The 'Third Party' Effect

A recent study finds that employees work harder and are more dedicated to their jobs when they witness their companies’ fair treatment of others.
Firms that treat their employees well, but treat external stakeholders unfairly, could be hurting their employees’ performance. A recent study finds that employees work harder and are more dedicated to their jobs when they witness their companies’ fair treatment of others—what the au­thors refer to as "third-party justice."

The study was co-authored by Ben­jamin Dunford and Christine Jackson, associate professors of management at Purdue University in West Lafayette, Indiana; Louis Tay, assistant professor of industrial and organizational psychology at Purdue; Alan Boss, assistant professor of business at the University of Washing­ton in Bothell; and Wayne Boss, professor of management and entrepreneurship at the University of Colorado in Boulder. The group collected data from primary care physicians and specialty physician offices in 12 cities, as well as from a large regional hospital in the southeastern U.S. They found that those who perceived their office or hospital to be treating patients fairly—consulting with them openly and giving them more control over treatment decisions, for instance—were more likely to go above and beyond their own job de­scriptions to fulfill their responsibilities.

The researchers see a need for future research that looks at the “conta­gion” effect that third-party justice can have within organizations in other indus­tries. “People in uncertain environments are always looking for cues to understand the extent to which the organization can be trusted,” says Dunford. “Those external cues have a big influence on the relationship employees have with their employers.”

“Be fair, your employees are watching: A relational response mod­el of external third-party justice” was published in the Summer 2015 issue of Personnel Psychology.