Ducks and Decoys: Revisiting the Exit-Voice-Loyalty Framework in Assessing the Impact of a Workplace Dispute Resolution System

Until now, empirical research has been unable to reliably identify the impact of organizational dispute resolution systems (DRSs) on the workforce at large, in part because of the dearth of data tracking employee perceptions pre- and post- implementation. This study begins to fill this major gap by exploiting survey data from a single, geographically-expansive, US firm with well over 100,000 employees in over a thousand locations. The research design allows us to examine employment relations and human resource (HR) measures, namely, perceptions of justice, organizational commitment, and perceived legal compliance, in the same locations before and after the implementation of a typical, multistep DRS that begins with informal reporting to local managers and culminates with mandatory arbitration. Even after holding all time-constant, location-level variables in place, we find that introduction of the DRS is associated with elevated perceptions of informal procedural justice and interactive justice, but diminished perceptions of formal procedural justice. We also find no discernible effect on organizational commitment, but a significant boost to perceived legal compliance by the company, raising important questions about the tradeoff between voice and exit and formal versus informal aspects of dispute resolution mechanisms.