Arbitration and distributive justice: Equity or equality?

Abstract

Conflict over criteria used to allocate scarce resources is widespread in organizations. Two frequently used criteria (especially in labor-management disputes) are equity and equality. The conditions under which these two criteria are likely to be used by arbitrators were examined by investigating the effect of final offer (FOA) and conventional arbitration (CA) on the decisions and attitudes of 132 graduate and undergraduate students who acted as arbitrators in a series of wage and salary disputes between universities and their faculty associations. Subjects in the CA condition made arbitration awards that were most consistent with an equality, that is, split-the-difference decision rule (p < .001). Subjects in the FOA condition made awards that were most consistent with equity, that is, making reference to variables such as the cost of living and comparable salaries (p < .05). Because the external validity of the findings for the CA condition was a concern, a second experiment was conducted using 31 practicing arbitrators as subjects. The practicing arbitrators (like their student counterparts) made decisions that were most consistent with a split-the-difference decision rule. Several alternative explanations for these findings are considered, as are the implications for organizations.

Perceived equity, motivation, and final-offer arbitration in major league baseball.

“…Donn, 1977). However, Feuille and Dworkin (1979) and Notz and Starke (1987) present evidence to the contrary. Even though arbitrators confined to the final offer format generally dislike it, they tend to play by the rules.…”

“…The dynamics of final offer arbitration allow examination of anticipatory expectancy effects and encourage both parties to critically assess the equity of their final position since hedging is likely to result in the arbitrator choosing the other party's position. Notz and Starke (1987) presented evidence that under the constraints of final offer arbitration, arbitrators adopt an equity decision rule rather than an equality decision rule. That is, not only do arbitrators "say that they weigh the inputs of each side in the dispute (e.g., in a labor-management dispute these might be productivity, ability, comparable salaries, etc.)…”

Psychological models of the justice motive: Antecedents of distributive and procedural justice.

“…A number of studies have examined how circumstances shape distributive justice tradeoffs (Austin, 1980;Barrett-Howard & Tyler, 1986;Benton, 1971;Curtis, 1979;Elliott & Meeker, 1984Foa& Stein, 1980;Greenberg, 1979aGreenberg, , 1979bGreenberg, , 1982Greenberg, , 1983Hartup, Laursen, Stewart, & Eastenson, 1988;Lamm & Schwinger, 1980;Leung & Park, 1986;Leventhal, 1976aLeventhal, , 1976bLeventhal, Michaels, & Sanford, 1972;Morgan & Sawyer, 1967, 1979Murphy-Berman, Berman, Singh, Pachauri, & Kumar, 1984;Notz & Starke, 1987;Peterson, 1975;Pfeffer & Langton, 1988;Prentice & Crosby, 1987;Shapiro, 1975).…”

Deriving benefits from conflict resolution: A macrojustice assessment

“…While this is the ideal, no attempt has been made to determine whether it exists in organization conflict resolution systems. In fact, research at the microjustice level suggest that we might expect differences in patterns of outcomes based on procedural differences (Karambayya & Brett, 1989;Notz & Starke, 1987).…”