Once bitten, twice shy? Past breach and present exchange relationships

Purpose – The purpose of this paper is to examine the relationship between previous employer's psychological contract breach and exchange perceptions with the current employer, and seeks to uncover moderating influences of perceived organizational support (POS). Design/methodology/approach – Data were obtained from a cross-lagged sample of 314 employees in Norway. Hierarchical moderated regression analysis was used to test the hypotheses. Findings – The authors found a positive relationship between previous employer's psychological contract breach and economic exchange with the current employer, and a negative relationship between previous employer's psychological breach and social exchange with the current employer. The authors also found that POS from the current employer attenuates the positive association between previous employer's breach and economic exchange with the current employer. Research limitations/implications – The data were cross-lagged, so causal inferences should be made with caution. Practical implications – Managers should be aware that past employment experiences may relate to present employment exchange relationships. In addition, POS from current employer may serve to counterbalance the “carry over” effects of past employment experiences. Social implications – In light of the present global economic climate, increasing POS among employees could decrease the likelihood that they assume that the employment relationship constitutes an economic exchange relationship. Originality/value – This study contributes to a more complete understanding of factors that shape employees’ relationships with their organization. Furthermore, this study suggests a way by which organizations can repair damages incurred by previous employer's psychological contract breach.