Municipal Officials' Reactions to Justice in Budgetary Resource Allocaiton

Abstract

INTRODUCTION A primary purpose of budgeting in governmental units is resource allocation (Key, 1940; Schick, 1980). The budgetary process encompasses procedures for determining the distribution of limited financial resources among governmental programs. The finalized budget, in turn, becomes the primary vehicle by which these resource allocation decisions are communicated throughout the governmental unit and authorizes a maximum level of spending within each program. From a general perspective, the budget represents a link between financial resources and human behavior to facilitate accomplishment of the governmental unit's policy objectives (Wildavsky, 1984:1). Lynch (1985:8) noted that budgetary decisions concerning the allocation of governmental resources evoke strong emotions. One group that would be expected to react emotionally to governmental resource allocation decisions is comprised of the officials who head the governmental unit's programs. An official in charge of a governmental program will likely be concerned with the outcome of the budgetary resource allocation decision--the distribution of resources to the program--because it affects his or her ability to realize personal gains. For example, the distribution places a ceiling on expenditures which may inhibit the program's performance (Peters, O'Connor, and Rudolph, 1980; O'Connor et al., 1984). The program's performance, in turn, will have an influence on the rewards (e.g., pay, promotion, recognition) that the official is able to garner from the governmental unit. In addition, the distribution may affect the official's status among parties who have a personal stake in the budget such as the program's subordinate employees and its clientele (Anton, 1967; Niskanen. 1971). These parties view the official as the program's primary advocate in the competition for scarce resources and the distribution to the program reflects the official's effectiveness in this role. For these reasons, perceptions surrounding the distribution (e.g., whether it met expectations, whether it met the program's needs) would be expected to trigger strong emotions on the part of the official heading the program. Evidence from justice research suggests that governmental officials will have emotional reactions not only to the distribution of resources but also to the process by which the distribution was made. Early studies of justice in allocations focused on distributive justice which is the perceived fairness of a distribution (Adams, 1965; Walster, Berscheid, and Walster, 1973). Recent research has emphasized procedural justice which is the perceived fairness of the steps by which the distribution is determined (Barrett-Howard and Tyler, 1986; Greenberg, 1987a; Bies and Shapiro, 1988; Folger and Konovsky, 1989; McFarlin and Sweeney, 1992). The organizational justice literature has established that employees react to the process of allocation as well as to the outcomes of that process. The primary purpose of the present study was to examine municipal department heads' reactions to procedural justice and distributive justice in budgetary resource allocation. The authors focused on how justice judgments affect department heads' attitudes toward their municipality and higher-level municipal officials. THEORETICAL FOUNDATIONS A rich literature has demonstrated that distributive justice judgments are a determinant of employee attitudes and behaviors (see reviews by Walstar, Berscheid, and Walstar, 1978 and Greenberg, 1982). Generally, this work has dealt with the allocation of organizational rewards and is based on the premise that employees compare the actual rewards they receive from the organization with some perceived normative distribution (e.g., the rewards they deserved to receive given their contributions o the organization; the rewards they expected to receive). Differences between the actual distribution and the normative distribution represent an unfair condition and employees will attempt to redress this unfair condition through attitudinal and/or behavioral changes. …