Creating Fairness in the Workplace

Transparency gives employees a strong sense of organizational justice

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By Run Ren

Organizational justice is one of the most important topics for both managers and scholars – with good reason. Employees who perceive fair treatment from an organization and their supervisors exhibit increased satisfaction, commitment, helping behaviors and, most importantly, better overall performance. Additionally, perception of fairness leads to lower turnover.

While the benefits of perceived fairness are important, scholars are only now uncovering how employees form these perceptions. In my research, “Fairness Heuristics and Substitutability Effects: Inferring the Fairness of Outcomes, Procedures, and Interpersonal Treatment When Employees Lack Clear Information" in the Journal of Applied Psychology, my colleagues and I investigated how Chinese employees make judgments about justice, specifically asking if and how employees rely on educated guesses when they lack clear information. We found that employees will often make judgments of fairness even when information is scarce.

My colleagues and I conducted a series of studies, using samples of migrant workers, college students and employees, with both surveys and experiments to assess how they judge justice. We looked at three accepted forms of justice: distributive (fairness of the outcomes), procedural (fairness of the procedure used to determine the outcome) and interactional (fairness of interpersonal treatment).

Results across our three China-based studies were consistent. When people have clear information on only one type of justice, their judgments on the other two types of justice will rely on this clear one.

One common scenario of this is a judgment of salary. When employees perceive that their outcomes, such as salary, are fair, they will likely believe that the procedures used to determine their salaries are also fair and that their supervisors treat them with interactional justice. As you can see, even when employees have little information regarding procedural or interactional justice, they will apply their clear perception of distributive justice to those other forms. However, when there is no sense of clear justice in any form, people will lose all sense of a just system.

Our results have practical implications for managers. While information related to all three types of justice should be accessible to employees, sometimes company policy may prevent this. In such cases, managers should make sure that employees perceive at least one type of justice to be fair. Again considering remuneration policy, while some companies prefer to keep their policies secret, employees may find it hard to judge whether their salary is fair, leading to discontent. Instead, managers could provide detailed information on salary procedures to ensure a high procedural justice perception, thereby creating the perception there is distributive justice in salary levels.

We are not suggesting that managers should manipulate the information available to employees. Rather, we suggest that employees have the right to know all the information related to their welfare. Therefore, only in situations that prohibit open sharing should managers focus on only one type of justice to create the idea of fairness for employees.

Run Ren is Assistant Professor of Organizational Management, with a specialty in organizational justice, at Peking University's Guanghua School of Management.