Organizational Justice Effect on Job Outcomes ...

Online Access: www.absronline.org/journals

Entrepreneurship and Innovation Management Journal Volume 4, Issue 2 Pages: 48-62

May 2016

e-ISSN: 2311-1836 p-ISSN: 2310-0079

Organizational Justice Effect on Job Outcomes: Moderating Effect of Islamic Work Ethics Durkhanai1, Saif ul Amin2*, Sammandar Khan2 1University 2COMSATS

of Agriculture, Peshawar, Pakistan. Institute of Information Technology, Islamabad, Pakistan.

The study focuses and analyzes a model that shows the relationship between procedural justice, distributive justice, work engagement, organization citizenship behavior and Islamic work ethics. Organization justice, work engagement and organization citizenship behavior has extensively been researched previously but the role of Islamic work ethics as a moderating variable between organization justice and job outcomes has been considered in this study, as this aspect has not been researched yet. The study proposes that Islamic work ethics act as a moderator in the relations between organizational justice dimensions (procedural justice, distributive justice) and work outcomes (work engagement and organization citizenship behavior). Potential and practicing employees were surveyed by using questionnaire as data collection tool. A sample of 140 employees employed in private and public universities were considered for this survey. Data collected from the sample was analyzed, the concluded results shows positive effect of procedural justice and distributive justice on work engagement and organization citizenship behavior. A positive relationship exists between organizational justice and Islamic work ethics that moderate the predictor (procedural justice, distributive justice) and criterion (work engagement and organization citizenship behavior).

Keywords: Organizational justice, Job outcomes, Islamic work ethics, Procedural justice, distributive justice, Work engagement, Organization citizenship behavior.

*

Corresponding author: Saif ul Amin, COMSATS University, Department of Management Sciences, Pakistan. E-Mail: [email protected]

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Entrep. innov. manag. j. p-ISSN: 2310-0079, e-ISSN: 2311-1836 Volume: 4, Issue: 2, Pages: 48-62

INTRODUCTION Organization Justice Justice theory within organizational context has been the focus of a large number of researches. Employees working in organizations expect fair treatment of procedures and outcomes. If treatment is not up to the expectations of employees, it can give rise to negative emotional feelings (Lind, 2001b). To avoid such negative consequences that arise because of injustice, researchers worked to explore the relationship between dimensions of organizational justice and job outcomes (Colquitt et al, 2001). Organizational justice has three dimensions; distributive justice (DJ) that includes work related outcomes (Adams, 1965), procedural justice (PJ) that includes procedures which determine work related out comes and interactional justice that includes treatment with employees.

Holly Prophet Muhammad PBUH) (Yousef, 2000a). This study is significant in providing detailed understandings of Islamic codes and ethics for increasing work outcomes in the context of organizational justice.

Much attention is given to the concept of organizational justice because of its impact on work or job oriented consequences (Cohen-Charash, & Spector, 2001). Consequences might be in the form of job satisfaction, organization citizenship behavior (OCB) (Skarlicki, & latham, 1996) and work engagement (WE) (Kahn, 1990). Work engagement is the attachment of employees to their work roles and to express themselves physically, emotionally and cognitively involve during their work performance. Organization citizenship behavior is discretionary behavior that is not specified by duties and roles assigned to employees. Organizational justice gives rise to justice and trust perception which in turn gives rise to sense of reciprocation which is social exchange. Work ethics have also been under focus of many researchers in Europe and North America with main focus on Protestant Work Ethics proposed by Weber (1958). Islamic work ethics thus emerged as distinct domain of research by researchers (Ali, 1992; Yousef, 2000a). IWE has been originated from Quran (Holly book of the Muslims) and Sunnah (sayings and practices of

Objectives of the study

Research Questions 

Does Islam and Islamic codes of life make employees feel more engaged in their work?



Does Islam and Islamic codes of life make employees perform tasks other than their assigned duties?



Is there any organization justice effect on work engagement and organizational citizenship behavior?



To explore impacts of Islamic work ethics on organizational justice dimensions (distributive justice and procedural justice) and job outcome (Work engagement and organization citizenship behavior).



To broaden the perception of fairness and IWE by analyzing the effect of OJ on job outcomes under the influence of IWE.

LITERATURE REVIEW Organizational justice is concept related to work place fairness. This concept has been under focus because it fits relation between important individuals and organization outcomes. Organization justice consists of three dimensions (Colquitt, 2001), distributive justice, and procedural justice. Distributive justice is one of the major dimensions of organizational justice and is considered an ancient form of justice. Distributive

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justice is related to the perception of employees related to outcomes (Adams, 1965). Procedural justice is related to the process or means used to get outcomes. It involves the means, process and systems which defined pay, wages and other outcomes related to workplace being fair or not (Leventhal, 1980). Outcomes might also be in the form of promotions or budget related allocation (Cohen-Charash, & Spector, 2001). The issues of justice has been under focus as many employees negotiate about it that is whether employees get outcomes fairly (Distributive justice) and whether the procedures used by organizations to give outcomes are fair or not (Procedural justice) (Tyler, 1989). Early organizational justice literature argues that distributive justice determine economic value of outcomes like raise in pay or not (Folger, & Cropanzano, 1998). Procedural justice is relations based and determine self-linked motives like giving voice to others and using fair procedures (Folger, & Cropanzano, 1998), commitment to employees and groups (Tyler, 1999) without considering their culture differences. That’s why it has been concluded that distributive justice determine economic benefits, however procedural justice determine socio-emotional benefits (Cropanzano, & Ambrose, 2001), because of this difference both types of justice are considered separate. . It has been observed that procedural justice and its affect is observed when outcomes are unfavorable or unfair (Brockner, & Wiesenfeld, 1996). When outcomes are favorable employees feel satisfied but when outcomes are unfair then procedural justice is use to determine those outcomes that are to be analyzed, which might give rise to negative response of people to these outcomes (Brockner, & Wiesenfeld, 1996). Distributive and procedural justice is closely related to attitude and behavior of employees. Distributive justice is about satisfaction whereas procedural justice is about commitment and trust upon supervisor (Folger, & Konovsky, 1989). Moreover it is generally argued that distributive justice relates

to personal outcomes that are job satisfaction and procedural justice relates to institutions and plays an important role in employee contribution evaluation (Lind, & Tyler, 1998). Procedural justice can be used to alleviate the unfavorable outcome, negative effects and behavioral outcomes (Brockner, & Wiesenfeld, 1996). Work Engagement and Organization Justice Employees work engagement has been the focus of researchers from past many years. Initial contribution to work engagement literature was made by Kahn (1990) who has been known as “the academic parent of employee engagement work”. According to Kahn (1990) engagement can be defined as “the harnessing of organization members’ selves to their work role by which they employ and express themselves physically, cognitively and emotionally during work performances’. Another most accepted definition states that work engagement is “a positive, fulfilling, work-related state of mind characterized by vigor, dedication and absorption”. Vigor means high energy and mental flexibility at work place, open heartedly and willingly putting efforts in one’s work and determination though there is a difficult situation. Dedication means having sense of importance, excitement, motivation, honor and challenge. While absorption means doing one’s job with concentration and interest. One is immersed in work to the extent that time passes so quickly and leaving work without completion becomes difficult for him/her. Kahn (1990) suggests that three psychological conditions are important for engagement that is meaning fullness, safety and availability. Workers would be engaged in their work when there is physiological meaningfulness of their job or work to them, they feel safe and they are psychologically available at a time of performing the job. In empirical study to test Khan’s model three psychological conditions; meaningfulness, safety

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and availability are essential in relation with work engagement.

Organization outcomes

Social Exchange Theory (SET) (Cropanzano, & Ambrose, 2001) gives theoretical basis for the employee being more committed or less committed with organization and their work. Social exchange is defined as Subjective, relationship oriented interaction between employers and employees characterized by an exchange by social-emotional benefits, a long term focus and open ended commitments. This frame work was given to understand leader-follower relationship and factors of commitment. According to this theory two parties interact with each other which create scene of obligation to reciprocate to trust, loyalty and commitment of others (Cropanzano, & Ambrose, 2001). Organizational justice represents perception of employee’s fairness at workplace which in return administrator social exchange relationship.

OCB is voluntary behavior of employees for effectiveness of the organization that go beyond the duties or roles assigned to them (Organ, 1990). Many studies concluded that organizations having more committed employees are engaged in OCB creation (Moorman, 1991). OCB can have many different orientations like workers oriented OCB which include helping coworkers who might be facing heavy workload, supervisor oriented OCB which means to be helpful to supervisor in time of difficulty and customers oriented OCB too that include being helpful to customers. Two categories of OCB are designed by Tyler (1989). One is OCBI, which means organization citizenship behavior that will be beneficial for individuals. Second type is OCBC which means organization citizenship behavior that will be beneficial for whole of organization. Recent research evaluates OCB effect in increasing retention of employees (Mackensie et al., 1993).

According to Moorman (1991), procedural justice positively affects organization engagement. Another study conducted by Kahn (1990) conclude that both distributive and procedural justice influence WE equally like positive procedural justice perception leads to greater absorption where as positive distributive justice perception leads to greater dedication and vigor. Other study argues that procedural justice has relationship with employee engagement and strongly related to work satisfaction, organization committed and OCB whereas distributive justice has positive relation with employee engagement. Procedural justice has importance to predict vigor but does not exhibit significance in predicting absorption and dedication. Hypothesis 1a Distributive justice is positively related to work engagement. Hypothesis 1b Procedural justice is positively related to work engagement.

Citizenship

Behavior

and

job

OCB has been the focus of research as a consequence of organizational justice. Previously conducted research explain OCB related to employees from social exchange aspect (Organ, 1988), thus employees with more social exchange relationship shows more trust in organization and sense of reciprocity towards organization, so perform voluntary behaviors for that organization beyond their assigned roles and duties. Organizational justice has also been conceptualized from social exchange theory thus it can be considered that SET support OJ and OCB up on which research has been conducted (Aryee et al., 2002; Karriker et al., 2008). For instance with respect to distributive justice if an organization will have fair output and reward system employees will perceive an organization being fair thus employees will voluntarily show more interest towards it then self-interest (Lind & Tyler, 1989). According to the group value model

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(Tyler, & Lind, 1992) employees feel respected in organization and consider themselves with pride and dignity being a member of the organization when decisions and treatment with them are fair (Tyler, & Lind, 1992) such feelings of respect and pride make employees act favorable towards an organization in the form of OCB (Tyler et al., 1996; Lind, & Tyler, 2001). Employees also feel motivated towards philanthropic, selfless and humane behavior for organization in exchange of fair treatment (Skarlicki, & Latham, 1996). Hypothesis 2a Distributive justice is related to organization citizenship behavior. Hypothesis 2b Procedural justice is related to organization citizenship behavior. Islamic Work Ethics and job outcomes Ethics are principles that differentiate between right and wrong. It is crucial for organizations, government, academic institutions and general public to be fully aware of ethical and moral dimensions of business activities (Crane, & Matten, 2007). Ethics has its conceptual roots in Weber’s theory (1958) of protestant work ethics that was the major focus of Western business ethics researchers (Yousef, 2000a). Recently a new concept of IWE has been brought under focus to study Islamic ethical practices in businesses world (Ali, 1988). This new concept and its principles got rise from Quran and Sunnah (Yousef, 2000a; Ali, & AlOwaihan, 2008). Quran and Sunnah serve as the valid source of principles to be followed for each era and individual who embraced Islam (Beekum, & Badami, 2005). Religion Islam provides a complete and valid ethical system that is for all spheres of life including economic and social spheres (Rice, 1999). It not only focuses on individual but also on collective lives of followers (Beekun, 1997). IWE has its base in Islamic Law, these laws are over lasting and

universal thus is not confined to particular individual, field or society (Syed, & Ali, 2010). Islamic modes of life reveals that productive work has to be performed, link between IWE and organization justice has been mentioned at several places in Quran (Abeng, 1997a). Quran says ‘‘and he who does righteous deeds and he is a believer, he will neither have fear of injustice nor deprivation’’ (20:112) and ‘‘for those who were believers and they did righteous deeds, are the Gardens as accommodation for their deeds’’ (32:19). Prophet Muhammad (PBUH) said, hard work clears the sins of people and the best food which a person eats is the one he eats out of his work (Ali, 1992). Teachings of Islam focus on being loyal, hard worker and have dignity (Ali, 1992). In Islam workers and labors who work hard for their lives are considered important for the society well-being (Ali, 1992). Quran says ‘‘for all people, there are ranks according to their deeds’’ (6:132) ‘‘and man has nothing except that for which he strives’’ (53:39). Therefore Islam stress up on hard work and forbids from being useless or being involved in unproductive activities (Abeng, 1997b). Therefore work has numerous benefits to keep balance in some one’s life and society (Ali, 1988). According to IWE perspective it is obligatory to be involved in economic activities and life without work is meaning less (Yousef, 2000a). IWE at work is source of achievement, success and satisfaction. Moderating role Of IWE IWE plays an important moderating role between justice types and job outcomes because it focuses on kindness and justice (Yousef, 2000a). IWE is individual based concept that’s why it is argued that individuals who are strong believer of IWE will show reaction even in absence of organization fairness. People who are strong believer of IWE will not bother much if there is absence of distributive and procedural justice. FIGURE 1 HERE

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As previously discussed low perception of distributive and procedural justice in organization results in low work commitment and OCB but employees that are strong believer of IWE will have less or no effect of injustice perception on outcomes. As IWE argues that everybody is morally obliged to fulfill work related goals even in the absence of fair distribution of rewards and fair procedures. Quran says ‘‘and he who does righteous deeds and he is a believer, he will neither have fear of injustice nor deprivation’’ (20:112). It is argued that individuals who strongly follow IWE do not even bother for low organizational justice as Muslims have moral obligations towards work (Bouma et al., 2003). Research conducted on religion suggests that religious beliefs influence intrinsic and extrinsic work values of an individual (Parboteeah et al., 2009).As IWE is an important part of Muslim religious beliefs and values, employees having high IWE will show high level of work commitment and OCB even when distributive and procedural justice is perceived low. Hypothesis 3a IWE will moderate the positive relationship between distributive justice and work engagement. Hypothesis 3b IWE will moderate the positive relationship between distributive justice and organization citizenship behavior. Hypothesis 3c IWE will moderate the positive relationship between procedural justice and work engagement. Hypothesis 3d IWE will moderate the positive relationship between procedural justice and organization citizenship behavior. RESEARCH METHODOLOGY To conduct this research private and public organization of Pakistan especially KP regions are

taken as sample. Sampling method for the current research was non probability convenience sampling. Data has been gathered from employees working in private and public university. Total 160 questionnaires were distributed among targeted respondents out of which 141 questionnaires has been completely and positively filled. The study is cross sectional as data was collected at one period of time. The questionnaire begins with demographic variables and comprise of 28 items. There are two independent (DJ and PJ), two dependent (WE and IWE) and one moderating variable (IWE). 5 point Likert scale has been used in questionnaire. Statistical Package for Social Sciences (SPSS) has been used as analysis tool and different tests like regression, correlation coefficient were run upon the data.

DATA ANALYSIS AND INTERPRETATION Distribution of demographic Table 1 shows the frequency distribution of demographic variables like gender, age, experience and tenure of the respondents. Table shows that the majority precipitants are males. The majority respondents of the age group 26-35 of whole sample. According to working experience, most of the participants having experience within range of 1-10 years. TABLE 1 HERE Number of respondents having qualification of graduation, master, and other (M.Phil./PHD, intermediate, Diploma etc...) are 34, 59, and 48 respectively. Relationship of work organization justices

engagement

and

Regression coefficient “R” value is .557 (see table 2) which means there is 55% relationship between dependent and independent variable. TABLE 2 HERE

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The coefficient of determination “R2” value is .31 which means there is 31% of variation in WE due to change in DJ and PJ. Other factor adjusted R square is actually R2 adjusted to population. It tells variation occurring in DV due to population and has value less then R square. Its value is .30 that means 30% variation in DV for population. TABLE 3 HERE In table 3 regression coefficient of DJ= 0.067 and of PJ= 0.483 which means that with a percent increase in distributive justice, work engagement will increase 6% whereas with one percent increase in procedural justice WE will increase by 48%. The value of T for DJ and PJ are 1.28 and 5.96 which show insignificant relationship between DJ and WE but significant relationship between PJ and WE at 0.000. Organizational Justice Citizenship Behavior

and

Organization

In table 4 R= 0.305 which means that 30% of the relationship exist between OJ and OCB, coefficient of determination “R2” = 0.093 or 93% which means there is 93% variation in OCB is due to change in OJ. TABLE 4 HERE In table 5 regression coefficient of DJ is 0.19 or 19% and of PJ is 0.22 or 22% which means that with one percent change in DJ, OCB change by 19% and one percent change in PJ bring 22% change in OCB. TABLE 5 HERE The value of T for DJ and PJ are 3.65 and 2.68 which show significance at .000 thus insure the acceptance of alternate hypothesis that there is positive relationship between OJ and OCB. Regression Analysis of Interaction-1 (DJ*IWE), interaction-2 (PJ*IWE) and WE Regression coefficient “R”= .646 (see table 6) which means that there is 64% relationship between

DV and IV. Coefficient of determination “R2”= .418 which means 41% of variation is explained in WE by interaction 1 and interaction 2. TABLE 6 HERE For interaction 1 table 7 illustrate regression coefficient value is .036 which means there is 3% moderating effect of IWE between distributive justice and WE. There is less and positive moderating effect of IWE between DJ and WE. TABLE 7 HERE For interaction 2 regression coefficients is .115 which makes 11% moderating effect of IWE between procedural justice and WE establish significant relationship. Regression Analysis of interaction-1 (DJ*IWE), interaction-2 (PJ*IWE) and OCB R=0.415 which shows that (see table 8) there is 41% relationship between predictors and OCB. Coefficient of determination value illustrate that 17% of variation is explained by interaction terms in OCB. TABLE 8 HERE For interaction 1 coefficient of regression is 42% and there is significant moderating effect of IWE between distributive justice and OCB. TABLE 9 HERE For interaction 2 coefficient of regression is 93% and there is significant moderating effect of IWE between procedural justice and OCB (see table 9). TABLE 10 HERE Table 10 shows beta and significance values before and after introducing moderating variable. It shows that relationship between WE and DJ is insignificant and positive (B=0.067, ns) thus reject the alternate hypothesis 1a whereas relationship between WE and procedural justice is positive and significant (B=0.483, p