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

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For example. Brown. such as repurchase intentions. Then. We will also determine which type of justice is related to different customer outcomes. and four factor model of justice). and Tax 1997. Moreover. credit. train their employees. trust with the organization. repatronage intentions. When failures occurs. including satisfaction with the encounter (Smith. An application of the four factor model to a marketing context (specifically to customer complaint handling) is lacking but definitely needed. 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. Deutsch 1985. Next. Within this study we will examine the dimensionality of justice by comparing several different models of justice (one factor. if distributive justice has an impact on satisfaction with complaint handling. Understanding which type of justice impacts certain customer outcomes is essential if effective complaint handling strategies are to be implemented. One of the purposes of this paper. Hill. Hill. organizations sometime fail to deliver products or services that customers expect. organizational complaint handling becomes a critical part of customer retention and. Researchers in marketing have shown that complaint handling activities that involve tangible compensation in the form of reimbursement. therefore. this research demonstrates that the perceived distributive justice of complaint handling positively affects customers’ reactions. correction. satisfaction. Blodgett. we review the types of justice that are central to customers’ perceptions of complait handling. and is typically evaluated with respect to the equity of those outcome distributions (Adams 1965. and negative word-of-mouth behavior. and Wagner 1999. Brown. Literature Review and Hypotheses Despite their best efforts. Smith and Bolton 2002). three factor. whereas informational justice has an effect on repatronage intentions. and Chandrashekaran 1998. and loyalty (Clemmer 1993. two factor. Tax. apology. refund.was related to helping behavior. Smith. if well executed. and Tax 1997). product/service replacement. Blodgett. we offer a set of hypotheses that address our proposed research questions. 2 . Bolton. Smith. whereas informational justice was related to collective esteem. Distributive Justice Distributive justice is the perceived fairness of outcome allocations. and Wagner 1999. Research on complaint handling demonstrates that the perceived fairness of how the complaint is handled affects several customer outcomes. 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. and treat customers following service failures. Tax. repair. these findings have important implications for how organizations should design organizational complaint handling procedures. and Wagner 1999). offers organizations an opportunity to restore customer confidence. Homans 1961). We begin by defining organizational complaint handling and justice. and Chandrashekaran 1998. Bolton. Bolton. and additional tangible compensation positively affect customer perceptions of distributive justice (Goodwin and Ross 1992.

explanation. Researchers in marketing have shown that empathy. Tax. overall satisfaction (Maxham and Netemeyer 2002). and honesty are important factors influencing customers’ perceptions of interactional justice (Goodwin and Ross 1992. lack of bias. repatronage intentions (Blodgett. Maxham and Netemeyer 2002). process knowledge. Research demonstrates that both interpersonal sensitivity and explanations affect individuals’ perceptions of fairness (Brockner and Greenberg 1990. Research indicated that interactional justice positively affects satisfaction with the encounter (Smith. Researchers generally agree that there are two dimensions of interactional justice: interpersonal sensitivity and explanations (Bies and Shapiro 1988. repurchase intentions (Clemmer 1993. and Wagner 1999.). Karuza. and Tax 1997. Thibaut and Walker 1975). Procedural Justice Procedural justice refers to the perceived fairness of the process(es) by which allocation decisions are made. Research demonstrated that when individuals believed procedures were fair. and 3 . representativeness (voice). outcome satisfaction (Clemmer 1993). Brown. 1994. opportunity to voice. in turn. Leventhal. and Wagner 1999). satisfaction with complaint handling (Goodwin and Ross 1992. satisfaction with the encounter (Smith. Bolton. Goodwin and Ross 1992). satisfaction with complaint handling (Tax. sensitivity. timeliness (of response). flexibility. Clemmer 1993. Bolton. correctability. individuals are also sensitive to interactional justice. Conlon and Murray 1996. Brown. process control. Interpersonal Justice and Informational Justice In the traditional model of justice. Customers’ perceptions that complaint handling processes are fair have a positive effect on many outcomes such as. and Chandrashekaran 1998. Conlon and Murray 1996. Smith and Bolton 2002). Bolton. have been shown to affect individuals’ attitudes and behaviors (Cropanzano and Greenberg 1997). Early work on procedural justice identified several procedural rules that influence perceptions of fairness: consistency. and perceptions of fairness (Goodwin and Ross 1992). politeness. Brown. they were more satisfied with the outcome they received. and Chandrashekaran 1998). Brown. even when the outcome was unfavorable (Thibaut and Walker 1975. Smith. and Chandrashekaran 1998. friendliness. Greenberg 1993b. apology. and follow-up (Tax. Tax. and ethicality (Leventhal 1980. accuracy.Smith and Bolton 2002). Interactional fairness perceptions. and Chandrashekaran 1998. Hill. Tax. and Wagner 1999). and decreases negative word-of-mouth (Blodgett. Clemmer 1993. Maxham and Netemeyer 2002) and a negative effect on negative word-of-mouth behaviors (Maxham and Netemeyer 2002). effort. Hill. Blodgett. the fairness of the treatment that one receives during the enactment of procedures (Bies and Moag 1986. assumption of responsibility. and Chandrashekaran 1998. bias suppression. outcome satisfaction (Clemmer 1993). overall satisfaction/return intentions (Clemmer 1993. Greenberg 1993). Maxham and Netemeyer 2002). Lind and Tyler 1988). efficiency. Bolton. Brown. Smith. Researchers in marketing have shown that customer perceptions of procedural justice are based on convenience. and Tax 1997). justification. and Fry 1980. Hill. helpfulness. and Tax 1997).

and Chandrashekaran 1998.e. or one factor models). procedural. and respect. we propose that informational justice will have a unique affect on global or organizational centered outcomes such as repurchase intentions. Hill.e. In management. Tax. we propose that the dimensionality of justice will be best exemplified with four factors compared to the traditional three factor conceptualization. Greenberg (1993) suggested these two dimensions of interactional justice are better conceptualized as two distinct forms of justice: interpersonal justice. Maxham and Netemeyer 2002). (2001. Cohen-Charash and Spector 2001). Bobocel. Thus. interactional (containing interpersonal justice and informational justice) and satisfaction with complaint handling (Goodwin and Ross 1992.e. organizational defined) aspects of the process. and Rupp 2001. Brown. First. dignified behavior. satisfaction with complaint handling (Tax. we expect that interpersonal justice will affect satisfaction with complaint handling. trust in the organization. In contrast.” This perspective is also reflected by Tyler and Bies (1989) who suggests 4 . outcome satisfaction (Clemmer 1993).. and Chandrashekaran 1998. However. H1: The fit of the four factor model of justice will be superior to the alternative models of justice (i. Colquitt et al. three. can ease an individual’s response to decision outcomes (i. Brown. and informational justice as the fairness of explanations and information. in that explanations provide the information needed to evaluate structural (i.. two factor model. Smith and Bolton 2002). Colquitt (2001) has shown that the four factor model management provides superior fit to alternative models of justice such as the one factor. Cropanzano. defined as the fairness of interpersonal treatment provided during the enactment of procedures and distributions of outcomes. two. Byrne.and we propose that these types of justice will be related to very different customer outcomes. Hill. as described previously. 427)) claims that “informational justice acts primarily to alter reactions to procedures. and Tax 1997. This proposed relationship is consistent with Greenberg (1993) who states that interpersonal justice. recall that the four factor model divides interactional justice into two distinct parts-interpersonal justice and informational justice-. complaint handling outcomes). However. politeness. 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. p. and decreases negative word-of-mouth (Blodgett. repatronage intentions (Blodgett. and negative word-of-mouth. and three factor models of justice.Wagner 1999. 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. Maxham and Netemeyer 2002). overall satisfaction/return intentions (Clemmer 1993.. Maxham and Netemeyer 2002). We also expect that distributive and procedural justice will impact satisfaction with complaint handling. Indeed. Maxham and Netemeyer 2002). because it reflects issues such as sensitivity. and Tax 1997). Differential Effects of Justice on Customer Outcomes Previous research in marketing has established relationships among distributive. especially if these outcomes are unfavorable.

The survey began with a series of open-ended questions requesting respondents to describe in detail the problem that occurred. and one granted permission. trust with the organization. trust with the organization. and interpersonal justice will be related to satisfaction with complaint handling. The sampling frame used for this study was passengers waiting for flights at departure gates at a major international airport. Overall. Clemmer 1993). This protocol is similar to those used in much previous research focusing on evaluations of failures. Research Methodology Design and Sample We used a cross-sectional survey design to collect perceptions about product and service complaint experiences. and negative word-of-mouth behaviors . complaining behavior. These openended questions were used to elicit detailed information from memory and assist with the retrieval of feelings and evaluations about the incident. and what actions were taken to resolve the problem. 5 . Following these open-ended questions. and informational justice. 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. and asked for their participation by completing the survey. Thus. with a mean age of 38 years. we asked for their evaluations about how the company responded to their problem(s). The sample was composed of 40% men. Respondents were approached by researchers who introduced themselves. In terms of level of education completed.. in the context of complaint handling. described the purpose of the study.9% graduate degrees. the sample included: 15. identified the two principal researchers and university affiliations. and negative word-of-mouth). Next.that candid communication with group members may decrease perceptions of secrecy and dishonesty of the group. we included items assessing their satisfaction with complaint handling. 29. trust with the organization. repurchase intentions. interpersonal. A cover letter reiterated the purpose of the study. procedural. These questions addressed their perceptions of distributive. H2: Distributive justice.1% high school. we believe that our sample is a well-represented convenience sample. repurchase intentions. 10. and complaint handling (Tax.g. Permission was formally requested from several major airlines for such a survey. H3: Informational justice will be related to repurchase intentions. and 20. and Chandrashekaran 1998. respondents were asked fixed response and evaluative questions concerning their incident. 24% some college. procedural justice. with whom within the organization they discussed the incident. Three-hundred thirteen surveys were collected with 285 being usable. and guaranteed anonymity of all responses.7% some graduate education. Brown. we expect that informational justice will be related to global or organizational centered outcomes (e. enhancing perceptions that the overall group is trustworthy.3% undergraduate degree. Then. 60% women.

Finally. demographic information and measures of control variables were requested. 6 .and negative word-of-mouth behaviors. The respondents were then thanked and debriefed.

Bolton. age. These control variables were chosen because previous research reported that these were influential in complaint handling situations (Smith. Four different conceptual models of jstice were tested-. with a ratio of 2. These four factor structures were compared because each model has appeared recently in the marketing and management literatures and considerable debate exists in the management discipline about which model provides the best fit. we performed a confirmatory factor analysis with intercorrelated factors using LISREL 8. These indices compare the fit of the proposed model to a baseline model. procedural. interpersonal. According to Arbuckle (1997). We also collected information about perceptions of the severity of the failure. First. and informational justice. and informational justice were based on those developed recently by Colquitt (2001). and Wagner 1999. Brown. we assessed the chi-square statistic which provides a measure of absolute fit of the implied covariances to the observed covariances. interpersonal. we assigned all items shown in the Appendix to a single factor. The three factor model contained items designated for distributive justice.Measures of Constructs and Control Variables The measures used in this study. Next. we also compared the four models using a ratio of chi-square and degrees of freedom. Overall. ratios closer to 2 are indicative of superior fit. repurchase intentions. These measures. and informational justice. Given this criterion. two. Analysis and Results Confirmatory Factor Analysis In order to test the first hypothesis. The measurement of satisfaction with complaint handling. and four factor models. interpersonal.30 (Joreskog and Sorbom 1998). procedural justice. source of the measures. The table indicates that the four factor model is superior to the three alternative models. We also examined the incremental fit index (IFI) and the comparative fit index (CFI). importance of the product or service. Many researchers are critical of the chi-square statistic because it is sensitive to differences in sample size. with interactional justice subsuming the items for interpersonal and informational justice. A comparison of fit statistics for these models is shown in Table 1. Ganesan. and Klein 2003). and various demographic information. trust. and the coefficient alphas for each measure are presented in Appendix A. were adapted for use in a marketing context1. disconfirmation. For the one factor model. A chi-square closer to 0 signifies a better fit. Hence. is superior to the one. and Chandrashekaran (1998). such as gender.one factor. the two factor model was tested with distributive justice as one factor and procedural justice encompassing the items for procedural. the four factor model included separate factors for distributive. Indices 7 . and level of education. Measures of distributive. three factor. originally developed for use in a management context. Only minor modifications of the wording were necessary. Hess.55. our results reveal that the four factor model. and three factor models. and negative word-of-mouth were based on established measures from Oliver and Swan (1989) and Tax. procedural. it shows that the four factor model provides a superior fit compared to the other three models. Finally. two factor. and interactional justice. Such a test has never been conducted in the marketing discipline.

procedural.95) compared with the three alternative models. our results indicate that informational justice is the only type of justice that has a significant impact on these important customer consequences.26. p < 0. The four factor model exemplifies superior fit (RMSEA = 0. In the following section. Bentler and Bonett 1980). IFI = 0. and negative word-of-mouth. A check of modification indices did not suggest adding paths from distributive. The fit indices of our structural model are presented in Table 2 and show that the proposed structural model provides good fit to the data. We also investigated whether distributive. which hypothesized that distributive justice (_ = 0. repurchase intentions.01).01). p < 0.approaching 1.05 and 0. or interpersonal justice to these outcomes. procedural. 8 . 47% for repurchase intentions.90 representing the established threshold for good fit (Bentler 1990). the four factor model provides superior fit (CFI = 0.30 (Joreskog and Sorbom 1998). The structural model provides full support for H 2. 63% for trust. and interpersonal justice were related to satisfaction with complaint handling. procedural. p < 0.94. The final criteria used was the root-mean-square error of approximation (RMSEA) which designates how well the model compares to the population covariance matrix (Brown and Cudeck 1993).95.01).01). Our findings showed that the four factor model which proposed that justice is best conceptualized as containing four factors. and negative word-of-mouth (_ = 0. The percentage of variance explained for each of our dependent variables is also quite high at 80% for satisfaction with complaint handling. These authors define good fit as an RMSEA between 0. distributive. with 0.0 exemplify models with superior fit. RMSEA = 0. and negative word-of-mouth. p < 0.29. we included these hypothesized paths in a structural model using LISREL 8.24.01). repurchase intentions.94. the fit indices summarized in Table 1 clearly demonstrates the superior fit of the four factor model compared to the three alternative models and supports Hypothesis 1.08. CFI = 0. Thus. Analysis of the Structural Model Given that the four factor model provided superior fit. procedural justice (_ = 0. we discuss the theoretical and practical implications of our findings. Overall. and interpersonal justice (_ = 0. trust with the organization. interpersonal.23.07) compared to the three alternative models. p < 0.061. trust with the organization.048 (Browne and Cudeck 1993. p < 0.27.50. Consistent with previous results. trust with the organization (_ = 0. To test H2 and H3. as proposed. Discussion Our study examined the theoretical dimensionality of justice by comparing the fit of four models of justice within the context of complaint handling. and H3 which proposed that informational justice was related to global or organizational cenetered outcomes such as. we used this model to test H2 which proposed that distributive. and the SRMR = 0. Our results also provide support for H 3 which stated that informational justice would be related to repurchase intentions (_ = 0. and 64% for negative word-of-mouth. as each index approaches or exceeds established criteria: IFI = 0.01) would be related to satisfaction with complaint handling. and informational justice were uniquesly related to satisfaction with complaint handling. It is also worth noting that informational justice is not significantly related to satisfaction with complaint handling.

procedural. 9 . and informational justice. the Colquitt (2001) measures provided better overall convergent and discriminant validity. This research is the first to use and compare the four factor model within a complaint handling context. Taken together. interpersonal. ENDNOTES Within our survey. these findings clearly demonstrate the unique impact that informational justice has on how organizations handle customer complaints. we also included justice measures that have been utilized in previous marketing research (see Tax. informational justice influences global or organizational centered outcomes such as repurchase intentions. and negative word-of-mouth. Instead. and Chandrashekaran 1998. Overall. Brown. Our results also show that informational justice has no significant relationship with satsifaction with complaint handling. we used these measures in our analyses. Smith. Thus. Bolton. and interpersonal justice influence their evaluations of how the complaint had been handled (i. procedural. provides the best fit to the data compared with three popular alternative models of justice. We also examined the differential impact of the four types of justice on important customer outcomes. satisfaction with complaint handling). However. and Wagner 1999).. trust with the organization.e. we found support for the fact that customers’ judgments of distributive.

94 RMSEA 0.94 0.63 0.89 (387) IFI 0.18 0./df Ratio 11.41 4.88 0.95 CFI 0.55 IFI 0.94 CFI 0.78 0.8 (152) 1119.TABLE 1 Comparison of Four Models of Justice Models 1-Factor Model 2-Factor Model 3-Factor Model 4-Factor Model Chi-Sq.72 2.94 0.88 0.87 7.78 0.063 0.13 0.24 0.061 SRMR 0.63 0.08 (151) 702.64 (149) 372. (df) 1804.95 RMSEA 0.75 (146) Chi-Sq.046 0.07 TABLE 2 Fit Indices for the Measurement and Structural Models Models Measurement Model Structural Model Chi-Sq. (df) 808.72 (377) 829.048 10 .

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3. "The Four Factor Model of Justice: 13 . 5. 2.91) During the process of resolving your complaint. 4. 2. to what extent: (5-point scale) 1.88) During the process of resolving your complaint. ( R ) I am satisfied with the organization. to what extent: (5-point scale) 1. 6. 3.85) (7-point scale) (Strongly Agree --.Strongly Disagree) 1. 4.85) Satisfaction with the Organization (Alpha = . 2. 4. 3. 7. Were you able to express your views and feelings during those procedures? Did you have influence over the outcomes arrived at by those procedures? Were those procedures applied consistently? Were those procedures free of bias? Were those procedures based on accurate information? Were you able to appeal the outcomes arrived at by those procedures? Did those procedures uphold ethical and moral standards? Distributive Justice (Adapted from Colquitt 2001) (Alpha = . I am unhappy with how the organization handled my complaint.97) To what extent: (5-point scale) 1. Were they candid in communications with you? Did they explain thoroughly the procedures used to make decisions about your complaint? Were their explanations regarding the procedures used to make decisions about your complaint reasonable? Did they communicate details in a timely manner? Did they seem to tailor (his/her/their) communications to your specific needs? Procedural Justice (Adapted from Colquitt 2001) (Alpha = . to what extent: (5-point scale) 1. 2. given your problem? Satisfaction with Complaint Handling (Adapted from Oliver and Swan 1989) (Alpha = . 3. I am pleased with the manner in which the complaint was dealt with. 2.Measures of Contructs Interpersonal Justice (Adapted from Colquitt in press) (Alpha = . 3. Did they treat you in a polite manner? Did they treat you with dignity? Did they treat you with respect? Did they refrain from improper remarks or comments? Informational Justice (Adapted from Colquitt 2001) (Alpha = . 1. 3. 4. Did your outcomes reflect what you deserved? Were your outcomes appropriate given the experience you had? Did your outcomes reflect a fair resolution? Were your outcomes justified. 5. 2. ( R ) I am satisfied with how the organization handled my complaint. I am unhappy with the organization. I am pleased with the organization.87 ) During the process of resolving your complaint.

hess@business.ambrose@bus.ucf.O.edu 14 .O.wm. Ronald L. Assistant Professor of Marketing School of Business Administration The College of William & Mary P. FL 32816-1400 (407) 823-5684 (407) 823-3725 (fax) maureen. Jr. Maureen Ambrose Professor of Management University of Central Florida Management Department P.An Application to Customer Complaint Handling " Dr. Box 8795 Williamsburg. VA 23187-8795 (757) 221-2676 (757) 221-2937 (fax) ron.edu Dr. Box 161400 Orlando. Hess.

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