In workers compensation, the news that an employee receives about their claim is not always what they want to hear. Their experience of the decision-making process does not always feel fair.

Conveying unwelcome news can be difficult. When a decision is conveyed verbally, the individual delivering the news might be uncomfortable, squirming at having to give bad news. On the other hand, written information conveying bad news can have a legalistic tone or be confusing.  Either method can compound the negative experience of a claimant.

People react to poorly communicated negative news in different ways. Some will just accept the decision and move on with life. Others will appeal, some react negatively and become angry. There can be a loss of goodwill, the person may become uncooperative, and the likelihood of return to work declines.  The process of an appeal and the loss of cooperation can have significant consequences. And large numbers of appeals clog conciliation, tribunal and court lists.  

How a decision has been made i.e. the process and how the decision is conveyed can have a major effect on the person’s view of the outcome and determine how they respond. We call this "perceived justice" - the extent to which a person perceives a decision that affects them to be fair or unfair. The importance of perceived justice within the process is not well understood. 

In part one of this three part series on ‘Decision Making Justice’, we examine the benefits of fairness and balance within all aspects of the process. 

Psychologists describe two types of justice experienced by a person who is ‘subjected’ to a decision making process. These are procedural justice and distributive justice. The qualities of both are important in facilitating the best possible outcome for the claimant.

Procedural justice, a process of decision making that is perceived as fair and just, is a positive experience for claimants regardless of the decision.  This may be because the person has had a chance to have their say, their input has been taken into account, the system has used accurate information, or they feel the system has treated them with respect and the decision is conveyed in a timely manner and in a format they can understand.

Distributive justice is the manner in which the outcome of the decision is applied, whether it goes in the person’s favour or not. Distributive justice is seen as a balanced decision, one that is fair, based on all available information within the system.

Joel Brockner from Columbia University and Batia Wiesenfeld from New York University undertook a major review of decision making justice and these issues.[They summarised the results of 45 different research studies that assessed the reactions of people to distributive and procedural justice.

The studies explored situations where individuals had been subject to a decision. The studies covered many different arenas. People may have been through a court appointed arbitration process, or someone may have made a decision that they would be laid off work.  Drug testing may have been introduced at their workplace (against their wishes), they may have had pay rise requests knocked back, or they may have been a researcher and a journal had declined to publish their research.  Each individual participant was in a position where someone else had made a decision that impacted them.

Across the 45 studies Brockner and Wiesenfeld found that procedural justice was almost as important as the actual decision made.

They found that:

• When the person received a favourable outcome, the impact of procedural justice was small; but
• When the person received an unfavourable outcome, procedural justice was of major importance.

At the end of the day, if people received an unfavourable outcome but felt they had been treated fairly, the negative reaction from having an unfavourable outcome was substantially reduced. It wasn't completely negated.  However, the sense of procedural fairness counteracted a large component of the negative effects of a decision against them.

Brockner and Wiesenfeld went on to point out that both types of justice are important. 

It is vital for decision makers to understand the importance of fairness within procedural justice.  It is also important for decision makers to understand that they can save money by ensuring the process is seen as fair.

The $ costs of procedural justice are not high. A phone call at the beginning of the process, ensuring the person is dealt with in a considerate manner, ensuring communication is readable, and providing decisions in a timely fashion are not expensive activities. 

On the other hand dealing with a person who does not consider their issue has been dealt with fairly is often expensive. They are more likely to appeal the decision, there is loss of cooperation, time and energy is spent on the person ready to ‘fight for their case’, and communicating with frustrated / angry people can consume a lot of resources. Further, the decision-making body can suffer loss of credibility. This results in increased distrust, a higher likelihood of legal involvement, more disputes, less cooperation, and in turn less stability within the body making decisions. 

An example used in the review is an organisation that is downsizing. Procedural fairness in this setting may include advanced notice about layoffs, providing clear and adequate explanation about the reasons for the layoffs, allowing employees to participate in decisions where appropriate, and implementing the layoffs in a socially sensitive fashion. Fairness in this context is likely to result in better productivity while people are at work, fewer disputes about the layoffs, and potentially reduced costs in terms of severance pay and compensation matters.

While the economic costs of a fair process may not be high, there can be barriers for decision makers in introducing such a system. Organisations may wish to distance themselves from the person about whom the decision is being made. They may have a sense that they do not have the resources to provide emotional support, or the time to spend gathering relevant information. Or the may be following instructions from a more senior organisation and have little chance of changing the burecratic process.  Further, organisations may think that if they provide a level of closeness and support, their decision-making may be harder or may be swayed by the personal contact.

More commonly, however, the issues and impacts of procedural fairness are simply not thought through.

95% of energy goes into making the decision. By the time the process is set up and decisions are made, there is often little time and focus on how the decision-making process can be implemented fairly. And there is often less focus on how the ‘bad’ news is conveyed.

Research evidence shows procedural fairness has a major bearing on the individual about whom a decision is being made. Just as importantly, it can have a major bearing on how the person then deals with the situation. Do they accept the decision or dispute it, will this result in an expensive dispute resolution process?

It is also important to consider how procedural justice  influences others subject to decisions or peripheral to them. Does it reduce trust and therefore lower goodwill and discretionary effort? Does it increase the likelihood of further disputes?

In the second of this three part series on decision-making justice we discuss the key elements of decision making process that achieve high levels of procedural justice.