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Article

The Relationship between Psychological Contract Breach and Job Insecurity or Stress in Employees Engaged in the Restaurant Business

by
Hyoung Chul Shin
Department of Foodservice and Culinary Management, Kyonggi University, Seoul 03746, Korea
Sustainability 2019, 11(20), 5709; https://doi.org/10.3390/su11205709
Submission received: 12 August 2019 / Revised: 24 September 2019 / Accepted: 14 October 2019 / Published: 16 October 2019
(This article belongs to the Section Economic and Business Aspects of Sustainability)
Browse Figure
Versions Notes

Abstract

:
This study explored the relationship between psychological contract breach and job insecurity or stress in employees engaged in the restaurant business. To do this, four hypotheses were proposed. First, job insecurity has a significant positive effect on psychological contract breach. Second, job insecurity has a significant positive effect on job stress. Third, psychological contract breach has a significant positive effect on job stress. Fourth, job insecurity has a significant positive effect on job stress via psychological contract breach. Then, eligible respondents (n = 384; 183 men and 201 women) were recruited from a total of five restaurant business companies and then evaluated for a self-administered questionnaire survey. Results showed not only that job insecurity had a significant positive effect on psychological contract breach and job stress but also that psychological contract breach had a significant positive effect on job stress and mediated the interaction between job insecurity and stress. It can therefore be concluded that restaurant business owners should establish rational criteria for compensating job insecurity and stress arising from psychological contract breach in employees engaged in the restaurant business because of an inconsistency between psychological contract breach arising from job insecurity and compensation for work performance of employees engaged in the restaurant business.

1. Introduction

With remarkable changes in the economic environment, such as internationalization and technological advancements in the information and telecommunication industry, there has been a requirement for remodeling the industrial structure and organizational accommodation to surroundings [1]. The restaurant business is a type of labor-intensive industry requiring much labor power, and it is characterized by simultaneous production and consumption of a food product. Its business performance should therefore be maximized within limited time and space. Moreover, as shown in other types of industry, it is wholly dependent on how qualified human resources can be acquired and managed. This deserves objective assessment [2,3,4,5].
The restaurant business is sensitive to political, economic, and socio-environmental changes. As strategic measures against these changes, reduction of human resources has been of primary concern for a majority of restaurant business companies [6]. In addition, voluntary resignation, recruitment of temporary employees, outsourcing, layoff, and salary peak are factors worsening the job security of employees [7]. Considering that attitudes and behavioral changes of employees have a direct impact on business performance, the efficient management of human resources should be emphasized [8,9].
The traditional employment relationship has undergone alterations arising from organizational modifications, which is accompanied by changes in the behavior and attitude of employees [10,11]. Psychological contract is defined as “an individual’s beliefs about the terms of the exchange agreement between employee and employer”, and it is also referred to as the obligation or commitment which employees expect from the organization from the context of a reciprocal relationship between the two parties [12]. On the other hand, psychological contract breach is defined as the recognition of a lack of expectation for mutually reciprocal obligation constituting an exchange relationship between the organization and its members [13,14]. Moreover, it is also referred to as employees’ subjective recognition of the organization’s violation of the above-defined psychological contract [15,16]. To put this another way, employees are encouraged to devote themselves to the restaurant business company, and they are expected to receive opportunities for job security, promotion, and career development [17]. Thus, they work for a company while vaguely expecting to receive explicit or implicit compensation. Indeed, this is referred to as a psychological contract from the standpoint of employees. If employers fulfill a psychological contract, employees will have positive attitudes towards the company. However, if employees recognize a psychological contract breach, they will have negative attitudes towards the company or unfavorable behavior. This is such an important issue that cannot be ignored from the perspective of organizational management [18,19].
Job insecurity is defined as a feeling of helplessness which employees recognize in such a threatening condition that they could not successfully perform the task [20]. Therefore, employees are overwhelmed by such a threatening situation that they are skeptical about the continuity of job security [21]. To put this another way, job insecurity can be described as employees’ recognition of a threat from any changes in the job environment [22].
Job stress is defined as an anxious symptom of behavior due to psychosomatic derangements, possibly because of an interaction between employees and the environment [23,24].
Employees’ loss of work motivation has a negative impact on the business performance of the company, and it also forms a conflict between the coworkers. Appropriate management of human resources is therefore required from the perspective of organizational management. It is considered an essential factor that serves as a determinant of business performance. Employees play a pivotal role in providing services for customers and inducing their reliability. Thus, their roles are a determinant of business performance [8,11,19].
In such conditions where the restaurant business is getting more and more competitive, employees’ ability to successfully perform a task is a key element that is closely associated with the revenue of a company [25,26]. It is imperative, however, that human resources be efficiently managed in the current restaurant business. The restaurant business is characterized by a higher degree of dependence on human resources as well as that of contact to customers as compared with other types of industry [27,28]. It can therefore be inferred that there is great variability in the quality of customer services, depending on employees’ job attitudes.
No companies would survive if neglected by customers. A favorable relationship between a company and a customer arises from that between an employee and a customer, for which employees’ job security serves as an essential factor. This explains why the impact of employees’ job security on the business performance of a restaurant business deserves special attention [29,30,31].
Given the above background, this study was conducted to explore the relationship between psychological contract breach and job insecurity or stress in employees engaged in the restaurant business, thus attempting to suggest the efficient management of human resources in practical restaurant business settings.

2. Materials and Methods

2.1. Study Design and Setting

As shown in Figure 1, the current study examined whether psychological contract breach played a role in mediating job insecurity and stress, thus attempting to explore the impact of job insecurity on customer orientation, in regular employees in restaurant business settings.

2.2. Study Hypothesis

For the current study, the following hypotheses were proposed:
Hypothesis 1 (H1).
Job insecurity has a significant positive effect on psychological contract breach.
Hypothesis 2 (H2).
Job insecurity has a significant positive effect on job stress.
Hypothesis 3 (H3).
Psychological contract breach has a significant positive effect on job stress.
Hypothesis 4 (H4).
Job insecurity has a significant positive effect on job stress via psychologicalcontract breach.

2.3. Questionnaire Survey

For the current questionnaire survey, operational definitions of variables were used; they are referred to as a definite description of conceptual definitions of variables prior to the measurement, and they are closely associated with an ability to observe or measure for the current empirical study. Therefore, the current study defined job insecurity as the degree of threat that may cause psychological anxiety as a stressor to employees and thereby affect their behavior and attitude. Moreover, psychological contract breach was defined as a lack of implicit contract which employees expect from the organization. Furthermore, job stress was defined as a cause of employees’ negative response to the task. Responses to job stress were classified into physiological (or somatic) and psychological symptoms.
In the current questionnaire survey, job insecurity, job stress, and psychological contract breach served as outcome measures. Example questions of these outcome measures include job insecurity (“I feel it is not easy to get a salary raise on a regular basis”), job stress (“I always feel depressed because I am worried about my position at work.”), and psychological contract breach (“I donot think that there is a fair promotion system at work”). Interactions between the outcome measures were previously described in the literature [32].
A questionnaire sheet was composed of a total of four parts containing a total of 45 questions (I: job insecurity, II: psychological contract breach, III: job stress, and IV: demographic and socio-economic characteristics). Respondents were instructed to respond to a questionnaire based on a five-point Likert scale (0 = “Never” and 4 = “Always”).

2.4. Data Collection

In the current study, respondents were recruited using judgment sampling, a type of non-probability sampling, from a total of five restaurant business companies located in Seoul, Korea during a one-month period between October 1 and 31, 2018. All the respondents were regular employees. They were informed of its purposes and implications and then provided verbal consent to participate in the current self-administered questionnaire.
Thus, the questionnaire was performed by a research company; it visited the respondents and thereby distributed a total of 537 questionnaire sheets to them. Then, a total of 433 questionnaire sheets were collected in the same manner. Of these, a total of 49 incomplete responses were excluded from the analysis. Therefore, a total of 384 responses were finally considered valid.

2.5. Statistical Analysis of Data

All data was expressed as mean SD (SD: standard deviation) or number with percentage, where appropriate. Statistical analysis was done using SPSS for windows Ver. 18.0 (SPSS Inc., Chicago, IL, USA) and AMOS Ver. 18.0 (IBM, Armonk, NY, USA). Statistical significance was set at p < 0.05.
For the current study, baseline characteristics of the respondents were collected. These included age, sex, years of education, position, years of working, and the frequency of turnover. They were assessed using a frequency analysis.
To identify factors associated with psychological contract breach, affecting job insecurity or stress, Pearson’s correlation analysis was performed. To assess the model-fit, the χ2-test was performed. Based on a structural equation model, the degree of freedom (df), the number of variables that will be estimated (Q), goodness-of-fit indices (GFI), adjusted goodness-of-fit indices (AGFI), root-mean-square error approximation (RMSEA), normed fit index (NFI), and comparative fit index (CFI) were calculated. Moreover, unstandardized coefficient, factor loading, statistical significance, squared multiple correlations (SMCs), average variance extracted (AVE), and confidence were calculated for each question constituting each measurement variable. Thus, the validity of each measurement variable was tested using exploratory factor analysis.

3. Results

3.1. Baseline Characteristics of the Respondents

The eligible respondents (n = 384) participating in the current study comprised 183 men (47.7%) and 201 women (52.3%), whose age distributions were 20–29 years old (n = 163; 42.4%), 30–39 years old (n = 137; 35.7%), 40–49 years old (n = 63; 16.4%), and 50–59 years old (n = 21; 5.5%). Their baseline characteristics are summarized in Table 1.

3.2. Factors Affecting Job Insecurity or Stress

Pearson’s correlation analysis showed that age (r = −0.212, p < 0.01) and frequency of turnover (r = −0.215, p < 0.01) had a significant correlation with job insecurity or stress.

3.3. Reliability and Validity of Outcome Measures

Following an analysis of the reliability and validity of outcome measures, they exceeded a level of general acceptance of 0.7. This indicates that reliable and valid outcome measures served as variables (Table 2).
To assess the validity of the outcome measures, a confirmatory factor analysis was performed using a correlation matrix plot. This showed that the degree of model appropriateness reached the level of general acceptance. Moreover, unstandardized regression coefficient, factor loading, critical ratio, squared multiple correlation, average variance extracted, and construct reliability of each question exceeded the level of general acceptance. Thus, valid measurement variables served as outcome measures (Table 3).
Additionally, the current study analyzed a discriminant validity. That is, when each outcome measure had values of mean and standard deviation that were greater than the square of correlation coefficient between the two concepts, we assumed that there was a discriminant validity between the two concepts. Thus, the current study performed an analysis of correlations between the three outcome measures (Table 4).

3.4. Hypothesis Testing

To test hypotheses, the structural equation model was analyzed using AMOS. This showed that the overall appropriateness of the model exceeded the level of general acceptance. Thus, the results of hypothesis testing were of a fair degree. It was therefore determined that the model was appropriate for hypothesis testing (Table 5).

4. Discussion

The restaurant business is sensitive to alterations in its surroundings, and its major survival strategies lie in the reduction of human resources. Such measures as early retirement, recruitment of temporary employees, outsourcing, and layoffs further worsen job insecurity of employees. This has a direct effect on attitudes, behavioral alterations, and the work performance of employees. The job insecurity of those who are engaged in the restaurant business has a detrimental effect on psychological expectations and compensation, and the resulting psychological stress should be appropriately managed on an organizational scale [4,5,9].
The implications of the current results are as follows:
(1)
As shown in the current results, job insecurity had a significant positive effect on psychological contract breach. According to a review of previous published studies in this series, the seriousness of threat due to a loss of job and a feeling of helplessness as a response to such threat had a significant effect on psychological contract breach [11,19,33]. To put this another way, significant correlations between the two variables confirmed that the job insecurity of employees who are intimidated by the loss of a job had a significant effect on the degree of compensation that they implicitly expect;
(2)
Job insecurity had a significant positive effect on job stress. It was therefore demonstrated that job insecurity had a significant effect on stress responses [3,7,26,30]. In more detail, job insecurity is a definite variable that determines job stress. It can therefore be inferred that a higher degree of job insecurity is closely associated with that of job stress [21,28];
(3)
Psychological contract breach had a significant positive effect on job stress. According to a review of the literature, stress responses had a significant effect on psychological contract breach [16,17,27]. Moreover, there was a significant correlation between the two variables. To put this another way, psychological contract breach is a variable that affects job stress [23,34]. It may also be described as a factor affecting the sustainability of human resources;
(4)
Psychological contract breach mediated the interaction between job insecurity and stress. It has been reported that psychological contract breach is involved in the relationship between job insecurity and organizational citizenship behavior. Moreover, there have also been attempts to demonstrate the effects of psychological contract breach as a moderating variable, thus exploring whether there was a significant correlation between role stress and organizational commitment [11,28,31,35,36]. This is in agreement with our results showing that psychological contract breach was a causative factor affecting job insecurity.
It would be valuable to interpret our results from practical perspectives, as shown below:
(1)
The job environment of employees engaged in the restaurant business should be appropriately managed and its stability should be assured, for which the corresponding organization should be managed for the stabilization of their working environment;
(2)
Considerable efforts should be made to stabilize the job environment of employees engaged in the restaurant business; an instability of their working environment serves as a factor causing physiological and psychological stress to them;
(3)
Rational criteria for rewarding the business performance of employees engaged in the restaurant business. It would therefore be mandatory to establish rational criteria for compensating any loss that employees engaged in the restaurant business sustained when they were exposed to psychological contract breach;
(4)
Employees engaged in the restaurant business consider the stability of the organization as a primary concern; they have a tendency not to be stabilized rather than to be threatened in the organization, while avoiding physiological and psychological stress as a response to psychological contract breach.
Taken together, our results indicate that the appropriate management of human resources on an organizational level should be followed by the stabilization and improvement of the working environment of employees engaged in the restaurant business.
However, our results cannot be generalized; their limitations are as follows:
(1)
We failed to clarify the effects of job insecurity of those who are engaged in restaurant business, arising from changes in the external environment, on other variables;
(2)
We performed a self-administered questionnaire for those who are located in Seoul, Korea only. It would therefore be mandatory to conduct further nationwide studies;
(3)
We clarified effects arising from a causalrelationship as well as the relevant mediating ones, but we failed to consider moderating variables. This remains regrettable. It would therefore be mandatory to consider moderating variables in assessing the effects of psychological contract breach of those who are engaged in the restaurant business on their job insecurity and stress;
(4)
In the current study, psychological contract breach and job stress served as outcome measures that are dependent on job insecurity. However, this is associated with the simplification of the outcomes of job insecurity. Further studies are therefore warranted to consider dependent variables that are associated with job insecurity;
(5)
We failed to identify the components of job insecurity affecting psychological contract breach and job stress to the greatest extent. This also remains regrettable. Further studies are therefore warranted to explore detailed components of job insecurity;
(6)
We failed to analyze the possible effects of age or turnover on job insecurity or stress. This deserves further study.

5. Conclusions

Based on our results, it can be concluded that restaurant business owners should establish rational criteria for compensating job insecurity and stress arising from psychological contract breach in employees engaged in the restaurant business, because of an inconsistency between psychological contract breach arising from job insecurity and compensation for the work performance of employees engaged in the restaurant business. Moreover, it is generally known that employees engaged in the restaurant business suffer from physiological and psychological stress when they are exposed to psychological contract breach. This is followed by an imbalance in circadian rhythm as well as a feeling of helplessness as a response to the loss of a job, thus leading to a detrimental effect on the management strategies of the restaurant business. It would therefore be mandatory to establish definite criteria for managing and compensating the psychological stress of employees engaged in the restaurant business. Otherwise, restaurant business owners would be further burdened with responsibilities for compensation for any negative outcomes of psychological contract breach. Moreover, they would also be devoid of power to control human resources, which is followed by poor outcomes that customers should tolerate.

Funding

This research received no external funding.

Conflicts of Interest

The author declares no conflict of interest.

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Sustainability 11 05709 g001 550
Figure 1. Study model.
Figure 1. Study model.
Sustainability 11 05709 g001
Table
Table 1. Baseline characteristics of the respondents.
Table 1. Baseline characteristics of the respondents.
VariablesValues
Age (years old)20–29163 (42.4%)
30–39137 (35.7%)
40–4963 (16.4%)
50–5921 (5.5%)
SexMen183 (47.7%)
Women201 (52.3%)
Years of educationHigh school114 (29.7%)
College129 (33.6%)
University88 (22.9%)
Graduate school53 (13.8%)
PositionOrdinary employee168 (43.8%)
Assistant manager75 (19.5%)
Manager86 (22.4%)
Deputy general manager33 (8.6%)
General manager19 (4.9%)
Director3 (0.8%)
Years of working (years)<5244 (63.5%)
5–10125 (32.6%)
11–2014 (3.6%)
>201 (0.3%)
The frequency of turnover<5279 (72.7%)
1–563 (16.4%)
6–1033 (8.6%)
11–207 (1.8%)
>212 (0.5%)
Values are mean ± standard deviation with range or the number of the respondents with percentage, where appropriate.
Table
Table 2. Reliability and validity of outcome measures.
Table 2. Reliability and validity of outcome measures.
Outcome MeasuresThe Initial Number of QuestionsThe Final Number of QuestionsCronbach’s α
Job Insecurity750.937
Job Stress320.859
Psychological Contract Breach220.862
Table
Table 3. Results of a confirmatory factor analysis.
Table 3. Results of a confirmatory factor analysis.
Outcome MeasuresMeasurement VariablesURCFLCR (t)SMCAVECR
Job InsecurityEmployment insecurity0.9290.83325.5260.7590.5320.947
Pay precarity0.9860.92925.3680.824
Uncontrollable environment0.9210.84724.9480.748
Job StressPhysiological stress0.8440.73313.6210.5480.5180.925
Psychological stress0.9080.78514.1590.619
Psychological Contract BreachTransactional contract breach0.9140.71015.1680.5190.5760.918
Relational contract breach0.9370.81620.5070.644
χ2 = 977.694 (df = 529, p = 0.00), Q = 1.817, GFI = 0.918, AGFI = 0.883, RMSEA = 0.039, NFI = 0.967, CFI = 0.944. Abbreviations: URC, unstandardized regression coefficient; FL, factor loading; CR (t), critical ratio (t); SMC, squared multiple correlation; AVE, average variance extracted; CR, construct reliability.
Table
Table 4. Results of correlation analysis.
Table 4. Results of correlation analysis.
Outcome MeasuresJob InsecurityJob StressPsychological Contract BreachMeanStandard Deviation
Job Insecurity1.000 3.4950.518
Job Stress0.687 ***1.000 3.5540.623
Psychological Contract Breach0.672 ***0.648 ***1.0003.5890.678
* p < 0.05, ** p < 0.01, *** p < 0.001.
Table
Table 5. Hypothesis testing.
Table 5. Hypothesis testing.
HypothesisPathPCCR (t)SMCResults
1Job insecurity
→ Psychological contract breach		0.3144.476 ***0.459Accept
2Job insecurity
→ Job stress		0.4097.198 ***0.447Accept
3Psychological contract breach
→ Job stress		0.1872.417 **0.453Accept
4Job insecurity
→ Job stress viapsychological contract breach		0.1792.198 *0.536Accept
χ2 = 977.694 (df = 529, P = 0.00), Q = 1.817, GFI = 0.918, AGFI = 0.883, RMSEA = 0.039, NFI = 0.967, CFI = 0.944. Abbreviations: PC, unstandardized path coefficient; CR (t), critical ratio (t); SMC, squared multiple correlation; AVE, average variance extracted. * p < 0.05, ** p < 0.01, *** p < 0.001.

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Shin, H.C. The Relationship between Psychological Contract Breach and Job Insecurity or Stress in Employees Engaged in the Restaurant Business. Sustainability 2019, 11, 5709. https://doi.org/10.3390/su11205709

AMA Style

Shin HC. The Relationship between Psychological Contract Breach and Job Insecurity or Stress in Employees Engaged in the Restaurant Business. Sustainability. 2019; 11(20):5709. https://doi.org/10.3390/su11205709

Chicago/Turabian Style

Shin, Hyoung Chul. 2019. "The Relationship between Psychological Contract Breach and Job Insecurity or Stress in Employees Engaged in the Restaurant Business" Sustainability 11, no. 20: 5709. https://doi.org/10.3390/su11205709

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