This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Download to citation manager Citing Articles Citing Articles via HighWire Google Scholar Articles by Wu, Y. Articles by Heyden, L. V. d.

A Model of Fair Process and Its Limits

Department of Decision Sciences, NUS Business School, National University of Singapore, 117592 Singapore
Technology and Operations Management, INSEAD, 77305 Fontainebleau Cedex, France
Technology and Operations Management, INSEAD, 77305 Fontainebleau Cedex, France
bizwyz{at}nus.edu.sg
christoph.loch{at}insead.edu
ludo.van-der-heyden{at}insead.edu

Fair process research has shown that people care not only about outcomes, but also about the process that produces these outcomes. For a decision process to be seen as fair, the people affected must have the opportunity to give input and possibly to influence the decision, and the decision process and rationale must be transparent and clear. Existing research has shown empirically that fair process enhances both employee motivation and performance in execution. However, work to date has not addressed why fair process is so often violated in practice. This paper breaks new ground by analytically examining the subtle trade-offs involved. We develop a model of fair process in a principal-agent (i.e., manager-employee) context, rooted in psychological preferences for autonomy and fairness. We show that indeed fair process will not always be used, and why the hoped-for benefits may be insufficient to convince management to use fair process.

Key Words: fair process; engagement; transparency; social preference; agency theory; motivation
History: Received: June 30, 2006; accepted: May 29, 2007.

This article has been cited by other articles:

				N. Gans and R. Croson Introduction to the Special Issue on Behavioral Operations MSOM, September 1, 2008; 10(4): 563 - 565. [Abstract] [PDF]