How psychological contract breach affects long-term mental and physical health: the longitudinal role of effort-reward imbalance

This study contributes to the research of employee health and well-being by examining the longitudinal effects of psychological contract (PC) breach on employees' health. We integrate Social Exchange and Conservation of Resources theories to position effort-reward imbalance (ERI) as the mediating mechanism. We also assessed the moderating role of perceived job control as a boundary condition through which employees could prevent PC breach and ERI from adversely affecting their health. Using three-wave longitudinal survey data from 389 employees, we estimated a path model using each variable's growth parameters (intercept and slope). We found support for our hypotheses regarding stable effects; we found positive associations between PC breach and physical and mental health complaints and a need for recovery through ERI perceptions. We further tested employees' perceived control over the work environment as a boundary condition and found support for its role in attenuating the positive relationship between PC breach and ERI perceptions, but not for its moderating role in the ERI-health outcomes relationship. Our findings indicate that exposure to PC breach has a detrimental impact on employee health/well-being via perceptions of ERI and allow us to unravel one of the cognitive mechanisms leading to potential employee ill-health. We conclude with theoretical and practical implications.