Procedural Justice and the Organization of Labor

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Procedural Justice and the Organization of Labor

• Tom R. Tyler
• Department of Psychology
• New York University

Presented at the Conference on Social and
Psychological Foundations of Economic Life.
European Science Days 2001. July 2-5, 2001 -
Steyr, Austria
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The psychology of motivation

• One important issue underlying the organization
  of labor is the psychology of employee motivation
  --
• What motivates employees to do their jobs well?
• The structures of organizations and the rules
  governing the workplace are most effective when
  they are based on an accurate model of what
  motivates employees

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Workplace design

• The underlying assumption is that the structure
  of the workplace influences employee motivation
• This leads to a strategy of trying to design work
  institutions to produce desired employee behavior
• This can be contrasted to a selection model (get
  the right people for the job)

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Motivational goals

• Before we can address the question of which are
  the appropriate models of employee motivation, we
  need to identify the workplace behaviors that we
  want to motivate

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What behavior do we want from
employees?

• I focus on two types of workplace behavior
• Rule following
• I follow organizational policies
• I do not steal, etc.
• Job performance
• I do my job well (in-role, required tasks)
• I volunteer to help (extra-role tasks)

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Why do we want these motivations?

• The occurrence of these behaviors facilitates the
  efficiency and effectiveness of organizations
  (organizational psychology)
• Employee engagement in organizations enhances
  employees psychological well being (positive
  psychology)

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Possible motivations for employee
workplace behavior

• I will distinguish between two basic types of
  employee motivation
• Reward based motives
• Command and control
• Pay for performance
• Reinforcement based leadership
• Social motives

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Reward-based motivations

• Incentives pay for good work
• Sanctions punishment for rule breaking
• Level of rewards received
• Salary, benefits
• Future opportunities for promotion
• Relative to other possibilities

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Social motives

• Attitudes Things that people want to do
• Intrinsic motivation (I like my job)
• Commitment (I like my organization)
• Loyalty (I like my supervisor)
• Values Things that people feel that they ought
  to do
• Personal responsibility and obligation

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Two types of behavior

• Mandatory (Required)
• Discretionary (Voluntary)

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A typology of behavior
Mandatory (Required) Discretionary (Voluntary)
Rule following Compliance Deference
Job performance In-role behavior Extra-role behavior
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Question 1 What motivates employee
behavior in the workplace?

• This is an empirical issue.
• I will report the results of several efforts to
  address it.
• Multi-company study
• Single corporation study - bankers

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Multi-company study

• 401 employees drawn from various companies in the
  New York area
• Employees complete questionnaires
• Evaluating their workplace
• Reporting on workplace behavior
• From Tom Tyler and Steve Blader (2000),
  Cooperation in Groups, Philadelphia Psychology
  Press.

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Study of a single corporation

• New York City-based financial services company
  (banking)
• 540 private banking group employees
• Completed questionnaires about their workplace
• Independent supervisor ratings of employee
  behavior

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Rule-following behaviors

• Rule following
• Mandatory (Compliance)
• How often do you comply with work related rules
  and regulations
• Voluntary (Deference)
• How often do you willingly follow corporate
  policies?
• How often do you follow rules when no one is
  watching what you do?

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Job performance behaviors

• Mandatory (In-role behavior)
• How often do you adequately complete your
  required work projects?
• Voluntary (Extra-role behavior)
• How often do you volunteer to do things that are
  not required by your job?

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Instrumental motivation(multi-company study)

• Incentives (rewards for performance)
• If you do your job well, how much does that
  improve your pay and benefits?
• Sanctions (punishment for rule breaking)
• If you are caught breaking a rule, how much does
  it hurt your pay and benefits?

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Instrumental motivation(multi-company study)

• Level of rewards received
• Overall, I receive excellent pay and benefits
  where I work
• I have good opportunities for promotion.
• It would be very difficult for me to find another
  job with the pay and benefits of my current job.

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Measuring internal motivation (multi-company
study)

• Intrinsic motivation
• My job is enjoyable, worthwhile
• Commitment to work organization
• I feel that the organization for which I work
  deserves my loyalty.

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Measuring internal motivation (multi-company
study)

• Values Legitimacy
• I feel that I should accept the decisions of my
  supervisor, even when I think they are wrong.
• Work organizations are most effective when people
  follow the directives of their supervisors

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Measuring internal motivation(multi-company
study)

• Value congruence
• My moral values and the values of my work
  organization are very similar.

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What shapes employee workplace behavior?
(multi-company study)
Note. Entries are the total variance explained
by rewards, attitudes, and
values.
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What shapes employee workplace behavior?
(multi-company study / unique
variance explained)
Note. Entries are the unique variance explained
by each cluster of variables.
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Distinguishing the influence of attitudesand
values on work behavior(multi-company study /
unique variance explained)
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What shapes employee rule-following behavior in
the workplace?(single corporation study)
Entries are the unique variance explained by each
factor.
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What shapes employee rule-following behavior in
the workplace?(single corporation study)
Using an independent indicator of rule-following
behavior
Note. Entries are beta weights for a regression
equation. The dependent variable is the
supervisors rating of employee rule-following
behavior.
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Conclusion 1

• Employees attitudes and values have an important
  influence on behavior in the workplace

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Question 2. What characteristics of employees
work environments shape their behavior?

• We can compare the influence of three issues
• Rule/policy favorability
• Organizational rules usually lead to decisions
  that favor me.
• Rule/policy fairness
• How fair are the outcomes you receive from your
  work organization?
• The fairness of organizational procedures
• How fairly does your organization make decisions?

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The idea of procedural justice

• People value being the members of an organization
  that they experience as making its decisions
  fairly
• Bruno Frey Procedural utility
• The empirical question
• Does procedural justice influence employees
  attitudes, values, and behaviors?

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The influence of the work environment(multi-compa
ny study)
Entries are the total variance explained.
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Results of the multi-company study
Entries are beta weights for regression equations.
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Results of the single corporation study
Entries are beta weights for regression equations
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Conclusion 2

• The justice of organizational procedures shapes
  employees attitudes, values, and behaviors
• It also strongly influences employees behavior

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Question 3. What shapes judgments about the
procedural justice of workplace rules and
policies?

• Issues
• Quality of decision making
• Neutrality, objectivity, consistency
• Quality of treatment
• Consideration, treatment with dignity
• Sources
• Organizational rules
• Ones workgroup, supervisor

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Factors shaping procedural justice judgments
Multi- company study Single corporation study
Quality of decision-making (org.) .26 .19
Quality of decision-making (super.) .31 .22
Quality of treatment (org.) .24 .43
Quality of treatment (super.) .25 .12
Adj. R-sq. 79 66
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Conclusion 3

• Organizational culture shapes judgments about the
  fairness of organizational procedures.

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Question 4. Why does procedural justice matter?

• There are two bodies of social psychological
  theory that address the relationship between
  people and organizations
• Social exchange theorypeople want resources
• Get them from exchanges in group contexts (pay
  for work)
• Social identity theorypeople want a favorable
  identity
• Draw it, in part, from the status of the groups
  to which they belong

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Indicators from each model

• Social exchange
• Level of resources
• Incentive mechanisms
• Social identity
• Identification-how much of self is drawn from
  group membership
• PrideStatus of the group
• RespectStatus in the group

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Model
Procedural justice
Identification
Attitudes, values, behaviors
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Elements that shape group engagement
(multi-company study)
Note. Entries are beta weights.
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Elements of the group that shape identification
(single corporation study)
Note. Entries are beta weights.
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Identification and group engagement
(multi-company study)
Note. Entries are the average Pearson
correlation within each cell.
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Identification, attitudes and behavior(single
corporation study)
Note. Entries are the average Pearson
correlation within each cell.
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• So, when people feel that group procedures are
  fair
• They identify with their group
• They engage themselves in that group

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• How does identification fit into the procedural
  justice-cooperative behavior relationship?
• Identification mediates the relationship between
  procedural justice and engagement.

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The relationship between procedural justice and
engagement in groups Identification as a
mediator(Tyler and Blader, 2000)
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Why? Because procedural justice communicates
status-relevant information

• Procedural justice judgments communicate status
  - Shape ones sense of self
• Quality of decision making
• Neutrality
• Quality of treatment
• Consideration, concern, politeness, dignity,
  rights recognition

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Identification and self-esteem (sample of
corporate employees)
Identification Level of resources Policy favorability
Self-esteem (Crocker) .47 .16 .15
Note. Entries are Pearson correlations.
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• Identification has broader positive consequences
  it leads to
• Voluntary rule following
• Voluntary actions designed to help the group
• High self-esteem/self-worth

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Groups can facilitate employee identification

• The key to so doing is to have fair procedures
• Quality of decision making
• Quality of treatment

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Conclusion 4

• People care about the fairness of organizational
  procedures because Procedural Fairness signals
  identity-relevant information
• Organizations are important shapers of
  self-identities

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Summary Procedural justice and the organization
of labor

• Employee behavior in work organizations is
  indepen-dently influenced by noninstrumental
  motivations
• Attitudes and values
• Procedural justice judgments
• Issues of quality of decision-making and
  treatment
• Identity and status evaluation
• Identification
• Pride, respect

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Implications
We will gain in our ability to understand what
motivates employees by incorporating social
motives of the type I have outlined into our
models. We will also be better able to design
work organizations.