Employee benefits: A growing source of psychological contract violations

Abstract Since the 1940s, the number of employee benefits provided by employers and costs related to these benefits have increased dramatically. However, in the face of intensified product market competition, more and more organizations are decreasing their benefits packages as part of broader efforts to decrease labor costs. At the same time, many employees have become dependent on employer‐provided benefits to help satisfy basic security needs. This article examines the evolution of this predicament and the associated consequences that are likely to arise as a result of this conflict between worker expectations and employer practices. Ideas for resolution of this employee–employer conflict are also discussed.