Interactional Justice: The Link Between Employee Retention and Employment Lawsuits
Dr. Joni Johnston (written for HR.com)

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“A weak man is just by accident. A strong but nonviolent man is unjust by accident.” Mohandas K. Gandhi

Take it from someone who has heard more than her share of plaintiff’s stories, employee complaints, and human resource nightmares. Create a climate of organizational justice and you’ll make a significant dent in employee retention, poor morale, workplace assaults, and employment liability. You’ll have emotionally committed workers who are less stressed out and willing to go the extra mile. Yet, for some strange reason, organizational justice is one of the least understood and underutilized tools to create a better and more effective workplace.

Of course, organizational justice in general – and interactional justice in particular – are complex concepts that require some serious work. They’re certainly harder to implement than fancy perks, paid sabbaticals, or hefty bonuses. Yet, without a sense of perceived fairness, employees judge financial rewards less positively, and multiply the negative impact of challenging events (layoffs, difficult project deadlines, organizational chaos). In this article, we’ll focus on interactional justice, look at its impact, and offer strategies for creating a climate that will help employers reap the rewards and reduce their risks of their human capital.

The Three Faces of Organizational Justice

On the surface, organizational justice seems to be a pretty simple concept; was a company or management decision fair? However, it’s not just the outcome of a decision that matters; it’s also how the decision was made and communicated.

These three forms of organizational justice are known as distributive, procedural, and interactional justice.

Distributive justice refers to the "bottom line" of justice, i.e., was the outcome of a decision fair? This assessment of fairness generally involves a comparison between what an employee is experiencing to what is happening to others in the organization. Procedural justice focuses on how the decision is made, i.e., were the procedures used to set goals, make decisions, or investigate a grievance fair? Determinants of procedural justice include consistency of application, unbiased decision-makers, information accuracy, avenues for appeal, input from affected parties, and prevailing moral standards.

Interactional justice is up close and personal. It pertains to the behavior of the organization's leaders in carrying out their decisions, i.e., how they treat those who are subject to their authority, decisions, and actions. Research shows that the effects of interactional justice are independent of individuals' evaluations of fairness regarding the outcomes they receive (i.e., distributive justice) or the procedures used in allocating those outcomes (i.e., procedural justice) and, in some contexts, may be more important.

Determinants of perceptions of interactional justice: Explanation: Did the manager emphasize aspects of procedural fairness that justify the decision?

Social sensitivity: Did the manager treat the employee with dignity and respect?

Consideration: Did the manager listen to the person’s concerns?

Empathy: Did the manager identify with the person’s feelings?

Why Supervisors Control Your Business

Interactional justice is a key to employee motivation, retention and organizational commitment. In a survey of 225 employees at two large U.S. paint manufacturing companies, for instance, researchers found justice trumped job satisfaction in motivating employees. However, it wasn’t interactional justice in general that was the key; it was the employee's faith in their supervisor and the fairness implicit in day-to-day transactions. Employees, it seems, view the organization through their supervisor.

It is the supervisor who most often explains the organization to the employee and explains the employee to the organization. It is the personal assessment of a supervisor's honesty, impartiality and integrity that causes employees to go the extra mile past where they had to go to get their jobs done. In it simplest terms it is the answer to the question: Can I count on this person's integrity?

In one study, supervisors who were regarded as fair or unfair in situations where they recommended higher or lower pay, based on merit, for work performed. Unfair supervisors commanded little commitment, even from higher-paid workers. Fair supervisors, on the other hand, commanded much more commitment -- even from those who were paid lower. In addition, workers chose to remain with a supervisor who enacted procedurally fair behavior and they chose to leave the supervisor who did not -- regardless of the supervisor's assessment of their performance and the pay outcome associated with it. Another study, reported in the New York Times, found that employees' productivity and their length of stay at their companies were determined by their relationship with their immediate supervisor.

Teaching Interactional Fairness to Managers: Interpersonal Skills + Leadership

Supervisors with transformational leadership style are better able to influence employees to perform extra duties by creating more procedural justice and trust. Researchers think this is because transformational leaders are able to inspire and appeal to their employee's since of fairness and trust, which compels employees to work harder and more conscientiously, make suggestions, perform extra duties, and help others.

Such leadership styles are characterized by:

• Clarification of responsibilities and expectations
• Explanation of tasks that must be performed and benefits to self-interest
  
• A contingent reward system
• Followers have a positively reinforcing relationship with the leader
• The leader only intervenes when things go wrong
• A lack of personalization of the working relationship

In addition to a transactional leadership style, employees judge their manger’s sense of fairness on the following interpersonal skills:

Consistency— the extent to which a subject treats staff consistently and does not play favorites

Decision-making— the extent to which a subject is unbiased and impartial in making decisions

Empathy— the extent to which a subject can see things from the perspective of his or her staff

Equality— the extent to which a manager treats employees like equals rather than as inferiors

Relative fairness— how fair the manager is relative to other managers within his or her organization;

Supportiveness— the extent to which a manager provides substantive, symbolic and emotional support to employees

Transactional fairness— the extent to which a manager is fair and non-exploitative in resource exchanges with employees

Treatment— the extent to which a manager is respectful and sensitive in interactions with staff

Voice—the extent to which a manager is open to the advice and feedback of staff.

Organizations who hire or promote managers and supervisors strictly for their technical skills, or who fail to provide an interpersonally oriented management development program as part of the promotion process, are missing a critical opportunity to simultaneously increase employee retention, improve management effectiveness, and reduce the risk of employment lawsuits.

The Straw That Breaks the Camel’s Back: Workplace Violence, Theft and Other Forms of Revenge

Failing to provide critical information on a project. Spreading malicious rumors about coworkers. Destroying or stealing company equipment. Giving classified product information to a competitor. These are just a few of the ways I’ve seen employees retaliate toward a company for perceived injustices. Plaintiffs don’t talk about distributive justice (I’m suing because I lost my job or because I was sexually harassed) nearly as much as they relate stories of interpersonal inconsideration and abuse (no one took my complaint seriously, I was marched out the door accompanied by a security guard).

In a work environment, revenge occurs in response to violations of trust, i.e., when expectations concerned another person’s behavior are not met, or when that person does not act consistent with one’s values. Violations of interpersonal justice tend to evoke the strongest emotional responses, ranging from anger to moral outrage. There is evidence, for example, that dismissals or terminations do not provoke violence in and of themselves. Rather, vengeful attitudes and behaviors result from the humiliation that occurs when terminations are conducted in an abusive and insensitive manner. In fact, numerous studies have found a relationship between distributive justice (being terminated, for example) and retaliation only when there was low interactional and procedural justice.

Over 80% of the cases of workplace homicide involve employees who want to get even for what they perceived as their organizations' unfair or unjust treatment of them. This is not to deny the role of individual differences and how they interact with different workplace situations. An employee who explodes may have a higher level of aggression to contribute to the outburst.

In addition, various conditions in the workplace play a role in heating up tempers at work. Downsizing, layoffs, cutbacks in wages and benefits, and outsourcing all increase pressure at work; however, layoffs, disciplinary actions, or dismissals do not provoke violence by themselves; it is the wounded pride and loss of face that occurs when actions are conducted in a demeaning manner. It’s the interaction between distributive, procedural and interactional justice that leads to retaliation; unfair or unjust treatment during the termination interview may be the "last straw" or the final "push" that moves the terminated employee from retaliatory thoughts to actual retaliation.

Retaliation at work doesn’t just occur in response to interpersonal abuse or humiliation; it can also result from the perceived violation of a psychological contract, i.e., beliefs in paid-for-promises or reciprocal obligations. For example, unrealistic sales projections to a candidate during a hiring interview, for instance, can lead to a sense of betrayal and injustice. Violation of the psychological contract is a process that contains elements of unfulfilled promises that deprive employees of desired outcomes (distributive justice) and elements that affect the quality of treatment employee’s experience (procedural justice).

Unfortunately, this happens all too often. In a study of 128 MBA students, who had already accepted an offer of employment, 54.8% of the subjects reported that their employer had violated their psychological contract. This violation was significantly related to low scores on a measure of the employee's trust in his or her employer and to low scores on a measure of employee satisfaction. The results also suggested that employees who left the company reported a greater degree of contract violation than those who had not left their employer.

Apparently, these violations spanned all areas of employment (e.g., training, compensation, promotion, nature of job, job security, feedback, management of change, responsibility).

Improving Your Fairness Quotient

Any organization that wishes to excel must make sure that the employee-employer relationship is cast outside the economic relationship into the emotional arena. Human resources can play a vital role in organizational justice by:

Check all policies and work rules to assure that there are procedures that create fairness. The important ones center on pay, diversity, etc. Look at decisions made in implementing these rules and general working practices to assure that fairness and equality is explicit in all supervisory and management decisions about employees and their work.

Include leadership and interpersonal skills in your management development program, including 360-degree evaluations by subordinates, coworkers and management.

To guard against unintentional psychological contract violations, make sure all candidates are provided with "realistic job previews" (i.e., providing an accurate description of the job, organization, and opportunities, including both positive and negative features). The degree of honesty shown for employees during the selection process will shape perceptions of support and justice among those who are ultimately hired.

Because employees are most likely to engage in revenge either to restore equity or express feelings of outrage, provide multiple avenues for employees to deal with grievances (and the feelings associated with them). For example, in addition to formal grievance procedures, engage your EAP to give informal talks during corporate transitions and offer outplacement services during layoffs.

The Bottom Line

Columbian author Gabriel Garcia Marquez once said, “Justice limps along . . . but it gets there all the same.” Organizations who create a sense of organizational justice will reap the human capital rewards in improved motivation, retention and fewer employment lawsuits. Unfortunately, companies who don’t may find themselves limping while their competition sprints ahead.