The Psychological Contract and the Whistleblower

• In Event: Public Interest

Abstract

Understanding the impact of psychological contracts on an employee’s intent to report fraud are paramount in crafting effective internal reporting policies and creating an effective internal fraud reporting environment. Using an experimental approach, this study provides evidence that employee intention to internally report fraud differs with the occurrence of a psychological contract violation, which is operationalized through interpersonal affect and company stability. Results indicate that these variables impact the likelihood of reporting fraud, where participants had the highest likelihood of reporting fraud when negative interpersonal affect was present and the fraud took place in a stable company, and the lowest likelihood of reporting fraud when positive interpersonal affect was present and the company was also stable.

Author

• Andrea Scheetz, Case Western Reserve University