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Characteristics of the Supervisor-Subordinate Relationship as Predictors of Psychological Contract Breach*

William H. Turnley
Professor of Management Kansas State University

Renate R. Mai-Dalton
Associate Professor of Management University of Kansas Researchers have described the psychological contract as an individuals beliefs regarding the terms and conditions of the reciprocal exchange agreement between that employee and the employing organization (Rousseau, 1989). One key issue in the psychological contract is the employees expectation that the organization will live up to its promises. When an employee believes that the organization has not kept its promises, then the employee perceives psychological contract breach (Morrison and Robinson, 1997; Rousseau, 1995). Prior research has primarily focused on the outcomes of psychological contract breach. This previous research has consistently found that psychological contract breach (PCB) has a negative effect on a wide range of employee attitudes and behaviors, such as job satisfaction (Turnley and Feldman, 1998), organizational commitment (Guzzo et al., 1994), trust in the organization (Deery et al., 2006; Robinson, 1996), and in-role and extra-role job perform-

* The authors would like to thank the outgoing Editor in Chief of the Journal of Managerial Issues, Charles Fischer, and two anonymous reviewers for their helpful comments on previous versions of this manuscript. We would also like to acknowledge that support for this research was provided by a grant awarded to the second author by the Department of Navy, Office of Naval Research. JOURNAL OF MANAGERIAL ISSUES Vol. XX Number 3 Fall 2008 (295)

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CHARACTERISTICS OF THE SUPERVISOR-SUBORDINATE RELATIONSHIP ilarity might be an important antecedent of perceived PCB. More specifically, this study examines two types of supervisor-subordinate similarity: perceived similarity (in terms of cognitive styles) and actual similarity (in terms of gender or race). These two types of similarity can be described as non-observable (perceived similarity) and observable (actual similarity) characteristics of diversity in the workplace (Kochan et al., 2003). Both types of similarity have been found to play significant roles in workplace attitudes, behaviors, and beliefs (e.g., Martins and Parsons, 2007; McKay et al., 2007). Given the increasing diversity within contemporary organizations (especially within the United States), the influence of perceived and actual similarity on various aspects of the employment relationship seems to be a particularly relevant research issue (Chrobot-Mason and Ruderman, 2004; Holvino et al., 2004). In particular, as organizations become increasingly diverse, it becomes more important to examine the role that diversity in the supervisor-subordinate dyad plays in determining whether individuals perceive that their psychological contracts have been fulfilled or breached. Thus, while most prior research has examined the psychological contracts of White-Americans, this research utilized two samples that were selected because they contained significant numbers of African-American and Hispanic-American employees. THEORY Similarity of Cognitive Styles While the influence of cognitive similarity between individuals in or-

ance (Robinson and Morrison, 1995; Turnley et al., 2003). However, while the outcomes of PCB have been widely documented, very little research has examined possible antecedents of PCB (ONeill et al., 2007). In the limited empirical research to date, Robinson (1996) found that an employees initial trust in his/her employer was negatively related to the perception of PCB, Robinson and Morrison (2000) suggested that reneging and incongruence are the two main sources of PCB, and Raja, Johns, and Ntalianis (2004) examined individual personality traits as predictors of PCB. One potentially important issue that has not received much attention is the influence that the relationship between the supervisor and subordinate has on the perception of PCB. While the psychological contract is conceptualized as an implicit agreement between the individual and his/ her employing organization, prior research suggests that supervisors (as the most important organizational representative in the employment relationship) play an especially meaningful role in the development and maintenance of the psychological contract (Rousseau, 1995). As such, one relevant question is whether certain types of similarity between a supervisor and subordinate are associated with perceptions of PCB. This issue is important because prior research suggests that similarities accentuate the positive characteristics and dissimilarities accentuate the negative characteristics of a dyadic relationship (Tsui et al., 2002). Therefore, although there appears to be no previous empirical research on this particular topic, it is reasonable to believe that supervisor-subordinate sim-

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SUAZO, TURNLEY AND MAI-DALTON ganizations has been examined in a number of contexts, it has not been examined in terms of its influence on psychological contracts. This omission is somewhat surprising given the prominence of cognition in the development and maintenance of the psychological contract. Previous research indicates that similarity in cognitive decision-making styles leads to enhanced supervisor-subordinate relationships (e.g., Allinson et al., 2001; Triandis, 1960). Moreover, cognitive similarity in the supervisor-subordinate dyad is likely to result in shared cognitive schemata. Schemas are developed as a result of life experiences and determine the way events are perceived by helping individuals fill in the blanks from missing or unavailable information (Crocker et al., 1984). Therefore, a common frame of reference between the supervisor and subordinate is likely to promote agreement regarding the promises that comprise the psychological contract and to result in a mutuality of understanding regarding the terms and conditions of the employment relationship (Rousseau, 2001). Here, it is suggested that the similarity of cognitive styles between the supervisor and subordinate will influence the perception of PCB. In particular, cognitive similarity should result in increased levels of interpersonal attraction, greater communication, and reduced ambiguity in the supervisor-subordinate dyad (Graen, 1989; Johlke and Duhan, 2001). As a result, subordinates who are cognitively similar to their supervisors are likely to have fewer misunderstandings, which should result in fewer perceptions that promises have been broken. Thus, cognitive similarity between supervisors and subordinates is

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likely to be negatively related to the perception of PCB.

Gender and Race Similarity Research on relational demography, which refers to demographic variation (e.g., gender, race) among employees that interact regularly, has consistently found that dissimilarity in the supervisor-subordinate dyad leads to negative work attitudes and behaviors (Williams and OReilly, 1998). For example, Tsui and OReilly (1989) found that demographic differences between a supervisor and subordinate are often associated with heightened role ambiguity on the part of the subordinate, unfavorable performance evaluations of the subordinate, and ratings of less personal attraction by the supervisor. Thomas (1990) found that proteges in mixed-race mentor ing relationships received less psychosocial support than proteges in same race mentoring relationships. In addition, demographically different individuals are likely to hold vastly different perceptions regarding the same events, and dissimilarity in supervisor-subordinate dyads has been found to result in less communication between the supervisor and subordinate (Ely, 1995; Nemetz and Christensen, 1996; Williams and OReilly, 1998). Extending the findings of prior research on relational demography to the study of psychological contracts suggests that demographic heterogeneity in supervisor-subordinate dyads is likely to result in the perception of higher levels of PCB. Instances of per-

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CHARACTERISTICS OF THE SUPERVISOR-SUBORDINATE RELATIONSHIP their leaders than do their in-group counterparts. Similar to the LMX literature, the research on psychological contracts is based on the ideas of reciprocity and social exchange. Specifically, the psychological contract is described as a reciprocal exchange agreement between the employee and the employer (Rousseau, 1995). However, employees often treat the actions of their direct supervisor as the personification of the organizations commitment to them (Levinson, 1965; Rousseau, 1995). As a result, psychological contract theory places a great deal of emphasis on the relationship between an employee and his/her immediate supervisor. Because of this, LMX theory may be an especially important lens through which to view the psychological contract. In particular, it is suggested here that LMX will act as the critical intervening (or mediating) variable between supervisor-subordinate similarity and perceived PCB. The vast majority of work on both cognitive and demographic similarity is based on the similarity-attraction paradigm (e.g., Byrne et al., 1966; Werner and Parmlee, 1979). In general, the similarity-attraction paradigm predicts that similarity in a vast array of individual attributes such as attitudes, values, and demographic characteristics leads to interpersonal attraction and closer relationships (e.g., Byrne et al., 1966; Werner and Parmlee, 1979). Indeed, prior research suggests that both perceived and actual similarity within the dyad are often associated with enhanced relationships between supervisors and subordinates (e.g., Baskett, 1973; Triandis, 1960; Turban et al., 1990). Moreover, prior research has found a direct link between similarity

ceived PCB that result from demographic heterogeneity are likely to result either from divergent perceptions of work-related promises or insufficient communication regarding the promises or obligations that comprise the employment relationship (Morrison and Robinson, 1997). Thus, it is posited here that actual dissimilarity in the supervisor-subordinate dyad, defined in terms of gender or race, will be positively related to the perception of PCB.
Hypothesis 2. Subordinates in mixed-gender supervisor-subordinate dyads will perceive more PCB than subordinates in samegender supervisor-subordinate dyads. Hypothesis 3. Subordinates in mixed-race supervisor-subordinate dyads will perceive more PCB than subordinates in same-race supervisor-subordinate dyads.

Mediating Effects of LeaderMember Exchange Since its introduction, LeaderMember Exchange Theory (LMX) has been used by researchers to explain the relationships a supervisor has with each of his or her subordinates (Dansereau et al., 1975). The relationships that leaders develop with subordinates have been described on a continuum. At one extreme are subordinates who are part of the ingroup. In-group membership is characterized by a high degree of mutual trust, respect, and obligation (Graen and Uhl-Bien, 1995). At the other extreme are the subordinates who are part of the out-group. Out-group membership is characterized by low trust, respect, and obligation (Graen and Uhl-Bien, 1995). In addition, out-group subordinates receive worse performance ratings, less attention and fewer perks from

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SUAZO, TURNLEY AND MAI-DALTON in the supervisor-subordinate dyad and the quality of the LMX relationship. Specifically, prior research suggests that the greater the similarity in the supervisor-subordinate dyad, the higher the quality of the LMX relationship (e.g., Engle and Lord, 1997; Liden et al., 1993; Turban and Jones, 1988). Consistent with this prior research, it is expected that supervisorsubordinate similarity in terms of both cognitive styles and demographic characteristics will result in higher quality LMX relationships. Another branch of research on LMX has focused on the outcomes that are determined by the quality of the supervisor-subordinate relationship (e.g., Harris et al., 2005; Ilies et al., 2007; Sparrowe et al., 2006). While the relationship between LMX and the perception of PCB has not been empirically examined, it is likely that LMX will be related to employees perceptions of PCB. In particular, prior research on the outcomes of LMX suggests that LMX is positively related to trust (Bauer and Green, 1996), empowerment (Gomez and Rosen, 2001), and communication frequency (Baker and Ganster, 1985). This research also indicates that LMX is positively related to performance appraisal ratings (Campbell and Swift, 2006; Judge and Ferris, 1993). Taken together, these ideas suggest that LMX is likely to mediate the relationship between supervisor-subordinate similarity and PCB. That is, this study suggests that similarity between a supervisor and subordinate is likely to result in in-group membership for the subordinate. Subordinates who are members of the ingroup are likely to receive considerably better treatment from their supervisors than subordinates

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who are out-group members (Gomez and Rosen, 2001). As a result, subordinates engaged in high-quality LMX relationships with their supervisors (e.g., in-group members) should be more likely than out-group members to perceive that the organization has lived up to its promises and commitments.
Hypothesis 4a: LMX will mediate the relationship between supervisor-subordinate cognitive similarity and perceived PCB. Hypothesis 4b: LMX will mediate the relationship between supervisor-subordinate gender similarity and perceived PCB. Hypothesis 4c: LMX will mediate the relationship between supervisor-subordinate race similarity and perceived PCB.

METHOD A total of 234 full-time employees participated in this research. Fortyone percent of the respondents were male and 59% were female. Approximately 46% of respondents were Hispanic-American, 40% were AfricanAmerican, and 14% were White-American. The mean age of the respondents was 37. Across these individuals, organizational tenure averaged 4.5 years and job tenure averaged 2.1 years. Data were collected from two different samples in the United States. The first sample consisted of 126 African-American (N 95) and Hispanic-American (N 31) working professionals who were participants in the PhD Project Conference. The PhD Project Conference is an annual meeting coordinated by the KPMG Foundation to address the lack of ethnic diversity in business school faculties. Participation in the meeting is open only to African-American, Hispanic-American, and Native-American professionals who are consider-

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CHARACTERISTICS OF THE SUPERVISOR-SUBORDINATE RELATIONSHIP Demographic Similarity. Subordinates were asked to report their gender and race (summary characteristics discussed above) as well as the gender and race of their immediate supervisor. Overall, 68% of respondents worked for a supervisor who was male, while 32% worked for a supervisor who was female. In addition, 8% of respondents worked for a supervisor who was African-American, 37% worked for a supervisor who was Hispanic-American, 53% worked for a supervisor who was White-American, and 2% worked for a supervisor who was either Native-American or Asian-American. Dyads comprised of supervisors and subordinates of the same gender were coded with a one. Dyads comprised of supervisors and subordinates of different genders were coded with a zero. Forty-three percent of participants worked for a supervisor who was of the same gender as themselves. A similar process was used for coding supervisor-subordinate dyads in terms of their racial composition (i.e., a one was assigned when supervisors and subordinates were of the same race, while a zero was assigned when supervisors and subordinates were of different races). Fiftyseven percent of participants worked for a supervisor who was of the same race as themselves. Leader-Member Exchange. The quality of the supervisor-subordinate relationship was examined using the seven-item measure of Leader-Member Exchange (LMX-7) provided by Graen and Uhl-Bien (1995). Based on a meta-analytic investigation of the scales used to measure leader-member exchange, Gerstner and Day report that the LMX-7 appears to provide the soundest psychometric

ing the pursuit of a doctorate in one of the business disciplines. Participants in this research project had not left their jobs (i.e., all were employed at the time the data were collected). The second sample consisted of 108 full-time employees working in whitecollar positions for a county government in New Mexico. This sample was comprised of 76 Hispanic-Americans and 32 White-Americans. (Because only three responses two from the PhD Project and one from the County were obtained from Native American respondents, those data were not included in the analyses.) Data were collected via mail surveys sent to the home addresses of the PhD Project participants and to the work addresses of the County participants. A follow-up request was mailed three weeks after the initial request for participation. Participants returned the surveys directly to the lead researcher using a postage-paid return envelope. All participants were assured of confidentiality. The response rate for the PhD Project sample was 28%, and the response rate for the County employees was 26%. Measures Cognitive Similarity. Cognitive similarity was assessed using a six-item measure developed by Liden, Wayne, and Stillwell (1993). Two representative statements are: 1) My supervisor and I handle problems in a similar way and 2) My supervisor and I think alike in terms of coming up with a similar solution for a problem. Responses to the statements were made on a seven-point Likerttype scale ranging from (1) Strongly Disagree to (7) Strongly Agree. Cronbachs alpha for the scale was .96.

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SUAZO, TURNLEY AND MAI-DALTON properties of all available LMX measures (1997: 837). Two representative items from the LMX-7 are: 1) Regardless of how much formal authority he/she has built into his/her position, what are the chances that your immediate supervisor would use his/her power to help you solve problems in your work? and 2) How would you characterize your working relationship with your immediate supervisor? The coefficient alpha obtained for this measure was .90. Psychological Contract Breach. Perceived PCB was measured using an instrument designed to assess the overall extent to which the organization has lived up to its promises and obligations. This scale was developed by Robinson and Morrison (2000). This measure consists of five items that are rated using a seven-point Likert-type scale anchored by (1) Strongly Disagree and (7) Strongly Agree. Two sample items are: 1) Almost all the promises made by my employer during recruitment have been kept so far (reverse scored) and 2) My employer has broken many of its promises to me even though Ive upheld my side of the deal. A coefficient alpha of .91 was obtained for this measure. Control Variables. Several control variables were included for all analyses. Organizational tenure and the amount of time the subordinate had worked for his/her supervisor were included because the length of employment may be related to the extent of perceived PCB (Robinson, 1996). In addition, consistent with the research on relational demography (e.g., Tsui et al., 1992), subordinate gender (Male 0, Female 1) and race (reflected as two dummycoded variables to account for the three categories: African-American,

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Hispanic-American, and White-American) were also included in the analyses to control for the possibility that perceived PCB varies across individuals based on their demographic characteristics. Finally, in order to control for mean differences across samples, we also controlled for the sample from which the data were collected (PhD Project 0, County 1). The means, standard deviations, and correlations among all key variables appear in Table 1. Cronbachs alphas for the scales appear along the diagonal. RESULTS Confirmatory Factor Analysis A confirmatory factor analysis (CFA) using maximum likelihood estimation and randomly created item parcels (as outlined by Floyd and Widaman [1995]) was performed in order to assess the discriminate validity of the PCB, LMX, and cognitive similarity scales. Next, because all of the data were collected from the same source and because the PCB, LMX, and cognitive similarity scales were correlated, the fit of the three-factor model was compared to the fit of the one-factor model. The three-factor model fit the data very well ( 2 2, df 6, GFI .99, AGFI .99, NFI .99) while the one-factor model did not fit the data very well ( 2 304, df 9, GFI .69, AGFI .29, NFI .76). Finally, an unparcelled CFA model indicated that each of the items in the three-factor model loaded significantly onto its specified factor. Thus, these results suggest that the perceived PCB, LMX, and cognitive similarity scales are empirically distinct.

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Table 1 Means, Standard Deviations, Correlations, and Scale Reliabilitiesa Mean 4.50 2.13 .59 .41 .46 .46 4.46 .43 .57 3.66 3.19 1.60 .06 -.02 .06 .83 -.09 .13 -.06 -.34 .31 .50 -.20 .29 .11 .40 .50 -.05 -.14 -.39 .16 -.10 -.36 .23 -.14 1.67 -.07 .02 -.06 -.42 .30 .50 .16 .22 -.05 -.76 .46 .40 -.09 -.50 .36 -.36 (.96) .09 -.28 .73 -.51 .06 .02 .00 -.19 .19 (.90) -.61 (.91) .50 .15 .24 -.08 -.76 .49 -.11 -.25 .16 .49 .04 -.07 1.64 .44 4.91 SD 1 2 3 4 5 6 7 8 9 10 11

Variable

1. Organizational Tenure

2. Time Under Supervisor

3. Gender

4. African-American

5. Hispanic-American

6. Sample

7. Cognitive Similarity

8. Gender Similarity

9. Race Similarity

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10. LMX

11. Perceived PCB

CHARACTERISTICS OF THE SUPERVISOR-SUBORDINATE RELATIONSHIP

Cronbachs alphas are listed on the diagonal in parentheses. All correlations above |.14| are significant at p < .05. All correlations above |.20| are significant at p < .01. All correlations above |.23| are significant at p < .001.

SUAZO, TURNLEY AND MAI-DALTON Main Effects of Similarity Hypothesis 1 examined the effect of perceived similarity (in terms of cognitive style) between a supervisor and subordinate on perceived PCB, while Hypotheses 2-3 examined the effects of actual similarity (in terms of gender and race) between a supervisor and subordinate on perceived PCB. Multiple regression analyses were used to test these hypotheses. As the results of Table 2 suggest, Hypothesis 1 was supported. Specifically, the greater the similarity between the supervisor and the subordinate in terms of cognitive style, the less the extent of PCB reported by the subordinate. However, Hypotheses 2-3 were not supported. Thus, whether the subordinate worked for a supervisor of the same or different gender or whether the subordinate worked for a supervisor of the same or a different race, those characteristics did not influence the extent of PCB experienced by the subordinate. Mediating Effects of LeaderMember Exchange To test for the mediating effects of leader-member exchange (Hypotheses 4a-c), the method suggested by Baron and Kenny (1986) was utilized. According to Baron and Kenny (1986), before testing for mediation, a preliminary step is to verify that three assumptions have been met: 1) that the independent variable (similarity) is correlated with the dependent variable (perceived PCB), 2) that the independent variable (similarity) is correlated with the mediator variable (LMX), and 3) that the mediator variable (LMX) is correlated with the dependent variable (perceived PCB).

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Because demographic similarity was not significantly associated with perceived PCB (cf. Table 1 and Table 2), no tests were run to examine whether LMX mediated the relationships between gender similarity or race similarity and perceived PCB. However, because all three assumptions were met for the analyses regarding cognitive similarity (cf. Table 1 and Table 2), tests were conducted to determine whether LMX mediated the relationship between cognitive similarity and perceived PCB. According to Baron and Kenny (1986), in order to conclude that there is perfect (or full) mediation, it is necessary to demonstrate that the independent variable has no significant effect on the dependent variable when the mediating variable is controlled for in the regression analysis. The results of the data analyses reveal that Hypothesis 4a was supported. As shown in Table 2, LMX fully mediated the relationship between similarity of cognitive style and perceived PCB. Specifically, while similarity of cognitive style is significantly related to perceived PCB when LMX is not included in the regression analysis (Step 2), when LMX is controlled for (Step 3), cognitive style is no longer significantly related to perceived PCB (while LMX is significantly related to this outcome). DISCUSSION In contrast to most prior research which has focused on the consequences of perceived PCB, this study examined the antecedents of such experiences. Specifically, this study examined supervisor-subordinate similarity as a predictor of perceived PCB. In addition, it examined the mediating effect of LMX on the relationship

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CHARACTERISTICS OF THE SUPERVISOR-SUBORDINATE RELATIONSHIP

Table 2 Regression Analyses Results with Psychological Contract Breach as the Dependent Variable (N = 234) Variable Step 1 Organizational TenureA Time Under SupervisorA GenderA African-AmericanA Hispanic-AmericanA SampleA Cognitive Similarity Gender Similarity Race Similarity Leader-Member Exchange F R2 R2 Note: AControl Variable, ***p < .001.
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Step 2 .02 -.02 .09 .42 .52 -.48 -.40*** -.07 .07

Step 3 .00 .06 .04 .54 .55 -.27 -.06 .00 .18 -.97***

.04 -.01 .05 .69 .45 -.83

6.16*** 10.14*** 14.82*** .12 .28 .16 .38 .10

SUAZO, TURNLEY AND MAI-DALTON between supervisor-subordinate similarity and perceived PCB. Several important conclusions are suggested by the results of this study. First, this study compared the influence of three forms of supervisor-subordinate similarity (cognitive style, gender, and race) on subordinates perceptions of PCB. Similarity of cognitive style was found to be negatively related to perceived PCB. However, demographic similarity (in terms of gender or race) was not found to be significantly related to perceived PCB. Thus, whether supervisors and subordinates approach problems similarly appears to be more related to perceived PCB than whether supervisors or subordinates are of the same gender or race. Interestingly, while previous research has not examined the influence of similarity on perceived PCB, these findings appear to be generally consistent with prior research that has examined the influence of similarity on performance ratings and person-organization fit. Specifically, Harrison, Price, and Bell (1998) suggest that deep-level diversity (e.g., similarity in terms of cognitive style) often has stronger consequences for interacting individuals than surfacelevel diversity (e.g., similarity in terms of characteristics like gender or race). Along the same lines (but dealing with the specific area of performance ratings), Strauss, Barrick, and Connerley (2001) suggest that people react and make attributions on the basis of perceived similarities, not actual similarities. In addition, Cable and Judge (1996) found that perceived similarity in person-organization fit perceptions predicted job choice intentions, while actual similarity (i.e., demographic similarity) did not predict such intentions. Thus,

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the results in the current study extend the findings of other research that has examined the effects of similarity in the workplace. Second, this study suggests that LMX fully mediates the relationship between cognitive-style similarity and perceived PCB. The mediated regression analyses suggest that similarity in terms of cognitive-style leads to a higher-quality supervisor-subordinate relationship, which, in turn, increases interaction and communication and reduces the likelihood that subordinates believe that their psychological contracts have been breached. As such, this study identifies the quality of the relationship between a supervisor and subordinate (i.e., LMX) as a powerful explanatory mechanism in understanding the process through which antecedent variables might influence perceived PCB. Thus, while prior research has alluded to the importance of the supervisor-subordinate relationship in predicting the perception of PCB, this study empirically demonstrates the key role that LMX plays in the process. Third, the findings of this study also provide insights that organizations might be able to utilize to better manage an increasingly diverse workforce. In particular, the results indicate that gender and race differences within the supervisor-subordinate dyad were unrelated to the perception of PCB. Thus, it appears that assigning mixed-gender and mixedrace supervisor-subordinate dyads is unlikely to increase employees perceptions that their psychological contracts have been breached. This result may be particularly important given both the increasing diversity in the U.S. workplace and the desire of most organizations to retain members of under-represented groups (e.g.,

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CHARACTERISTICS OF THE SUPERVISOR-SUBORDINATE RELATIONSHIP influence of common method variance. While the effects of common method variance cannot be completely discounted, there are several reasons to believe that its influence may not be too great in this study. First, because an individuals cognitive-style is a relatively enduring characteristic (and relatively unlikely to be influenced by an individuals responses to other questions), the threat of common method variance may be somewhat mitigated in the analyses examining this characteristic. Second, the other type of similarity examined here focused on the demographic characteristics of the respondent and his/her supervisor which should also reduce the likelihood that common method variance is significantly influencing the results. Third, a post hoc analysis using Harmans one-factor test (Podsakoff and Organ, 1986) indicated that not all of the variables loaded onto a common factor, an outcome suggesting that common method variance is not the primary determinant of the results in this study. Finally, the confirmatory factor analysis (discussed at the beginning of the results section) indicated that the PCB, LMX, and cognitive style variables were empirically distinct. Taken together, these points help to allay concerns regarding the extent to which common method variance may be influencing the results. Another limitation is that this study took a relatively simple approach to analyzing demographic differences between supervisors and subordinates. For example, it focused on whether the subordinate and supervisor were similar or different in terms of gender or race. However, it is possible that not all types of dissimilarity are equal. For instance, it

women, African-Americans, and Hispanic-Americans). Fourth, and finally, the results of this study suggest that it is important for managers to try to develop high quality LMX relationships with as many subordinates as possible. This is particularly relevant given the increasing trend for supervisor-subordinate relationships to be characterized by lower levels of trust, respect, and loyalty (De Meuse et al., 2001). To meet the objective of high quality LMX relationships, prior research indicates that managers can be trained (leadership making) to enhance the quality of the relationships they have with their subordinates (Graen and Uhl-Bien, 1995; Scandura and Graen, 1984). For instance, managers may be able to transform subordinates who were members of the outgroup into members of the in-group by following a three-stage cycle in which the individual moves from stranger status to an acquaintance status to partner status (Graen and Uhl-Bien, 1991; (Graen and Uhl-Bien, 1991, 1995). The development of a greater number of high quality LMX relationships should, in turn, reduce the extent to which subordinates experience breaches of their psychological contracts. Limitations While we believe that this study advances the literature on psychological contracts in several important ways, this research is not without its limitations. Like most studies that have examined perceived PCB, this research relied on self-reported data and employed a cross-sectional design. As such, one concern is that the results obtained here may be subject to the

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SUAZO, TURNLEY AND MAI-DALTON might be that male subordinates working for female supervisors would experience different levels of perceived PCB than would female subordinates working for male supervisors. In addition, a White-American subordinate might respond differently to working for an African-American or Hispanic-American supervisor than an African-American or Hispanic-American subordinate would respond to working for a WhiteAmerican supervisor. However, while such differences could turn out to be important in other samples, follow-up analyses conducted on these data suggest that such differences did not matter among this set of respondents. There were no significant differences in the extent of subordinates perceived PCB based on the gender or racial composition of the supervisorsubordinate dyad. Future Research The results of this study suggest several possibilities for future research focusing on the psychological contract. In particular, this study highlights the need for additional research on the antecedents of perceived PCB. While recent research has begun to investigate the influence of personality on the psychological contract (e.g., Raja et al., 2004), there are a number of traits and characteristics that might play a role in predicting perceived PCB. Specifically, work ethic, reciprocation wariness, and locus-of-control are a few individual differences that might influence the perception of PCB. Also, previous researchers (Rousseau and Schalk, 2000a, 2000b) have commented on the fact that the samples used in studies of the psychological contract need to become more

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diverse. While this research focused on obtaining samples that included a significant number of African-American and Hispanic-American professionals, future research should focus on identifying samples with a closer balance between members of various racial categories (e.g., Asian-Americans, African-Americans, HispanicAmericans, White-Americans) and samples accessing a wider variety of occupations. Finally, samples consisting of employees from various countries could provide valuable insights into how national cultural differences influence individuals perceptions of (and reactions to) PCB (Rousseau and Schalk, 2000a, 2000b). Obviously, psychological contracts are influenced by the sociopolitical and cultural influences of the country in which the organization is located or to which the employee belongs. For instance, in France, the psychological contract has been described as existing not simply between the individual and the organization, but between the employee, the employer, and the government. Because the government takes a relatively active role in the relationships between employees and organizations, the French tend to believe that the government is supposed to compensate individuals for any imbalances that occur in the relationship between the employee and employer (Cadin, 2000). Thus, the specific make-up of the psychological contract is likely to vary dramatically across countries. Conclusion Due in large part to the changing nature of the exchange relationship between individuals and their organizations, psychological contracts have

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CHARACTERISTICS OF THE SUPERVISOR-SUBORDINATE RELATIONSHIP predict perceived PCB than whether supervisors and subordinates are of the same gender or race. Additionally, we found that the quality of the relationship between the supervisor and subordinate (i.e., LMX) may be a powerful mechanism for explaining the process through which similarity influences perceived PCB. Future research on additional antecedents of perceived PCB is necessary to develop a more complete understanding of this important employee cognition.

become a topic of great interest to academicians and managers alike. While prior research has increased our understanding of the consequences of perceived PCB, an emerging area of inquiry investigates the antecedents of such experiences. This study suggests that some forms of supervisor-subordinate similarity may be more important than others as predictors of perceived PCB. Specifically, we found that similarity of cognitive styles between a supervisor and subordinate may be more likely to

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