The concept of organizational justice with regard to how an employee judges the behavior of the organization and the employee’s resulting attitude and behaviour. For example, if a firm makes redundant half of the workers, an employee may feel a sense of injustice with a resulting change in attitude and a drop in productivity.
Justice or fairness refers to the idea that an action or decision is morally right, which may be defined according to ethics, religion, fairness, equity, or law. People are naturally attentive to the justice of events and situations in their everyday lives, across a variety of contexts. Individuals react to actions and decisions made by organizations every day. An individual’s perceptions of these decisions as fair or unfair can influence the individual’s subsequent attitudes and behaviors. Fairness is often of central interest to organizations because the implications of perceptions of injustice can impact job attitudes and behaviors at work. Justice in organizations can include issues related to perceptions of fair pay, equal opportunities for promotion, and personnel selection procedures.
There are two forms of Organizational Justice; outcome favourability and outcome justice. Outcome favourability is a judgement based on personal worth, and outcome justice is based on moral propriety. Managers often believe that employees think of justice as justice the desired outcome.
Four components of organizational justice are distributive, procedural, interpersonal, and informational justice. Research also suggests the importance of affect and emotion in the appraisal of the fairness of a situation as well as one’s behavioral and attitudinal reactions to the situation. Much literature in the industrial/organizational psychology field has examined organizational justice as well as the associated outcomes. Perceptions of justice influence many key organizational outcomes such as motivation and job satisfaction.
Researchers have classified three main components of organizational justice: distributive, procedural, and interactional.
Distributive justice is conceptualized as the fairness associated with decision outcomes and distribution of resources. The outcomes or resources distributed may be tangible (e.g., pay) or intangible (e.g., praise). Perceptions of distributive justice can be fostered when outcomes are perceived to be equally applied. Distributive justice may involve one or more of three different rationales for how resources are distributed: equity, equality and need. Equity focuses more on rewarding employees based on their contribution, and thus can be can be viewed as capitalist justice: the ratio of one’s inputs to one’s outcomes. Equality on the other hand provides each employee with the same compensation. Finally, need is providing a benefit based on one’s personal requirement.
Procedural justice is defined as the fairness of the processes that lead to outcomes. When individuals feel that they have a voice in the process or that the process involves characteristics such as consistency, accuracy, ethicality, and lack of bias then procedural justice is enhanced. Procedural justice is the appropriateness of the allocation process. It includes six main points which are consistency, lack of bias, accuracy, representation of all concerned, correction and ethics. Procedural justice seems to be essential to maintaining institutional legitimacy. What is more interesting is that procedural justice affects what workers believe about the organization as a whole.
Accuracy: The determinant accuracy means that the information used for justifying the decision is correct and up-to-date. All hearsays should be validated for authenticity.
Consistency: One of the critical determinants of procedural justice is consistency. It means that same allowances and criteria are applicable for every person in similar situations, for instance, an employer will have to terminate a contract as per the stated laws in his book and not on a whim.
Neutrality: This determinant of procedural justice means that the decisions will have to be based on facts and not on personal feelings or interest of the person making the decisions. He must take an objective view of the situation to arrive at a conclusion
Representativeness: This determinant of procedural justice means that all those individuals who will be affected by the outcome can express their doubts ad their concern should be taken into account.
Correctability: There should be provisions in place for reversing or challenging a decision like in case of appeal procedures and grievances.
Morality: In case of procedural justice, morality is an essential determinant as it encourages decision-makers to avoid making decisions based on factors like nationality, gender and age.
Interactional justice refers to the treatment that an individual receives as decisions are made and can be promoted by providing explanations for decisions and delivering the news with sensitivity and respect. A construct validation study published in 2001 suggests that interactional justice should be broken into two components: interpersonal and informational justice. Interpersonal justice refers to perceptions of respect and propriety in one’s treatment while informational justice relates to the adequacy of the explanations given in terms of their timeliness, specificity, and truthfulness
Interpersonal justice “reflects the degree to which people are treated with politeness, dignity, and respect by authorities and third parties involved in executing procedures or determining outcomes”.
Informational justice “focuses on explanations provided to people that convey information about why procedures were used in a certain way or why outcomes were distributed in a certain fashion”.
Three different models have been proposed to explain the structure of organizational justice perceptions including a two-factor model, a three-factor model, and a four-factor model. Many researchers have studied organizational justice in terms of the three-factor model; while others have used a two factor model in which interpersonal justice is subsumed under procedural justice while yet some other studies suggest a four factor model best fits the data. Greenberg (1990) proposed a two-factor model and Sweeney and McFarlin (1993) found support for a two-factor model composed of distributive and procedural justice. Through the use of structural equation modelling, Sweeney and McFarlin found that distributive justice was related to outcomes that are person-level (e.g., pay satisfaction) while procedural justice was related to organization-level outcomes (e.g., organizational commitment).
The accuracy of the two-factor model was challenged by studies that suggested a third factor (interactional justice) may be involved. Some argue that interactional justice is distinct from procedural justice because it represents the social exchange component of the interaction and the quality of treatment whereas procedural justice represents the processes that were used to arrive at the decision outcomes. Generally, researchers are in agreement regarding the distinction between procedural and distributive justice but there is more controversy over the distinction between interactional and procedural justice. Colquitt demonstrated that a four-factor model (including procedural, distributive, interpersonal, and informational justice) fit the data significantly better than a two or three factor model. Colquitt’s construct validation study also showed that each of the four components have predictive validity for different key organizational outcomes (e.g., commitment and rule compliance).
Another model of organizational justice proposed by Byrne and colleagues suggested that organizational justice is a multi-foci construct, one where employees see justice as coming from a source – either the organization or their supervisor. Thus, rather than focus on justice as the three or four factor component model, Byrne suggested that employees personify the organization and they distinguish between whether they feel the organization or supervisor have treated them fairly (interactional), use fair procedures (procedural), or allocate rewards or assignments fairly (distributive justice). A number of researchers used this model exploring the possibility that justice is more than just 3 or 4 factors.
Effective Reporting Avenues: A company has to offer a variety of reporting avenues for managers and employees. At least one has to offer anonymity. Whether one or multiple avenues are offered, senior executives have to encourage and communicate the importance of reporting misconduct or concerns. In the absence of a vibrant and credible reporting system, managers and employees will ignore misconduct, undermine corporate integrity and slowly erode any chance of creating a culture of ethics and compliance.
Equal Discipline: Many companies establish a committee that reviews internal investigations and disciplinary actions. It is absolutely critical that the system impose discipline consistently without regard to the seniority of the offender. Unequal discipline undermines any chance for organizational justice. A senior official who commits the same offense as an employee should receive the same discipline, unless there are good reasons to deviate one way or the other.
Prompt Resolution: The old adage, justice delayed is justice denied, applies to organizational justice. Routine investigations have to be resolved within 60 to 90 days. Employee concerns should be acknowledged promptly and matters requiring investigation should be quickly identified and assigned. Investigative staff has to respond to communicate regularly with complainants to keep them informed as to the status of the investigation without discussing the details of the investigation.
Non-Retaliation Against Whistleblowers: A company has to communicate at every conceivable opportunity its commitment not to retaliate against complainants/whistle-blowers. It is an important point to make. The message should be communicated in all policy documents relating to investigations, and should be communicated orally during meetings with employees and complainants.
Compliance Program Improvements: The results of internal investigations should always be monitored and analyzed for potential compliance program enhancements. Internal investigations often reveal weaknesses in internal controls, especially in the financial area. A company has to take these important findings and then use them to design enhancements to the compliance program. If there is a disconnect between the investigation function and the ethics and compliance program review process, a company is ignoring a valuable source of information needed to monitor its compliance program.