Human Resource Management B8204: Managing Organizational Fairness, Commitment and Trust

1. Human Resource Management B8204: Managing Organizational Fairness, Commitment and Trust Thursday January 26, 2006

2. Agenda Organizational Fairness Greenberg (1988) Sidle (2003) Organizational Commitment and Trust Dessler (1999) Braun (1997) DeBoer, Bakker, Syroit & Schaufeli (2002)

3. Fairness and Organizations Biggest Challenges in 21st Century: Harassment, privacy, fairness Legal means to ensure fair treatment Laws, regulations, executive orders Legal compliance is the first step But, complying with laws is not enough E.g., must follow due process, respond to concerns, keep records, intervene if necessary, stay current, report illegal behaviour, educate others Effective managers are sensitive to employee perceptions and to the broader social fabric Anticipate employee reactions Personally respect employees Elicit positive attitudes from employees

4. Greenberg, J. (1988). Cultivating an image of justice: Looking fair on the job. Academy of Management Executive, 2, 155-158. Is fairness really just what employees perceive to be fair? Is “looking fair” as important as “being fair”? Are they unique constructs? What are the positive and negative aspects associated with “cultivating an image of fairness”?

5. Organizational Justice Fair treatment from an organization or its members Multidimensional Construct – What fairness means to employees Distributive Justice Procedural Justice Interactional Justice Interpersonal Informational (sometimes part of procedural)

6. Distributive Justice Perceived fairness of outcomes relative to our contributions and the outcomes and contributions of others Cognitive and affective reaction Equality principle Need principle Equity principle

7. Equity Theory People determine if allocations fair by comparing their input/outcome ratios to those of someone else Inputs: skills, effort, experience, tenure, etc. Outputs: pay, promotion, recognition, status, etc. Unbalanced ratios lead to: Change in work effort or quality Attempts to change own or others outcomes Cognitive distortion Withdrawal from situation Subjective Choice of comparative other Human nature: overestimate our own contributions, underestimate others Individual differences

8. Procedural Justice The fairness of the policies and procedures used to decide the distribution of resources People believe they should have a say in decision processes, and these processes should be predictable

9. Leventhal (1980) Criteria: “Procedural Justice Rules” Policies & procedures applied consistently Decision-maker unbiased Complete & accurate information used Correction or appeal mechanism Policies & procedures conform to prevailing ethical standards Policies & procedures gather information and take account all affected groups

10. Interactional Justice How the decision maker treats employees during the process Interpersonal Treated rudely, ignored, vs. courtesy, respect Informational Quality of explanations about procedures, or why outcomes distributed in a particular way Transparency in organization

11. Outcomes of Justice Direct link to employees’ emotions Anger, withdrawal, stress Direct link to employees’ attitudes Organizational commitment, job satisfaction Direct link to employees’ behaviours Organizational citizenship behaviours, counterproductive workplace behaviours – if fair, will fulfill obligation to firm Indirect link to employees’ behaviours Reputation of firm

12. Pink Slips Without Tears Joe Worked in plant for 15 years Victim of layoff Angry and distrustful toward former company; told everyone how many years he had put in at company and that they just up and let him go without explaining why Jill Worked in plant for 10 years Victim of layoff Manager told her three months prior to layoff that would likely lose her position due to restructuring, and the rationale was explained Jill had positive things to say about her former company

13. Joe

14. Jill

15. Sidle, S. D. (2003). Best laid plans: Establishing fairness early can help smooth organizational change. Academy of Management Executive, 17, 127-128. Do you buy the argument that organizational change will be facilitated by following these recommendations? Would you expect to see an increase in trust and commitment as a result of such actions? What are the ramifications for not following these recommendations? What are the implications should employees adjust their attitudes and behaviors to create a more “equitable” working relationship when they feel unfairly treated?

16. Measuring Fairness Employee Surveys Satisfaction, exit, etc. Grievances, complaints Turnover rates Transfers Lower productivity, sabotage, counterproductivity, etc.

17. De Boer, E.M., et al. (2002). Unfairness at work as a predictor of absenteeism. Journal of Organizational Behavior, 23, 181-197. Have you or would you expect to see these same results in the ‘real-world’? Do you believe that perceived unfairness is related to individual health and well-being at work? Would you expect to see ‘withdrawal’ occur directly as a result of unfairness at work?

18. Trust Positive expectations about another party’s intentions and actions in risky situations Placing yourself in the vulnerable position of relying on others to treat you in a fair, open, and honest way Occurs when you believe that another party will not adversely affect you in situations where you are vulnerable Absence of trust is not necessarily distrust Employees transfer trust in organizational members towards organization as a whole

20. Implications of Trust Trust is fragile and difficult to rebuild Trust is crucial for any interdependent activity Predicts positive and negative attitudes and behaviours Organizational commitment Cynicism, motivation Absenteeism, turnover, general performance

21. Braun, C. (1997). Organizational infidelity: How violations of trust affect the employee-employer relationship, Academy of Management Executive, 11, 94-95. If you have a certain degree of trust, can you really get away with a transgression? Do you think that people begin with particular levels of trust? Does this vary across people or situations? What are the implications for HRM?

22. How to Build Trust Discuss values Avoid over-controlling employees Encourage interdependency Wait….(2 years?!)

23. Work Commitment Organizational commitment Affective Normative Continuance Professional/Occupational commitment Employment commitment Union commitment, co-worker commitment….!!

24. Affective Organizational Commitment Employees’ emotional attachment to an organization I feel like part of the family at this company Working here has a great deal of personal meaning I would be very happy to spend the rest of my career here

25. Normative Organizational Commitment Reflects a feeling of obligation to continue employment Stable over time, less subject or organizational intervention I owe a great deal to my company I would feel guilty if I quit this firm I feel a sense of obligation to this firm

26. Benefits of Affective and Normative Commitment Affective Increased job satisfaction Increased organizational citizenship behaviours More constructive problem solving Fewer absences Lower turnover Normative Fewer absences Lower turnover

27. Continuance Organizational Commitment A bond felt by employees that motivates them to stay only because leaving would be costly Stay because think need to, not because want to (pay, pensions, benefits, etc.) It would be hard for me to leave, even if I wanted to One disadvantage of leaving this firm would be the scarcity of available job alternatives

28. Consequences of Continuance Organizational Commitment Lower turnover but….. Lower performance Fewer organizational citizenship behaviours More grievances (if unionized)

29. Building Affective Organizational Commitment Justice – reciprocity Trust Job security Organizational comprehension Employee involvement Organizational identification

30. Dessler, G. (1999). How to earn your employees’ commitment. Academy of Management Executive, 13, 58-67. Is this entire list, in practice, useful? What are the best, out of the many, recommendations made in this piece? If someone read this without being knowledgeable about the different types of commitment could there be potential problems?

31. Next Class… Tuesday January 31, 2006 Managing Recruitment Chapter 4 of text Taylor, P.J., & Small, B. (2002). Asking applicants what they would do versus what they did do. Journal of Occupational and Organizational Psychology, 75, 277-294. Butler, T. & Waldroop, J. (1999). Job sculpting: The art of retaining your best people. Harvard Business Review, Sept-Oct, 144-152.