Company leaders constantly make decisions that affect their employees. Often, these decisions can be controversial or unpopular. When companies have policies like limiting employee tips (as Chipotle has), or altering employee titles once they leave the company (as Apple has), or asking employees to pay back money that was stolen during a robbery while they were on duty (as The Lodge allegedly has), how these policies are created and enforced can strongly impact employees.
This is also an important consideration around the termination of employees. Recent headlines include the termination of an employee for being a belligerent passenger on an airplane, for repeatedly parking in inappropriate spots and arguing with a coworker, and Peloton’s termination of 2,800 employees to cut costs. These headline grabbing anecdotes all capture the importance of employees’ sense of organizational justice. This is the personally held belief that one’s organization acts in a just and fair way. Research suggests there are four types.
Distributive justice is the belief that rewards from the company (pay, bonus, promotion, good assignments, etc.) are distributed among employees in a fair way. For example, one of the chief complaints of an employee of Salem County is that he was denied promotions based on his race. This is a clear perceived distributive injustice.
Procedural justice is the belief that an organization has just processes and procedures in place. Are the policies ethical? Are they enforced consistently across all employees at all times? The example of the employee fired, in part, for consistently violating a parking policy shows that the employee sensed that this policy was not consistently enforced among all employees, hence a lack of perceived procedural justice.
The final two forms of justice go hand-in-hand. Informational justice is the belief that a company will provide honest information and explanations surrounding decisions. Interpersonal justice is the belief that authority figures in the organization will treat people with dignity and respect. The Peloton story captures these clearly. Terminated employees were given little notice, provided a cash severance, access to career counseling, and a one-year subscription to Peloton. These former employees, felt a lack of justice and allegedly crashed an all-hands virtual meeting and derailed the chat with complaints.
One of the challenges with justice, as Peloton shows, is that what is seen as just may differ from person to person. Decision makers ought not assume their perceptions of what are just policies and practices will be shared by others in the company.
Importantly, a sense of justice is predicts a range of organizational outcomes (Cohen-Charash & Spector, 2001; Colquitt et al., 2001; Colquitt et al., 2013; Greenberg, 2011). But what impact does it have on the employees themselves?
There is evidence that perceptions of injustice are associated with higher rates of anxiety and depression (Spell & Arnold, 2007), burnout, stress, and negative emotions (Robbins et al., 2012).
To avoid harming employee wellbeing and engagement, organizations and leaders must strive to be seen as just. Assessing policies and their implementation to ensure they are consistent and seen as fair is an important first step. Soliciting input from employees who are impacted by these decisions is important, but only if their input can actually have an impact. When changes are made, providing clarity around the process of making the decision and the direction forward should help improve perceptions of justice.
In the current economic model where employees have very little control, power, or voice over the decisions that directly impact them, perceived justice is critical, and the burden of fostering those perceptions fall to workplace decision makers.
-Keaton