Turning the tide: the role of bottom-line mentality in mitigating the impact of recessionary actions on employee performance

Purpose Drawing on psychological contract theory, this study examines how organizational recessionary actions influence employee performance through psychological contract breach, and further investigates the moderating role of supervisor bottom-line mentality on the relationship between psychological contract breach and performance. Design/methodology/approach Data were collected through a time-lagged survey of 250 full-time employees in Pakistan and analyzed using partial least squares structural equation modeling. Findings Results reveal that psychological contract breach mediates the relationship between organizational recessionary actions and employee performance. Moreover, bottom-line mentality significantly moderates the relationship between psychological contract breach and performance. Originality/value This study contributes by identifying psychological contract breach as a mechanism through which organizational recessionary actions influence employee performance and by highlighting supervisor bottom-line mentality as a boundary condition on the psychological contract breach–performance relationship in austerity contexts.