American Journal of Economics and Business Administration 2 (1): 56-63, 2010

ISSN 1945-5488
© 2010 Science Publications

The Impact of Organizational Justice on Employee’s Job Satisfaction:

The Malaysian Companies Perspectives

Choong Kwai Fatt, Edward Wong Sek Khin and Tioh Ngee Heng
Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia

Abstract: Problem statement: This research study analyzed the impact of organizational justice as
encompassed by two components, namely distributive justice and procedural justice on employee’s job
satisfaction, organizational commitment, and turnover intention. This study revealed a positive and
significant relationship showing that the foundation of an employee’s job satisfaction and
organizational commitment is within the application of both distributive and procedural justice, and
this supports a significant negative relationship to turnover intention. Approach: This study included
the design and distribution of a self-administered questionnaire to 300 Malaysian employees working
for small and middle size companies in the Malaysia, Klang Valley. The sample consisted of
managerial and non-managerial employees who volunteered to participate in this study. The results
supported the hypothesis that distributive and procedural justice has significant relationship with
employee’s job satisfaction, organizational commitment and turnover intention. Result: This finding
implied that the higher the level of employee’s perception towards fairness to the means used to
determine outcomes (procedural justice) and fairness of the outcomes employees receive (distributive
justice) tended to increase the level of employees’ job satisfaction, organizational commitment while
reduces turnover intention. Therefore, organizations that take a proactive approach to understand
employee’s perceptions of distributive and procedural justice, and provide appropriate working
environment can potentially reap benefits including cost associated to employee retentions.
Conclusion: The findings in this study would help managers and business organization in Malaysia
to formulate strategies that involved work factors such as distributive and procedural justice to
improve the management of human resource development. These strategies would help in
influencing positive behaviors among employees, and hence achieve effectiveness and high
productivity in the organization. Therefore, it was worth the effort for the organization to train and
educate their managers on the impact of perceptions of organizational justice on the motivation and
commitment of their employees.

Key words: Organizational justice, job satisfaction, distributive, procedural justice

INTRODUCTION policies. The reward included a variety of benefits and

perquisites other than monetary gains. Employees with
The globalization trend, technology development, higher job satisfaction was important as they believed
new business practices and technology continuously that the organization would be tremendous future in the
influence organizations in Malaysia. Many companies long run and care about the quality of their work; hence
were also facing intensive challenge of improving the they were more committed to the organization, have
employee’s job satisfaction, organizational commitment higher retention rates and tend to have higher
to gain the competitive advantage and retention of key productivity (Ishigaki, 2004).
employees in the organization. Successful organizations Committed employees were more likely to perform
realized that employee retention was important to beyond the call of duty to meet customers’ needs and
sustaining their leadership and growth in the were highly motivated to work to the best of their
marketplace (Mello, 2006). ability. These traits were crucial for continued customer
Employees were more satisfied when they felt they commitment and ongoing revenue and growth for an
were rewarded fairly for the work they have done by organization. Committed employees remained in the
making sure rewards were for genuine contributions to employment of the company longer, resisted
the organization and consistent with the reward competitive job offers, did not actively look for other
Corresponding Author: Edward Wong Sek Khin, Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia
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employment and recommend the company to others as organizational effectiveness. According to Tang et al.
a good place to work. The longer the companies kept (1996), there was one factor related to the distributive
their employees; there would be no need for additional justice to which the extend how fairly employees were
expenditure to train new employees. Recent studies rewarded while there were five identified factors
have shown that managers were able to reduce (aspects) of procedural justice, namely fairness, two-
unwarranted employee turnover because the most way communication, trust in supervisor, clarity of
important factors driving employee satisfaction and expectations and understanding of the performance
commitment were largely within the direct purview and appraisal process. They found that distributive justice
control of the manager. These included providing was significantly related to satisfaction with pay,
recognition, regular feedback and ensuring fair promotion, the performance appraisal, and
compensation reflecting an employee’s contributions organizational commitment while procedural justice
and value to the organization (Insightlink were related to satisfaction with supervision, self
Communication, 2004). reported performance appraisal rating, performance
Employees in an organization have always been a appraisal, commitment, and job involvement.
key asset, as their departures could have a significant Meyer and Smith (2000) considered the justice
effect on the implementation of the organization’s climate of the procedural, interpersonal and the
business plans and may eventually cause a parallel informational, and suggested that the provision of
decline in productivity. As such, employee retention training of managers to ensure that all of their
was important to the long-term growth and success of employees perceived fair treatment. Facilitating
the company. Retaining the best employees would meetings where subordinates were able to express their
ensure customer satisfaction and effective succession opinions, and that needed information was well
planning (Mello, 2006). It would also improve communicated, that explanatory role-playing was
investor’s confidence, as they were concerned with the performed, and that interpersonal sensitivity was
organization’s capacity to perform in such ways that observed when providing performance appraisal
would positively influence the value of their investment feedback to subordinates. As well as establishing
in the company. Hence, there was no question that policies, that increased the likelihood of procedural and
uncontrolled employee turnover could damaged the informational justice and rule satisfaction.
stability of the company and consequently the national In addition, employees in more flexible plans were
economy. found to have higher perceptions of procedural justice
This study seeks to answer the following research than those in more traditional benefit plans (Cole and
questions: Flint, 2004; 2005). Flexible plans were involved in
allocating employer contribution amounts by choosing
• Does distributive and procedural justice and affects benefits and coverage levels, and therefore employees
employee’s job satisfaction, organizational were able to have control over benefit outcomes such as
commitment and turnover intention for Malaysian life insurance, long-term disability, health insurance,
employees dental insurance, and pensions. Employers were
• Do what degree of the impact of distributive and becoming facilitators rather than providers of benefits
procedural justice on employee’s job satisfaction, in the flexible benefit plans. Hence, it may provide a
organizational commitment and turnover intention higher perceived value of benefits because employees
for Malaysian employees become more aware of the value of their benefits in
terms employer’s cost and coverage levels. Besides
Below, we reviewed the literature and developed that, consistent treatment meant that all employees had
related hypotheses for the variables of interest, followed the opportunity to make benefit choices and supplied
by the description of the sampling design, selection of with accurate information to use in making their benefit
measurement scales and data analysis techniques. decisions. It was suggested that organizations take a
Afterwards is a presentation and discussion of results, proactive approach to understand how the employees
limitations of study and implications for practitioners determine their perceptions of procedural and
and future research. distributive justice, and design a benefit plan
accordingly, and this could increased the employees’
Literature review: perceptions of justice and ultimately reap the associated
Organizational justice: For the past three decades, HR benefits including improved employee retention,
managers and researchers have recognized the enhanced ability to hire and increased benefits
important relationship between organizational justice and satisfaction.
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 Am. J. of Economics and Business Administration 2 (1): 56-63, 2010

All of the studies reviewed above demonstrated

that distributive and procedural justices were important
in predicting employees’ subsequent personal
satisfaction and commitment to the organization.
According to Tang et al. (1996), it was also important
for organizations to ensure that they communicated the
relevant information to employees. The improvement in
the perceptions of informational justice as well as
procedural justice is through information
communicated by higher levels of management and by
organizational policies and practices. Another aspect
was two-way communication to identify the needs,
desires, and expectations of employees, that helped
them to achieve their goals and objectives, to recognize
their achievements and their accomplishments, provide
feedback, and allows for an employee’s input. As such,
performance appraisal criteria and possible rewards
should be expressed to their employees clearly to
enhance their understanding of the process and
improving their performance and trust in managers. Fig. 1: Research model
They have also suggested that by applying rules fairly
and consistently to all employees and reward them H1: The two independent variables (distributive justice
based on performance and merit without personal bias, and procedural justice) do not significantly explain
would have a positive perception of procedural and the variance in organizational commitment in
distributive justice, which might lead to a higher Malaysia
satisfaction, commitment and involvement. As well as
procedural and distributive justice, ‘interpersonal Hypothesis 3:
sensitivity” and the supply of information to employees,
and adding that there is a great need of a focus on the H0: The two independent variables (distributive justice
actual presentation of needed information. Therefore, and procedural justice) do significantly explain the
managers needed to understand employee’s intention, variance in turnover intention in Malaysia
values, and attitudes, to communicate clearly, to respect H1: The two independent variables (distributive justice
their wishes and to project courtesy and friendliness. and procedural justice) do not significantly explain
Based on the above literature, this study seek to the variance in turnover intention in Malaysia
investigate how significance was the perceptions of
organizational justice on employee’s job satisfaction, The framework (Fig. 1) signified the research
organizational commitment and turnover intention in model for this research study. It was the outline for the
the context of Malaysian employees. The following research study that consisted of two major attributes,
hypotheses were developed:
namely independent and dependent variables, which
Hypothesis 1: serves as guidelines for conducting the research study.
The independent variables in this research study were
H0: The two independent variables (distributive justice components of organization justice, namely distributive
and procedural justice) do significantly explain the justice and procedural justice, while dependent variable
variance in job satisfaction in Malaysia includes employee’s work outcome, namely job
H1: The two independent variables (distributive justice satisfaction, organizational commitment and turnover
and procedural justice) do not significantly explain intention.
the variance in job satisfaction in Malaysia
Hypothesis 2: MATERIALS AND METHODS

H0: The two independent variables (distributive justice A distribution of three hundred self-administered
and procedural justice) do significantly explain the questionnaires to the respondents who were working in
variance in organizational commitment in the Klang Valley, Malaysia. The questionnaire was
Malaysia designed to test the three hypotheses was separated into
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 Am. J. of Economics and Business Administration 2 (1): 56-63, 2010

two sections. The questionnaire consisted of 46 Result of Hypothesis 1: Table 1 showed the Pearson
questions, whereby the first section obtained the Correlation between distributive justice, procedural
demographic variables of the respondents such as justice and job satisfaction. The value of Pearson
gender, age, education level, current position and years Correlation equaled 0.282, which indicated a weak
of service with the organization, while the second correlation between distributive justice and job
section is to test the hypotheses. satisfaction (Saunders et al., 2006). Result also
In the second section, the questions consisted of indicated a positive relationship between distributive
five parts, namely job satisfaction, organization justice and job satisfaction. Since the p-value was less
commitment, turnover intention, distributive justice and than 0.05, hence there was significant relationship
procedural justice. Respondents were required to rate between distributive justice and job satisfaction with
their importance towards each factor based on Likert 95% confidence level.
five-point scale ranging from “1-Strongly Disagree, 2- The value of Pearson Correlation equal 0.458,
which indicated a fair correlation between procedural
Disagree, 3-Neutral, 4- Agree, 5-Strongly Agree”.
justice and job satisfaction (Saunders et al., 2006).
This self-administered questionnaire was to allow
Result also indicated a positive relationship between
the researchers to collect relevant information to test the
procedural justice and job satisfaction. Since the p-
relationship between employee’s perceptions of value is less than 0.05, hence there was significant
organizational justice and work outcomes. The relationship between procedural justice and job
measures of the dependent variables, namely job satisfaction with 95% confidence level.
satisfaction, organizational commitment and turnover From the results obtained in regression analysis as
intention variables and independent variables, namely shown in Table 2, the value of R was 0.461, value of R2
distributive and procedural justice in this research study equals 0.21, which mean 21% of variation in job
have been modified from the scales adopted by Lee satisfaction was due to variation in distributive justice
(2000) and was discussed as below: and procedural justice. The p-value is very low (less
than 5% significance level), therefore accepted null
• Job satisfaction was the mean of a 6-items scale hypothesis H0, whereby the two independent variables
that addressed the extent to which the respondent (distributive justice and procedural justice) did
was satisfied with their overall job significantly explained the variance in job satisfaction.
• Measurement of organizational commitment was Hence, the model adequately explained the relationship
by a 6-items scale that contained statements that between the job satisfaction, distributive justice and
described participants’ commitment to the procedural justice.
organization in which they work From the result output, the value of the t-test
• Measurement of turnover intention was by a 5- statistics for ‘distributive justice’ was 0.734 and p-value
items scale. Asking respondents to evaluate their was 0.46 (more than 5% significance level), hence
likelihood of staying or leaving their work ‘distributive justice’ did not contribute significantly to
organization assessed loyalty the model. However, the value of the t-test statistic for
‘procedural justice’ was 4.977 and p-value was very
• Measurement of distributive justice was by using
low (less than 5% significance level), hence ‘procedural
the mean of a 5-items scale whereby the items
justice’ did contribute significantly to the model.
described the respondent's perceptions that
distribution of pay and benefits is fair and equitable Table 1: Correlation result for Hypothesis 1
compared to similar jobs externally and reflect on Job Distributive Procedural
their performance appraisal satisfaction justice justice
• Measurement of procedural justice was by a 19- Job satisfaction 1.000 0.282 0.458
Distributive justice 0.282 1.000 0.516
item list based on literature related to procedural Procedural justice 0.458 0.516 1.000
justice, namely fairness (4-items), communication Correlation is significant at the 0.01 level (2-tailed)
and employee’s participation (7-items),
performance appraisal (5-items) and trust (3-items) Table 2: Multiple regression results for Hypothesis 1
Beta t Sig (p) R R2
(Overall distribution 0.461(a) 0.212
RESULTS AND DISCUSSION and procedural justice)
(Constant) 1.646 6.396 0.000
Distributive justice 0.049 0.734 0.464
Results consisted of three sections to test Procedural justice 0.451 4.977 0.000
Hypothesis 1 to 3 as below: A dependent variable: Job satisfaction
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 Am. J. of Economics and Business Administration 2 (1): 56-63, 2010

The explanation of the two independent variables is The value of Pearson Correlation equals 0.475,
by using the multiple regression equation: which indicates a fair correlation between procedural
justice and organizational commitment (Saunders et al.,
y = a + β1x1 + β2x2 + β3x3 + β4x4 + βnxn 2006). Result also indicated a positive relationship
between procedural justice and organizational
commitment. Since the p-value is less than 0.05, hence
Based on the beta coefficient from the Table 2, the there was significant relationship between procedural
regression weight for ‘distributive justice’ was 0.049 justice and organizational commitment with 95%
and ‘procedural justice’ was 0.451. Hence, the multiple confidence level.
regression equation (fitted model) was as follows: From the results obtained in regression analysis as
shown in Table 4, the value of R was 0.535, value of R2
Job Satisfaction = 1.646 + 0.049 (distributive justice) + 0.451 equals 0.28, which mean 28% of variation in
(procedural justice) organizational commitment was due to variation in
distributive justice and procedural justice. The p-value
Based on the equation above, the relative was very low (less than 5% significance level),
predictive importance of the independent variables was therefore accepted null hypothesis H0, whereby the two
established by comparing these beta weights, hence it independent variables (distributive justice and
procedural justice) did significantly explain the
could be concluded that among the two independent
variance in organizational commitment. Hence, the
variables, procedural justice was more influential than
model adequately explained the relationship between
distributive justice in predicting employee’s job
the organizational commitment, distributive justice and
satisfaction. Note that distributive justice was not a procedural justice (there was a goodness of fit).
significant predictor; therefore, there is partial From the result output, the value of the t-test
supportive data for Hypothesis 1. statistic for ‘distributive justice’ was 3.544 and p-value
was very low (less than 5% significance level), hence
Result of Hypothesis 2: Table 3 showed the Pearson ‘distributive justice’ did contribute significantly to the
Correlation between distributive justice, procedural model. However, the value of the t-test statistic for
justice and organizational commitment. ‘procedural justice’ was 4.00 and p-value was very low
The value of Pearson Correlation equal 0.456, (less than 5% significance level), hence ‘procedural
which indicated a fair correlation between distributive justice’ did contribute significantly to the model.
justice and organizational commitment (Saunders et al., The explanation of the two independent variables is
2006). Result also indicated a positive relationship by using the multiple regression equation:
between distributive justice and organizational
commitment. Since the p-value was less than 0.05, y = a + β1x1 + β2x2 + β3x3 + β4x4 + βnxn
hence there was significant relationship between
distributive justice and organizational commitment with Based on the beta coefficient from the Table 4, the
95% confidence level. regression weight for ‘distributive justice’ is 0.261 and
‘procedural justice’ is 0.401. Hence, the multiple
Table 3: Correlation result for Hypothesis 2 regression equation (fitted model) was as follows:
Organizational Distributive Procedural
commitment justice justice
Organizational commitment 1.000 0.456 0.475 Organizational Commitment = 1.02 + 0.261( distributive justice )
Distributive justice 0.456 1.000 0.516 + 0.401 ( procedural justice )
Procedural justice 0.475 0.516 1.000
Correlation is significant at the 0.01 level (2-tailed)
Based on the equation above, the relative
Table 4: Multiple regression results for Hypothesis 2 predictive importance of the independent variables was
Beta t Sig (p) R R2 established by comparing these beta weights, hence it
(Overall distribution 0.535(a) 0.286 could be concluded that among the two independent
and procedural justice) variables, procedural justice was more influential than
(Constant) 1.020 3.589 0.000 distributive justice in predicting employee’s
Distributive justice 0.261 3.544 0.001
Procedural justice 0.401 4.007 0.000 organizational commitment. The results show that the
A dependent variable: Organizational commitment data supports Hypothesis 2.
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Result of Hypothesis 3: Table 5 shows the Pearson From the result output, the value of the t-test
Correlation between distributive justice, procedural statistic for ‘distributive justice’ is -1.02 and p-value is
justice and turnover intention. 0.306 (more than 5% significance level), hence
The value of Pearson Correlation equals -0.339, ‘distributive justice’ does not contribute significantly to
which indicates a fair correlation between distributive the model. However, the value of the t-test statistic for
justice and turnover intention (Saunders et al., 2006). ‘procedural justice’ is -6.149 and p-value is very low
Result also indicates a negative relationship between (less than 5% significance level), hence ‘procedural
distributive justice and turnover intention. When justice’ does contribute significantly to the model.
employee perception of distributive justice is high, their The explanation of the two independent variables is
by using the multiple regression equation:
turnover intention will be low. Since the p-value is less
than 0.05, hence there is significant relationship
y = a + β1x1 + β2x2 + β3x3 + β4x4 + βnxn
between distributive justice and turnover intention with
95% confidence level.
The value of Pearson Correlation equals -0.539, Based on the beta coefficient from the Table 6, the
which indicates a fair correlation between procedural regression weight for ‘distributive justice’ is -0.087 and
justice and turnover intention (Saunders et al., 2006). ‘procedural justice’ is -0.706. Hence, the multiple
regression equation (fitted model) is as follows:
Result also indicates a negative relationship between
procedural justice and turnover intention. When
employee perception of procedural justice is high, their Turnover Intention = 5.355 - 0.087 (distributive justice) -
0.706 (procedural justice)
turnover intention will be low. Since the p-value is less
than 0.05, hence there is significant relationship
between procedural justice and turnover intention with Based on the equation above, the relative
95% confidence level. predictive importance of the independent variables is
From the results obtained in regression analysis as established by comparing these beta weights, hence it
shown in Table 6, the value of R is 0.544, value of R2 can be concluded that among the two independent
equals 0.29, which means 29% of variation in variables, procedural justice is more influential than
distributive justice in predicting employee’s turnover
employees’ turnover intention is due to variation in
intention in Malaysia. Note that distributive justice is
distributive justice and procedural justice. The p-value
not a significant predictor; therefore, the data partially
is very low (less than 5% significance level), therefore
supported Hypothesis 3. Results presented the results of
accept null hypothesis H0, whereby the two independent the statistical analyses of the hypotheses based on the
variables (distributive justice and procedural justice) do data collected from the questionnaire. The relationship
significantly explain the variance in turnover intention shown and discussed among the variables used the
in Klang Valley. Hence, the model adequately explains Pearson correlation analysis and multiple regressions.
the relationship between the turnover intention, The analysis shows that the data partially supported
distributive justice and procedural justice (there was a Hypotheses 1 and 3 while the data supported
goodness of fit). Hypothesis 2.

Table 5: Correlation result for Hypothesis 3 CONCLUSION

Turnover Distributive Procedural
intention justice justice
Turnover intention 1.000 -0.339 -0.539 Implications: This study provided some guidelines to
Distributive justice -0.339 1.000 0.516 assist managers to understand how to reduce employee
Procedural justice -0.539 0.516 1.000 turnover, increase job satisfaction and organizational
Correlation is significant at the 0.01 level (2-tailed) commitments, by making better decisions about the
outcomes and procedures for their employees. The
Table 6: Multiple regression results for Hypothesis 2 research findings indicated the importance to include
Beta t Sig (p) R R2 the management of both fair procedures and fair
(Overall distribution 0.544(a) 0.296 outcomes. These findings helped the managers to
and procedural justice)
(Constant) 5.355 16.433 0.000 understand how fair judgments could contribute
Distributive justice -0.087 -1.027 0.306 towards the effective management of workforce
Procedural justice -0.706 -6.149 0.000 through implementation of organizational policies such
A dependent variable: Turnover intention as reward and performance evaluation policies.
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The results have several valuable practical collecting the data, the researcher attempted to include
implications for the managers. Managers need to a diverse range of organizations and employees in terms
apply rules fairly and consistently to all employees, of demographic characteristics. This procedure has
and rewarding them based on performance and merit made the sample less concentrated on a specific factor
without personal bias in order to create a positive and does not represent the random sampling procedure.
perception of distributive and procedural justice Therefore, the interpretation of this sample is as a
(Tang et al., 1996). The perceptions of unfairness can convenience sample. Although the sample of this study
result in negative reactions to the organization, due to represents a wide range of industries, jobs, and ages of
poor job satisfaction, commitment and turnover. the working population, it is a self-selected sample. The
This research study also has several implications results may not represent workers in areas in which
widespread economic problems are prevalent in the
for managers concerned with the high economic costs
Klang Valley.
of obtaining and retaining a committed workforce. The
present findings suggest that procedural fairness has Suggestions for future research: The present study
more effect on their job satisfaction, organizational also dealt with employees working for private
commitment and turnover intention than distributive companies, in which management practices are highly
justice does. Hence, managers should be paying more focused on visible performance of individual
attention to the means or the process of decision employees. However, government-related or other
making for the distribution as it will leads to substantial public organizations may view HR management
pay-offs in individual job satisfaction, organizational systems differently from those in the private sector;
commitment and turnover intention. Generally, the hence, emphasis on individual performance may
economic costs of acting in a procedurally fair manner possess a lesser value. As such, further research is
such as treating individuals with respect and needed to examine the generalization of these findings
justification for actions are minimal when comparing to to nonprofit and/or government organizations.
the cost of distributive fairness. Therefore, managers Therefore, a recommendation is that further
can influence important work attitudes through creation research applies to other regions and environments:
and maintenance of a procedurally fair climate.
• In other private sector organizations in other states
As such, managers needed to nourish a
in Malaysia, so that the findings can be generalized
procedurally fair climate environment in the
across the whole population of Malaysia
organization by establishing two-way communication
• In other nonprofit and government organizations in
to allow their employees the opportunity to participate
Malaysia
and voice their preferences and opinions during the
decision making process (Wong and Teoh, 2009, Future research should also attempt to achieve a
Wong, 2006; 2007; Potter, 2006; Muhammad, 2004; larger random sample to determine whether general
Cole and Flint, 2005; Lemons and Jones, 2001). While results apply to a larger population sample size.
management usually retained the prerogative to alter Future researchers can improve the general
the policies and procedures, however, by informing the application of the present study by replicating these
employees about possible changes and seeking their results using other samples and other methods. Future
opinions of those changes might avoid deteriorating of research should also examine the effects of
their work attitudes. Therefore, the human resource interpersonal and informational justice climates towards
played an important role in devising policies and organizational outcomes such as job satisfaction,
procedures that are visible in demonstrating their organizational commitment and turnover intention.
commitment to open communication, empowerment Therefore, suggested suggestion is made that future
and a just environment. research should consider experimental or longitudinal
approach and other consideration in terms of subject
and setting of the study to generalize the results that
Limitations: This study has several limitations. First, allow for reaching conclusions that are more concrete.
the small sample size raises concern about sample bias.
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