The contract is essential for the employment, the labor contracts standardize the right and duty for the employment, but the psychological contract is another type of contract. A psychological contract is an employee's belief about the mutual obligations, and it balances the relationship between the employee and his/her organization. In order to promote the corporation's competition, the corporation carries out the restructuring and downsizing strategies, but these strategies are contrary to the critical role that people play in successful organization. Under this condition, the employee's belief and loyalty become more important to maintain the balance of relationship between employee and his organization. When the psychological contract was violated, it may lead to reduce the employee's belief, loyalty, job satisfaction and performance, citizenship behavior, even the employees will turn- over. However, the react may be affected by the individual's discrepancy and external circumstances. The case study is based on the employees in Yueng Foong Yu Paper MFG. CO., LTD. so as to prove if the psychologial contract violation will reduce the employee's performance, and some factors deal with how to affect the violation of psychological contract and work performance. The result is shown as the following: 1. In different SEU(Strategic Entrepreneurial Units¡^, the performance of the employees in the general management office is better than the Fine Paper and Board SEU. 2. In the sexual difference, the task performance of the female employees is better than that of the male ones. 3. In the workage, the employees whose contextual performance are from 11 to 15 years are better than the ones whose workage are over 25 years. 4. The difference between psychological contract violation and work performance is insignificant. 5. When the employees whose orgnizational commitment is higher feel more satified with the organizational benefits, his/her task performance becomes worse. 6. The difference between employability, personal characteristics and work performance is significant. 7.The differecne between relationship of employers and employees and contextual performance is significant.