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A global evaluation of
organizational fairness and its
relationship to psychological
contracts
Aaron Cohen
School of Political Science, University of Haifa, Haifa, Israel

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Received 27 January 2013
Revised 2 July 2013
3 July 2013
Accepted 16 August 2013

Abstract
Purpose The aim of this paper is to examine whether the concepts of organizational politics,
procedural justice, and psychological contract breach can serve as indicators of a global evaluation of
the (un)fairness of the organization, and that this general fairness evaluation predicts attitudes and
behaviors.
Design/methodology/approach The paper compares the model to one in which the concepts are
considered in terms of both their unique effects and the interrelationships among them. In addition, the
study examines how psychological contract types are related to each model. A survey of 311 bank
employees in Israel was conducted.
Findings The findings show that neither model is strongly superior to the other. This suggests that
the three exchange variables can be conceptualized, not only in terms of their unique effects and
interrelationships, but also as aspects of one global concept of fairness.
Originality/value This study suggests that the concepts of organizational politics, procedural
justice, and psychological contract breach can serve as indicators of a global evaluation of the
(un)fairness of the organization, and that this general fairness evaluation predicts attitudes and
behaviors.
Keywords Justice, Psychological contracts, Organizational politics, True and fair view
Paper type Literature review

Introduction
Todays business environment is changing and with it, the way we think about work
and employment. Market forces such as globalization, greater competition, rapid
technological development, and expanding consumer expectations have engendered
sweeping changes in organizational structures, the labor market, and employment
relationships (Westwood et al., 2001). For many organizations, the new circumstances
have forced a radical revision of their employment strategies, seen mainly in a rapid
shift from permanent to fixed-term contracts and greater use of contract alternatives,
such as part-time work, job sharing, and telecommuting (Millward and Hopkins, 1998).
This change, in turn, has profound consequences for the ways in which individuals
involve themselves in the organizations for which they work. All the unwritten
contractual obligations implicit in the old employment relationship for example, the
security of a job for life in return for organizational commitment and citizenship are
no longer appropriate. An employee is now only a relatively temporary resident in the
organizational condominium.
The changes which have upturned old conceptions of the employment relationship
have likewise made the research paradigms long used to explore it less useful. As

Career Development International

Vol. 18 No. 6, 2013
pp. 589-609
q Emerald Group Publishing Limited
1362-0436
DOI 10.1108/CDI-01-2013-0011

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Guest (2004) argues, we need a new conceptual framework within which to describe
and analyze employment relations in the new environment. Several such concepts have
been advanced in recent years, among them organizational justice, organizational
politics and psychological contract breach (Rosen et al., 2009). All three of these
concepts focus on the nature of the exchange relationship between the organization and
its employees.
Because these concepts are fairly new, only a few studies have explored them
together. Kickul et al. (2002) examined the interaction between psychological contract
breach and organizational justice, and its effect on work outcomes. They emphasized
the importance of a global perspective of variables that might represent fairness and
justice in the organization and the effect of such variables on desirable outcomes.
Kickul et al. (2002) argued that although few researchers have begun to investigate
these relationships, more research is needed to identify and clarify how different types
of unfairness perceptions contribute to the attitudinal and behavioral effects of contract
breach. Andrews and Kacmar (2001) analyzed the discriminant validity of perceptions
of organizational politics, organizational justice and organizational support. Most
recently, Rosen et al. (2009) examine the interrelationships among psychological
contract breach, organizational politics, and procedural justice, and their effects on
work outcomes.
These last two studies raise a point that warrants more consideration. As Andrews
and Kacmar (2001) argue, the three concepts they examine share a common underlying
theme of fairness, in the context of how employees understand their exchange
relationships with organizations. Both Andrews and Kacmar (2001) and Rosen et al.
(2009) suggest that a more global understanding of organizational fairness can be
achieved by looking at all three variables in this light. Andrews and Kacmar
concentrate on methodological issues, specifically the discriminant validity of their
three variables ( justice, organizational politics, and organizational support). Rosen et al.
(2009) take a more conceptual approach, examining several alternative models for the
interrelationships among their three concepts (procedural justice, organizational
politics and psychological contract breach).
One of Rosen et al.s (2009) models, which they call the general (un)fairness
evaluation model, is based on the idea that the three constructs serve as indicators of a
global evaluation of the (un)fairness of the organization, and this general fairness
evaluation predicts attitudes and behaviors. In other words, the model represents a
movement from a simplified view of the focal constructs as unique perceptions to a
more nuanced understanding of each construct as representing one aspect of an overall
(un)fairness judgment. Rosen et al.s (2009) findings show a very high common
relationship between the general (un)fairness model and employee attitudes. They
therefore suggest that the common relationship between politics, procedural justice,
and psychological contract breach may be a primary source of variance in work
attitudes. They also contend that these findings support Ajzen and Fishbeins (1977)
compatibility principal by showing that when perceptions and attitudes are examined
at similar levels of abstraction, they demonstrate the strongest relationships with one
another.
Despite the advantages of the general (un)fairness model in reflecting a more
nuanced, global understanding of organizational fairness, the approach presented by
this model has not been followed by other studies. This may be because what is

missing in Rosen et al.s (2009) work is a conceptual framework that explains why and
how organizational fairness can be better viewed as a global construct composed of
several indicators. This paper will advance the fairness heuristic theory (Lind, 2001a)
to justify such an approach. The current study has three main goals. First, the study
aims to advance the global approach to fairness as one that should receive much more
attention in future studies. Second, it offers a conceptual framework for this approach
based on the fairness heuristic theory. Third, the study examines a global model based
on Rosen et al.s general (un)fairness model with a new set of data, along with an
alternative model which treats the components of the unfairness construct separately.
In examining the two models together, the study thus offers insights as to whether the
general (un)fairness model is indeed superior to alternative models.
Beyond these three main goals, the study makes two additional contributions to the
literature. First, it advances psychological contract type (transactional versus
relational contracts) as a possible outcome of the general fairness construct. Second, the
study advances organizational commitment as the work attitude that is most strongly
related to the general construct of fairness and to the psychological contract types. In
raising these issues, this study helps build our understanding of the exchange process
in organizations in this new era of the employment relationship.
Conceptual framework
The pursuit of a global approach
Several researchers have argued for integrating fairness concepts in some form. Lind
(2001a) posited the fairness heuristic theory to suggest that people plan their future
involvement and investment in groups or organizations based on an overall judgment
of how fairly they have been (and will be) treated in the social context in question.
Specifically, Lind proposed that at the beginning of a relationship or at times of
uncertainty or change in the relationship, justice-relevant information is processed to
create or to revise a general justice judgment, which is then used to guide social
decisions and to make sense of incoming information. Lind argued that this global
judgment of fair treatment draws information from procedural, process, and
distributive elements of organizational justice. For our purposes here, Linds crucial
insight is that there is little value in drawing sharp distinctions between these different
types of justice judgments. According to Lind, although people can certainly
distinguish between different types of justice, in the sense of giving distinct responses
to questionnaire items asking about distributive justice, procedural justice, or
interactional justice, the real impact of justice judgments depends on a more general
overall perception of the fairness of a given relationship. In his view, researchers
should be focusing on common themes and close links across justice judgments, rather
than putting effort into the delineation and differentiation of various types.
Ambrose and Schminke (2009) point to increasing acknowledgment in the justice
literature that a focus on distinct forms of justice may provide only an incomplete,
inaccurate picture of how individuals make and use justice judgments. For example,
Tornblom and Vermunt (1999, p. 51) argued that individuals consider fairness as a
Gestalt i.e. that the components of fairness are meaningful only in relation to the
overall fairness of the situation. Like Lind (2001a), Tornblom and Vermunt (1999), and
others, Ambrose and Schminke (2009) asserted that a global perception of
organizational fairness is needed to capture the depth and richness of individuals

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justice experiences in organizational settings. While Ambrose and Schminke (2009)

recognized that there are some research questions for which a focus on specific facets
of justice is desirable, they argued that research examining an overall justice construct,
and its relationship to specific types of justice and outcomes, would broaden the
questions justice researchers consider and overcome some limitations in current
examinations of justice.
The approach outlined above will guide the logic behind the models advanced in
this study. However, this study will broaden the work of Ambrose and Schminke
(2009) and Lind (2001a) by extending the concept of fairness beyond organizational
justice.
Organizational fairness
What is organizational fairness? There is no consensus in the literature in terms of how
to define or even to approach this concept. A review of the literature reveals three main
approaches to organizational fairness. The first approach is to define it as an
independent concept that can be measured using older or newly-developed scales
(Bettencourt and Brown, 1997; Jenssen, 2001; Kotabe et al., 1992; McAllister and Bigley,
2002). The second is to define it as a dimension of organizational justice. In studies that
have applied this approach, fairness is measured by existing scales of organizational
justice (Ambrose and Cropanzano, 2003; Chiaburu and Marinova, 2006; Schappe, 1998;
Schminke et al., 2002; Sutinen et al., 2002; Long et al., 2011). The third approach, applied
here, advances a global perspective of organizational fairness (Andrews and Kacmar,
2001; Rosen et al., 2009). As discussed above, this approach argues that fairness can
best be understood through several interrelated concepts.
Rosen et al.s (2009) findings, particularly those which support their general model,
provide an interesting and promising direction toward understanding the concept of
organizational fairness. This new approach needs further development, and as noted,
this is one of the main goals of the present study. However, before presenting the
models to be tested here, it is appropriate to briefly describe the three main concepts
that represent organizational fairness in Rosen et al.s (2009) framework.
The building blocks of organizational fairness
As described above, the fairness heuristic theory offers a conceptual framework that
explains why organizational fairness should be viewed as a global concept comprising
several constructs, each with its role in forming the fairness perception. According to
the theory, fairness judgments are formed quickly via information that is readily
available. Subsequently, people use these fairness judgments as a guide to regulate
their behavior in various social settings (Lind, 2001a). Using fairness evaluations as
heuristic substitutes frees up cognitive resources and allows people to proceed with
confidence in their actions. It is important to note, however, that as with all cognitive
heuristics, these judgments are based on perceptions that can at times be inaccurate.
Therefore, by using fairness as a heuristic we run the risk of being led astray.
The fairness heuristic theory assumes that people use justice judgments as
cognitive shortcuts that can help them to decide how to act at any time. Once the
general fairness judgment (the fairness heuristic) is built, people try to interpret all
incoming fairness information so as to make it compatible to the heuristic. The fairness
heuristic changes only when there are signs of a changing relationship, or in the face of

unexpected or irreconcilable treatment (Lind, 2001b). The fairness heuristic theory thus
stresses the role of information availability (Fortin, 2008).
As described in the fairness heuristic theory, people in situations of uncertainty
regarding their relationships with authorities refer to impressions of fairness. These
impressions do not necessarily concentrate on organizational justice. Other experiences
in the organization may also play an important part in the formation of fairness
perceptions. In this study, organizational politics and psychological contract breach
are considered as two such experiences. The following section will present the
components of fairness examined here.
Procedural justice
Procedural justice refers to the fairness of the rules and procedures that are used to
determine outcomes (Rosen et al., 2009). It stands in distinction to distributive justice,
which focuses on the distribution of work rewards relative to work input. Blader and
Tyler (2005) emphasize the importance of procedural justice in the context of fairness,
arguing that distributive justice is less relevant in this context, whereas the fairness of
rules and procedures has a vital impact on employees attitudes and behavior. Tyler
and Blader (2003) similarly contend that studies have found procedural justice
judgments to play a greater role in shaping peoples reactions to injustice. Subjects in
their study who were asked to talk about personal experiences of injustice spoke
primarily about procedural issues, in particular about being treated with a lack of
respect by others. Most justice research in recent years has followed the path outlined
by this evidence (Tyler and Blader, 2003). The current study takes the same view, in
light particularly of Rosen et al.s (2009) decision to use only procedural justice as an
indicator for fairness.
Procedural justice has two components. The first, formal procedures, refers to the
presence or absence of procedures believed to be fundamental to the fair distribution of
resources, including rewards. Unsurprisingly, formal procedures influence perceptions
of fairness and commitment; Martin and Bennett (1996) find that employees are more
likely to feel committed to an organization they perceive to be procedurally fair. The
second component, interactional justice, refers to fairness in how formal procedures are
enacted or explained (Niehoff and Moorman, 1993). Prior research and theory on social
exchange and procedural justice suggest that when organizational decision-making is
consistent and meets the bias suppression rule (uniform treatment of all), employees
have positive assessments of procedural justice (Ang et al., 2003; Colquitt, 2001;
Greenberg, 1990). As a result, employees will have higher perceptions of fairness.
Organizational politics
Organizational politics is an elusive product of power relationships in the workplace. It
represents a unique domain of interpersonal relations, characterized by the direct or
indirect (active or passive) engagement in influence tactics and power struggles, with
the aim of securing or maximizing personal interests or, alternatively, avoiding
negative outcomes within the organization (Ferris et al., 2002; Vigoda-Gadot and
Talmud, in 2010). Organizational politics has been defined as actions by individuals
which are directed toward the goal of furthering their own self-interests without regard
for the well-being of others or their organization (Kacmar and Baron, 1999, p. 4).
Organizational politics undermines fairness in the organization because not everyone

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engages in politicking to meet their own objectives. Those who do adhere to proper
procedures often experience jealousy and resentment, due largely to their perceptions
of unfair distribution of the organizations resources, including rewards and
recognition (Andrews and Kacmar, 2001).
Contemporary research addresses organizational politics as a perceptual
phenomenon (Andrews and Kacmar, 2001), meaning it focuses on individuals
subjective appraisals of the pervasiveness of self-serving influence tactics in work,
decision-making, and resource allocation processes (Rosen et al., 2009). This
cognitive/perceptual perspective has produced a large number of empirical studies
on how organizational politics affects employees attitudes, behavior, and resulting
performance in the workplace (see Vigoda-Gadot and Talmud, 2010).
Psychological contract breach
A psychological contract can be described as an unwritten agreement between an
individual and the employing organization about the terms of employment. The
psychological contract signals issues of exchange and of mutual expectation between
individuals and the organizations for which they work (Millward and Hopkins, 1998).
Beliefs in reciprocal obligations can arise from overt promises (e.g. bonus programs
discussed in the recruitment process), patterns of past exchanges, and vicarious
learning (e.g. witnessing other employees experiences), as well as through various
factors that each party may take for granted (e.g. good faith or fairness) (Millward and
Hopkins, 1998). All the above suggests that the psychological contract is a subjective
construct that exists in the mind of the employee and the mind of the organizational
representative who made or did not make promises to the employee.
Breach of the psychological contract occurs when one side fails to fulfill the terms of
the contract as understood by the other that is, when there is a perceived discrepancy
between what was promised and what has been performed (Coyle-Shapiro, 2002). The
perception that ones psychological contract has been breached is an inherently
subjective phenomenon. In some cases it may arise from a real breach of specific terms in
an actual written or oral agreement. In other cases it is much less clear (to others, at least)
whether a real breach has occurred (Robinson and Morrison, 2000). Either way, the
violators motivations, as perceived by the supposed victim, can be crucial to how the
victim sees the alleged violation. Whether the victim understands the violation to be due
to unwillingness or inability to comply has a tremendous impact on how the violation is
experienced and what the victim does in response (Rousseau, 1995). The former is far
more likely than the latter to produce a sense of unmet expectations, a loss of trust, and
job dissatisfaction, which in turn can negatively affect employee contributions.
Before we move on, it should be noted that the current study does not argue that the
three concepts described here solely and exclusively represent organizational fairness.
Future research might consider additional or alternative concepts, such as distributive
justice or organizational support, as suggested by Andrews and Kacmar (2001).
Research models
Model 1
Two models will be examined here (see Figure 1). The first is similar to the
environmental responsiveness model of Rosen et al. (2009), with the exception that
Rosen et al.s model does not include psychological contract types. In this model,

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Figure 1.
Model 1: The elaborated
environmental
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perceived contract breach mediates the effects of organizational politics and procedural
justice on workplace psychological contracts. The model is based on the social
information processing (SIP) theory of Salancik and Pfeffer (1978). The basic argument
of this model is that the social context in which work-life is embedded provides cues
that employees use to construct and interpret reality. When the social context is not
political, and is procedurally just, employees understand that they are valued, which
leads to positive evaluations of the organization as an exchange partner. When the
social context is highly political and unjust, employees may regard the organization as
incapable of meeting its exchange obligations, because organizational agents are
believed to be preoccupied with protecting their own self-interest and accumulating
power. The distance from this perception to perceived psychological contract breach is
not a long one (Rosen et al., 2009).
Another way of looking at it is that more organizational politics and less procedural
justice add ambiguity and uncertainty to employee organization exchange
relationships and decision-making. When procedures, standards, and expectations
are unclear or inconsistent, employees and organizations are likely to have divergent
understandings of what and how much each owes to the other. This sort of
incongruence is a primary antecedent of psychological contract breach (Morrison and
Robinson, 1997). High procedural justice and less politics therefore reduce perceptions
of contract breach because they promote congruence between employees and the
organizations beliefs about their obligations.
In sum, the first part of Model 1 suggests that politics and procedural injustice lead
to perceptions of psychological contract breach. These perceptions then have a
(negative) impact on employees attitudes and behavior (Rosen et al., 2009). What is
important in this model is that it keeps the components of organizational fairness as
separate constructs and does not integrate them into a global construct. By examining
this model, this study will be able to compare an approach where dimensions of
fairness are examined as independent constructs to a model that integrates the three
constructs of fairness into one global scale.
In the second part of the model, we explore how psychological contract breach
might be related to the two psychological contract types. The psychological contract
literature suggests while there is infinite variety in the forms psychological contracts
take, differences in the content of these perceptions tend to cluster around the extent to
which they are transactional versus relational (Rousseau, 1995). Transactional
contracts are characterized by limited involvement of the parties, and they emphasize
specific, short-term, monetary obligations. In such contracts the identity of the parties
is irrelevant. In contrast, relational contracts emphasize broad, long-term,
socio-emotional obligations, such as commitment and loyalty. These contracts are
consistent with collectivism, and have a pervasive effect on personal as well as work
life (Thomas et al., 2003).
We expect a negative relationship between the transactional psychological contract
and perceptions of psychological contract breach, and a positive relationship between
the relational psychological contract and perceived contract breach. We reason here as
follows: The promise of a meaningful, long-term relationship, as opposed to a more
arms-length business transaction, is expected to lead employees to perceive a higher
level of organizational commitment. Employees who feel that this commitment is not
being honored (because of politics or procedural injustice) are likely to perceive this

situation as a breach of the psychological contract. On the other hand, employees who
regard their relationship as based on short-term, monetary, instrumental expectations
will anticipate a lower level of organizational commitment. An unfair or highly political
organizational culture will simply meet these expectations.
Model 2
The second model, presented in Figure 2, is based on idea advanced by Rosen et al.
(2009) in what they term the general (un)fairness evaluation. The main characteristic of
this model is the global concept of organizational fairness composed of procedural
justice, organizational politics, and psychological contract breach. According to this
model, similarities between perceptions of organizational politics, procedural justice,
and psychological contract breach support a new way of looking at how these
constructs are related. Each of these constructs is linked to an evaluation of fairness in
relation to different aspects of the employee-organization exchange relationship. A
highly political social context raises the question of whether the organization is willing
to tolerate certain behaviors (i.e. those of a self-serving nature) in the organizational
arena, and may be interpreted as interfering with the organizations ability to honor its
reciprocal exchange relationships with employees. Psychological contract breach
arises from perceptions that the organization has failed to meet its fair and just
obligations to employees. Finally, procedural justice involves an evaluation of formal
structures that contribute to fair decision-making processes both whether such
structures exist, and whether they are fairly applied.
Given the conceptual similarities between the three constructs, Rosen et al. (2009)
argue that empirical and theoretical research suggest it may be appropriate to view
organizational politics, procedural justice, and psychological contract breach as
reflecting a common, overlapping theme. They contend that these constructs serve as
indicators of a global evaluation of the (un)fairness of the organization, an evaluation
that in turn can be used to predict attitudes and behaviors. They suggest that this
model represents a progression from characterizing the focal constructs as unique
perceptions to a more nuanced view, where each construct is seen to capture one aspect
of an overall (un)fairness judgment.
Our expectation here is for a strong positive relationship between organizational
fairness and the relational psychological contract form. In the first model, described
above, we focused on the psychological contract type as driving employees
perceptions of the organizations commitment and fairness. The current model looks at
this relationship the other way around, with employees perceptions about the
organization driving their subjective psychological contracts. Following exchange
theory, employees who perceive that the organization is treating them fairly will, as a
result, perceive their relationship with the organization as long-term, and based on
mutual trust and exchange (as in a relational contract). In contrast, employees who
attribute to the organization low levels of organizational fairness will perceive their
relationship with the organization as a short-term, shallow, and instrumental in nature.
Research design
Subjects and procedure
The study population comprised staff employees of one of the largest banks in Israel.
The banks management agreed to participate in the study in return for feedback on

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Figure 2.
Model 2: The elaborated
general (un)fairness model

the findings, but stipulated that none of the participants would be identified in any
way. This stipulation prevented a longitudinal design or the collection of data from
sources other than the employees on topics such as performance, absenteeism, or
turnover. By request of the management, data collection was limited to the head office
of the bank. Data were collected from employees working in different departments in
the head office. Research assistants personally distributed and collected the
questionnaires over a period of about three months. The questionnaires were
usually distributed during working hours. Employees completed the questionnaires in
small groups and returned then to the research assistant(s). The average time for
completing a questionnaire was about 20 minutes. Altogether, 313 usable
questionnaires were collected.
The demographic breakdown was as follows: 58.7 percent of the respondents were
females, the average age was 37.5 (SD 11.7), and the average tenure in the bank and
in the present job was 13.2 years and 4.8 years respectively. With regard to family
status, 71.4 percent of the respondents were married, and 49.4 percent had one or more
children under 18. About 73.1 percent had a university degree.
Measures
Organizational commitment. Affective organizational commitment was measured by
the eight-item scale developed by Meyer and Allen (1984). The commitment items were
measured on a seven-point scale (1 strongly disagree to 7 strongly agree).
Procedural justice. This variable was measured using Niehoff and Moormans (1993)
scales, which tap both formal procedures and interactional justice. Six items measured
the degree to which job decisions included mechanisms to ensure the gathering of
accurate and unbiased information and to make sure employees voices were heard,
along with an appeals process (formal procedures). A total of nine items measured the
degree to which employees felt their needs were considered in, and adequate
explanations were made for, job decisions (interactional justice). Given the strong
correlation found here between formal procedures and interactional justice (r 0.87),
the two sets of items were combined to form one procedural justice scale.
Organizational politics. This variable was defined as the degree to which
respondents view their work environment as political, and therefore unjust and unfair
(Ferris et al., 1989). Based on previous studies (Kacmar and Carlson, 1994; Kacmar and
Ferris, 1991; Vigoda, 2000), a six-item scale was used here. Sample statements included:
Favoritism rather than merit determines who gets ahead around here; (Rewards
come only to those who work hard in this organization (reversed); and There is a
group of people in my department who always get things their way because no one
wants to challenge them. Respondents were asked to report how much they agreed
with the items on a scale from 1 (strongly disagree) to 5 (strongly agree). A higher score
means a higher perception of organizational politics.
Psychological contracts. The 18-item scale developed by Raja et al. (2004) was
applied here. The nine items presented statements we would associate with relational
contracts; sample items included: I expect to grow in this organization; I feel part of
a team in this organization. The other nine presented statements associated with
transactional contracts, such as: I work only the hours set out in my contract and no
more; and My commitment to this organization is defined by my contract.

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Psychological contract breach. This construct was measured by the five-item scale
developed by Robinson and Morrison (2000). Sample items: My employer has broken
many of its promises to me even though Ive upheld my side of the deal; and Almost
all the promises made by my employer during recruitment have been kept so far
(reversed).

600

Findings
Table I presents the basic statistics of the research variables and the inter-correlations
among them. The results show acceptable reliabilities of the variables following
DeVelliss (1991) criterion of 0.60 and above. The correlations among the independent
variables were on the whole not high (only two between 0.60 and 0.70), and so almost
preclude the possibility of multicollinearity. Blalock (1972) argues that whenever there
are high correlations between independent variables, it is necessary to have both large
samples and accurate measurement. Both conditions are met in this research. The
sample is well above 300, and the independent variables have acceptable reliabilities.
To further establish the discriminant validity of the scales applied here, several
procedures recommended by Podsakoff et al. (2003) were applied. First, confirmatory
factor analyses (CFA) were performed for the research scales, following the procedure
outlined by Brooke et al. (1988) and Mathieu and Farr (1991). Three indicators were
established for each multi-item measure by first fitting a single-factor solution to each
set of items and then averaging the items with highest and lowest loadings to form the
first indicator, averaging the items with the next highest and lowest loadings to form
the second indicator, and so forth until all items were assigned to one of the three
indicators for each variable. This procedure was necessary to reduce the number of
parameters estimated in the measurement models. In effect, this strategy reduced the
scale items to three parallel indicators of each construct, in much the same manner that
parallel test forms are developed (see Hall et al., 1999; Nunnally, 1978). The extent to
which the three indicators adequately tapped the more general underlying constructs
was then assessed by fitting the confirmatory factor analysis models.
The first analysis compared the fit for the three-factor model for psychological
contract variables (incorporating the transactional contract, relational contract, and
contract breach scales) to a one-factor model. The three-factor model revealed the
following fit indices: X2 90:02 (DF 24); X2 =df 3:79; CFI 0.92; IFI 0.92;
NFI 0.90; and RMSEA 0.095. These fit indices are quite high and much better
(DF 27);
than
those
for
the
one-factor
model
X2 299:42
2
X =df 11:09;CFI ; 0:68; IFI 0.69; NFI 0.67; and RMSEA 0.18). A
Chi-square difference test also indicated that the three-factor model fit significantly
better than the one-factor model (Chi-square difference 208.4; DF 3; p # 0:001:
In a more specific analysis, the fit of a two-factor model incorporating transactional
contract and relational contract was compared to a one-factor model. The results for
the former were X2 49:05 (DF 8); X2 =df 6:13; CFI 0.90; IFI 0.90; NFI
0.88; and RMSEA 0.13 again, significantly better than for the alternative,
one-factor model X2 112:19 (DF 9); X2 =df 12:46;CFI 0.74; IFI 0.75; NFI
0.73; and RMSEA 0.19). The Chi-square difference test again confirmed these
results (Chi-square difference 63.14; DF 1; p # 0:001:
The second analysis compared the fit for the three-factor model for organizational
fairness (incorporating psychological contract breach, procedural justice, and

Transactional psychological contract

Relational psychological contract
Procedural justice
Organizational politics
Psychological contract breach
Organizational commitment

3.38
4.43
4.58
4.34
3.33
4.24

Mean
0.80
0.96
1.24
1.07
1.24
1.08

SD
(0.64)
20.31 * * *
20.15 *
0.10
0.23 * * *
20.40 * * *

1
(0.79)
0.51 * * *
20.40 * * *
2.47 * * *
0.66 * * *

Notes: n 277-311 due to missing values. *p # 0.05; * *p # 0.01; * * *p # 0.001

1.
2.
3.
4.
5.
6.

Variables

(0.95)
2 0.48 * * *
2 0.37 * * *
0.24 * * *

(0.69)
0.47 * * *
2 .28 * * *

(0.86)
20.32 * * *

(0.80)

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Table I.
Descriptive statistics,
reliabilities (in
parentheses), and
inter-correlations among
research variables

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organizational politics) to a one-factor model. The three-factor model produced X2

41:29 (DF 24); X2 =df 1:72; CFI 0.99; IFI 0.99; NFI 0.99; and
RMSEA 0.048. In the one-factor model, the fit indices were X2 448:89
(DF 27); X2 =df 16:62; CFI 0.73; IFI 0.73; NFI 0.72; and
RMSEA 0.22. Again, the fit indices for the three-factor model are quite high and
much better than those for the one-factor model. A Chi-square difference test again
confirmed these results (Chi-square difference 407.60; DF 3; p # 0:001:
To test for common method variance, a Harmans one-factor test was performed
(Harman, 1967; Podsakoff and Organ, 1986). All the procedural justice, psychological
contract, organizational politics, and commitment foci items were entered into a
principal components factor analysis with varimax rotation. According to this
technique, if a single factor emerges from the factor analysis or one general factor
accounts for most of the variance, common method variance is deemed present.
However, the results of the analysis revealed 11 factors (explaining 64 percent of the
variance) with eigenvalues greater than one and with only one factor accounting for
more than 17 percent of the variance (17.82 percent). The second highest factor
accounted for 11 percent of the variance and the nine others each accounted for less
than 10 percent of the variance. These results are consistent with the absence of
common method variance. In short, the findings show that the respondents were able
to differentiate among the different dimensions of psychological contracts, procedural
justice, organizational politics, and organizational commitment and that the data were
not inflated with common method errors.
Figure 1 presents the path coefficients for Model 1. The analysis was performed
using AMOS 7. It should be noted that in all the variables the three indicators for each
scale were generated based on the process described above for the CFA. As expected,
the findings show a strong and positive coefficient between organizational politics and
psychological contract breach 0:53; p # 0:001: The non-significant relationship
between procedural justice and psychological contract breach was not expected; we
had predicted a negative relationship between the two. The relationships in the other
parts of the model were expected (see Figure 1). Specifically, we found for the
transactional contract type a positive relationship with contract breach and a negative
relationship with organizational commitment; these values were reversed for the
relational contract type. The strong negative relationship between contract breach and
the relational contract type 20:61; p # 0:001; and the strong positive relationship
between this type of contract and organizational commitment (0.71; p # 0.001), are
worth noting.
The fit indices of the model indicate acceptable fit as shown in Table II X2 390
(DF 128); X2 =df 3:05; CFI 0.90; IFI 0.91; NFI 0.87; TLI 0.87; and
RMSEA 0.08). The structural model shows much better fit indices than the
measurement model, and the Chi-square difference test between the two also show that
the structural model is superior X2 606:85* * * ; df 7; p # 0:001:
Figure 2 presents the path coefficients for Model 2. A key difference between this
model and Model 1 is that here, the three variables of contract breach, procedural
justice and organizational politics serve as indicators for the general concept of
organizational fairness. The three indicators for the two types of psychological
contracts were generated based on the process described above for the CFA. In
addition, the scale for procedural justice was reversed so that all the scales comprising

The elaborated environmental responsiveness model

Measurement model
Structural model (Figure 1)
The elaborated general (un)fairness model
Measurement model
Structural model (Figure 2)

Models
135
128
54
50

553.90
219.22

df

996.85
390

x2

10.26
4.38

7.38
3.05

x2/df

0.61
0.87

0.70
0.90

CFI

0.62
0.87

0.70
0.91

IFI

0.44
0.80

0.62
0.87

TLI

RMSEA
0.14
0.08
0.17
0.10

NFI
0.67
0.87
0.60
0.84

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Table II.
Fit indices of the research
models

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the general unfairness construct would run in the same direction. Figure 2 shows that
all the paths for this model are significant and in the expected directions. The
aggregated concept of organizational unfairness is related positively to the
transactional contract type (0.48 * * *; p # 0:001 and negatively to the relational
contract type (2 0.82 * * *; p # 0:001: As expected, the relationships between the two
contract types and organizational commitment are as in Model 1, with organizational
commitment being related to the transactional contract type negatively (2 0.33 * * *;
p# 0:001 and the relational type positively (0.83 * * *; p # 0:001:
The strong negative relationship between organizational unfairness and the
relational contract type 20:82; p # 0:001; and the strong positive relationship
between that contract type and organizational commitment 0:83; p # 0:001; are
worth noting. The fit indices of the model indicate acceptable fit, although lower than
in Model 1, as shown in Table II X2 219:22 (DF 50); X2 =df 4:38; CFI 0.87;
IFI 0.87; NFI 0.84; TLI 0.80; and RMSEA 0.10). Again, the structural model
shows much better fit indices than the measurement model, and the Chi-square
difference test also shows that the structural model is superior X2 334:68* * * ;
df 4; p # 0:001:
Discussion
Recent changes in employment patterns, particularly in Western cultures, have led to a
transformation in the nature of the exchange relationship between employees and
employers (Westwood et al., 2001). These developments have left organizational
scholars in need of a new research paradigm, at the same time as it has become clear
that this new exchange relationship has a major impact on employees attitudes and
behavior in the workplace. Various concepts, or sets of concepts, have been advanced
as helping to capture this new exchange relationship, including the psychological
contract (Millward and Hopkins, 1998), organizational justice (Blader and Tyler, 2005;
Rousseau, 1995), and organizational politics (Ferris et al., 2002). Different scholars take
different approaches to these concepts, with some studies looking at one or the other as
an independent variable or mediator (e.g. Niehoff and Moorman, 1993), while others are
interested in the interrelationships among them (e.g. Kickul et al., 2002).
It is only natural that researchers have started to question the discriminant validity
of these concepts, as well as the possibility of concept redundancy (Andrews and
Kacmar, 2001). Today, research on the subject appears to fall into two distinct groups.
One approach follows the traditional path of examining the various concepts (whether
separately or together) in terms of the interrelationships among them, and their
relationship to outcomes. These studies ask questions such as how does organizational
justice, or the type of psychological contract, affect psychological contract breach
(Coyle-Shapiro and Neuman, 2004; Robinson and Morrison, 2000). The second
approach, which is much newer, takes a more generalized and global perspective,
whereby each concept represents an aspect of a higher level of abstraction, a global
concept termed organizational fairness. This is the possibility examined by Rosen et al.
(2009) in their (un)fairness evaluation model.
It should be noted that few studies, if any, have applied this approach of Rosen et al.
(2009), namely, the global perspective on organizational fairness. The current study
offers an opportunity to further examine and develop this approach. An important
contribution of this study is its support for the effort to move beyond the perspective

that organizational justice dimensions are the only indicator of fairness. Other indicators,
such as organizational politics and psychological contract breach, are equally important
in understanding fairness perceptions of employees. Beyond this, however, the study
suggests that the type of psychological contract an employee holds is an important
component of the exchange process, and should be included in future models.
The findings of the current study in general support both models. However, they do
appear to offer stronger backing for the general (un)fairness model (Rosen et al., 2009), or
Model 2. This conclusion, based on the magnitude of the path coefficients, will be
thoroughly discussed below. First, however, some important findings regarding the
environmental responsiveness model (Model 1, shown in Figure 1) should be pointed out.
The findings for Model 1 show a very strong relationship between the relational
psychological contract type and psychological contract breach as an independent
variable, and with organizational commitment as dependent variable, emphasizing the
importance of this contract type to the exchange process. Employees who perceive that
their organization has not fulfilled its obligations are likely also to perceive only a
weak, if any, relational psychological contract i.e. one implying a long-term and
stable relationship with the organization. The modest relationship between the
transactional contract type and the same variables shows that this type of contract
makes a limited contribution to the exchange process. The non-significant relationship
between procedural justice and psychological contract breach remains unexplained; it
may perhaps be attributed to the specific sample examined here. The findings in
general show the usefulness of psychological contract type in a better understanding of
exchange and fairness in the organization.
The findings for the general (un)fairness evaluation model (Model 2, shown in
Figure 2) make clear the benefits of a more general and higher-level perception of the
exchange process. The message we can draw is that it is not really important whether,
say, procedural justice is related to contract breach more or less than organizational
politics, and whether one concept is causally related to another. All three are important
components of a general fairness perception, which in turn has a strong and positive
relationship with the two types of psychological contracts, particularly with the
relational type. In short, the findings provide support for the contention that it is time
to move from a view of the focal constructs (politics, justice, and psychological contract
breach) as unique perceptions to an outlook in which each construct captures one
aspect of an overall (un)fairness judgment.
The general model suggests an abstraction of the exchange process on the one hand,
and simplification on the other. The model calls into question the belief that underlies
much scholarly endeavor: namely, that a better understanding of processes can be
achieved by developing more and more constructs. Indeed, researchers have produced
so many constructs that sometimes it is questionable whether subjects are able to
differentiate among them (Morrow et al., 1991). A more generalized and integrative
approach can provide an equally rich understanding of attitudes and behaviors. The
very strong relationship between the general unfairness concept and the relational
psychological contract type provides strong support for this approach.
This conclusion receives additional support from the relationships between
organizational unfairness and the psychological contract types. Organizational
unfairness was strongly and negatively related to the relational contract type and
positively but modestly related to the transactional type. This simple model sends a

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clear and simple message to theorists and practitioners. Strong perceptions of

organizational unfairness are related to strong perceptions of a relational psychological
contract, which in turn is related to a higher level of organizational commitment. The
basic element of this exchange process is perceptions of relational contract. The main
reason we should look for causal relationships among the different components of
organizational fairness (justice, politics and contract breach) might be to help
organizations find better ways to improve each of the fairness components.
The main limitations of this study are its cross-sectional design and its reliance on
data collected from one source. The cross-sectional design could lead to common
method error. However, the analyses confirming the discriminant validity of the scales
applied here reduce this possibility. The current study does not include performance
outcomes collected from a different source, such as a supervisor, because of the refusal
of the employer to provide such data. However, this absence has no real effect on either
the conceptual models or our conclusions. We know that attitudes like commitment are
related to performance, and we have enough data, including findings from
meta-analyses, on the magnitude of this relationship (Cohen, 2003; Meyer et al.,
2002). Including a path between organizational commitment and performance would
not change any of the conceptual conclusions here, and therefore its absence does not
limit the contribution of this study.
The study has a number of practical implications. The findings emphasize the
importance of fairness perceptions in shaping employee attitudes, especially
organizational commitment. Fairness seems to be the key building block of the
exchange relationship between employees and their organization. Managers should be
sensitive to employees perceptions about how they are treated, and should do their best to
ensure that unfairness perceptions do not damage the employeeemployer relationship.
On the theoretical level, the findings here advance an interesting research agenda,
which can significantly increase our understanding of exchange processes in the new
employment era. The current research offers support, strong but not definitive, for the
new approach that represents a general (un)fairness model. Future research should
apply this agenda to different occupational groups and organizations, allowing a more
thorough examination of the new approach and its benefits vis-a`-vis more traditional
models. The current study also makes an important general contribution in suggesting
that scholarship would benefit from an approach which integrates many similar
concepts into a higher-level construct. Such an approach can also be applied to other
concepts, such as commitment in the workplace and work satisfaction.
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Corresponding author
Aaron Cohen can be contacted at: acohen@poli.haifa.ac.il

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