Organizational Justice during Strategic Change

The Employee’s Perspective

Marcos Komodromos, Daphne Halkias

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781472453280
• eBook ISBN:
  9781317085058
• Topic: Business
• Subtopic: Business General
• Index: Business

Organizational leaders often struggle to establish and sustain a trusting culture in times of constant changes in the corporate fabric and unethical behavior by corporate leadership. Organizational justice theory provides a means to explain and better understand employees' perceptions of trust, fairness, and the management of change during strategic change. Qualitative studies have yet to be conducted on how an organizational justice framework would address the need of organizational justice for novel, conceptually derived accounts of non-managerial employee perspectives. The purpose of Organizational Justice during Strategic Change is to be both an academic and practical book. After presenting the theoretical elements of the topic, half the book is devoted to a detailed case study of employee interviews conducted in a large, privately-owned media organization addressing the issues of the book topic. The authors' research findings from the case study indicated employees who experience trust and positive feelings regarding their treatment within the organization are willing to become involved in the change process and adopt positive working relationships with their colleagues and managers. This study is important for organizational management to gain knowledge and understanding on how employees' perceptions of distrust and unfairness can lead to resistance and negative behaviors toward organizations and management during strategic change.

PART I
FUNDAMENTAL ELEMENTS

Chapter 1
Promoting Organizational Change in the Workplace: An Ongoing Challenge for Organizational Leaders Today

Organizations may be able to maintain their competitive advantage by managing employees effectively and seeking out techniques that promote trust and facilitate change as well as minimize resistance to the latter. Researchers have endeavored to determine pertinent factors that promote trust during change through the use of the organizational justice framework. The organizational justice framework is the degree of perceived fairness of decision outcomes (distributive justice), decision-making processes (procedural justice), and how employees have been treated by their leaders during organizational processes such as in a period of strategic change.

Organizations need strategic change in order to expand and successfully compete in a dynamic market. However, not all changes are successful. In fact, almost 70 percent of the planned strategic change programs in organizations do not accomplish their desired objectives. Negative employee reactions to organizational strategic imperatives have the potential for highly negative impact, significantly interfering with the intended gains of change. As such, it is essential that organizations implementing change better understand potentially negative reactions by employees to the process in the interests of effectively managing the outcomes.

Managerial efforts for strategic change and restructuring in organizations over the past few years have consistently failed in the absence of support from non-managerial employees and their resistance towards the strategic change itself. Employee dedication, sincerity, and loyalty with regard to the management of change largely determine its success or failure. Employee resistance to strategic change leads to increased absenteeism, employee turnover, lackluster performance, feelings of dissatisfaction, and lower morale—all of which can create feelings of mistrust in employees towards management.

Trust in management is driven mainly by how employees perceive fairness and the management of change within an organization. Organizational justice theory provides a means of conceptualizing employees’ perceptions of trust, fairness, and the management of change within their organizations. As such, application of an organizational justice framework—inclusive of distributive, procedural, and interactional justice—can offer greater understanding of how employees’ personal and institutional trust are related to perceptions of how fairly they have been treated during a strategic organizational change. Employees will regard organizational change more favorably when, from their viewpoint, it has been fairly handled and elements of fairness in management’s decision-making process are easily observed.

Among the many concerns organizations have, an important focus is employee perception of organizational justice given the role it plays in attitudes and behaviors of employees. Researchers have extensively analyzed employees’ perceived organizational justice showing that organizational fairness has positive and negative impact on various outcomes. In organizational science research, justice is considered to be more understandable in its relation to organizational justice.

Considerable research on organizational justice has evidenced that fairness perceptions are linked to outcomes that are important both to the employees and their employing organization; these include trust, job satisfaction, cooperative work behaviors, and organizational commitment. More specifically, prior research in the area of organizational justice revealed that its dimensions correlate negatively to turnover intention, but are positively associated with trust, job satisfaction, and commitment to one’s organization. Furthermore, knowing how employees perceive organizational justice can help anticipate and manage work-related behavior as well as set a high moral and ethical standard. This in turn works to boost commitment to the organization as well as feelings of trust towards supervisor and the organization as a whole.

Social scientists who have investigated the important role justice plays in organizational management support the view that social institutions need to view organizational justice as a priority virtue. In a seminal quantitative study on organizational justice and the management of change, researchers found that the justice framework is optimal for more fully explaining and gaining a better understanding of employees’ feelings of trust and mistrust. Perceptions of justice and trust assessments can be relied on as consistent predictors of the attitudes and behaviors of employees. In the literature on organizational behavior, the organizational justice framework has garnered much attention, first appearing in the early 1970s and more particularly in social science research. Organizational justice brings together the methods employed in making higher management decisions, perceptions regarding their outcomes, and the treatment of impacted employees. As such, organizational justice offers insight into employees’ reactions in relation to trust and mistrust, and sheds light on the rationale behind them.

Seminal social psychologists have concluded that trust is psychologically important to organizational life. It follows then that scholars call for more dynamic conceptualizations of workplace phenomena, and focus on perceptions of justice and trust assessments for reliably predicting the attitudes and behaviors of employees. When trustworthiness is operationalized with regard to ability, there is a weaker connection between trustworthiness and justice. The skills, competence, and efficiency of managers do not have significant bearing on whether or not they actually adhere to justice rules.

Fairness is deemed a critical element in any aspect of the change process. The perceptions of an entity’s fairness can evolve and change through an ongoing cyclical process in which individuals’ judgments of justice events are affected by their existing perceptions concerning the entity involved. Many authors support that the perception of an entity’s fairness represents a trait-like and global evaluation that is often informed by a series of judgments of justice events involving that entity that are experienced over time. Organizational justice scholars concluded that in the absence of unexpected events, perceptions people have about the entity are relatively stable and resistant to change.

Organizational justice as a contingency framework can be useful for assessing the effectiveness of a change initiative, helping to lessen possible negative effects accompanying change and thus enhancing the overall success of an organization’s change implementation. Recent studies on organizational change management have found that positive workplace characteristics and strategies enhance support for and acceptance of change. More specifically, scholars place an emphasis on the content as well as the quality of communications related to the change initiative, on ensuring that the procedures as well as the outcomes are equitable and fair, and on providing employees with support in their adjustments to the change. Furthermore, considering the increasing frequency with which organizations seek to implement large-scale initiatives of strategic change, it is important that researchers and practitioners understand those strategies and managerial actions that both contribute to effective implementation of organizational change and help ensure its sustainability over the long term.

In the justice literature, a central finding is that employees’ justice perceptions, beyond being influenced by the outcomes of organizational decisions, are also impacted by the processes employed to make, communicate, and implement work-related decisions. Recognizing the relevance of organizational justice to organizational change, researchers have used the justice perspective as a base from which to examine employees’ reactions to organizational change initiatives. Additional empirical research is needed to explore these relationships further and test them in different settings, for example, in varying social contexts or where change is not seen as being successfully implemented.

Organizational leaders often struggle to establish and sustain a trusting culture in times of constant changes in job roles, corporate globalization, global competition, technological advancement, strategic change, and unethical behavior by corporate leadership. Organizational justice theory provides a means with which to explain and better understand employees’ perceptions of trust, fairness, and the management of change within the context of strategic change. Empirical studies over the past three decades have confirmed the link between constructs of organizational justice and certain outcomes valued as important by organizations, and the processes yielding the results. However, prior research illustrates how organizational justice perceptions within the same business unit differ considerably depending upon whether one is a manager or not.

Researching employees’ perceptions of trust, fairness, and the management of change using an organizational justice framework can have significant implications for human resources management during a time of strategic change. Seminal studies on trust, fairness, and management of change have largely been conducted with public sector employees, and further research is needed to establish if these outcomes can be replicated in other sectors as well as for different events of organizational change. The specific problem is how an organizational justice framework would address the need raised by scholars of organizational justice (for example, Colquitt and Greenberg, 2003; Mayer, Nishii, Schneider, and Goldstein, 2007) for novel, conceptually derived accounts of non-managerial employee perspectives on organizational justice during periods of organizational change.

Chapter 2
Theoretical and Conceptual Framework

In the past three decades, the management literature has focused much attention on the topics of organizational justice, trust, fairness, and the management of change. Seminal scholars have investigated and extended the work on a number of theoretical and conceptual models on the aforementioned topics. Researchers have also developed theories to explore perceptions of fairness and trust in managing organizational change that may influence employees’ evaluations of outcomes.

Kurt Lewin is recognized for creating the most controversial organized approach to change. The “Three Step Model of Change” (Lewin, 1958)—unfreezing, change, and refreezing—was an outcome of his earlier seminal contributions to areas such as action research, field force theory, and group dynamics. Although authors such as Bullock and Batten (1985; four-phase model) and Cummings and Huse (1989; eight-phase model) tried to improvise the model, Lewin’s concept of change and action research set a foundation for research focused on organizational development, and is, in essence, a planned approach to change employing knowledge from behavioral science.

According to Lewin’s unfreezing, change, and refreezing model (1951), change originates from two forces: those internally driven (from a person’s own needs) and those imposed or induced by the environment. The unfreezing step involves getting people to accept the impending change. The change step has to do with getting people to accept the new state, while the refreezing step intends to make permanent the new practices and behaviors once the implementation process has been concluded. In order to achieve organizational change and to break a given state of inertia, managers and agents of change should strive to achieve the state of refreezing.

Recently, researchers have come out in support of the idea that perceptions of trust and fairness can influence employees’ reactions and attitudes towards a change initiative. Neves and Caetano (2006) and Saunders and Thornhill (2003, 2011) studied the role of supervisory trust, justice perceptions, and commitment in implementing organizational change. Findings in both studies concluded that the social relationship between employees and supervisors during change is a critical factor for successful organizational changes. Neves and Caetano (2006) proposed a model of analysis to extend Lewin’s change model by suggesting the addition of a process of informing employees about the proposed change in order to understand it and support it.

Organizational justice theory was originally developed from applied research in organizational management. The taxonomy of organizational justice theories by Greenberg (1987) have received strong empirical support citing trends in the research questions concerning justice and workplace perceptions of fairness. Greenberg (1987) focused on more proactive and more process-oriented conceptualizations of organizational justice, combining two dimensions that are conceptually independent: a reactive–proactive dimension and a process–content dimension. Such an approach helped distinguish theorized interrelationships in the professional environment, mark trends in emerging areas of inquiry regarding research on organizational justice, and hone in on points revealing empirical or theoretical deficiencies.

Continuing in this vein, Greenberg (2009) argued that most studies on organizational justice focus mainly on theoretical issues and essentially only regard implications for practice as a secondary issue. As a result, Greenberg (2009) investigated organizational justice and identified such implications for practice in four theory-based studies in order to better evaluate the impact of interventions aimed at promoting justice. Greenberg’s findings of theory-based research added to the existing organizational justice theories, illustrating how efforts to test theory-based applications can offer clearer insight into prevailing theories. Other research efforts support Greenberg’s (2009) findings and even earlier contributions in this regard. Examples of such efforts include Bartunek and Rynes (2010) and Behson (2011), who illustrated that theory-based application studies promoting organizational justice can benefit organizations and their employees as well as extend the theories on which they are originally based.

Despite their recognized benefits, several reasons exist for why such investigations, in the form of applied studies, have been rarely conducted. First, managers tend to be unaware of justice-related problems and so are unlikely to collaborate with researchers on the topic. Second, some researchers contend that studies seeking to uncover ways of improving the work environment lack scientific objectivity. Third, academic scholars are in favor of research addressing theoretical issues and avoiding practical applications. Recently, applied studies have confirmed Greenberg’s (2009) theorem that the context in which organizational justice is assessed may play a role in identifying which justice factors are relevant to employees. Finally, recent research findings have added to the empirical evidence supporting the dimensionality of organizational justice and suggest that dimensionality of organizational justice is more context-dependent than previously thought.

Organizational trust has until recently received relatively little research attention, with most conceptualizations of trust being focused on at an interpersonal level. The literature on organizational trust, drawn from a wide range of disciplines such as sociology, psychology, and economics, has resulted in many conceptualizations of the trust construct. Seminal organizational scholars extracted common themes from various conceptual definitions of trust and proposed a consensus definition: “Trust is a psychological state comprising the intention to accept vulnerability based on positive expectations of the intentions or behaviors of another” (Rousseau, Sitkin, Burt, and Camerer, 1998: 395). The same study confirmed that interpersonal trust is important for the motivation of workers to self-organize, and that where trust is present it can promote a critical mass of trust-related behaviors, such as cooperation needed to create higher-unit trustworthiness.

In addition, Six’s (2007) research on developing a theoretical model for building interpersonal trust within organizations supported Rousseau et al.’s (1998) trust theory, and offered more insight into the dynamics of interpersonal trust-building in the workplace environment. In general, trust-building has to do with the logic of appropriateness, where considerations of trust focus on what managers think is appropriate in a certain situation; in other words, each party should desire a continued relationship. Extending work in this area, other authors found that the ability to demonstrate trust in times of change requires managers to engage their employees.

Social psychologists indicate that organizational justice theory is strongly linked to the construct of organizational trust. Saunders and Thornhill (2003) theorized that any influential factors on employees’ perceptions of interpersonal justice are critical for building trust in the organization. Saunders and Thornhill (2004, 2011) investigated further on this issue, and used an organizational justice framework to investigate the relationship between trust and mistrust in an organization. The authors contended that various dimensions of organizational justice (perceptions of distributive, procedural, informational, and interpersonal theories) have varying impacts on trust and mistrust. Their theory extended Folger and Cropanzano’s (1998) organizational justice theory, which states that leaders’ decisions are influenced by subordinates’ perceptions of justice. This theory was elaborated on by examining employees’ perceptions that made judgments about the actions of organizational leaders.

Greenberg (1990) recognized the importance of fairness theories and models of social and interpersonal justice as important tools to understand employees’ behaviors in the work environment. Folger and Cropanzano (1998) extended procedural justice theory by investigating how managers’ decisions can influence subordinates’ perceptions of justice in organizational life. The authors theorized that negative fairness perceptions are determined by factors related to procedural, interactional, and distributive justice because of the influence of accountability. More recently, other researchers have developed a variety of justice theories focused on the role of emotions and the perception of fairness in organizations.

Contributing to Folger and Cropanzano’s (1998) theory of fairness, Colquitt (2001) established the theoretical dimension of organizational justice, consequently supporting a four-factor structure. More specifically, distributive, procedural, interpersonal, and informational justice were to be regarded as distinct entities that, albeit correlated, have differential effects on a number of outcome variables at both the individual and group levels. Colquitt (2001) posited that if the four types of justice are conceptually distinct and seen to predict different criteria, they should be deemed separate constructs. As a result, fairness theory is considered to be an important element of the trust construct, with perceptions of distrust and unfairness leading to resistance or negative and even destructive employee reactions towards the organization.

Integrating present justice theories with research on social cognition and sense-making, Jones and Skarlicki (2012) put forward a model of organizational justice to illustrate the processes that can influence changes in perceptions of fairness. The model asserted that an individual’s perceptions and judgments of an event are guided by their perceptions of the entity involved. This study confirmed Folger and Cropanzano’s (1998) theory that procedural and interactional justice serve to moderate the perception of degree of fairness of the outcome of management decisions.

Building upon the research of Greenberg (1987), Bidarian and Jafari (2012) added additional understanding to the theories of perceived justice by employees and their interactions with their managers. The authors suggested that a manager’s trustable behavior forms organizational trust, and lack of justice does not establish a climate of trust in the organization. Greenberg’s (1990) theory on interactional justice supports that employees’ perceptions are more positive when their treatment is characterized by dignity and respect, and when they are provided with desired communication. The theory also supports that the current literature discusses distributive and procedural justice as the two most common forms of organizational justice. However, more recent research has given additional emphasis to interactional justice as a distinct aspect of justice in its own right. Cropanzano, Byrne, Bobocel, and Rupp (2001) argued that interactional justice was more observable for employees and thus helps to overcome perceptions of a lack of distributional and procedural justice. Extending this, other researchers have noted that organizational justice should include interactional justice as a third dimension. This ties in well with implications for engaging employees in the interests of more positive socio-emotional...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• About the Authors
• PART I FUNDAMENTAL ELEMENTS
• PART II CASE STUDIES
• Bibliography
• Index