Understanding pay plan acceptance: The role of distributive justice theory

As U.S. businesses shift from individual rewards toward more aggregated pay systems, they must address the issue of reward allocation within groups. Specifically, should aggregate rewards be allocated equally to all group members, or should individual contributions be recognized? In this paper, the multiprinciple view of distributive justice is used as a starting point to predict employee reactions to different allocation methods. Propositions for future research that could facilitate the implementation of alternative pay plans are offered.     

Relationships among pay inequity,perceptions of procedural justice,and organizational citizenship

This study explored relationships between employee dissatisfaction with pay, perceptions of procedural justice, and organizational citizenship behavior. It was hypothesized that pay inequity would be negatively related to citizenship, while favorable perceptions of procedural and interpersonal justice would be positively related. Results provided strong support for the hypotheses only with regard to a dimension of citizenship labeled “compliance.” Implications for employee behavior in the workplace and the expression of grievances are discussed; future research directions are also offered.     

Employee reactions to pay dispersion: A typology of existing research

Pay dispersion has received growing attention in the management literature. Despite an increasing number of studies, research evidence on the effects of pay dispersion has not yet been consistent. The purpose of this paper is to review existing work and to provide a comprehensive theoretical framework that can advance pay dispersion research. Specifically, our framework suggests four unique types of pay dispersion and discusses three existing theories (equity theory, expectancy theory, and tournament theory) to integrate existing research from an employee reaction perspective in the pay dispersion area. We build upon this taxonomy and theoretical explication to suggest an agenda for future pay dispersion research.     

The effect of procedural justice in the relationship between charismatic leadership and feedback reactions in performance appraisal

In this study, the relationship between procedural justice, charismatic leadership and feedback reactions (i.e. perceived feedback utility and feedback accuracy) is investigated. We conducted both regression analyses and path analyses (n = 299) to establish whether there is a moderating or mediating effect of charismatic leadership in the relationship between procedural justice and feedback reactions of teachers. Our results indicate there is a mediating effect of charismatic leadership. This demonstrates that besides the appraisal system, charismatic leadership is important for feedback reactions. Hence, supervisors should take into account that they have an important function to fulfill when conducting performance appraisals and not see performance appraisal as just another perfunctory system in human resource management.     

Multi‐foci CSR perceptions,procedural justice and in‐role employee performance: the mediating role of commitment and pride

This study explores differential employee responses to perceived corporate social responsibility (CSR) treatment of social and non‐social stakeholder foci of the community, customers, shareholders and environment along with first‐party employee justice perceptions. At a finance‐sector multinational, we test the mediating role of commitment and pride in accounting for the relationship between perceptions of stakeholder treatment and in‐role performance. We propose and pilot a new multi‐foci CSR measure and include this in a mediated model within a separate study. Socially responsible treatment of customers and the environment play a role in predicting performance; these foci are related to either pride or commitment. Community CSR, first‐party justice perceptions and commitment predict performance either directly or indirectly. Our research shows an absence of any positive employee response associated with CSR towards shareholders. The study uncovers new insights into our understanding of complexities in employee responses to CSR activities.     

Performance, seniority, and wages: formal salary systems and individual earnings profiles

This paper replicates studies by Medoff and Abraham [Quart. J. Eco. 95 1980 703; J. Hum. Res. 16 1981 186] and Flabbi and Ichino [Lab. Eco. 8 2001 359] using personnel data from the Dutch national aircraft manufacturer Fokker. It shows how a formal salary system, as is widely used by large firms, brings about that seniority-wage profiles are largely independent of controls for reported performance in cross-sectional wage regressions even though supervisors' evaluations shape life-cycle earnings profiles. Performance ratings determine how fast a worker climbs the firm's career and wage ladder. The paper also reveals that real wage growth depends on the employer's prosperity, and it demonstrates that formal salary systems cause serial correlation in wage growth and “Green Card” effects.     

National diversity and team performance: the moderating role of interactional justice climate

In this team-level study, we present and test a model in which two aspects of interactional justice climate, its level and its strength, interact to moderate the effects of national diversity on team performance. Connecting the literatures on team diversity and (interactional) justice climate, we hypothesize that a high level of interactional justice exhibited by the line manager promotes the performance of nationally diverse teams, but only when team members share this perception (i.e. when the climate is strong). Using time-lagged performance measurement, we conducted a multisource field study using data from 272 employees clustered in 45 teams who worked for a local subsidiary of a multinational enterprise. The findings confirm our hypothesis and have implications for the diversity and justice literatures, while advancing knowledge that promotes the effective management of increasingly diverse workforces in this era of globalization.     

Gender differences in the effect of downward influence strategies on perceived stress and general-health: The mediating role of organizational justice

This study examined the effects of supervisor’s downward influence strategies (DIS) on subordinates’ perceived stress and general-health. The influencing effects of DIS were also analyzed in the light of the mediating effects of organizational justice dimensions, namely, distributive justice (DJ), procedural justice (PJ) and interactional justice (IJ). Responses were collected from three organizations through survey method (Males, N = 91; females, N = 74). Gender differences were observed in the perceptions of DIS which affected perceived stress and general-health conditions of both male and female employees. Further, the results revealed that supervisor’s task-oriented DIS (e.g., negative sanctions) increase perceived stress and negative health conditions in both genders. Supervisor’s people-oriented DIS (e.g., ingratiation) lowered perceived stress and triggered botheration-free existence in the employees. The mediation analysis of justice dimensions indicated that, in the case of males, IJ and PJ positively mediate people-oriented DIS effects on stress and general health. However, in females, supervisor’s ingratiation and positive sanctions helped in ameliorating stress through their positive PJ perceptions. Strong indirect effects of supervisor’s task-oriented strategy (e.g., rationality) were observed on male’s stress and general-health through IJ. On the other hand, supervisor’s rationality and assertiveness reduced female employees’ perceived stress through their PJ and DJ perceptions, respectively.     

Employee commitment to the organization and customer reactions: mapping the linkages

Although it has been claimed that the attitudes that employees have toward their work influence how customers react to the organization, its service and products, relatively little empirical research has examined these possible linkages. The focus in this article is on the relations between organizational commitment and customer reactions (e.g., customer satisfaction, repeat purchase behavior). Specifically, we review relevant theory and research, discuss methodological issues associated with examining this issue, and make recommendations for both researchers and human resource (HR) practitioners interested in mapping linkages between organizational commitment and customer reactions.     

Talent management and organisational justice: employee reactions to high potential identification

We examined how perceived distributive and procedural justice affected the relationship between an employee's identification as a high potential (drawn from archival data), job satisfaction and work effort. A questionnaire was distributed within one large company among employees who were and employees who were not identified as a high potential (n = 203). The results indicated that perceptions of distributive justice were significantly higher for employees identified as a high potential. Moreover, perceived distributive justice fully mediated the relationship between an employee's identification and his or her level of job satisfaction. The results also revealed that perceptions of procedural justice moderated the relationship between perceived distributive justice and work effort. Theoretical and practical consequences of these findings are discussed.     

A field study of corporate employee monitoring: Attitudes, absenteeism, and the moderating influences of procedural justice perceptions

Managers are responsible for creating and enforcing company policies governing organizational practices, and one practice that is on the rise in organizations involves monitoring of employees for security purposes. The research literature on security behaviors has focused almost exclusively on compliance with or obedience to such policies; however, compliance with prescribed behaviors is not complete in terms of organizational performance. People may comply with policies with which they disagree, but harbor resentments and exhibit counterproductive and even destructive behaviors in protest. We conducted a field study of organizational monitoring policies and practices using factors from the threat control model and found that perceptions of threat, self-efficacy, and trust in the organization were key factors in attitudes about monitoring, and that these factors interacted with employee perceptions of organizational procedural justice such that high perceptions of organizational procedural justice moderated negative attitudes toward corporate monitoring, and better attitudes about monitoring was found to associate with reduced employee absences from the job.     

Treating employees fairly and organizational citizenship behavior: Sorting the effects of job satisfaction,organizational commitment,and procedural justice

A study was conducted to measure the relative contribution of perceptions of procedural justice toward predicting organizational citizenship behavior (OCB) controlling for the effects of job satisfaction and organizational commitment. Employees in a national cable television company completed a survey containing measures of work satisfaction, affective and continuance commitment, and perceptions of fairness, while their managers completed an OCB survey. Results using LISREL 7 indicated support fpr relationships between procedural justice and commitment, satisfaction, and OCB. However, no individual relationships between commitment and OCB nor between satisfaction and OCB were found once the relationships between justice and citizenship were controlled. These findings are discussed using the group value model of procedural justice.     

Employee reactions to voice and choice in the workplace: the influence of culture

The present study investigated the effect of culture on a much-prescribed management practice, that of employee participation in decision making. A survey was conducted among employees from two countries culturally distinct in the dimensions of power distance and individualism, namely Canada and the Philippines. Given eight decision-making scenarios that varied in terms of whether voice and/or choice was given to the employee and in terms of the importance of the outcomes, the respondents were asked about their perceptions of fairness of the procedures and outcomes, satisfaction with the procedures and outcomes, and preference for the decision-making procedures. Results show a highly significant country decision-making mode outcome importance interaction effect, but not in the directions expected. Overall, the Philippine sample registered more positive reactions to participation in decision making, although the Philippines' higher rank in power distance and lower rank in individualism than Canada seem to indicate otherwise. The results, together with a previous study conducted in high power distance-low individualism Mexico, forcefully suggest that employee participation in decision making may be successfully transferred.     

Attitudes to pay systems:an exploratory study within and across cultures

The present study investigates employees’preferences for criteria that are used in pay systems, namely, performance, cost of living, tenure, educational qualification, collective bargaining, skill, market rate, responsibility and special demands. The study also explored variation and similarities of employees’preferences for the criteria across four countries, namely Australia (N = 162), Indonesia (N = 100), Malaysia (N = 129) and Hong Kong (N = 39). The results indicate that the respondents prefer multiple criteria to determine their pay. Preferences for length of service and educational attainment were found to be significantly different across countries, particularly between Australian and Asian samples (Indonesian and Malaysia). This variation is, in part, attributed to cultural differences. Other variables, such as age, educational qualification, position, and industry sector, have been found to be significant correlates of preference for pay systems. Implications for reward management have been discussed.     

The psychological role of pay systems in choosing to work more hours

Psychological and economic perspectives are blended to model aspects of pay systems that dispose employees to work more hours beyond what would be predicted by economically rational exchange alone. Three pay-system triggers and their respective paths to more work are expounded: 1) pay equated to units of time, 2) pay contingent on subjective performance standards, and 3) pay growth determined by tournament pay structures. The effects are conceived as self-reinforcing due to loss aversion stemming from endowment of income and sunk cost bias. Also considered are implications for human capital, a posed curvilinear relationship that holds practical relevance for organizational sustainability—i.e., maintenance of the firm's human capital over the long term.     

Personality and pay satisfaction: exploring the influence of organizational justice and gender in South Africa

This study contributes to the limited established empirical research on the impact and relevance of individual-level personality variables, specifically the broad dispositional trait, core self-evaluations, on the pay satisfaction of historically disadvantaged individuals. In light of recent inquiries which document the important causal role of personality attributes in the emergence of fairness perceptions, this study examines the mediating role of justice perceptions on the relationship between core self-evaluations and pay satisfaction. Using a sample of historically disadvantaged individuals from South Africa, our results show that organizational justice perceptions fully mediate the relationship between core self-evaluations and pay satisfaction. Furthermore, this study finds that gender moderates the relationship between core self-evaluations and pay satisfaction such that self-confident historically disadvantaged females are more satisfied with their pay than their male counterparts.     

The outcomes of variable pay systems: tales of multiple costs and unforeseen consequences

Two veins of research predominate in evaluations of variable pay systems. The first seeks to associate superior financial performance with the use of incentive schemes and the second assesses the success of variable pay systems in effecting behavioural and attitudinal change. This paper argues that both of these approaches suffer from limitations and presents a framework for examining a neglected aspect of the implementation of variable pay systems by considering their operational outcomes and impact on organizations. It contemplates why little evaluation of this kind is conducted and presents a detailed qualitative analysis of the findings from six multiple case studies conducted among medium-sized organizations in the engineering sector. The article contributes to the literature in the area by revealing significant unanticipated costs in management time, administration and staff recruitment and training as a result of pay system change through applying the framework developed, identifying the relative effectiveness of the pay systems and illustrating the scope for organizational context to influence pay system outcomes. It concludes by arguing that the scope for error in managing pay systems raises questions about how far pay systems are effective sources of competitive advantage.     

Trust in the employer: the role of high-involvement work practices and procedural justice in European organizations

Despite the central role of trust in the organizational sciences, we know little about what makes people trust the organizations they work for. This paper examines the antecedents of employees' trust in their organizations drawing on survey data from over 600 European professional workers and managers. The results revealed direct as well as indirect relationships of both human resource (HR) practices and procedural justice with trust. The relationships of both HR practices and procedural justice with trust were partially mediated by perceptions of organizational trustworthiness (in terms of perceived ability and trustworthy intentions of the organization). Justice and HR practices were also found to interact such that justice forms a stronger predictor of trust in organizations when HR practices are less developed. In addition, employees' dispositional propensity to trust explained significant variance in employee trust in their organization, even when it was controlled in our analysis. The implications of these findings for research and practice are discussed.     

Employee affective and behavioral reactions to the spatial density of physical work environments

This field study of a medical clinic found that employees in spatially dense work areas (i.e., those with little space available per person) experienced higher levels of perceived crowding, transfer intentions, and tardiness, as well as lower work area satisfaction, than employees in low‐density areas. Crowding perceptions explained the relations between spatial density and the measures of work area satisfaction and tardiness. Finally, when employees had high workloads and their jobs required physical movement, spatial density had weaker relations to crowding perceptions and area satisfaction than in other conditions. Implications of these findings for human resource practitioners are discussed. © 2005 Wiley Periodicals, Inc.     

The mediating role of organizational justice on the relationship between administrative performance appraisal practices and organizational commitment

This study investigates the relationships among administrative performance appraisal (PA) practices, perception of organizational justice and organizational commitment. The results obtained from 395 employees who work in manufacturing companies in Taiwan show that the implementation of administrative PA activities is highly associated with employee perception of organizational justice and that the level of perceived organizational justice is highly associated with the level of organizational commitment. The results also demonstrate that perceived organizational justice has a partial mediating effect on the relationship between administrative PA practices and organizational commitment. Theoretical and practical implications of these results are discussed.