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2008 Forum
Controls, Fairness, andCommitment inOrganizations
Gipsie B. Ranney
In2:InThinking Network2008 ForumApril 17 – 22
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The Psychological Contract
Argyris (1960)
Unwritten expectations between anemployee and the employingorganization
Employee’s expectations include:
sense of dignity
sense of worth
fair treatment
opportunities to learn and grow
Employer’s expectations of theemployee include:
loyalty
commitment
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Breach of Psychological Contract
Not as expected:
•opportunities for promotion
•career guidance & mentoring
•competitive pay
•participation in decision making
•well-defined job responsibilities
•reasonable work load
•adequate resources to perform job
•recognition of accomplishments
Adapted from
Kickul, J. (2001), “When Organizations Break Their Promises:Employee Reactions to Unfair Processes and Treatment,” Journal ofBusiness Ethics, 29, 289-307.
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Organizational Justice
Perceptions of fairness in the workplace
Types:
Distributive – perceived fairness of decision outcomes; .e.g., pay, allocation
of resources
Procedural – perceived fairness of procedures (process) used to make decisions.
Interactional – perceived fairness ofenactment of decisions by authority
figures
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Criteria
•Equity – relative contributionrewards inputs
•Competition - outcome
•Equalityperceived as fair in allocation of loss
pay reductions (equal %)shared across all levels
•Needslayoffs
allocation of outplacementresourcesscheduling of individual layoffs
budget reductions – long term view
Distributive Justice
equal
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Procedural Justice
Indicators of the presence ofprocedural justice
•consistency over time
•unbiasedness•accurate information collected andused
•mechanisms in place to correctflawed decisions
•opinions of groups affected takeninto account
•“voice”
•decision control - “choice,”autonomy
•conform to prevailing standards ofethics or morality
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Interactional Justice
Interactional Justice
•Informational – adequate andhonest explanations
•Interpersonal – courteous,respectful treatment
Indicators of absence of interpersonaljustice
•derogatory judgments
•deception
•invasion of privacy
•inconsiderate or abusive actions
•public criticism
•coercion
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Opportunity: Informational Justice
•advance notice of decisions /announcements
•explanations that can be perceivedas legitimate
•apologies, statements of regret
•acknowledgement of mistakes
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Example “Can’t let that happen again!”
Getting a Company Car to Go on a Trip
Fill out use form
Get managerto sign form
Turn in form
Pick up car keys
Find car
Start car Need gas?
Go back in plant
Drive to pump
Put gas in car
Go backin plant
Turn in gaspump key
Start trip
Check outgas pump key
Return tocar
Returnto car
Yes
No
Source: Kit Schessele
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Opportunity: Organizational Policies
Was the policy introduced in reactionto a possible special cause event?Would some other action have beenpreferable?
Does the policy communicatemistrust?
Is the policy based on anoverstatement of the likelihood of alawsuit?
Does the policy offend the dignity ofthe employee?
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Punishment
Punishment as a social event
•may serve to uphold social norms
•may signal appropriate andinappropriate behaviors
•may deter misconduct
•may create perceptions of thesupervisor and the organization as justor unjust
Adapted from
Trevino, L.K. (1992), “The Social Effects of Punishment in Organizations:A Justice Perspective,” The Academy of Management Review, 17(4),p. 647-676.
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Punishment
To ensure procedural justice,
•use a court system
•have a judicial board
Clarify what constitutes a firing offense
Train managers
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Opportunity: Performance Evaluation
Fairness determinants
•solicitation of input
•consistent application of standards
•degree of evaluator’s familiaritywith the employee’s work
•two-way communication duringinterviews
•opportunity to challenge / rebutevaluation received
Adapted from
Greenberg, J. (1987), “A Taxonomy of Organizational JusticeTheories,” The Academy of Management Review, 12(1), 9-22.
Note: performance evaluations areinherently unfair and should be abolished
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Opportunity: Selection
Communications with applicant
•open and honest
•timely
Inform the applicant
•realistic job previews
•realistic preview ofopportunities for advancement
•recognition of uncertainty
Fairness and accuracy of tests andother selection devices
Establish and maintain standardsfor moral character
Provisional employment
Mentoring
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Opportunity: Downsizing
•conduct system-wide analyses oftasks and personnel beforedownsizing (cause the work to goaway before the people go away)
•fairness in order of layoffs
•outplacement
good references
contact with recruitment agencies
permission to use organization’sresources to hunt jobs
training in special skills
counseling
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Opportunity: Change
Procedural context:
“If employees believe the process offormulating an initiative has been fair, theyare more likely to accept and adopt thechanges it involves.
Procedural fairness [means that] people havehad a chance to voice their opinions … theybelieve their views have been consideredcarefully and they have had a genuineopportunity to influence the design androllout of the initiative.
Procedural legitimacy is equally critical. Itmeans that employees believe the changeinitiative fits with the tenets of what thecompany stands for and how work should bedone.”
Source:
Roberto, M.A. and Levesque, L.C. (2005), “The Art of Making ChangeInitiatives Stick,” MIT Sloan Management Review, 46(4), 52-60.
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Opportunity: Change
Accounts
Accounts are explanations given bymanagement for actions that result indisappointing outcomes for employees.
•Causal accounts – explain the causes thatcompel a change
•Ideological accounts – argue for a changebased on higher-order values
•Referential accounts – aimed at changingthe frame of reference; e.g., things couldbe worse or things will be better in thefuture
•Penitential accounts – apologies fordamage and for mistakes
Accounts provide for informational justice.
Adapted from:
Cobb, A., Folger, R., and Wooten, K. (1995), “The Role Justice Plays inOrganizational Change,” Public Administration Quarterly, Summer, 135-151.
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Narrow Objectives
With intervention
Without intervention
Sales
Sales
Time
Time
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Organizational Control
Coordination of the activities of subunits of theorganization in order to attain the aims of theorganization as a whole.
Needs for specialization and coordination presenta dilemma.
One approach:
encourage subunits to operate as separate entities;
define performance criteria so that when subunits operate solely in accordance with their
individual criteria, they collectively perform inthe best interest of the organization as a
whole;
use reporting, appraisal, and rewards to achieve subunit performance
– the “defined criteria” approach
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Organizational Control
Another approach: coordination by feedback andmutual adjustment; highly adaptive; performancecriteria for the organization as a whole
Adapted from
Baumler, J. (1971), “Defined Criteria of Performance inOrganizational Control,” Administrative Science Quarterly, 16(3),340-350.
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Baumler’s Experiment
Baumler conducted a laboratoryexperiment - volunteers participatedin a business game
Two factors were manipulated:
degree of interdependence ofparticipants
with or without defined criteria
Findings:
defined criteria reduced theamount of communication betweenparticipants
defined criteria successful onlywhen there was minimalinterdependence
defined criteria detrimental whenthere was strong interdependence
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Trust
Trust is evolutionary
conditional unconditional
Unconditional trust fundamentallychanges the quality of theexchange relationship
Source:
Jones, G. and George, J. (1998), “The Experience and Evolution ofTrust: Implications for Cooperation and Teamwork,” The Academy ofManagement Review, 23(3), 531-546.
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Trust
Effects of Unconditional Trust onInterpersonal Cooperation and Teamwork
•willingness to go beyond jobdescription
•high confidence in others
•people want to help each other
•willing to seek help
•free exchange of knowledge andinformation
•subjugation of personal needs andego for the greater common good•high involvement
Adapted from: Jones and George (1998).
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Betrayal of Trust in Organizations
•By supervisors
coercive or threatening behavior
withholding promised supportblaming employees for his or herown mistakesfavoritismimproper dismissalmisuse of private information
•change of rules “after the fact”
•stealing of ideas
•wrong or unfair accusations
•broken promises
•lyingAdapted from
Elangovan, A. and Shapiro, D. (1998), “Betrayal of Trust inOrganizations,” The Academy of Management Review, 23(3), 547-566.
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Opportunity:Clarify Betrayal of Trust
Cascade of discussion
These constitute betrayals of trustand must be eliminated from day-to-day work
Each higher level is a model forlower levels
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Opportunity: Less Churning
Churning of managers reducesopportunities for development of trustbeyond conditional
“Plug &play” view of managementtaught in schools of business (don’tneed to know much, if anything,about the work and how it is done)
conditional trust
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Trust and Distrust AreMultidimensional
Adapted from: Lewicki, McAllister and Bies (1998).
Undesirableeventualities expected& fearedHarmful motivesassumedInterdependencemanagedParanoia
CasualacquaintanceLimitedinterdependenceBounded, arms-lengthtransactions
LowNo hope,faith,confidencePassivityHesitance
Trust but verifyRelationships highlysegmented & boundedOpportunities pursuedbut vulnerabilitiesmonitored
High valuecongruenceInterdependenceOpportunitiespursuedNew initiatives
HighHope, faith,confidenceAssuranceInitiative
HighFear, skepticism,cynicism, vigilanceWariness andwatchfulness
LowNo fear,skepticism,cynicism, vigilanceLow monitoring
Trust
Distrust
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The Manager as Model
The manager has an obligation tobe trustworthy.
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A Virtuous (or Vicious) Cycle
+ Employee perceptionof management’srespect for rights anddignity
Employeecitizenshipbehavior
Fair treatmentof employees
Employee trust inmanagement
Managementtrust in employees
+
+
++
Trust &Fairness
Time
Recognition+
+
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The Organization in Its Environment
External organizational actions thatcan affect its relationships with itsemployees:
unfair / dishonest treatment ofcustomers
unfair / dishonest treatment ofsuppliers
cheating investors, dishonestpublic statements
breaking laws
damaging the physicalenvironment
Movement into other countriesbrings further responsibilities tounderstand and respect culturalnorms and values
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Beyond Ethics
Moral, not just ethical, behavior bythe organization.
The absence of unethical behaviordoesn’t imply highly principledbehavior, integrity.
Values enacted, not just espoused.
Taking responsibility, not just beingaccountable.
Responsibility for the lives ofemployees, their families, theircommunities.
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Sources
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