A critical analysis of organisational justice in the South African financial service industry

Abstract

Organisational justice has captured the interest of scholars in recent years since it is associated with the perceptions and reactions of an individual, to the presence of fairness in an organisation. It thus captures what an individual feel or evaluates to be, morally correct rather than viewing it to be something prescriptive. This study was aimed at investigating the extent of organisational justice on organisational citizenship behaviour, ethical behaviour and employee retention in the South African financial services industry. A hypothetical model and measuring instrument was developed in order to investigate factors that may influence the organisational justice in the financial services industry. Six independent variables (trustworthiness of management, employee engagement, reward system, organisational transparency, two-way communication and organisational climate) were identified as variables that have the potential to influence organisational justice (mediating variable). It was also hypothesised that organisational justice) has the potential to affect the dependent variables (organisational citizenship behaviour, ethical behaviour and employee retention). Furthermore, nine null-hypotheses were developed to test the relationship between independent, mediating and dependent variables. All these variables were clearly defined and operationalised with various items that were obtained from other measuring instruments or self-developed items. A quantitative research approach followed. This study made use of the non-probability sampling technique, specifically convenient and judgemental sampling, as there is no data base of financial services firms available in South Africa. A purposive sample of 800 respondents was drawn from four provinces in South Africa. Factor and regression analyses were used to test the significance of the relationship between the various independent and dependent variables. The mediating variable of organisational justice was viewed by respondents as a two-dimensional construct, namely procedural-interactional justice and distributive justice. Consequently, intrinsic rewards, extrinsic rewards, organisational transparency and organisational climate were identified as independent variables that could have an impact on the procedural-interactional justice to predict organisational citizenship behaviour and reputable employee retention in the financial services industry. No relationships were identified between trustworthiness of management and employee engagement and procedural-interactional justice. The independent variables, trustworthiness of management, extrinsic rewards and organisational climate, could have an impact on distributive justice to predict organisational citizenship behaviour and reputable employee retention in the financial services industry. No relationships were identified between employee engagement, intrinsic rewards, organisational transparency and distributive justice. The findings of this study have contributed to the body of knowledge in the financial services literature in South Africa, by developing a theoretical model and a measuring instrument of organisational justice in the financial services industry. The antecedents of organisational justice in the financial services industry are not well documented in literature and findings of this study could thus contribute towards closing this gap in literature. The findings of this study could also inform policy formulation to assist with the implementation of organisational justice programmes in the financial services industry. This study provided useful and very practical guidelines to organisations in order to ensure the effective strategising and management of OJ that could enhance their local and global competitiveness and long-term survival