Since its 1997 financial crisis, the South Korean government has rapidly pushed to reform public enterprises in the market-oriented way. With the increasing possibility of employees;; perception about psychological contract breach, there is a growing need to research psychological contracts. Targeting Korea Electric Power Corporation(KEPCO), one of the South Korea;;s major public enterprises, this study sought to analyze the effects of the organization;;s generation gap on employees;; psychological contract breach, and the effects of employees perception of this breach on their job attitude, and finally would like to derive policy implications from this study. 316 KEPCO employees were surveyed, and the corresponding data underwent a multiple regression analysis, thus verifying the research hypotheses. Generation variable, a major variable, involved a generation gap according to the respondents;; age and company joining time (before and after joining the company in 1997). The psychological contract breach was classified into transactional and relational contract breach. Job attitude variables consisted of job satisfaction and organizational commitment levels. The findings of this study are outlined as follows. First, employees;; age had a negative relation with transactional contract breach perception levels and relational contract breach perception levels. Second, employees joining the company after the financial crisis, compared with those joining the company before the crisis, had a higher level of relational contract breach, but there was no significant difference in transactional contract breach perception levels. Third, transactional contract breach perception levels and relational contract breach perception levels had all a negative relation with job attitude. Job satisfaction was more influenced by relational contract breach than by transactional contract breach, while organizational commitment was more influenced by transactional contract breach.Fourth, age;;s moderating effects on the relation between psychological contract breach perception and job attitude were only partially confirmed. Fifth, the division of generation by the time of joining the company had a moderating effects on the relation between psychological contract breach perception and job attitude. Employees joining the company before the financial crisis, compared with employees joining after that, had greater negative effects of psychological contract breach perception on their job attitude. The policy implications, derived from this study, are outlined as follows. First, employees;; perception of psychological contract breach has a negative effect on their job attitude, suggesting that an organization should devise systematic, psychological contract management measures, and should regularly check its employees;; psychological contracts. Second, in terms of organizational management, organizational commitment, which involves the future behavioral intention, is recognized as more important factors than job satisfaction. Therefore, an organization should always pay attention to improving transactional contract factors. But more practical measures for public enterprises with more budget limitations should focus on encouraging employees to put more importance on relational contract factors rather than on transactional contract factors, thereby reducing transactional contract breach. Possible effective solutions include education designed to foster value views on public jobs, and bolstering of career development programs. Third, the reason why young employees had a higher perception of psychological contract breach is presumably due to exaggerated information which is provided to applicants for joining the company. Thus, an organization needs to provide realistic job preview when recruiting employees. Fourth, an organization needs to consider employees;; characteristics by generation to manage their psychological contracts. It should be pointed out that young employees;; needs are different from older generations;; needs, and thus this should be reflected in human resources management, and this measures should be worked out to realize their expectations. For older generation employees, efforts should continue to be made to monitor their psychological contract breach levels, and to re-negotiate psychological contract terms and conditions according to the changing organizational environment. If differentiated management is implemented according to employees;; characteristics by generation, the corporations can achieve their intended purposes in human resource management effectively.
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