B8204 Human Resource Management

1
B8204 Human Resource Management

• The Legal Environment
• Workplace Diversity
• Organizational Fairness, Trust and Commitment

2
Agenda

• Research Discussion
• Foster, C., Harris, L. (2005). Easy to say,
  difficult to do Diversity management in retail.
  Human Resource Management Journal, 15 (3), 4-17.
• Thomas D.A. (2004). Diversity as strategy.
  Harvard Business Review, 82 (9), 98-108.
• Brockner, J. (2006). Why its so hard to be fair.
  Harvard Business Review, 82, 122-129.
• Case
• Surprise Under the Carpet at Northern Sigma (p.
  131 of text)

3
Fairness The Intended Purpose

• Most employment law represents an ongoing
  attempt to determine and enforce standards that
  reflect the consensus on what it means to be fair
  or equitable as an employer.

4
Fairness and Organizations

• One of biggest Challenges in 21st Century
• Legal means to ensure fair treatment
• Laws, regulations, executive orders
• 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

5
Fair Treatment

• Legal compliance is the first step
• Effective managers are sensitive to employee
  perceptions and to the broader social fabric
• Anticipate employee reactions
• Personally respect employees
• Elicit positive attitudes from employees

6
Organizational Justice

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

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Distributive Justice

• Perceived fairness of outcomes relative to our
  contributions and the outcomes and contributions
  of others
• People determine if allocations are fair by
  comparing their input/outcome ratios to those of
  someone else
• Inputs skills, effort, experience, tenure, etc.
• Outputs pay, promotion, recognition, status,
  etc.

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
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

10
Measuring Fairness

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

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Why is Justice Important

• Fairness is related to
• Employees attitudes
• Employees emotions
• Employees behaviours
• Reputation of firm
• It is associated with important outcomes
• Organizational commitment
• Trust
• Counterproductive work behaviors

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Organizational Fairness Key Points

• Fairness is a perception, but there are some key
  drivers of fairness in organizations that promote
  overall perceptions and satisfaction with
  fairness
• Evidence demonstrates that fairness plays a
  significant role in all aspects of organizational
  functioning
• It is important to ensure that employees know the
  organization values fairness they need to
  demonstrate this, but at the same time, they must
  actually practice fairness!
• Fairness has implications for a number of
  important organizational variables including
• CWB
• Trust
• Commitment

13
Greenberg, J. (1990). Employee theft as a
reaction to underpayment inequity The hidden
cost of pay cuts. Journal of Applied Psychology,
75, 561-568.

• Study background
• Company had lost 2 large contracts
• In lieu of layoffs, company made temporary pay
  cuts of 15 in 2 manufacturing plants
• The explanation for pay cut was varied
• Plant A Adequate explanation
• rationale for cut, management showed remorse
• Plant B Inadequate explanation
• rationale was minimal, no remorse
• Plant C Control plant
• plant owned by same company with no cuts

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Research Questions

• Would employees perceive the pay cut as unfair
  and seek to redress this via theft?
• Would the nature of the reason provided for the
  pay cut influence the degree of theft that would
  occur?

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Mean percentage of employee theft as function of
time relative to pay cut
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Study Findings

• Would employees perceive the pay cut as unfair
  and seek to redress this via theft?
• Increase in theft during underpayment period
• Pay cut inadequate explanation greatest theft
  increase
• Pay cut adequate explanation medium theft
  increase
• Control group no theft increase
• Would the nature of the reason provided for the
  pay cut influence the degree of theft that would
  occur?
• Adequacy of explanation played a role

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Trust

• Positive expectations about another partys
  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
• Employees transfer trust in organizational
  members towards organization as a whole

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The importance of trust

• Productive relationships are based on trust
  often unrecognized and taken for granted
• Its a resource that increases with use
• Enables coordination without coercion
• Enables commitments to be undertaken in
  situations of high risk
• Trust within an organization is fragile and
  complicated Individuals are provided with many
  different messages, and there are different kinds
  of trust (strategic, personal, and organization).
  
• You need to protect trust it can take years to
  build, but moments to destroy.

19
Cook Wall (1980). Trust in Management Measure.

• Strongly Disagree1, Moderately Disagree2,
  Somewhat Disagree3, Neither Agree nor
  Disagree4, Somewhat Agree5, Moderately Agree6,
  Strongly Agree7
• At the organization I work for
• Management at my company is sincere in its
  attempts to meet the workers point of view.
• Our company has a poor future unless it can
  attract better managers.
• Management can be trusted to make sensible
  decisions for the companys future.
• Management at work seems to do an efficient job.
• I feel quite confident that the company will
  always try to treat me fairly.
• Our management would be quite prepared to gain
  advantage by deceiving the workers.
• I have confidence and trust in management at my
  company.

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Commitment

• Organizational commitment
• Affective
• Normative
• Continuance
• Professional/Occupational commitment
• Employment commitment
• Union commitment, co-worker commitment.

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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

22
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

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Benefits of Affective and Normative Commitment

• Normative
• Fewer absences
• Lower turnover

• Affective
• Increased job satisfaction
• Increased organizational citizenship behaviours
• More constructive problem solving
• Fewer absences
• Lower turnover

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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

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Consequences of Continuance Organizational
Commitment

• Lower turnover but..
• Lower performance
• Fewer organizational citizenship behaviours
• More grievances (if unionized)

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Organizational Commitment and Trust Key Points

• Productive relationships are based on trust
  often unrecognized and taken for granted
• The value of the commitment depends on the
  nature of the commitment
• The challenge is to build trust in management and
  positive affective commitment

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Next Class Monday May 25th

• Selection Separations, Downsizing and
  Outplacement
• Text Chapters 5 and 6
• Simulation Hiring the Right Person