Linking job insecurity to organizational trust in times of crisis: a moderated mediation of psychological contract breach and organizational support

Purpose The outbreak of COVID-19 has led to a public health and economic crisis. Therefore, many countries implemented furlough policies, but the impact of these policies on employees and organizations has not been adequately investigated. This study aims to analyze the relationship between job insecurity and organizational trust, mediated by psychological contract breach (PCB) and moderated by perceived organizational support (POS) through the lens of both Conservation of Resources Theory and Social Exchange Theory. Design/methodology/approach The study uses an online survey conducted over two chronological waves, involving 122 furloughed employees and 134 continuing employees. Findings PCB is found to fully mediate the relationship between job insecurity and organizational trust, while POS does not serve as a moderator. The mediation path was significantly stronger for the furloughed employees. The authors also find significant differences in the levels of PCB, perceived job insecurity, POS and organizational trust between furloughed employees and those who continued to work. Originality/value This study discovers that PCB can act as a mediator between job insecurity and organizational trust during times of crisis. The study findings provide insight into the employee–employer relationship in the distinct context of furlough policy.