Ogwayo paced the halls of his office up and down…..up and down. The month of January brought the commencement of the annual performance appraisal process at his office. One by one he noticed the employees filing in for 15 minute discussions with company bosses. Further, he observed the varied reactions of staff after they left the rooms.
As he treaded the floors of the office perplexed, Ogwayo pondered the fairness of what secret discussions were taking place in the appraisals. Some employees widely viewed by fellow staff as poor performers left the room elated while several strong performers appeared devastated as if hit by an out- of-control matatu. Ogwayo felt frustrated at his perception of a lack of equity in how employees seemed to be treated, punished, and rewarded.
Disappointedly for company management, staff performance following the annual appraisal reviews started to drop. Ogwayo along with his colleagues put in less effort in the following months and company indicators dropped sharply. Precisely the activity intended to celebrate top performers and motivate staff actually carried the opposite result. Unfortunately, management never attributed the decline to the performance review exercise and the staff perception of fairness gaps and lack of equity of effort.
What Ogwayo felt and an astute management team should have noticed entails what researchers deem as organizational justice. Jerald Greenberg defines organisational justice as employees’ perceptions of fairness within their respective organisation. So, Ogwayo and his colleagues’ perceptions fell within the research context for the issue. The field encompasses three broad categories that every executive and manager should be familiar: distributive, procedural, and interactive justice.
Procedural justice centers on the perceived fairness of procedures, policies, or decision making processes. GS Leventhal uncovered that six factors govern whether staff feel that a process stands as procedurally fair. First, procedures must remain free from any hint of bias whereby the actual final decision should not appear to benefit the personal interests of the decision-maker. Second, procedures should be based on accurate information, not on anecdotal stories. Third, the entity’s rules and policies should apply consistently for every employee. Fourth, if an unjust or bad decision crops up, then the procedures must allow for corrections and appeals. Firth, employees must consider procedures morally and ethically acceptable and just. Sixth, all groups impacted by procedures, policies, decisions, and actions must be fairly represented. Ogwayo’s firm failed in the first, second, third, and sixth factors listed above: to appear free from bias, base on perceived accurate information, apply rules consistently, and retain fair representation.
Conversely, distributive justice holds its roots in John Stacey Adams’ theory and focuses on outcomes rather than the process of arriving at the outcomes. Tertiary education classrooms around the world teach his Equity Theory. Employees internalize distributively by comparing the ratio of their inputs (like pay, benefits, promotions, and perks received) and outputs (their performance, effort, extra actions) as compared to their coworkers and supervisors. If employees think the two ratios as uneven, then they try to change either their inputs or outputs. In Ogyawo’s example above, he perceived that many of his coworkers received higher inputs than their outputs deserved, so he reduced his outputs (his performance and effort specifically).
Jason Colquitt details the third type of organisational justice, interactional justice, as the perceived quality of interpersonal treatment received by employees when procedures, announcements, discussions, etc. are carried out. Interactional justice itself comprises two sub-components: interpersonal and informational justice. Interpersonal justice means that employees must feel that they received treatment of respect and dignity even if the news delivered was bad. Many employees react negatively to the callous uncaring interaction with superiors rather than the actual content of the interaction.
Informational justice, on the other hand, refers to the perceived fairness of explanations that accompany announcements, policies, or procedures. The research highlights the importance of framing announcements with supporting evidence, stories, and explanations to give staff members context. Informing employees breeds confidence, lack of information brings fear. So frame the scenario through which you desire to interact and inform workers. Unfortunately, many executives put a fraction of attention on internal communication as they do external public relations types of communication. In terms of expediency, many managers avoid communicating properly with staff thinking that employees usually understand enough background to appreciate management’s decisions without extra details provided.
In Ogwayo’s firm, the 15 minutes allotted to performance reviews did not lend itself favorably to adequate rapport building to establish concrete interpersonal justice. Further, the entire context surrounding the necessary framing and information for the decisions and assessments could not fit comfortably into such short sessions. Human resources research already shows that annual performance appraisals reduce rather than raise staff performance. So when also done incorrectly, disastrous affects, as demonstrated above, creep forth and can sink an otherwise profitable firm.
In summary, utilize the tripartite organizational justice methods to ensure you interact with your employees properly and garner the best performance from them. Discuss your personal experiences with equity or inequity in organisational justice with other readers through #KenyaFairness on Twitter.
In next week’s edition of Business Talk, we explore “Environmental Citizenship Behaviour“. Read current and prior Business Talk articles here.