Perceptions and Consequences of Organizational Injustice

Organizational Practices Performance evaluation Pay cuts Drug testing Smoking bans Layoffs Allocations of scarce resources often raise issues of fairness Unfavorable outcomes: With a limited pool of resources, not everyone can receive a favorable outcome did not receive promotion my raise was so small our budget is less this year than last year My performance appraisal was not favorable Layoffs cut across diverse industries and locations in the US Understanding how layoffs impact those who remain is critical to the future success of the organization (Clear that those who were not negatively affected are concerned with fairness issues)

What Do Employees Consider Fair (Unfair)? Distributive justice Outcome favorability Procedural justice Perceptions of the methods and procedures used in the decision making process Appropriate criteria Consistent Without personal bias Accurate information Voice DJ: Student example here -- I am shocked and disappointed that I received an F. (unfavorable allocation) legal system -- what makes a verdict fair? open-ended interviews and surveys people were asked what makes the recruiting process fair- what makes budget allocations fair, when is organizational decision making fair? These surveys identified attributes of what has been termed procedural justice. Justice research has examined responses to unfavorable outcomes and more recently, the procedures used to arrive at outcomes. The POTENTIAL to feel unfairly unfairly treated increases when one receives an unfavorable outcome (distributive justice focuses on outcomes received) People also evaluate the ATTRIBUTES OF the decision-making process or procedures used to arrive at such decisions. To the extent these attributes are perceived to be part of a decision making process, the more employees are likely to perceive the procedures as fair. Federal express as an example of procedural justice in a grievance system

Reactions to Procedural Injustice Distancing responses Commitment declines Intention to quit increases High cost of turnover Responses to injustice have recently been studied in a variety of field studies pertaining to important organizational decisions survivors' responses to layoffs performance appraisals In general reference to decision-making Group-value model: Why does fairness matter? It matters because it sends a signal to us as to whether or not we are valued and respected members of the group or organization. We do not want to be members of groups that do not treat us fairly.

Reactions to Procedural Injustice (cont.) Retaliatory responses Extending lunch & coffee breaks Personal work on company time Wasting company materials Damaging property or processes

Reactions to Procedural Injustice (continued) Organizational citizenship declines Extra-role behaviors (Doing more than is required) Willingness to recruit for the organization Willingness to attend organizational events “Pitching in” to help others Neglect responses Work effort declines (quantity & quality)

Fair-process Effect The more one considers a resource allocation process to be fair, the more one is accepting of and satisfied with the decision -- independent of the outcome received (favorable or unfavorable) People are willing to accept unfavorable outcomes when the allocation procedures are fair Reactions are particularly negative when outcomes are unfavorable and procedures are unfair

Performance Appraisal & the Fair-process Effect Independent of the amount of the raise, employees who perceive that performance appraisals are conducted in a fair manner, report more satisfaction with pay and more satisfaction with the appraisal itself

Interpersonal Justice Quality of interpersonal treatment received during the enactment of organizational procedures Demonstrating concern for the needs and well being of those affected empathy Treating those affected with dignity and respect Polite interaction & interpersonal sensitivity

Interpersonal Justice (continued) Examples of interpersonal injustice in the layoff context “We’ve gotten rid of the deadwood and rotten apples” Father and daughter escorted out of the office by security guards on “bring your daughter to work day” Distinct from procedural justice Interpersonal justice and procedural justice perceived as unique justice episodes

Study of Responses to Interpersonal Injustice 15% pay cut at 2 plants for a period of 10 weeks Plant A: “...It really hurts me to do this, the decision did not come easily…. It hurts me to take away what you’ve worked so hard for” Stayed for almost an hour answering all employee questions Plant B: “...This is an unfortunate fact of life in our business. I’ll answer one or two questions but then I have to leave”

Responses to Interpersonal Injustice Theft & turnover during 10 week period Plant C (control group): 3% theft & no turnover Plant A (sensitive message): 4% theft & 2% turnover Plant B (insensitive message): 8% theft & 25% turnover

Conclusion Employee morale and organizational effectiveness can be enhanced to the extent that decisions are: Made following rules of procedural justice Enacted with interpersonal sensitivity