ORGANISATIONAL JUSTICE AND COMMITMENT AMONG THE EMPLOYEES OF AN AUTO COMPONENT MANUFACTURING COMPANY

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1 ORGANISATIONAL JUSTICE AND COMMITMENT AMONG THE EMPLOYEES OF AN AUTO COMPONENT MANUFACTURING COMPANY ABSTRACT Organizational justice refers to an overall perception of what is fair in the workplace, composed of distributive, procedural, and interactional justice. In the present study an attempt was made to study the impact of organizational justice on organizational commitment. A convenience sample consisting of forty five employees working in an auto component manufacturing company participated in the study. Questionnaire method was used for data collection. The collected data was analyzed with mean, standard deviation, ANOVA, correlation and regression tests. Results indicated that there was a significant difference in the perception of procedural justice and interactional justice among the respondents of different age groups. There was a significant difference in continuance commitment, procedural justice, and interactional justice among the respondents of different income groups. There was a significant correlation between perception of distributive justice and continuance commitment, and also between interactional justice and normative commitment. It was found that distributive justice affects continuance commitment positively and significantly and also distributive justice, and interactional justice affect normative commitment significantly and positively. INTRODUCTION In general, research about organizational justice has focused on two major issues: employees' responses to the outcomes they receive, and the means by which they obtain these outcomes, that is, the procedures used (Cropanzano and Greenberg, 1997). In other words, theorists in the field of organizational justice have distinguished between conceptualizations of justice that deal with the content of fairness, or what the decisions are, which is termed distributive justice, and those that focus on the process of fairness, or how decisions are made, called procedural justice (Greenberg, 1990). A great deal of research concerning justice has historically emphasized the distribution of payment and other work-related rewards derived from equity theory (Greenberg, 1987). Although this outcome-oriented perspective explains how employees react to the nature, level, and distribution of organizational rewards, it ignores the procedures or means through which ends are established. Therefore, the research focus has 1

2 recently shifted from distributive justice to procedural justice (Greenberg, 1990). The procedures used to determine a particular outcome can be more important than an actual outcome itself (Folger and Greenberg, 1985; Folger and Martin, 1986). Interactional justice is related to the quality of relationships between individuals within organisations (Folger and Cropanzano, 1998). In interactional justice, decision makers treatment of those affected by decisions is crucial because persons identify attitudes as indicators of justice within the organisation. It refers to perceptions concerning the way authorities treat their subordinates, and how these subordinates respond to these perceptions (Masterson et al., 2000; Cohen-Charash and Spector, 2001). Employees are sensitive to the communications they receive regarding the implementation of procedures and the explanations of decisions (Aydin and Karaman-Kepenekci, 2007). A number of empirical studies have been conducted to investigate the predictive roles of distributive justice and procedural justice on organizational outcomes. Overall, the results of these studies suggest that distributive justice and procedural justice may be predictive of different attitudes (Greenberg, 1990). In general, distributive justice may be a more important predictor of personal outcomes such as pay satisfaction (McFarlin and Sweeney, 1992), whereas procedural justice may have strong effects on attitudes about institutions or authorities such as organizational commitment and trust in management (Folger and Konovsky, 1989; Lind and Tyler, 1988; McFarlin and Sweeney, 1992). Although individuals' reactions may differ depending on the extent to which they focus on outcomes or procedures, both procedural justice and distributive justice contribute to individuals' perceptions of organizational fairness (Schminke, Ambrose, and Noel, 1997). Meyer and Allen (1991) described three components of organizational commitment: affective, continuance and normative. According to Meyer and Allen (1997) affective commitment is the employee s emotional attachment to, identification with, and involvement in the organisation. Organisational members who are affectively committed to the organisation continue to work for the organisation because they want to (Meyer and Allen, 1991). Members who are committed on an affective level stay with the organisation because they view their personal employment relationship as congruent to the goals and values of the organisation (Beck and Wilson, 2000). Hall (1970) defines the affective component as the process by which the goals of the organisation and those of the individual become increasingly congruent. Meyer and 2

3 Allen (1997) indicated that affective commitment is influenced by factors such as job challenge, role clarity, goal clarity, and goal difficulty, receptiveness by management, peer cohesion, equity, personal importance, feedback, participation, and dependability. Affective commitment development involves identification with the organization and internalisation of organisational values (Beck and Wilson, 2000). Meyer and Allen (1997) define continuance commitment as awareness of the costs associated with leaving the organisation. Kanter (1968) supports this definition and states that it is the profit associated with continued participation and a cost associated with leaving the organisation. It is calculative in nature because of the individual s perception or weighing of costs and risks associated with leaving the current organisation (Meyer and Allen, 1997). Meyer and Allen (1991) further state that employees whose primary link to the organisation is based on continuance commitment remain because they need to do so. Continuance commitment can be regarded as an instrumental attachment to the organisation, where the individual s association with the organisation is based on assessment of economic benefits gained (Beck and Wilson, 2000). Meyer et al (1990) also maintain that accrued investments and poor employment alternatives tend to force individuals to maintain their line of action and are responsible for these individuals being committed because they need to. Individuals stay in the organisation because of the investments they accumulate due to the time spent in the organisation, not because they want to. Meyer and Allen (1997) define normative commitment as a feeling of obligation to continue employment. Internalised normative beliefs of duty and obligation make individuals obliged to sustain membership in the organization (Allen and Meyer, 1990).The normative component is viewed as the commitment employees consider morally right to stay in the company, regardless of how much status enhancement or satisfaction the firm gives him or her over the years (Marsh and Mannari). Normative commitment is also viewed as the totality of internalised normative pressures to act in a way which meets organisational goals and interests (Wiener, 1982). Meyer and Allen (1991) argue that this moral obligation arises either through a process of socialisation within the society or the organisation. Employees consequently feel obliged to repay the benefits from the organisation by remaining as part of the work force. REVIEW OF LITERATURE 3

4 Arif Hassan (2002) investigated how perception of equity and justice played an important role in employees' commitment to the organization and intent to leave. The sample consisted of 181 middle and lower level managers from the banking and finance, production and manufacturing, and service sectors. The results hypothesized that both internal and external equity perceptions are positively related to commitment and negatively related to intent to leave. Among all the facets, equity promotion appeared to be the most significant predictor. Both distributive and procedural justice factors made significant contributions to employees' organizational commitment and intent to leave. Nazim Ali and Shahid Jan (2012) investigated the relationship between organizational justice, organizational commitment and turnover intention. Data were collected from 223 medical representatives of pharmaceutical companies of Pakistan. Statistical Package for Social Sciences (SPSS) was used for finding out the relationship between organizational justice, organizational commitment and turnover intention. The results indicated that both distributive justice perception and procedural justice perception had a significant relationship with organizational commitment and turnover intentions amongst Medical Representatives of Pharmaceuticals Companies operating in Pakistan. Fariba Rafei-Dehkordi, Sardar Mohammadi and Mozafar Yektayar (2013) examined the relationship between organizational justice and its relation with organizational commitment of the staff in Directorate of Youth and Sport of Chahar Mahal va Bakhtiari. 150 staff employed in the Office of Youth and Sports in Chahar Mahal va Bakhtiari were selected as sample. To collect data, questionnaire of organizational justice (Nihoof and Moorman 1993) and organizational commitment questionnaire (Allen and Meyer, 1991) were used. Results indicated that all of the components of the organizational justice distributive justice, procedural justice and interactional justice effect organizational commitment and there is direct and significant relationship between organizational justice and its dimensions with organizational commitment. Akanbi et al., (2013) examined the role of organizational justice on organizational commitment in Nestle Nigeria PLC Agbara, Lagos State Nigeria. The objectives of the study were to ascertain the significant difference between procedural justice and perceived organizational commitment, and also to examine the significant relationship between distributive justice and perceived organizational commitment. In addition, the study ascertained the main and interaction effect of distributive justice and procedural justice on organizational commitment. 4

5 The study employed survey research using questionnaire to collect data from all categories of workers in the multi-national manufacturing company. Two hundred and fifteen employees of the company responded to the questionnaire. Results indicated that organizational justice as measured by procedural justice and distributive justice can have a significant impact on the organizational commitment of multi-national company. The findings from the study also showed that there was a significant relationship between distributive justice and perceived organizational commitment HYPOTHESES H 1 : Perception of Distributive justice (DJ) affects affective commitment (AC) positively and H 2 : Perception of Procedural justice (PJ) affects affective commitment (AC) positively and H 3 : Perception of Interactional justice (IJ) affects affective commitment (AC) positively and H 4 : Perception of Distributive justice (DJ) affects continuance commitment (CC) positively and H 5 : Perception of Procedural justice (PJ) affects continuance commitment (CC) positively and H 6 : Perception of Interactional justice (IJ) affects continuance commitment (CC) positively and H 7 : Perception of Distributive justice (DJ) affects normative commitment (NC) positively and H 8 : Perception of Procedural justice (PJ) affects normative commitment (NC) positively and H 9 : Perception of Interactional justice (IJ) affects normative commitment (NC) positively and METHODOLOGY A convenience sample consisting of 45 employees working in an auto component manufacturing company participated in the study. Questionnaire method was used for data collection. The collected data was analysed with mean, standard deviation, ANOVA, correlation and regression tests. 5

6 MEASURES: Distributive Justice: The perceptions of distributive justice were measured with a 5-item scale developed by Neihoff and Moorman (1993). Respondents indicated the extent of their agreement or disagreement with each item on a scale from 1 (strongly disagree) to 5 (strongly agree). Procedural Justice: The perceptions of procedural justice were measured with a 6-item scale developed by Neihoff and Moorman (1993). Employees responded to each item using a 5-points Likert scale. Interactional Justice: The perceptions of interactional justice were measured with 11-items (Neihoff and Moorman, 1993) measuring the degree to which employees felt their needs were considered, and adequate explanations were made for job decisions. RESULTS AND DISCUSSION Table 1: Demographic characteristics of the Sample Demographic factors Classification Number of Percent Respondents Age ( in years) 30 and Below Above Gender Male Female Education Post graduate Graduate Diploma Income and (in rupees) Below Above Among the 45 respondents, 28 (62.2%) belong to 30 years and below age group; 24 (53.3%) are female; 27 (60.0%) are graduates and 35 (77.8%) belong to rupees and below income group. 30 and below Table 2: Mean and Standard Deviation of research variables in different age groups AGE (Years) AC CC NC DJ PJ IJ Mean N Std. Deviation Above 30 Mean N

7 Std. Deviation Total Mean N Std. Deviation A higher level of affective commitment (Mean = 17.94) and continuance commitment (Mean = 18.82) was observed among the above 30 age group. A higher level of normative commitment (Mean = 16.79) was seen among 30 and below age group. A higher level of procedural justice (Mean = 18.50) and interactional justice (Mean = 26.46) was observed among 30 and below age group. Table 3: Mean and Standard Deviation of research variables in different gender groups GENDER AC CC NC DJ PJ IJ Male Mean N Std. Deviation Female Mean N Std. Deviation Total Mean N Std. Deviation A higher level of affective commitment (Mean = 18.25), continuance commitment (Mean = 19.46) and normative commitment (Mean = 16.92) was observed among the female respondents. A higher level of distributive justice (Mean = 16.37), procedural justice (Mean = 18.25) and interactional justice (Mean = 25.08) was observed among female respondents. Table 4: Mean and Standard Deviation of research variables in different education groups EDUCATION AC CC NC DJ PJ IJ PG Mean N Std. Deviation UG Mean N

8 Std. Deviation Diploma Mean N Std. Deviation Total Mean N Std. Deviation A higher level of affective commitment (Mean = 19.00) was observed among the diploma holders. A higher level of continuance commitment (Mean = 19.81), normative commitment (Mean = 16.78) and distributive justice (Mean = 16.48) was observed among the graduates. A higher level of procedural justice (Mean = 19.75) and interactional justice (Mean = 30.00) was observed among post graduates. Table 5: Mean and Standard Deviation of research variables in different income groups INCOME (Rs) AC CC NC DJ PJ IJ Below Mean N Std. Deviation Above Mean N Std. Deviation Total Mean N Std. Deviation A higher level of continuance commitment (Mean = 21.90), normative commitment (Mean = 17.40), distributive justice (Mean = 16.70), procedural justice (Mean = 20.10) and interactional justice (Mean = 29.80) was observed among the above rupees income group. AC Table 6: Analysis of variance in relation to age Sum of Squares df Mean Square F Sig Within

9 CC NC DJ PJ IJ Total Within Total Within Total Within Total Within Total Within Total Results of the ANOVA test revealed that there was a significant difference in the perception of procedural justice (F = 5.857and p<.05) and interactional justice (F = and p<.01) among the respondents of different age groups. There was no significant difference in the perception of distributive justice, and the three forms of commitment among the respondents of different age groups. Table 7: Analysis of variance in relation to gender AC CC Sum of Squares df Mean Square F Sig Within Total Within

10 NC DJ PJ IJ Total Within Total Within Total Within Total Within Total Results of the ANOVA test revealed that there was a significant difference in the continuance commitment (F = 4.967and p<.05) among the male and female respondents. There was no significant difference in affective commitment, normative commitment, and the perception of three forms of justice among the male and female respondents. Table 8: Analysis of variance in relation to education AC CC NC Sum of Squares df Mean Square F Sig Within Total Within Total Within

11 DJ PJ IJ Total Within Total Within Total Within Total Results of the ANOVA test revealed that there was a significant difference in continuance commitment (F = and p<.01), distributive justice (F = and p<.05), procedural justice (F = and p<.01), and interactional justice (F = and p<.01) among the respondents of different education groups. There was no significant difference in affective and normative commitments among the respondents of different education groups. Table 9: Analysis of variance in relation to income AC CC NC DJ Sum of Squares df Mean Square F Sig Within Total Within Total Within Total Within

12 PJ IJ Total Within Total Within Total Results of the ANOVA test revealed that there was a significant difference in continuance commitment (F = and p<.01), procedural justice (F = and p<.01), and interactional justice (F = and p<.01) among the respondents of different income groups. There was no significant difference in affective and normative commitments, and perception of distributive justice among the respondents of different income groups. Table 10: Correlation among the research variables AC CC NC DJ PJ Pearson Correlation Sig. (2-tailed) N 45 Pearson Correlation Sig. (2-tailed).382 N Pearson Correlation AC CC NC DJ PJ IJ Sig. (2-tailed) N Pearson Correlation ** Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N

13 IJ Pearson Correlation **.306 *.847 ** 1 Sig. (2-tailed) N **. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed). There was a significant correlation (r =.437 and p<.01) between perception of distributive justice and continuance commitment. There was a significant correlation (r =.391 and p<.01) between interactional justice and normative commitment. Table 11: Regression analysis summary F P Hypotheses Results IV DV β t R R 2 Rev R 2 DJ AC H1 Rejected PJ AC H2 Rejected IJ AC H3 Rejected DJ CC ** H4 Accepted PJ CC H5 Rejected IJ CC H6 Rejected DJ NC ** H7 Accepted PJ NC H8 Rejected IJ NC ** H9 Accepted ** p<0.01 Note: IV Independent Variable DV Dependent Variable DJ Distributive Justice PJ Procedural Justice IJ Interactional Justice AC Affective Commitment CC Continuance Commitment NC Normative Commitment In the first regression analysis, it was tested to see that if the perceptions of three forms of justice have an effect on affective commitment. It was proved that perceptions of distributive, continuance, and normative justice do not affect affective commitment The model was not significant. Hence, hypotheses 1, 2 and 3 were rejected. In the second regression 13

14 analysis, continuance commitment was the dependent variable. It was found that distributive justice affects continuance commitment positively and Hence, hypothesis 4 was accepted and hypotheses 5 and 6 were rejected. The last regression analysis was made to see if the components of organizational justice have an effect on normative commitment. It was found that the distributive justice and interactional justice affect normative commitment significantly and positively. Hence, hypotheses 7 and 9 were accepted, and hypothesis 8 was rejected. CONCLUSION Organisational justice refers to an overall perception of what is fair in the workplace, composed of distributive, procedural, and interactional justice. In the present study an attempt was made to study the impact of organizational justice on organizational commitment. A convenience sample consisting of 45 employees working in an auto component manufacturing company participated in the study. Questionnaire method was used for data collection. The collected data was analysed with mean, standard deviation, ANOVA, correlation and regression tests. Results indicated that there was a significant difference in the perception of procedural justice and interactional justice among the respondents of different age groups. There was a significant difference in the continuance commitment among the male and female respondents. There was a significant difference in continuance commitment, distributive justice, procedural justice, and interactional justice among the respondents of different education groups. There was a significant difference in continuance commitment, procedural justice, and interactional justice among the respondents of different income groups. There was a significant correlation between perception of distributive justice and continuance commitment, and also between interactional justice and normative commitment. It was found that distributive justice affects continuance commitment positively and significantly and also distributive justice and interactional justice affect normative commitment significantly and positively. REFERENCES 1. Adams, J. S. (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in experimental social psychology, 2, New York: Academic Press, Akanbi et al., (2013). Impact of Perceived Organizational Justice on Organizational Commitment of a Food and Beverage Firm in Nigeria. International Journal of Humanities and Social Science, 3 (14), Arif Hassan (2002). Organisational Justice as a Determinant of Organisational Commitment and Intention to Leave. Asian Academy of Management Journal, 7(2),

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17 34. McFarlin, D. B., and Sweeney, P. D. (1992). Distributive and procedural justice as predictors of satisfaction with personal and organizational outcomes. Academy of Management Journal, 35, (3), Meyer, J. P. (1997). Organizational commitment. In C. L. Cooper., and I. T. Robertson (Eds.), International Review of Industrial and Organizational Psychology, 12, Chichester: John Wiley and Sons. 36. Meyer, J. P., and Allen, N. J. (1991). A three-component conceptualization of organizational commitment. Human Resource Management Review, 1(1), Mowday, R. T., Steers, R. M., and Porter, L. W. (1979). The measurement of organizational commitment. Journal of Vocational Behavior, 14, Adler, D.A. and Lawler, E.E. III (2007). Motivation: a diagnostic approach, in Osland, J.S., Turner, M.E., Kolb, D.A. and Rubin, I.M. (Eds), The Organizational Behavior Reader, 8/ed., Pearson Prentice Hall, Upper Saddle River, NJ, Nazim Ali and Shahid Jan (2012). Relationship between Organizational Justice and Organizational Commitment and Turnover Intentions amongst Medical Representatives of Pharmaceuticals Companies of Pakistan. Journal of Managerial Sciences, 6(2), Taylor, M.S., Tracy, K.B., Renard, M.K., Harrison, J.K. and Carroll, S.J. (1995). Due process in performance appraisal: a quasi-experiment in procedural justice. Administrative Science Quarterly, 40, Tepper, B. J. (2000). Consequences of abusive supervision. Academy of Management Journal, 43, Viswesvaran, C. and Ones, D.S. (2002). Examining the construct of organizational justice: a meta-analytic evaluation of relations with work attitudes and behaviors. Journal of Business Ethics, 38 (3), This research paper attempts to study the relationship between the three components of organisational justice and the three components of organisational commitment. The findings of the study can help managers to build commitment among employees. I seek suggestions from the reviewers to improve the relevance of this study to organisations. Dr. P. Paramanandam, Associate Professor, GRG School of Management Studies, Peelamedu, Coimbatore paramanandam@grgsms.com Handset: