Role of organizational justicein determining work outcomes

of national and expatriateacademic staff in Malaysia

Arif Hassan and Junaidah HashimDepartment of Business Administration,

International Islamic University Malaysia, Kuala Lumpur, Malaysia

Abstract

Purpose – The study aims to analyze the differences between national and expatriate academic staffperception of organizational justice in Malaysian institutions of higher learning. It also explores therole of organizational justice in shaping teaching faculties’ attitude ( job satisfaction and commitment)and behavioral intention (turnover intention).

Design/methodology/approach – The sample consisted of teaching staff belonging to severalfaculties drawn from four public universities in Malaysia. Sample was divided into two groups –Malaysian nationals with tenure appointments and expatriates with contractual appointments. Datawere collected using standardized tools to measure the study variables.

Findings – Except for job satisfaction, where Malaysians recorded significantly higher endorsementcompared to expatriates, no significant difference was found between the two groups on perception ofdistributive, procedural, and interactional aspects of organizational justice, as well as organizationalcommitment and turnover intention. However, Malaysians demonstrated significantly higher level ofjob satisfaction compared to expatriates. Different facets of organizational justice predicted workoutcomes in the two groups. Whereas interactional and distributive justice promoted expatriates’organizational commitment and/or intention to stay with the organization, it was mainly proceduraljustice that contributed to local employees’ job satisfaction, organizational commitment, and turnoverintentions. Distributive justice also predicted turnover intentions of locals.

Practical implications – The study should add to the literature on international human resourcemanagement. Organizations that employ expatriates and knowledge workers should benefit from thefindings of this study.

Originality/value – Not many empirical studies have been conducted on university academic staffs’perception of organizational justice in an Asian context, as well as how employment practices mightinfluence justice perception and resultant work outcomes of national citizens vs expatriates. Thisstudy attempts to fulfill the gap.

Keywords Employee attitudes, Job satisfaction, Expatriates, Employee behaviour, Employee turnover,Malaysia

Paper type Research paper

IntroductionAttracting and retaining quality academic staff has remained a concern in institutions ofhigher learning for a long time. Further, to improve global rankings on quality standards,universities are keen to add more international academic staff to their teaching faculties.This has been the case in Malaysia as well. However, there are differences between localand expatriates on conditions of their employment in Malaysian public universities.The local staff is generally given full-time tenure employment, whereas the international

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International Journal of Commerceand ManagementVol. 21 No. 1, 2011pp. 82-93q Emerald Group Publishing Limited1056-9219DOI 10.1108/10569211111111711

faculties are appointed on contracts which vary between one and three years duration.Contracts are then subjected to renewals based on requirements and performanceappraisals. As a result, the performance expectation and the resultant perception ofreward may vary between the two groups. Moreover, the international staff belongs tomany countries and the diverse cultural backgrounds may influence their perception ofinterpersonal treatment given to them by the university administration. This may affecttheir attitude and work behavior. Against this backdrop, how do Malaysian universitiesensure fair employment and work practices to promote employee job satisfaction,organizational commitment, and intention to stay? This is an important issue that needs tobe examined. Fernandes and Awamleh (2006) examined the differences in organizationaljustice perception and its role in work performance and job satisfaction among local andexpatriate employees in the UAE. They reported that the two groups exhibited fairlydissimilar levels of organizational commitment and job satisfaction as a result of differenttreatment given to them by the employers. However, their sample did not belong to onespecific industry or occupational groups. They drew the sample from a variety ofindustries and divided them into two groups, namely, UAE nationals and expatriates.

The present study is aimed at examining perception of organizational justice and itsrelationship with organizational outcomes in relation to employment conditions of local(national citizens) and expatriate academic staff working with public universities inMalaysia. Thus, taking these two groups, i.e. Malaysian nationals and expatriates, thestudy proposed to see if there were differences in their perception of organizationaljustice. If so, how do they impact their organizational commitment, job satisfaction, andturnover intentions? The result of the study should add value to the existing literature onorganizational justice and employee work attitude and behavior especially in the contextof the academic community of institutions of higher learning. It should be of interest touniversity administration in designing effective HR systems and practices.

Organizational justiceOrganizational justice research over the last four decades has highlighted theimportance of perceptions of justice for work behavior and motivation (Loi et al., 2006;Colquitte et al., 2001). However, the extent to which these findings can be generalized toother countries and cultures as well as to work groups is still not well explored. There isgrowing evidence now that employees from different socio-cultural backgrounds withdifferent expectations and value systems may also differ in the way that they perceiveand react to their organizational environments.

The term organizational justice describes the role of fairness as it directly relates tothe workplace. Specifically, organizational justice is concerned with the ways in whichemployees determine if they have been treated fairly in their jobs and the ways in whichthose determinations influence other work-related variables (Moorman, 1991). There is ageneral consensus that organizational justice consists of at least two components,namely distributive and procedural justice. The former is concerned with perception offairness in allocations of reward, whereas the latter is concerned with the fairness of theprocess of allocation decisions (Adams, 1965). A number of procedural justice criteriahave been outlined, such as opportunities for control of the process and the outcomes,ability to voice one’s view points (Folger and Cropanzano, 1998), consistency, lack of bias,availability of appeal mechanisms, accuracy, use of accurate information, and followingethical and moral norms (Leventhal, 1998).

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This clear two-factor model of organizational justice was challenged by theintroduction of the concept of interactional justice (Bies and Moag, 1986). Interactionaljustice is focused on the treatment of individuals by decision makers and whether theyshow respect, sensitivity, and explain decisions thoroughly. Greenberg (1993) classifiedthe components of organizational justice under two dimensions. The first dimension is theclassical differentiation of justice focusing either on procedures or outcomes. The seconddimension refers to the focal determinant (either structural or interpersonal). Greenbergargued that traditionally procedural and distributive justice dealt with structural aspects.The focus is on the environmental context within which the interaction occurs, e.g. theprocedures used to determine an outcome and the perceived fairness of the final outcome.Interpersonal justice deals with the treatment of individuals, and therefore the emphasis ison social determinants.

Moorman (1991), while examining the relationship between organizational justiceand employees’ behavioral outcomes, argued for measuring non-traditional types ofbehavior. According to him, traditional outcomes like job performance depend uponseveral factors beyond the control of the person. On the contrary, non-traditional types ofbehavior such as organizational commitment and extra-role behavior (ERB) are notusually captured by traditional job descriptions and thus are more likely to be underpersonal control (Organ, 1997).

Past researches have demonstrated that procedural justice has a positive relationshipwith organizational commitment (Cohen-Charash and Spector, 2001; Colquitte et al.,2001; Wong et al., 2002). The degree of fair treatment some employees received relative toothers has been postulated to influence their motivation and performance which mayinclude their intention to leave or stay with the organization (Hassan and Chandaran,2005; Williams et al., 2002). Hassan (2002) reported similar findings in Malaysia.Procedural justice was an important determinant of employees’ attitudinal andbehavioral outcomes, namely, satisfaction, commitment, and turnover intentions.

Organizational commitmentBlau and Boal (1987) defined organizational commitment as a psychological state inwhich an employee identifies with a particular organization and its goals and desires tomaintain membership with the organization. Organizational commitment has threecomponents; namely affective, continuance, and normative commitment (Loi et al., 2006).Affective commitment refers to an affective or emotional attachment to the organization,such that the strongly committed individual identifies with, is involved with, and enjoysmembership of the organization (Loi et al., 2006). The continuance component refers tocommitment based on the costs that the employee associates with leaving theorganization. The normative component relates to the employee’s feeling of obligation toremain with the organization.

Law (2005) found that affective commitment is the most salient component ofcommitment in predicting turnover, but an interaction of continuance and affectivecommitment is also significant. Affective commitment has been found to be associatedwith job satisfaction but correlates negatively with turnover intention or actual turnover(Konovsky and Cropanzano, 1991; Lok and Crawford, 2001; Wong et al., 2002).Researchers have argued that the importance of the organizational commitment constructis derived from its relationship with work-related behaviors such as absenteeism,turnover, job satisfaction, performance, and leader-subordinate relations (Finegan, 2000).

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Job satisfactionJob satisfaction is usually defined as an affective or emotional response toward one’s job.According to Locke (1976), job satisfaction is a positive emotional state resulting from theappraisal of one’s job or job experiences. It results from employees’ perception of their jobsand the degree to which there is a good fit between the individual and the organization.Studies have reported strong relationship of job satisfaction and organizationalcommitment (Winterton, 2004) and organizational justice (McDowall and Fletcher, 2004).

Turnover intentionTurnover is a major problem for many organizations today because it is extremely costlyfor the employer, especially jobs which offer high education and extensive on-the-jobtraining (Dick et al., 2004; Yavas and Bodur, 1999). Intention to leave is one of the strongestpredictors and immediate precursor of employee turnover (Dick et al., 2004; Loi et al., 2006).

Existing literature suggests that employees’ organizational commitment andintention to leave are two important predictors of employee turnover (Chiu andFrancesco, 2003; Loi et al., 2006). Most conceptual models of voluntary turnover assumethat job dissatisfaction is the root cause of employee turnover. When the overall jobsatisfaction level is sufficiently low, the person will develop a behavioral intention toquit his or her job and find alternative employment. This relationship has been longestablished (Chiu and Francesco, 2003). Birdseye and Hill (1995) reported thatexpatriates working in an unfamiliar environment with different political, cultural, andeconomic conditions often deal with both job-related and personal problems. Theseproblems can create stress and dissatisfaction that may eventually lead to turnover.Affective commitment has consistently been shown to negatively predict turnover andturnover intention (Loi et al., 2006; Chiu and Francesco, 2003; Winterton, 2004). There aremixed results in relation to the linkage between justice and turnover intention.In response to low distributive justice, employees choose to quit their job so as to end theinequity (Loi et al., 2006). Other studies conclude that procedural justice is negativelyrelated to turnover since procedural justice reflects organizational norms of decisionmaking (Cohen-Charash and Spector, 2001; Loi et al., 2006).

The literature reviewed so far has demonstrated that organizational justice is one of thedeterminants of job satisfaction and organizational commitment, and lack of them maygenerate turnover intention among employees in various organizations and industries.

HypothesesIt is common to have different and inconsistent procedures including compensation,performance appraisals, career mobility, and other treatment when dealing withemployees of diverse nationalities and backgrounds. As stated earlier, in case ofappointments for faculty positions in Malaysian public universities, the employmentpolicies are different. Malaysian nationals are generally appointed on a permanent basiswith some advantages that are given only to Malaysians such as Employee ProvidentFund contribution and generous housing loans, etc. On the other hand, expatriatesare given contractual appointments which are for a period for one to three years and maybe renewed based on performance. The job contract is fairly detailed resulting in clear jobexpectations, as well as the package of rewards and benefits. Moreover, theremuneration package for expatriates includes some benefits which are not available tothe national group.

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However, it may also be the case that expatriate staff finds it difficult to becomein-group members of the authorities (who are generally nationals) due to culturaldistance. This may not be the case with locals. Obviously, the situation encouragesdifferent types of psychological contract and performance expectations that mightinfluence their justice perception. It is, therefore, hypothesized that:

H1. Compared to Malaysian nationals, the expatriates will demonstratesignificantly higher level of distributive and procedural justice but lowerlevel of interactional justice perception.

Organizational justice does not appear to impact job performance but it does correlatewith job satisfaction. Based on their studies on local and international workers in theUAE, Fernandes and Awamleh (2006) argued that perhaps due to the fear of terminationof contract or non-renewal of contract lack of justice does not influence the performanceof contractual workers but it does reflect their job satisfaction level.

This finding is in line with the argument that justice or lack of it may better contributeto employees’ attitude and extra-role behavior rather than in-role behavior (Moorman,1993; Organ, 1991). Performance is in-role behavior and a number of factors contribute toperformance; some of them are beyond the control of employees. As far as work attitudeissues are concerned, it is expected that expatriates would be more sensitive to theinterpersonal treatment given to them than the distributive and procedural aspects,because the contractual appointment provides relatively clear understanding regardingthese issues. For locals, however, distributive and procedural justice issues appear to bemore important than interactional justice because of language and cultural similaritieswith their superiors. Based on these arguments, it was hypothesized that:

H2a. Interactional justice will predict job satisfaction, commitment, and turnoverintention of expatriates.

H2b. Distributive and procedural justice will predict the job satisfaction,commitment, and turnover intention of local employees.

MethodologySampleSample consisted of 197 academic staff drawn from four public universities in Malaysia.It included 124 Malaysians (Male ¼ 55 and Female ¼ 69) and 73 expatriate facultymembers (Male ¼ 60 and Female ¼ 13). Table I presents age and tenure background ofthe two groups.

The sample was randomly selected. They were individually approached by theresearch staff that distributed the questionnaires and collected surveys. A total of300 questionnaires were distributed and 197 usable ones were returned suggesting agood response rate of 65.66 percent.

MeasuresThe following instruments were employed to measure the study variables. Theseinstruments have been extensively used in organizational studies and havedemonstrated robust reliability and validity indices (Hassan and Chandaran, 2005):

. Interactional justice. Interactional justice was measured by a seven-item scaledeveloped by Niehoff and Moorman (1993). The items measured the degree to

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which concerns for employees’ rights are shown by the management in decisionmaking, and that employees are given adequate justification and explanationpertaining to the outcome of any decision.

. Distributive justice. The distributive justice index developed by Price and Mueller(1986) was adapted to measure the perception of distributive justice construct. Thefive-item scale measures the degree to which rewards received by the employeesare perceived to be related to performance inputs. Each item asks for the degree towhich the respondents believes that he or she is fairly rewarded on the basis ofsome comparison with responsibilities, education, training, effort, stresses andstrains of the job, and performance.

. Procedural justice. Perception of procedural justice was measured by a 15-itemscale developed by Niehoff and Moorman (1993). The items measure the degree towhich the decision-making process ensure accurate and unbiased gathering ofinformation, institution of employees’ voice and appeal process, consistency,accuracy, correctability, representativeness, and ethicality.

. Job satisfaction. A 14-item scale based on Hackman and Oldham’s (1975) jobdiagnostic survey was used to measure job satisfaction. The scale measured fivefacets of job, namely, job security, pay, social, supervisory, and growthsatisfaction.

. Organizational commitment. Organizational commitment was measured by a12-item short version of the organizational commitment questionnaire developedby Mowday et al. (1979). Satisfactory reliability and validity evidence has beenprovided by Steers (1977).

. Turnover intention. This variable is operationally defined as thinking of quittingintent to search for a new job, and intent to quit (Hom and Griffeth, 1991). Thethree-item scale used in this study to measure this outcome variable is taken fromthe Michigan organizational assessment questionnaire (Cammann et al., 1979).

All the instruments used in the study solicited response on a seven-point scale(1 – strongly disagree and 7 – strongly agree).

Nationals (n ¼ 124) Expats (n ¼ 73) Total (197)(%) (%) (%)

Tenure (years),1 31 25.00 11 15.06 42 21.312-3 15 12.09 16 21.91 31 15.733-4 13 10.48 8 10.95 21 10.654-5 11 8.87 17 23.28 28 14.21.5 54 43.54 21 28.76 75 38.07Age (years)Below 30 47 37.90 4 5.47 51 25.8830-35 29 23.38 11 15.06 40 20.3036-40 20 16.12 24 32.87 44 22.3341-50 19 15.32 28 38.35 47 23.85Above 50 9 9.25 6 8.21 15 7.61

Table I.Demographic profile

of the sample

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ResultsTable II displays the descriptive statistics and correlations among the study variables.Alpha values of the scales employed in the study indicated good reliability of the items.Means of the three facets of organizational justice showed moderate ratings on theseven-point scale. Among the three forms of organizational justice, procedural justiceobtained the highest endorsement, followed by interactional justice and distributive inthat order. Organizational commitment obtained higher score (Mean ¼ 5.42) than jobsatisfaction (Mean ¼ 5.07) and the intent to turnover was given low rating (Mean ¼ 3.06).

Intercorrelations indicated that all three facets of organizational justice weresignificantly and positively correlated. Also, they were positively correlated withorganizational commitment and job satisfaction and negatively with turnover intention.Both age and tenure were negatively correlated with turnover intention.

Table III shows mean differences between national and expatriate staff onorganizational justice, organizational commitment, job satisfaction, and turnoverintention variables.

No significant difference was observed between the two groups on any except jobsatisfaction where national group indicated higher mean score compared to the expatriates.

a Mean SD 1 2 3 4 5 6 7 8

1 IJ 0.85 4.93 1.29 –2 DJ 0.95 4.87 1.19 0.64 * * –3 PJ 0.96 4.99 1.04 0.63 * * 0.77 * * –4 OC 0.90 5.42 1.07 0.29 * * 0.21 * * 0.33 * * –5 ITT 0.86 3.06 1.78 20.01 0.04 20.09 20.39 * * –6 JS 0.93 5.07 1.07 0.54 * * 0.61 * * 0.76 * * 0.60 * * 20.027 * * –7 Age – – – 0.09 0.09 0.00 0.10 20.23 * * 0.07 –8 Exp – – – 0.01 20.08 20.08 0.13 20.23 * * 0.07 0.46 * * –

Notes: n ¼ 197; significance at: *p , 0.05 and * *p , 0.001; IJ ¼ interactional justice,DJ ¼ distributive justice, PJ ¼ procedural justice, OC ¼ organizational commitment, IIT ¼ intent toturnover, and JS ¼ job satisfaction

Table II.Mean, SD,intercorrelations andalpha coefficient of studyvariables

Groups Mean SD t-values

Interactional justice Nationals 5.02 1.44 1.35Expats 4.79 0.97

Distributive justice Nationals 4.81 1.23 1.03Expats 4.98 1.12

Procedural justice Nationals 5.02 1.07 0.64Expats 4.92 0.99

Org. commitment Nationals 5.44 0.95 0.39Expats 5.38 1.28

Job satisfaction Nationals 5.19 0.87 2.19 *

Expats 4.88 0.99Turnover intention Nationals 3.14 1.84 0.88

2.91 1.66

Note: Significant at: *p , 0.05

Table III.Test of mean differencesbetween locals andinternationals onorganizational justice,organizationalcommitment,job satisfaction, andintent to turnover

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Tables IV and V display multiple regression results predicting organizationalcommitment, job satisfaction, and turnover intention from organizational justice anddemographic factors for the national and expatriate groups, respectively.

Regression result for the Malaysian sample (Table IV) showed that the modelspredicting organizational commitment and job satisfaction were significant. However, itwas not the case with turnover intention. Variables in equation predicting organizationalcommitment and job satisfaction explained 22 and 67 percent variance, respectively.The result showed significant contribution of procedural justice on organizationalcommitment and job satisfaction. In case of turnover intention, distributive andprocedural justice contributed negatively though the model itself was not significant.

Table V reports the regression result using expatriates’ sample.As displayed in Table V, all the variables predicting organizational commitment, job

satisfaction, and turnover intention entered into the equation and explained 12, 49 and22 percent of the variances, respectively. Individually, distributive and proceduraljustice factors made negative contributions to turnover intention of expatriates.Interactional and distributive justice factors contributed to organizational commitment.Procedural justice predicted expatriates’ job satisfaction.

Discussion and conclusionsBoth Malaysian and expatriate academic staff perceived moderate levels of distributive,procedural, and interactional justice in their workplace.

St. bPredictors Org. commitment Job satisfaction Intent to turnover

Age 0.10 0.12 * 20.17Experience 20.01 0.02 20.13Inter. justice 0.12 0.02 0.10Distr. justice 0.01 0.05 20.34 * *

Proc. justice 0.42 * * 0.75 * * 20.33 * *

Adj. R 2 0.22 0.65 0.08F 8.17 48.59 0.81p ,0.000 ,0.000 NS

Notes: Malaysian nationals, n ¼ 124; significance at: *p , 0.01 and * *p , 0.05

Table IV.Multiple regression

predicting organizationaloutcomes from

organizational justicefactors

St. bPredictors Org. commitment Job satisfaction Intent to turnover

Age 0.05 0.03 20.17Experience 0.20 0.15 20.20Inter. Justice 0.50 * * 0.31 20.36Distr. Justice 0.51 * * 0.00 20.38 * *

Proc. Justice 0.13 0.46 * * 20.33 *

Adj. R 2 0.12 0.49 0.22F 3.09 15.22 5.05p ,0.001 ,0.000 ,0.001

Notes: Expatriates, n ¼ 73; significance at: *p , 0.01 and * *p , 0.05

Table V.Multiple regression

predicting organizationaloutcomes from

organizational justicefactors

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Intercorrelations among the independent and dependent variables showed positiveassociation of organizational commitment and job satisfaction with all the threeorganizational justice factors, namely, interactional justice, distributive justice,and procedural justice. Organizational commitment was positively correlated withjob satisfaction and negatively with turnover intention. These relationships were in linewith previous findings. Past researches have demonstrated that procedural justice haspositive relationship with organizational commitment (Cohen-Charash and Spector,2001; Colquitte et al., 2001; Hassan, 2002; Wong et al., 2002). Organizational commitmentis positively associated with job satisfaction and negatively with turnover intention oractual turnover (Konovsky and Cropanzano, 1991; Lok and Crawford, 2001).

One of the expectations in this study was that there would be significant differencesbetween national and expatriate staff perception of organizational justice because ofdifferences in their terms of employment related to tenure, compensation, performanceappraisals, promotion opportunities, etc. The findings, however, did not support thishypothesis as no significant difference was obtained between the two groups on anyfacets of organizational justice perception as well as on organizational commitment, andturnover intention. However, the Malaysian sample obtained significantly higher meanscore on job satisfaction compared to the expatriates. Possibly, both Malaysian andexpatriates shared the same perception as far as justice issues in the universityorganizations were concerned and that terms of employment did not make much of adifference except in the case of job satisfaction.

Nonetheless, the regression results predicting the three work outcome variablesyielded different sets of findings. In the case of Malaysian employees, only proceduraljustice was an important determinant of organizational commitment, whereas forexpatriates it was interactional and distributive justice. The result in a way was in theexpected direction. It supported the hypothesis (H2a) which expected the significant roleof interactional justice on expatriate academic staff work attitude such as commitment.It did not turn out to be a significant predictor in case of local employees’ organizationalcommitment, job satisfaction, and turnover intention.

It is argued that interactional justice is more personal than proceduraland distributive justice. According to Greenberg (1993), classification, the focaldeterminant of interactional justice, is interpersonal, whereas it is organizationalsystem and structure for distributive and procedural justice. Therefore, when it comesto organizational commitment which is a measure of emotional attachment with theworkplace perhaps interactional justice assumes greater significance. This seems to bemore salient for employees who do not belong to the local culture and therefore it isdifficult for them to earn the in-group membership. The results also indicated thatprocedural justice was significantly related to job satisfaction of both the groups.Turnover intention was negatively associated with perceived distributive justice ofMalaysian employees. It was distributive as well as procedural of justice in the case ofexpatriates. In general, the findings are in line with other research reporting negativecorrelations of procedural justice with turnover intention and positive correlation withorganizational commitment (Cohen-Charash and Spector, 2001; Loi et al., 2006;Colquitte et al., 2001; Wong et al., 2002; Hassan, 2002) as well as positive association oforganizational justice with satisfaction (Hassan, 2002; McDowall and Fletcher, 2004).

The result of the study thus suggests that distributive and/or procedural justice domatter in promoting commitment and intention to stay among academic staff working in

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Malaysian universities. No major difference was found between national and expatriateteaching staff on any forms of perceived justice as well as on organizational commitmentand turnover intentions. However, significant difference was seen in the job satisfactionscores of national and expatriate group – the former more satisfied than the latter. Thesefindings can be useful to organizations employing a mix of national and expatriateemployees –particularly the knowledge workers.

Limitations of the studyThe study had several limitations. It had a small sample size and included only fourpublic universities in Malaysia. A larger sample from both public and privateuniversities could have provided more meaningful results, which could be generalized tothe Malaysian situation. Further studies are suggested using a larger sample. Finally,the study employed cross-sectional design that puts limitations on any causalexplanation.

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Further reading

Woods, P. (2003), “Performance management of Australia and Singaporean internationals”,International Journal of Manpower, Vol. 24 No. 5, pp. 517-34.

About the authorsArif Hassan is a Professor and Deputy Director of Management Centre at International IslamicUniversity Malaysia. He is involved with teaching and research in the area of generalmanagement, organizational behavior, and human resource management. His current researchwork relates to HRD, leadership, organizational justice, and ERB in organizations. Arif Hassan isthe corresponding author and can be contacted at: arifh@iiu.edu.my

Junaidah Hashim is an Associate Professor at the Department of Business Administration atInternational Islamic University Malaysia. She teaches human resource management and relatedcourses. Her recent researches are in the area of training, employees learning styles, and Islamicperspective of HRM.

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