The Four Factor Model of Justice:

An Application to Customer Complaint Handling

Dr. Ronald L. Hess, Jr., The College of William & Mary

Dr. Maureen Ambrose, University of Central Florida

“We waited a very long time for a waiter, and finally the person who seated us came and took our order. She was obviously in a rush, and neglected to go over the evening’s specials or spend one second more with us than she had to. Our drinks and order were delivered by a waitor that didn’t even bother to ask if we needed anything else. After we could eat no more, we waited pateient;y for human life, and hopefully refills for our drinks. After a very long time, we went to the hostess and told her about our lack of waiters and growing thirst. It took three trips from her before we saw anyone or could get a refill.”

From a Disgruntled Traveler-- Epinions.com

“We had a third person staying in the hotel room and had requested a cot from the moment we checked in. The people at the front desk assured us that it would be there when the third person arrived. Unfortunately, when the third person came to stay sure enough there was no cot available. To our great annoyance, one person had to sleep on the floor. Is this the kind of service you would expect from a four star hotel? I don’t think so. “

From an Annoyed HotelG uest-- Epionions.com

Organizations spend millions annually trying to attract and retain customers; however, as these example indicate, failures in service delivery can greatly threaten such efforts. Given the significant costs of losing such customers when failures occur, a critical aspect of customer retention is effectively handling complaints (Hart, Heskett, and Sasser 1990). Research shows that the success of these strategies in restoring customer satisfaction and repurchase intentions depends on customers’ perceptions that their complaint was handled fairly (Clemmer 1993; Blodgett, Hill, and Tax 1997; Tax, Brown, and Chandrashekaran 1998; Smith, Bolton, and Wagner 1999).

The management and marketing disciplines have traditionally distinguished among three types of fairness: distributive justice (fairness of outcome distributions), procedural justice (fairness of the process by which decisions are made), and interactional justice (fairness in the treatment one receives during the enactment of the procedures) (Clemmer 1993; Blodgett, Hill, and Tax 1997; Tax, Brown, and Chandrashekaran 1998; Smith, Bolton, and Wagner 1999; Smith and Bolton 2002). Recently, Greenberg (1993) argued that this traditional three factor model of justice is better conceptualized as four different types of justice. He suggested that in addition to distributive and procedural justice, interactional justice be split into two distinct types of justice: interpersonal justice, defined as the fairness of interpersonal treatment provided during the enactment of procedures and distributions of outcomes, and informational justice, defined as the fairness of explanations and information.

Recently, empirical research in management has appeared that supports the four factor model of justice (Colquitt 2001; Colquitt, Conlon, Wesson, Porter and Ng 2001) and that interpersonal and informational justice have unique effects on managerial outcomes (Colquit 2001). For example, Colquitt (2001) found that interpersonal justice was related to helping behavior, whereas informational justice was related to collective esteem. An application of the four factor model to a marketing context (specifically to customer complaint handling) is lacking but definitely needed. One of the purposes of this paper, therefore, is to explore the theoretical dimensionality of justice by explicitly comparing the traditional three factor model and the four-factor model in the context of customer complaint handling.

A second purpose of this article is to understand how these types of justice differentially impact important customer outcomes following organizational complaint handling (Clemmer 1993; Blodgett, Hill, and Tax 1997). Understanding which type of justice impacts certain customer outcomes is essential if effective complaint handling strategies are to be implemented. For example, if distributive justice has an impact on satisfaction with complaint handling, whereas informational justice has an effect on repatronage intentions, these findings have important implications for how organizations should design organizational complaint handling procedures, train their employees, and treat customers following service failures.

Within this study we will examine the dimensionality of justice by comparing several different models of justice (one factor, two factor, three factor, and four factor model of justice). We will also determine which type of justice is related to different customer outcomes, such as repurchase intentions, trust with the organization, and negative word-of-mouth behavior. We begin by defining organizational complaint handling and justice. Then, we offer a set of hypotheses that address our proposed research questions.

Literature Review and Hypotheses

Despite their best efforts, organizations sometime fail to deliver products or services that customers expect. When failures occurs, organizational complaint handling becomes a critical part of customer retention and, if well executed, offers organizations an opportunity to restore customer confidence, satisfaction, repatronage intentions, and loyalty (Clemmer 1993; Blodgett, Hill, and Tax 1997; Tax, Brown, and Chandrashekaran 1998; Smith, Bolton, and Wagner 1999; Smith and Bolton 2002). Research on complaint handling demonstrates that the perceived fairness of how the complaint is handled affects several customer outcomes. Next, we review the types of justice that are central to customers’ perceptions of complait handling.

Distributive Justice

Distributive justice is the perceived fairness of outcome allocations, and is typically evaluated with respect to the equity of those outcome distributions (Adams 1965; Deutsch 1985; Homans 1961). Researchers in marketing have shown that complaint handling activities that involve tangible compensation in the form of reimbursement, product/service replacement, credit, apology, repair, refund, correction, and additional tangible compensation positively affect customer perceptions of distributive justice (Goodwin and Ross 1992; Tax, Brown, and Chandrashekaran 1998; Smith, Bolton, and Wagner 1999). Moreover, this research demonstrates that the perceived distributive justice of complaint handling positively affects customers’ reactions, including satisfaction with the encounter (Smith, Bolton, and Wagner 1999; Smith and Bolton 2002), outcome satisfaction (Clemmer 1993), satisfaction with complaint handling (Goodwin and Ross 1992; Tax, Brown, and Chandrashekaran 1998; Maxham and Netemeyer 2002), repatronage intentions (Blodgett, Hill, and Tax 1997), overall satisfaction/return intentions (Clemmer 1993; Maxham and Netemeyer 2002), and perceptions of fairness (Goodwin and Ross 1992), and decreases negative word-of-mouth (Blodgett, Hill, and Tax 1997).

Procedural Justice

Procedural justice refers to the perceived fairness of the process(es) by which allocation decisions are made. Early work on procedural justice identified several procedural rules that influence perceptions of fairness: consistency, accuracy, representativeness (voice), bias suppression, correctability, and ethicality (Leventhal 1980; Leventhal, Karuza, and Fry 1980; Thibaut and Walker 1975). Research demonstrated that when individuals believed procedures were fair, they were more satisfied with the outcome they received, even when the outcome was unfavorable (Thibaut and Walker 1975; Lind and Tyler 1988).

Researchers in marketing have shown that customer perceptions of procedural justice are based on convenience, flexibility, timeliness (of response), opportunity to voice, process control, process knowledge, helpfulness, efficiency, assumption of responsibility, and follow-up (Tax, Brown, and Chandrashekaran 1998; Clemmer 1993; Conlon and Murray 1996; Goodwin and Ross 1992). Customers’ perceptions that complaint handling processes are fair have a positive effect on many outcomes such as, satisfaction with the encounter (Smith, Bolton, and Wagner 1999; Smith and Bolton 2002), outcome satisfaction (Clemmer 1993), satisfaction with complaint handling (Tax, Brown, and Chandrashekaran 1998), overall satisfaction (Maxham and Netemeyer 2002), repurchase intentions (Clemmer 1993; Maxham and Netemeyer 2002) and a negative effect on negative word-of-mouth behaviors (Maxham and Netemeyer 2002).

Interpersonal Justice and Informational Justice

In the traditional model of justice, individuals are also sensitive to interactional justice, the fairness of the treatment that one receives during the enactment of procedures (Bies and Moag 1986; Tax, Brown, and Chandrashekaran 1998; Blodgett, Hill, and Tax 1997; Smith, Bolton, and Wagner 1999). Researchers generally agree that there are two dimensions of interactional justice: interpersonal sensitivity and explanations (Bies and Shapiro 1988; Greenberg 1993). Research demonstrates that both interpersonal sensitivity and explanations affect individuals’ perceptions of fairness (Brockner and Greenberg 1990; Greenberg 1993b, 1994;). Interactional fairness perceptions, in turn, have been shown to affect individuals’ attitudes and behaviors (Cropanzano and Greenberg 1997).

Researchers in marketing have shown that empathy, effort, politeness, friendliness, sensitivity, apology, explanation, justification, lack of bias, and honesty are important factors influencing customers’ perceptions of interactional justice (Goodwin and Ross 1992; Clemmer 1993; Conlon and Murray 1996; Tax, Brown, and Chandrashekaran 1998; Smith, Bolton, and Wagner 1999). Research indicated that interactional justice positively affects satisfaction with the encounter (Smith, Bolton, and Wagner 1999; Smith and Bolton 2002), outcome satisfaction (Clemmer 1993), satisfaction with complaint handling (Tax, Brown, and Chandrashekaran 1998; Maxham and Netemeyer 2002), repatronage intentions (Blodgett, Hill, and Tax 1997; Maxham and Netemeyer 2002), overall satisfaction/return intentions (Clemmer 1993; Maxham and Netemeyer 2002), and decreases negative word-of-mouth (Blodgett, Hill, and Tax 1997).

Most research on justice treats interactional justice as a third type of justice while distinguishing between its two sub-dimensions: interpersonal sensitivity and explanations (Bies 2001; Cropanzano, Byrne, Bobocel, and Rupp 2001; Cohen-Charash and Spector 2001). However, as described previously, Greenberg (1993) suggested these two dimensions of interactional justice are better conceptualized as two distinct forms of justice: interpersonal justice, defined as the fairness of interpersonal treatment provided during the enactment of procedures and distributions of outcomes, and informational justice as the fairness of explanations and information. In management, Colquitt (2001) has shown that the four factor model management provides superior fit to alternative models of justice such as the one factor, two factor model, and three factor models of justice. Thus, we propose that the dimensionality of justice will be best exemplified with four factors compared to the traditional three factor conceptualization.

H1: The fit of the four factor model of justice will be superior to the alternative models of justice (i.e., three, two, or one factor models).

Differential Effects of Justice on Customer Outcomes

Previous research in marketing has established relationships among distributive, procedural, interactional (containing interpersonal justice and informational justice) and satisfaction with complaint handling (Goodwin and Ross 1992; Tax, Brown, and Chandrashekaran 1998; Maxham and Netemeyer 2002). We also expect that distributive and procedural justice will impact satisfaction with complaint handling. However, recall that the four factor model divides interactional justice into two distinct parts-- interpersonal justice and informational justice-- and we propose that these types of justice will be related to very different customer outcomes. First, we expect that interpersonal justice will affect satisfaction with complaint handling. This proposed relationship is consistent with Greenberg (1993) who states that interpersonal justice, because it reflects issues such as sensitivity, politeness, dignified behavior, and respect, can ease an individual’s response to decision outcomes (i.e., complaint handling outcomes), especially if these outcomes are unfavorable.

In contrast, we propose that informational justice will have a unique affect on global or organizational centered outcomes such as repurchase intentions, trust in the organization, and negative word-of-mouth. Greenberg (1993) states that informational justice should affect long-term or organizational-centered outcomes because explanations and open communications provide individuals with information necessary to assess the systemic bases of existing procedures. Indeed, Colquitt et al. (2001, p. 427)) claims that “informational justice acts primarily to alter reactions to procedures, in that explanations provide the information needed to evaluate structural (i.e., organizational defined) aspects of the process.” This perspective is also reflected by Tyler and Bies (1989) who suggests that candid communication with group members may decrease perceptions of secrecy and dishonesty of the group, enhancing perceptions that the overall group is trustworthy. Thus, in the context of complaint handling, we expect that informational justice will be related to global or organizational centered outcomes (e.g., repurchase intentions, trust with the organization, and negative word-of-mouth).

H2: Distributive justice, procedural justice, and interpersonal justice will be related to satisfaction with complaint handling.

H3: Informational justice will be related to repurchase intentions, trust with the organization, and negative word-of-mouth behaviors .

Research Methodology

Design and Sample

We used a cross-sectional survey design to collect perceptions about product and service complaint experiences. This protocol is similar to those used in much previous research focusing on evaluations of failures, complaining behavior, and complaint handling (Tax, Brown, and Chandrashekaran 1998; Clemmer 1993). The sampling frame used for this study was passengers waiting for flights at departure gates at a major international airport. Permission was formally requested from several major airlines for such a survey, and one granted permission. Respondents were approached by researchers who introduced themselves, described the purpose of the study, and asked for their participation by completing the survey. A cover letter reiterated the purpose of the study, identified the two principal researchers and university affiliations, and guaranteed anonymity of all responses. Three-hundred thirteen surveys were collected with 285 being usable. The sample was composed of 40% men, 60% women, with a mean age of 38 years. In terms of level of education completed, the sample included: 15.1% high school, 24% some college, 29.3% undergraduate degree, 10.7% some graduate education, and 20.9% graduate degrees. Overall, we believe that our sample is a well-represented convenience sample.

Procedure

Respondents were asked to think about a service problem that they experienced and complained about to someone in the organization within the previous six months. The survey began with a series of open-ended questions requesting respondents to describe in detail the problem that occurred, with whom within the organization they discussed the incident, and what actions were taken to resolve the problem. These open-ended questions were used to elicit detailed information from memory and assist with the retrieval of feelings and evaluations about the incident. Following these open-ended questions, respondents were asked fixed response and evaluative questions concerning their incident. Next, we asked for their evaluations about how the company responded to their problem(s). These questions addressed their perceptions of distributive, procedural, interpersonal, and informational justice. Then, we included items assessing their satisfaction with complaint handling, repurchase intentions, trust with the organization, and negative word-of-mouth behaviors. Finally, demographic information and measures of control variables were requested. The respondents were then thanked and debriefed.