Employees hold beliefs about reciprocal obligations that were never written down, and react to perceived violation of them more strongly than to the objective loss.
Rousseau's 1989 formulation is that the contract exists in the employee's perception, so breach is a matter of belief rather than of contract law. The reaction is characteristically disproportionate, because what has been lost is the belief that the relationship was reciprocal, and that belief was doing work no clause was doing.
In practice
- A firm that withdraws a benefit worth little produces a response no financial account of it predicts.
- A promotion that was implied and never promised, then given to someone else, costs the organisation an employee.