1 1.0 INTRODUCTION Employees’ perceptions of fairness in organizational settings, also known as organisational justice, influence their attitudes and behaviour and consequently their performance and the organisation’s success. The degree of fair treatment compared to others received by employees has been proposed to influence their performance which may include their intention to stay or leave the organization. Although companies spend millions of dollars each year in their attempts to comply with fair employment laws, many firms continue to have problems with employees who perceive unfair treatment in employment practices (Lemons & Jones, 2001). Previous research shows the importance of different dimensions of organizational justice and its relationship with pay satisfaction, job satisfaction, commitment and turnover intention. The present study is focused on perception of organizational justice in terms of its three main part; distributive justice, procedural justice and interactional justice and its impact on organizational commitment. There are three types of organisational justice which have different impact. The first type is distributive justice which refers to the perceived fairness of the outcomes employees receive. Second type of organisational justice is procedural justice. It describes the perceived fairness of the means used to determine those outcomes. Meanwhile the third type of organisational justice which is interactional justice will perceive fairness of the process that leads to outcomes. All three types of justice may give different impact on employees’ commitment. Therefore, this study is conducted to determine the relationship between employees’ perceptions on organisational justice and employees’ commitment, the type of organisational justice that give the biggest impact on employees’ commitment, and how do employees attempt to create fair policies or procedure in workplace.
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1.0 INTRODUCTION
Employees’ perceptions of fairness in organizational settings, also known as organisational
justice, influence their attitudes and behaviour and consequently their performance and the
organisation’s success. The degree of fair treatment compared to others received by employees
has been proposed to influence their performance which may include their intention to stay or
leave the organization. Although companies spend millions of dollars each year in their attempts
to comply with fair employment laws, many firms continue to have problems with employees
who perceive unfair treatment in employment practices (Lemons & Jones, 2001).
Previous research shows the importance of different dimensions of organizational justice
and its relationship with pay satisfaction, job satisfaction, commitment and turnover intention.
The present study is focused on perception of organizational justice in terms of its three main
part; distributive justice, procedural justice and interactional justice and its impact on
organizational commitment.
There are three types of organisational justice which have different impact. The first type is
distributive justice which refers to the perceived fairness of the outcomes employees receive.
Second type of organisational justice is procedural justice. It describes the perceived fairness of
the means used to determine those outcomes. Meanwhile the third type of organisational justice
which is interactional justice will perceive fairness of the process that leads to outcomes. All
three types of justice may give different impact on employees’ commitment. Therefore, this
study is conducted to determine the relationship between employees’ perceptions on
organisational justice and employees’ commitment, the type of organisational justice that give
the biggest impact on employees’ commitment, and how do employees attempt to create fair
policies or procedure in workplace.
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2.0 RESEARCH OBJECTIVES
The research project is conduct to explore and investigate the following:
i. Degree of employees’ perception on organizational justice
ii. Level of employees’ commitment towards the organization
iii. Relationship between organizational justice and organizational commitment
3.0 RESEARCH QUESTIONS
This study address three research questions which as follows:
i. What is the degree of employees’ perception on organizational justice?
ii. What is the level of employees’ commitment towards the organization?
iii. What is the relationship between organizational justice and organizational commitment?
4.0 SCOPE OF STUDY
Generally there are many factors that influence employees’ commitment towards the
organization, it includes compensation, environment, emotional intelligence (EI), organizational
justice and others. Amongst all of the factors, one of them is organizational justice.
Organisational justice concerned with people’s fairness perceptions in their employment
relationship. These perceptions will directly influence their commitment in that particular
organization. Therefore, this research study will focus on organizational justice as in the
employees’ fairness perceptions and its impact on organizational commitment.
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5.0 RATIONALE OF STUDY
From researcher’s observation, workers in Pertubuhan Peladang Negeri Perak always have
talked regarding organizational justice and the way they perceived organizational justice is
different from one another. Their different perception will directly influence their commitment in
the organization. Therefore, this research study is conducted to determine the relationship
between the perceived organizational justice and organizational commitment.
6.0 SIGNIFICANT OF STUDY
As the research study focused on the relationship between organizational justice and
organizational commitment, thus this study tries to encourage workers to be more committed
towards their job. It is because the top management may use this research to determine how
workers perceived organizational justice in Pertubuhan Peladang Negeri Perak and how it will
influence organizational commitment. Organizational justice is clearly related to organizational
commitment, therefore the top management may plan the strategy which will lead to justice.
Other than that, this study will add to the existing literature regarding organizational justice and
organizational commitment. It can be used as the secondary resources for the future research.
7.0 DEFINITION OF TERMS
From the previous studies, many researchers had different perception in defining
organizational justice. According to Byrne and Cropanzano (2001), organizational justice is an
area of psychological inquiry that focuses on perceptions of fairness in the workplace. It is the
psychology of justice applied to organizational settings.
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Meanwhile, Greenberg (1990) defined organizational justice as the examination of fairness
within organizational parameters and emerges through work in social psychology focused at
insight at fairness aspects in social interactions. In addition, James (1993) defined
organizational justice as staff perceptions of fairness of treatment received from an organization
and their behavioral reaction to such perceptions.
Organizational justice was divided into three categories: distributive justice, procedural
justice and interactional justice. Distributive justice refers to the perceived fairness of the
outcomes employees receive (Lam, Schaubroeck, & Aryee, 2002). Alexander and Ruderman,
(1987) defined distributive justice as the perceived fairness of the allocation of resources by the
organization, meanwhile Klendauer and Deller (2009) defined distributive justice as the
perception of outcomes that are consistent with implicit norms for allocation.
The second category of organizational justice is procedural justice. Different from
distributive justice, procedural justice focus on the fairness of the process that leads to the
outcome. According to Alexander and Ruderman (1987), procedural justice refers to the
perceived fairness of the process used to make allocation decisions. Meanwhile Lam,
Schaubroeck and Aryee (2002) defined procedural justice as the perceived fairness of the
means used to determine those outcomes. Another definition of procedural justice by Folger
and Cropanzano (1998) defined it as the perceptions of fairness regarding the methods,
mechanisms, and processes used to determine these outcomes.
The third category of organizational justice is interactional justice. Bies and Moag (1986)
said, people also judge the fairness of the interpersonal treatment they receive as organisational
procedures are enacted. In other words, interactional justice can be defined as the nature of the
relationship between the employee and his/her supervisor (Mohyeldin & Suliman, 2007). Other
than that, interactional justice justifies how the information was communicated and whether the
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individuals affected by a decision were treated in a courteous and civil manner (Bies and Moag,
1986).
The other side of this research study is organizational commitment. According to Allen and
Meyer (1990), it is a psychological state that binds the individual to the organization. Scholl
(1981) defined organizational commitment as a stabilizing force that acts to maintain
behavioural direction when expectancy/equity conditions are not met and do not function. It is
supported by Brickman (1987) which defined organizational commitment as a force that
stabilizes individual behaviour under circumstances where the individual would otherwise be
tempted to change that behaviour. Another definition by O’Reilly and Chatman (1986) said that
organizational commitment as the psychological attachment felt by the person for the
organization; it will reflect the degree to which the individual internalizes or adopts
characteristics or perspectives of the organization.
Organizational commitment also divided into three categories: affective commitment,
continuance commitment and normative commitment. According to Allen and Meyer (1990),
affective commitment is an affective or emotional attachment to the organization such that the
strongly committed individual identifies with, is involved in, and enjoys membership in, the
organization. Meanwhile, continuance commitment reflects pressures on an employee to remain
with an organization resulting from organizational obligations. On top of that, normative
commitment refers commitment associated with the costs that employees perceive are related
to leaving the organization (Allen & Meyer, 1990).
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8.0 LITERATURE REVIEW
Organisational justice is concerned with people’s fairness perceptions in their employment
relationship. Organizational justice indicates the examination of fairness within organizational
parameters and emerges through work in social psychology focused at insight at fairness
aspects in social interactions (Greenberg, 1990). The concept of organisational justice has been
used to define the role of the organisational justice in workplace. According to the definition of
Çakmak; organizational justice is the social norms and rules that determinate of the distribution
decision procedures of organizational source (prize and punishments) and the relationships
between employees within implementation of those procedures.
The concept of organisational justice extends traditional models of work behaviour that tend
to conceptualise job demands, job control and social support as the main factors determining
individual well-being and productivity (Baldwin, 2006). Fairness is a largely subjective construct,
which captures more basic elements of the social structure in which these other characteristics
operate (Baldwin, 2006). According to Baldwin (2006), examples of perceived injustices within
an organisation might include unequal pay for men and women doing same job; performance
reviews being conducted by someone with whom the employee has had little previous contact;
the use of personality inventories to select new staff; and arbitrary dismissals. In general,
organisational justice can be categorize into three types which are distributive justice;
procedural justice; and interactional justice. All three types of justice differ from each other and
may have different impact on employees’ commitment.
The other side of this research study is employees’ commitment. The commitment was
defined by Harold Guetzkov (1955) as a behavior that makes people ready against to a group,
people and idea. The commitment entails employees' belief in and acceptance of organizational
goals and values, their willingness to work towards accomplishing the organization's goals, and
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their strong desire to continue as an organizational member (Porter, Steers, Mowday and
Boulian, 1974). Commitment also reflects in the form of employees' intention to stay or leave the
organization, though it may be moderated with factors like opportunities available outside and
normative pressure to stay on the job (Hassan, 2002). The determination of the effects of the
organizational justice perception of employees on their organizational commitment is so
important for organizations. Because it is impossible for employees to feel committed or adopt
them to an organization that is perceived as unfair. The low commitment refers to employee
who can leave organization in every time. This situation causes increasing employee turnover
and low performance. The high employee turnover cause low customer satisfaction and
negatively effects customers’ perception of enterprises.
A research conducted by Irfan Yazicioglu and Isil Gokce Topaloglu (2009) focused on
determining the relationship between organizational justice and commitment. The research was
designed in accommodation establishments in Mugla and employees who work in
accommodation operations in Mugla province was the total population of the study. It was
showed that there was a significant relationship between organizational justice and
organizational commitment. When the relationship analyzed in term of the dimensions of
organizational justice, the highest relation was found between interactional justice and
organizational commitment. The dimensions of organizational justice and organizational
commitment also been analyzed in term of gender, education and working years. The means of
distributive justice, procedural justice, interactional justice and organizational commitment are
not significantly differ in term of gender. Meanwhile, the means of procedural justice,
interactional justice and organizational commitment are significantly differ in term of education
but not differ significantly in the mean of distributive justice. It showed that education have effect
over the procedural justice, interactional justice and organizational commitment, but doesn’t
have effect over distributive justice. In term of working years, the means of distributive justice,
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procedural justice, interactional justice and organizational commitment are significantly differ
and showed that working years have effect over the organizational justice and organizational
commitment. Therefore, it was concluded that the perceptions of organizational justice and its
dimensions by employees are not differ in term of gender. The highest organizational justice
and organizational commitment are seen at elementary education level and lowest level is seen
at college education level. In term of working years, the highest organizational justice and
organizational commitment level are seen at 6-10 working years and lowest level is seen at 11-
15 working years.
Meanwhile, a research conducted by Faisal Karim and Omar Rehman from Faculty of
Administrative Science, Air University of Pakistan on 2012, focused on analyzing the impact of
organizational justice, employee’s job satisfaction and employee empowerment on
organizational commitment of semi government organizations employee. The respondents who
involve employees of Civil Aviation Authority of Pakistan were selected. Authority of Pakistan is
chosen as sample organization mainly because of its relatively large and diverse manpower.
Karim and Rehman used organizational justice, job satisfaction, and employee’s empowerment
as the independent variables. For this study, researcher only focused on one of the independent
variable which is organizational justice. Based on the research conducted, it showed that
perceived organizational justice was strongly correlated with organizational commitment and
therefore strong correlation was observed between organizational commitment and perceived
organizational justice. According to Karim and Rehman (2012), subject to the fair treatment from
organization, employees tend to be more devoted. The policies, procedures and implementation
should be just and unbiased. In addition, employees should be briefed regularly regarding the
existing procedures and their implementation techniques (Karim & Rehman, 2012). The
employees having confidence in the fairness of organizational policies, its implementation
procedures would result in greater organizational commitment.
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In spite of the importance of officers’ perception of organizational justice and its influence
on organizational commitment, the policing literature lacks information about the relationship
between the factors. A study by Crow, Lee and Joo (2012) aimed to examine an indirect
influence of organizational justice on police officers’ commitment to their organization. The study
involved police officers employed by the Korean National Police Agency (KNPA), a centralized
police organization. The result showed that officers’ perception of organizational justice was
positively related with their level of organizational commitment. In addition, perception of
procedural and interactional justice had an indirect impact on the officers’ organizational
commitment through distributive justice. Lastly, perception of organizational justice showed an
indirect influence on organizational commitment through job satisfaction.
8.1 Distributive Justice
As the abovementioned, there are three types of organizational justice and the first type of
organisational justice is distributive justice. Early studies on organisational justice were more
focused on distributive justice. Distributive justice is actually grounded in Adams’ (1965) equity
theory. According to equity theory, a person look at others in a social setting, calculates his /her
perceived input outcome ratio and then compares this ratio with that of others. Equity exists if
the individual perceives that his/her ratio of inputs to outcomes received is similar to that of the
referent. On the other hand, inequity is presence when there is an unequal input-outcome ratio
between the individual and the referent other. This will lead to a feeling of unfairness
experienced by both parties and an attempt to resolve this discrepancy is made. Both parties
would rectify the unjust situation by either reacting psychologically or behaviorally. He/she may
make behavioral changes that increase or decrease his/her input or cause a change in received
outcomes. Besides, he/she may also react psychologically to change the perceived input/output
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ratio of self and/or referent (e.g altering perception of outcomes) (Greenberg, 1990). Distributive
justice was found to be related to such work outcomes as pay satisfaction, job satisfaction,
organizational commitment and trust in organizational (Cohen-Charash and Spector, 2001).
Distributive justice focuses on the fairness of outcomes of the manner in which the reward
allocation is taken into consideration (Muzumdar). In this research the distributive justice deals
with fairness in outcome irrespective of the procedure followed to achieve it. Distributive justice
plays an important role in individual employee performance where his performance is compared
with the performance of other employees. The biggest example of distributive justice is
distribution of sales commission as per the number of sales. Employees thinking of distributive
justice are largely based on their comparisons with other employees in the organization. As it
can be difficult to determine what constitutes an appropriate level of reward for a particular
degree of input, people tend to make this judgement in relative terms, looking for a contribution-
outcome ratio that is similar to that of their peers (Baldwin, 2006).
On the other hand, McFarlin and Sweeney (1992) considered pay rules, distributing tasks
and pay levels as forms of distributive justice in which the perceived fairness of the outcomes
received are judged. Pay administration, rule administration, work pace and latitude can be
considered as forms of procedural justice in which the perceived fairness of the methods used
to determine outcomes are judged (Ponnu & Chuah, 2010).
8.2 Procedural Justice
The second type of organizational justice which is procedural justice focuses on the
fairness of the manner in which the decision-making process is conducted (Folger & Konovsky,
1989). There occurs a shift in perception of an individual from what was decided to how the
decision was made (Cropanzano & Folger, 1991). In this research study, procedural justice
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deals with the fairness in the procedure of a decision taken irrespective of the fairness in the
outcome. Employees’ perceptions on procedural justice are likely to be enhanced if they are
given the chance to convey information and voice out their concerns before decisions are taken.
This can apply as much to general day-to-day working life and management practice as to
formal, one-off procedures such as disciplinary hearings (Baldwin, 2006). Psychologists have
argued that having a voice helps to fulfill particular needs such as the chance to be heard and
influence other people, as well as the confirmation of being valued as a participative group
member (Storey, 2000).
Both distributive and procedural justice are consistently found to be related to employee
work-related attitudes and behaviors (Greenberg, 1990). For example, Folger and Konovsky
(1989) reported distributive justice to be more strongly related to pay satisfaction than
procedural justice, whereas procedural justice was more strongly related to organizational
commitment and trust in supervisor than distributive justice.
Research conducted by Ponnu and Chuah (2010), said that both procedural and
distributive justice perceptions were significant contributors in explaining organizational
commitment. The reseach was conducted to investigate the relationship among organizational
justice, organizational commitment and turnover intention of Malaysian employees. The study
managed to obtain 200 respondents from various industrial backgrounds across organizations
in the country and it provides a high response rate of 86%. The research showed a highly
significant correlation between procedural justice and organizational commitment which
determined that employees who have high perception of procedural justice towards their
organization tend to have high organizational commitment and verse versa. The correlation
between distributive justice and organizational commitment was also highly significant and it
indicate that employees who have high perception of distributive justice towards their
organization tend to have high organizational commitment or verse versa. Since the perceptions
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of procedural and distributive justice were high, their organizational commitment was also high
and therefore employees will be more committed to their present employer if they perceived
higher fairness in the organization. The result of the research conducted by Ponnu and Chuah
also showed that procedural justice plays a more important role that distributive justice in
influencing employees’ organizational commitment. Therefore it is suggested that employees’
commitment with an organization could be significantly increased by enhancing organizational
fairness, particularly procedural justice. Managers should be aware that the fairness of
procedures used in allocating rewards and the voice afforded employees in the allcoation
process are more important than the fairness of the allocation of rewards in improving level of
employees’ commitment in the organization (Ponnu & Chuah, 2010). In addition, to increase
employees’ orgaizational commitment, managers should first improve the procedural justice and
hence increase overall levels of perceived justice by involving employees in the procedures for
making decisions and allocating rewards.
Another research by Nazim and Shahid also indicated the same result which both
distributive justice and procedural justice showed a significant positive relationship with
organizational commitment. The research conducted involved Medical Representatives of
Pharmaceuticals Companies operating in Pakistan and it aimed to investigate the relationship
between organizational justice, organizational commitment and turnover intention. The
correlation between distributive justice, procedural justice and organizational commitment was
found highly significant and therefore employees’ commitment to their organization increases
with increased perception of distributive and procedural justice. The management of
Pharmaceuticals companies is enjoined to pay special attention towards doing distributive
justice and procedural justice to medical representatives in order to increase the employees’
commitment to the organization because the results of the study indicated a significant positive
relationship between organizational justice and employees’ commitment.
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8.3 Interactional Justice
Interactional Justice is defined by sociologist John R. Schermerhorn as the degree to which
the people affected by decision are treated by dignity and respect. In some respects,
interactional justice falls under the umbrella term of procedural justice, but is significant enough
to be considered in its own right; it refers to the quality of the interpersonal treatment received
by those working in an organisation, particularly as part of formal decision making procedures
(Baldwin, 2006). Interactional justice is divided into two parts; the first part is called as
interpersonal justice and the second part is informational justice (Muzumdar). Interpersonal
justice is defined as the way in which a person is treated by his supervisors, subordinates etc.
Greenberg proposed to split interactional justice into two main elements: the quality of
treatment (respect and sensitivity), and explanations and information regarding decision making
(Greenberg 1993). These two elements were consequently treated as separate dimensions of
justice by some authors (Colquitt, 2001) and were named informational justice and interpersonal
justice. Interpersonal justice regards the quality of personal treatment, respect and sensitivity
(Greenberg, 1990). Honesty, respect and politeness generally increase interpersonal justice
perceptions (Colquitt, 2001). Informational justice focuses on the amount and quality of
information provided concerning procedures and outcomes (Colquitt 2001; Greenberg 1990).
Clarity, adequacy and sincerity of communications regarding a decision are important
antecedents of informational justice.
Despite of research conducted which focused on subordinates, there was also previous
research which studied on organizational commitment of managers in corporate mergers. It
involved managers on middle and senior level companies in Germany which varied in the
application of fairness rules. The study conducted by Klendauer and Deller (2009) aimed to
investigate whether perceptions of distributive, procedural and interactional juctice can explain
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the frequently reported low organizational commitment of managers in corporate mergers. The
results of the multiple regression analysis indicated that only the interactional justice coefficient
is significant, meanwhile distributive and procedural justice coefficients are not significant.
Klendauer and Deller concluded that interactional justice makes a unique contribution to
estimating affective commitment, but the three fairness dimensions do not have independent
effects when considered simultaneously. It was also recommended that top managers topay
extra attention to timely, candid and specific internal communication with thorough and
reasonable explanation of decisions, as well as the respectful treatment of managers. Moreover,
the results indicate that managers reacted positively to fairness because it conveys positive
relational signals, and because one can gain personal advantages through fair outcomes and
processes.
Well-designed systems that promote distributive, procedural and interactional justice profit
both individual, who will be satisfied that they have been fairly treated, and the organization,
which will maintain control over potential challenges and threats from its staff while reaping the
benefits of being an employer of choice (Baldwin, 2006). For example, Sheppard (1992) state
that equitable pay improves individual performance, equal treatment raises group spirit, voice
creates commitment to a decision, and access creates a loyal ally.
On the other hand, employee may respond in a number of different ways to a perceived
injustice, with varying degrees of impact on the organization. There is often a desire to name
and/or blame the person, procedure or system considered to be at fault (Sheppard, 1992). It is
commonly a person or group of people that comes under attack, as employees may not feel
inclined or qualified to question underlying organisational systems (Baldwin, 2006). Turnley and
Feldman (1999) summarise four possible responses to dissatisfaction that might apply to
employees who feel they have been unjustly treated; exit behaviour (negative/active) e.g leave
the organisation; withdrawal behaviours (negative/passive) e.g reduce one’s efforts; voice
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behaviours (positive/active) e.g file a grievance; and loyalty behaviours (positive/passive) e.g
ignore or try to rationalise the injustice.
9.0 RESEARCH FRAMEWORK
The research framework shows the connection of the three facets of independent variables with