axial coding of the qualitative data was performed by three raters. Findings – Information asymmetry in high potential programs, indeed, poses a potential risk for psychological contract breach. Although strategic ambiguity can be an effective communication strategy in that it creates a power imbalance in favor of the organization, at all times a delicate balance must be maintained between leaving room for flexibility and intuitive decision making, and creating perceived promises in high potential employees that are subsequently broken. In fact, through information asymmetry organizations run the risk of achieving the exact opposite of the goals they had for their high potential programs in the first place. Originality/value – Hardly any research has been done on the psychological effects of identifying a very small proportion of an organization's workforce as high potentials. In addition, research contrasting employee and employer beliefs about psychological contract terms is scarce.