71376967244

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Modelling the role oforganizational justice:effects on satisfaction andunionization propensity ofCanadianMichel Tremblay & Patrice RousselPublished online: 09 Dec 2010.

To cite this article: Michel Tremblay & Patrice Roussel (2001) Modellingthe role of organizational justice: effects on satisfaction and unionizationpropensity of Canadian, The International Journal of Human ResourceManagement, 12:5, 717-737

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Modelling the role of organizationaljustice: effects on satisfaction andunionization propensity of Canadianmanagers

Michel Tremblay and Patrice Roussel

Abstract This research explores the direct in uence of pay referents and proceduraljustice on pay satisfaction, job satisfaction and organization satisfaction, and themediating role of these three aspects of satisfaction between forms of justice andunionization propensity. To test the importance and directions of these relations, we useda LISREL-type structural equation model. The ndings showed that the three equityreferents of organizational justice (internal, external and individual) are linked to paysatisfaction, and that distributive justice is a better predictor of pay satisfaction thanprocedural justice perceptions. In contrast, procedural justice is a better predictor oforganizational satisfaction and job satisfaction than are distributive justice perceptions.The nal model suggests that job satisfaction and organization satisfaction signi cantlyin uence propensity to join a union compared with organizational justice perceptions.The paper also speci es the limitations of the study and its practical implications, andmakes suggestions for future research.

Keywords Distributive justice; procedural justice; work satisfaction; unionization;managers; compensation.

Introduction

A substantial body of literature suggests that justice is an important motivator forworking people. In eld of compensation, a growing amount of research has beendevoted to examining how people react to pay injustice in workplace. To explain thesevarying reactions, two major theoretical perspectives have been proposed anddeveloped. Employee reactions are affected by the perceived fairness of the rewardsthey receive as well as the procedures used to determine these rewards (Greenberg,1990, 1996). Although these justice dimensions have been associated with a range oforganizational attitudes and behaviours (e.g. Folger and Konovsky, 1989), thedifferential effects of distributive and procedural justice seem equivocal, and littleattention has been paid to the nature of various relationships.

Originally, work on justice focused on the consequences of fairness decisionoutcomes (Greenberg, 1987). In most cases, researchers have sought to test thefoundations of Adams (1963, 1965) theory of equity and Crosbys (1976) theory of

Michel Tremblay, Full professor, Ecole des Hautes Etudes Commerciales de Montreal,Canada, and senior researcher at CIRANO, 3000, chemin de la Cote-Sainte-Catherine,Montreal, Canada, H3T 2A7, (e-mail: [email protected]). Patrice Roussel, professeurdes Universites, Universite de Toulouse 1, France, and researcher at LIRHE, Place AnatoleFrance, 31042, Toulouse Cedex, France (e-mail: [email protected]).

Int. J. of Human Resource Management 12:5 August 2001 717737

The International Journal of Human Resource ManagementISSN 0958-5192 print/ISSN 1466-4399 online 2001 Taylor & Francis Ltd

http://www.tandf.co.uk/journalsDOI: 10.1080/09585190110047802

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relative deprivation. Field research has shown that individuals who perceive theiroverall situation to be equitable tend to exhibit higher levels of pay satisfaction and jobsatisfaction, and adopt better work behaviour than do individuals who feel they are paidunfairly (Sweeney et al., 1990; Berg, 1991; Witt and Nye, 1992; Agho et al., 1993;Covin et al., 1993).

Following Goodman (1974) and Schwab and Wallace (1974), attempts were made tode ne the role of referents in the social comparison process. Although emphasis wasplaced mainly on pay satisfaction (Hills, 1980; Ronen, 1986; Scholl et al., 1987;Berkowitz et al., 1987; Capelli and Sherer, 1988; Summers and DeNisi, 1990; Sweeney,1990; Lee and Martin, 1991; Taylor and Vest, 1992; Blau, 1994), the role of payreferents on other affective components was also examined (Dittrich and Carell, 1979;Ronen, 1986; Johnson and Johnson, 1991; Roussel, 1996), along with behaviour atwork (Dittrich and Carrell, 1979; Scholl et al., 1987). These empirical studiesdemonstrated that referents play a key role in understanding the attitudes and behaviourof employees. Other advocates of distributive justice have attempted to explain the linksin the equity perception chain of consequences, and to elucidate the mediating role ofcertain variables between equity perception and its presumed outcomes. For example,Summers and Hendrix (1991) explored the mediatory role of pay satisfaction, jobsatisfaction, organizational commitment and intention to leave in relation to equityperception and staff turnover, and with respect to performance at work. Berg (1991)studied the mediatory role of job satisfaction on intention to leave, while Ried andMcGhan (1987) examined the way in which pay satisfaction mediates job satisfaction,and Witt and Wilson (1991) the moderating role of job satisfaction on extra-rolebehaviours. Barling et al. (1992) investigated the mediatory role of extrinsic jobsatisfaction between pay equity and intention to vote for a union. These authors allobserved that the relationship between justice perception and its presumed con-sequences is much more complex than equity theories and pay satisfaction modelswould suggest.

Subsequent to research by Thibault and Walker (1975), Greenberg (1987), Sheppardand Lewicki (1987) and Lind and Tyler (1988), it became obvious that theunderstanding of justice must encompass the procedural level. These authorscontributions led to the emergence of a body of work on the in uence of distributivejustice and procedural justice on various attitudes and behaviour at work (Alexanderand Ruderman, 1987; Folger and Konovsky, 1989; Fryxell and Gordon, 1989;Moorman, 1991; Citera et al., 1992; Dailey and Kirk, 1992; Sweeney and McFarlin,1993; Lee, 1995; Lowe and Vodanovich, 1995; Scarpello and Jones, 1996). Theseempirical studies provided substantial evidence to support the claim that humanmotivation could be better understood through consideration of these two dimensions ofjustice.

Although research has furthered our knowledge of the determinants of organizationaljustice and its consequences in the compensation context, the role of referents andprocedural justice in the chain of attitudes and behaviours has received little attention.To our knowledge, no study to date has tested the direct effects of pay and proceduraljustice referents on satisfaction. The present research builds upon Summers andHendrix (1991) by exploring the direct in uence of pay referents, along with that ofprocedural justice, on pay satisfaction, job satisfaction and organization satisfaction. Italso extends the study of Barling et al. (1992) by investigating the intermediary role ofpay, in addition to job and organization satisfaction, between distributive andprocedural justice and unionization propensity.

718 The International Journal of Human Resource Management

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To test the importance and direction of these various relations, we used structuralequation modelling. The initial hypothesized model, formulated from the hypothesespresented after Figure 1, presents all the associations tested. This type of modelrepresents the hypothetical causal relations between latent variables, and allowsinference rather than demonstration of causality (Brannick, 1995), according to thethree main conditions de ned by James et al. (in Kelloway, 1995): a) association, b)isolation (the inclusion of all relevant predictors) and c) the establishment of causaldirection. If the conditions for causal inference are not met, only a reliable associationbetween the independent and dependent variables can be inferred. This is the case ofour model which represents a set of hypothetical relations deriving exclusively from areview of the empirical and theoretical literature. Consequently, some explanatoryvariables and causal directions could be ignored. The study is thereforecon rmatory.

Distributive justice and its consequences

Distributive justice theory has sought to understand and explain how individuals reactto an unfair distribution of rewards and resources (Greenberg, 1990). The explanatoryapproach cited most often is Adams theory of equity (1963, 1965). Accordingly,individuals calculate their own ratio by comparing their contributions with their

Figure 1 Initial research model

Tremblay and Roussel: The role of organizational justice 719

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outcomes, and then do the same for other individuals, known as referents. However,little is known about the issue of social comparison, especially with respect to thechoice of referents (Pinder, 1984; Scholl et al., 1987; Tremblay et al., 1997). Althougha number of taxonomies of referents have been proposed, a great deal of evidence hasbeen found to suggest that people base their equity perceptions on more than onereferent (Finn and Lee, 1972; Goodman, 1974; Dyer and Theriault, 1976; Dittrich andCarrell, 1979; Hills, 1980; Lee and Martin, 1991). Our research uses the commonclassi cation of social referents found in the literature on organizational justice(Greenberg, 1996) and compensation (Milkovich and Newman, 1993; Hills et al., 1994,etc.). Three classes of referents have been identi ed and largely used by compensationpractitioners: internal, external and individual referents. Internal equity refers tocomparisons with other people holding comparable or different jobs within the sameorganization. External equity relates to comparisons with people holding jobs outsidethe organization, whereas individual equity implies comparisons based on theindividuals own contributions, results or past experience.

The relationship between justice perception and pay satisfaction is probably thatwhich has most intrigued researchers. The ndings reveal a clear link betweendistributive justice and pay satisfaction (Oldham et al., 1986; Sweeney, 1990; Sweeneyet al., 1990; Summers and DeNisi, 1990; Summers and Hendrix, 1991). Sweeney(1990), using three random samples of workers from different companies, showed thatperceived equity was a better predictor of pay satisfaction than pay level. Summers andHendrix (1991), in explanatory research, found that distributive justice perception wasthe best indicator of pay satisfaction. However, in both cases the authors used overallmeasures of equity perception, and were consequently unable to assess the uniquecontribution of each of these referents. Pay satisfaction convincingly varies according tothe level of referents (Dyer and Theriault, 1976; Goodman, 1974; Summers and DeNisi,1990; Sweeney et al., 1990). When employees perceive that their pay is higher than payreferents, their pay satisfaction increase. However, support for a signi cantly positiverelationship between pay referent and pay level satisfaction has been inconsistent (Blau,1994), together with ndings on the relative in uence of speci c referents on paysatisfaction. Some studies found that internal and external referents can have a positiveimpact on pay satisfaction (Ronen, 1986; Blau, 1994). Other researchers have suggestedthat internal comparisons are more likely to lead to pay satisfaction than externalcomparisons (Finn and Lee, 1972; Hills, 1980; Capelli and Sherer, 1988; Taylor andVest, 1992). Strong evidence also suggests that external referents in uence paysatisfaction more than internal comparisons (Dreher, 1981; Scholl et al., 1987; Das andBhadury, 1997; Tremblay et al., 2000). Some studies found that individual referentsmay be more strongly related to pay satisfaction than external (Taylor and Vest, 1992)or internal comparisons (Scholl et al., 1987). The literature points to a consistentpositive relationship between distributive justice perceptions and pay satisfaction.However, in the absence of stronger evidence of the relative importance of pay referentson pay satisfaction, it may be worth investigating the role of comparisons moreextensively. We therefore propose the following general hypothesis:

H1: Internal, individual and external perceptions of equity are positively associatedwith pay satisfaction.

Researchers have pointed out that justice perception may in uence aspects other thancompensation. Agho et al. (1993), Berg (1991) and Witt and Nye (1992) identi ed apositive relationship between distributive justice and job satisfaction. In their explana-


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tory studies, Summers and Hendrix (1991) and Moorman (1991) emphasized thecontribution of distributive justice to job satisfaction. Research that speci callyevaluated the impact of referents on job satisfaction showed that satisfaction wasin uenced more by internal equity than by external equity perceptions (Dittrich andCarrell, 1979; Covin et al., 1993). Yet Ronen (1986) and more recently Tremblay et al.(2000) failed to nd a signi cant relationship between the pay referents studied and jobsatisfaction. These inconsistent results suggest that pay referents play a minor role injob satisfaction.

H2: Pay comparisons (internal, individual and external) are not signi cantly relatedto job satisfaction.

In contrast with job satisfaction, the in uence of distributive justice on organizationsatisfaction has received very little attention in the literature. Alexander and Ruderman(1987) found that distributive justice perception was signi cantly linked to con dencein management. However, the in uence of referents on organization satisfaction is notwell established. Ronen (1986) observed that external comparisons were linked moreclosely to company satisfaction than are internal comparisons, whereas Tremblay et al.(2000) found that internal and individual comparisons were more strongly related toorganization satisfaction than were outside comparisons. Given that policies governingcompensation distribution, e.g. pay market position, pay structure and size of payincrease, are determined mainly by senior management, perceived pay inequities wouldmost probably be ascribed to organizational decision makers. However, there is verylittle evidence to support the importance of any particular referent. We thereforepropose the following explanatory hypothesis:

H3: Internal, individual and external perceptions of equity are positively associatedwith organizational satisfaction.

Procedural justice and its consequences

To understand individual reactions to unfair treatment, it is worth considering a seconddimension of organizational justice: procedural justice. This term refers to theperception of justice in decision-making procedures (Folger and Greenberg, 1985). Twoprocedural elements appear to be relevant from the compensation standpoint, i.e. degreeof control over the process leading to pay-related decisions and degree of control overcompensation decisions. Some authors have shown that control over the processproduces a stronger sense of procedural justice and more positive attitudes towardsoutcomes and the organization (Tyler et al., 1985). In the eld of compensation,Scarpello and Jones (1996), using agency theory as a theoretical framework, suggestedthat these positive results may be explained by the fact that fair compensationprocedures may act as mechanisms that align the interests of agents with those of theprincipal.

The independence of the concepts of distributive justice and procedural justice hasbeen examined on several occasions. Individuals are apparently able to distinguishbetween the two forms (Thibault and Walker, 1975; Sheppard and Lewicki, 1987). Inaddition, each form has its own consequences (Alexander and Ruderman, 1987; Lindand Tyler, 1988; Folger and Konovsky, 1989; Moorman, 1991; Dailey and Kirk, 1992;Sweeney and McFarlin, 1993; Lee, 1995; Scarpello and Jones, 1996; Tremblay et al.,2000). In fact, many of these authors have observed that distributive justice is a betterpredictor of individual attitudes, whereas procedural justice is a better predictor of


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organizational attitudes. The hypothesis that distributive justice is a better predictor ofpay satisfaction than procedural justice has been widely supported in the literature(Weiner, 1980; Konovsky et al., 1987; Folger and Konovsky, 1989; Miceli et al., 1991;Citera et al., 1992; Sweeney and McFarlin, 1993; Roussel, 1996; Scarpello and Jones,1996; Tremblay et al., 2000). This does not necessarily imply that procedural justicedoes not have a positive impact on pay satisfaction. For example, Folger and Konovsky(1989) and Tremblay et al. (2000) found that procedural justice may have a signi cantand independent in uence on pay satisfaction, compared with distributive justice. Wecan therefore propose the following two hypotheses:

H4a: Procedural justice perceptions are positively associated with paysatisfaction.

H4b: Distributive justice perceptions are more closely associated with paysatisfaction than are procedural justice perceptions.

Given the preceding argument that procedural justice has a greater in uence onattitudes towards the organization, we can expect that procedural justice will be moreclosely related to organizational satisfaction. In the compensation context, Alexanderand Ruderman (1987), Folger and Konovsky (1989) and Scarpello and Jones (1996)observed such a relationship. They found that con dence in management andsupervision were explained more strongly by procedural justice than by distributivejustice. However, Tremblay et al., (2000) failed to support the same relationshippattern. They observed that distributive justice was a more powerful predictor ofcompany satisfaction than procedural justice. The evidence suggests the followinghypotheses:

H5a: Procedural justice perceptions are positively associated with organizationalsatisfaction.

H5b: Procedural justice perceptions are more closely associated with organizationalsatisfaction than are distributive justice perceptions.

Employees who perceive procedural justice should judge their jobs more favourably.Accordingly, individuals who consider that they are in a situation of sub-equity havetwo options: they can decrease their contributions (input) or attempt to increase theiroutcomes. Hills et al. (1994) reported that the reduced contributions may assumeseveral forms: arriving late, taking long breaks, taking all possible sick leave, etc. Thisoption can be considered the behavioural expression of high job dissatisfaction. Theother option appears more positive, in that individuals can enhance their outcomes byrequesting a wage increase, a promotion or better bene ts and working conditions. Theunderlying assumption here is that, for these outcomes to be achieved, proceduraljustice must exist within the organization; for example, employees must be able toin uence the outcomes by participating in decision making, or to le claims (voice). Inthese cases, the individuals job satisfaction can be enhanced and in uenced byprocedural justice. Alexander and Ruderman (1987) found that procedural fairnessaccounted for signi cantly more variance than distributive fairness in job satisfaction.However, this relationship is not fully supported. Dailey and Kirk (1992) and Lowe andVodanovich (1995) found that job satisfaction was in uenced solely by distributivejustice perceptions, whereas Tremblay et al. (2000) predicated that procedural and


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distributive justice account for the same proportion of variance in job satisfaction.These contradictory results can be explained in part by the fact that the researchers usedglobal measures, rather than focusing on multifaceted measures of justice andsatisfaction. Overall, however, the research seems to argue in favour of the followinghypotheses:

H6a: Procedural justice perceptions are positively associated with jobsatisfaction.

H6b: Procedural justice perceptions are more closely associated with job satisfac-tion than are distributive justice perceptions.

The mediating role of satisfaction between justice perceptions and unionizationpropensity

Comprehensive models have been proposed to explain the antecedents and con-sequences of justice perceptions. More speci cally, these models have examined therole of organizational justice and satisfaction in prediction of several behaviouraloutcomes. Summers and Hendrix (1991) found that distributive justice had only anindirect effect on turnover, through pay satisfaction, job satisfaction and organizationalcommitment. Martin and Bennett (1996) found that procedural fairness, rather thandistributive fairness or job satisfaction, was a direct cause of organizational commit-ment, whereas Moorman (1991) demonstrated that perception of procedural justice, butnot distributive justice, had a signi cant direct effect on citizenship behaviours, and thislink was stronger than that between job satisfaction and outcome. Nonetheless,empirical research as a whole has yielded mixed conclusions. Some studies suggest thatorganizational justice perceptions have a direct effect on attitudes and behaviours, andthe link seems to be stronger than that between antecedents (e.g. pay and jobsatisfaction) and behaviour. Other authors conclude that justice perceptions have onlyan indirect effect on behaviour, via certain antecedents (e.g. job or pay satisfaction).

The role of organizational justice and satisfaction therefore needs to be exploredmore fully. To our knowledge, no research to date has tested the effect of distributivejustice and procedural justice on attitudes towards unionization in the compensationcontext. Lawler (1971) and Barling et al. (1992), among other authors, suggested thatsalary inequity may in uence the desire to join a union owing to pay dissatisfaction.Heneman and Sandver (1983) found that the level of satisfaction explained between 25and 50 per cent of the variation in employees voting behaviour. Two aspects ofsatisfaction have been particularly studied: satisfaction with working conditions(economic and extrinsic) and satisfaction with the employment context (non-economicand intrinsic). Dissatisfaction with pay, employee bene ts and job security was found tobe associated more closely with the desire to join or form a union than dissatisfactionwith the employment context (Allen and Keaveny, 1983; Brett, 1980). In contrast, otherstudies have shown that dissatisfaction with the employment context may be closelylinked to the desire to join a union (Kochan, 1979; Maxey and Mohrman, 1980;DeCotiis and Le Louarn, 1981; Hammer and Berman, 1981; Youngblood et al., 1984;Deshpande and Fiorito, 1989). Accordingly, satisfaction with the supervisor, job,career, participatory structures and in uence on decision making have been identi ed asjob context factors most strongly related to the desire to join a union. Although Weiner(1980) found that procedural justice had a greater in uence on the attitude towardsunionization than distributive justice, the unionization literature suggests that theintention to join a union is affected more strongly by pay satisfaction, job satisfaction


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and organization satisfaction than by justice perception. Therefore, we propose thefollowing general hypotheses:

H7a: Procedural justice perceptions are more closely associated with unionizationpropensity than are distributive justice perceptions.

H7b: Pay satisfaction, organization satisfaction and job satisfaction are moreclosely associated with unionization propensity than are distributive andprocedural justice.

In uence of pay satisfaction on other work-related attitudes

Theoretical models such as those of Lawler (1971) and Deckop (1992) suggest that paysatisfaction may have an in uence over a variety of work attitudes and behaviour.However, relatively few studies have examined the relationship between pay satisfac-tion and attitudes towards work. Empirical evidence suggests that pay satisfaction canaffect employment and job satisfaction (Ried and McGhan, 1987; Summers andHendrix, 1991; Covin et al., 1993; Roussel, 1996; Tremblay et al., 1999) andsatisfaction with the organization and with supervision (Covin et al., 1993; Tremblay etal., 2000). A study of Canadian organizations found that job satisfaction accounted forsigni cantly more variance than did pay satisfaction in explanation of companysatisfaction (Tremblay et al., 2000). Findings suggest that pay satisfaction seems to berelated more strongly to job satisfaction, and that job satisfaction seems to be moreclosely linked to organization satisfaction than pay satisfaction. We consequentlypropose the following hypothesis:

H8: Pay satisfaction is more closely associated with job satisfaction, whereas jobsatisfaction is more strongly associated with organization satisfaction.

Methodology

Population

This research is part of a wider study of work managers in Canadian organizations. Datawere collected from three large industrial sectors of the Quebec economy: pulp andpaper; consumer services, speci cally food services; and the public sector. This choicewas motivated by the number and diversity of managerial jobs and the varying sizes andgeographical locations of these organizations. The questionnaires were distributed tomanagers at all levels, from rst-line supervisors to top executives. Given the linguisticand cultural diversity of the study population, surveys were developed in both Frenchand English. The sample consists of 3,067 managers from forty-one establishments andassociations. The response rate varied between 23 per cent and 80 per cent, accordingto the organization. Given the exhaustive nature of the questionnaire (over twentypages), these response rates are understandable. Furthermore, despite modest responserates, the large sample of managers who participated in this study (over 3,000) make itrepresentative of the managerial population from these three industrial sectors (in termsof sex, age, etc.). The vast majority of respondents were men (83 per cent), French-speaking (89 per cent) and had a direct supervisory role (90 per cent). On average, therespondents were 42 years old, had twenty-two years of experience in the work marketand sixteen years seniority in their organization. More than half (52.5 per cent) have auniversity degree.


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Measuring instruments

The questionnaire includes scales designed to measure eight latent variables: internal,individual and external equity for distributive justice and procedural justice (independ-ent variables), pay, organizational and job satisfaction (intermediary variables), andunionization propensity (dependent variable).

Distributive justice Distributive justice was broken down into justice based oninternal, external and individual equity. Perceptions of these three forms of distributivejustice were measured using the same types of question, based on Goodman (1974). Inquestions on referents, respondents were asked to situate their pay on a seven-pointscale from: 2 3 (considerably less) to 1 3 (considerably more), where 0 representedequity, 2 3 represented extreme negative inequity and 1 3 represented extreme positiveinequity. A typical question was: Compared to your subordinates and given the type ofwork they do, do you think your pay is . . .? To measure the facets of distributivejustice, we grouped the questions together according to the form of justice to whichthey referred. Internal equity was measured as the average of the answers to theitems comparing respondents with subordinates, colleagues and shop oor employees( a 5 0.73). External equity was measured by a single item: Compared to the peoplewith whom you compare yourself outside the organization, and given the type of workthey do, do you think . . .? Individual equity was measured using three items related tothe requirements of the job (dif culties and responsibilities), perceived performance andskills ( a 5 0.90). It was read on the same scale as internal equity.

Procedural justice Perceived procedural justice in pay allocation was measured usingtwo items re ecting the level of participation in decision making regarding pay policiesand in appraisal of individual performance. Respondents were asked to indicate theextent to which they were involved in these decisions, using a ve-point scale:1 5 others make the decision, 3 5 equal contribution to the decision-making process,5 5 the decision is entirely mine. As was the case for distributive justice, the mean ofthe answers to the two items was taken as the measure of perceived procedural justice( a 5 0.77).

Satisfaction Satisfaction with the organization ( a 5 0.82), with pay ( a 5 0.72) andwith the job itself ( a 5 0.81) was measured using Warr and Routledges (1969)Managerial Scale. The alpha coef cients of reliability that we obtained compare verywell with those observed by these researchers. The stability and validity of thisinstrument has been demonstrated by Jung et al. (1986). In addition, this instrument ofmeasure is very well adapted to a sample of managers.

Unionization propensity Propensity to join a union was measured using a Guttman-type scale comprising the following seven items: (1) I would object if my friends tookpublic membership in an association for managers; (2) If the managers in myorganization formed an association, I would accept it; (3) I would be willing to join anassociation for managers; (4) I would be in favour of unionizing the managers of myorganization; (5) I would work hard for the unionization of the managers in myorganization; (6) If a union were formed, I would be among the rst to sign up and paymy dues; (7) I would be willing to be an of cer of such a union. Responses were codedin binary fashion, with no receiving a score of 1 and yes a score of 2, so that thescale of intensity ranged from 7 (no propensity to support unionization) to 14 (strong


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propensity to support unionization). The instrument exhibited a coef cient ofreproducibility of 0.84. Guttman de ned this index as a measure of the extent to whicha respondents scale score is a predictor of ones response pattern (in Nie et al., 1975:533).

Statistical analyses

The data gathered from the questionnaires returned have been analysed with a structuralequation model under LISREL VII. The hypothesis testing (Figure 2) is based on theevaluation of the reliability of the association between several latent variables. Thehypothesis is con rmed if the structural coef cient is deemed to be signi cant, i.e. ifStudents t test exceeds, plus or minus two, precisely 1 / 2 1.96 at the alpha level of0.05 (Joreskog and Sorbom, 1989).

As for the measurement model that links the latent variables to their indicators (orobserved variables), by convention the former are represented with circles and the latterwith rectangles. The indicators are measured by the items of the questionnaire, whichhave been grouped to establish mean type scores. This allows limiting of the number ofindicators to adjust the model to the data according to the recommended approximatethreshold of thirty indicators, which should not be exceeded (Joreskog and Sorbom,1989).

Figure 2 Final research model


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Furthermore, the evaluation of the t of the model to the data is founded on theindices proposed by LISREL VII. For the x 2 of the nal model adjusted to the degreeof freedom ( x 2/df), a ratio of 5, not to be exceeded, is the most exible norm, whereasthe most rigorous criteria have been set at three, even two (Pedhazur and Schmelkin,1991). In terms of the goodness of t index (GFI) and the adjusted goodness of t index(AGFI), the norms to be exceeded are 0.90 for the GFI and 0.80 for the AGF1 (Joreskogand Sorbom, 1989). Norms of 0.80 are occasionally applied to these two indices (Hart,1994). As for the root mean square residual (RMR or RMSR), the maximum thresholdis 0.05 when correlation matrices are analysed and 2.58 for covariance matrices(Pedhazur and Schmelkin, 1991). Our research corresponds to the latter case.

Results

The means, standard deviations and correlations between the variables are shown inTable 1. Table 1 reveals that no serious multicollinearity was observed between thelatent variables (r , 0.70). Correlations greater than 0.70 apply solely to indicators thatmeasure the same construct, that is a single latent variable. They con rm the highreliability of internal coherence observed for each of the scales of distributive justice.The intercorrelations between the three distributive justice constructs reveal correlationindices that vary between 0.66 and 0.71. This indicates a conceptual overlapping of thevarious facets of distributive justice also observed with other measuring instruments inexploratory and con rmatory research (Igalens and Roussel, 1998).

Figure 2 presents the nal model. Only the signi cant results are presented (Figure 2and Table 2). The results show that the four explanatory variables for distributivejustice and procedural justice are positively associated with pay satisfaction, con rminghypotheses 1 and 4a. Yet it is mainly the external ( g 42 5 0.167) and individual ( g 435 0.253) referents of pay that are most closely linked to the dependent variable understudy. The in uence of internal equity, although signi cant, appears weak in our modelof pay satisfaction ( g 41 5 0.098). Procedural justice was found to be the organizationaljustice variable least strongly associated with pay satisfaction ( g 44 5 0.059). Thisresult supports hypothesis 4b, as it is quite apparent that distributive justice (internal,individual and external) is a better predictor of pay satisfaction than is proceduraljustice.

No signi cant association was found between the three referents of pay andsatisfaction with the job and organization. Hypothesis 2 is consequently supported, butnot hypothesis contrast, procedural justice plays a signi cant role in satisfaction withboth the company ( g 24 5 0.325) and the job ( g 14 5 0.233). Hypotheses 5a and 6a arethus con rmed. In addition, the relations verify hypotheses 5b and 6b, wherebyprocedural justice is a better predictor of company satisfaction and job satisfactionthan distributive justice of pay. Nonetheless, these interesting results must berelativized. Satisfaction with the organization is moderately explained by the model(R2(h 2) 5 0.244), whereas job satisfaction is only weakly so (R

2( h 1) 5 0.053).

Regarding unionization propensity, the model fails to explain this variable (R2(h 3 50.063). Hypothesis 7a, which suggests that the perceptions of procedural justice arebetter predictors of unionization propensity than distributive justice, is not supported.The model reveals that satisfaction with the company ( b 32 5 2 0.844) and jobsatisfaction ( b 31 5 2 0.262) are negatively associated with unionization propensity. Ifpay satisfaction is also negatively associated with unionization propensity ( b 34 52 0.283), the weakness of the coef cient of determination R2( h 3) of the structuralequation and of the correlation between these two variables (r 5 2 .07, p , .01) leads


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Tabl

e 1

Mat

rix

of c

orre

lati

ons,

mea

ns a

nd s

tand

ard

devi

atio

ns

Vari

able

sY

1Y

2Y

3Y

4X

1X

2X

3X

4X

5X

6X

7X

8X

9

Y1

Job

sati

sfac

tion

(sa

tist

ra)

1.00

Y2

Org

aniz

atio

n sa

tisf

acti

on (

sati

sent

).4

6**

1.00

Y3

Inte

ntio

n to

joi

n a

unio

n (i

ntsy

nd)2

.15*

*2

.23*

*1.

00Y

4P

ay s

atis

fact

ion

(sat

isre

m)

.14*

*.1

1**2

.07*

*1.

00X

1sa

lvsu

b (i

nter

nal

equi

ty)

.06*

*2

.14*

*2

.08*

*.2

0**

1.00

X2

salv

asco

(in

tern

al e

quit

y).0

32

.16*

*.0

8**

.18*

*.6

9**

1.00

X3

salv

syn

(int

erna

l eq

uity

).0

4*2

.15*

*.0

9**

.18*

*.8

2**

.70*

*1.

00X

4sa

lvex

(ex

tern

al e

quit

y).0

32

.15*

*.0

9**

.30*

*.6

6**

.68*

*.6

8**

1.00

X5

salc

omp

(ind

ivid

ual

equi

ty)

.07*

*2

.11*

*.0

8**

.26*

*.6

8**

.67*

*.6

9**

.70*

*1.

00X

6sa

lvsr

e (i

ndiv

idua

l eq

uity

).0

4*2

.12*

*.0

8**

.27*

*.6

7**

.66*

*.6

8**

.70*

*.8

5**

1.00

X7

salv

spo

(ind

ivid

ual

equi

ty)

.03

2.1

3**

.08*

*.3

0**

.68*

*.6

6**

.69*

*.7

1**

.81*

*.8

4**

1.00

X8

jusr

emu

(pay

pro

cess

jus

tice

).0

5**2

.08*

*.0

5**

.09*

*.5

2**

.52*

*.5

1**

.49*

*.4

9**

.48*

*.4

8**

1.00

X9

juse

va (

appr

aisa

l pr

oces

s ju

stic

e).1

9**

.26*

*2

.01

.12*

*.0

8**

.03

.05*

.10*

*.1

1**

.08*

*.0

9**

.43*

*1.

00M

ean

2.67

2.33

10.8

62.

322.

391.

862.

451.

931.

691.

691.

761.

241.

69S

tand

ard

devi

atio

n.3

7.4

91.

90.4

9.8

5.6

1.8

4.7

6.6

9.7

1.7

7.6

4.8

3

* p,

0.05

**

p,0.

01


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Tabl

e 2

Est

imat

es o

f ca

usal

rel

atio

nshi

p pa

ram

eter

s an

d ad

just

men

t in

dexe

s

Stru

ctur

al m

odel

x an

d y

mea

sure

men

t m

odel

s

Para

met

ers

Est

imat

et-

valu

eSt

anda

rdiz

edes

t.Pa

ram

eter

sE

stim

ate

t-va

lue

Stan

dard

ized

est.

g41

inte

rnal

equ

ity

pay

satis

fact

ion

0.09

86.

091

0.13

6l

11(x

)1.

000a

0.00

0a0.

674

g32

exte

rnal

equ

ity

inte

ntio

n to

joi

n a

unio

n0.

155

3.17

20.

062

l21

(x)

0.30

015

.779

0.20

2g

42ex

tern

al e

quity

pa

y sa

tisf

actio

n0.

167

14.7

970.

264

l31

(x)

0.93

127

.900

0.62

7g

43in

divi

dual

equ

ity

pay

sati

sfac

tion

0.25

312

.580

0.28

9l

42(x

)1.

000a

0.00

0a0.

765

g14

proc

ess

just

ice

job

satis

fact

ion

0.23

39.

557

0.18

6l

53(x

)1.

000a

0.00

0a0.

555

g24

proc

ess

just

ice

orga

niza

tion

sat

isfa

ctio

n0.

325

10.8

720.

196

l63

(x)

1.10

549

.644

0.61

3g

34pr

oces

s ju

stic

e

inte

ntio

n to

joi

n a

unio

n0.

383

3.12

80.

060

l73

(x)

1.13

547

.411

0.63

0g

44pr

oces

s ju

stic

e

pay

satis

fact

ion

0.05

92.

290

0.03

6l

84(x

)1.

000a

0.00

0a0.

297

b14

pay

satis

fact

ion

job

sati

sfac

tion

0.08

86.

454

0.11

5l

94(x

)2.

699

9.36

10.

800

b21

job

satis

fact

ion

orga

niza

tion

satis

fact

ion

0.55

425

.174

0.41

7l

11(y

)1.

000a

0.00

0a0.

371

b31

job

satis

fact

ion

inte

ntio

n to

joi

n a

unio

n2

0.26

22

2.58

42

0.05

1l

22(y

)1.

000a

0.00

0a0.

493

b32

orga

niza

tion

sat

isfa

ctio

n

inte

ntio

n to

joi

n a

unio

n2

0.84

42

10.8

742

0.22

0l

33(y

)1.

000a

0.00

0a1.

895

b34

pay

satis

fact

ion

inte

ntio

n to

joi

n a

unio

n2

0.28

32

3.65

72

0.07

2l

44(y

)1.

000a

0.00

0a0.

486

R2

(h1)

job

sat

isfa

ctio

n0.

053

R2

(h2)

org

aniz

atio

n sa

tisf

acti

on0.

244

R2

(h3)

int

enti

on t

o jo

in a

uni

on0.

063

R2

(h4)

pay

sat

isfa

ctio

n0.

320

GF

I0.

99A

GF

I0.

98R

MR

0.01

x2

291.

00D

I51

x2 /

dl5.

71

Not

ea

The

se p

aram

eter

s ar

e se

t at

1.0

00 t

o es

tabl

ish

a m

easu

rem

ent

scal

e. T

he t

val

ues

of t

hese

par

emet

ers

cann

ot b

e ca

lcul

ated

and

are

set

at

0.00

0.


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us to conclude that hypothesis 7b is only partially con rmed. Finally, the data suggestthat company satisfaction is the best predictor of unionization propensity. Jobsatisfaction and pay satisfaction are moderately associated with unionizationpropensity.

Regarding relationships between satisfaction variables, the structural model suggeststhe existence of two signi cant relationships. First, job satisfaction is positively andsigni cantly related to organization satisfaction ( b 21 5 .554). Second, we found apositive and signi cant link between pay satisfaction and job satisfaction ( b 14 5 0.088).However, our results show that the link between pay and job satisfaction is muchweaker than the one between job and organization satisfaction Thus, hypothesis 8 issupported.

Discussion

The goal of this research was, rst, to examine the differential effect of proceduraljustice and distributive justice (broken down into internal, external and individualequity) on three facets of satisfaction (with pay, job and organization) and, second, toexplore the relationship between organizational justice perception, facets of satisfactionand unionization propensity. The nal model (Figure 2) shows that the three equityreferents of organizational justice are linked to pay satisfaction, and that distributivejustice is a better predictor of pay satisfaction than are procedural justice perceptions. Incontrast, procedural justice is more strongly related with organization satisfaction andjob satisfaction than are distributive justice perceptions. Moreover, the nal modelsuggests that job satisfaction and organization satisfaction play a more signi cant rolein unionization propensity than do organizational justice perceptions.

The differential effects of organizational justice

Our results, in a French-Canadian cultural context, support previous research ndings(Lind and Tyler, 1988; Folger and Konovsky, 1987; Citera et al., 1992; Sweeney andMcFarlin, 1993; Scarpello and Jones, 1996) that distributive justice perceptions providea better explanation of pay satisfaction and that procedural justice plays a moreimportant role than distributive justice does in organization satisfaction and jobsatisfaction. The higher the managers fairness perception of comparison levels, themore satis ed they are with their pay, regardless of which procedure produces theresults. Similarly to Alexander and Ruderman (1987), we observed a strong linkbetween procedural justice and job satisfaction. Our study suggests that the in uence ofprocedural justice is not restricted to satisfaction with the organization or institution; itcan also make the job itself more satisfying. The managers behave as though theyconsider organizational justice to be part of their job. To explain the in uence ofprocedural justice, the role of its indicators should not be overlooked. In the presentstudy, two components of procedural justice were examined: participation in decisionsrelating to pay policies and participation in performance appraisal decisions. Thecorrelations show that participation in performance appraisal is more closely associatedwith the three facets of satisfaction than is participation in decisions related to pay. Ourresults support Greenbergs (1996) assertion that some decisions and procedures aremore important than others in the evaluation of procedural justice. Giving employeesthe opportunity to express their opinions in the performance appraisal process mayincrease their feeling of control over the job, the impression that they can in uence theirsupervisors judgement, and that they have some power in pay decisions. However,


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individual in uence on other pay policies, e.g. salary structure and market position,appears to be more limited.

Regarding salary referents, the results suggest that individual equity and externalequity are more strongly associated with pay satisfaction than is internal equity.Compared with other employee categories, managers tend to be more mobile in theircareers and willing to be paid according to their skills or performance. This may explainwhy their satisfaction is linked more strongly to individual equity and external equityrather than internal equity. Our results are consistent with research showing that salaryreferents play a signi cant role in pay satisfaction (Goodman, 1974; Dyer and Theriault,1976), and that not all referents have the same in uence on pay satisfaction (Taylor andVest, 1992; Blau, 1994; Roussel, 1996; Das and Bhadury, 1997; Tremblay et al., 2000).Moreover, the ndings underline the need for organizations to introduce compensationpractices and procedures aimed at fostering internal, external and individual equity(Milkovich and Newman, 1993; Scarpello and Jones, 1996).

Our nal model did not support Dailey and Kirks (1992) ndings that distributivejustice is a more powerful predictor of job satisfaction than procedural justice.Conceptual differences between their research and ours may explain this divergence. Intheir study, the main criterion was job satisfaction, whereas ours emphasized paysatisfaction. Moreover, their measures of organizational justice were associated with theperformance appraisal context, and did not take into account the compensation context.These differences underline the need to interpret organizational justice contextually(Greenberg, 1996). In effect, the causal relationships hypothesized are unlikely to be thesame for all reward situations.

Organizational justice perceptions and unionization propensity

The structural equation model has highlighted the associations between organizationaljustice variables and unionization propensity. The con rmatory analysis reveals theweakness of the predictive power of organizational justice pay dimensions. Johnson andJohnson (1991) reached comparable conclusions, in that they failed to nd a linkbetween pay equity perception and commitment to a union. As Barling et al. (1992)observed, organizational justice has only an indirect effect on unionization propensity.Its in uence appears to be exercised via organizational satisfaction, job satisfaction and,to a lesser extent, pay satisfaction. If the negative relationship observed between paysatisfaction and unionization propensity is conformed to our hypothesis and literature,the positive relationships between external equity, procedural justice and unionizationpropensity are more dif cult to explain. For external equity perceptions, it is possiblethat some managers may perceive unionization as superior to individual in uence formaintaining their advantageous pay position vis-a`-vis the market. A careful inspectionof data shows that older, less educated and plateaued managers were signi cantly morepositive regarding unionization. We may speculate that their individual bargainingpower regarding their pay, inside and outside the work market, is lower than that oftheir counterparts. For these less powerful managers, unions are perceived as apreferred voice instrument to express and protect their advantageous workingconditions relative to the external market.

The positive relationship between procedural justice and unionization propensity ismore dif cult to explain. Conceivably, the more organizations give employeesopportunities to in uence compensation decision making, the more compensation issuesbecome important, and the more employees perceive, over time, the limits of theirindividual power or in uence on pay procedures. Personal in uence on the process,


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despite its positive effects, may become insuf cient if outcomes are not commensuratewith individual investments in procedures, or if procedures fail to satisfy the majorityof employees. As suggested by group-value theory, several non-control issues, such asneutrality of decision-making procedure, trust in decision makers and social standing,may have a more powerful in uence on judgements of procedural justice than controlissues (Tyler, 1989). Violation of these procedural components may reduce the long-term affective membership relationship with the organization, and increase the need foraf liation with another group. Unions are thus perceived as a powerful instrument forobtaining better or fairer interpersonal treatment. This surprising positive associationbetween structural aspects of procedural justice and unionization propensity suggeststhat the in uence of procedural justice cannot be fully understood if the role of socialaspects is not taken into account.

Our ndings also suggest that intention to join a union is in uenced not solely by payor extrinsic satisfaction. In this respect, although administered to a sample of Canadianmanagers, our research supports numerous earlier studies, conducted among variouspopulations (e.g. blue, pink and white collar), which have shown that satisfaction withintrinsic factors is a more powerful predictor of unionization propensity than withextrinsic satisfaction factors (Kochan, 1979; DeCotiis and LeLouarn, 1981; Hammerand Berman, 1981; Youngblood et al., 1984).

It is interesting to note that the chain of relationships observed in our research issomewhat similar to that reported by Summers and Hendrix (1991) and Barling et al.(1992). We observed a relationship between equity perception and pay satisfaction, andan association between the latter and job satisfaction, organization satisfaction andunionization propensity. However, neither Summers and Hendrix nor Barling et al.tested the in uence of procedural justice in their respective models. Our nal modelsuggests a causal chain from procedural justice to job satisfaction organizationsatisfaction and unionization propensity.

Conclusion

This research is, to our knowledge, the rst to have used an explanatory-type model totest the in uence of organizational justice on satisfaction and unionization propensity.At the theoretical level, it supports the idea that the concept of organizational justiceincludes two broad dimensions: distributive and procedural. Individuals seem predis-posed to react in different ways when the two forms of justice are violated. This allowsus to predict more accurately the consequences of compliance with standards of justiceapplied in organizations. We have shown that procedural justice in a reward contextseems to in uence a broader set of attitudes than does distributive justice. In addition,our research suggests that the relationship between organizational justice and behav-iours at work may be more fully understood and explained if we take into accountemployees attitudes towards speci c and broad aspects related to their work.

Although this research in a Canadian context produced some interesting results andcorroborated many earlier studies in the eld, it nonetheless has certain limitations.First, all the data were obtained by means of a single questionnaire on a single occasion,and common variance risks are certainly present. Second, external equity was measuredusing just one item, and procedural justice using two. Third, only the organizational(internal and individual) and market (external) referents were assessed for distributivejustice even though, as Blau (1994) pointed out, other categories of relevant referentsexist. Finally, organizational justice and satisfaction are necessary but insuf cientfactors in the prediction of employees propensity to join a union. Other factors, such


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as general (e.g. union power) and speci c (e.g. union instrumentality) attitudes towardsunions can play critical roles (Barling et al., 1992; Deshpande and Fiorito, 1989).

Further research in this area is needed. Research similar to ours, but using differentsub-populations, such as that examined by Witt and Nye (1992), Scarpello and Jones(1996) and Sweeney and McFarlin (1997), would be extremely useful. For example, itwould be interesting to examine whether men react in the same way as women, whetheremployees in the public and private sectors respond in similar ways and if workersshare the perceptions of managers. More detailed research could also examine some ofthe intermediary variables between justice and attitude indicators in an analysis of theeffects of justice on behaviours. It would be interesting to study other behavioursaffected by organizational justice, such as performance, loyalty, absenteeism, staffturnover and their antecedents. This research considered only one dimension ofcompensation: pay level. According to the compensation models of Heneman andSchwab (1985) and Miceli and Lane (1991), there are at least four separate componentsto compensation, including employee bene ts. Employee bene t satisfaction has yet toreceive attention from researchers. Studies of exible bene t plans suggest that thisaspect may be interesting from the organizational justice standpoint (Tremblay et al.,1998). Leventhal (1980) also highlighted the fact that individuals use rules other thanequity to bring about justice. It would be interesting to examine the role of the conceptsof equality and need in the distributive justice model. While this study investigatedprocedural justice using two indicators, this form of justice, like distributive justice,may well comprise at least three facets, as proposed by Scarpello and Jones (1996),namely 1) job analysis and job evaluation, 2) the wage survey process and 3)performance appraisal and pay increases. These three aspects correspond to internalequity, external equity and individual equity. It would be useful, as Blau (1994) did fordistributive justice, to test the in uence of the importance and level of proceduraljustice of several facets of procedural justice on work attitudes and behaviours.Moreover, the intriguing positive in uence of procedural justice on unionizationpropensity justi es further investigation. It may be interesting to evaluate how thesubjects of procedures (e.g. compensation, performance appraisal), the content ofprocedures (e.g. on process or decision making) and the degree of control exert anindividual and interactive in uence on work attitudes and behaviours.

This has practical implications for decision makers in the eld of compensation. Inmodern compensation policies, managers are more frequently called upon to evaluatetheir employees and colleagues. Management by objectives and performance appraisaltechniques are increasingly used by managers in organizations. Communication ofmethods used to determine salary increases and individual and group incentives,feedback on performance, justi cation of rewards accorded and involvement ofemployees in the performance appraisal process are merely a few examples of tasks thatare incumbent on line managers. Managers have a dual role in procedural justice: whilethey are evaluators and implementers of the procedures, they are also those evaluated.Awareness of the relevance of procedural justice in the distribution of rewards isgrowing, in part owing to the advent of innovative pay programmes based on skillacquisition (skill-based pay), on team performance (team rewards or gain sharing), andon company performance (pro t sharing). These programmes draw on numerousprocedures that reinforce the relevance of the procedural fairness. However, fairprocedures alone will not generate the expected behaviours and attitudes if theemployees do not recognize them as being fair. Participation in and communicationregarding procedures are therefore crucial in the quest for justice in the workplace. Inaddition, organizations may nd it nancially advantageous to manage procedural


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justice. As Martin and Bennett (1996) point out, the economic costs of acting in aprocedurally fair manner are minimal in comparison with distributive fairness. Unionmovements and employers must be aware that pay satisfaction is not necessary the only,or even the principal, trigger of interest in unionization. Middle and junior managerswho are dissatis ed with their job content, who perceive that their organizationsdecision-making processes are unfair and who have little trust in key decision makerscan become good candidates for unionization, as their loyalty and commitment declinesigni cantly.

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