How does Organizational Justice influence Job Satisfaction and Organizational Commitment? Explaining with Psychological Capital

Abstract

‘Looking fair’ is the desired goal of individuals and organizations. Fairness perceptions of organizational actions, by employees, translate into various favourable work outcomes. For instance, perceptions of fairness, defined as organizational justice, significantly influences attitudinal variables as job satisfaction and organizational commitment. However, the existing literature does not offer complete picture of this influence. In other words, the ‘underlying mechanism’ governing the influence of organizational justice on job satisfaction and organizational commitment is not fully understood. On the basis of extant literature review and arguments grounded in the social exchange theory, and ‘broaden and build’ theory of positive emotions, this study identifies psychological capital (PsyCap) as an explanatory mechanism for the influence of organizational justice on job satisfaction and organizational commitment. The primary objective of this study was to test a theoretical and structural model that hypothesized mediation of PsyCap in the influence of organizational justice on job satisfaction and organizational commitment. A survey-based methodology, with standardized scales was used. A pilot study was conducted to test the scale properties. A sample of 440 employees from the Indian service sector industry was drawn. A two-step process of analysis, with AMOS 16, was employed to test the structural model. The scales were assessed and found fit for reliability and validity criteria. Besides examining the significance of indirect effects using the bias-corrected confidence intervals with two-thousand bootstrap samples, the study also applied alternative⁄nested structural equation models to test the mediation hypotheses. Results are found to be consistent with the stated hypotheses thus confirming the mediation of PsyCap in the influence of organizational justice on job satisfaction and organizational commitment. The findings of this study advance available knowledge on job satisfaction and organizational commitment; and provide impetus to research in this domain by identifying PsyCap as an intervening variable. The study thus extends the application of PsyCap as an organizational variable capable of translating the effect of justice on satisfaction and commitment. It also supports and extends the view of previous researchers that PsyCap is a significant positive organizational behaviour (POB) variable, as it is capable of performance improvement and is open to development. From a managerial perspective, given the ‘open to control’ nature of PsyCap, it renders a significant tool in the hands of managers to control the satisfaction and commitment of their employees. Moreover, controlling PsyCap is much easier as compared to directly controlling justice perceptions.