LAUSR

Abstract A manufacturer-initiated reward event not only influences the awarded distributor but also alters the behaviors of the unrewarded distributors in the distribution network (i.e., observers). Going beyond a bilateral view of reward, this article examines the spillover effects of rewards on observers. Specifically, taking distributive fairness, procedural fairness, and the magnitude of the reward into consideration, this study postulates that these three aspects of the reward affect observers' level of commitment to the manufacturer through their malicious or benign envy of the awarded recipient. These hypotheses are tested with a survey of 204 distributors from multiple industries in China. The results reveal that distributive fairness of the reward strengthens observers' commitment by decreasing their malicious envy and increasing their benign envy and that procedural fairness and the magnitude of the reward enhance their commitment by increasing their benign envy. We also summarize the theoretical and practical implications about the findings.