Investigating Employee Turnover in the Construction

Industry: A Psychological Contract Perspective

Ying-Yi Chih, Ph.D. 1; Kohyar Kiazad, Ph.D. 2; Lian Zhou, Ph.D. 3;
Alessandra Capezio, Ph.D. 4; Min Li 5; and Simon Lloyd D. Restubog 6

Abstract: Employee turnover has long been, and will continue to be, a significant concern in the construction industry. Organizations that
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.

can retain skilled employees have a stronger competitive advantage. In two independent studies in China and the Philippines, the authors
investigated the role of psychological contract breach in predicting employee turnover in the construction industry. The results reveal that
psychological contract breach results in emotional exhaustion, which in turn predicts employees’ turnover intentions (Study 1) and actual
turnover (Study 2). The results further suggest that younger as opposed to older construction workers who experience psychological contract
breach are more likely to experience greater levels of emotional exhaustion and exit their organizations. Accordingly, to retain skilled work-
ers, construction organizations should understand and continuously manage employees’ psychological contract expectations and provide
more support to younger workers. This paper offers significant theoretical contributions because it is one of the few in the construction
literature that examine both employee turnover intentions and actual turnover from a psychological contract perspective. DOI: 10.1061/
(ASCE)CO.1943-7862.0001101. © 2016 American Society of Civil Engineers.
Author keywords: Age; Construction workers; Emotional exhaustion; Employee turnover; Psychological contracts; Psychological contract
breach; Labor and personnel issues.

Introduction
Employee turnover has long been a significant concern in the con-
struction industry worldwide as a result of the industry’s highly
hazardous and stressful job conditions (Business Roundtable
1982). For example, the U.S. construction industry reported one
of the highest annual quit rates (20.3%) in the world (Bureau of
Labor and Statistics 2014). This phenomenon is costly to construc-
tion organizations and the industry because of the human capital
investments made (e.g., in employee recruitment and development)
(Business Roundtable 1982; Lingard 2003). In a demanding work
environment where industry-specific knowledge and skills take
time to master, the turnover of qualified construction personnel
1
Senior Lecturer, Research School of Management, ANU College of
Business and Economics, Australian National Univ., 26 Kingsley St.,
Acton, ACT 2601, Australia (corresponding author). E-mail: ying-yi
.chih@anu.edu.au
2
Senior Lecturer, Dept. of Management, Monash Business School,
Monash Univ., Sir John Monash Dr., Caulfield, VIC 3145, Australia.
E-mail: kohyar.kiazad@monash.edu
3
Assistant Professor, School of Management, Guangdong Univ. of
Technology, Yinglong, Guangzhou 510520, P.R. China. E-mail:
zhouliansd@gmail.com
4 (Griffeth et al. 2000). They have identified several salient anteced-
Senior Lecturer, Research School of Management, ANU College of
Business and Economics, Australian National Univ., 26 Kingsley St.,
Acton, ACT 2601, Australia. E-mail: alessandra.capezio@anu.edu.au
5
Professor, School of Business Administration, South China Univ. of
Technology, Wushan, Guangzhou 510640, P.R. China. E-mail: bmminli@
scut.edu.cn
6
Professor, Research School of Management, ANU College of Business
and Economics, Australian National Univ., 26 Kingsley St., Acton, ACT
2601, Australia. E-mail: simon.restubog@anu.edu.au
Note. This manuscript was submitted on January 15, 2015; approved on
October 9, 2015; published online on January 11, 2016. Discussion period
open until June 11, 2016; separate discussions must be submitted for in-
dividual papers. This paper is part of the Journal of Construction Engi-
neering and Management, © ASCE, ISSN 0733-9364.
can also result in loss of productivity and expertise, and can con-
tribute to a significant upsurge in on-site accidents (Jones et al.
2010). As the industry faces an intensifying labor shortage and in-
creased competition over talent (Sing et al. 2012), organizations
that can retain skilled employees will have a stronger competitive
advantage.
In recent years, there have been calls for more research to
address this long prevailing problem from a psychological
(e.g., individual) and sociological (e.g., social aspects of the work
environment) perspective (Love et al. 2011). This viewpoint is sup-
ported by a growing body of construction literature that investigates
construction workers’ behaviors (e.g., risk taking, absenteeism) and
the corresponding consequence (e.g., job performance) from a
social-psychological perspective (see for example Ahn et al. 2013;
Tixier et al. 2014). Surprisingly, research on employee turnover
in the construction industry, from a social-psychological perspec-
tive, is limited. With few exceptions, it has focused on its anteced-
ents (e.g., job satisfaction, job characteristics) and its consequences
(e.g., Lingard 2003). Other disciplines are more advanced in this
regard. For example, numerous management and organizational
behavior scholars have adopted the social-psychological perspec-
tive to understand employee turnover as an industry problem
ents to turnover, including job-related attitudes and dysfunctional
behaviors (e.g., tardiness and absenteeism), perceived work oppor-
tunities (e.g., work alternatives), and organizational changes.
Although these findings help explain predictors of turnover and
ways to curtail the loss of valued human resources, it is necessary
to examine this issue specifically in the construction industry.
The present paper investigates the role of psychological contract
breach in predicting emotional exhaustion and turnover in the
construction industry. Psychological contracts reflect “individual
beliefs, shaped by the organization regarding terms of an exchange
agreement between individuals and their organization” (Rousseau
1995, p. 9). Psychological contract breach captures “the employee’s

© ASCE 04016006-1 J. Constr. Eng. Manage.

J. Constr. Eng. Manage., 04016006

 perception regarding the extent to which the organization has failed
to fulfill its promises or obligations” (Zhao et al. 2007, p. 649). An
extensive body of evidence confirms that nonfulfillment of psycho-
logical contracts has a detrimental effect on employees’ work
outcomes and may elicit turnover intentions (Zhao et al. 2007).
However, the psychological contract perspective has received
scarce empirical attention in the construction literature, so it should
be studied for a broader understanding of the potential causes of
employee turnover. Given that the aging workforce is another sig-
nificant industry concern (Sing et al. 2012), this research further
examines the influence of age on the relationships among psycho-
logical contract breach, emotional exhaustion, and turnover.
Knowledge generated from this research will help develop strate-
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.
gies to curtail construction employee turnover. The following
sections discuss the proposed research model, the theoretical pre-
dictions among study variables, and the theoretical and practical
implications of the research findings.
Theoretical Framework and Hypotheses
Psychological Contracts and Psychological Contract
Breach
Psychological contract breach takes place when the employee
perceives that the organization has failed to satisfactorily provide
the employee the inducements that it had promised to provide
(Rousseau 1995). For example, an employer may promise a
construction worker rewards for exemplary performance. The con-
struction worker then exerts effort to improve his or her perfor-
mance. If the employer does not subsequently provide rewards,
the result is psychological contract breach. In this example, the
construction worker cognitively evaluates his or her contributions
and outcomes against the rewards promised. Psychological contract
breach therefore derives from the construction worker’s perception
that there is a discrepancy between what was promised (rewards in
exchange for exemplary performance) and what was actually de-
livered. Prior research shows that psychological contract breach
is negatively associated with a host of work attitudes and behaviors
(e.g., Restubog et al. 2007, 2008, 2010; Zhao et al. 2007). Indeed,
fulfilling employees’ psychological contracts is argued to be criti-
cal to construction worker retention (Dainty et al. 2004).
Psychological Contract Breach, Emotional Exhaustion,
and Turnover
The construction literature (e.g., Yip and Rowlinson 2009) has
confirmed the predictive relationship between burnout and turn-
over intentions. The current research extends this line of reasoning
in examining the conditional indirect effects of psychological
contract breach on turnover via emotional exhaustion [one of
the three widely adopted burnout symptoms, according to Maslach
et al. (1986)] through the theoretical perspective of conservation
of resources.
Conservation of resources (COR) is a theory of motivation
predicated on the idea that people strive to protect, retain, and ac-
quire resources (e.g., time, money, health, relationships), or “those
objects, personal characteristics, conditions, or energies that are
valued” (Hobfoll 1989, p. 516). When resources are lost or threat-
ened, people adopt either a defensive posture to conserve their re-
maining resources (to avoid further loss) or a proactive strategy of
resource investment to acquire more resources (to offset the loss)
(Hobfoll 1989). This paper adopts COR as a theoretical lens be-
cause it is increasingly significant in the organizational literature
(Halbesleben et al. 2014) and it is useful in explaining various
© ASCE 04016006-2
J. Constr. Eng. Manage., 04016006
employee affective and behavioral reactions, including responses
to psychological contract breach (Kiazad et al. 2014) and work-
family conflict (Lingard et al. 2010). COR provides a parsimonious
explanation of why psychological contract breach is likely to pro-
duce emotional exhaustion and subsequent voluntary turnover.
Also, as older age can be conceptualized as a personal resource,
COR can explain variations in employees’ responses to psychologi-
cal contract breach based on age.
COR theory proposes that individuals have a limited pool
of resources from which to draw to meet their needs or goals
(Halbesleben et al. 2014), which makes resource loss distressing.
For example, Carlson et al. (2012) found that subordinates of
abusive supervisors (who directly threaten or harm subordinates’
well-being) are more likely to experience burnout, leaving them
less time and energy for resource-enriching activities. Similarly, be-
cause anticipated inducements are not delivered, psychological
contract breach can be construed as a type of resource loss (Kiazad
et al. 2014). The resource loss deriving from psychological con-
tract breach can be associated with psychological strain (manifested
in emotional exhaustion) in that individuals disfavor losing resources
that can help them meet professional goals (Halbesleben et al. 2014).
This research proposes three hypotheses as discussed in the fol-
lowing sections. The theoretical relationships examined in this re-
search is illustrated in Fig. 1.
Hypothesis 1
The first hypothesis states that psychological contract breach is
indirectly related to turnover via emotional exhaustion.
In keeping with the resource conservation tenet of COR,
construction workers who feel emotionally exhausted are likely
to “distance themselves” from the source of the exhaustion
(Halbesleben et al. 2014). Specifically, because resources are finite
and emotional exhaustion depletes them, construction workers may
become motivated to leave their organizations as a means of
safeguarding their remaining resources (or avoiding further loss).
In other words, quitting a job can prevent a resource loss spiral
because emotional exhaustion may beget future resource loss in
the domains of work and nonwork (e.g., less time and energy to
spend with family) (Grandey and Cropanzano 1999).
Hypothesis 2
Hypothesis 2 states that age moderates the relationship between
psychological contract breach and emotional exhaustion, such that
the positive relationship between psychological contract breach and
emotional exhaustion is stronger for younger as opposed to older
construction workers.
Although psychological contract breach can be perceived as a
loss of valued resources, not all construction workers experience
loss in the same way. In particular, COR theory asserts that those
endowed with existing resources are more immune to the detrimen-
tal effects of loss (Hobfoll 1989). For example, personal resources,
such as self-esteem, can help decrease the impact of resource loss
Fig. 1. Theoretical model
J. Constr. Eng. Manage.
 on employees (Halbesleben et al. 2014). Following this logic, a
construction worker’s age can be conceptualized as a personal
resource, with older workers being better able to regulate their
emotions following resource loss, including psychological contract
breach (Bal et al. 2013). In other words, age is expected to mod-
erate the relationship between psychological contract breach and
emotional exhaustion. Older construction workers are likely to re-
act less intensely to resource loss because their greater maturity
and experience render them better able to manage their emotions
(Bal et al. 2013).
Moreover, older workers are less likely to experience the intense
negative emotions associated with emotional exhaustion because
they are quicker to experience an affective shift toward a positive
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.
address these limitations, Study 2 was conducted to investigate the
same theoretical arguments but with actual turnover data collected
over two measurement periods.
Study 1
Sample and Procedure
Participants were recruited from 14 construction organizations in
China. Each participant received a survey kit including a cover
letter that described the research goals and a self-report questionnaire.
Participants were assured of confidentiality and anonymity. Of the
425 surveys distributed, 305 were completed, with a response rate
of 71.8%. The participants were primarily male (92.1%); mean age

mood following resource loss (Bal et al. 2013). Overall, older age
is a personal resource that yields experience, maturity, and self-
regulation, all of which can help alleviate the negative impact of
psychological contract breach on emotional exhaustion. In contrast,
those who lack resources are more vulnerable to resource loss
following an initial loss. Younger workers, who lack the psycho-
logical resources to cope as effectively with their emotions, may be
more vulnerable to emotional exhaustion following psychological
contract breach. This leads to the second hypothesis.
Hypothesis 3
Hypothesis 3 states that the conditional indirect effect of psychologi-
cal contract breach on turnover intentions via emotional exhaustion
is stronger for younger as opposed to older construction workers.
Integrating Hypotheses 1 and 2, it is proposed that emotional
exhaustion transmits the effect of psychological contract breach
to turnover intentions and turnover behavior. These indirect effects
are stronger for younger as opposed to older construction workers.
Quitting becomes a viable option for withdrawing from emotion-
depleting events as a way to prevent further depletion, especially for
younger workers. Thus, a moderated mediated effect is proposed:
Research Methodology and Results
Overview
Two studies were conducted in the construction industry in China
and the Philippines to test the proposed hypotheses. Study 1 inves-
tigated the relationships among psychological contract breach,
emotional exhaustion, age, and employee turnover intentions. It
was limited in that turnover was measured in terms of intentions
but not actual behaviors (although intentions are a good predictor
of behavior). In addition, given the study’s cross-sectional design,
causal inferences from the data collected could not be drawn. To
was 30.63 years (SD ¼ 6.96); and average tenure was 3.36 years
(SD ¼ 3.26). The responses represented low-educational semi-
skilled workers, with 62.4% of them below junior secondary
education.
Measures
Unless otherwise specified, all items except demographic variables
were measured on a five–point Likert scale (1 = strongly disagree;
5 = strongly agree). The questionnaire was originally prepared in
English and then back-translated into Chinese (Brislin 1980).
Psychological contract breach (PCB) (α ¼ 0.85) was measured
by nine items, among which five were adopted from Chen et al.
(2007) and four from Lo and Aryee (2003). Participants were pre-
sented with a list of commitments generally made by employers to
their employees. They were instructed to rate the extent to which
each promise was fulfilled on a five–point scale, ranging from −2 =
receiving much less than promised to þ2 = receiving much more
than promised. Emotional exhaustion (α ¼ 0.76) was assessed by
six items from Maslach and Jackson (1986). Intentions to quit
(α ¼ 0.63) was measured by three items developed by Cammann
et al. (1983).
Gender and tenure were controlled in the analysis. Gender was
controlled because men and women were found to report different
levels of turnover intentions (Tsui et al. 1992). Tenure was con-
trolled because work experience can be confounded with age
and senior workers reported a higher level of job satisfaction be-
cause of their tenure (Onukwube 2012). The effects of job satisfac-
tion were also controlled because prior studies confirmed a
significant relationship between job dissatisfaction and turnover
intentions (Sang et al. 2009). Job satisfaction (α ¼ 0.69) was as-
sessed by six items taken from Rusbult et al. (1998) and Cammann
et al. (1983).
Results
Means, standard deviations, and bivariate correlations among study
variables are reported in Table 1.

Table 1. Means, Standard Deviations, and Bivariate Correlations for Variables in Study 1
Variable Mean SD 1 2 3 4 5 6 7
Gender 0.92 0.27 — — — — — — —
Age 30.63 6.96 0.05 — — — — — —
Organizational tenure 3.35 3.26 0.09 0.35b — — — — —
Job satisfaction 2.96 0.61 0.00 0.09 0.03 (0.72) — — —
Psychological contract breach (PCB) 3.11 0.68 0.06 −0.03 0.05 −0.41b (0.85) — —
Emotional exhaustion 3.10 0.66 −0.13c 0.09 0.06 −0.29b 0.28b (0.76) —
Turnover intentions 3.05 0.71 0.00 0.00 −0.09 −0.24b 0.21b 0.43b (0.63)
Note: N ¼ 305.
a
p < 0.01.
b
p < 0.001.
c
p < 0.05.

© ASCE 04016006-3 J. Constr. Eng. Manage.

J. Constr. Eng. Manage., 04016006

 Table 2. Hierarchical Regression Analysis Predicting Emotional Exhaustion in Study 1
Emotional exhaustion
Variable/steps b R2 ΔR2 Confidence interval
Step 1
Gender −0.34a — — −0.60 to −0.08
Organizational tenure 0.02 — — −0.01 to 0.04
Job satisfaction −0.32b 0.11b — −0.43 to −0.20
Step 2
Gender −0.37c — — −0.63 to −0.11
Organizational tenure 0.01 — — −0.02 to 0.03
Job satisfaction −0.24b — — −0.36 to −0.11
Psychological contract breach (PCB) 0.19c — — 0.08 to 0.31
Age 0.01a 0.15b 0.04b 0.00 to 0.02
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.

Step 3
Gender −0.34c — — −0.59 to −0.09
Organizational tenure 0.01 — — −0.01 to 0.04
Job satisfaction −0.21c — — −0.33 to −0.09
Psychological contract breach 0.26b — — 0.14 to 0.37
Age 0.01 — — 0.00 to 0.02
PCB × age −0.03b 0.19b 0.04b −0.04 to −0.02
Simple slopes for younger construction workers 0.39b — — 0.23 to 0.55
Simple slopes for older construction workers 0.01 — — −0.11 to 0.13
Note: N ¼ 305. Unstandardized beta coefficients are reported for all steps.
a
p < 0.05.
b
p < 0.001.
c
p < 0.01.

Hypothesis 1 states that psychological contract breach is indi-
rectly related to turnover via emotional exhaustion. To test this indi-
rect relationship, Hayes’s PROCESS macro (2012) with 5,000
bootstrap resamples was used. Demographic variables (e.g., gender,
organizational tenure) and job satisfaction were entered as control
variables because they could potentially influence work attitudes
and behaviors. After controlling for demographic characteristics
and job satisfaction in the first step of the regression model, the
indirect effects of psychological contract breach on self-reported
turnover intentions through emotional exhaustion were shown to
be significant (indirect effect = 0.08, 95% bootstrap, CI: 0.03 to
0.15) (Table 1). This result suggests that construction workers
who perceive a breach of their psychological contract experience
higher levels of emotional exhaustion, which in turn lead to higher
levels of turnover intentions. Hypothesis 1 is thus supported.
Hypothesis 2 states that age moderates the relationship be-
tween psychological contract breach and emotional exhaustion
such that the positive relationship between psychological contract
breach and emotional exhaustion is stronger for younger as op-
variance accounted for (ΔR2 ) between the first step (control
variables) and the second step (main effects) and between the sec-
ond step and the third step (interaction term).
As shown in Step 3 of Table 2, entry of the interaction term
(PCB × age) explained an additional amount of variance in predict-
ing emotional exhaustion (ΔR2 ¼ 0.04) over and above the contri-
bution of the main effects. The interaction between PCB and age
was also significant (b ¼ −0.03, 95% CI: −0.04 to −0.02). Infor-
mation from the regression equation was extracted to plot the effect
of PCB on emotional exhaustion at conditional values of age (þ1
SD representing older workers and −1 SD representing younger
workers). As shown in Fig. 2 and Table 2, the effects of PCB
on emotional exhaustion were statistically significant for younger
4.5
4 b=.39, 95% CI: .23 to .88
Emotional exhaustion

posed to older construction workers. To test this, a hierarchical

multiple regression analysis was conducted to assess the incre-
3.5
mental explanatory power of variables in each block and to con-
trol statistically for demographic and relevant variables (Aiken
et al. 1991). Specifically, in Step 1 demographic characteristics 3
b=.01, 95% CI: −.11 to .13
and job satisfaction were entered as control variables in the first
block of the regression equation. In Step 2, the independent var- 2.5
iable (psychological contract breach, PCB) and the moderator
(age) were entered to test for main effects. The multiplicative
interaction term was computed between the independent variable 2
(PCB) and the moderator variable (age) and entered in the regres- Low High
sion equation in Step 3. Psychological contract breach
Table 2 summarizes the moderated regression results along with
the unstandardized regression coefficients (when the control vari- Older construction workers Younger construction workers
ables, main effects, and multiplicative term/interaction term have
Fig. 2. Interactive effects between psychological contract breach and
been entered into the regression model), R2 (the proportion of vari-
age in predicting emotional exhaustion in Study 1
ance explained by the variables within a block), and the incremental

© ASCE 04016006-4 J. Constr. Eng. Manage.

J. Constr. Eng. Manage., 04016006

 Table 3. Indirect and Conditional Indirect Effects in Study 1
Intention to quit
Variable/step b R2 ΔR2 Confidence interval
Step 1
Gender 0.03 — — −0.26 to 0.32
Organizational tenure −0.02 — — −0.04 to 0.01
Job satisfaction −0.27a 0.06a — −0.40 to −0.14
Step 2
Gender 0.01 — — −0.28 to 0.30
Organizational tenure −0.02 — — −0.04 to 0.01
Job satisfaction −0.20b — — −0.34 to −0.07
Psychological contract breach (PCB) 0.15c 0.08c 0.02c 0.02 to 0.27
Step 3
— — −0.10 to 0.44
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.

Gender 0.17
Organizational tenure −0.03c — — −0.05 to −0.01
Job satisfaction −0.10 — — −0.23 to 0.03
Psychological contract breach 0.06 — — −0.05 to 0.18
Emotional exhaustion 0.43a 0.22a 0.14a 0.32 to 0.55
Indirect effects 0.08 — — 0.03 to 0.15
Conditional indirect effects for younger construction workers 0.24 — — 0.15 to 0.36
Conditional indirect effects for older construction workers 0.05 — — 0.00 to 0.12
Note: N ¼ 305.
a
p < 0.001.
b
p < 0.01.
c
p < 0.05.

construction workers (b ¼ 0.39, 95% CI: 0.23 to 0.55) but not for
older construction workers (b ¼ 0.01, 95% CI: −0.11 to 0.13). In
other words, psychological contract breach results in greater levels
of emotional exhaustion for younger but not older workers.
Hypothesis 2 is thus supported.
Hypothesis 3 states that age moderates the indirect relationships
between psychological contract breach and turnover via emotional
exhaustion. Here Hayes’s PROCESS macro was used to calculate
conditional indirect effects at various levels of the moderator. As
shown in Table 3, the conditional indirect effect of psychological
contract breach (PCB) in predicting turnover via emotional exhaus-
tion is significant for younger construction workers (indirect
effect = 0.24, 95% CI: 0.15 to 0.36) but not for older construction
workers (indirect effect = 0.05, 95% CI: 0.00 to 0.12). These results
suggest that younger workers who perceive a PCB experience
greater levels of emotional exhaustion, which in turn increase their
desire to leave their organization. Hypothesis 3 is thus supported.
Study 2
Study 2 complemented Study 1 in several ways. First, it increased
external generalizability by testing the research model in another
cultural context, the Philippines. Second, it used a different opera-
tionalization of psychological contract breach. Specifically, Study 1
used a facet-based measure, where participants assessed whether
specific promised obligations had been fulfilled. This had two
key limitations: there was no clear indication of the extent to which
an obligation was actually perceived or promised (Restubog et al.
2008) and facet-based measures tend to exhibit weaker relation-
ships with outcomes compared with global measures (Zhao et al.
2007). To overcome these limitations, Study 2 used a global mea-
sure of psychological contract breach, where participants assessed
their overall sense that the organization had fulfilled its promised
obligations. Following the same logic, job satisfaction was mea-
sured globally also. Using different operationalizations that stem
from the same conceptualization, the present research aimed to
establish constructive replication that would further strengthen
internal validity and provide greater confidence in the findings
(Lykken 1968). Finally, instead of measuring turnover intentions,
Study 2 collected data on whether the focal employee actually
voluntarily left the organization. In other words, could the event
be construed as actual turnover. The use of an 18-month time
lag in the two data collection rounds further strengthened the
research methodology.
Sample and Procedure
Over two measurement periods, 269 construction workers in the
Philippines were surveyed. At Time 1, surveys assessing psycho-
logical contract breach (PCB), emotional exhaustion, and control
variables (e.g., gender and tenure) were distributed. The response
rate was 71%, with 191 completed surveys received. Eighteen
months later (Time 2), a follow-up survey assessing actual turnover
(whether the survey participants voluntarily left their organization)
was administered to the initial 191 respondents, of whom 164 com-
pleted it for a response rate of 85.86%. The surveys collected at
Time 1 and Time 2 were matched using a code identifier. Only
those participants who completed both surveys were included
in the analysis. The surveys with missing responses (n ¼ 3) and
missing/inaccurate code identifiers (n ¼ 9) were removed, result-
ing in a final sample of 155 participants.
The respondents were 93.5% male. The average age was
33.55 years (SD ¼ 8.39). To protect participants’ identity, their ten-
ure was assessed in terms of bands consisting of <1 year (16.8%),
1–5 years (37.4%), 6–10 years (20.6%), 11–15 years (22.6%), and
16–20 years (2.6%).
Measures
Unless otherwise specified, all items except the demographic var-
iables were measured on a seven–point Likert scale (1 = strongly
disagree; 7 = strongly agree). The questionnaire was originally pre-
pared in English and then back-translated to Filipino/Tagalog to
ensure readability (Brislin 1980).
Psychological contract breach (PCB) (α ¼ 0.94) was assessed
using a five-item global measure (Robinson and Morrison 2000)

© ASCE 04016006-5 J. Constr. Eng. Manage.

J. Constr. Eng. Manage., 04016006

 Table 4. Means, Standard Deviations, and Bivariate Correlations for Variables in Study 2
Variable Mean SD 1 2 3 4 5 6 7
Gender 0.94 0.25 — — — — — — —
Age 33.55 8.39 0.23a — — — — — —
Organizational tenure 2.57 1.09 0.23a 0.93a — — — — —
Job satisfaction (T1) 4.82 0.81 0.24a 0.49b 0.49b (0.85) — — —
Psychological contract breach (T1) 3.86 1.01 0.24a −0.49b −0.47b −0.62b (0.94) — —
Emotional exhaustion (T1) 2.47 0.91 0.39b −0.64b −0.61b −0.54b 0.58b (0.82) —
Actual turnover (T2) 0.17 0.38 −0.16 −0.10 −0.07 −0.08 0.08 0.22a —
Note: N ¼ 155; T1 = Time 1; T2 = Time 2.
a
p < 0.01.
b
p < 0.001.
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.

that evaluated employees’ overall assessment of the extent to which
the organization had fulfilled (or breached) its promised obligations
to them. As in Study 1, emotional exhaustion (α ¼ 0.82) was
measured by a six-item scale developed by Maslach and Jackson
(1986). To assess actual turnover, the employees were requested
to report whether they had voluntarily left the organization.
Employees who responded yes were coded 1 (leavers); those
who stayed in the organization were coded 0 (stayers). Again as in
Study 1, employees’ gender, tenure, and job satisfaction were
controlled in the analysis. Job satisfaction (α ¼ 0.85) was mea-
sured by a three-item global scale developed by Cammann
et al. (1983).
Results
Table 4 summarizes the descriptive statistics, zero-order correla-
tions, and reliability coefficients. The same data-analytic approach
employed in Study 1 was used in this study. Hypothesis 1 states
that psychological contract breach is indirectly associated with
turnover via emotional exhaustion. Using Hayes’s PROCESS
macro with 5,000 bootstrap resamples, the indirect effect of
psychological contract breach on actual turnover via emotional
exhaustion was shown to be significant (indirect effect = 0.42,
95% bootstrap CI: 0.05 to 0.82) (Table 5). This result suggests
that construction workers who experience a breach of their
psychological contract experience greater levels of emotional
exhaustion, which in turn lead them to exit their organization.
Hypothesis 1 is thus supported.
Table 6 summarizes the results of the moderated regression.
Entry of the interaction term in Step 3 contributed additional
variance in explaining emotional exhaustion (ΔR2 ¼ 0.01) over
and above the contribution of the main effects. This value fell
within the typical range (between 0.01 and 0.03) reported for
moderator effects (Champoux and Peters 1987). The interaction
term was also significant (b ¼ −0.02, 95% CI ¼ −0.04 to
−0.001). The interactions at conditional values of age (þ1 SD
representing older construction workers and −1 SD representing
younger construction workers) were plotted. As depicted in Fig. 3
and Table 6, the relationship between psychological contract
breach and emotional exhaustion is statistically significant for
younger workers (b ¼ 0.33, 95% CI = 17 to 0.49). However,
the association between psychological contract breach and emo-
tional exhaustion is not significant for older workers (b ¼ 0.04,
95% CI ¼ −0.19 to 0.25). In comparison with older workers,
younger construction workers tend to report greater levels of
emotional exhaustion as a result of psychological contract breach.
Hypothesis 2 is thus supported.
Using Hayes’ PROCESS Macro (Table 5), the conditional indi-
rect effects of psychological contract breach in predicting turnover
via emotional exhaustion was found to be significant for younger
workers (indirect effect = 0.35, 95% CI = 0.06 to 0.76) but not for

Table 5. Indirect and Conditional Indirect Effects in Study 2

Turnover
2
Variable/steps b R ΔR2 95% confidence interval
Step 1
Gender −0.22 — — −0.03 to 0.48
Organizational tenure −0.01 — — −0.07 to 0.06
Job satisfaction −0.02 0.03 — −0.10 to 0.07
Step 2
Gender −0.22 — — −0.04 to 0.48
Organizational tenure −0.01 — — −0.07 to 0.06
Job satisfaction −0.01 — — −0.11 to 0.09
Psychological contract breach 0.01 0.03 0.00 −0.07 to 0.09
Step 3
Gender −0.13 — — −0.13 to 0.39
Organizational tenure 0.03 — — −0.04 to 0.10
Job satisfaction 0.01 — — −0.09 to 0.11
Psychological contract breach −0.02 — — −0.10 to 0.06
Emotional exhaustion 0.12a 0.06a 0.04a 0.02 to 0.21
Indirect effects 0.42 — — 0.05 to 0.82
Conditional indirect effects for younger construction workers 0.35 — — 0.06 to 0.76
Conditional indirect effects for older construction workers 0.10 — — −0.04 to 0.35
Note: N ¼ 155. Unstandardized beta coefficients are reported for all steps.
a
p < 0.05.

© ASCE 04016006-6 J. Constr. Eng. Manage.

J. Constr. Eng. Manage., 04016006

 Table 6. Hierarchical Regression Analysis Predicting Emotional Exhaustion in Study 2
Emotional exhaustion
Variable/steps b R2 ΔR2 95% confidence interval
Step 1
Gender −0.84a — — 0.41 to 1.28
Organizational tenure −0.35a — — −0.46 to −0.24
Job satisfaction −0.32a 0.50a — −0.47 to −0.17
Step 2
Gender −0.77b — — 0.35 to 1.18
Organizational tenure −0.02 — — −0.26 to 0.22
Job satisfaction −0.16 — — −0.32 to 0.01
Psychological contract breach 0.23a — — 0.10 to 0.36
Age −0.04 0.56a 0.06a −0.07 to −0.01
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.

Step 3
Gender −0.73a — — 0.32 to 1.14
Organizational tenure −0.01 — — −0.25 to 0.23
Job satisfaction −0.17c — — −0.33 to −0.01
Psychological contract breach 0.18b — — 0.05 to 0.32
Age −0.05b — — −0.08 to −0.02
PCB × age −0.02c 0.57a 0.01c −0.04 to −0.001
Simple slopes for younger construction workers 0.33a — — 0.17 to 0.49
Simple slopes for older construction workers 0.04 — — −0.19 to 0.25
Note: N ¼ 155. Unstandardized beta coefficients are reported for all steps.
a
p < 0.001.
b
p < 0.01.
c
p < 0.05.

3.5 workers respond to psychological contract breach differently. Older

workers, because of their greater human capital (e.g., experience,
maturity), were found to react to psychological contract breach with
b=.33, 95% CI: .17 to .49 less intensity and to experience lower levels of emotional exhaus-
Emotional exhaustion

3
tion. They are therefore less likely to leave the organization in
response to psychological contract breach. In contrast, younger
workers experience greater levels of loss (through higher levels
2.5
of emotional exhaustion) and so are more likely to leave the organi-
zation as a means of conserving current resources and avoiding
further loss. These findings are consistent with previous research
2 (e.g., Bal et al. 2013).
b=.04, 95% CI: -.19 to .25

1.5
Low
Psychological contract breach
Older construction workers Younger construction workers
Fig. 3. Interactive effects between psychological contract breach and
age in predicting emotional exhaustion in Study 2
older workers (indirect effect = 0.10, 95% CI ¼ −0.04 to 0.35).
These results suggest that when younger workers perceive
psychological contract breach, they tend to experience greater
levels of emotional exhaustion, which in turn lead to actual turn-
over. Hypothesis 3 is thus supported.
Discussion
Drawing on COR theory, it was proposed that psychological con-
tract breach can be a form of resource loss, which begets further
resource loss in the form of emotional exhaustion, which in turn
predicts turnover. The findings from the current research not only
support this proposition but also reveal that older and younger
High
Practical Recommendations
The results of Studies 1 and 2 have important practical implications
for the construction industry. First, construction organizations
should establish a mechanism for understanding and managing
their workers’ psychological contracts. Beginning with recruit-
ment, they should clearly communicate realistic job expectations
to potential employees. Such realistic job previews may help to
regulate workers’ perceptions of organizational promises and pre-
vent psychological contract breach. Construction managers should
also actively and explicitly discuss with workers any promises
made to detect a breach early and mitigate its harmful consequen-
ces. However, given a changing business environment and the
subjective nature of psychological contracts (Rousseau 1995),
psychological contract breach, either intentional or due to mistaken
perceptions, is likely to be inevitable. For this reason, construction
organizations should reinforce workplace justice norms that
encourage apology, reparation, and punishment of promise break-
ers to ensure that the consequences of breach can be managed
effectively (Palanski 2012).
The findings also suggest that younger, as opposed to older,
construction workers are more likely to leave their organization
in response to psychological contract breach. Given that attracting
and retaining younger workers is a significant industry challenge

© ASCE 04016006-7 J. Constr. Eng. Manage.

J. Constr. Eng. Manage., 04016006

 (Sing et al. 2012), construction organizations should implement
human resource policies and practices that increase younger
workers’ material and psychological resources as a means of off-
setting the resource loss associated with psychological contract
breach. This is particularly important because younger workers
are less resource-endowed and more vulnerable to the effects of
resource loss than their older counterparts. Financial compensation
is still a significant and basic resource to be used for attracting and
retaining employees in the construction industry (Dainty et al.
2004). However, to appeal to younger workers, construction organ-
izations should demonstrate the potential for growth and career de-
velopment. For example, establishing schemes in which employees
are rewarded with voluntary ownership and/or profit-sharing op-
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.
tions based on length of service may augment younger workers’
loyalty to the organization.
The project-based nature of work in the construction industry
makes job security a considerable concern to young workers (Fung
and Tam 2013). To alleviate psychosocial fear of unemployment
(itself a source of resource loss), construction organizations can
emphasize longer-term employment opportunities, such as an inter-
nal career path with supporting professional development. They
may also reduce their profit margin to increase their chance of se-
curing new projects for continued employment (Yip and Rowlinson
2009). The reduced profit may be compensated by the savings from
the layoff, recruitment and training of new employees. Indeed, con-
tinuity in employment has been found to be a source of positive
psychological resources and a useful strategy for employee retention
(Dainty et al. 2004). In contrast to their older counterparts, younger
workers place greater value on organizational cultures that foster
work-life balance (Loughlin and Barling 2001). Construction organ-
izations can promote this balance by offering flexible work arrange-
ments. It is also important to provide younger workers with access to
social resources, such as mentoring, to develop their human capital
(Loughlin and Barling 2001). Finally, construction organizations
should promote a climate of safety to reduce younger workers’ con-
cerns about hazardous working conditions (Gillen et al. 2002).
Even though these recommendations are based on data from two
non-Western contexts, China and the Philippines, they can provide
valuable insight into the management of turnover in the construction
industry in Western contexts. Because the findings of these studies
are consistent with prior evidence from Western contexts linking
psychological contract breach to construction industry turnover.
For instance, in the United Kingdom Dainty et al. (2004) found that
construction project managers’ turnover intentions increase when
organizations fail to fulfill their psychological contracts.
Limitations and Future Research
Like most research, this study is not without limitations. First, the
moderated mediation model tested only a small set of turnover ante-
cedents, specifically psychological contract breach and emotional
exhaustion. Future research can examine how other antecedents,
such as personality traits, availability of job alternatives, and op-
portunities for career advancement (Griffeth et al. 2000) may affect
the turnover behavior of different occupational groups (e.g., project
managers, architects). Such studies can further enrich understand-
ing of the causes of turnover in the construction industry. Further
research may also examine how psychological contract breach af-
fects other employee behaviors (e.g., revenge seeking) and their
impact on productivity. This line of research will add to the increas-
ing body of construction literature that investigates psychological
and sociological predictors of work outcomes (Love et al. 2011).
Also, based on COR theory, turnover is argued to be a signifier of
© ASCE 04016006-8
J. Constr. Eng. Manage., 04016006
resource conservation and remaining in the organization, a signifier
of resource investment. In other words, the present research did not
explicitly and directly test resource conservation and resource loss.
Additional research is needed to examine resource loss and conser-
vation more directly.
The study’s findings indicate that younger construction workers
are more likely to leave their organization when they experience
psychological contract breach. Future research may investigate
more forensically the needs of younger workers and how they
are distinct from those of older workers. Such knowledge is essen-
tial to organizations in customizing strategies to attract and retain
younger workers. Although beyond the scope of the research, a
significant main effect of gender on emotional exhaustion was
found, which suggests that women tend to report greater levels
of emotional exhaustion compared with men. Future research might
examine the reasons for this finding. Finally, because the present
research was conducted in China and the Philippines, it is important
to temper the generalizability of its findings to Western cultures.
Future work should discern whether differences across Western
and non-Western contexts influence psychological contract breach
and its attendant resource depletion. For example, employees in
Europe differ in terms of the importance they place on work in their
lives and their perceived norms regarding rights and duties attached
to work (Sparrow 1998). Additionally, because the construction in-
dustry in Western contexts (e.g., the United States, Australia) is
characterized by higher levels of union density (Gillen et al.
2002), It would be interesting to examine how workers’ regional
backgrounds and local employment conditions affect their percep-
tions and the management of psychological contract breach.
Conclusions
Recent construction literature recognizes the importance of social-
psychological perspectives in understanding workers’ behaviors
and thus performance outcomes (Love et al. 2011). The present
research contributes to this line of inquiry by examining why con-
struction workers leave an organization and why, from a psycho-
logical contract perspective, younger workers more so than older
ones are at risk of leaving. This research also extends knowledge
of employee turnover beyond commonly studied antecedents such
as burnout and job dissatisfaction (Sang et al. 2009) to the more
complex interplay of psychological contract breach, emotional ex-
haustion, age, and turnover. Thus, it offers novel insights into the
causes of employee turnover and the practical strategies that may
curtail the loss of valued human resources. These findings not only
lend support to the proposition that understanding psychological
contract breach is the key to what lies behind employee turnover
(Dainty et al. 2004); they also attest to the value of using a psycho-
logical contract perspective as a theoretical lens to understand long
prevailing issues in the construction industry.
Acknowledgments
It is acknowledged that the second, fourth, and sixth authors con-
tributed equally. The authors would like to thank the National Nat-
ural Science Foundation of China for supporting Study 1 (Grant
No. 71472066).
Supplemental Data
Table S1 is available online in the ASCE Library (http://www.
ascelibrary.org).
J. Constr. Eng. Manage.
 References
Ahn, S., Lee, S., and Steel, R. (2013). “Construction workers’ perceptions
and attitudes toward social norms as predictors of their absence
behavior.” J. Constr. Eng. Manage., 10.1061/(ASCE)CO.1943-7862
.0000826, 04013069.
Aiken, L. S., West, S. G., and Reno, R. R. (1991). Multiple regression:
Testing and interpreting interactions, Sage, Newbury Park, CA.
Bal, P. M., Lange, A. H., Jansen, P. G., and Velde, M. E. (2013). “A lon-
gitudinal study of age-related differences in reactions to psychological
contract breach.” Appl. Psychol. An Int. Rev., 62(1), 157–181.
Brislin, R. W. (1980). “Translation and content analysis of oral and written
material.” Handb. Cross-cult. Psychol., 2(2), 349–444.
Bureau of Labor and Statistics. (2014). “Economic news release.” 〈http://
www.bls.gov/news.release/jolts.t18.htm〉 (Jan. 7, 2015).
Downloaded from ascelibrary.org by East Carolina University on 01/18/16. Copyright ASCE. For personal use only; all rights reserved.
Business Roundtable. (1982). “Absenteeism and turnover.” Rep. No. C-6,
New York.
Cammann, C., Fichman, M., Jenkins, D., and Klesh, J. (1983). “Assessing
the attitudes and perceptions of organizational members.” Assessing
organizational change: A guide to methods, measures and practices,
S. Seashore, E. Lawler, P. Mirvis, and C. Cammann, eds., Vol. 138,
Wiley, New York.
Carlson, D., Ferguson, M., Hunter, E., and Whitten, D. (2012). “Abusive
supervision and work-family conflict: The path through emotional labor
and burnout.” Leadersh. Q., 23(5), 849–859.
Champoux, J. E., and Peters, W. S. (1987). “Form, effect size and power in
moderated regression analysis.” J. Occup. Psychol., 60(3), 243–255.
Chen, Z. X., Tsui, A. S., and Zhong, L. (2007). “Reactions to psychological
contract breach: A dual perspective.” J. Organ. Behav., 29(5), 527–548.
Dainty, A. R., Raiden, A. B., and Neale, R. H. (2004). “Psychological
contract expectations of construction project managers.” Eng. Constr.
Archit. Manage., 11(1), 33–44.
Fung, I. W., and Tam, V. W. (2013). “Occupational health and safety of
older construction workers (aged 55 or above): Their difficulties, needs,
behaviour and suitability.” Int. J. Constr. Manage., 13(3), 15–34.
Gillen, M., Baltz, D., Gassel, M., Kirsch, L., and Vaccaro, D. (2002).
“Perceived safety climate, job demands, and coworker support among
union and nonunion injured construction workers.” J. Safety Res., 33(1),
33–51.
Grandey, A. A., and Cropanzano, R. (1999). “The conservation of resour-
ces model applied to work-family conflict and strain.” J. Vocational
Behav., 54(2), 350–370.
Griffeth, R. W., Hom, P. W., and Gaertner, S. (2000). “A meta-analysis of
antecedents and correlates of employee turnover: Update, moderator
tests, and research implications for the next millennium.” J. Manage.,
26(3), 463–488.
Halbesleben, J. R., Neveu, J. P., Paustian-Underdahl, S. C., and Westman,
M. (2014). “Getting to the “COR”: Understanding the role of resources
in conservation of resources theory.” J. Manage., 40(5), 1334–1364.
Hayes, A. F. (2012). “PROCESS: A versatile computational tool for ob-
served variable mediation, moderation, and conditional process model-
ing [White paper].” 〈http://www.afhayes.com/public/process2012.pdf〉.
Hobfoll, S. E. (1989). “Conservation of resources: A new attempt at
conceptualizing stress.” Am. Psychol., 44(3), 513–524.
Jones, S. M., Ross, A., and Sertyesilisik, B. (2010). “Testing the unfolding
model of voluntary turnover on construction professionals.” Constr.
Manage. Econ., 28(3), 271–285.
Kiazad, K., Seibert, S. E., and Kraimer, M. L. (2014). “Psychological
contract breach and employee innovation: A conservation of resources
perspective.” J. Occup. Organ. Psychol., 87(3), 535–556.
Lingard, H. (2003). “The impact of individual and job characteristics on
‘burnout’ among civil engineers in Australia and the implications for
employee turnover.” Constr. Manage. Econ., 21(1), 69–80.
© ASCE 04016006-9
J. Constr. Eng. Manage., 04016006
Lingard, H. C., Francis, V., and Turner, M. (2010). “Work-family enrich-
ment in the Australian construction industry: Implications for job
design.” Constr. Manage. Econ., 28(5), 467–480.
Lo, S., and Aryee, S. (2003). “Psychological contract breach in a Chinese
context: An integrative approach.” J. Manage. Stud., 40(4), 1005–1020.
Loughlin, C., and Barling, J. (2001). “Young workers’ work values, atti-
tudes and behaviours.” J. Occup. Organ. Psychol., 74(4), 543–558.
Love, P., Edwards, D., and Wood, E. (2011). “Loosening the Gordian knot:
The role of emotional intelligence in construction.” Eng. Constr. Archit.
Manage., 18(1), 50–65.
Lykken, D. T. (1968). “Statistical significance in psychological research.”
Psychol. Bull., 70(3p1), 151–159.
Maslach, C., and Jackson, S. E. (1986). Maslach burnout inventory,
Consulting Psychologists Press, Palo Alto, CA.
Onukwube, H. N. (2012). “Correlates of job satisfaction amongst quantity
surveyors in consulting firms in Lagos, Nigeria.” Australas. J. Constr.
Econ. Build., 12(2), 43.
Palanski, M. E. (2012). “Forgiveness and reconciliation in the workplace: A
multilevel perspective and research agenda.” J. Bus. Ethics, 109(3),
275–287.
Restubog, S. L. D., Bordia, P. and Tang, R. L. (2007). “Behavioural out-
comes of psychological contract breach in a non-western culture: The
moderating role of equity sensitivity.” Br. J. Manage., 18(4), 376–386.
Restubog, S. L. D., Bordia, P., Tang, R. L., and Krebs, S. A. (2010). “In-
vestigating the moderating effects of leader-member exchange in the
psychological contract breach-employee performance relationship: A
test of two competing perspectives.” Br. J. Manage., 21(2), 422–437.
Restubog, S. L. D., Hornsey, M. J., Bordia, P. and Esposo, S. R. (2008).
“Effects of psychological contract breach on organizational citizenship
behaviour: Insights from the group value model.” J. Manage. Stud.,
45(8), 1377–1400.
Robinson, S. L., and Morrison, E. W. (2000). “The development of psycho-
logical contract breach and violation: A longitudinal study.” J. Organ.
Behav., 21(5), 525–546.
Rousseau, D. M. (1995). Psychological contracts in organizations, Sage,
Thousand Oaks, CA.
Rusbult, C. E., Martz, J. M., and Agnew, C. R. (1998). “The investment
model scale: Measuring commitment level, satisfaction level, quality
of alternatives, and investment size.” Personal Relationship, 5(4),
357–387.
Sang, K. J., Ison, S. G., and Dainty, A. R. (2009). “The job satisfaction of
UK architects and relationships with work-life balance and turnover
intentions.” Eng. Constr. Archit. Manage., 16(3), 288–300.
Sing, C., Love, P., and Tam, C. (2012). “Stock-flow model for forecasting
labor supply.” J. Constr. Eng. Manage., 10.1061/(ASCE)CO.1943-
7862.0000485, 707–715.
Sparrow, P. R. (1998). “Reappraising psychological contracting: Lessons
for the field of human-resource development from cross-cultural
and occupational psychology research.” Int. Stud. Manage. Organ.,
28(1), 30–63.
Tixier, A., Hallowell, M., Albert, A., van Boven, L., and Kleiner, B. (2014).
“Psychological antecedents of risk-taking behavior in construction.”
J. Constr. Eng. Manage., 10.1061/(ASCE)CO.1943-7862.0000894,
04014052.
Tsui, A. S., Egan, T. D., and O’Reilly, III, C. A. (1992). “Being different:
Relations demography and organizational attachment.” Admin. Sci. Q.,
37(4), 549–579.
Yip, B., and Rowlinson, S. (2009). “Job redesign as an intervention strategy
of burnout: Organizational perspective.” J. Constr. Eng. Manage.,
10.1061/(ASCE)CO.1943-7862.0000023, 737–745.
Zhao, H. A. O., Wayne, S. J., Glibkowski, B. C., and Bravo, J. (2007). “The
impact of psychological contract breach on work-related outcomes:
A meta-analysis.” Personnel Psychol., 60(3), 647–680.
J. Constr. Eng. Manage.