Role of organizational justice theory in performance management

Management of human resources is an important and complex process of an organization. Performance management systems help to retain the talents within an organization and growth of the organization (Jenkins, 2005). Organizational justice theory helps the performance management process of an organization to make it more transparent, trustworthy, and reliable.

Different categories of organizational justice theory

Organizational justice theory is, broadly defined as, “the individual’s and the group’s perception of the fairness of treatment received from an organization and their behavioural reaction to such perceptions (Mccardle, 2007). Traditionally, there are three broad categories of organizational justice theory:

  1. procedural,
  2. distributive, and
  3. interactional justice.

Distributive justice deals with the fairness of outcomes such as rewards, promotions and compensation. Employees tend to compare their outcomes with that of others on the same post or work profile and that is that they measure the justice. Whereas, procedural justice is defined as the procedures by which the outcomes such as pay and rewards are allocated to the employees. When an employee feels that the procedure by which he has received the outcome is accurate and unbiased then the procedures are considered to be fair (Leventhal, 1980). When employees perceive outcomes (e.g., pay and promotion) to be fairly distributed, they will be satisfied with their pay and positions. Perceived fairness of formal rules and procedures governing decisions, on the other hand, will improve employees’ attitudes toward their organizations and supervisors. Interactional justice is a measure of how the employees relate to each other at the workplace. This is not just looking at the superior-subordinate relationship but also the interactive behaviour among co-workers at the workplace. Establishing standards of conduct are critical to ensuring a high level of respect is shown to employees and to ensure the organization is regarded as a fair and safe workplace.

Influence of perceived justice in performance management

Employees are the backbone and driving force of any organization. Perceived justice in the organization is predicted to influence employees’ attitudes toward their job and workplace significantly. Hence, the performance of the employees is an important parameter to estimate and measure the growth and potential of an organization. It directly implies that the working environment at an organization must be friendly and fair enough for the employees so that they are motivated to perform well (Warokka et al., 2012). Organizational justice helps to create a harmony in the workplace and it also promotes a good organizational culture. A good working environment within an organization helps both superior and subordinate to work towards the achievement of organizational goals.

Performance management system is used by various organizations and has a core component called the performance appraisal system. It refers to a structural and formal interaction based system that periodically assesses the interactions between a supervisor and the subordinates. It also considers the performance of the subordinates at the workplace and then discussed with the management for appraisal of the subordinates (Gelens et al., 2014). Performance management system is focused on finding the strength and weaknesses of an employee, and then finding suitable opportunities to help the subordinates to improve their skills and acquire knowledge (Huong, Zheng and Fujimoto, 2016). The primary goal of a performance management system is to guide, encourage, and help employees to improve their performance. An effective performance appraisal system must have clear performance measurement standards and relevancy. It must consider all relevant information that can help to gauge the talent and effort of an employee (Warokka et al., 2012).

Organizational justice is important for performance management and appraisal system. Negative perceptions about procedural justice are particularly harmful to organizations as well as for employees. This result in low motivation and less effort towards organization goal. It may also lead to theft of information from an organization, increased level of stress among the employees and so on (Warokka et al., 2012).

Applicability of organizational justice in performance management system

Organizational justice has an important role to play when it comes to its applicability in organizations because the effectiveness of an organization is directly linked with the working of its employees. In today’s competitive workplaces, it is important for employers to provide employees with organizational justice in order to reap the positive outcomes of well-performing employees (Choudhary, Kumar Deswal and J Philip, 2013).

Small and big organisations, both should implement suitable measurements and information systems for performance management systems used in an organization. However, the applicability of performance management systems in both cases is different owing to the difference in their sizes. In small organizations, there are small teams and the employees play multiple roles. The primary focus is to grow the business steadily with time. So, the appraisal system should adhere to the goals and requirements of the organizational processes. Whereas, a big organization has a pool of human resources. There are multiple levels of management and human resource manager groups to enforce better justice across an organization.

It is also easier for a small organization to track and monitor the performance of the employees at the individual level (Fischer, 2012). On the other hand, a big organization has various documentation, feedback processes to collect performance related information from various business transactions, then they can make well-informed decisions, and retain the talents in their organization (Huong, Zheng and Fujimoto, 2016).

References

  • Choi, S. (2011) ‘Organizational justice and employee work attitudes: The federal case’, American Review of Public Administration, 41(2), pp. 185–204. doi: 10.1177/0275074010373275.
  • Choudhary, N., Kumar Deswal, R. and J Philip, P. (2013) Impact of Organizational Justice on Employees’ Workplace and Personal Outcomes: A Study of Indian Insurance Sector Impact of Organizational Justice on Employees’ Workplace and Personal Outcomes: A Study of Indian Insurance Sector.
  • Fischer, R. (2012) ‘Rewarding Employee Loyalty : an Organizational Justice Approach’, International Journal of Organisational Behaviour, 8(3), pp. 486–503.
  • Gelens, J. et al. (2014) ‘Talent management and organisational justice: Employee reactions to high potential identification’, Human Resource Management Journal, 24(2), pp. 159–175. doi: 10.1111/1748-8583.12029.
  • Heslin, P. A. and VandeWalle, D. (2011) ‘Performance appraisal procedural justice: The role of a manager’s implicit person theory’, Journal of Management, 37(6), pp. 1694–1718. doi: 10.1177/0149206309342895.
  • Huong, L., Zheng, C. and Fujimoto, Y. (2016) ‘Inclusion, organisational justice and employee well-being’, International Journal of Manpower, 37(6), pp. 945–964. doi: 10.1108/IJM-12-2015-0212.
  • Jenkins, A. (2005) ‘Performance appraisal research: a critical review of work on “the social context and politics of appraisal ”’, Essec.
  • Mccardle, J. G. (2007) ‘Organizational Justice And Workplace Deviance : The Role Of Organizational Structure , Powerlessness , And Information Salience’.
  • Warokka, A. et al. (2012) ‘Organizational justice in performance appraisal system and work performance: evidence from an emerging market’, Journal of Human Resources Management Research. IBIMA Publishing LLC, 2012, p. 1.

Priya Chetty

Partner at Project Guru
Priya is a master in business administration with majors in marketing and finance. She is fluent with data modelling, time series analysis, various regression models, forecasting and interpretation of the data. She has assisted data scientists, corporates, scholars in the field of finance, banking, economics and marketing.

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