Organizational justice is an employee’s perception of fairness in the workplace. It’s whether people believe their organization’s processes, decisions, and norms are fair and equitable. Within organizational justice theory, researchers have identified different types of justice, including:
- Distributive: Fairness in outcomes like pay and workload
- Procedural: Fairness in how decisions are made
- Interactional, also known as interpersonal: Fairness in how people are treated
- Informational: Whether organizations share adequate, truthful information
Decades of research on fairness perceptions in the workplace reveals that when companies prioritize organizational justice, employees are healthier. They’re better at their jobs and more likely to share ideas that help the company succeed. Moreover, several studies suggest organizational justice improves employees’ organizational citizenship behavior. Organizational citizenship behavior is the actions that contribute to the overall well-being of the team.
Conversely, perceived injustice is linked to higher turnover intention and absenteeism. If employees believe their work environment is unfair, morale deteriorates and burnout increases. This is why Robin Nichols, content lead U.S. at learning management system 360Learning, says one of the biggest mistakes a company can make is to underestimate the significance of fairness in the workplace.
As an HR leader, you can take the concept of organizational justice and turn it into a concrete plan to cultivate a fair, inclusive workplace. You’ll be able to apply these principles of organizational justice to build a workplace based on trust, mutual respect, and honesty.
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Embrace a Culture of Openness
Being open with employees builds trust in the company and reinforces informational justice. Companies should communicate their practices, policies, and objectives clearly and frequently.
Here’s how you can encourage transparency across the workplace.
Make performance data public
According to the Academy of Management Journal, transparency is linked with perceptions of fairness in performance management. Sharing performance data with employees increases credibility in your evaluation process.
At 360Learning, performance data and promotions are shared with all employees. Nichols says when an employee is up for a promotion, peers can view their performance record. Then, they can benchmark their own progress or identify disparities. Nichols says the company first checked this policy with employees, and the feedback is encouraging.
“Not only have we recently achieved our highest employee satisfaction score to date (a 9 out of 10, way above the industry standard), but our turnover rate has also decreased.”
Another approach is to simply share performance trends with employees. You might select specific performance metrics like successfully leading projects or learning job-critical skills. This still allows people to understand how they’re doing in relation to the rest of the team.
Share company information
Provide employees with information about the organization’s projects to keep your people in the loop.
Schedule Q&As or office hours where team members can submit questions to senior management. For instance, Square hosts weekly town hall meetings. Questions are compiled throughout the week and employees upvote the questions they’d like answered. Employees can also ask follow-ups once a question is answered.
Sharing updates on matters like diversity, equity, and inclusion is especially important. This is because employees want to see action, not just lip service. Alyssa Nowicky, former people analytics manager at B2B fintech Even Financial, says she shares the data she prepares for senior management with all employees.
“One of our company values is transparency, so we are big on sharing any data that I am creating for the leadership team…I share a little bit more granularly with the leadership team but then just do an overall share across the company to make sure that everyone is aware of what’s going on,” Nowicky says.
In addition to company meetings, it also pays to set up self-serve systems that allow employees to view the organizational structure, hiring plans, and other business metrics. Promoting transparency in this way shows people where the organization is headed and how they fit into those future plans.
Prioritize Pay Equity
A standard measure of fairness in any workplace is whether people get paid equally for their work. Research shows pay disparities between race and gender persist, and this gap is most significant for women of color. Without a strategy to eliminate these wage gaps, you risk perpetuating pay inequality.
Promote pay parity
The first step in achieving pay equity is to gather information about your workforce demographic. This is where self-ID demographic data can help to better understand workforce representation and identify potential disparities.
Once you have this data for your own company, you can conduct a pay equity analysis to identify discrepancies and introduce a strategy to offer fair, equitable compensation. Specifically, your goal should be to offer the same pay across job levels, irrespective of gender or other variables that have nothing to do with the roles.
Pay equity is particularly relevant in discussions on location-based salaries. To this point, as more companies remain remote, many are considering options for value-based vs. location-based pay. Both approaches have their pros and cons, and which one is right for your organization depends on numerous factors. The key is to make a clear decision, establish a standardized system accordingly, and communicate that information to employees.
Increase pay transparency
One way to improve pay equity is to promote pay transparency by establishing a clear system for salaries and merit increases and making everyone in your organization aware of those criteria. According to the Business Horizons journal, pay transparency can bring about distributive justice. Moreover, open discussions about compensation will expose wage inequality.
360Learning finds a 100% transparent compensation model makes salaries more predictable for employees. And because compensation is calculated in a standard way, pay isn’t linked to an employee’s negotiation skills. Importantly, this approach requires ongoing transparency, for example by sharing each level and salary band with employees and by sharing the outcomes of regular compensation reviews with all employees.
360Learning shares the outcome of its compensation review with employees
Create Fair Decision-Making Processes
Procedural justice means employees believe the processes used to make decisions are fair. And organizational justice research is fairly prescriptive about what fair procedures typically look like:
- Clear, standard processes that reduce the impact of implicit bias: Take work assignment allocation as an example. Research shows white men are more likely to receive high-profile work assignments. To avoid this scenario, you might develop a system for assigning new projects that considers all relevant employees based on their skill set, not just those employees that managers think of first.
- Systems that serve the needs of all employees: Processes don’t favor one group of employees over another. For instance, in a hybrid workforce, a compensation plan must meet the needs of in-office and remote workers.
- Decisions that are grounded in data: Support evidence-based decisions, particularly to inform discussions on pay and performance. For example, you can create measurable KPIs for all employees and set up promotional thresholds based on those KPIs. With a data-based compensation strategy, you can objectively reward employees who go beyond that threshold. This approach makes sure you measure and reward employee performance fairly.
Create an objective, clear performance review process
Research shows when performance measurement systems aren’t clear, employees may reject the system. To provide clarity, make sure people know how they’ll be graded. Be upfront about scoring criteria and performance metrics, and encourage managers to work with team members to set job performance expectations. All of these actions must take place well ahead of the formal review.
360-degree review surveys also reduce bias by supporting an objective review process. During a 360 review, you’ll bring in more than one perspective to provide an accurate reflection of performance.
Don’t forget to review workforce analytics to identify any bias in the assessment. Check performance review data by race, gender, department, and title to spot potential discrimination.
Involve Managers in Organizational Justice Efforts
Managers shape employees’ perceptions of organizational justice because they represent the company to employees, according to the Journal of Managerial Psychology. This means you must educate managers on what organizational justice looks like in their day-to-day work lives.
Think about the types of manager behaviors your organization wants to see. For example, Zapier filters performance review data by manager to identify the best practices for leading teams. JT Haskell, Zapier’s director of recruiting, says if a manager has several strong performers on their team, Zapier’s learning and development team will dig deeper.
“We have two people in L&D solely focused on managers at Zapier. They’re there … to help train them and develop them and also just learn the best practices for those who are really doing a great job here of leading teams.”
You can take a similar approach to organizational justice. Run an employee survey or check employee engagement by department. Look for themes and patterns in work behavior that point to fair treatment.
Then build training programs for managers around those traits. It may be helpful to first conduct a skills mapping exercise with managers to see potential gaps. For example, you might find managers need training on communicating with empathy. Perhaps they need support to make unbiased decisions. Whatever it is, offer middle management concrete strategies to support an equitable workplace.
End Unfair Treatment in Your Workplace
Creating an equitable work environment is top of mind for most organizations. Over 70% of HR professionals say they’re increasing their focus on diversity, equity, and inclusion. An important part of fostering this type of work environment is recognizing the role of justice.
When you advance organizational justice, your team will be happier and healthier. They’ll enjoy higher job satisfaction and will be less likely to leave the organization.
To get started on your organizational justice journey, evaluate how your organization can be more objective. You’ll want to understand how factors like race, gender, and age shape your employees’ work lives.
If you’re like most organizations, you already have a wealth of data to improve organizational justice. Use our DEI reporting guide to gain deeper insights into your organization’s diversity metrics.