The Roles of Organizational Justice and Trust in a Gain-Sharing Control System
32 Pages Posted: 28 Jul 2006
Date Written: July 27, 2006
This study examines the roles of organizational justice and trust in a specific type of management control system (MCS), gain-sharing. According to the proposed theory, employee perceptions involving the procedural and distributive justice of the gain-sharing plan influence employee trust in management. Positive perceptions of fairness lead to high trust, which, in turn, has positive consequences for the organization such as lower employee turnover and higher organizational performance. To investigate these issues, a survey was administered to employees of a large manufacturing company. Results of structural equation modeling indicate that employee perceptions regarding the fairness of the gain-sharing plan are positively related to employee trust in management. Further, trust is linked to employee turnover intentions. The results imply that the organizational justice of a MCS has consequences for the attitudes and behaviors of employees and thus the success or failure of the MCS.
Keywords: Gain-sharing, organizational justice, trust, turnover
JEL Classification: M41
Suggested Citation: Suggested Citation