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R E A D I N G 7 . 2

The Management of Organizational Justice Russell Cropanzano, David E. Bowen and Stephen W. Gilliland

Executive Overview

Organizational justice has the potential to create powerful benefits for organizations and employees alike. These include greater trust and commitment, improved job performance, more helpful citizenship behaviors, improved customer satis- faction, and diminished conflict. We demonstrate the man- agement of organizational justice with some suggestions for building fairness into widely used managerial activities. These include hiring, performance appraisal, reward systems, con- flict management, and downsizing.

Justice, Sir, is the greatest interest of man on earth —Daniel Webster

Business organizations are generally understood to be economic institutions. Sometimes implicitly, other times explicitly, this “rational” perspective has shaped the relationship that many employers have with their workforce (Ashforth & Humphrey, 1995). Many organizations, for example, emphasize the quid pro quo exchange of monetary payment for the performance of concrete tasks (Barley & Kunda, 1992). These tasks are often rationally described via job analysis and formally appraised by a supervisor. Hierarchical authority of this type is legitimized based upon the manager’s special knowledge or expertise (Miller & O’Leary, 1989). Employee motivation is viewed as a quest for personal economic gain, so individual merit pay is presumed to be effective. Using the rational model, one can make a case for downsizing workers who are not contributing adequately to the “bottom line.” And the rational model is found at the heart of the short-term uptick in the stock price of firms that carry out aggressive cost-cutting measures (Pfeffer, 1998).

Businesses certainly are economic institutions, but they are not only economic institutions. Indeed, adherence to this paradigm without consideration of other possibilities can have problematic side effects. Merit pay is sometimes ineffective (Pfeffer & Sutton, 2006), downsizing often has pernicious long-term effects (Pfeffer, 1998), and bureau- cratic management can straitjacket workers and reduce innovation. We should attend to economic matters, but also to the sense of duty that goes beyond narrowly defined

quid pro quo exchanges. It includes the ethical obligations that one party has to the other. Members may want a lot of benefits, but they also want something more. Organizational justice—members’ sense of the moral propriety of how they are treated—is the “glue” that allows people to work together effectively. Justice defines the very essence of indi- viduals’ relationship to employers. In contrast, injustice is like a corrosive solvent that can dissolve bonds within the community. Injustice is hurtful to individuals and harmful to organizations.

In this paper we will discuss organizational justice, with an emphasis on how it can be brought to the workplace. We first define justice, paying careful attention to its three core dimensions: distributive, procedural, and interactional. We then examine why justice is important; we will consider various criterion variables that justice favorably influences. Once we understand the nature of justice we will be in a better position to describe how it can be brought about. The lesson here is that organizational justice actually has to be managed. This paper will provide specific techniques and recommendations for doing so.

What Is Organizational Justice? Prescription vs. Description Philosophers and social commentators were writing about justice long before management scientists were. Among the ancient Greeks, for example, Herodotus’ History and Plutarch’s Lives described the achievements of the lawgiver Solon, who reformed Athenian government. These are the prescriptive approaches, since they seek to logically determine what sorts of actions truly are just. As such, they reside com- fortably within the domain of business ethics.

While organizational justice borrows from these older traditions, it has its own distinctions. Unlike the work of phi- losophers and attorneys, managerial scientists are less con- cerned with what is just and more concerned with what people believe to be just. In other words, these researchers are pursuing a descriptive agenda. They seek to understand why people view certain events as just, as well as the conse- quences that follow from these evaluations. In this regard, justice is a subjective and descriptive concept in that it

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captures what individuals believe to be right, rather than an objective reality or a prescriptive moral code. As defined here, organizational justice is a personal evaluation about the ethical and moral standing of managerial conduct. It fol- lows from this approach that producing justice requires man- agement to take the perspective of an employee. That is, they need to understand what sorts of events engender this sub- jective feeling of organizational justice. On this important competency, many fall short.

Why Employees Care About Justice Managers too often assume that justice, in the minds of employees, means only that they receive desirable outcomes. These managers are confusing outcome favorability with outcome justice. The former is a judgment of personal worth or value; the latter is a judgment of moral propriety. Evidence shows that outcome justice and outcome favor- ability are distinct (Skitka, Winquist, & Hutchinson, 2003) and correlated between .19 and .49, depending on where and how the variables are measured (Cohen-Charash & Spector, 2001). In so many words, it’s important to get what you want, but other things matter as well. For this reason it is useful to consider three reasons justice matters to people (for details, see Cropanzano, Rupp, Mohler, & Schminke, 2001).

Long-Range Benefits People often “sign on” for the long haul. Consequently, they need to estimate now how they are likely to be treated over time. A just organization makes this prediction easy. According to the “control model,” employees prefer justice because it allows them to predict and control the outcomes they are likely to receive from organizations. According to the control model of justice, appropriate per- sonnel policies signal that things are likely to work out even- tually. Most of us understand that every personnel decision cannot go our way, but justice provides us with more cer- tainty regarding our future benefits.

For this reason the control model proposes that people are often motivated by economic and quasi-economic inter- ests (cf. Tyler & Smith, 1998). People want fairness because fairness provides things they like. There is more than a little truth to this idea. For instance, when individuals are rewarded for successfully completing a task they report being happy (Weiss, Suckow, & Cropanzano, 1999) and hav- ing pride in their performance (Krehbiel & Cropanzano, 2000). This is so even when their success resulted from cheat- ing. At the same time, these individuals also report feeling guilty for their unfair behavior, suggesting that individuals can recognize and react to injustice, even when it is person- ally beneficial.

There is sometimes a certain tension between getting what we want and playing by the rules. The two tend to go together, but less so than many believe. For example, pay satisfaction is only modestly correlated with perceptions

of pay justice (Williams, McDaniel, & Nguyen, 2006). If “justice” were based exclusively on obtaining benefits, then one would expect a higher association. Later we shall discuss evidence suggesting that individuals can accept an unfortunate outcome as long as the process is fair and they are treated with interpersonal dignity (e.g., Goldman, 2003; Skarlicki & Folger, 1997).

Social Considerations People are social animals. We wish to be accepted and valued by important others while not being exploited or harmed by powerful decision-makers. In the “group-value model,” just treatment tells us that we are respected and esteemed by the larger group. We are also at less risk for mistreatment. This sense of belonging is impor- tant to us even apart from the economic benefits it can bring (Tyler & Blader, 2000; Tyler & Smith, 1998). As you might expect, this can pose a potential problem for organizations. To the extent that justice signals our value to an employer, the more we care about the organization the more distressed we become when we are treated unfairly. Brockner, Tyler, and Cooper-Schneider (1992) assessed the commitment of a group of employees before a layoff occurred. After the down- sizing those people who were initially the most committed responded the most negatively to the downsizing. When we treat workers unfairly, we may end up doing the most harm to those who are most loyal.

Ethical Considerations People also care about justice because they believe it is the morally appropriate way others should be treated (Folger, 2001). When individuals witness an event they believe is ethically inappropriate, they are likely to take considerable risks in the hopes of extracting retribution (Bies & Tripp, 2001, 2002). Such unfor- tunate (from the organization’s point of view) reactions may occur even when an employee simply witnesses the harm and is not personally wronged (Ellard & Skarlicki, 2002; Spencer & Rupp, 2006). Consider, for example, a day-to-day problem faced by many service workers. When these employees see a customer treating one of their coworkers unfairly, the observ- ing worker is apt to experience stress symptoms. Through this mechanism, injustice may spread ill will throughout a workgroup.

Three Components of Justice Research has shown that employees appraise three families of workplace events. They examine the justice of outcomes (dis- tributive justice), the justice of the formal allocation processes (procedural justice), and the justice of interpersonal transac- tions they encounter with others (interactional justice). These are shown in Table 1.

Distributive, procedural, and interactional justice tend to be correlated. They can be meaningfully treated as three com- ponents of overall fairness (Ambrose & Arnaud, 2005;

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Ambrose & Schminke, 2007), and the three components can work together. However, if one’s goal is to promote work- place justice, it is useful to consider them separately and in detail. This is because each component is engendered in dis- tinct ways, arising from different managerial actions.

Distributive Justice Researchers call the first component of justice distributive justice because it has to do with the allocations or outcomes that some get and others do not. Distributive justice is concerned with the reality that not all workers are treated

alike; the allocation of outcomes is differentiated in the work- place. Individuals are concerned with whether or not they received their “just share.” Sometimes things are distribu- tively just, as when the most qualified person gets promoted. Other times they are not, as when advancement goes to cor- porate “insiders” with a political relationship to upper management.

Equity Theory Perhaps the earliest theory of distributive jus- tice can be attributed to Aristotle. In his Nicomachean Ethics, the philosopher maintained that just distribution involved “something proportionate,” which he defined as “equality of ratios.” Specification, and a bit of rearrangement, led Adams (1965) to represent his influential equity theory of distribu- tive justice with the following equation:

O1 I1

! O2 I2

According to equity theory, we are interested in how much we get (outcomes or O1) relative to how much we con- tribute (inputs or I1). Such a ratio is meaningless, however, unless anchored against some standard. To accomplish this, we examine the outcomes (O2) and inputs (I2) of some refer- ent. Usually, though not necessarily, this is another person who is similar to us. Things are “equitable” when the ratios, not the individual terms, are in agreement. When the ratios are out of alignment, employees may feel uneasy. They are motivated to “balance” the equation by modifying the terms. For example, one who is underpaid might reduce inputs by a corresponding amount.

This simple equation leads to a number of predictions, some of which are not obvious. For example, an individual who earns less than another may still be satisfied, as long as he or she also contributes less. Likewise, a person who is paid equally to another may feel unjustly treated if he or she also contributes substantially more to the organization. These consequences often do not occur to managers, but they make good sense in light of equity theory. But by far the most famous prediction from equity theory is the “over- reward effect”—that is, what happens when the equation is unbalanced in one’s own favor.

According to equity theory, when one is overpaid the two sides of the ratios are misaligned. Consequently, one must work harder (i.e., increase inputs) in order to be equitable. These effects seem to occur. Greenberg (1988) studied man- agers who were temporarily moved to higher- or lower-status offices than their position actually warranted. Those moved to higher-status offices boosted performance, whereas those moved to lower-status offices showed decrements. These gains and losses later disappeared when individuals were returned to status-appropriate office spaces. Apart from its impact on performance, inequity can also cause workplace sabotage (Ambrose, Seabright, & Schminke, 2002) and employee theft (Greenberg, 1993). It is personally painful for

Table 1

Components of Organizational Justice

1. Distributive Justice: Appropriateness of outcomes.

• Equity: Rewarding employees based on their contributions.

• Equality: Providing each employee roughly the same compensation.

• Need: Providing a benefit based on one’s personal requirements.

2. Procedural Justice: Appropriateness of the alloca- tion process.

• Consistency: All employees are treated the same.

• Lack of Bias: No person or group is singled out for discrimination or ill-treatment.

• Accuracy: Decisions are based on accurate information.

• Representation of All Concerned: Appropriate stakeholders have input into a decision.

• Correction: There is an appeals process or other mechanism for fixing mistakes.

• Ethics: Norms of professional conduct are not violated.

3. Interactional Justice: Appropriateness of the treat- ment one receives from authority figures.

• Interpersonal Justice: Treating an employee with dignity, courtesy, and respect.

• Informational Justice: Sharing relevant information with employees.

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