How to bind together in times of crisis? A research of employee perceived psychological contract in high-star hotels

ABSTRACT

In the COVID-19 pandemic, the employee-employer relationship in the hospitality industry has been shaken. The psychological contract between employers and employees has changed dramatically during this turbulent time. Extant studies have primarily focused on the impact of crisis on the tourism and hospitality industry at the macro-and meso-levels. However, the impact at the microlevel, e.g. employees' psychological mechanism, is underexplored. Few studies have explored the process of how psychological contract breaches occur during crises, as well as the mechanism of how psychological contract breaches influence employees. Using the multiple-case method and grounded theory, this study explored the content of psychological contract, and the mechanism and outcomes of psychological contract breach in hotel organizations. Six high-star hotels located in Fujian province were selected as our study cases, and their human resource managers, frontline managers and employees were interviewed. The salient dimensions of psychological contract in the crisis were identified, which are income guarantee, safety assurance, job security, specific welfare, and work arrangements. Employees emphasized the transactional obligations (i.e. income, welfare, and job guarantee), and attached far less importance to relational obligations in the crisis setting. Three causes of psychological contract breach were identified inability, unwillingness, and incongruence. Employees' attribution of this crisis, demographics (i.e. age, education, and position), and personalities(i.e. collectivist mindset) make they respond differently towards the psychological contract breach. Most employees did not blame the hotels for the breach, and attributed the breach to the factors beyond the hotels, thus their negative responses were attenuated. Our study proposes a dynamic model that indicates psychological contract breaches lead to varied employee responses and how psychological contract maintenance occure. Whether hotel employees and management can bind together during the crisis depends on their mutual consideration and fulfillment of corresponding obligations. Hotels that invested in employees during normal times and actively helped employees during crisis times were more likely to motivate employees' loyalty to the hotel. Several remedy strategies are proposed to help hotels develop a sustainable employee-employer relationship during and after the crisis. Our study advances knowledge in hotel crisis management by systematically investigating psychological contract and its influencing mechanism, which helps to build a resilient hotel workforce in crisis time.