National Institute of Technology 2009 M.B.A Finance Organizational Behavior - Question Paper

5. The rational decision maker can find full info about criteria and options as it is presumed that there is no time or cost constrains.
6. Maximum payoff: The rational decision maker selects the option which would give the highest perceived value.


Q.4: A) Contrast distributive and procedural justice. What implications might they have for designing pay systems in various countries?
ANS:
Distributive justice id the perceived fairness of the amount and allocation of rewards among individual. Distributive justice has a greater impact on employee satisfaction than procedural justice. Distributive justice concerns what is just or right with respect to the allocation of goods in a society. Thus, a community whose individual members are rendered their due would be considered a society guided by the principles of distributive justice.
Procedural justice is the perceived fairness of the process used to determine the allocation of rewards. Procedural justice tends to effect the employee’s organizational commitments, trust in his or her boss and intention to quit. Procedural justice, who is concerned with just processes such as in the administration of law, distributive justice concentrates on just results and consequences.
This distinction ranging from procedural and distributive justice is not simply theoretical. For example, when managers are asked to define instances of fair or unfair performance evaluations, they naturally distinguish ranging from problems relating to the decision and those concerning the process used to reach it. There are 2 complementary explanations. The 1st is ‘instrumental’ and suggests that individuals see fair process as a guarantee that, over time, they will receive their fair share of favorable results. They are hence bypassing short-term gain to maximize long-term gain. A more ‘psychological’ explanation is that fair process carries symbolic value, signaling respect for the dignity of the individual and confirming his or her status in the unit.
Statutory compensation in Australia was implemented very early in Australia as a relatively influential labor movement in the late 19th and early 20th century took place. Statutory compensation in Canada: Workers’ compensation was Canada’s 1st social program to be introduced as it was favored by both workers’ groups and employers hoping to avoid lawsuits. The system arose after an inquiry by Ontario Chief Justice William Meredith who outlined a system that workers should be compensated for workplace injuries, but that they must provide up their right to sue their employers. It was introduced in the different provinces at various dates Ontario was 1st in 1915, Manitoba in 1916, British Columbia in 1917. It remains a provincial responsibility and thus the exact rules vary from province to province. In a few provinces, such as Ontario’s workplace safety. In British Columbia, the occupational health and safety mandate is legislated. In most provinces it remains solely concern with insurance. It is paid by employees based on the payroll, industry sector and history of injuries (or lack thereof) in their workplace, sometimes known as “Injury experience”.

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