Do procedures really matter when rewards are more important? A Pakistani perspective on the effects of distributive and procedural justice on employee behaviors

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Do procedures really matter when rewards are more important? A Pakistani perspective on the effects of distributive and procedural justice on employee behaviors Les procédures sont-elles vraiment importantes lorsque les récompenses sont plus importantes ? Une perspective pakistanaise sur les effets de la justice distributive et procédurale sur les comportements des employés U. Raja a , R.A. Sheikh b , M. Abbas c,∗ , D. Bouckenooghe a a b c

Goodman School of Business, Brock University, 1812, Sir-Isaac-Brock-Way, St.-Catharines, L2S 3A1 Ontario, Canada Department of Business Studies, NAMAL College Mianwali, District de Mianwali, Pendjab, Pakistan FAST School of Management, National University of Computer and Emerging Sciences, Islamabad, Pakistan

a r t i c l e

i n f o

Article history: Received 25 January 2017 Received in revised form 16 March 2018 Accepted 24 March 2018 Keywords: Distributive justice Procedural justice Citizenship behaviors Job performance Creativity

a b s t r a c t Introduction. – Researchers agree that procedural justice and distributive justice interact so that high procedural fairness reduces the negative consequences of distributive unfairness. Objectives. – Our objective was to test the hypothesis that employees in Pakistan (i.e., an underdeveloped economy) would be more focused on rewards than procedures. Therefore, procedural and distributive justice will not interact in predicting employee behaviors. Methods. – Using independent measures for organizational justice and job outcomes, we conducted two field surveys (n = 372 and n = 550 paired responses) in Pakistan to examine the direct and combined effects of procedural and distributive justice on job performance, citizenship behaviors, and creativity. Results. – In both studies, the results suggest that distributive justice is a more consistent and relatively stronger predictor of job outcomes as compared to procedural justice. The results also showed that procedural justice did not moderate the relationship between distributive justice and employee behaviors. Conclusion. – The findings suggest that workers in an underdeveloped economy like Pakistan may be more concerned with fairness in the distribution of rewards than procedural fairness. Therefore, in such context, procedures may be less likely to reduce negative consequences of unfair reward distribution. © 2018 Elsevier Masson SAS. All rights reserved.

r é s u m é Mots clés : Justice distributive Justice procédurale Comportements de citoyenneté Performance au travail créativité

Introduction. – Les chercheurs conviennent que la justice procédurale et la justice distributive interagissent de sorte qu’une grande équité procédurale réduit les conséquences négatives de l’injustice distributive. Objectifs. – Notre objectif était de tester l’hypothèse selon laquelle les employés au Pakistan (c’est-àdire une économie sous-développée) seraient plus axés sur les récompenses que sur les procédures. Par conséquent, la justice procédurale et distributive n’interagirait pas dans la prédiction des comportements des employés. Méthodes. – En utilisant des mesures indépendantes pour la justice organisationnelle et les résultats professionnels, nous avons mené deux enquêtes sur le terrain (n = 372 et n = 550 réponses jumelées) au Pakistan pour examiner les effets directs et combinés de la justice procédurale et distributive sur le rendement au travail, les comportements citoyens et la créativité.

∗ Corresponding author. E-mail addresses: [email protected] (U. Raja), [email protected] (R.A. Sheikh), [email protected] (M. Abbas), [email protected] (D. Bouckenooghe). https://doi.org/10.1016/j.erap.2018.03.001 1162-9088/© 2018 Elsevier Masson SAS. All rights reserved.

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Résultats. – Dans les deux études, les résultats suggèrent que la justice distributive est un prédicteur (prédicteur)plus cohérent et relativement plus fort des résultats de l’emploi par rapport à la justice procédurale. Les résultats ont également montré que la justice procédurale n’a pas modéré la relation entre la justice distributive et les comportements des employés. Conclusion. – Les résultats suggèrent que les travailleurs, dans une économie sous-développée comme le Pakistan, peuvent être plus préoccupés par l’équité dans la répartition des récompenses que par l’équité procédurale. Par conséquent, dans un tel contexte, les procédures peuvent être moins susceptibles de réduire les conséquences négatives de la distribution injuste des récompenses. ´ ´ es. © 2018 Elsevier Masson SAS. Tous droits reserv

Perceived organizational justice has remained a construct of immense significance in the fields of management, psychology, and sociology over the past few decades. Its inception into the management and applied psychology literature is relatively recent compared to other disciplines, but it remains one of the most researched constructs in these fields. Rooted in Adam’s (1965) work on equity, early research on organizational justice was more focused on distributive justice, which refers to the perceived fairness of reward distribution in organizations. Research has clearly established that perceived unfairness of rewards leads to negative outcomes such as theft, dissatisfaction, and poor performance (Colquitt, Conlon, Wesson, Porter, & Ng, 2001; Greenberg, 1990a; Velez & Neves, 2017). However, later research showed that individuals are not only concerned about decision outcomes, but also about the fairness of decision-making procedures (Alexander & Ruderman, 1987; Folger & Konovsky, 1989), referred to as perceived procedural justice. According to Folger and Konovsky (1989, p. 115) “distributive justice refers to the perceived fairness of the amounts of compensation employees receive; procedural justice refers to the perceived fairness of the means used to determine those amounts.” Following Greenberg’s seminal work on justice (1987), research has established that fair procedures reduce the negative consequences of perceived distributive unfairness (Lowe & Vodanovich, 1995; McFarlin & Sweeney, 1992; Skarlicki & Folger, 1997; Tepper, 2001). Multiple studies, including meta-analytic reports, support the idea that job performance, organizational citizenship behaviors (OCB), and creativity are not only directly affected by perceptions of fair reward distribution and decision-making procedures related to rewards, but also that both types of perceived justice interact in determining work behaviors (Colquitt et al., 2001; Tepper, 2001). However, a big caveat in the domain of perceived organizational justice research is that the bulk of research has been conducted in economically developed regions (i.e., North America and Europe), where per capita income is high and the basic needs of working individuals are largely met. Insight into the efficacy of organizational justice theories in underdeveloped economies is limited at best. Although it makes theoretical sense to expect that people would be more concerned about rewards than procedures in contexts where their basic needs are not met, there appears to be a tendency to generalize and implement ideas in research and practice based on results from very different settings. A manager enforcing procedure transparency to reduce possible negative outcomes associated with perceived unfairness of rewards in Pakistan, India, or Bangladesh might be caught by surprise as people might not care about procedures if they do not receive what they expect. We believe that researchers should pay more attention to testing justice theories in less economically developed contexts. Despite Brockner and Wiesenfeld’s (1996) call to elucidate the conditions under which the interactive effects of distributive and procedural fairness are more pronounced or non-existent, little has been done in this area, especially regarding the role of geographic spread. Similarly, Inglehart (1997: 329) suggested that

“cultural factors are immediately linked with economic factors” and that both economic and cultural factors should be considered in our models. Although there is significant research on culture, little has been done to incorporate economic factors into OB models. More recently, Shao, Rupp, Skarlicki, and Jones (2013, p. 264) asserts that “it is unclear whether national culture or something else (e.g., economic development, history, or politics) explains the cross-country differences in justice effects”. We examine the direct and interactive effects of perceived distributive and procedural justice on organizationally significant behaviors such as job performance, OCB, and creativity in Pakistan to demonstrate that in a low income and less developed context, procedures would not matter as much to mitigate the negative effects of distributive injustice. This would allow us to delve into the well-developed and established theory of justice and explore whether it is universally applicable. If not, we must be careful in applying strategies drawn from theories that are not ‘universal’ after all. On the one hand, we do expect the types of justice and their negative effects on organizationally significant outcomes to hold. Perceptions of fairness are likely to be based on the same factors universally. However, on the other hand, the implications of justice types, their significance in affecting attitudes and behaviors, and their interplay to predict various outcomes is likely to differ in various cultural settings. For example, distributive justice would gain more importance where instrumental values and economic gain are priorities. Similarly, procedures will be more pronounced when people are more concerned about the social and procedural aspects of justice. Pakistan, the research context for this inquiry, is a country of approximately 200 million people ranking low on economic and human development indices. Despite these rankings, the country does have highly educated professionals, many of whom have been trained in the West (HDR, 2013; OECD, 2013). Pakistan has an important geo-political significance because it is geographically located in a region next to China, an economic superpower, and India, one of the fastest growing economies globally. It is the second largest exporter of textile products and one of the largest exporters of rice. In addition, hundreds of multinational organizations from Western developed countries are represented in the country and employ highly trained HR professionals. Notwithstanding a highly educated workforce implemented by these multinationals, organizations have failed to understand that policies developed and anchored in theories tested in mainly western and economically developed contexts may not translate well to other contexts. Henceforth, drawing from Shao et al. (2013) who found cross-cultural differences in the relative impact of procedural and distributive justice in predicting desirable work outcomes, we hypothesize that although both types of justice will be related to behaviors, there will be no interaction among the justice types. More specifically, unlike the findings of research conducted in developed countries, fair procedures may not reduce the harmful effects of perceived distributive unfairness in Pakistan.

Please cite this article in press as: Raja, U., et al. Do procedures really matter when rewards are more important? A Pakistani perspective on the effects of distributive and procedural justice on employee behaviors. Rev. Eur. Psychol. Appl. (2017), https://doi.org/10.1016/j.erap.2018.03.001

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1. Theory and hypotheses 1.1. Putting justice into context: culture vs. socio-economic conditions Over the past few decades, perceived organizational justice has been a core construct in OB and psychology literatures. Distributive justice is embedded in assumptions of equity theory (Adams, 1965) and is concerned with perceived fairness of rewards in organizations. Extant research shows that perceived distributive injustice leads to many negative outcomes, such as low job satisfaction, pay satisfaction, outcome satisfaction, and individual performance (Colquitt et al., 2001). Similarly, procedural justice refers to the perceived fairness of processes in determining reward allocation in organizations (Greenberg, 1990b). Research clearly shows that procedural fairness is related to attitudes and behaviors, such as satisfaction, commitment, performance, and citizenship behaviors (Colquitt et al., 2001). Furthermore, it has been argued that distributive fairness is more likely to be associated with person-referenced outcomes, such as satisfaction, whereas procedural fairness is likely to be strongly associated with organization-referenced outcomes, such as commitment, performance, and OCBs (Colquitt et al., 2001; Greenberg, 1990b). Moreover, it is well-established that fair procedures reduce the negative consequences of perceived distributive unfairness and many studies show that both types of perceived justice (distributive and procedural) interact in determining organizational behaviors (Lowe & Vodanovich, 1995; McFarlin & Sweeney, 1992; Skarlicki & Folger, 1997; Tepper, 2001). However, like other theories in OB and psychology, the majority of organizational justice research has been conducted in North America and Europe where there is a high level of economic and social development. Generally, this research has conveniently been accepted and embraced worldwide without much attention to its context. We believe that this uninformed acceptance of theories can be detrimental to organizations, especially given that reactions to perceived fairness in reward distribution and procedures can differ according to the need level of people in a society. People who are at a lower need level are more likely to be concerned with lower level needs such as rewards (Maslow & Abraham, 1954). Therefore, employees in countries that are less developed and have low per capita income are likely to be more sensitive to the fairness of reward distribution than the fairness of procedures. Conversely, people in more developed countries, where basic needs of individuals are met well, would be at a higher need level, where they pay attention not only to the distribution of rewards, but also to the fairness of procedures. There has been some discussion of the cross-cultural implications of justice (Greenberg, 2001), and some studies have examined the impact of perceived organizational justice in a variety of settings. For example, Pillai, Scandura, and Williams (1999) collected data in China and found that only distributive justice is related to trust and satisfaction, whereas in their Indian sample, procedural justice was unrelated to organizational commitment and satisfaction. Moreover, in the U.S. samples of their study, procedural justice—but not distributive justice—was a significant predictor of satisfaction and commitment. Another study by Pillai et al. (1999) observed that distributive justice, rather than procedural justice, predicted job satisfaction in an Indian sample. More recently, a meta-analysis highlights that both procedural and distributive justice perceptions are related significantly to job satisfaction, organizational commitment, trust, and turnover intentions in East Asian culture (Li & Cropanzano, 2009), yet these justice perceptions tended to be more strongly related to job outcomes in North America as compared to East Asia. Another seminal piece by Lam, Schaubroeck, and Aryee (2002) examined the effects of procedural and distributive justice on

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job satisfaction, absenteeism, and job performance among U.S. and Hong Kong managers. The authors found that the impact of both justice types was stronger for individuals with low (vs. high) power distance values. Further, Brockner et al. (2001) examined the moderating role of power distance in the relationship between procedural justice and organizational commitment among Chinese, U.S., Mexican, Hong Kong, and German respondents. These authors found that the association between procedural justice and organizational commitment was stronger for individuals with low (vs. high) power distance values. Recently, a meta-analysis by Shao et al. (2013) found cross-cultural differences in the relative impact of procedural and distributive justice in predicting desirable work outcomes. Almost all of the cross-cultural studies listed, including the meta-analyses, attempt to explain the differences in justice perceptions relying on Hofstede’s (Hofstede, 1991) cultural lens of national cultural dimensions (Brockner et al., 2001; Fischer & Smith, 2003; Li & Cropanzano, 2009; Morris & Leung, 2000; Murphy-Berman & Berman, 2002; Pillai et al., 2001; Reithel, Baltes, & Buddhavarapu, 2007; Shao et al., 2013). Hence, few studies have examined the impact of justice perceptions on behaviors using perspectives other than culture, such as political and socio-economic factors. Moreover, most cross-cultural studies and studies conducted in developing countries have focused on the influence of perceived organizational justice on attitudinal outcomes, such as trust, satisfaction, commitment, and intentions to quit. Thus, little or no attention has been paid to the effects of justice on behavioral outcomes such as performance, OCB, and creativity. Socio-economic factors have influenced other organizational outcomes, such as voluntary turnover rates, which decrease under high unemployment conditions (Banerjee & Gaston, 2004; Gerhart, 1990). Multinationals need to understand how the two types of fairness perceptions affect employees’ behaviors in economically weak and less developed countries (White, Tansky, & Baik, 1995). Rewards are likely to become more important in developing economies where per capita income is low and the unemployment rate is high. From a socio-economic standpoint, Maslow and Abraham’s (1954) need-gratification theory postulates that higher needs will become more salient as lower needs are gratified. Studies suggest that lower needs are less likely to predict happiness in rich countries than in poor countries (Veenhoven, 1991; Veenhoven & Ehrhardt, 1995). We expect that the same would hold true for behaviors. For instance, Adigun and Stephenson (1992) found that Nigerian workers were more motivated by extrinsic job factors such as pay, fringe benefits, and working conditions, whereas British workers were motivated more by intrinsic job factors such as achievement and recognition. Inglehart (1997: 31) argued that in more economically developed societies, “one’s survival can be taken for granted”. These developed societies have experienced a progressive economic development value change where values related to economic achievement have become less salient than values related to enhancing self-expression (Inglehart, 1997). In developed economies, such as the United States, the emphasis has shifted from economic goals of material wellbeing towards humanistic goals of self-actualization (Inglehart, 1990). Therefore, it is possible that employees in developed countries may be more concerned about the aspects of procedural fairness because they take survival for granted and are relatively less concerned about outcome fairness. In contrast, employees in poor countries may be motivated more by the outcomes and relatively less concerned about procedural fairness because their lower level needs are more salient than higher level needs. On the contrary, “the fact that unmet physiological needs take priority over social, intellectual, or aesthetic needs has been demonstrated all too often in human history” (Inglehart, 1997:

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33). In poor countries, intrinsic job characteristics (challenge, recognition, and autonomy) are less effective than extrinsic job characteristics (pay, job security, and working conditions) in predicting outcomes (Adigun & Stephenson, 1992; Kanungo, 1990). A study conducted by Huang and Van De Vliert (2003) in 49 countries revealed that intrinsic motivation was a strong predictor of job satisfaction for countries with high social security, irrespective of the degree of their power distance, whereas it did not affect satisfaction in countries with low social security. These authors concluded that intrinsic motivation might work in countries where social security is high, irrespective of the degree of their power distance. Since procedural justice is more closely associated with intrinsic motivation (Zapata-Phelan, Colquitt, Scott, & Livingston, 2009) and intrinsic motivation has more pronounced effects on job outcomes among rich nations, it is reasonable to believe that that effects of procedural justice will be more significant in developed societies, whereas distributive justice will be more effective in developing societies. Pillai and Williams (1996) suggest that the process underlying procedural justice is a social exchange, whereas the process underlying distributive justice is an economic exchange. Together, we believe that the economic exchange process underlying distributive justice may be more relevant and significant among poor nations, whereas procedural justice may be more relevant and significant among rich nations. According to the Central Intelligence Agency factbook (CIA, 2014), Pakistan is a developing country that has immense geopolitical significance. It is the sixth most populous country in the world and is among the nine countries that have developed nuclear weapons. Also, it is neighboring the two most populous countries in the world. Furthermore, the country has attracted hundreds of global companies and multinational brands to operate in and out of Pakistan. Ironically enough, despite the progress the country has made based on a highly educated and professional workforce, Pakistan also has one of the poorest literacy rates in the world. Similarly, the size and growth potential of the economy is marred by problems such as low per capita income, high unemployment, and very low socio-economic development (OECD, 2013). In addition, Pakistan is not fully developed in terms of its social security system (Huang & Van De Vliert, 2003; Mahmood & Nasir, 2008). Hence, struggling with multiple economic, societal, and geo-political challenges, Pakistan ranks low on the Human Development Index (HDI), a comparative measure of life expectancy, literacy, education, standards of living, and quality of life for countries worldwide (146th out of 186 countries). This lower ranking for HDI classifies Pakistan as an underdeveloped country (HDR, 2013). In general, individuals may not pay attention to procedural fairness if they believe rewards have not been distributed in a fair manner when unemployment and poverty rates are very high and money is a major motivator. We argue that in such situations, employees will be very sensitive about the fair distribution of outcome rewards. Therefore, it is reasonable to expect that employees may place a greater emphasis on distributive fairness compared to procedural fairness in developing countries like Pakistan where appropriate social security systems are not available. In low need level contexts, the ‘ends justify the means’ mentality is likely to be easily accepted and embraced as people are more concerned with money to take care of their immediate needs rather than showing concern about procedures and processes. As highlighted earlier, Pakistan’s low per capita income, high unemployment and poverty rates (OECD, 2013), in addition to its poorly developed social security system (Huang & Van De Vliert, 2003; Mahmood & Nasir, 2008), have made it difficult to fully satisfy the basic needs of society and its people as a country. Furthermore, such societies are more likely to place a greater emphasis on the extrinsic aspects of the work environment (Huang & Van De Vliert, 2003). A good security system serves as a tool to

secure the fulfilment of basic human needs (Taylor-Gooby, 1991) and it may cause a shift in social values towards an emphasis on autonomy and self-expression (Doyal & Gough, 1984; Huang & Van De Vliert, 2003; Plant, 1985; Weale, 1983). Related to the saliency of needs and their capacity to predict happiness, studies suggest that higher needs will be salient as lower needs are gratified (Maslow & Abraham, 1954) and lower needs are less likely to predict happiness in rich countries (Veenhoven, 1991; Veenhoven & Ehrhardt, 1995) where survival is taken for granted (Inglehart, 1997) and individuals are more inclined towards selfactualization (Inglehart, 1990). In contrast, economic and social security is often considered more important to life than freedom and control in the workplace among developing and collectivist societies (Kanungo, 1990). Therefore, in an underdeveloped society like Pakistan, individuals may place relatively less emphasis on procedural fairness and more emphasis on distributive fairness. As a result, procedural fairness may be less salient in influencing job outcomes when the distribution of rewards is fair. We argue that although both distributive and procedural justice would be related to behaviors, there would be no interaction among the two to predict job performance, citizenship behaviors, and creativity. Based on the above discussion, we therefore formulate the following hypotheses: Hypothesis 1. Distributive justice and procedural justice will be positively related to job performance, OCBs, and creativity. Hypothesis 2. Distributive justice in comparison to procedural justice is expected to explain more variance in job performance, OCBs, and creativity. Hypothesis 3. There will be no significant interactive effects of distributive and procedural justice on job performance, OCB, and creativity. We tested our hypotheses in two studies, one using employeepeer pairs and the other using employee-supervisor pairs. 2. Methods (Study 1) 2.1. Sample and data collection procedures The data were collected through onsite administration of surveys distributed among employees working in a variety of organizations in the Punjab province of Pakistan. Personal and professional contacts were used to gain access to the research sites. Procedural and distributive justice types were measured using employee self-reports, whereas job performance, creativity, and OCBs were measured using peer-reports. A total of 600 distributed questionnaires yielded 400 returns for a response rate of 67%. After removing incomplete questionnaires and those with missing peer reports, 372 complete useable pairs of responses resulted in an effective response rate of 62%. A cover letter explaining the purpose and scope of the study assured respondents of strict confidentiality. Participation in the study was voluntary. Each respondent completed separate questionnaires and returned them directly to the researchers. A peer of each respondent rated the performance, OCB, and creativity of the focal employee. Respondents and peers did not have access to each other’s responses. Codes were assigned to the self and peer report surveys for pairing of the received responses. 2.2. Measures Since English is the official language of correspondence in all offices in Pakistan, we administered the questionnaires in English. Previous studies conducted in Pakistan have also used English versions of questionnaires (Abbas, Raja, Darr, & Bouckenooghe, 2014; Raja, Johns, & Ntalianis, 2004; Raja, Javed, & Abbas, 2017).

Please cite this article in press as: Raja, U., et al. Do procedures really matter when rewards are more important? A Pakistani perspective on the effects of distributive and procedural justice on employee behaviors. Rev. Eur. Psychol. Appl. (2017), https://doi.org/10.1016/j.erap.2018.03.001

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A five point-Likert scale with anchors ranging from 1 = ‘strongly disagree’ to 5 = ‘strongly agree’ was used to obtain the responses. A higher response on the scale represented high level on that construct. We conducted Confirmatory Factor Analysis (CFA) to ascertain the discriminant validity of variables tapped from same source. The CFA results revealed that a two-factor model for justice fit the data (2 /df = 1.31, GFI = 98, AGFI = .96, CFI = .99, IFI = .99, RMSEA = .03) much better than a single factor model (2 /df = 7.34, GFI = 89, AGFI = .80, CFI = .88, IFI = .88, RMSEA = .13). Similarly, for performance, OCB, and creativity, a three-factor model rendered better fit indices (2 /df = 2.46, GFI = .90, AGFI = .86, CFI = .89, IFI = .89, RMSEA = .06) than a one-factor model (2 /df = 4.51, GFI = .83, AGFI = .78, CFI = .73, IFI = .73, RMSEA = .10).

2.2.1. Organizational justice We measured distributive justice using a 4-item scale validated by Colquitt (2001). Each item referred respondents to an outcome (e.g., pay or promotions) and asked them about the appropriateness of the outcome, given their contributions. Sample items included “Is your (outcome) justified, given your performance?” and “Does your outcome reflect the effort you have put in your work?” Similarly, we used Colquitt’s (2001) 7-item scale to measure procedural justice. Each item assessed the compliance of six procedural justice rules, which included consistency (e.g., consistency of process across individuals and time), bias suppression (e.g., unbiased decision makers), accuracy of information (e.g., procedures are based on accurate information), correctability (e.g., existence of appeal procedures for correcting any bad outcome), representation (e.g., all subgroups affected by the decision are heard from), and ethicality (e.g., the process upholds ethical and moral standards) (Colquitt, 2001). Sample items included “Have the procedures used to arrive at your (outcome) been free of bias?” and “Have the procedures used to arrive at your (outcome) upheld ethical and moral standards?” The reliability of the distributive justice scale was ˛ = .91 and for procedural justice was ˛ = .78.

2.2.2. Job performance and OCB Performance and citizenship behaviors were assessed using peer reports to the 21-item scale developed by Williams and Anderson (1991), where seven items tap performance and 14 items tap the two dimensions of OCB. We dropped one item from the performance scale to improve reliability. Therefore, six items measured performance with reliability of ˛ = .77 and 14 items tapped OCB (individually directed and organizationally directed) with reliability of ˛ = .78. We used an additive measure to create an overall score for OCB.

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Table 2 Results of main and moderated regressions analysis (Study 1).

Step 1 O1 O2 O3 O4 Gender Step R2 Step 2 Procedural Justice (A) Distributive Justice (B) Step R2 Step 3 A×B Step R2

OCB ˇ

Performanceˇ

Creativityˇ

−.13* .08 −.10 −.12* −.16** .06***

−.13* .09 −.16** −.17*** .05 .08***

−.05 .15** .03 .00 −.03 .03****

.14* .22*** .08***

.06 .28*** .08***

.15* .15* .06***

−.04 .00

.05 .00

−.00 .00

n = 372; Gender was coded as “1” for male and “2” for female; O1, O2, O3, and O4 are dummy variables for organization. * p < .05. ** p < .01. *** p < .001. **** p < .08.

2.2.3. Creativity Creativity was measured using peer reports to the 3-item scale developed by Oldham and Cummings (1996). The reliability for this scale was ˛ = .91. 2.2.4. Control variables One-way ANOVA revealed that there were significant differences across organizations and gender in OCBs, job performance, and creativity. Therefore, we controlled for the effects of organizations and gender. We created dummy variables to control for effects of organizations. 3. Results Table 1 presents the means, standard deviations, and correlations among study variables. Table 2 shows the main and interactive effects of distributive and procedural justice on all behavioral outcomes. We ran main and moderated regression analyses using the procedures recommended by Cohen, Cohen, West, and Aiken (2003). In Step 1, we entered the four types of organizations and gender as control variables. In Step 2, we entered the centered terms for procedural and distributive justice. We then entered the interaction term (procedural justice × distributive justice) in the third step, which, if significant, confirmed moderation. As shown in Table 2 (Step 2), procedural justice was significantly related to OCB (ˇ = .14, p < 05) and creativity (ˇ = .15, p < 05). However, it was not related

Table 1 Means, standard deviations, correlations, and reliabilities (Study 1).

1. O1 2. O2 3. O3 4. O4 5. Gender 6. Procedural justice 7. Distributive justice 8. OCB 9. Performance 10. Creativity

Mean

SD

1

2

3

4

5

6

7

8

9

10

.25 .06 .06 .06 1.06 2.75 3.04 3.69 4.12 4.82

.43 .24 .24 .23 .24 .82 1.16 .53 .58 1.27

– −.14** −.14** −.14** −.15** −.26** −.36** −.09**** −.09**** −.07

– −.06 −.06 −.02 .06 .11* .13** .15** .17**

– −.06 −.06 −.12* −.04 −.08 −.16** .02

– −.06 .04 −.10**** −.09**** −.15** .00

– .05 .06 −.13* .07 −.02

(.78) .54** .25** .22** .22**

(.91) .30** .34** .22**

(.78) .67** .49**

(.77) .42**

(.88)

n = 372; Cronbach’s alphas presented in parenthesis; O1, O2, O3, and O4 are dummy variables for organization. * p < .05. ** p < .01. **** p < .08.

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6 Table 3 Results of dominance analysis (Study 1).

DV job performance K=0 K=1 K=2 M(Cxi) Relative contribution DV OCB K=0 K=1 K=2 M(Cxi) Relative contribution DV creativity K=0 K=1 K=2 M(Cxi) Relative contribution

Controls

Procedural justice

Distributive justice

.08 .05 .04 .057 36%

.05 .015 0 .022 14%

.11 .075 .05 .078 50%

.06 .043 .040 .048 34%

.06 .032 .014 .035 25%

.09 .054 .030 .058 41%

.032 .015 0 .016 19%

.047 .029 .016 .031 36%

0 .005 .01 .038 45%

K = 0, 1, 2; where K are the number of additional sets taken into account. M(Cxi) indicates the average usefulness of each set of variables. Relative percentages indicate the relative importance of each set of variables to overall prediction.

to job performance (ˇ = .06, ns). Distributive justice was significantly related to OCBs (ˇ = .22, p < 001), job performance (ˇ = .28, p < 001), and creativity (ˇ = .15, p < 05). As shown in Table 2 (Step 3), the interaction term (procedural justice × distributive justice) was insignificant across all outcomes, suggesting that procedural justice does not moderate the relationship between distributive justice and behavioral outcomes. To test Hypothesis 2, we computed the percentage of explained variance in our three dependent variables (job performance, OCBs, and creativity) attributable to distributive and procedural justice after controlling for our control variables. To determine the relative importance of these three sets of variables (control variables, distributive justice, and procedural justice), we performed dominance analysis (Budescu, 1993; Budescu & Azen, 2004). First, we computed seven separate regression equations based on all possible orderings of three sets of variables. Using the information from Step 1, we computed the relative contribution of each set of predictors as displayed in Table 3. In support of the second hypothesis, our results show that distributive justice explained relatively more variance in job performance, OCBs, and creativity after controlling for differences across organizations and gender. 4. Discussion The purpose of this study was to determine if procedural and distributive justice would be related to job performance, OCB, and creativity in Pakistan, a significantly different context than that of advanced countries in Europe and North America where the bulk of the research on justice has been conducted. We also predicted that, unlike past research conducted in developed countries, the two types of justice will not have combined effects on behaviors. Both our assertions were supported by the results of this study. The results clearly indicate that both distributive and procedural fairness have desirable positive effects on job performance, OCB, and creativity. In a fair organization, employees will perform better, help others, and will be more creative as compared to organizations that are perceived as unfair. However, managers must be careful in applying policies and procedures purely based on existing research suggesting that the harmful effects of perceived distributive unfairness would be mitigated by fair procedures. The lack of interaction suggests that if employees detect unfairness in reward distribution, the reduction in their performance, OCB, and creativity will not be reduced by procedural fairness. We also

conducted usefulness analyses to ascertain the relative effects of the justice types on behaviors. Our analyses clearly indicated stronger and more pervasive effects of distributive justice than procedural fairness on all three behaviors namely performance, citizenship behaviors, and creativity. This again supports our argument that in developing countries where economic rewards are more important, distributive justice may be a stronger predictor of outcomes as compared to procedural justice. 5. Methods (Study 2) The objective of this study was to re-examine the hypotheses using an employee’s supervisor as the source of the dependent variable ratings. However, slightly different measures were used in the present study. 5.1. Sample and data collection procedures The data was collected through onsite administration of surveys distributed among employees working in a variety of organizations including banks, telecom companies, educational institutions, and government service organizations. Procedural and distributive justice were measured using self-reports of the employees, whereas job performance, creativity, and OCBs were measured using supervisory reports. A cover letter was attached to each questionnaire explaining the purpose and scope of the study, ensuring the strictest confidentiality of the responses and that the participation was voluntary. Each respondent completed the self-report and returned it directly to the researcher. The immediate supervisor of each respondent rated his or her job performance, OCB, and creativity. Respondents and supervisors did not have access to each other’s responses. A total of 870 questionnaires were distributed, of which we received 550 usable pairs of responses with a response rate of 63%. Eighty-five percent of the respondents were male with an average age of 33.68 years (SD = 8.90). About 86% of the respondents were university graduates. Average experience was 7.4 years (SD = 8.5). The respondents belonged to a variety of occupations including clerks, technical staff, bank officers, faculty members, professional engineers, and marketing, finance, and management professionals and held full-time jobs ranging from clerical work to top management positions. 5.2. Measures The questionnaires used a Likert-type rating scale for all measures. Higher values on the scale represented a high level on that construct. We conducted CFAs for all variables tapped from the same source. For justice, a two-factor model fit the data (2 /df = 3.69, GFI = .95, AGFI = .92, CFI = .96, IFI = .96, RMSEA = .07) much better than a single factor model (2 /df = 16.13, GFI = .75, AGFI = .62, CFI = .79, IFI = .79, RMSEA = .16). Similarly, for performance, OCB, and creativity, a three-factor model rendered better fit indices (2 /df = 2.85, GFI = 90, AGFI = .88, CFI = .93, IFI = .93, RMSEA = .06) than a single factor model (2 /df = 9.11, GFI = 67, AGFI = .62, CFI = .69, IFI = .70, RMSEA = .12). 5.2.1. Organizational justice We measured distributive justice with 4-items and procedural justice with 7-items using the same scale used in Study 1 (Colquitt et al., 2001). The reliability for distributive justice was ˛ = .89 and procedural justice was ˛ = .85. 5.2.2. Job performance Performance was measured using a 7-item scale developed by William and Anderson (1991). Sample items include “This person

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Table 4 Means, standard deviations, correlations, and reliabilities (Study 2).

1. O1 2. O2 3. O3 4. Gender 5. Distributive Justice 6. Procedural Justice 7. Performance 8. OCB 9. Creativity

Mean

SD

1

2

3

4

5

6

7

8

9

.35 .24 .21 .85 2.87 2.76 3.74 3.43 4.52

.48 .43 .40 .36 .96 .71 .77 .59 1.25

– −.42** −.37** .08 .08 −.10* .00 .00 −.11*

– −.29** .02 .07 .14** −.12** .01 .02

– .15** −.16** −.04 .03 −.06 .06

– .14** .03 .05 .07 .06

– .49** .11* .20** .07

(.85) .09* .19** .02

(.89) .65** .48**

(92) .53**

(.85)

n = 550; Cronbach’s alphas presented in parenthesis; Gender was coded as “1” for male and “0” for female; O1, O2, and O3 are dummy variables for organization. * p < .05. ** p < .01.

Table 5 Results of moderated regressions analysis (Study 2).

Step 1 O1 O2 O3 Gender Step R2 Step 2 Procedural justice (A) Distributive justice (B) Step R2 Step 3 A×B Step R2

Table 6 Results of dominance analysis (Study 2).

OCBˇ

Performanceˇ

Creativityˇ

−.05 −.06 −.07 .05 .01

−.06 −.13** .03 .04 .01****

−.13** −.04 .03 .07**** .02*

.12** .13** .05***

.06 .10* .02**

.01 .09* .01*

.02 .00

.00 .00

.02 .00

n = 550; Cronbach’s alphas presented in parenthesis; Gender was coded as “1” for male and “0” for female; O1, O2, and O3 are dummy variables for organization. * p < .05. ** p < .01. *** p < .001. **** p < .08.

adequately completes assigned tasks and responsibilities.” The reliability of this scale was ˛ = .85. 5.2.3. Organizational citizenship behavior OCB was measured using a 19-item scale developed by Moorman and Blakely (1995). Since it uses several dimensions, which are slightly different from the scale of Williams and Anderson (1991), we decided to use it in Study 2 to see if the results are similar for both studies. The alpha reliability for this scale was ˛ = .92. 5.2.4. Creativity Creativity was measured using a 3-item scale developed by Oldham and Cummings (1996). The reliability for this scale was ˛ = .91. 5.2.5. Control variables One-way ANOVA revealed that there were significant differences across organizations and gender in OCBs, job performance, and creativity. Therefore, we controlled for the effects of organizations and gender. We created dummy codes for organizations. 6. Results Table 4 presents the means, standard deviations, and correlations among study variables. All the correlations were in the expected directions. Table 5 shows the main and interactive effects of distributive justice and procedural justice on all behavioral outcomes. We ran

DV job performance K=0 K=1 K=2 M(Cxi) Relative contribution DV OCB K=0 K=1 K=2 M(Cxi) Relative contribution DV creativity K=0 K=1 K=2 M(Cxi) Relative contribution

Controls

Procedural justice

Distributive justice

.02 .02 .03 .023 58%

.01 .005 0 .005 13%

.01 .015 .01 .012 29%

0 0 0 0 0%

.037 .023 .011 .024 48%

.04 .026 .013 .026 52%

.02 .022 .025 .022 81%

0 0 0 0 0%

0 .005 .01 .005 19%

K = 0, 1, 2; where K are the number of additional sets taken into account. M(Cxi) indicates the average usefulness of each set of variables. Relative percentages indicate the relative importance of each set of variables to overall prediction.

main and moderated regression analyses using the procedures recommended by Cohen, Cohen, West and Aiken (2003). In the first step, we entered three types of organization and gender as control variables. In Step 2, we entered the centered terms for procedural and distributive justice. We then entered the interaction term (procedural justice × distributive justice) in the third step, which, if significant, confirmed moderation. As shown in Table 5 (Step 2) procedural justice was significantly related to OCB (ˇ = .12, p < .01) only. Distributive justice was related to job performance (ˇ = .13, p < .01), OCBs (ˇ = .10, p < .01), and creativity (ˇ = .09, p < .08). As shown in Table 5 (Step 3), the interactive term (procedural justice × distributive justice) was insignificant across all outcomes, suggesting that procedural justice does not moderate the relationship between distributive justice and behavioral outcomes. Finally, based on dominance analysis and in line with Study 1, we found that overall distributive justice explains more variance in the outcome variables than procedural justice (Table 6).1 7. Discussion The results of this study replicate the findings of the first study. In this study, we used self -and supervisor-reports to demonstrate

1 To see whether our findings are similar for each organization, we conducted moderated regression analyses for each organization within each sample. These moderated regression analyses showed that the results for each organization were generally similar to the main results.

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that both distributive and procedural justice are generally related to performance, OCB, and creativity, and that the justice types did not have interactive effects on outcomes. Managers must be very careful in making and keeping promises because the perceived unfairness of procedures and reward distribution not only reduces job performance, but also results in decreased citizenship behaviors and creativity on the part of employees. Similar to Study 1, usefulness analyses revealed that distributive justice either had as strong or better effects on behaviors. In addition, the results of this study demonstrate that, unlike the observations in developed countries, the two types of justice did not interact in affecting behaviors. This implies that procedures will not reduce the negative effects of distributive injustice.

8. General discussion The findings of the current study provide an extended view of the controversies and discussions revolving around organizational justice theory. The current study contributes to the literature on justice by exploring the impact of distributive and procedural justice on behavioral outcomes such as OCBs, job performance, and creativity in an underdeveloped country. We hypothesized that although justice types and their independent impact on outcomes will hold well in a Pakistani context, the interplay of the two types or their relative significance in affecting outcomes would differ from developed countries. Our findings in both studies suggest that both distributive and procedural justice have a positive impact on OCBs, creativity, and performance in Pakistan. Individuals who perceived high levels of distributive and procedural justice demonstrated high citizenship behaviors, creativity, and job performance. However, contrary to the established view that distributive justice is more relevant to person-centered outcomes, such as satisfaction and procedural justice, are more relevant to organization referenced outcomes such as OCBs and performance, our results indicated that distributive fairness had more consistent and stronger effects on the three behaviors examined. Usefulness analyses further revealed that distributive justice had relatively stronger effects than procedural fairness on all outcomes. These findings support our initial assertion that individuals in underdeveloped economies are primarily concerned with fairness in reward distribution. Procedural justice may matter for certain outcomes such as OCBs and creativity; however, these behavioral outcomes are more intrinsic in nature as compared to job performance, which is likely more tightly related to extrinsic aspects of fairness. Moreover, contrary to established research findings that both justice types interact to predict outcomes, we found that procedural fairness did not moderate the relationship between distributive justice and the three job outcomes. The results of both studies we conducted in Pakistan clearly support our argument that individuals in underdeveloped economies may be more concerned with reward distribution and the “end justifies the means” philosophy may be more acceptable. Therefore, in such context, procedures may be less likely to reduce the negative consequences of unfair reward distribution. Our findings have significant research implications. First, researchers must be careful in exporting OB theories and strategies derived from such theories that have almost exclusively been developed and tested in highly developed social-economic contexts. We should first examine the efficacy of various theories in a variety of contexts, especially those of developing countries where extremely limited research has been conducted that appears in mainstream management journals. Second, although there is merit in studying culture as a force that shapes behaviors and attitudes, we need to delve deeper into international contexts to see how

social and economic development itself can render many other factors less important in their capacity to drive attitudes and behaviors. We would like to raise the issue related to the desire for newness and uniqueness as a requirement for publishing in top tier journals. Such pressure discourages the replication of wellestablished OB theories in newer settings as authors are almost certain of being unaccepted for lack of creativity or not adding to the knowledge. We believe that top journals should take a lead to encourage replication and testing OB theories in newer settings such as those of Pakistan India, China, and other developing economies. Managers should also be careful in deploying methods and interventions based purely on ideas derived from knowledge developed and tested in the West. Although, we can generally expect concepts such as justice to hold well across contexts, their implications and interplay might be quite different. For example, a manager trying to ensure fair and transparent procedures just to buffer any unexpected (or expected) breaches of distributive fairness might be in for a big surprise. Our results indicate that people in less developed and poorer economies may be less likely to be concerned with procedures if they detect distributive unfairness, which is quite the contrary to what existing literature would suggest. Similarly, they must be extremely careful in ensuring that people see the distribution of rewards to be fair, as that would be the primary concern and a major driver of behaviors in countries like Pakistan. A main strength of current research is that both studies used independent measures for behaviors. In Study 1, behaviors were peer-reported and in Study 2, behaviors were tapped through supervisor reports. This combination of independent measures for a variety of behaviors in a newer context (Pakistan) is very rare in management literature. Another strength of this research is the high amount of variance in outcomes explained by self-reported justice dimensions. In addition, contrary to most of the previous studies that relied heavily on homogenous samples (Lam et al., 2002; Lowe & Vodanovich, 1995; McFarlin & Sweeney, 1992; Skarlicki & Folger, 1997; Velez & Neves, 2017), our data in both samples were collected from employees working in a variety of occupations and organizations, thereby enhancing our efficacy on the generalizability of our findings. This study is not without limitations. The first limitation is the cross-sectional nature of the data. Second, the insignificant interactions do not suggest whether procedural or distributive justice will have a null effect. However, we suggest that the null effects may hold for procedural fairness based on the extant theory, the main effects of both types of justice found in this study, and the context in which the study is conducted. As suggested by an anonymous reviewer, future research may replicate the relative effects of both types of justice in both developed and underdeveloped economies to help accept or reject the economic perspective. Since the focus of the current study was on the behavioral outcomes of organizational justice, future studies may include attitudinal outcomes, such as job satisfaction and organizational commitment. Second, our study did not explicitly test for the moderation of economic variables (e.g., income-levels of employees), although both Study 1 and Study 2 included diverse samples of employees belonging to a variety of occupations within Pakistan. Future research may use discrete economic variables as potential moderators to examine how individuals with low versus high income respond to the justice types. Future meta-analytic studies need special attention with respect to the examination of studies from both socio-economic and cultural perspectives. This categorization is important to understand the socio-economics factors that may explain the differential effects of justice types on a variety of job outcomes. Although previous research has very significant contributions in providing an understanding of the organizational justice phenomenon, recent studies suggest extending this theory across

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nations to draw its boundary conditions (Shao et al., 2013). The current study extends the organizational justice literature by studying the impact of distributive and procedural justice on behavioral outcomes such as job performance, OCB, and creativity in an underdeveloped country. Nevertheless, more research is required to examine the relative effect of perceived organizational justice from socio-economic and cultural perspectives. We also call for more research of other theories in OB in such contexts. Disclosure of interest The authors declare that they have no competing interest. Acknowledgements We are grateful to the associate editor Annique Smeding and the anonymous reviewer for their constructive feedback on earlier versions that greatly contributed to improving this article References Abbas, M., Raja, U., Darr, W., & Bouckenooghe, D. (2014). Combined effects of perceived politics and psychological capital on job satisfaction, turnover intentions, and performance. Journal of Management, 40(7), 1813–1830. http://dx.doi.org/10.1177/0149206312455243 Adams, J. S. (1965). Inequity in social exchange. Advances in experimental social psychology, 2, 267–299. http://dx.doi.org/10.1016/s0065-2601(08)60108-2 Adigun, I. O., & Stephenson, G. M. (1992). Sources of job motivation and satisfaction among British and Nigerian employees. The Journal of Social Psychology, 132(3), 369–376. http://dx.doi.org/10.1080/00224545.1992.9924712 Alexander, S., & Ruderman, M. (1987). The role of procedural and distributive justice in organizational behavior. Social Justice Research, 1, 177–198. http://dx.doi.org/10.1007/BF01048015 Banerjee, D., & Gaston, N. (2004). Labour market signaling and job turnover revisited. Labour Economics, 11, 599–622. http://dx.doi.org/10.1016/j.labeco.2003.10.001 Brockner, J., Ackerman, G., Greenberg, J., Gelfand, M. J., Francesco, A. M., Chen, Z. X., et al. (2001). Cultural and procedural justice: The influence of power distance on reactions to voice. Journal of Experimental Social Psychology, 37, 300–315. http://dx.doi.org/10.1006/jesp.2000.1451 Brockner, J., & Wiesenfeld, B. M. (1996). An integrative framework for explaining reactions to decisions: Interactive effects of outcomes and procedures. Psychological Bulletin, 120, 189–208. http://dx.doi.org/10.1037/0033-2909.120.2.189 Budescu, D. V. (1993). Dominance analysis: A new approach to the problem of relative importance of predictors in multiple regression. Psychological Bulletin, 114, 542–551. http://dx.doi.org/10.1037/0033-2909.114.3.542 Budescu, D. V., & Azen, R. (2004). Beyond global measures of relative importance: Some insights from dominance analysis. Organizational Research Methods, 7(3), 341–350. http://dx.doi.org/10.1177/1094428104267049 CIA. (2014). Official website of the Central IntelliAgency of the United States of America. gence https://www.cia.gov/library/publications/the-world-factbook/geos/pk.html Cohen, J., Cohen, P., West, S., & Aiken, L. (2003). Applied multiple regression/correlation analysis for the behavioral sciences. Mahwah, NJ: Erlbaum. Colquitt, J. A. (2001). On the dimensionality of organizational justice: A construct validation of a measure. Journal of Applied Psychology, 86, 386–400. http://dx.doi.org/10.1037/0021-9010.86.3.386 Colquitt, J. A., Conlon, D. E., Wesson, M. J., Porter, C. O., & Ng, K. Y. (2001). Justice at the millennium: A meta-analytic review of 25 years of organizational justice research. Journal of Applied Psychology, 86, 425–445. http://dx.doi.org/10.1037/0021-9010.86.3.425 Doyal, L., & Gough, I. (1984). A theory of human needs. Critical Social Policy, 4(10), 6–38. http://dx.doi.org/10.1177/026101838400401002 Fischer, R., & Smith, P. B. (2003). Reward allocation and culture a meta-analysis. Journal of Cross-Cultural Psychology, 34, 251–268. http://dx.doi.org/10.1177/0022022103034003001 Folger, R., & Konovsky, M. (1989). Effects of procedural and distributive justice on reactions to pay raise decisions. Academy of Management Journal, 32, 851–866. http://dx.doi.org/10.2307/256422 Gerhart, B. (1990). Voluntary turnover and alternative job opportunities. Journal of Applied Psychology, 75, 467–478. http://dx.doi.org/10.1037/0021-9010.75.5.467 Greenberg, J. (1987). Reactions to procedural injustice in payment distributions: Do the means justify the ends? Journal of Applied Psychology, 72, 55–61. http://dx.doi.org/10.1037/0021-9010.72.1.55 Greenberg, J. (1990a). Employee theft as a reaction to underpayment inequity: The hidden cost of pay cuts. Journal of Applied Psychology, 75, 561–568. http://dx.doi.org/10.1037/0021-9010.75.6.667 Greenberg, J. (1990b). Organizational justice: Yesterday, today, tomorrow. Journal of Management, 16, 399–432. and http://dx.doi.org/10.1177/014920639001600208

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