272 Organizacija, Volume 53 Issue 4, November 2020Research Papers 1 Received: 16th March 2020; revised: 15th August 2020; accepted: 28th August 2020 Procedural Justice in Selection from the Lens of Psychological Contract Theory Phuong TRAN HUY, Ngan Hoang VU, Hue Thi HOANG, Hanh Thi Hai NGUYEN Faculty of Human Resource Economics and Management, National Economics University Hanoi, Viet Nam, phuongth@neu.edu.vn (corresponding author), nganvh@neu.edu.vn, hoanghue@neu.edu.vn & nguyen.hanh@stneuedu.onmicrosoft.com Background and purpose: In recruitment and selection, job applicants do not only base their justice judgment on the actual experience but also compare what happens and what they expect. This study, therefore, investigates ap- plicants’ reaction to procedural justice in recruitment selection through the lens of psychological contract framework. Psychological contract theory highlights the role of expectations, discrepancies between perception and expectation, and perceived contract breach on individual outcomes. Methodology: Two surveys were conducted with job seekers in Vietnam, one before and one after the selection process. Printed questionnaires were administered to job seekers in the first survey, while the second used online survey. Structural Equation Modeling technique was adopted to analyze the data. Results: Data from a sample of 232 job seekers indicated that previous job experience and source of candidates were significantly related to justice expectations. In addition, perceived unmet expectations were found to predict procedural contract breach, which in turn negatively influenced job acceptance intention and recommendation inten- tion. Conclusion: The research highlights the role of unmet justice expectation, the perceived discrepancy between what happened and what was supposed to be, in predicting intention to accept offer and to recommend others. The re- sults suggest that firms should provide updated and official information regarding the selection process to all parties such as internal employees, recruitment agency and job search website to reduce over-expectation. Keywords: Applicants’ reaction, Procedural justice, Expectations, Psychological contract, Job acceptance intention, Recommendation intention DOI: 10.2478/orga-2020-0018 1 Introduction Human resource represents a primary source of sustain- able competitive advantages (Kundu & Gahlawat, 2016). Ensuring that the organizations acquire the right types of employees at the right time is the pivotal and challenging task of recruitment and selection function (Absar, 2012; Van Hoye, 2013). As a result, recruitment and selection of employees have been an important focus of both aca- demics and practitioners (Truxillo et al., 2009; Konradt, et al., 2017). The aspect of recruitment and selection that attracts the most research interest so far is applicants’ jus- tice perceptions in selection settings and subsequent out- comes (Gilliland, 1993; Ryan and Ployhart, 2000; Ploy- hart and Harold, 2004). Gilliland (1993) suggested that job candidates use the information they have during selection to make inferences about employment situations, which in turn, influence their attitudes, beliefs, and behaviors. Previous research has confirmed the positive relationship between perception of justice in selection and job offer ac- ceptance, subsequent job performance, job attractiveness, organizational attractiveness, and recommendation inten- 273 Organizacija, Volume 53 Issue 4, November 2020Research Papers tions (Chapman et al., 2005; Hausknecht et al, 2004; Mc- Carthy et al, 2017). Also, negative reactions influence the attitudes and behaviors of both applicants and successful candidates including withdrawal from the selection pro- cess, turnover intentions, and counterproductive behaviors (Bauer et al., 2012). Within the focus of justice perception, a significant body of literature highlights the role of justice expec- tations in applicants’ reaction research (Bell, Ryan and Wiechmann, 2004; Ployhart and Harold, 2004; McCarthy et al., 2017). Bell et al. (2004) proposed that justice ex- pectations serve as a reference point for the evaluation of the fairness of outcomes. Similarly, applicant attribution reaction theory (AART; Ployhart and Harold, 2004) pro- posed that applicants’ reactions are shaped from the match between their expectations and observations. McCarthy et al. (2017) highlighted the role of attribution processes that underlie applicants’ justice expectations. Recently, Wang, Hackett, Zhang and Cui (2019) found that fairness expec- tations play a mediating role in the relationship between applicants’ personal characteristics and experience of pro- cedural fairness. In spite of these interests, much is not known about the relationships among employee’s expec- tations, their actual experience, the discrepancies between expectation and experience, and the subsequent outcomes. First, what role does procedural justice expectation play, together with actual experience of applicants, in pre- dicting applicants’ outcomes? Second, if job seekers do have different expectations regarding procedural fairness n selection, then what cause the differences? Because ex- pectations are developed based on available information, do previous experience and source of information influ- ence expectations? Third, what theory can be adopted to explain the influence of expectation and real experience of procedural justice on applicants’ reactions? A theoret- ical framework should be helpful in providing systematic explanation of the causal relationships between procedural justice and applicants’ reactions. Attempting to answer these aforementioned research questions, the purpose of the current study is three-fold. First, it conceptualizes unmet justice expectations as the perceived discrepancy between an applicant’s expecta- tion of procedural justice and his actual experience. This conceptualization is realized with the use of a two-wave survey, one before and one after the selection process. Un- met expectation would then lead to a perception of jus- tice contract breach, i.e., the overall perception that the selection process is unjust. Such perception ultimately influences applicants’ reactions to the hiring companies. Second, it examines previous job experience, experience in public sector and source of candidate as the antecedents of procedural justice expectations among job applicants. Finally, it explains the proposed relationships through the lens of psychological contract (PC) theory (Rousseau, 1989). Psychological contract encompasses the bundle of employee expectations about the manner of the employer’ behaviors based on promises or past practices (DiMatteo, Bird and Colquitt, 2011). Psychological contract provides a theoretical framework to understand applicants’ reaction in the recruitment process. First, the theory acknowledg- es the importance of applicants’ justice expectations in the recruitment process. Second, it highlights the role of perceived discrepancies between expectations and percep- tions in shaping the applicants’ overall evaluation of pro- cedural justice. Third, the theory postulates that failure to fulfill justice expectations will lead to applicants’ negative reactions towards the hiring organizations (Morrison and Robinson, 1997; Schalk and Roe, 2007). Vietnam offers an important context for the current study in a few ways. Practically, according to Tower Wat- son (2011), turnover intention among Vietnamese work- force is at 46%, much higher than Asia-Pacific average of 39%. This signifies research attempts to understand appli- cant reactions to selection justice. Theoretically, Hoang, Truxillo, Erdogan and Bauer (2012) argued that Vietnam is “virtually absent in industrial/ organizational psychology research” (p. 210). A meta analytic study by McCarthy et al. (2017) showed a paucity of applicant reaction research in Vietnam. Furthermore, in a rare cross-cultural studies, Hoang et al. (2012) found that there are remarkable dif- ferences between Vietnamese and American applicants in their preferred selection methods, suggesting a possible discriminating pattern of reaction towards selection justice between Vietnamese applicants and applicants in other Western context. 2 Literature review 2.1 Theoretical background Organizational justice (OJ) Organizational justice refers to employees’ subjective perceptions of fairness in the workplace (Colquitt, Green- berg, and Zapata-Phelan, 2005). OJ is usually measured along three dimensions, i.e., distributive, procedural, and interactional justice (Colquitt, 2001). Distributive justice refers to the perception that outcomes are allocated fairly among group members. Procedural justice can be defined as the perception that the procedures for determining out- comes and resolving conflict are fair. Interactional justice refers to both what is said to individuals during the deci- sion process and how it is said. In the context of personnel selection, Konradt et al. (2016) propose that procedur- al justice is the most important dimension. In a seminal work, Gilliland (1993) proposed that procedural justice is composed of three components: formal characteristics of procedures, explanation of procedures and decision making, and interpersonal treatment. Bauer, et al. (2001) developed the Selection Procedural Justice Scale which 274 Organizacija, Volume 53 Issue 4, November 2020Research Papers consists of 40 items. The scale is composed of 2 higher order factors, namely, structure and social, each contains 5 lower-order subscales. The structure factor involves the characteristics of the actual process, such as opportunity to perform and the content of the test itself. The social factor involves communication with and treatment of job appli- cants. Previous research has adopted the structure-social (Bye and Sandal, 2016) or, systematic-interactional (Wang et al., 2019) classification to capture procedural justice in recruitment and selection settings. The current research adopts the systematic-interactional dimensions of selec- tion procedural justice. Psychological contract Psychological contract describes the formation of indi- vidual perceptions by employees regarding what is owed by themselves and the organization (Rousseau, 1989). Rousseau (1989) viewed the psychological contract at the individual level. She also pointed out the role of percep- tions and beliefs in the psychological contract. Rousseau defined it as individual’s subjective beliefs with which the parties need not agree on the contract. Psychological con- tract theory postulates that the applicants tend to develop their own expectations of procedural fairness in selection at the company to which they are applying for, based on the information available to them from such sources as societal and industry norms, past experiences, and infor- mation from company’s channels. These expectations are incorporated in their psychological contract towards the hiring organization. Moreover, psychological contract theory suggests that applicants compare between what really happens during the recruitment process and what they expected to interpret and evaluate the situation and then prepare subsequent responses. Finally, perception of psychological breach, the perception that obligations have been unfulfilled, will eventually predict their intentions and behaviors towards the hiring organization (Morrison and Robinson, 1997). 2.2 Hypothesis development Determinants of Fairness expectations Extant research suggests that psychological contract is mainly created during the encounter stage of the so- cialization process (Rousseau, 1995; Tomprou and Niko- laou, 2011). However, the important role of pre-entry expectations in the creation of psychological contract has been widely acknowledged (Rousseau, 2001; Tomprou and Nikolaou, 2011; Welander, Blombergb and Isaksson, 2020). Thomas and Anderson (1998) argued that before en- tering the organization, the individual employee has some pre-entry expectations about the terms and conditions of his or her employment including those about the jobs, the working conditions, and the organization. Welander et al. (2020, p. 67) proposed that the creation of a psychological contract starts with pre-entry expectations. It can be in- ferred that job seekers collect information about the hiring organizations and develop expectations regarding proce- dural fairness based on available information. Pre-entry expectations are affected by a number of factors including the employees previous work experience, the information they had about the organizations, and other individual dif- ferences (De Vos, De Stobbeleir and Meganck, 2009; Tom- prou and Nikolaou, 2011; Rousseau, Hansen and Tomprou, 2018). In recruitment and selection context, Wang et al. (2019) found that applicants’ Confucian value, personality traits such as neuroticism and conscientiousness, and test experience significantly influence fairness expectations. Regarding previous work experience, literature suggests that experienced applicants may develop different cogni- tive schemata that shape their expectations compared to applicants with limited work experience (Rousseau, 2001). Tomprou and Nikolaou (2011) suggested that employees who have work experience are more likely to have realistic expectations and perceive less promises than those who do not. Similarly, Ng and Feldman (2009, p. 1062) proposed that individuals with more years of work experience tend to have lower expectations because their perceptions of the world of work would become more realistic. First, higher work experience enables people to develop more realistic standards of ‘‘good’’ and ‘‘bad’’ work situation. Second, more experienced employees are less likely to overreact to inevitable disappointments. Therefore, in personnel se- lection scenarios, it is expected that applicants who have less work experience expect a higher level of procedural fairness than more experienced job seekers. H1: Work experience is negatively related to procedur- al fairness expectations in recruitment and selection. Pre-entry expectations are also influenced by informa- tion about societal and industry norms, past experiences, the experiences of family and friends, and other factors that collectively generate expectations regarding the exchange (De Vos et al., 2009). Previous breach of psychological contract has also been found to influence new expecta- tions. Both Krause and Moore (2018) and Tomprou, Rous- seau, and Hansen (2015) found that following a breach, an individual may alter his contract by reducing the perceived expectations. In Vietnamese context, Hoang et al. (2012, p. 216) indicated that corruption within recruitment and hiring systems, lack of transparency and invalid assess- ment practices are prevalent in Vietnamese firms. Because breaches of procedural fairness contract are not excep- tions, it is expected that following a breach, job seekers may reduce their expectations regarding procedural fair- ness in recruitment. Furthermore, Nguyen, Bahaudin, Mu- jtaba and Cavico (2015) studied the variance in perception towards ethical behavior among employees in Vietnam and found significant individual differences. Specifically, 275 Organizacija, Volume 53 Issue 4, November 2020Research Papers people with no government work experience demonstrate a higher level of ethical development than those with such experience. In other words, employees with previous work experience in State Owned Enterprises (SOEs) are more tolerant to unfairness and tend to have lower expectations of procedural fairness. Therefore, it is hypothesized that: H2: Applicants who have experience in SOEs have lower procedural fairness expectations in recruitment and selection. Tomprou and Nikolaou (2011) asserted that previous work experiences and pre-entry information about the future employer are important determinants of pre-entry expectations. During personnel recruitment process, job applicants are also expected to evaluate the information they have before, during and after the selection process to make final decisions (Bangerter, Roulin and Konig, 2012; Nikolaou and Georgiou, 2018). Rousseau (2001) suggested that organizational newcomers engage in ef- fortful cognitive processing, incorporating both their prior beliefs and newly acquired organizational information to form their PC schema. Thus, it can be expected that before joining the organization, the candidates may seek for in- formation regarding the organization they are applying for. Pre-entry information is collected by job applicants during the job search process from both formal channels such as organizational websites, advertisement and public relation activities, and informal channels such as social networks. Furthermore, during recruitment and selection process, the employer may send messages about the contractual obli- gations. Psychological contract research concludes that source of information plays an important role in establish- ing the employees’ psychological contract. Specifically, organizational delegates such as managers, recruiters, top management, mentors or structural human resource man- agement practices are considered more reliable source of information than others such as recruitment agencies or other insiders (Rousseau, 2001; Tomprou and Nikolaou, 2011). In personnel selection, Moser (2005) studied the relationship between recruitment sources and post-hires outcomes and found that internal candidates experienced less unmet expectations than external applicants. Internal recruitment sources refer to referrals, rehires, internships and in-house notices while external sources include job advertisements, employment agencies, executive search firms and school/college placement offices. Internal can- didates are believed to have higher possibility to receive internal information about the organization before entering the organization. According to Moser (2005), recruitment sources differ in the extent to which they yield realistic information. Specifically, internal candidates receive more realistic information about their new jobs and organiza- tions. Realistic information may help the internal candi- dates to develop realistic expectations about procedural fairness during selection. Froese, Vo and Garrett (2010) studied the attractiveness of foreign companies in attract- ing Vietnamese applicants. They found that because the Vietnamese labor market is competitive, companies have to compete for talents. In order to attract candidates, com- panies send out specific recruitment messages and empha- size characteristics that applicants find more desirable. In order to be effective, these messages need to reflect the actual characteristics of the firm. Otherwise, job seekers may feel deceived as their expectations are not met, lead- ing to dissatisfaction and turnover. Therefore, internal ap- plicants, who have more correct information about the job, tend to have lower expectation than external candidates who only have access to advertised information. H3: Internal candidates are more likely to have lower fairness expectations than external candidates. Unmet expectations and procedural fairness con- tract breach Self-regulation theory (Carver and Scheier, 1990) pos- tulates that individuals compare an actual state with a de- sired state, and take corrective action in case of significant discrepancies. Within the context of a psychological con- tract, when the employees perceive that their organizations did not meet all of their promises, the perception of breach occurs (Robinson and Rousseau, 1994). Psychological contract breach can even occur even before the employ- ees enter the new organization. Waung and Brice (2000) found that applicants not selected for a position may feel as if a psychological contract has been violated if they do not receive a rejection letter after spending the time to interview with the employer. Consequently, they are less likely to enter into an employment relationship with this employer in the future. In an employment relationship, previous research suggests that a majority of the employ- ees perceive that they are receiving less than what they expected (Robinson and Rousseau, 1994). However, other studies proposed that not all perceived discrepancy would lead to perceived breach (Morrison and Robinson, 1997; Tran Huy and Takahashi, 2018). Schalk and Roe (2007) proposed that minor discrepancies which fall within a cer- tain boundary are unlikely to result in negative reactions. On the other hand, variations beyond this boundary are interpreted as inappropriate or intolerable and they ignite employees’ engagement in different types of corrective re- sponses. H4: Perceived unmet expectations positively predict perceived breach of the procedural fairness contract. Outcomes of procedural fairness contract breach Previous psychological contract research has shown that fulfillment of the contract exerted a significant pos- itive impact on individuals’ behaviors and attitudes (Coyle-Shapiro and Kessler, 2002; Guerrero and Herrbach, 2008). In contrast, perceived breach has been found to 276 Organizacija, Volume 53 Issue 4, November 2020Research Papers negatively influence workplace outcomes (Zhao, Wayne, Glibkowski and Bravo, 2007; Bal, De Lange, Jansen and Van Der Velde, 2008; Restubog, Bordia, Tang and Krebs, 2010). Applicant reaction research provides evidences to support the positive direct impact of perceived fairness on subsequent outcomes such as perceived organizational attractiveness, job offer acceptance intention, recommen- dation intention, actual job offer acceptance, test perfor- mance and job performance (McCarthy et al., 2013; Kon- radt et al., 2017). Alternatively, Waung and Brice (2007) highlighted the role of perceived organizational obligation fulfillment on applicants’ reaction. Applicants in both laboratory experiment and field survey indicated that ap- plicants who were rejected without rejection notification tended to perceive that the organization has failed to fulfill its obligations. In addition, in both settings, perception of organizational obligation fulfillment was positively related to applicants’ intentions towards the organization includ- ing reapplication, recommendations to others, patronizing the organization, and negatively related to speaking badly about the organization. In a similar vein, we can thus hy- pothesize that: H5: Breach of the procedural fairness contract is neg- atively related to job offer acceptance intention. H6: Breach of the procedural fairness contract is neg- atively related to recommendation intention. 3 Method 3.1 Sample and Procedure A two-wave survey was designed to collect data for the current study. The survey was conducted with participants who attended a big job fair organized in Hanoi, Vietnam in 2019. According to organizer, the job fair attracted a total of 40 employers with more than 300 vacancies, many of which target experienced candidates. Reports also indicat- ed than nearly 1500 candidates attended the job fairs with 79% of the participants have at least two years of work ex- perience. A sample of 285 applicants accepted our invita- tion to join the first survey and filled in the questionnaires before they participate in the first selection activity. The re- spondents were asked about their demographic character- istics, previous work experience, name of the companies they applied for, and their procedural fairness expectations with regards to the company’s selection process. The sec- ond wave survey was conducted right after the completion of the whole selection process informed to us by the hiring companies. We telephoned and sent the link to the online version of the questionnaires to the email addresses pro- vided by the respondents. In order to limit the impact of self-serving bias, the second survey was conducted before the release of final selection decision (the applicants did Characteristics Description Frequency Percentage Gender Male 113 48.7 Female 119 51.3 Age From 16 to 25 108 46.5 From 26 to 35 86 37.0 From 36 to 45 39 16.5 Highest education High school or below 45 19.4 Vocational degree 56 24.1 College/university 106 45.7 Post-graduate 25 10.8 Work experience Less than a year 69 29.7 One to five years 65 28.0 Six to ten years 63 27.1 Eleven to fifty years 21 9.1 Sixteen years or more 16 6.1 Experience in public sector Yes 101 43.5 No 131 56.5 Table 1: Demographic characteristics of respondents 277 Organizacija, Volume 53 Issue 4, November 2020Research Papers not get the results of selection). The authors asked the re- spondents about the actual perception of procedural fair- ness during selection and their intentions towards the hir- ing organizations. There were 232 returned questionnaires which comprise the final dataset for the current study. Of the participants, 49% were male. The age of the participants ranged from 22 to 38 years with a mean of 28.2 years (SD= 4.3). A majority (70.3 %) of the respond- ents had at least one year of experience. 3.2 Analysis The author use AMOS 22.0 with maximum likelihood estimation to conduct confirmatory factor analyses (CFA) which validate the convergent and discriminant validity of the study variables, and structural equation models (SEM) to test the hypotheses. 3.3 Measures State experience. This is a dummy variable which take the value of 0 if the respondent has no previous work ex- perience in the public sector and 1 otherwise. Work Experience. This was measured the length of an applicants’ work experience (in years) until the date of survey. Internal candidate. Respondents were asked to indi- cate one primary source of information based on which they apply for the job. This variable was coded as a dum- my variable which takes 0 if the source was job adver- tisements, employment agencies, executive search firms, walk-ins, school/college placement offices and so on, and 1 if the source was referrals, rehires, internships, in-house notices, and so on. Justice expectation: To measure expectation, at the first survey, we asked the respondents to respond to the extent to which they expect about procedural justice in recruitment/selection process at the company they are applying for. The response format was a 5-point Likert scale with 1 representing “to a very small extent” and 5 representing “to a very large extent”. Two variables were developed to measure expectation of procedural justice, namely Interactional Justice Expectation (IJE) which fo- cuses on social aspect of procedural and Systematic Jus- tice Expectation (SJE) which concerns with structural as- pect. Interactional justice expectation (IJE) was measured by six items, including “the test(s)/interview(s) will be administered to all applicants in the same way”. System- atic justice expectation (SJE) was measured by six items including “the content of the selection test(s)/interview(s) will be closely related to the job”. These total 12 items were adopted from Selection Procedural Justice Scale (SPJS) by Bauer et al. (2001) and adapted to fit with se- lection in Vietnamese context. Similar procedural has been reported in Bye and Sandal (2016), and Wang et al. (2019). Unmet Justice Expectation. To measure unmet expec- tation, at the second survey conducted after the selection process, we asked the respondents to compare their actu- al experience with expectation regarding the procedural justice in recruitment/selection process. Responses were scored by a reverse-coded 5-point Likert scale with 1 rep- resenting “much more than expected” and 5 representing “much less than expected”. Two variables were created; Unmet Systematic Justice (USJ) measures the perception of discrepancy between actual experience and expectation regarding the structure component of the process and Un- met Interactional Justice (UIJ) concerning the social as- pect of the process. Each of the variables was measured using a six-item scale concerning the same aspects of the selection process with those used to measure expectation. A sample item for USJ is “the content of the selection test(s)/interview(s) was related to the job”, and for UIJ, it is “the test(s)/interview(s) was/were administered to all applicants in the same way”. Alpha coefficients for USJ and UIJ were .91 and .89, respectively. Justice Contract Breach (JCB). The three-item Overall Procedural Justice Scale developed by Bauer et al. (2001) was adapted to measure perceived justice contract breach. The items were: “Overall, the selection process adminis- tered by the company is a fair way to select people for the job”; “The selection devices used by the company were fair by nature”; and “Overall, the method of selection used by the company was fair”. Responses were measured in a reverse-coded 5-point Likert scale where 1 representing “strongly agree” and 5 representing “strongly disagree”, thus higher score represents stronger perception of con- tract breach. Reliability coefficient for this scale was .89. Recommendation intention (RI). Recommendation intention was captured by a three-item scale developed and used by Konradt, Warszta, and Ellwart (2013). Sam- ple items include “I would recommend this company to others”. The response format was a 5-point Likert scale with 1 representing “strongly disagree” and 5 representing “strongly agree”. Reliability coefficient for this scale was .87. Job acceptance intention (JAI). Job acceptance inten- tion was measured by two items developed by Harris and Fink (1987) and used by Carless (2005). The items read: “If you were offered the job, would you accept it?’ and, “If you were offered the job would you accept it immediate- ly”. The response format was a 5-point Likert scale with 1 representing “not at all likely” and 5 representing “ex- tremely likely”. A Cronbach’s Alpha of .75 was obtained for this scale. 278 Organizacija, Volume 53 Issue 4, November 2020Research Papers Variable Question wording Source α Interactional Justice Expec- tation To what extent do you expect the following from the company you are apply- ing for regarding the recruitment/selection process? 1. To a very small extent. 5. To a very large extent Bauer et al. (2001) .83 Items The test(s)/interview(s) will be administered to all applicants in the same way. There will be no differences in the way test(s)/interview(s) is(are) administered to different applicants. Test administrators will make no distinction in how they treat the applicants. The content of the test(s)/interview(s) will not appear to be prejudiced. The test itself will not be too personal or private. The content of the test will be appropriate. Systematic Jus- tice Expectation To what extent do you expect the following from the company you are applying for regarding the recruitment/selection process? 1. To a very small extent. 5. To a very large extent Bauer et al. (2001) .80 Items The content of the selection test(s)/interview(s) will be related to the job. Doing well on the selection test(s)/interview(s) means that a candidate can do the job well. An applicant’s scores on the selection test(s)/interview(s) would indicate whether he is fit for the job. All applicants will see that the selection test(s)/interview(s) is related to the job. Applicants will be able show their skills and abilities through the selection pro- cess. The selection process will allow the applicants to show what their job skills are. Unmet Interac- tional Justice How would you compare your actual experience of the selection process with your expectation regarding the followings? 1. Much more than expected 5. Much less than expected Bauer et al. (2001) .89 Items The test(s)/interview(s) were administered to all applicants in the same way. There were be no differences in the way test(s)/interview(s) is(are) administered to different applicants. Test administrators made no distinction in how they treat the applicants. The content of the test(s)/interview(s) were not appear to be prejudiced. The test itself was not too personal or private. The content of the test was appropriate. Unmet System- atic Justice How would you compare your actual experience of the selection process with your expectation regarding the followings? 1. Much more than expected 5. Much less than expected Bauer et al. (2001) .91 Items The content of the selection test(s)/interview(s) were related to the job. Doing well on the selection test(s)/interview(s) means that a candidate can do the job well. An applicant’s scores on the selection test(s)/interview(s) would indicate whether he is fit for the job. All applicants saw that the selection test(s)/interview(s) is related to the job. Applicants were able show their skills and abilities through the selection pro- cess. The selection process allowed the applicants to show what their job skills are. Table 2: Measurement items of research variables 279 Organizacija, Volume 53 Issue 4, November 2020Research Papers 4 Results Hypotheses from H1 to H3 propose that work experi- ence, experience in public sector and being an internal can- didate would influence procedural justice expectation. To test these hypotheses, data collected from the first survey were used. The mean, standard deviation and correlation of variables in the first survey was showed in table 3. Prior to testing the hypotheses, a confirmatory fac- tor analysis (CFA) was conducted to evaluate the meas- urement models of Procedural Justice Expectation. The one-factor model suggests that all 12 items load on a sin- gle factor. The 2-factor model proposes that Systematic Justice Expectation and Interactional Justice Expectation load on two different factors, each with 6 items. The results indicated that the 2-factor model fits the data significant- ly better than the one-factor solution. The correlation be- tween two latent factors was 0.674. In addition, the struc- tural model, detailed in figure 1, also fit well with the data (Table 4). Justice Contract Breach Please indicate your opinion regarding the following statements. (R) 1. Strongly agree 5. Strongly disagree Bauer et al. (2001) .89 Items Overall, the selection process administered by the company is a fair way to se- lect people for the job The selection devices used by the company were fair by nature Overall, the method of selection used by the company was fair Recommenda- tion intention Please indicate your opinion regarding the following statements. 1. Strongly disagree 5. Strongly agree Konradt et al (2013) .87 Items I’d proactively recommend this company to others I’d recommend this company to anyone who asks me about a place to work I’d say positive things about this firm Job Acceptance Intention Please indicate your opinion regarding the following statements. 1. Not at all likely 5. Extremely Likely Harris and Fink (1987) .75 Items If you were offered the job, would you accept it? If you were offered the job would you accept it immediately? Table 2: Measurement items of research variables (continues) Variable Mean SD 1 2 3 4 1. Work Experience 5.24 2.64 2. Internal .376 .285 .013 3. State Experience .618 .386 -.104 -.089 4. Systematic Justice Expectation 3.11 .645 -.285** -.112* -.022 5. Interactional Justice Expectation 3.89 .650 -.142* -.151* -.102 .513** Table 3: Mean, standard deviation, and correlation of variables – first survey Note: *: p<0.5; **: p<.01. Measurement Model Chi-square/df GFI CFI TLI RMSEA Decision One factor model 201.5/54 .903 .883 .824 .094 Two factor modelTwo factor model 103.2/53 .951 .962 .962 .057 Structural model (figure 1) 125.4/87 .953 .975 .977 .040 Accepted Table 4: Fit indices of measurement models of justice expectation 280 Organizacija, Volume 53 Issue 4, November 2020Research Papers The results of hypothesis testing were showed in Fig- ure 1. Accordingly, work experience was found to nega- tively influence both IJE and SJE, providing support for hypothesis H1. Public experience significantly and nega- tively predicted IJE but not SJE; as a result, H2 was par- tially supported. The results also provided support for Hy- pothesis H3, in which internal candidates had significantly lower expectation of both systematic and interactional jus- tice expectations compared to external candidates. -.345*** Work Experience Internal candidate Systematic Justice Expectation -.148* Interactional Justice Expectation -.186** -.083 ns -.176** -.160** State Experience Figure 1: Antecedents of Procedural Justice Expectation Note: *: p<0.5; **: p<.01, ***: p<.001, ns: not significant A confirmatory factor analysis was conducted with data collected from the second survey to test the measure- ment models and to examine the convergent and discrimi- nant validity of all scales in the model. The research model consisted of five latent variables: USJ, UIJ, JCB, JAI, and RI. The measurement model fit the data well. Specifically, degree of freedom was 160, chi-square was 263.2, CMIN/ df = 1.687, CFI = 0.964, TLI = 0.956, GFI = .927; SRMR = .039, RMSEA =0.046, and P-close = 0.76, which rep- resented a close model fit, according to Hu and Bentler (1998). Reliability, Convergent validity and discriminant va- lidity was tested by calculating and comparing composite reliabilities (CR), average variance extracted (AVE), and maximum shared squared variance (MSV). As indicated in table 5, the critical ratios (CRs) were greater than 0.7 in all cases, confirms the composite validity of the scales. The convergent validity was achieved because no average var- iance extracted (AVEs) were less than 0.5. Finally, discri- minant validity was confirmed when all AVEs were greater than the maximum shared variance (MSV). Table 5: Reliability and validity of and correlations among research variables Variable CR AVE MSV ASV 1 2 3 4 5 1. Unmet Systematic Jus- tice .883 .559 .167 .122 (.748) 2. Unmet Interactional Jus- tice .871 .532 .453 .284 .409 *** (.729) 3. Justice Contract Breach .877 .704 .454 .301 .330*** .613*** (.839) 4. Job Acceptance Inten- tion .856 .665 .412 .251 -.231 *** -.524*** -.642*** (.815) 5.Recommendation Inten- tion .712 .553 .265 .224 -.399 *** -.492*** -.478*** .515*** (.744) CR= Composite Reliability, AVE= Average variance extracted; MSV= maximum shared squared variance; ASV: average shared variance. Diagonals (in parentheses) represent the square root of the average variance extracted. N= 232, *: p<0.5; **: p<.01, ***: p<.001. 281 Organizacija, Volume 53 Issue 4, November 2020Research Papers Path analysis in the structural model (figure 2) was used test hypotheses from H4 to H6, with data from sec- ond survey. The structural model also produced a good fit to the data (chi-square = 280.3; df=166, CMIN/df = 1.752, CFI = 0.965, TLI =0.958, IFI = 0.975, GFI = 0.928, SRMR = .048, RMSEA = .044, and P-close is .87). The results in- dicated that both UIJ and USJ significantly predicted JCB, which, in turn, significantly influenced OAI and RI. There- fore, hypothesis H4, H5 and H6 were supported. Figure 2: Antecedents and consequences of Justice Contract Breach Note: *: p<0.5; **: p<.01, ***: p<.001, ns: not significant 5 Discussion and conclusion 5.1 Discussion The current research investigates applicant’s reactions to procedural justice in recruitment and selection. Unlike other research which focuses on the direct impact of jus- tice perception on applicants’ outcomes, it examines the interaction between justice expectation and justice per- ception as a predictor of job acceptance intention and rec- ommendation intention. The results indicated that it is the perceived discrepancy between real experience and expec- tation that predicts applicant’s intentions. Perceived unmet structural and interactional justice negatively predicted job acceptance intention and recommendation intention. Yet, it was found from the data that perceived unmet expecta- tion of procedural justice components positively predict- ed the overall justice contract breach. Overall perception of procedural justice contract breach, in turn, appeared to be a better predictor of applicants’ reaction, including job acceptance intention and recommendation intention. The findings were in support of the psychological contract the- ory. The theory suggests that applicants tend to develop the expectation about the jobs and the organizations they are applying for, including expectations for procedural justice during selection. These expectations can be incorporated in to the implied contract towards the hiring organization. During the actual selection process, the applicants com- pare and contrast what they experience and what they ex- pect. The feeling of unmet expectation occurs when the applicants perceive that the actual experience is less fa- vorable that their expectations. Such unmet expectations, may lead to negative attitudinal and behavioral outcomes. Ultimately, high degree of discrepancies may eventually lead to the perception of overall contract breach, which ul- timately affects applicant’s reactions. The expectations regarding procedural justice in se- lection were developed based on an applicant’s past ex- perience and pre-entry information. Specifically, the data showed that applicants rich in work experience have significantly lower procedural fairness expectations than those who lack such experience. The results can be ex- plained in the light of psychological contract which postu- late that applicants with a long previous work experience, may develop different cognitive schemata to organize the information they obtain, while those with limited previous work experience are more likely to rely on schemata de- veloped in similar, yet different contexts, such as a college or university. Therefore, candidates with limited previous work experience may have expectations are inconsistent 282 Organizacija, Volume 53 Issue 4, November 2020Research Papers with the organizational reality (Welander et al., 2020). Experience in public sector has been found to nega- tively predict interactional dimension of procedural justice expectations but not systematic dimension. The findings can be explained by previous argument regarding the is- sue of cronyism in Vietnamese context. Cronyism refers to the favoritism given by the leader to his or her followers based on their personal relationship, rather than the latter’s capability or qualification (Khatri and Tsang, 2003). In the public sectors, Tran, Fallon and Vickers (2016) found that, exemplary behaviors and people skills are more valued than intelligence, knowledge, and expertise. Nguyen, Teo and Ho (2018) suggested that employees in Vietnam tend to accept overqualified tasks or those that fall outside their job descriptions and perceive superiors’ abuse of power and unfair treatment as legitimately. Therefore, it could be expected that although applicants with experience in pub- lic sector may expect fairness in the content of selection tests and interviews, they may have lower expectations regarding the interactional fairness in personnel selection scenarios due to cronyism issues. Source of candidates was another important determi- nant of justice expectations, with internal candidate has lower expectations of procedural justice than their external counterparts. Reason for that may be found in the fact that in applying to a new job, applicants are likely to seek infor- mation from a wide range of organizational agents, and it is likely that each of these agents will provide the employ- ees with inconsistent information (Welander et al, 2020). It can be expected that external agents such as employment agencies and executive search firms may provide positive- ly-biased information to attract applicants to apply to the hiring companies. On the other hand, for internal sources such as referrals, the referrers, in fear of losing their cre- dentials to friends or acquaintances, are more likely to pro- vide accurate information regarding procedural fairness. 5.2 Theoretical contribution The current study provides an alternative way to look at applicants’ reaction to procedural justice in recruitment and selection. Viewing through the lens of the psycholog- ical contract framework, it highlighted the role of justice expectation, the perception of unmet expectation and over- all perception of justice contract breach on applicants’ out- comes. While previous research acknowledged the impor- tant role of fairness expectations in applicants’ reaction, no empirical study investigates the relationship between these variables. By confirming the role of previous work experience and pre-entry information as predictors of justice expecta- tions, it adds to the current understanding of the anteced- ents of procedural justice expectation in addition to indi- vidual difference and personality traits (Wang et al., 2019). Finally, although there are considerable research ev- idences in the field of applicant reactions to recruitment and selection, a vast majority of existing studies was con- ducted in Western context. Nikolaou and Georgiou (2018) indicated that there are very few studies exploring this top- ic in a non-English culture. Furthermore, McCarthy et al. (2017) reviewed 145 studies conducted in the field in the period from 2000 to 2015. Among these 145 studies, none were dedicatedly focused on an Asia-Pacific country. Al- though some countries such as Korea, China, Taiwan and Vietnam have been mentioned in previous study, this was only as a part in a multi-country comparative survey. This study provides some insights on the issues of applicants’ reaction in Vietnamese context. 5.3 Practical contribution First, according to Buhwar, Varma and Patel (2016), Vietnam is facing a talent dilemma with an excess supply of non-skilled and semi-skilled labor, while there is a con- tinuing shortage of skilled labor. Strong demand for talent creates fierce competition in the labor market. In that situ- ation, ensuring that the recruitment and selection process is implemented in a fair and justice manner would enhance the job offer acceptance rate and recommendation among applicants. Second, due to high competition in the labor market, many organizations have to rely on external recruitment agencies and executive search firms to find appropriate applicants for their vacancies. These headhunting agen- cies search the labor market for suitable candidates and refer them to the hiring organizations. In order to attract qualified applicants, these headhunting companies may exaggerate positive information and conceal negative as- pects about the hiring firms and selection procedure, which may lead to unrealistic expectations among job applicants. Inflated expectations based on biased information could increase the experience of contract breach. Therefore, the hiring organizations should provide accurate information about recruitment process via official organizational chan- nels in order to reduce the negative impacts of perceived breach of psychological contract. 5.4 Limitation and future research In spite of the theoretical and managerial contributions, this study has some limitations that can be addressed in fu- ture research. First, data for this study were collected with participants who attended a job fair, which may be subject to selection bias. Respondents would be those who are in- terested to apply for the job vacancies at the companies in the job fair only. Furthermore, job fair attendants tend to be relatively young, with mean age of 28 years; therefore, generalizability of research results may be limited. Future 283 Organizacija, Volume 53 Issue 4, November 2020Research Papers research may focus on a wider population to yield more significant results. Second, the current study concerns job offer intention and recommendation intention which may also be influenced by other factor such as individu- al preference, alternative job offer and offering packages. Intention may not necessarily lead to the actual behaviors. Therefore, future research may include possible modera- tors in a longitudinal research design. Finally, changes in the expectations are likely to occur in relation to the appli- cants’ actual experience. Current research design is unable to capture such changes in applicants’ expectations which leave room for future research. 5.5 Conclusion This study provides further evidence to support the influence of procedural justice on applicant reactions. By conducting a two-wave survey, the current study suggests that the perceived discrepancy between employee expecta- tion and actual experience of procedural justice is indeed important in shaping employees’ reactions. Therefore, ensuring the transparency of recruitment and selection procedure is of great importance to Vietnamese firms. In hiring context, Hoang et al. (2012) found that Vietnamese applicants prefer objective selection methods than meth- ods that require personal contacts, in comparison with U.S applicants. They also indicated that corruption within re- cruitment, biased judgments of managers and supervisors, and getting a job through one’s personal connections are the main reasons. 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Phuong does research in Organizational behavior, Human Resources and labor economics. His current project is ‘High performance work system in Vietnam’. 286 Organizacija, Volume 53 Issue 4, November 2020Research Papers Ngan Hoang Vu, Associate Professor, completed her doctoral dissertation at Paris Descartes University (Paris V) in France in 1998, and has been working for nearly 30 years at the National Economics University (NEU) in Vietnam as a lecturer in Human Resource Management, Human Resource Development, Organizational Behavior and Labor Economics. She is currently the Dean of the NEU Faculty of Human Resource Economics and Management. She has authored and co-authored numerous researches in Human Resource Management, Human Resource Development, Labor Markets and Labor Productivity. She also provides short-term training courses and advisory services to enterprises on human resource management. Hue Thi Hoang has been working for National Economics University in Hanoi, Vietnam for approximately 10 years as a lecturer of Human Resource Economics and Management faculty. She holds a bachelor›s degree and a master’s degree in Human Resource Management from National Economics University. She has authored and co-authored numerous research papers in Human Resource Management, Human Resource Development, and Business Development. Hanh Thi Hai Nguyen is currently a lecturer of National Economics University in Hanoi, Vietnam, teaching on a number of programs relating to labor economics. She holds a bachelor’s degree in Business Administration and Banking and Finance (double major). She also has a Master of Science (Msc)’s degree in Management. She has authored and co-authored numerous academic papers in Human Resource Management, Organizational Behavior, and Corporate Culture. Proceduralna pravičnost pri zaposlovanju v luči teorije psihološke pogodbe Ozadje in namen: Kandidati za zaposlitev svoje ocene pravičnosti izbire ne temeljijo zgolj na dejanskih izkušnjah, temveč tudi primerjajo, kaj se zgodi pri izbiri kandidatov in kaj so pričakovali. Ta študija zato preučuje reakcijo pro- silcev na proceduralno pravičnost pri izbiri kandidatov za zaposlitev skozi prizmo teorije psihološke podobe. Le-ta poudarja vlogo pričakovanj, neskladja med zaznavanjem in pričakovanjem ter zaznano kršitev pogodbe pri posa- meznih izidih. Zasnova / metodologija / pristop: Izvedeni sta bili dve anketi med iskalci zaposlitve v Vietnamu, ena pred izbirnim postopkom in ena po njem. V prvi anketi so iskalci prejeli natisnjene vprašalnike, v drugi pa so izpolnjevali spletno anketo. Za analizo podatkov je bila uporabljena tehnika modeliranja strukturnih enačb. Rezultati: Analiza podatkov, ki so bili zbrani na vzorcu 232 iskalcev zaposlitve kažejo, da so bile prejšnje delovne izkušnje in izvor kandidatov (notranji, zunanji) v veliki meri povezani s pričakovanji glede pravičnosti. Poleg tega je bilo ugotovljeno, da zaznana neizpolnjena pričakovanja napovedujejo kršitev proceduralne pogodbe, kar pa je ne- gativno vplivalo na namen sprejetja zaposlitve in namen priporočila drugim kandidatom. Zaključek: Raziskava poudarja vlogo nezadovoljenega pričakovanja pravičnosti, zaznano neskladje med tem, kar se je zgodilo in tem, kar so pričakovali, pri napovedovanju namere sprejetja ponudbe in priporočanja drugim. Re- zultati kažejo, da bi morala podjetja vsem udeleženim, kot so interni zaposleni, agencija za zaposlovanje in spletno mesto za iskanje zaposlitve, zagotoviti posodobljene in uradne informacije v zvezi z izbirnim postopkom, da zmanj- šajo prevelika pričakovanja. Ključne besede: Reakcija prosilcev, Proceduralna pravičnost, Pričakovanja, Psihološka pogodba, Namen sprejetja dela, Namen priporočila