A Model of Fair Process and Its Limits

31 Pages Posted: 19 Nov 2007

See all articles by Yaozhong Wu

Yaozhong Wu

National University of Singapore - Business School

Christoph H. Loch

INSEAD - Technology and Operations Management

Ludo Van der Heyden

INSEAD - Technology and Operations Management

Date Written: January 2007

Abstract

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 and why, in these instances, the hoped for benefits are not pursued. This paper breaks new ground by analytically examining the subtle trade-offs involved: We develop a model of fair process in a principal agent setting, rooted in psychological preferences for autonomy and fairness. We show that indeed fair process will not always be used, and explain why the hoped for benefits may be insufficient to convince management to use fair process.

Suggested Citation

Wu, Yaozhong and Loch, Christoph H. and van der Heyden, Ludo, A Model of Fair Process and Its Limits (January 2007). INSEAD Business School Research Paper No. 2007/06/TOM, Available at SSRN: https://ssrn.com/abstract=1031147 or http://dx.doi.org/10.2139/ssrn.1031147

Yaozhong Wu (Contact Author)

National University of Singapore - Business School ( email )

1 Business Link
Singapore, 117592
Singapore

Christoph H. Loch

INSEAD - Technology and Operations Management ( email )

Boulevard de Constance
77305 Fontainebleau
France
+33 1 6072 4477 (Phone)
+33 1 6074 6716 (Fax)

HOME PAGE: www.insead.edu/~loch/fullcv.htm

Ludo Van der Heyden

INSEAD - Technology and Operations Management ( email )

Boulevard de Constance
77 305 Fontainebleau Cedex
France
+33 0 1 60 72 42 89 (Phone)
+33 0 1 60 74 61 60 (Fax)

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