Beaten before begun: The role of procedural justice in planning change

This investigation examines the potential adverse effects of planning strategic change on the employment relationship. We proposed that planning change can alter the psychological contract such that employees believe that organization obligations to the employee will diminish. We also argue that planning change may adversely affect employees' perceived obligations to the organization, their trust in management, and their intention to remain with the organization but that such effects depend upon whether employees perceive the planning process to be procedurally just. We tested these hypotheses in a longitudinal study of a utility company undergoing reengineering planning. The findings supported the proposition that reactions to planning change depend upon perceptions of procedural justice in that employee obligations and intention to remain were only adversely affected by planning when employees perceived the, process as unjust. Surprisingly, planning change did not significantly affect trust for employees who perceived the process as unjust and actually resulted in an increase in trust for employees who perceived the process as just. We discuss implications for practice and research. (C) 2002 Elsevier Science Inc. All rights reserved.