Research Paper

Creating Effective Organization

Impact of Organizational Justice on

Employee Turnover Intentions

Impact of Organizational Justice on

Employee Turnover Intentions
 Abstract

This study is about the relationship between performance appraisal and job
satisfaction. It indicates that when appraisals provide clear & transparent criteria
(perceived to be fair and are sent with employee’s approval), job satisfaction of
employees increases.

1. INTRODUCTION

Call center is an integral part of customer relationship management. Call centers

have a huge impact on customer retention, revenue and profit. However, to
ensure positive outcomes, it is necessary for management that their CSRs are
satisfied with their job. 

Attracting and retaining talented employees is a top priority for call centers. Call
center representatives represent the front lines of customer service. CSRs are in
a position to keep current business, promote new business, and develop solid
relationships with customers for the future.

Customer satisfaction and customers’ perceptions of service quality are

significantly influenced by the attitudes and behaviors of service employees
(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).

Turnover in call center is painfully expensive for organizations, and call center
operations can be disturbed by high turnover rates. The level of employee
turnover in Call Centers is a major Management challenge. Employee Turnover
has been of great interest to researchers of organizational behavior and
management practitioners. This is because of its association with desirable work
behaviors such as increased productivity, personnel stability, lower absenteeism
rate, job satisfaction and organizational loyalty. The performance of each
employee has a measurable impact on the profit of a company. Employee
dissatisfaction leads to poor performance, resulting in low productivity & affecting
organizational goals.

Organizational justice or fairness in organization has emerged as an important

concept contributing to the understanding of workplace attitude & behavior in
recent years (Cropenzano & Rupp, 2003; Ambrose, Hess & Ganesan, 2007).
Employee perceptions of justice have been found to be a strong predictor of
important outcomes such as job satisfaction, pay satisfaction, organizational
commitment & turnover intentions (Cohen-Charash & Specfor, 2001; Colquitt
Conlon, Wesson, Porter & Ng, 2001)
The present study will investigate the impact of organizational justice on turnover
intentions of call center employees. Two dimensions of organizational justice:
Procedural Justice & Distributive Justice will be observed to see their impact on
turnover intentions.

1.1. Problem statement:

Employee turnover has a major impact on any organization’s function and

performance. Organizations always need to find ways to minimize employee
turnover which causes loss/cost in the form of the expertise of person who left
the organization, recruitment process for hiring new employee and his training.
Call centers are facing same problem and they are finding ways to solve that
problem.

The problem statement is:

“How to control high employee turnover in the Call center of an
organization?”

1.2. Significance of the Topic:

This research will be helpful in exploring the relationship between organizational

justice & employees’ turnover intention. The study will assess the extent to which
each of justice type is related to turnover intentions. The findings will be helpful
for call center management to focus on the causes of high turnover rates. This
will in turn, help to adopt practices to improve the employees’ perception about
the level of fairness existing in the organization. The study will be contributing in
finding the key area (Procedural / distributive) to be focused by the management
to reduce the turnover and its costs.

The results will also be helpful in finding the relationship between Procedural
justice & distributive justice.

1.3. Literature Review:

2. RESEARCH OBJECTIVES

The main objective of research is to identify if there is any impact of

organizational justice on the intentions of employees to quit the organization,
specifically in the Call centers. The findings could indicate the areas requiring
greater focus i.e. if any strategies can be implemented for the improvement of
either of the organizational justice types, whichever founds to be more significant
through the study. Human resource professionals and managers could place
greater emphasis on those aspects to reduce the turnover intentions prevailing.
 The objective of the study is to identify if procedural or distributive justice or both
directly influence the turnover intentions.

3. HYPOTHESIS

3.1. Theoretical Framework:

Organizational Justice

Procedural Justice

Turnover Intentions

Distributive Justice

Independent Variable Dependent Variable

4. METHODOLOGY
4.1 Population:

The study has been conducted at Mobilink call center Islamabad. Mobilink has
overall about 5000 employees working in different departments. There are about
300 employees in Islamabad Contact Center, including 265 CSRs & other
employees in different internal sub departments of contact center.

Most of the CSRs handle inbound calls, responding to customer’s query &
handling their complaints related to products & services. A few of them work in
backend support department to explore the issues (if needed) and/or give any
detailed information required by calling the customers back.

4.2. Sample:

4.2.1. Sampling Procedure:

Sample criteria was set to include the employees having at least one year of
experience in any one of Mobilink Contact center (Karachi, Lahore or Islamabad).

4.2.2. Sampling Size:

 A sample of 100 CSRs has been selected from the population to collect
the data.
 Sample included both inbound CSRs & outbound CSRs.
 Both male & female CSRs are considered.

5. RESEARCH INSTRUMENT

 Data has been collected through Questionnaire.

 The questionnaire includes questions about appraisal characteristics such
as fairness, openness, level of encouragement etc & job satisfaction.
 Questionnaire included overall 38 questions.
 23 Questions were related to different appraisal characteristics.
 15 questions were related to job satisfaction.
 Respondent needed to select 1 option out of 5 as mentioned below:

Strongly Disagree Neutral Agree Strongly

Scale Disagree Agree
1 2 3 4 5

(Questionnaire is attached at the end)

 6. DATA ANALYSIS

Data has been analyzed using Excel. Researchers have analyzed the impact of
different variables representing various characteristics of Performance Appraisal
on Job satisfaction.

Dependent Variable: Turnover Intention.

Independent Variable: Procedural Justice, Distributive Justice

6.1. Response Rate:

Response rate for data was 65% i.e. out of 100 responses 65 were finally
selected being error free & were considered for data analysis.

6.2. Analysis of Appraisal Characteristics:

Five important characteristics have been analyzed to be either Satisfactory or

unsatisfactory. Results of responses are as follows:

6.2.1. Appraisal Fairness:

Most of CSRs agreed that performance appraisals are fair. No favoritism or
personal grudge affects the appraisal rating. Overall 48% CSRs agreed/strongly
agreed to it.

13% 12%
Strongly Disagree
15%
Disagree

NA
34%
Agree
25%
Strongly Agree

Appraisal Fairness
6.2.2. Appraisal Reliability:
Most of CSRs agreed that performance appraisals are reliable. Rating is
accurate & error free & exactly reflects how I performed on job. Overall 45%
CSRs agreed/strongly agreed to it.

15% 11%
16% Strongly Disagree

Disagree

NA
31%
Agree
28% Strongly Agree

Appraisal Reliability

6.2.3. Appraisal Openness:

Most of CSRs agreed that performance appraisals are open & transparent. They
understand the criteria & know the main areas in which they are being evaluated.
Overall 45% CSRs agreed/strongly agreed to it.
 11% 11%
Strongly Disagree
21%
Disagree

34% NA
Agree
22% Strongly Agree

Open & Transparent

6.2.4. Employee Consent:
This is the only appraisal characteristic for which responses were mostly
negative. Most of CSRs think that their proper consent is not taken before
submitting the appraisal. Total 45% were against it while 32% were in its favor.

12% 17%

20% Strongly Disagree

Disagree
NA
28% Agree

23% Strongly Agree

Employee Consent

6.2.5. Feedback:
Most of CSRs agreed that performance appraisals provide correct feedback
about their performance. They are being guided about their weaknesses. They
feel that appraisals help in career growth. Overall 49% CSRs agreed/strongly
agreed to it.

16% 13%
Strongly Disagree
20%
Disagree
NA
Agree
33%
18% Strongly Agree

Feedback
6.3. Analysis of Job Satisfaction:

Most of the CSRs were satisfied with their job. They were happy with the
environment, salary & work assignment. They feel that their job helps them in
their professional grooming. They were satisfied with the supervision of their
department & with the chances of promotion. Collectively 53% CSRs showed
satisfaction about the job & 26% were dissatisfied, whereas 21% responses were
neutral.

The pie chart below shows percentage of the CSRs’ responses about job
satisfaction.
 21% 12% Strongly Disagree
14%
Disagree

NA

Agree
32% 21%
Strongly Agree

Job Satisfaction

6.4. Correlation between Variables:

The line chart below shows the variation of both independent variable (appraisal
characteristics) & dependent variable (job satisfaction).The chart shows both the
variables move almost in the same direction across the central value “3”. This
shows strong Correlation between two variables.
 5.00

4.50

4.00

3.50

3.00

2.50 Appraisal Characteristics

Job satisfaction
2.00

1.50

1.00

0.50

0.00
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85

6.4.1. Correlation Coefficient:

The correlation coefficient is a measure of the degree of interdependence

between two variables (dependent & independent).
The formula for Correlation Coefficient is

(X & Y are dependent & independent variables respectively)

The value of Correlation Coefficient ranges between -1 to+1 & 0 is the central
value referring to zero correlation between variables. -1 shows negative
correlation i.e. values of both variables move in opposite direction, whereas +1
shows positive correlation i.e. values of both variable move in same direction.

The value of correlation coefficient for Appraisal characteristics & job satisfaction
is

Correl(X, Y) = 0.70809004
This value shows strong positive correlation between Appraisal characteristics &
Job satisfaction, & supports both of the Hypothesis i.e.

Hypothesis 1: Performance appraisals that are based on inappropriate criteria

according to CSR’s perspective will result in lower levels of job satisfaction.

Hypothesis 2: Performance appraisals conducted in a formal way will result in

higher levels of CSR job satisfaction

7. CONCLUSION

As stated, the purpose of this research was to examine the relationship between
the criteria used in performance appraisals, antecedents of the appraisal
process, and satisfaction. The focus was to examine ways in which the appraisal
process could realize its maximum potential. The results indicate that if
management wants its employees to be satisfied, more professional
management may be helpful. The results show that employees experience the
greatest levels of satisfaction when they understand the criteria used, agree with
the criteria used, feel that the results of the evaluation have an impact on their
level of compensation, and believe that the appraisal process is fair.

Although one could contend that these factors should be self-evident in the
appraisal process, it seems that too often the appraisal process is either ignored
or misused. The result of a failure to use appraisals properly seems to be a
reduction in job satisfaction. Inadequate or poorly conceived performance
appraisals may have the greatest causal impact on the job-related behavior.
Employees have more positive attitudes toward their jobs when their managers
specify their jobs and show them how successful performance will lead to the
desired results.

8. REFERENCES

1: HUMAN RESOURCE DEVELOPMENT QUARTERLY, vol. 12, no. 2, Summer

2001

2: HUMAN RESOURCE MANAGEMENT JOURNAL QUARTERLY, vol. 18, no.

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368.

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6: Markowich, M. M. (1994). We can make performance appraisals work.

Compensation and BenefitsReview, 26 (3), 25–28.

7: Miner, J. B. (1968). Management appraisal: A capsule review and current

references. Business Horizons, 17 (4), 122–126.

8: Smither, J. W. (1998). Lessons learned: Research implications for

performance appraisal and management practice. In J. W. Smither (Ed.),
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9: www.blackwell_synergy.com

10: www.ucalgary.ca