Better Faster: How Procedural Justice Improves Innovation in Companies

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Brand-new research out of South Korea suggests companies seeking to gain a competitive edge should focus on increasing perceptions of organizational procedural justice. The study included 400 surveys from full-time employees in Korean organizations, but its implications for business in the West extends far beyond the shores of the Korean Strait.  The research was particular focused on organizational procedural justice’s impact on sustainability. Arguing that sustainability requires knowledge sharing and innovative workplace behavior, the researchers were able to prove that both knowledge sharing and innovative workplace behavior increase in organizations with high levels of procedural justice and that these effects are enhanced by high employee engagement.

Procedural justice is one of three components of organizational justice. Organizational justice includes procedural justice, distributive justice, and interactional justice. Procedural justice refers to the extent to which employees feel the procedures of decision-making in the organization were handled fairly. Distributive justice deals with whether employees feel the outcomes are fair. Interactional justice surrounds how those outcomes are communicated and the transactions that occur between leadership and employees when those outcomes are announced. This research focuses solely on procedural justice, as it’s primarily concerned with the general effects of fairness perceptions in an organization and less concerned with the individual interactions between managers and subordinates.

A significant amount of research has shown that improved procedural justice improves employee engagement. Employee engagement, as defined by Schaufeli et al. is that employee work engagement “refers to a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption.” High levels of employee engagement have been shown to increase levels of energy and enthusiasm for work, resulting in employees spending more discretionary time investing into their work. This results in increased levels of work quality.

The researchers theorized that organizational procedural justice would improve work engagement, knowledge sharing, and innovative work behavior both directly and via the interplay between these variables. The link between procedural justice and employee engagement had already been established by prior studies. However, this study went further to examining the extent to which the other two variables (knowledge sharing and innovative work behavior) in turn improved the employee engagement.

An increase in organizational procedural justice improves knowledge sharing and innovative work behavior directly. However, increased work engagement can compound these effects even more. Employee engagement leads to innovative work behavior in two ways: It increases the likelihood of knowledge sharing and it leads directly to innovative work behavior in its own right. Innovative work behavior requires employees be proactive in identifying, developing, and executing ideas. Employees will be much more likely to spend time in all three of these phases of innovative work behavior if they are feeling highly engaged and absorbed in their work. Because all innovative work behavior must begin with ideas, knowledge-sharing increases the amount of ideas from which innovative work behavior is the result. This knowledge sharing is fundamentally discretionary and requires employees to proactively seek out opportunities to share. Engaged employees will be much more likely to share knowledge than employees who are not engaged. Thus, increased levels of employee engagement lead to more knowledge sharing which in turn results in more innovative work behavior, all fundamental aspects of creating an innovative organization as a whole.

Companies seeking to maximise the innovation of their employees, whether applied towards sustainability or otherwise, should first begin by ensuring that employees view the system of decision-making in the company is fair and impartial. These organizations should increase employees’ ability to give feedback on their decision-making processes and sharing relevant information to affected parties involved. Increasing transparency and visibility into the decision-making processes surrounding strategic initiatives and major business decisions will result in improved perceptions of procedural justice.

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To maximize innovative work behavior, companies should create knowledge sharing communities online that allow for users to share and collaborate. This can help to build cross-functional knowledge across company silos and improve the organization’s retention of those ideas even after employees have left the idea. This can translate directly to innovative work behavior.

Finally, companies should align their incentive structures to reward innovative work behavior. Creating incentive plans that reward new cost-saving initiatives, product development, and other forms of intrapreneurial thinking will translate directly into that behavior being supported throughout the organization. By creating formal channels of recognition where those innovative work ideas can be recognized, companies will achieve new levels of innovation within their workplaces.

To read the original study, click here:

http://www.mdpi.com/2071-1050/9/2/205/htm

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