Employee Deviance as By-product of Psychological Contract: The Moderating Effects of Power Distance among Employees in Insurance Companies in Nigeria

Abstract

Employees have expectations from their organizations; whether they are written, contractual, or not, these expectations have an equally employee outcome such as employee deviance. Indices indicate that employee deviance is on the increase especially in the organized private sector; thus, this study evaluated employee deviance as by-product of psychological contract and power distance among a sample of employees (289) from insurance organizations in Nigeria with an average age of 34.50 years and standard deviation of 3.50. The study sought to ascertain the relationship between psychological contract and employee deviance and whether perceptions of power distance moderated this relationship. Psychological contract inventory (PCI), Power distance scale adapted from CVSCALE Five-dimensional scale of individual cultural values and Workplace deviant behaviour scale were utilized for data collection.  The result of data analysis indicated that the adjusted R2 for step 1 is .24 at F(42.06) p < .01. In the second model, the adjusted R2 is .26 and R change is .002.  This R change was significant at F (33.76), df = 285 p < .01. The Beta coefficient for model 2 shows that psychological contract significantly and negatively predicted employee deviant behaviours at Beta value, thus, the first hypothesis was confirmed at β = -.68, p < .01. Similarly, power distance significantly and positively predicted employee deviant behaviour at β coefficient value of .34, p < .01, thus, the second hypothesis was also confirmed. Also, the third hypothesis where power distance moderated the relationship between psychological contract and employee deviant behaviour was confirmed at β =.27, p < .01. The study concludes that organizations whose interests do not account for the expectations of their employees are at risk of higher levels of employees’ deviance either as byproduct of psychological contract violations or as a retaliatory behaviour.