Two factories owned by the same manufacturing group face the same problem. A lost contract means that pay must be cut by a tenth for three months to avoid redundancies.
At the first plant, the managing director calls a meeting of the whole workforce. She explains the lost contract, shows the figures, says that managers’ pay is being cut by the same proportion, describes the alternatives that were considered and why they were rejected, and answers questions for over an hour. She says she is sorry and that she knows what it means for people with mortgages. At the second plant, a notice goes up on the board on a Friday afternoon, signed by “Management”.
The cut is identical. Over the next three months the second plant sees a sharp rise in missing stock, a jump in sick leave and the resignation of four skilled machinists. The first plant sees almost none of this. When the contract situation improves, the first plant’s workforce is intact and its managers are, if anything, more trusted than before.
Managers spend most of their effort on getting decisions right: the correct pay rise, the right person promoted, the appropriate sanction. They spend much less on how the decision is reached and delivered. Research on organisational justice suggests the balance should be closer to even.
Organisational justice is the study of what people perceive as fair at work and how those perceptions affect behaviour. It is one of the most thoroughly researched areas of organisational psychology, and its central finding is consistent: how people are treated in the making and communicating of a decision often matters as much as the decision.
Fairness has several parts.
Outcome, procedure, respect and explanation each matter, and each affects behaviour.
Process counts most when news is bad.
People scrutinise how a decision was made mainly when they dislike the result.
Engage, explain, respect.
Give people a voice beforehand, an honest explanation afterwards and courtesy throughout.
What are the types of organisational justice?
Researchers distinguish three or four, depending on how they divide the last.
| Type | The question people ask | Example |
|---|---|---|
| Distributive | Is the outcome fair, given what I contributed and what others received? | “Is my bonus right compared with hers?” |
| Procedural | Was the decision made by a fair process? | “Were the criteria clear? Did I get a say? Was it the same for everyone?” |
| Interpersonal | Was I treated with dignity and respect? | “Did my manager tell me in person and listen?” |
| Informational | Was I given an honest, adequate explanation? | “Do I understand why, and was I told in time?” |
The last two are often grouped together as interactional justice, a term introduced by Robert Bies and Joseph Moag in 1986.
Distributive justice builds on equity theory, described in our guide to pay raise psychology. Procedural justice originates in the work of John Thibaut and Laurens Walker on legal disputes in the 1970s: people who had a chance to present their side accepted verdicts more readily, including verdicts against them.
What makes a procedure feel fair?
Gerald Leventhal proposed six rules in 1980 that remain the standard list.
- Consistency. The same procedure applies across people and over time.
- Bias suppression. The decision-maker has no personal stake and sets aside prejudice.
- Accuracy. The decision rests on good information.
- Correctability. There is a way to appeal or to fix mistakes.
- Representativeness. The concerns of those affected are taken into account.
- Ethicality. The process accords with prevailing moral standards.
To these, later research added voice: the opportunity to express one’s view before the decision is made. Voice has an effect even when it cannot change the outcome. In experiments, people allowed to give their opinion after a decision had already been taken still rated the process as fairer than people given no opportunity at all. Being heard matters in itself, because it tells people they are regarded as members of the group whose view counts.
How strong is the evidence?
Very strong.
A meta-analysis of 183 studies found that perceptions of distributive, procedural, interpersonal and informational justice each related to important outcomes, including job satisfaction, organisational commitment, trust in management, helpful discretionary behaviour, withdrawal and, more modestly, job performance. Each type of justice contributed something the others did not.
The most vivid single study concerns exactly the situation in the opening example.
A manufacturing company temporarily cut pay by 15% at two of its plants. At one, a senior executive gave a thorough explanation and expressed regret. At the other, the announcement was brief and without apology. Employee theft rose at both plants during the pay cut and rose considerably more at the plant given the inadequate explanation. It fell back when pay was restored. A third plant with no pay cut showed no change.
Greenberg interpreted the theft as an attempt to restore equity: people who felt cheated took back what they believed they were owed. A careful, respectful explanation, which cost the company nothing, substantially reduced the reaction.
What is the fair process effect?
It is the finding that people react much less negatively to unfavourable outcomes when they believe the process was fair. Joel Brockner and Batia Wiesenfeld reviewed 45 studies and found a consistent pattern.
| Fair process | Unfair process | |
|---|---|---|
| Favourable outcome | Positive reaction | Positive reaction (process matters little) |
| Unfavourable outcome | Mild negative reaction; trust largely retained | Strong negative reaction: resentment, withdrawal, retaliation |
When people get what they wanted, they pay little attention to how the decision was made. When they do not, the process becomes the main thing they look at. It follows that managers should invest most in fair process precisely when the news is bad: a rejected promotion, a small raise, a disciplinary step, a redundancy.
This is the reverse of what tends to happen. Brockner has observed that managers delivering bad news often become distant and hurried, because the task is uncomfortable and because they fear saying something that will be used against them. Discomfort produces the very treatment that makes the bad news intolerable.
Decision-makers assume people care mainly about what they get. So when the outcome cannot be improved, they conclude nothing can be done and put less effort into the process, at the moment when the process counts for most.
Why does process matter so much to people?
Two explanations have support.
The first is practical. A fair process is a reasonable predictor of fair outcomes over time. If the system is sound, a poor result today is more tolerable, since future results are likely to be acceptable.
The second concerns identity. Tom Tyler and Allan Lind argued that fair treatment by an authority tells people about their standing in the group. Being listened to, given reasons and treated politely conveys that you are a valued member. Being ignored or dismissed conveys the opposite. On this view, people care about process because it tells them who they are in the eyes of the organisation, which is why disrespect is felt so sharply even when little money is at stake.
What happens when people feel unfairly treated?
They restore balance, one way or another.
Withdrawal. Reduced effort, less helping, more absence. This is the most frequent response and the hardest to detect.
Retaliation. Daniel Skarlicki and Robert Folger found that workplace retaliation, from taking supplies and wasting time to damaging equipment, was best predicted by the combination of unfair outcomes, unfair procedures and disrespectful treatment. Fair treatment on any one dimension reduced it.
Exit. People leave, and they explain why to others.
Legal action. Studies of dismissed employees have found that those who felt they were treated without dignity at the point of dismissal were far more likely to bring claims; the evidence is set out in our guide to the termination conversation.
Injustice is also contagious. People react to how colleagues are treated as well as to their own treatment, a pattern central to the psychology of layoff survivors.
How do you build fair process into HR decisions?
W. Chan Kim and Renée Mauborgne summarised the practical requirements as three E’s: engagement, explanation and expectation clarity. Combined with the research above, they yield a short checklist that applies to almost any decision.
Before: engage. Ask the people affected for their input. Tell them what is being decided and by what criteria. Voice has to be genuine; consultation after the decision is taken is detected at once.
During: decide consistently. Apply the same criteria to everyone. Use accurate information. Keep those with a personal interest out of the decision.
After: explain. Say what was decided and why, including the alternatives considered. Do it in person where it matters, promptly, and before the rumour arrives.
Throughout: respect. Courtesy, attention and acknowledgement of the effect on the person.
Afterwards: allow correction. Provide a way to question the decision, and treat questions as legitimate.
Where is fair process most often neglected?
In the routine decisions that HR runs all year.
- Hiring. Candidates judge selection on job-relatedness, the chance to perform and how they are told the result. See the psychology of rejecting candidates.
- Pay. A modest increase explained well is better accepted than a larger one handed over without comment.
- Promotion. Unsuccessful internal candidates need the real reason, privately and first. See how to tell someone they did not get the promotion.
- Performance ratings. Clear standards, evidence and a way to challenge. See performance review bias.
- Discipline. A warning in advance, a hearing and consistency. See workplace discipline psychology.
- Reorganisation and redundancy. Criteria, consultation and candour.
For any decision that will disappoint someone, write down three sentences before you communicate it: what was decided, the main reason, and what the person can do if they think it is wrong. If you cannot write all three, you are not ready to deliver it.
Is fairness a matter of perception, then?
Partly, and that needs care. Organisational justice research measures perceived fairness, and perceptions can be shaped by presentation. A manager could, in principle, use the appearance of consultation and a warm explanation to gain acceptance of a decision that is unfair in substance.
That is manipulation. It also works less well than might be feared, since sham consultation is usually recognised and produces a stronger reaction than no consultation at all. The purpose of fair process is not to make bad decisions palatable. Genuine voice, consistent criteria and honest explanation tend to produce better decisions, because they bring more information to bear and expose reasoning to challenge.
Process cannot rescue a substantively unjust outcome indefinitely. If people are in fact underpaid, overlooked because of bias or punished inconsistently, courteous explanations will lose their effect, and deservedly. Procedural fairness is an addition to getting the decision right. It does not replace it.
Fair process also supports the climate in which people are willing to speak up, described in our guide to psychological safety, and it is the main defence against the erosion of trust discussed in the psychological contract.
The second plant in the opening example eventually recovered. But for some years afterwards its workforce referred to the episode simply as “the notice”, and new managers were told about it in their first week. The first plant had no name for its pay cut. By the following year, hardly anyone mentioned it.
Frequently asked questions
What is organizational justice?
Organisational justice refers to employees’ perceptions of fairness at work. It is usually divided into distributive justice (fairness of outcomes), procedural justice (fairness of the process) and interactional justice (respectful treatment and adequate explanation).
What is the difference between distributive and procedural justice?
Distributive justice concerns whether the result, such as pay or a promotion decision, is fair relative to contributions and to what others receive. Procedural justice concerns whether the method used to reach the result was consistent, unbiased, accurate and open to input and appeal.
Why does procedural justice matter?
People who see the process as fair accept unfavourable outcomes far more readily, retain trust in management and are less likely to withdraw effort, retaliate or leave. Fair treatment also signals to people that they are valued members of the organisation.
How can managers improve perceptions of fairness?
Seek input before deciding, apply clear criteria consistently, explain decisions honestly and promptly, treat people with respect when delivering news, and provide a real route to question or appeal.
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