The Contribution of Organizational Justice in Budget Decision-Making to Federal Managers' Organizational Commitment

Article excerpt

ABSTRACT. This study examines the contribution of distributive, procedural, and interactional justice in Federal budget decision-making to Federal managers' commitment to the Federal government as an employing organization. A total of 1,358 useable surveys were received from a sample of 9,643 managers. Reliability coefficients were acceptable (> .70), and intercorrelations consistent with previous studies. Hierarchical regression analysis supported only main-effect relationships between procedural justice and interactional justice and managers' organizational commitment. No support was found for a main effect relationship between distributive justice and organizational commitment - or for any interactive effects. Contrary to models of bureaucratic behavior based on economic theory, these findings may suggest that Federal managers may be motivated primarily by psychological outcomes of budget decisions.

INTRODUCTION

Scholars broadly define organizational justice as fairness in the allocation of organizational resources (Homans, 1982). This study empirically examines the effect of organizational justice in Federal budget decision-making on Federal managers' commitment to the Federal government as an employing organization. This study seeks to add to scholarly understanding of behavioral aspects of budgeting and organizational justice, contribute to professional understanding of budget formulation policies and procedures that lead to increased organizational commitment and suggest areas for future research.

This study presents an overview of organizational justice, including a review of organizational justice literature and development of hypotheses. It then details the methodology used - the model, the subjects, the measurement of variables, and data collection. Next, it presents the results of a hierarchical regression analysis test of the hypotheses. The study concludes with a discussion of the results, including the aforementioned implications for scholarly understanding, professional management and future research.

ORGANIZATIONAL JUSTICE: AN OVERVIEW

Academics and policy makers have long been interested in the effects of budget decision-making on organizational behavior. Niskanen's (1971) model in which budgets are maximized to increase salary and prestige is perhaps the most famous model of how employees and organizations react to governmental budget decision-making (see Friedman, 1984, for an excellent discussion of this model).

Beyond Niskanen, traditional accounting-based research on budget decision-making and organizational behavior has focused on the relationship between budgetary participation and managerial performance (Hopwood, 1974). Most of these studies find a positive relationship between participation in the budgetary process and managerial performance (Brownell & McInnes, 1986; Merchant, 1981; see also Hopwood, 1974), although, due to such factors as corporate culture (Brownell, 1982), the size the budget (Aranya, 1990), and performance standards (Dunk, 1989, 1990), this finding is not universal (Brownell, 1981, 1983; Milani, 1975).

Separately, academics and policy makers have long been interested in the effect of resource allocation in general on organizational behavior, namely, in the effect of organizational justice - distributive justice, procedural justice, and interpersonal justice-on organizational behavior. Homans (1961, p. 74) defines distributive justice as "justice in the distribution of rewards and costs between persons." Homans (1961) theorizes that an individual's reaction to an organization is dependent on the expected relationship (based on personal or reference group experience) between the individual's contributions to the organization and the resources allocated by the organization to the individual. Adams (1965) extends and expands the concept of distributive justice, labeling it equity theory and applying it to organizational behavior. …