Major Research Project on Employees Work Environment and Fairness Perceptions’ Effect on Work Engagement and Turnover Intentions in Services Sector

Major Research Project on Employees Work Environment and Fairness Perceptions’ Effect on Work Engagement and Turnover Intentions in Services Sector

Dr Harold Andrew Patrick

Professor- OB & HRM

Institute of Management

CHRIST (Deemed to be University)

Bangalore – 560029

 

 

Abstract:

 

Service sector is the lifeline for the socio-economic growth of a country. The Indian service sector has been a great stimulus to the Indian economy accounting for 56.9 per cent of the gross domestic product (GDP). India has the second fastest growing services sector with its compound annual growth rate at nine percent, during the last 11-year period from 2001 to 2012, as per the Economic Survey for 2013-14. India has concentrated on services. It stands out for the size and dynamism of its service sector (Eichengreen and Gupta (2010). It is today the largest and fastest growing sector globally contributing more to the global output and employing more people than any other sector. In the period April 2000-June 2014, the services sector in India attracted FDI inflows amounting to about US$ 40,197.21 million, according to data released by Department of Industrial Policy and Promotion (DIPP).

 

Employees in service organizations are important because they are central to service; employees attitudes and behaviors play a vital role in the quality of service. (Bitner, Booms, & Tetreault, 1990; Parasuraman, Zeithaml, & Berry, 1988; Schneider & Bowen,1993). The interaction between employees and customers in service delivery is essential to the satisfaction or dissatisfaction of customers (Bitner, Booms, & Tetreault, 1990). Employees are primarily responsible for providing a sustainable competitive advantage, and success in the service sector depends on managing and retaining employees (Woods, 1992).

 

Leigh, Lucas Jr, and Woodman (1988) report that employees look more to the broader organizational environment than to their role perceptions in attributing their job satisfaction. Need for research concerning how employees perceive the fairness of organizational systems and how this issue of fairness affects employees attitudes and behaviors (Dailey & Kirk, 1992). Greenberg (1990) also reports that organizational justice is important as a basic requirement for the effective functioning of organizations. Work engagement and turnover is critical and costly (Bonn & Forbringer, 1992). It is imperative that management understand the specific dimensions that help shape employees attitudes toward their jobs (Rogers, Clow, & Kash, 1994).

 

The purpose of this study is to present, test and validate a model that identifies the impact of work environment on the work engagement behavior of employees in the services sector. To develop a work environment scale suitable for Indian services organizations, the model will test if there is a significant mediation effect of employees’ justice perceptions on the relationship between work environment and work engagement and turnover intentions.

 

1,650 employees were surveyed for the present study. The researcher received 1200 usable questionnaires which was analysed with a 72.73% response rate. Stratified disproportionate and Quota sampling technique was adopted for selecting the participants. The services sector was first segmented into mutually exclusive groups. Locations were categorised for services sector based on the researcher’s discretion (disproportionate stratified sampling). Employees with a minimum of two years of experience in the organization were administered the questionnaire (Judgmental Sampling). The sample was drawn from the service industries located in cities like Bangalore, Delhi, Mumbai, Hyderabad, Chennai, Kolkata, Cochin, Pune, Gurgaon etc.

 

Five standardized, reliable and valid tools were adopted for data collection. 1. Utrecht Work Engagement Scale Version 1.1, (Schaufeli and Bakker, 2004), 2. Measurement of Turnover Intentions measuring Current career intentions (Robinson, 2007), 3. Measurement of Work Environment by Work Environment Services Scale (WESS) (Patrick, 2013), 4. Measurement of Distributive Justice (Price & Mueller, 1986), and 5. Measurement of Procedural Justice Niehoff and Moorman (1993).

 

The statistical techniques to treat data in the present study included Descriptive Statistics, Correlation, Confirmatory factor analysis – AMOS version 16, Path analysis –AMOS version 16, t test, and ANOVA.

 

Structural equation modelling using Maximum likelihood estimates was adopted to test the hypotheses. The findings indicate that work engagement is significantly positively related to work environment (β = 0.468**). Work environment is significantly positively related to organizational justice construct (β = 0.855**). Organizational justice is significantly positively related to work engagement (β = 0.459**). The findings indicate that organizational justice does significantly mediate the relationship between work environment and engagement.

 

A partial mediation was established of organizational justice between the work environment and work engagement relationship. This is supported by sobel test mediation – organizational justice significantly mediates 69.12% of the relationship between work environment and engagement. The direct relationship between work environment and work engagement remains significant, in the presence of the third variable organizational justice. This is because organizational justice also determines (mediates) the relationship between the two constructs. This supports mediation (Baron and Kenny,1986).

 

Comparison of the four model fit clearly indicate that the full model with both direct and indirect effects reports acceptable cut off values for all the model fit measures. Difference in Chi-square test statistic for each pair of comparisons done sequentially indicated model 3 (Mediating Effects Model) as the best fit in the services sector. When organizational justice is raised by one unit the odds ratio indicates that services employees are 1.2 times more likely to stay in the organization. Since the work environment dimensions significantly predict career intentions with the mediation of organizational justice, we conclude that there is a significant partial mediation of organizational justice on the relationship between work environment and career intentions.

 

The implications of the study include: Organizations should take effort or implement measures in the workplace to further increase perception of fairness among service employees. Procedural justice can be increased by ensuring that decisions are made in an unbiased manner. Before making decisions the organization needs to collect accurate and complete information. Decisions taken need to be applied consistently across all affected service employees and departments. Ensuring that service employees concerns are heard before job decisions are made. Provisions for clarifying decisions and providing additional information when requested should be available. Distributive justice can be increased by fairly rewarding service employees considering the responsibilities they have. Organizations must also take into consideration the stress and strains of a job and introduce suitable reward mechanisms.

 

The limitations of the study are: The study was conducted in the service sector limiting its scope. Future researches may examine the relationship in other sectors and may compare different sectors as well. The sample was highly scattered geographically. The maximum number of respondents was from Bangalore. The sample was location bias. Future studies may distribute the sample equally. The current study has used quantitative analysis as its statistical method. The future researchers may use qualitative methods. Qualitative methods such as depth-interviews would have added context and richness to the findings.

 

This research has established the influence of work environment and organizational justice on work engagement and turnover intentions of employees in the Indian service sector. It has enhanced our understanding of organizational justice as identified in the organizational behavior literature. It examined work environment as an antecedent of organizational justice and the impact of organizational justice on work engagement and turnover intentions. This research broadens the application of the justice concept in organizations beyond pay and has captured previously unexamined effects. This research was done in the organizational context as opposed to most work been conducted in controlled laboratory settings that are far removed from the organizational context. Indicates how service employees perceive the characteristics of their organizations which have important impacts on employee’s attitudes and behaviour.

 

 

Year of Publication: June 2014

ISBN:   978-93-82305-66-8 

Major Research Project: Vol 12

Pages  xix,   200

Price: available on request

Funded by Centre for Research-Projects-CHRIST (Deemed to be University)

Published by Centre for Publications, CHRIST (Deemed to be University)