Relationship between ORGANIZATIONAL JUSTICE

and ORGANIZATIONAL ENGAGEMENT

in Public Sector Banks of Pakistan : Mediating Role of

WORK ENGAGEMENT

MUHAMMAD SAJIDGovernment College University Faisalabad

Research Objectives

• To study whether there is any interrelationship between three dimensions of Organizational Justice.

• To explore whether Distributive Justice, Procedural Justice and Interactional Justice are positively related to Organizational Engagement.

• Whether three dimensions of Organizational Justice are significantly related to Organizational Engagement mediated by Work Engagement.

Abstract• Purpose: The purpose of this study is to explore whether perceptions of Distributive

Justice, Procedural Justice and Interactional Justice are related to Organizational Engagement mediated by Work Engagement.

• Methodology: A survey of 124 respondents from different public sector banks in Pakistan (offices at Faisalabad) has been conducted. Data were accumulated through questionnaire and analyzed on SPSS (v.20).

• Results: Findings show that all three dimensions of organizational justice predict the positive relationship with Organizational Engagement significantly through mediation of Work Engagement. .

• Implications: The study reveals how organizational justice affects the employee engagement and depicts how organizational engagement and work engagements can be improved through implementation of organizational justice practices in the Public Sector Banks in Pakistan.

Conceptual Framework

Distributive Justice

Procedural justice

Interactional Justice

Work Engagement

Organizational Engagement

Organizational Justice

Three Dimensions of organizational justice

• Distributive Justice

• Procedural Justice

• Interactional Justice

Distributive Justice

• Based on Equity Theory (Adams 1965)

• Perceptions of individuals on the degree to which rewards are distributed in equitable, just and fair manner. (Niehoff and Moorman 1993)

• Distributive Justice exists when there is equality between followingExpectations about rewardsInputs at work placeActual distribution of rewards

Procedural Justice

• Fairness issues concerning the methods, mechanisms, and processes used to determine outcomes (Folger and Cropanzano, 1998, p. 26)

• Fairness, just and equitable rules and regulations followed by the organization in deciding and determining the outcomes/benefits/rewards of employees in the organizations.

Interactional Justice

• This dimension suggested by Bies and Moag (1986).

• Employees assign full focus and attention on how respectfully and with dignity they are treated by their colleagues, seniors, supervisors etc. (Crow et al., 2012)

• What is the quality of processes regarding treatment of individuals and extent to which outcomes are explained to them.

Employee Engagement

Two Dimensions of Employee Engagement

• Work Engagement (Mediator in this study)

• Organizational Engagement (Dependent in this study)

Work Engagement

• A positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption (Schaufeli, 2002; Schaufeli and Bakker, 2010)

• Basically a relationship or bond between the employee and the work role he is performing.

• A state of mind of the employee that is associated with vigor, dedication and absorption.

Organizational Engagement

• Involvement and strong association of the employees with their organization because they take a lot of pride and honor for having association with the organization and being part of it Saks (2006)

• It is all about attitude of the employees and sense of attachment to their organization.

Theorization of the Study

• Equity Theory (Adams, 1965) argues that social behaviors conditioned by the distribution of outcomes. Individuals compare their outcome/ input ratio to that of some relevant person. Any imbalance in ratios creates a sense of distress.

• Social Exchange Theory (Blau, 1964) suggests, employees consider their workplace as social market-place where they are interested to obtain favorable return on their investment.

Hypotheses (Alternate)H1a. There is a positive relationship between distributive justice and Organizational engagement.

OE=f (DJ), OE= a+b1DJ+e

H1b. The relationship between distributive justice and organizational engagement is mediated by work engagement.

OE= F (DJ, WE), OE= A+b1DJ+b2WE+e

H2a. There is a positive relationship between procedural justice and Organizational engagement. OE=f (PJ), OE=a+b1PJ+e

H2b. The relationship between procedural justice and organizational engagement is mediated by work engagement.

OE= F (PJ, WE), OE= A+b1DJ+b2WE+e

H3a. There is a positive relationship between interactional justice and Organizational engagement.

OE=f (IJ), OE=a+ b1IJ+e

H3b. The relationship between Interactional justice and organizational engagement is mediated by work engagement.

OE= F (IJ, WE), OE= A+b1IJ+b2WE+e

Methodology

• Population: Public Sector Banks in Pakistan having their Branch offices in Faisalabad.

• Sampling Technique: Non probability convenience sampling• Sample Units: The study has been conducted on the

managerial and front level employees of public sector banks• Sample Size: Initially 150, but reduced to 124• Response rate: 130 questionnaires received out of 150

delivered i.e., 87%.• Survey Method: Questionnaire• Data Analysis: Regression analysis on IBM SPSS (v.20) and

mediation effect on Sobel simple Mediation Model

Measures

• Criterion Variable-OE: 6 items scale as suggested by Saks (2006) is used to measure the Organizational Engagement. Internal consistency and validity with the Cronbach's alpha scores are .87.

• Mediating Variable-WE: 9 items scale as suggested by Schaufeli et al. (2002) is used to measure Work Engagement. Cronbach alpha score .91

Measures

Predictor Variables:• Distributive Justice: 6-items scale suggested by James

L. Price (2000) to measure the Distributional Justice. Cronbach alpha score .62

• Procedural Justice: 6 items scale suggested by James L. Price (2000) is used to measure Procedural Justice. Cronbach alpha score .76

• Interactional Justice: 9 items scale as suggested by Niehoff and Moorman (1993) is used to measure the Interactional Justice. Cronbach alpha score .81

AnalysisDemographic Profile

Male74%

Female26%

Gender

Demographic Analysis Continued………

Less than 3 years 3-5 years 6-10 years 11-15 years 16 years or above 0

5

10

15

20

25

30

35

40

Age of Respondents

Frequency

Demographic Analysis Continued………

71%

29%

Marital StatusMarried Unmarried

Demographic Analysis Continued………

Less than 3 years 3-5 years 6-10 years 11-15 years 16 years or above 0

5

10

15

20

25

30

35

40

Experience in the Banking Sector

Frequency

Variables Mean S.D. 1 2 3 4 5

1 Distributive Justice 3.22 .64 (0.619)

2 Procedural Justice 3.19 .77 .886** (0.764)

3 Interactional Justice 3.47 .59 .688** .664** (0.805)

4 Work Engagement 3.55 .72 .701** .642** .742** (0.909)

5 Organizational Engagement 3.30 0.74 .754** .694** .740** .805** (0.869)

Mean, S.D., Correlation and Reliability Matrix

** p < .01 * p < .05

OEa

Variables Model 1 Model 2Predictor

Distributive Justice 0.878**(0.069) 0.435**(0.079)

Mediator

Work Engagement 0.557**(0.069)

Overall R 0.754 0.848Overall R2 0.569 0.719Overall Model F 161.064** 154.662**

ΔR2 0.15

Regression Analysis

** p < .01 * p < .05Dependent variable: Organizational EngagementaEntries are unstandardized coefficients, and values in parentheses are standard errors.

Value SE LL95CI UL95CI Z Sig(two)

Effect 0.4431 0.0688 0.3082 0.5779 6.4402 0.0000

Sobel Testa

Indirect Effect and Significance Using Normal Distribution

a Dependent: Organizational Engagement; Independent: Distributive Justice; Mediating: Work Engagement

OEa

Variables Model 1 Model 2Predictor

Procedural Justice 0.671**(0.063) 0.292**(0.063)

Mediator

Work Engagement 0.627**(0.066)

Overall R 0.694 0.837Overall R2 0.482 0.701Overall Model F 113.330** 142.073**

ΔR2 0.219

Regression Analysis

** p < .01 * p < .05Dependent variable: Organizational EngagementaEntries are unstandardized coefficients, and values in parentheses are standard errors.

Value SE LL95CI UL95CI Z Sig(two)

Effect 0.3797 0.0576 0.2667 0.4926 6.5862 0.0000

Sobel Testa

Indirect Effect and Significance Using Normal Distribution

a Dependent: Organizational Engagement; Independent: Procedural Justice; Mediating: Work Engagement

OEa

Variables Model 1 Model 2Predictor

Interactional Justice 0.936**(0.077) 0.403**(0.095)

Mediator

Work Engagement 0.583**(0.077)

Overall R 0.740 0.833Overall R2 0.548 0.693Overall Model F 148.000** 136.874**

ΔR2 0.145

Regression Analysis

** p < .01 * p < .05Dependent variable: Organizational EngagementaEntries are unstandardized coefficients, and values in parentheses are standard errors.

Value SE LL95CI UL95CI Z Sig(two)

Effect 0.5336 0.0831 0.3708 0.6964 6.4234 0.0000

Sobel Testa

Indirect Effect and Significance Using Normal Distribution

a Dependent: Organizational Engagement; Independent: Interactional Justice; Mediating: Work Engagement

Results - Regression

• Organizational Engagement was regressed separately on each dimension of Organizational Justice.

• Independent Variable was entered in the first block whereas independent variable and mediator was entered jointly in the second block.

• As shown in the Regression Analysis Table (Model 1), the each dimension of organizational justice is significantly related to Organizational engagement.

• Regression Analysis (Model 2) explains the changes in the coeffients and overall values of R, R2 and f. It has been found that after inclusion mediator, the model has improved significantly which supports our hypotheses. (p ˂ .001).

Results – Sobel (Mediation)

• The collected data has also been analyzed on Sobel Simple Mediation Model to check the total direct & indirect effect sizes

• Each dimension of Organizational justice has been entered separately in the software and their indirect effect have been given in the table above.

• The tables (Regression-Sobel) depict that the indirect effects have been shown as highly significant for all the predictor variables which supports our hypotheses. (p ˂ .001).

Discussion on Results

• The research paper studies the relationship of three dimensions of Organizational justice i.e., procedural justice, distributive justice and interactional justice with organizational engagement and work engagement through a mediation model.

• The results show that the perception of organizational justice in the minds of employees increases the sense of ownership of their job roles and association of organization.

• When employees assume that all decisions made by their supervisors are fair and just, their level of organizational engagement increases.

Discussion on Results Continued..

• Perceptions of employees about presence of established rules, policies and procedures helps in increasing the prestige employees feel being part of the organization.

• Results show that the perceptions of employees that they are being treated with dignity and respect, their level of Work Engagement and Organizational Engagement improves significantly.

Conclusion• By ensuring all the three dimensions of

organizational justice, the organization can improve the work & organizational engagement of the employees.

• In the public sector banks, it is of utmost importance that in order to meet the challenges posed by private banks, organizational justice can improve employee loyalities.

• The increase in Organizational and Work engagements, the overall performance of the organization improves considerably due to increased productivity.

Limitation

• Sample taken only from Faisalabad• Convenient Sampling

Future ResearchOrganizational justice relationship with Organizational Citizenship behavior, Employee Commitment and Psychological Contracts of Librarians