Morality and Justice 1
Running head: MORALITY AND JUSTICE
The Role of Leader Morality in
the Interaction Effect of Procedural Justice and Outcome Favorability
Xiao-Wan LIN
City University of Hong Kong
Mailing Address: Department of Management, City University of Hong Kong, 83# Tat
Chee Avenue, Kowloon Tong, Kowloon, Hong Kong; Email: mgxwlin@cityu.edu.hk; Tel:
+853-21942564; Fax: +852-27887220.
Hong-Sheng CHE
Beijing Normal University, China
Mailing Address: School of Psychology, Beijing Normal University, 19# Xin Jie Kou Wai
Street, Beijing, China; Email: hongshengche@sina.com; Tel: +86-10-58800349.
Kwok LEUNG
City University of Hong Kong
Mailing Address: Department of Management, City University of Hong Kong, 83# Tat
Chee Avenue, Kowloon Tong, Kowloon, Hong Kong; Email: mgkleung@cityu.edu.hk; Tel:
+852-27887969.
Correspondence concerning this article should be addressed to Xiao-Wan LIN.
Leader Morality 2
Abstract
The present research explored the role of leader morality in the interaction effect of
procedural justice and outcome favorability, and attempted to connect justice and morality
construct in a new direction. Two studies in different settings and using different designs (a
scenario experiment and a survey) yielded convergent results. When leader morality was
high, the interaction effect of procedural justice and outcome favorability was significant,
and fair procedures can mitigate the negative effect of low outcome favorability. When
leader morality was low, however, the interaction between procedural justice and outcome
favorability was absent.
Leader Morality 3
The Role of Leader Morality in
the Interaction Effect of Procedural Justice and Outcome Favorability
Since Adams (1965) proposed the equity theory, organizational justice has attracted
a great deal of attention from management and psychology scholars. In the early phase of
this line of research, researchers focused on the justice of outcomes, or distributive justice.
Thibaut and Walker’s (1975) seminal work shifted the attention toward fairness issues
concerning procedures, mechanisms, and processes used to determine outcomes, broadly
known as procedural justice.
A number of studies have found that employee attitudes and behaviors are not only
affected by outcomes, but also by procedures. Generally, people react more positively to
favorable rather than unfavorable outcomes, and fair rather than unfair procedures.
Commonly examined outcome variables include outcome satisfaction, job satisfaction,
organizational commitment, trust, evaluation of authority, organizational citizenship
behaviors, withdrawal, negative reactions and performance (see Colquitt, Conlon, Wesson,
Porter, & Ng, 2001). The consequences of outcomes and procedures have also been tested
in different settings, such as selection (e.g., Gilliland, 1994; Ployhart & Ryan, 1998), pay
relocation (e.g., Cobb & Frey, 1996; Dulebohn & Martocchio, 1998; Welbourne, 1998),
Organizational change (e.g., Spreizer & Mishra, 2002; Tyler & De Cremer,2005),
performance appraisal (e.g., Brown & Benson, 2003), and tenure and promotion decisions
(e.g., Ambrose & Cropanzano, 2003).
Based on more than forty previous studies, Brockner and Wiesenfeld (1996)
concluded that there exists an interaction between procedural justice and outcome
favorability. Specifically, the effect of outcome favorability is stronger when procedures
are unfair than fair. Because high procedural justice can attenuate the negative effect of
Leader Morality 4
low outcome favorability, this interaction pattern is also known as compensatory effect of
procedural justice (Kwong & Leung, 2002).
While the interactive relationship between procedural justice and outcome
favorability is very robust (e.g., Cremer & Knippenber, 2003), Lind (2001) pointed out that
the conclusion is far too general, and this interaction may vary across different contexts.
Indeed, a number of factors have been found to qualify the interaction between procedural
fairness and outcome favorability (e.g., Brockner, 2002; Kwong & Leung, 2002 ; Van den
Bos, Vermunt, & Wilke 1997). However, these studies focused on self-perceived attributes
of the recipient of a justice decision (e.g., Brockner, Chen, Mannix, Leung, & Skarlicki,
2000) or of the relationship between the parties involved (Kwong & Leung, 2002). To the
best of our knowledge, no attempt has been made to examine whether the attributes of
decision-makers in a justice context can qualify the compensatory effect of procedural
justice. This gap is unsatisfactory because decades of research on person perception clearly
shows that people’s attitudes and behaviors are affected by their perception of the
attributes of other social actors. For example, perceived agreeableness of individuals
emerged as a powerful determinant of others’ associative intentions toward them, and
perceived conscientiousness of individuals is strongly related to the trusting intentions they
received (Bond & Forgas, 1984). Perception of the emotionality of a disputant affected
one’s choice of conflict resolution strategy for resolving a dispute with this person (Morris,
Leung, & Iyengar, 2004). The present paper adds to the previous research by adopting a
person perception perspective in examining the impact of perceived leader morality on the
compensatory effect of procedural justice. More specifically, we argue that leader morality
qualifies the interaction effect of procedural justice and outcome favorability. When leader
morality is high, procedural justice could compensate for the negative effect of unfavorable
Leader Morality 5
outcomes; however, when leader morality is low, the compensatory effect of procedural
justice disappears.
The ethical dimension of leadership is uniquely important because of the leader’s
potential to influence the ethical climate of an organization and employees’ ethical
attitudes and behaviors (Schminke, Ambrose, & Neubaum, 2005; Treviño, Brown, &
Hartman, 2003). From a practical perspective, a leader who lacks morality and integrity
may destroy a company much faster than a leader who promotes a bad strategy (Black,
Morrison, & Gregersen, 1999), which is vividly illustrated by the Enron case. Previous
research on leader morality primarily focused on its main effect on employee attitudes and
behaviors (e.g., Cheng, Chou, Wu, Huang, & Farh, 2004; Koh & Boo, 2004; Parry &
Proctor-Thomson, 2002; Schiebel & Pochtrager, 2003). The present research further
explored the more intricate effect of leader morality as a moderator of the interaction
between procedural justice and outcome favorability.
It also should be noted that, in recent years, the important role of morality in the
justice domain has been more and more recognized (e.g., Cropanzano, Goldman, & Folger,
2003; Cropanzano & Rupp, 2002; Folger, 2001; Leung & Tong, 2003). Scholars attempt to
use morality to explain why people care about justice and how they react to injustice.
Echoing the call for linking morality to justice constructs, the present research attempts to
explore the joint effects of leader morality and organizational justice from a new
perspective. The study will not only shed new light on the boundary conditions of
compensatory effect of procedural justice, but also provide new evidence for the
importance of leader morality in organizational justice phenomena.
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Leader Morality
Although leader morality has drawn a great deal of attention from academics and
practitioners, its definition and measurement are still dubious. In fact, the terms “leader
morality”, “integrity”, and “ethicality” are often considered as interchangeable, and their
measurements often overlap. Craig and Gustafson (1998) developed a 31-item scale of
perceived leader integrity and the scale covered several domains, such as, truth-telling,
compliance with policies and procedures, and maliciousness. Law, Lee, Farh, and Pillutla
(2001) identified a new component of justice—moral justice—based on the
justice/injustice incidents described by participants that were related to the personal
integrity of their leaders. This construct consists of nine aspects, including rejection of
nepotism, responsibility, keeping promise, creating opportunities for subordinates’
personal development, and compliance with law. Treviño et al. (2003) identified three
dimensions of ethical leadership: People-orientation (e.g., respect and mentor people),
Visible ethical actions and traits (e.g., role-model; be honest; be a listener; trustworthy; and
have integrity), and Setting ethical standards and accountability. Recently, Hsu, Cheng,
Huang, and Farh, (2004), based on an inductive approach, developed a scale of moral
leadership that includes seven dimensions: impartialness, justness, integrity,
trustworthiness, responsibility, broad-mind, and lead by example. A synthesis of the
various measurement scales suggests that the major characteristics of a moral leader
include selflessness, conscientiousness, trustworthiness, benevolence toward subordinates,
compliance with policies and regulations, and the display of exemplary ethical behaviors.
Existing empirical studies on leader morality have mainly focused on three
directions. Firstly, as discussed above, some studies have explored the content domain of
ethical/moral leadership, and developed some measurement instruments (e.g., Brown,
Leader Morality 7
Treviño, & Harrison, 2005; Craig & Gustafson, 1998; Hsu, Cheng, Huang, & Farh, 2004;
Treviño et al., 2003); secondly, some studies have examined antecedents of unethical
behaviors in organizations, and identified a number of important individual, organizational,
and relationship factors (e.g., Brass, Butterfield, & Skaggs, 1998; Kahn, 1990); thirdly,
some studies have focused on the consequences of leader morality (e.g., Cheng et al., 2004;
Koh & Boo, 2004; Parry & Proctor-Thomson, 2002; Schiebel & Pochtrager, 2003). The
present research extended this third line of work and examined the consequences of leader
morality in the domain of organizational justice.
It is well-known that leader morality is closely related to leader effectiveness (e.g.,
Kanungo & Mendonca, 1996). Leader morality can enhance followers’ respect,
identification, compliance without dissent, and extra effort (Cheng et al., 2004),
satisfaction with leadership, and motivation (Parry & Proctor-Thomson, 2002). Leader’s
morality is also the best predictor of trust in leaders (Morgan, 1989). Job satisfaction and
organizational commitment are also positively related to top managers’ ethical behavior
(Koh & Boo, 2004). Before we explore how leader morality impacts the interaction effect
of procedural justice and outcome favorability, we first state a well-known finding as our
first hypothesis, namely, leader morality affects employee attitudes positively.
The Role of Leader Morality in the Compensatory Effect of Procedural Justice
Why can high procedural justice attenuate the negative impact of unfavorable
outcomes? Brockner and Wiesenfeld (1996) provided several explanations, among which
Lind and Tyler’s (1988) group-value theory or Tyler and Lind’s (1992) relational model is
perhaps most important. This theory assumes that people value their long-term social
relationship with other individuals, groups, or organizations, and link procedural justice
judgments to the desire to be a full-fledged, full-status member of a group, organization, or
Leader Morality 8
society (Lind & Earley, 1992; Tyler, 1989). When procedures are fair, people feel valued
and respected. Because procedures are considered as relatively stable, people feel
reassured about their identity and esteem in the future, leading them to care less about the
current outcomes (Brockner & Wiesenfeld, 1996).
Brockner and his colleagues (Brockner, Siegel, Daly, Tyler, and Martin, 1997)
provided another explanation for the interaction effect of procedural justice and outcome
favorability. They found that it was not procedural justice per se, but the degree of trust
elicited by procedural justice that interacted with outcome favorability to influence
employee attitudes and behaviors. They argued that unfavorable outcomes elicit a
sensemaking process in which people attempt to evaluate the trustworthiness of
organizational authorities, and that people may have used judgments of procedural justice
to make inferences about the trustworthiness of the authorities. When procedural justice is
high, the trust in the leader offsets the negative impact of unfavorable outcomes.
Although seemingly different, the relational model and trust explanations converge
in that when individuals are concerned about their relationships with other people, groups,
or organizations, they will use the information about procedural justice to make inference
about the nature of the relationships, including whether their identity and standing can be
reassured, or whether the authority can be trusted.
In line with the argument, several studies have revealed that the compensatory
effect of procedural justice is qualified by the psychological importance people accord to a
relationship (e.g., Brockner et al., 2000; Kwong & Leung, 2002). Brockner et al. (2000)
found that the compensatory effect of procedural justice is operative only among people
with interdependent self-construal, who regard themselves as connected to others and view
their relationships with others as important, but not among people with independent selfconstrual. A direct demonstration of this effect is provided by Kwong & Leung (2002).
Leader Morality 9
Their studies in two different settings (interpersonal dispute resolution and salary freeze or
cut in an organizational context) consistently showed that procedural justice reduced the
negative impact of low outcome favorability only when the relationship involved was
regarded as important.
The present research continues this line of enquiry by examining the boundary
conditions of the compensatory effect of procedural justice from a new perspective. As
mentioned previously, previous research has ignored the possibility that perceived
attributes of authority figures may qualify the interaction between procedural justice and
outcome favorability. This research tested the role of perceived leader morality as a
moderator of the interactive relationship between procedural justice and outcome
favorability.
To develop a theoretical foundation for predicting how leader morality may impact
the interactive relationship between procedural justice and outcome favorability, we first
note that leader morality is known to influence employees’ feeling about the importance of
their relationships with leaders. For instance, Brower, Schoorman and Tan (2000) proposed
a model of relational leadership, which assumed that parties to a leader-member
relationship evaluate the ability, benevolence and integrity of each other in establishing a
leader-member exchange relationship. In other words, leader morality is an important
factor that determines the strength of a leader-member relationship. In addition, perceived
leader morality is associated with identification with a leader (Cheng et al., 2004), and
perceived leader ethicality positively influences followers’ organizational commitment
(Koh, & Boo, 2004). These findings suggest that people value their relationship with
moral leaders and the organizations they represent, and accord more importance to this
relationship.
Leader Morality 10
Given our analysis that moral leadership is related to a heightened importance
accorded to a leader-member relationship, we hypothesize that when perceived leader
morality is high, procedural justice becomes important and consequential because people
will use it to infer how they are treated by the authority (including whether their identity
and status will be reassured, whether the authority is trustworthy), and the compensatory
effect of procedural justice is operative. In contrast, if perceived leader morality is low,
people are unlikely to value their relationship with a leader. In such a context, the
significance of procedural justice will be attenuated, and the compensatory effect of
procedural justice will disappear. The moderating effect of leader morality constitutes the
second hypothesis of the research.
Overview of Studies
Two studies were conducted in different settings to test the hypotheses. In Study 1,
undergraduate students participated in a scenario experiment involving a personnel
selection context to test the causal effects of the independent variables: Leader morality,
procedural justice, and outcome favorability. To overcome the lack of external validity of
Study 1, Study 2 asked full-time employees to recall a real performance appraisal incident
to evaluate the two hypotheses proposed. In addition, the contexts of the two studies
differed so that convergent results would provide strong evidences for the generality of the
effects.
Sweeney and McFarlin (1993) showed that procedural justice is a more important
predictor of “organizational outcomes” (e.g., organizational commitment) than of
“personal outcome” (e.g., pay satisfaction). In order to reveal the change of the
compensatory effect of procedural justice under different conditions, we chose employees’
attitudes to their organization as the dependent variables. In Study 1 (recruitment setting),
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“attractiveness of the organization to applicants” was used as the outcome variable, since
the target persons in the scenario had not joined the organization. In study 2 (performance
appraisal setting), “pride in organization” was used as the outcome variable. These two
dependent variables, while not identical, are conceptually related, because both reflect a
positive attitude toward the organization. Our hypotheses are formally stated as follows:
Hypothesis 1: Leader morality positively affects employees’ attitudes toward their
organizations (attractiveness of the organization to applicants in Study 1, and pride
in organization in Study 2).
Hypothesis 2: There exists a triple interaction effect of leader morality, procedural
justice, and outcome favorability on employees’ attitudes toward their
organizations (attractiveness of the organization to applicants in Study 1, and pride
in organization in Study 2). When perceived leader morality is high, procedural
justice can reduce the negative effects of low outcome favorability. When leader
morality is low, the compensatory effect of procedural justice is absent.
Study 1
Method
Participants
Participants consisted of 96 undergraduate students in a university in Beijing, China,
including 21 males and 75 females. They were from different departments (e.g.,
department of foreign language, Chinese, history).
Design and Procedure
Participants responded to a scenario during class, which was modeled upon similar
scenarios used in previous research (e.g., Brockner et al., 2000; Van den Bos et al., 1997).
Participants were asked to read a vignette and imagine they were the target person taking
part in a selection process of a famous organization. They were applying for a desirable
Leader Morality 12
position in the organization, and had completed a series of nine selection tests including
intelligence tests, personality measurements, and interviews. When waiting for the results,
they overheard some statements about the morality of the human resource (HR) manager
who was responsible for the hiring results. A week later, they received a letter informing
them of the selection procedures and the results. Two levels of outcome favorability,
procedural justice and leader morality were manipulated in the vignette, resulting in eight
versions. Participants were randomly assigned to receive one of the eight versions of the
vignette. Each version was read by 9 -14 participants, and the gender ratio was similar
across different conditions. After reading the vignette, they were asked to complete a short
questionnaire including the manipulation checks and the dependent variable.
Manipulation of outcome favorability. In the high outcome-favorability condition,
participants were told that they were given the offer. In the low outcome-favorability
condition, participants were told that they did not get the job.
Manipulation of procedural justice. In the high procedural-justice condition,
participants were told that the hiring decision was based on their performance on all the
nine selection tests. In the low procedural-justice condition, participants were told that the
hiring decision was based on their performance on only one of the nine tests, and other
pertinent information was ignored.
Manipulation of leader morality. Leader morality was manipulated by eight aspects
that were derived from various scales for measuring leader morality reviewed above: not
abusing power to pursue personal gains, being responsible, treasuring subordinates’ talent,
complying with the law, being tolerant, not coercing subordinates, living on promises, and
serving as a good role model. In the high leader-morality condition, participants were told
that they heard from some friends that the HR manager responsible for the hiring results
was a tolerant and responsible person who complied with the law, lived on promise,
Leader Morality 13
treasured subordinates’ talent, never abused power to pursue personal gain, never coerced
subordinates, and was a good role model. In the low leader-morality condition, participants
were told that they heard from some friends that the HR manager was a person who was
jealous of subordinates, often abused power, shirked responsibilities, pursued personal
vendetta, coerced subordinates, failed to keep promises, scorned the law, and was a bad
role model.
Manipulation checks. The effectiveness of the outcome favorability manipulation
was assessed by the item “I consider the outcome as favorable.” The effectiveness of the
procedural justice manipulation was assessed by the item “I believe that the selection
procedures were fair.” The item for checking the manipulation of leader morality was “The
HR manager is a moral person.” A 6-point scale with endpoints labeled with totally
disagree (1) and totally agree (6) was used.
Dependent variable. Since the target person in the vignette had not joined the
company, we used the attractiveness of the organization to the respondent as the dependent
variable. Two items were used: “The company is worth joining” and “I will recommend
the organization to my friends.” As before, a 6-point scale was used.
Results
Participants’ responses to the questionnaire were analyzed with analysis of variance.
Manipulation checks
Analyses revealed highly significant main effects of the manipulated variables on the
corresponding manipulation check items. Participants reported that outcome was more
favorable in the high than in the low outcome-favorability condition (M = 5.17 vs. 2.26
respectively), F(1, 88) = 102.61, p < .001. They reported that procedural justice was higher in
the high than in the low procedural-justice condition (M = 4.10 vs. 2.90 respectively), F(1, 88)
= 15.20, p < .01. Moreover, they reported that leader morality was higher in the high than in
Leader Morality 14
the low leader-morality condition (M = 3.53 vs. 2.29 respectively), F(1, 88) = 23.03, p < .001.
Other significant effects were also found, but they did not suggest any problem with the
effectiveness of the manipulations1.
Test of hypotheses
All main effects (outcome favorability, F(1, 88) = 21.25, p < .001; procedural
justice, F(1, 88) = 13.83, p < .001; leader morality, F(1, 88) = 16.18, p < .001) were
significant. The three main effects revealed that the attractiveness of the organization was
higher among participants who received a favorable than an unfavorable outcome (M =
3.90 vs. 2.88, respectively), who were subject to high than low procedural justice (M =
3.77 vs. 2.97, respectively), and who perceived the leader as high than low in leader
morality (M = 3.81 vs. 2.98, respectively). Hypothesis1 was supported because a moral
leader was able to heighten the appeal of an organization to job applicants.
A two-way interaction between procedural justice and leader morality, F(1, 88) =
6.69, p < .05, was found. This two-way interaction was not interpreted given the significant
triple interaction (outcome favorability × procedural justice × leader morality), F(1, 88) =
5.13, p < .05. To understand the nature of the triple interaction, simple interaction effect
analyses and simple main effect analyses were conducted. In the high leader-morality
condition, the interaction between outcome favorability and procedural justice was
significant, F(1, 88) = 5.49, p < .05. As showed in Figure1, high procedural justice could
reduce the influence of outcome favorability. Analysis of simple main effects showed that
outcome favorability showed a strong and positive effect only when procedural justice was
low, F(1, 88) = 24.55, p < .001, but not when procedural justice was high, F(1, 88) = 1.98,
p > .1. In the low leader-morality condition, the interaction between outcome favorability
and procedural justice, F(1, 88) = .66, ns, and the main effect of procedural justice, F(1, 88)
Leader Morality 15
= .69, ns, were not significant. Only the main effect of outcome favorability was significant,
F(1, 88) = 4.16, p < .05. This pattern of results supported Hypothesis 2.
Insert Figure 1 about here
Discussion
The current study provided support for our key hypothesis that when leader
morality is high, the interaction between procedural justice and outcome favorability
resembles the pattern that Brockner and Wiesenfeld (1996) depicted. That is, fair
procedures can reduce the negative effect of low outcome favorability. When leader
morality is low, however, the compensatory effect of procedural justice is absent, and
people’s reactions are significantly affected by outcome favorability regardless of whether
the procedures are fair or not.
Although the manipulation of the independent variables (leader morality,
procedural justice, and outcome favorability) established their causal effects, there are two
limitations of the design. First, in justice research, although results based on scenarios
typically resemble behavioral results based on experiments (e.g., Van den Bos, 1999) and
survey results based on real experiences (e.g., Brockner et al., 2000), it is prudent to
replicate the results in a real-life setting. Second, because the participants were full-time
students, it is important to evaluate our hypotheses with participants who have real
working experiences. To overcome these two limitations, Study 2 replicated the results of
Study 1 in a field setting involving full-time employees. Furthermore, Study 2 was a
conceptual replication of Study 1 and involved a different context, namely, performance
appraisal. If converging results are obtained, the generality of the findings is greatly
enhanced.
Leader Morality 16
Study 2
Method
Participants
A total of 181 working adults (42 men and 139 women) who enrolled in a part-time
program in a University in Beijing, China participated voluntarily in the study. Participants
of the study met two criteria: (1) they had worked for more than 3 months, and (2) they had
the experience of performance appraisal before. Most participants were from 21 to 40
years old (21-30: 41.6%; 31-40: 44.5%), 13.3% of them were 41-50 years old, and only
0.6% were above 50 year old. Nearly all of them (99.4%) finished junior college or above.
With regard to the type of organizations they worked for, 18% worked for foreign ventures,
19.3% for state-owned companies, 16.7% for private companies, and 8.7% for
international joint-ventures, 9.3% for government, 12.7% for social services organizations
such as schools and hospitals, 5.3% for military, and 10% for others.2
Procedure
We asked participants to recall the detail of a recent performance appraisal in
which they were being appraised. This incident provided the context for the participants to
respond to the survey questions. Participants were asked to respond to items concerning the
three independent variables and the dependent variable on six-point scales (1 - totally
disagree and 6 - totally agree).
Measurement
Procedural justice. The scale developed by Colquitt (2001) was used, which
contained seven procedural elements. Sample items included, “I was able to express my
views and feelings during those procedures” and “Those procedures were applied
consistently.” Cronbach’s alpha of the scale was .86.
Leader Morality 17
Outcome favorability. Two items were used to measure outcome favorability:
“Overall, I was satisfied with my performance appraisal results” and “The outcome was
favorable to me.” Cronbach’s alpha of the two-item scale was .88.
Leader morality. We assessed leader morality by eight items which covered the
dimensions of leader morality used in Study 1. The sample items were: “The leader shirked
responsibility (reverse)”, “The leader was jealous of subordinates (reverse)”, “The leader
lived on promises” and “The leader worked as a good role model.” Cronbach’s alpha of the
scale was .83.
Dependent variable. The dependent variable was pride in organization, which was
measured by four items drawn from scales designed to measure group pride (Tyler,
Degoey and Smith, 1996) and scales designed to measure affective evaluations of
organizations (O’Reilly & Chatman, 1986), including “I am proud to think of myself as a
member of this organization” and “It would be hard to find another organization I would
like as much to be a part of.” Cronbach’s alpha of the scale was .75.
Results and Discussion
Insert Table1 about here
Table1 presents the correlations among variables, which show that the variables
were moderately related. The highest correlation coefficient was .57, which is still lower
than .75, the highest level suggested by Tsui, Ashford, Clair, and Xin (1995) that would
result in a serious multicollinearity problem. Additionally, when regressing Pride in
Organization on the three independent variables, the range of the variance inflation factors
Leader Morality 18
was from 1.24 to 1.63, far less than the critical value of 10. Therefore, the multicollinearity
problem was not serious in the study.
Insert Table2 about here
We conducted hierarchical regression to test our hypotheses. As suggested by
Aiken and West (1991), the predictor variables (outcome favorability, procedural justice
and leader morality) were firstly centered, and two-way and three-way interaction terms
were formed by multiplying the corresponding centered predictors. The three main effects
(leader morality, procedural justice and outcome favorability) were entered in the
regression model in the first step, followed by the three two-way interactions, and finally
by the three-way interaction. As showed in Table 2, the main effect of perceived leader
morality was marginally significant in this study (hypothesis 1 was partially supported),
Beta = .17, t (177) = 1.90, p < .1, and the key triple interaction among procedural justice,
outcome favorability and leader morality was significant, △R2 = .02, F (1, 73) = 4.40, p
< .05; Beta = -.22, t (173) = -2.10, p < .05.
We followed the steps recommended by Aiken and West (1991) to probe the nature
of the triple interaction. For respondents who reported high leader morality, the interaction
between procedural justice and outcome favorability was significant, Beta = -.24, t (173) =
-2.13, p < .05. High procedural justice compensated for the negative effect of unfavorable
outcome, i.e., the effect of outcome favorability was significant (Beta = .42, t (173) = 2.84,
p < .01) in the low-procedural-justice condition, but not in the high-procedural-justice
condition. For those who reported low leader morality, the interaction was non-significant,
Beta = .08, t (173) = .69, p > .1. Figure 2 illustrates the nature of the procedural justice x
outcome favorability interaction in different conditions.
Leader Morality 19
In summary, the results of Study 1 and Study 2 are consistent in providing strong
support to our key hypothesis about the moderating role of perceived leader morality.
Insert Figure 2 about here
General Discussion
Theoretical Analysis of the Moderating Effect of Leader Morality
The consistent results from two different settings (personnel selection and
performance appraisal), two different designs (outcome favorability, procedural justice and
leader morality were either manipulated or measured), and two different dependent
variables (attractiveness of organization and pride in organization) provided strong support
to our key hypothesis. That is, fair procedures can reduce the negative impact of low
outcome favorability when perceived leader morality is high, but not when leader morality
is low. Our reasoning was based on the relational model. When leader morality is high,
people accord more psychological importance to their relationship with the leader, and care
more about the nature of the relationship. As a result, procedural justice exhibits a
compensatory effect and reduces the negative effect of unfavorable outcomes. When leader
morality is low, however, people are less concerned with their relationship with the leader,
thus attenuating the compensatory effect of procedural justice.
While our account of the moderating effect of leader morality is consistent with
previous theoretical analysis and empirical findings, we do not want to rule out other
plausible mechanisms. One such alternative account is concerned with the close
association between leader morality and authenticity. Authenticity, a term used in authentic
leadership theory, refers to the extent to which a leader is perceived as true to his/her self.
Leader Morality 20
Authentic leadership is usually regarded as a construct that incorporates transformational
and ethical leadership (e.g., Avolio, Gardner, Walumbwa, Luthans, & May, 2004). When
transformational leadership is “true to self and others, it is characterized by high moral and
ethical standards” (Bass & Steidlmeier, 1999, p.191). That is to say, authenticity can be
augmented by leader morality (Fields, 2007), and authentic leaders tend to have more
influence on followers because authenticity promotes their credibility in the eyes of
followers (Fields, 2007; Kouzes & Posner, 2002). Thus, it is quite possible that when
leader morality is high, the leader is also perceived as more authentic and his/her actions
have more influence on followers, giving rise to the compensatory effect of procedural
justice. On the contrary, when leader morality and hence authenticity is low, the influence
of what the leader does (i.e., procedural justice) will be weak. As a result, even high
procedural justice cannot compensate for the negative effect of unfavorable outcomes. To
examine the validity of this reasoning, it would be worthwhile to take authenticity of leader
into account in the future studies.
Another plausible account of our findings is based on relative status, because leader
morality may elicit thoughts about relative status. When viewing a leader as moral,
followers may feel a larger gap in relative status vis-à-vis the leader. Chen, Brockner, and
Greenberg (2003) found that procedural justice can reduce the negative effect of
unfavorable outcomes for lower-status people, but not for higher-status people. Thus, the
larger relative status that may be associated with leader morality may account for the
pattern of results we obtained, and this possibility should also be evaluated in future
research.
Theoretical Implications of Findings
There are at least four important theoretical implications of our findings. At a more
general level, the present study extends recent thinking on the role of morality in the justice
Leader Morality 21
domain. Although leader morality is an important topic in management, its importance in
organizational justice has just received attention recently. Folger (2001) lamented that
“we’ve continued the search for phenomena related to fairness, but we’ve lost sight of how
fairness related to morality.” There have been recent calls by justice researchers for paying
more attention to moral values (e.g., Cropanzano et al., 2003). Folger’s (2001) theory of
deonance, Cropanzano et al.’s (2003) deontic justice, Cropanzano and Rupp’s (2002)
deontological model, and Leung and Tong’s (2003) normative model of justice are recent
attempts to connect justice research to theorizing in morality and business ethics. One
commonality of these recent theoretical analyses is the attempt to explore the role of
morality in understanding why people care about justice and how people respond to
injustice. These different frameworks converge in the assumption that one impetus for
acting fairly or responding negatively to injustice lies in people’s motivation to fulfill
moral obligations independent of the consequences of their actions and outcomes.
Our results provide a novel direction for extending these recent attempts to link
justice and morality constructs, and suggest that morality provides a basis for people to
decide whether they would identify with authority figures and groups. In our context, if
leaders are seen as moral, people are willing to engage in long-term relationships with
them, leading to an active role of procedural justice in compensating for negative outcomes.
Low leader morality results in a transactional mode of interaction, in which instrumental
concerns loom large and overshadow the importance of justice. We may extrapolate from
our findings to argue that similar processes may operate when people face a group, such as
the firm they work for, or their government, and their willingness to invest in the group
depends on the perceived morality of the group. For instance, if a firm is seen as unethical,
employees are likely to deemphasize justice issues, and their behaviors may be primarily
Leader Morality 22
driven by the quality of their outcomes provided by the firm. It is important to explore the
role of perceived morality in influencing the importance of justice at the group level.
The second implication is specific to leadership research. Some researchers argued
that leader morality is especially important in the Chinese cultural context (e.g., Farh &
Cheng, 2000; Ling, Chia, & Fang, 2000). However, in the Global Leadership and
Organizational Behavior Effectiveness (GLOBE) Project, researchers have identified
several attributes reflecting integrity and morality that are important for outstanding
leadership in all the cultures studied (Hartog et al., 1999). Given the universal importance
of leader morality, we need to evaluate its impact on follower attitudes and behaviors. As
described in the Introduction, prior research has primarily focused on the main effects of
leader morality. Our results have pointed to a more intricate effect of leader morality: Its
moderating effect on the importance of justice. Our results suggest that it is fruitful to
explore how leader morality qualifies the impact of various antecedent variables that shape
important job attitudes and behaviors.
The third implication is concerned with moderators of the interaction between
procedural justice and outcome favorability. As noted before, previous research involved
only the attributes of self (e.g., self-construal, Brockner et al., 2000) or of a relationship
(e.g., importance of relationship, Kwong & Leung, 2002). The present research pioneered
the impact of an attribute of authority figures in an exchange relationship on the interactive
relationship between procedural justice and outcome favorability. Echoing results obtained
in the person perception tradition, which show that people’s attitude and behaviors toward
others are influenced by perceived attributes of others (e.g., Bond & Forgas, 1984; Morris
et al., 2004; Tse, Francis, & Walls, 1994), the present research brings this person
perception perspective to organizational justice research. Our results suggest that perceived
attributes of authority figures play a significant role in organizational justice phenomena,
Leader Morality 23
and that this perspective opens up a new avenue for future research. For instance, other
attributes of authority figures, such as some Big-Five personality factors (e.g.,
agreeableness and conscientiousness), which were found to be related to others’ associative
and trusting intentions (Bond & Forgas, 1984), may also show moderating effects on
effects of justice. As discussed above, perceived authenticity of the leader is another
interesting moderator for the interaction between procedural justice and outcome
favorability.
Finally, our findings suggest an intriguing theoretical question of how trust relates
to the interaction effect of procedural justice and outcome favorability. Previous theories
and research suggest a mediating role of trust in the interaction. Fairness heuristic theory
assumes that people use fair treatment as a proxy for interpersonal trust (Lind, 2001), and
people are especially attentive and sensitive to fairness-relevant information when they
have little information about the trustworthiness of an authority figure (Van den Bos, Wike,
& Lind, 1998). Brockner et al. (1997) showed in three studies that the interaction between
trust and outcome favorability mediated the interaction between procedural justice and
outcome favorability, and concluded that trust elicited by procedural justice, but not
procedural justice per se, may drive its interaction with outcome favorability to influence
people’s attitudes and behaviors. In contrast, given that leader morality is likely to elicit
trusting reactions from followers (e.g., Morgan, 1989), our findings suggest that
trustworthiness of an authority figure may also play a moderating role in the interaction
between procedural justice and outcome favorability. It would be interesting to explore the
conditions under which the mediating or the moderating role of trust in the interaction
between procedural justice and outcome favorability would be operative. In other words,
future research needs to examine in more depth when people’s judgment of a leader’s
trustworthiness is derived from perceived procedural justice (i.e., the mediating role), and
Leader Morality 24
when people use the trustworthiness of a leader to determine the importance of their
relationship with the leader, which gives rise to a moderating role of trust in influencing
the compensatory effect of procedural justice.
Limitations and Suggestions for Future Research
Although our studies yielded consistent findings with important implications, they
do have some limitations that need to be addressed. In calling attention to these limitations,
we also provide some suggestions for future research.
Firstly, the use of scenarios in Study 1 created a hypothetical setting for the
participants, and the results obtained lacked external validity. Although Study 2 corrected
this weakness by focusing on a real performance appraisal incident that participants had
encountered, it is useful to employ behavioral simulations to replicate Study 1 in the future.
The measure of actual behavior will strengthen the external validity of the results in Study
2, while retaining the causal inferences that an experimental study provides.
Secondly, all the independent and dependent variables were measured
simultaneously and from the same source in Study 2, resulting in the problem of common
method bias. We do not believe that the results obtained were caused by common method
variance for two reasons. First, in Study 1, the independent variables were manipulated,
and the results were free from the common method problem. The similarity of the results
across the two studies argues against a common method explanation. Second, a Monte
Carlo study conducted by Evans (1985) showed that artificial interaction cannot be created
by correlated errors produced by common method variance. In fact, correlated errors
function to reduce the chance of obtaining a significant interaction effect, which suggests
that common method variance makes it harder for significant interaction effects to emerge.
In any event, it is always useful to replicate our results with data from different sources to
settle the suspicion based on common method variance.
Leader Morality 25
Thirdly, the dependent variables of the two studies pertain to responses to
organizations. Previous research showed that the nature of dependent variables may impact
the pattern of the interaction between procedural justice and outcome favorability (e.g.,
Brockner, Heuer, Magner, Folger, Umphress, Van den Bos, et al., 2003). Whether the
nature of the dependent variables also influences the role of leader morality in the
compensatory effect of procedural justice is definitely worth exploring. Brockner et al.
(2003) argued that if a dependent variable is concerned with employees’ self-evaluation,
self-attribution would arise from procedural justice perception, which will heighten the
effect of outcome favorability. It is unclear what role leader morality will play with regard
to this type of dependent variables. In general, other dependent variables should be
included in gauging the effects of leader morality on the interaction effect of procedural
justice and outcome favorability in the future research.
Finally, there may be some concerns with the characteristics of the participants in
the two studies. For example, there were more females than males in Study 2, and Sweeney
and McFarlin (1997) suggested that gender differences exist in the importance that people
place on distributive and procedural justice. To rule out the potential bias caused by gender,
we added gender and two other demographic variables (age and educational level) into the
hierarchical regression and found that the main effects of the demographic variables were
all insignificant and the key triple interaction was still significant3. Another concern is that
the participants of the two studies were either full-time or part-time students from a single
university. However, participants of Study 2 were from diverse backgrounds. We believe
that the basic processes examined in our research should not be drastically affected by the
background of the participants. It is of course necessary to replicate our results with
participants recruited from other contexts. A related issue is that our participants were
Chinese, and it is also useful to evaluate our findings in other cultural contexts, although
Leader Morality 26
Leung (2004) concluded after a comprehensive review that basic justice processes are quite
robust across cultural boundaries.
Leader Morality 27
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Leader Morality 36
Footnotes
1
Besides the main effects of leader morality, procedural justice and outcome
favorability on their corresponding judgments, we also found significant main effects of
leader morality, F(1, 88) = 5.34, p < .05, and outcome favorability, F(1, 88) = 11.16, p < .01,
on judgment of procedural justice, and main effects of outcome favorability, F(1, 88) = 10.73,
p < .01, and procedural justice, F(1, 88) = 10.92, p < .01, on judgment of leader morality.
However, these four main effects did not qualify the effectiveness of our manipulations,
because previous justice literature also suggests that outcome favorability may influence
judgment about procedural justice, and vice versa (e.g., Lind & Lissak, 1985). We also found
a significant interaction between leader morality and outcome favorability on the judgment of
outcome favorability, F(1, 88) = 8.04, p < .01, which showed that the outcome favorability
manipulation had a stronger effect on participants’ judgment of outcome favorability in the
high than in the low leader-morality condition. However, despite this interaction, the
effectiveness of the outcome favorability manipulation was clearly confirmed in each of the
two levels of leader morality.
2
When collecting the data, we didn’t ask the participants to specify the type of
industry they worked in and their position. However, according to the demographic
information provided when students registered for the program, the three largest groups
were: finance, insurance, real estate or business services (25.3%), Community, social, or
personal services (23.7%), and transportation, storage, and communication (18.9%). With
regard to rank, 36.7 percent were at the supervisory level or above, and the rest were at
non-supervisory levels.
3
When demographic variables (gender, age, and educational level) were added in the
hierarchical regression in Study 2, the main effects of the demographic variables were all
nonsignificant (p > .1), and the key triple interaction of procedural justice, outcome
Leader Morality 37
favorability and leader morality was still significant, △R2= .02, F(1,170) = 4.14, p < .05.
We further tested the interaction effects between gender and the three independent
variables, and found that all the three interaction effects were not significant. In addition,
including both demographic variables and the three interaction terms involving gender and
the three independent variables as control variables in the regression model did not change
the pattern of our main findings, except that the key three-way interaction effect became
marginally significant (Beta = .20, t = -1.88, p = .06).
Leader Morality 38
Table 1
Correlations and Reliabilities of Variables for Study 2
Variable
Mean
SD
1
1. Procedural justice
3.71
1.23
.86
2. Leader morality
4.03
1.08
.42**
.83
3. Outcome favorability
3.88
1.40
.57**
.36**
.88
4. Pride in organization
3.67
1.08
.36**
.29**
.39**
Note. Coefficient alphas are given on the diagonal.
**Correlation is significant at the .01 level (2-tailed).
2
3
4
.75
Leader Morality 39
Table 2
Hierarchical Regression Results for Study 2
Pride in Organization
Beta
t
Step 1
Procedural justice (PJ)
.17
1.90+
Leader morality (LM)
.13
1.77+
Outcome favorability (OF)
.24
2.80**
OF ╳ LM
.08
.84
OF ╳ PJ
- .08
- 1.03
PJ ╳ LM
- .02
- .25
-.22
-2.10*
R2= .187
F(3,177) = 13.54***
Step 2
△R2= .006
F(3,174) = .45
Step 3
OF ╳ LM ╳ PJ
△R2= .02
F(1,173) = 4.40*
Note. + p<.1, * p<.05, ** p<.01.
Leader Morality 40
Figure Captions
Figure 1. Interaction of leader morality, procedural justice, and outcome favorability for
Study 1.
Figure 2. Interaction of leader morality, procedural justice, and outcome favorability for
Study 2.
Morality and Justice 41
attractiveness
High leader-morality condition
5.06
5.5
5
4.5
4
3.5
3
2.5
2
1.5
4.36
4.33
Low outcome
favorability
High outcome
favorability
2.00
Low
High
Procedural justice
attractiveness
Low leader-morality condition
5.5
5
4.5
4
3.5
3
2.5
2
1.5
3.58
3.04
High outcome
favorability
2.64
2.64
Low
High
Procedural justice
Figure 1.
Low outcome
favorability
Morality and Justice 42
Pride
High leader-morality condition
5.5
5
4.5
4
3.5
3
2.5
2
1.5
4.07
4.22
4.17
3.27
Low outcome
favorability
High outcome
favorability
Low
High
Procedural justice
Pride
Low leader-morality condition
5.5
5
4.5
4
3.5
3
2.5
2
1.5
3.46
3.03
3.41
2.76
Low
High
Procedural justice
Figure 2.
Low outcome
favorability
High outcome
favorability