Psychological contract breach (PCB)—employees’ perceptions that their employer has failed to fulfil promised obligations—has been widely linked to negative attitudes and behaviours. Yet existing research has focused predominantly on the causes and consequences of breach, treating it as a terminal event rather than as the starting point of a dynamic recovery episode. As a result, far less is known about how employees recover from breach, which managerial repair tactics are most effective, and how recovery unfolds over time and across relational contexts. Addressing these gaps, this dissertation develops a dynamic, context-sensitive, and interactional account of PCB recovery. Drawing on psychological contract theory, the dissertation conceptualises recovery as a discrepancy-reduction process in which negative affect diminishes as the gap between promised and delivered inducements is addressed. It distinguishes between two core managerial repair tactics—inducement delivery and promise revision—and introduces a velocity-based lens to capture not only whether recovery occurs, but how quickly employees’ perceptions improve following breach. The dissertation reports three quantitative studies using complementary methods. Two scenario-based experiments (Study 1a, N = 272; Study 1b, N = 374) compare the immediate effectiveness of inducement delivery and promise revision in reducing psychological contract violation, and examine the moderating roles of manager trustworthiness and implementation timing. A longitudinal field study (Study 2, N = 152) models recovery as change over time using latent growth modelling and demonstrates that managerial repair tactics differ in the speed at which employees’ negative affect declines. A dyadic field study (Study 3, N = 253 matched employee–manager dyads) conceptualises recovery as a co regulated process, showing how employee coping strategies condition the effectiveness of managerial repair efforts and how managers’ own breach perceptions predict repair behaviour. The findings advance psychological contract theory by reconceptualising recovery as a dynamic, velocity-based process in which managerial repair shapes both the immediate iii level and subsequent rate of psychological contract violation reduction. Across studies, inducement delivery outperformed promise revision, and the dyadic evidence further shows recovery is co-regulated: employee coping conditions the effectiveness of managerial repair, and managers’ own breach perceptions predict the repair they provide. More detailed academic and managerial implications, along with suggestions for future research, are discussed in the conclusion chapter.