Task and contextual performance as reactions of hotel staff to labor outsourcing: The role of procedural justice

The purpose of this study is to examine the role that procedural justice (PJ) and job satisfaction play in increasing employees' performance in a context of labor outsourcing in the hospitality industry. Because organizational procedures are the methods routinely used by in-house staff to handle their job activities in the hotel outsourcing context, the paper hypothesizes that when procedures are fairly implemented, they encourage staff satisfaction with their jobs. In turn, this job satisfaction is expected to lead house employees to participate in individual-level task and contextual activities. Data obtained from 215 internal hotel employees working side by side with outsourced peers were analyzed. The results found that the perception of procedural justice (PJ) was significantly related to the increase in task and contextual performance, and to job satisfaction as a full mediator. Significant support for mediation was weaker in the case of task performance. Findings advise hotel managers to pay explicit attention to procedures used in outsourcing, discussing them with the affected parties to ensure that it is fairly implemented procedurally.