ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT
EMBA PROGRAM

The Mediating Role of Employee Engagement in the Relationship

between Organizational Justice and Employee Turnover Intention
in the case of Commercial Bank of Ethiopia

BY: Belete Kene

Adviser: Jemal Mohammed (PhD)

In Partial Fulfillment of the Degree of Executive Master of Business

Administration [EMBA]

June 2018
 DECLARATION

I, the undersigned, declare that this study entitled ―The Mediating Role of Employee
Engagement in the Relationship between Organizational Justice and Employee Turnover
Intention in the case of Commercial Bank of Ethiopia‖ is my original work and has not been
presented for a degree in any other University, and that all sources of materials used for the study
have been duly acknowledged.

Declared By:

Name Belete Kene Woreta

Signature ___________________________

Date _______________________________
 ADDIS ABABA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
EMBA PROGRAM

CERTIFICATE

This is to certify that Belete Kene Woreta has carried out his research work on the topic entitled,
―The Mediating Role of Employee Engagement in the Relationship between Organizational
Justice and Employee Turnover Intention in the case of Commercial Bank of Ethiopia‖.
The work is original and is suitable for submission for the award of the Degree of Executive
Master of Business Administration [EMBA] at Addis Ababa University.

Research Adviser: Jemal Mohammed (PhD)

Signature ________________________________

Date __________________________________
 ADDIS ABABA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
EMBA PROGRAM

DECLARATION

This thesis, written by Belete Kene Woreta, and entitled “The Mediating Role of Employee
Engagement in the Relationship between Organizational Justice and Employee Turnover
Intention in the case of Commercial Bank of Ethiopia” and submitted in partial fulfillment of
the requirements for the degree of Executive Master of Business Administration [EMBA]
complies with the regulation of the University and meets the acceptable standards with respect to
originality and quality.

Approved by Board of Examiners

Internal Examiner: ________________________ Signature ____________ Date ___________

External Examiner: ________________________ Signature _____________ Date __________

Advisor: _____________________________ Signature _______________ Date ___________

 ACKNOWLEDGEMENT

First and foremost, I give thanks to the almighty God for giving me the health, strength and
patience to finalize this thesis.

I owe special gratitude to my advisor Dr. Jemal Mohammed. I am very grateful for his guidance,
encouragement and constructive comments for each part of the paper.

I also would like to thank my lovely wife Edlawit (Edu) and my sons Nathan and Dagmawi.
Your love, support and friendship are the most important elements of my life.

Last but not least, I would like to thanks employees of Commercial Bank of Ethiopia who
support me in the process of data collection.
 Table of Contents
CHAPTER 1 – INTRODUCTION ............................................................................................................... 1
1.1 Background of the Study............................................................................................................... 1
1.2 Statement of the Problem .............................................................................................................. 3
1.3 Research Questions ....................................................................................................................... 4
1.4 Objective of the Study................................................................................................................... 4
1.5 Significance of the Study .............................................................................................................. 5
1.6 Scope of the Study ........................................................................................................................ 5
1.7 Limitation of the Study ................................................................................................................. 5
1.8 Organization of the Study ............................................................................................................. 6
CHAPTER 2 – LITERATURE REVIEW .................................................................................................... 7
2.1 Theoretical Review ....................................................................................................................... 7
2.1.1 Employee Engagement ............................................................................................................. 7
2.1.2 Mediation ................................................................................................................................ 10
2.1.3 Organizational Justice ............................................................................................................. 10
2.1.3.1 Distributive Justice .............................................................................................................. 12
2.1.3.2 Procedural Justice ............................................................................................................... 13
2.1.3.3 Interactional Justice............................................................................................................. 16
2.1.4 Employee Turnover Intention ................................................................................................. 17
2.2 Empirical Review........................................................................................................................ 18
2.2.1 Organizational Justice and Employee Turnover Intention .................................................. 18
2.2.2 Organizational Justice and Employee Engagement ............................................................ 19
2.2.3 Employee Engagement and Employee Turnover Intention ................................................ 20
2.2.4 Mediation Role of Employee Engagement ......................................................................... 20
2.3 Conceptual Framework Model of the Study ............................................................................... 21
2.4 Research Hypothesis ................................................................................................................... 22
CHAPTER 3 – RESEARCH METHODOLOGY ...................................................................................... 23
3.1 Introduction ................................................................................................................................. 23
3.2 Research Design.......................................................................................................................... 23
3.3 Target Population and Sample .................................................................................................... 23
3.4 Data Source and Collection Instruments ..................................................................................... 25
3.5 Validity and Reliability ............................................................................................................... 25
3.6 Data Analysis Procedure ............................................................................................................. 26
 3.7 Ethical considerations ................................................................................................................. 26
CHAPTER 4 – DATA ANALYSIS AND INTERPRETATION ............................................................... 27
4.1 Introduction ................................................................................................................................. 27
4.2 Demographic Profiles of the Respondents .................................................................................. 27
4.3 Descriptive Statistics ................................................................................................................... 29
4.4 Reliability Test ............................................................................................................................ 30
4.5 Preliminary Test .......................................................................................................................... 31
4.5.1 Multicollinearty Test ........................................................................................................... 31
4.5.2 Linearity Test ...................................................................................................................... 32
4.5.3 Normality Test .................................................................................................................... 33
4.6 Correlation Analysis ................................................................................................................... 35
4.7 Testing the Research Hypothesis ................................................................................................ 36
4.7.1 Regression Model Specification ......................................................................................... 37
4.7.2 Regression Analysis ............................................................................................................ 38
4.7.3 Mediation Testing with Regression Analysis ..................................................................... 43
CHAPTER – 5: SUMMARY, CONCLUSION AND RECOMMENDATION ......................................... 45
5.1 Summary of the Study ................................................................................................................ 45
5.2 Conclusion .................................................................................................................................. 46
5.3 Recommendation ........................................................................................................................ 47
REFERENCE.............................................................................................................................................. 49
ANNEX: ..................................................................................................................................................... 60
 List of Tables and Figures
Table 1 Frequency table of Demographic profile of the respondents ......................................................... 28
Table 2 Descriptive Statistics of variables .................................................................................................. 29
Table 3 Reliability Analysis ........................................................................................................................ 30
Table 4 Correlation Matrix (only independent variables) ........................................................................... 31
Table 5 Collinearity Diagnosis ................................................................................................................... 32
Table 6 Correlation Matrix (with all variables) .......................................................................................... 35
Table 7 Model Summary ............................................................................................................................ 38
Table 8 ANOVA ......................................................................................................................................... 39
Table 9 Coefficient (Model 1) .................................................................................................................... 40
Table 10 Coefficient (Model 2) .................................................................................................................. 41
Table 11 Coefficient (Model 4) .................................................................................................................. 43
Table 12 Coefficient (Model 3) .................................................................................................................. 44

Figure 1 Conceptual Framework Model ....................................................................................... 21

Figure 2 Nominal point plot of standardized residual .................................................................. 33
Figure 3 Frequency Distribution of Standardized Residual .......................................................... 34
 Abstract
The objective of this study was to assess the mediating role of employee engagement in the
relationship between organizational justice and employee turnover intention. To achieve the
objective of the study established questionnaires were adapted from the previous research works.
Cross-sectional survey design was employed to quantitatively assess the relationship between the
study variables. Based on the data collected from 349 employees of CBE the overall result of the
study indicates that distributive justice, procedural justice, and interactional justice have
negative relationship with employee turnover intention. On the other hand the three dimensions
of organizational justice have positive relationship with employee engagement, which in turn is
found to have negative relationship with employee turnover intention. The study results also
confirmed that employee engagement had no mediating role on the relationship between
organizational justice and employee turnover intention. The overall implication of the study
result is that, since the three dimensions of organizational justice has positive and negative
relationship with employee engagement and employee turnover intention respectively, to keep
the benefit of having engaged employee and retaining talented and skilled employee the
importance of employing organizational justice in the workplace is crucial.
 CHAPTER 1 – INTRODUCTION
1.1 Background of the Study
The growing level of competition in the business environment requires organizations to
continuously adapt to changes and accommodate different kinds of competing mechanisms like
lowering prices, cutting costs, redesigning business processes and downsizing the number of
employees (Drar, 2014; Abu Baker, 2013). However, to remain competitive in such
environment the only unique source of competitive advantage is people (Burke 2009). With
enough time and resources, business competitors might be able to replicate the products,
distribution channels, and technology of its competitors; however, they will not be able to easily
duplicate passionate performance of employees (Colan 2009). In other words ‗human capital‘ is
a source of competitive advantage in many cases over and above technology and finance (Cook
2008; Kumar and Renugadevi, 2013). Thus the future success of the companies will depend on
the extent to which companies are able to attract and retain skilled and talented employees
(Schonebeck and Schonebeck, 2016).

Because of its positive effect on both the employees and the organization (Georgiades, 2015;
Rana, Ardichvili and Oleksandr, 2014), in recent years employee engagement becomes an
emerging and evolving concept (Saks 2006; Wollard and Shuck 2011 and Welch 2011). ―The
general thinking on the notion is that engaged employees give more of what they have to offer,
and that as a result, an engaged workforce is simply a more productive one‖ (Macey et al. 2009,
P. 2).

As many researchers suggest that employee engagement reduces turnover intention and increase
bottom-line performance (HBR, 2013; Kim, Judith and Kim, 2012; Macey et al., 2009; Sahoo
and Sahu, 2009; Saks, 2006). Likewise disengaged employees are more likely to hold intentions
to leave the organization than engaged employees (Shonebeck and Shonebeck, 2016).
Furthermore according to Aon Hewitt (2015) the financial implications of an engaged
workforces are significant, i.e. ―a 5% increase in employee engagement is linked to a 3%
increase in revenue growth in the subsequent year.‖ In it‘s the state of the American workplace
report Gullup (2017, P. 67) also confirm that ―engaged employees produce better business
outcomes than other employees — across industry, company size and nationality, and in good
economic times and bad.‖

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To obtain the aforementioned benefits of employee engagement, the employer has to engage
the hearts and the minds of its employees. According to Alvi and Abbasi (2012) company
leaders could enhance the level of engagement by employing organizational justice. According
to Aydogan and Ekmekcioglu (2016) organizational justice is related to employees‘ perceptions
of fairness in the workplace. The perception of workplace fairness has important consequences
for both employees and Organizations (Cropanzano, Fortin and Kirk, 2015; Cropanzano, Bowen
and Gilliland, 2007). Folger and Cropanzano (1998) stated the consequences of individual
perception with regard to fairness as follows:

“…when individuals perceive a lack of fairness, their morale declines, they

become more likely to leave their jobs, and they may even retaliate against the
organization. Fair treatment, by contrast, breeds commitment, intentions to
remain on the job, and helpful citizenship behaviors that go beyond the call of
formal job duties. In short, justice holds people together, whereas injustice can
pull them apart.” (Folger and Cropanzano, 1998, P. xii)

Having in mind, the aforementioned general backgrounds about employee engagement and
organizational justice the effect of employee engagement on the relationship between
organizational justice and employee turnover intention addressed through the concept of
mediation. According to MacKinnon (2008, p. 8) ―a mediating variable represents asymmetric
relations among variables‖. According to him in a mediation model, the independent variable
causes the mediator which then causes the dependent variable. Likewise Iacobucci (2008)
explains mediation as a conceptualization of mechanisms through which independent variable
affect dependent variable through an intervening variable; that intervening variable is called
mediator variable.

The history of the Commercial Bank of Ethiopia (CBE) dates back to the establishment of the
State Bank of Ethiopia in 1942 and it was legally established as a share company in 1963. Since
then, it has been playing significant roles in the development of the country as financial
intermediary. Proclamation No. 84/1994 that allowed the private sector to engage in the banking
business marked the beginning of a new era in Ethiopian banking. Following the entrance of
private commercial banks in the banking industry in 1994 the competition in the industry
becomes stiff. In a competitive business environment, good performance correlates with the
drive or willingness of people to go the extra mile. In order to keep employees satisfied,

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committed, and loyal to the organization, the organization needs to be fair in its system
regarding distributive justice, procedural justice, and interactional justice (Aboagye, 2015;
Ayobami and Eugene, 2013).

1.2 Statement of the Problem

According to Ayobami and Eugene (2013, P. 207) ―organizational justice is considered a
fundamental requirement for an effective functioning of organizations.‖ As a result a number of
researches have been conducted in the field of organizational justice in relation with different
variables like organizational commitment (Ayobami and Eugene, 2013; Ponnu and Chuah, 2010;
Jiang, Gollan and Brooks, 2017), turnover intention (Ponnu andChuah, 2010; Iyigun and Tamer,
2012; Aydogan and Ekmekcioglu, 2016; Phayoonpun and Mat, 2014), job satisfaction (Jain and
Mathur, 2015), work motivation (Cropanzano and Rupp, 2003; Celik and Sariturk, 2012),
organizational identification (Aydogan and Ekmekcioglu, 2016).

However, the majority of the researches on organizational justice have been conducted within the
context of North America (Hayashi and Sekiguchi, 2006) and recently as indicated in the above
paragraph a number of researches have been also done within the context of Asian countries.
According to Jiang, Gollan and Brooks (2017) due to distinctive national cultures people from
different countries evaluate wellbeing, allocation and fairness differently. Reithel, Baltes and
Buddhavarapu (2007) also stated national culture as one of the potential influence on perception
of fairness. According to them employees react differently to the same outcomes and procedures
based on cultural differences. Pillai, Williams and Tan (2001) in their cross-cultural study argued
that influences of justice on employee outcomes tend to vary between the western and eastern
cultures.

Moreover there is no sufficient academic literature in Ethiopia in the area of organizational

justice to examine its relationship with employee turnover intention and employee engagement.
In addition to this as confirmed by Alem (2011), Dirara (2014) and Hewan (2015) the academic
as well as empirical researches with regard to employee engagement in Ethiopian context are
also limited. Then to fill such gap more academic research that focuses specifically on
organizational justice and its impact on employee turnover intention and employee engagement
along with the mediating role of employee engagement on the relationship between
organizational justice and employee turnover intention is necessary.

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Therefore, the study would attempt to fill the gap by investigating the relationship between the
three dimensions of organizational justice (i.e. distributive justice, procedural justice and
interactional justice) and employee turnover intention and the mediating role of employee
engagement on the relationships between the three dimensions of organizational justice and
employee turnover intention in the context of Commercial Bank of Ethiopia.

1.3 Research Questions

The following research questions raised by the study:

a) What is the relationship between organizational justices (i.e. distributive justice, procedural
justice and interactional justice) and employee turnover intention?
b) What is the relationship between organizational justices (i.e. distributive justice, procedural
justice and interactional justice) and employee engagement?
c) Does employee engagement has a mediating role in relationship between organizational
justices (i.e. distributive justice, procedural justice and interactional justice) and employee
turnover intention?

1.4 Objective of the Study

The general objective of the study is to test the mediating role of employee engagement in the
relationship between the organizational justice and employee turnover intention in the context of
Commercial Bank of Ethiopia.

In conjunction with the aforementioned general objective, the study has the following specific
objectives:

 To assess the relationship between the three dimensions of organizational justice (i.e.
distributive justice, procedural justice and interactional justice) with employee turnover
intention.
 To assess the relationship between the three dimensions of organizational justice (i.e.
distributive justice, procedural justice and interactional justice) with employee
engagement.
 To assess the relationship between employee turnover intention and employee
engagement.

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  To assess the mediating role of employee engagement in the relationship between
organizational justice (i.e. distributive justice, procedural justice and interactional justice)
and employee turnover intention.

1.5 Significance of the Study

In light of the significant gaps in academics and practice concerning the topic under
consideration in Ethiopian context, this particular study would have the following notable
significances:

 The study offers valuable insight to the management of Commercial Bank of Ethiopia
especially for these in the human resource function. That is, it could help them to develop
policies and strategies with a better understanding.
 Given lack of empirical research on the relationship between organizational justice and
employee turnover intention as well as the mediating role of employee engagement on
the relationship between organizational justice and employee turnover intention in
Ethiopian context, this study would serve as a research foundation for further study in the
area.

1.6 Scope of the Study

The scope of this study will be limited to in examining the relationships of the three dimensions
of organizational justice (i.e. distributive justice, procedural justice and interactional justice) with
employee turnover intention and employee engagement. Furthermore the study also addresses
the mediating role of employee engagement on the relationships between the three dimensions of
organizational justice and employee turnover intention.

The study also delimited to the Commercial Bank of Ethiopia in Addis Ababa city; meaning the
data collection of the study will be at head office, District offices and Branches situated in Addis
Ababa city.

1.7 Limitation of the Study

As is the case for any research, this study has limitations. The first limitation was the sample
used by the study is delimited only in one company (Commercial Bank of Ethiopia) employees
working in Addis Ababa. The problem in this regard is that when generalizing the result beyond
the current study. The second limitation of the study is that the cross-sectional survey design of

5
the study. Data were collected at one point in time, so examining inferences about the causal
nature of the relationship in this study may be difficult.

1.8 Organization of the Study

This study is organized in five chapters. Chapter 1 is this introduction part of the document, it
comprises back ground of the study, statement of the problem, Research questions, objectives of
the study, Significance of the study, Scope of the study and Limitations of the study. Chapter 2
deals about the literature review which mainly constitutes the theoretical and empirical reviews,
conceptual framework model of the study and research hypothesis. Chapter 3 describes the
research methodology applied to conduct the study. It also tries to address the research design
employed, Target population and sample, data source and collection instrument, validity and
reliability, data analysis procedure and ethical consideration. Chapter 4 deals about data analysis
and interpretation of the results. Lastly Chapter 5 presents summary of the study, conclusion and
recommendations.

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 CHAPTER 2 – LITERATURE REVIEW
2.1 Theoretical Review
2.1.1 Employee Engagement
As confirmed by many researchers (like Shuck and Wollard, 2010; Albrecht, 2010; Anitha,
2013; Guest 2014) in the academic arena employee engagement first conceptualized in 1990 by
the academic work of William A. Kahn. Employee engagement defined as follows by different
researchers. According to Kahn (1990, P. 694) employee engagement is defined as ―the
harnessing of organization members‘ selves to their work roles; in engagement people employ
and express themselves physically, cognitively and emotionally during role performances‖.
Schaufeli et al. (2002, P. 74) defined engagement as ―a positive, fulfilling, work related state of
mind that is characterized by vigor, dedication and absorption‖. As confirmed by Albrecht
(2010) the Schaufeli et al. (2002) definition of employee engagement is the most widely cited
definition. Shuck and Wollard (2010) also defined as the cognitive, emotional and behavioral
energy an employee directs toward positive organizational outcomes. According to Shuck et al.
(2014) the definition given by Shuck and Wollard (2010) is considered as employee engagement
definition in the field of HRD.

According to Saks (2006, p. 600) ―much of what has been written about employee engagement
comes from the practitioner literature and consulting firms‖. Tthe practitioners‘ views are largely
driven from their respective survey databases/practice rather than theory (Balain and Sparrow
2009; Sakes 2006). Furthermore as explained by Guest (2014) the consultants‘ engagement
surveys are statistical rather than conceptually driven, which leads to a problem in defining
employee engagement.

According to Saks and Gruman (2014) the different theories of engagement stems from two
areas of study; namely Kahn‘s (1990) ethnographic study on personal engagement and
disengagement, and the work of Maslach and Leiter (1997) of job burnout and employee well-
being. Shuck (2011) also categorized the different theoretical aspects of engagement proposed by
different researchers into four approaches. Thus are Kahn‘s (1990) need-satisfying approach,
Maslach et al.‘s (2001) burnout-antithesis approach, Harter et al.‘s (2002) satisfaction-
engagement approach, and Saks‘s (2006) multidimensional approach.

7
Kahn (1990) assumes that employees become engaged when their meaningfulness, safety and
availability needs are simultaneously met. Kahn (2010, p. 22) further explained that ―people are
more likely to engage when they feel that it is meaningful to do so, when they sense that it is safe
to do so, and when they are available to do so‖. According to him together, the three conditions
shaped how people inhabited their roles. Therefore, what we understand from Kahn‘s (1990)
engagement theory is that employees who experience a greater amount of psychological
meaningfulness, safety, and availability will engage themselves to a greater extent in their work
role (Saks and Gruman, 2014). According to Rich, Lepine and Crawford (2010) and Imperatori
(2017) Kahn‘s engagement concept is motivational, since it refers to the allocation of personal
resources to role performance and how intensely and persistently such resources are applied. In
engagement, organization members harness their full selves in active, complete work role
performances by driving personal energy into physical, cognitive, and emotional labors (Rich,
Lepine and Crawford, 2010).

The JD-R model assumes that job resources and job demands operate through a number of
processes to influence engagement and burnout (Saks and Gruman, 2014, and Bakker and
Demerouti 2007). The JD-R model divides working conditions into two broad categories (i.e. job
demands and job resources).

“Job demands refer to physical, psychological, social, or organizational features

of a job that require sustained physical, mental, and/or psychological (cognitive
and emotional) effort from an employee that can result in physiological and/or
psychological costs;…. whereas job resources refer to those physical,
psychological, social, or organizational characteristics of the job that are either/or
functional in achieving work goals, reduce job demands and the associated
physiological and psychological costs, and Stimulate personal growth, learning
and development” (Bakker and Demerouti 2007, p. 312).

Research on the JD-R model has found that job resources are positively related to work
engagement, which in turn leads to increased well-being and positive organizational outcomes
whereas job demands are related to burnout, which in turn leads to poor health and negative
organizational outcomes (Bakker, Demerouti and Sanz-Vergel, 2014). According to the JD-R
model, resources energize employees, encourage their persistence, and make them focus on their
efforts (Schaufeli, 2013).

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As far as the weakness of this model Sakes and Gruman (2014) states as follows:

“…it is questionable if it really is a theory of engagement or just a framework for

classifying job demands and job resources. The basic premise of the model is
simply that the more resources an employee has, the more engaged he/she will be.
It does not, however, explain what resources will be most important for
engagement or why some resources might be more important than others for
facilitating engagement. Clearly, we need to know much more about what
resources are most important for engagement as well as when and why they will be
related to engagement.” (Sakes and Gruman, 2014, p.163)

Saks (2006) introduced the concept that employee engagement developed through a social
exchange model. According him though the psychological conditions or antecedents indicated in
the models of Kahn (1990) and Maslach et al.‘s (2001) are important for engagement they don‘t
fully explained why individuals will respond to these conditions with varying level of
engagement. Therefore, according to him a stronger theoretical rationale for explaining
employee engagement can be found in social exchange theory.

According to social exchange theory responsibilities created through individuals or groups

interaction (Karanges 2014, Saks 2006). Furthermore, Social exchange theory stipulates that
relationships evolve over time into trusting, loyal, and mutual commitments as long as all parties
involved abide by reciprocity principle or repayment rule (Schaufeli, 2013). Even though social
exchange can create a pattern of trust that facilitates the development of close relationship, to
create a balanced reciprocal interdependent relationship, both parties have to meet each other‘s
personal goals (Redmond 2015).

Engagement is the result of a two-way relationship between employer and employee (Imperatori,
2017). As a result according to social exchange theory employees repay their organization by
engaging themselves to a varying degree in response to the resources and benefits received from
their organization (Saks, 2006).

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2.1.2 Mediation
According to Baron and Kenny (1986, p.1173) defined mediation as ―the generative mechanism
through which the focal independent variable is able to influence the dependent variable of
interest‖. According to Wood et al. (2008) mediation occurs when the effects of one variable on
another can be explained a third intervening variable. Furthermore mediation analysis is
explained by Iacobucci (2008) as follows:

“Mediation analysis is a set of statistical procedures used to investigate whether a

particular data set exhibits a meditational structure. A meditational structure posits
a particular conceptualization of the mechanism through which an independent
variable might affect a dependent variable—not directly, but rather through an
intervening process, captured by the mediator variable” (Iacobucci, 2008, p. 1).

According to MacKinnon, Fairchild and Fritz (2007) and Hayes (2013) mediation in its simplest
form represents the addition of a third variable to the X → Y relation, whereby X causes the
mediator, M, and M causes Y, so X→ M → Y. Similarly according to MacKinnon (2008) in a
mediation model, the independent variable causes the mediator which then causes the dependent
variable. As explained by Wood et al. (2008) there are three general frameworks for testing
mediation in the existing approach; these are (i) the causal steps approach, (ii) differences in
coefficients and (iii) products of coefficients. According to MacKinnon (2008) mediation tests
require that there is a significant relation between the independent and the dependent variable for
mediation to exist. According to him if there is not a significant relation between two variables
then it does not make sense to talk about mediation, but it does make sense to talk about indirect
effects.

2.1.3 Organizational Justice

The concept of justice is as old as mankind (Lather and Kaur, 2015). According to Rupp et al.
(2017, P. 921) ―the origins of organizational justice are rooted in moral philosophy, beginning
with Plato and Aristotle and continuing through the work of thinkers such as Locke, Hobbes,
Hume, Hegel, Marx, Mill, and Rawls‖. According to them the earlier writings about justice
mainly focus on what societies do and how people treat each other. As stated by Lather and Kaur
(2015) justice becomes the matter of concern for human being, since the beginning of human
civilization.

10
According to Greenberg (1996) organizational justice can be defined as employee‘s perception
of justice concerning various practices and activities of the organization (cited in Gurbuz and
Mert, 2009). Likewise according to Baldwin (2006) organizational justice is defined as the extent
to which employees perceive workplace procedures, interactions and outcomes to be fair in
nature. Byrne and Cropanzano (2001) also defined organizational justice as the study of fairness
perceptions at work. ―Perceptions of workplace fairness bring beneficial results for both
employees and employers‖ (Cropanzano, Fortin and Kirk, 2015, P. 280). According to them
when employees perceive that they have been treated fairly, they tend to show more positive
work attitudes, higher job performance, and more citizenship behaviors whereas when
employees perceive that they have been treated unfairly, they tend to show counterproductive
work behaviors and turnover intentions. The employee‘s perceptions of fairness are based, in
large part, on norms and values (Greenberg, 2001).

In a business environment the success of service provider depends on the behavior of frontline
employees (Nasurdin and Khuan, 2007). In this regard organizational justice plays an important
role in the creation of organizational culture (Akram, Haider and Feng, 2016). To be fair in its
systems regarding distributive, procedural, and interactional justice make employees satisfied,
committed, and loyal to the organization (Aboagye, 2015; Ayobami and Eugene, 2013). This
implies that ―in the modern world, with the advancement of organizations, people became more
concerned about equity in the workplace like division of resources, fair decision making process
and same interpersonal treatment for all‖ (Lather and Kaur, 2015, P. 8). As confirmed by many
researchers organizational justice has three dimensions namely distributive, procedural and
interactional justice (Rupp et al., 2017; Yean and Yusof, 2016; Beis, 2015; Lather and Kaur,
2015; Byrne and miller, 2009; Forret and Love, 2008; Baldwin, 2006). However, Greenberg
(1993) expanded the three dimensional structure of organizational justice into four by arguing
that interactional justice actually consisted of two distinct constructs namely interpersonal and
informational justice (Bies, 2015; Colquitt, 2008). According to Bies (2015, P. 91) despite
Greenberg‘s (1993) conceptualization and Colquitt (2001) subsequent construct validation
studies, most organizational scholars do not measure informational and interpersonal justice
separately, rather most of them still measure interactional justice as one construct.

Furthermore, Cohen-Charash and Spector (2001) using 190 studies samples, totaling 64,757
participants examined the correlation of distributive, procedural and interactional justices. They

11
found that the three organizational justice dimensions (i.e. distributive justice, procedural justice
and interactional justice) are strongly related, yet distinct constructs. Hence in this study
distributive justice, procedural justice and interactional justice are covered as the main
components/dimensions of organizational justice.

2.1.3.1 Distributive Justice

The evolution of the study of organizational justice begins with distributive justice (Rupp et al.,
2017). According to Cohen and Greenberg (1982) Homans first introduced the concept of
distributive justice into social psychology literature by his academic work of ‗Social Behavior‘ in
1961. The work of Adams (1965) further advanced the concept of distributive justice (Rupp et
al., 2017). Distributive justice is interested with the reality that all workers are not treated alike
i.e. the allocation of outcomes is differentiated in the workplace (Cropanzano, Bown and
Gilliland, 2007).

According to Adams (1965) employees calculate and compare their own outcome (i.e. any form
of reward allocation) with the outcomes received by other similar employees. According to him
an employee perceives inequity or unfairness when his/her input-to-outcome ratio comparison
with a similar others are unequal. From this definition of inequity we can understand that
inequity happens not only when he/she is relatively underpaid, but also when he/she received
high pay with low effort as compared to other‘s effort and pay. According to Greenberg (1982)
the major structural components of the Adams equity theory are ‗inputs‘ and ‗outcomes‘. As
stated by Adams (1965) inputs are described as what a person perceives as his contributions to
the exchange whereas outcomes are described as an individual's receipts from the exchange.

Distributive justice focuses on the employee‘s belief and feelings of satisfaction with their work
outcomes (Aboagye, 2015). According to Adams‘ equity theory as stated in the above paragraph
an individual perceives distributive justice as a form of equity while calculating the ratio of his or
her own contributions to the outcomes received and comparing his or her ratio to ratios of similar
individuals. This implies that distributive justice refers to the perceived fairness of the outcomes
that an employee receives from organization.

As identified by the previous scholars distributive justice has three rules/attributes namely
equity, equality and need (Cropanzano, Fortin and Kirk, 2015; Cropanzano, Bowen and
Gilliland, 2007).

12
According to Tornblom and Kazemi, (2015, P. 36) ‗most people choose equality for the
allocation of love, equity for status and money, and equality and need for information.‘ Equity is
based on the principle of merit or the notion that employees should be rewarded based upon their
relative contributions (Cropanzano, Fortin and Kirk, 2015; P. 293) whereas equality tends to
build group esprit among teammates (Cropanzano, Bowen and Gilliland, 2007).

With regard to applying distributive justice rules Cropanzano, Fortin and Kirk (2015 P. 295)
stated the following points:

Equity, equality, and need can each serve as normatively ethical (i.e., as justice
rules). None of them are immoral per se. As such, people often do not use one
rule or the other, but, rather, seek to balance these different principles.
Understanding how distributive justice rules are balanced is a challenging
task, but it is often necessary for understanding real world behavior (P. 295).

Equity theory has limitations because of its uni-dimensional concept i.e. focusing on merit-based
allocation neglects the possible roles of justice rules and fairness alternatives like equality and
need (Cropanzano, Fortin and Kirk, 2015; Leventhal, 1977; Baldwin, 2006).

Cross-cultural differences in distributive justice generally are predicated on the idea that norms
prevailing in various cultures influence what is perceived to be fair in those cultures (Greenberg,
2001). As a result people from various cultures favor different outcome distributions (e.g. equity,
equality and need). People in highly individualistic cultures favor equity norms (Greenberg,
2001; Baldwin, 2006) while in collectivist culture more likely use equality as opposed to equity
(Cropanzano, Fortin and Kirk, 2015). Furthermore as indicated by Greenberg (2001) and
Baldwin (2006) as an example Americans generally favor the equity norm; people from India
favor distributions based on need, and people from the Dutch favor equality.

2.1.3.2 Procedural Justice

According to Folger and Cropanzano (1998) procedural justice refers to fairness issues
concerning the methods, mechanisms, and processes used to determine outcomes. Cropanzano,
Bowen and Gilliland (2007) also defined procedural justice as it refers to the means by which
outcomes are allocated, but not specifically to the outcomes themselves.

13
Yean and Yusof (2016) explained the focus of procedural justice and its motivational effect as
follows:

Procedural justice focuses on the process, i.e. the steps taken by the management
to reach a just decision. Procedural issues, such as equal employment
opportunities in manpower planning, fair disciplinary actions and reward
system, and the trustworthiness of the decision-making authority, are important
to enhance employees’ perception of procedural justice. If the managerial
process and procedures are perceived to be fair, then employees will be more
satisfied and more likely to form a positive attitude towards management’s
decisions, which indirectly can lead to less conflict between employer and
employees (Yean and Yusof, 2016, P. 800)

According to Bobocel and Gosse (2015) the concept of procedural justice was born in the 1970s
when people become more concerned on the fairness of the procedures by which allocation
decisions are made in addition to the outcomes of a social exchange. According to them although
several researchers contributed to the development of the procedural justice construct, the three
lines of research namely Thibaut and Walker (1975, 978) theory of procedure, Leventhal‘s
(1980) justice judgment model and Lind and Tyler (1988) group-value model of procedural
justice are considered groundbreaking. Unlike equity theory or distributive justice-oriented
theorizing, the context of primary interest to Thibaut and Walker was that of dispute resolution
(Rupp et al., 2017). Furthermore the works of Thibaut and Walker occurred not within the
context of organizations, but in the context of legal procedures (Nowaknowski and Conlon,
2005). Leventhal and his colleagues transform the notion of the procedural justice from the
context of legal procedure into the context of organizational procedure (Colquitt, 2008; Bobocel
and Gosse, 2015).

In contrast to distributive justice procedural justice concerns the fairness and transparency of the
processes of how decisions are made in terms of rewards, promotions, resource allocation, and so
on‘ (He, Zhu and Zheng, 2013). According to Leventhal (1977) the concept of procedural
fairness refers to an individual's perception of the fairness of procedural components of the social
system that regulate the allocation process. According to him the concept focuses on the

14
individual's cognitive map of events that precede the distribution of reward, and the evaluation of
those events.

According to Lind and Tyler (1988) the Thibaut and Walker (1978) theory of procedure focuses
on dispute resolution procedures in general and on legal procedures in particular, but many of the
explanations and prescriptions that it offers shed light on the working of social decision-making
procedures in other contexts. Furthermore Thibaut and Walker viewed third party dispute
resolution procedures such as mediation and arbitration as having both a process stage and a
decision stage; and they referred the amount of influence disputants had in each stage as
evidences of process control and decision control respectively (Lind and Tyler, 1988, Colquitt,
2008, Colquitt et al., 2001). As stated by Bobocel and Gosse (2015), Colquitt (2008), and
Cropanzano, Bowen and Gilliland (2007) Leventhal and his colleagues (i.e. Leventhal, 1976,
1980; Leventhal, Karuza and Fry, 1980) by boarding the list of determinants of procedural
justice far beyond the concept of process control they developed six specific criteria or
procedural rules (i.e. consistency, lack of bias, accuracy, representation of all concerned,
correction and ethics) that specifying and governing the roles of participants within the decision-
making processes.

As described in the six procedural rules, fair procedures should rule the allocation of outcomes in
the procedural justice theory. The most critical difference between procedural justice and
distributive justice lies on the aforementioned six procedural rules (Oh, 2013).

Procedural fairness … affects people’s attitudes about the arenas in which the
procedures were enacted. Evaluations of decision-makers, such as those involving
their perceived legitimacy … are affected by procedural fairness. But also
attitudes toward the group in which procedures are enacted are affected by the
quality of these procedures. For instance, job satisfaction …, and the intention to
stay within or to leave the group … are all influenced by procedural fairness
(Gonzalez and Tyler, 2007, P. 92)

15
2.1.3.3 Interactional Justice
A person is interactionally just, if he or she appropriately shares information and avoids rude or
cruel remarks (Cropanzano, Bowen and Gilliland, 2007). According to Cohen-Charash and
Spector (2001, P. 279) ―interactional justice is focused on the interpersonal side of organizational
practices, specifically, the interpersonal treatment and communication by management to
employees.‖ The concept of interactional justice introduced as a third dimension of
organizational justice construct by the works of Bies and Moag in 1986 (Bies, 2015; Colquitt et
al. 2001; Colquitt, 2008). Bies and Moag (1986) argued that the authority‘s behaviors during the
interaction phase could also be gauged in justice terms (cited in Colquitt et al. 2001).
Interactional justice mainly depends on the quality of relationships between individuals within
organizations (Folger and Cropanzano, 1998)

Although some scholars view interactional justice as a single construct, others have proposed
two dimensions of interactional justice (Bies, 2015; Colquitt, 2008). The two dimensions of
interactional justice proposed by Greenberg (1993) are interpersonal and informational justice
(Bies, 2015; Colquitt, 2008). According to Bies (2015, P. 91) despite Greenberg‘s (1993)
conceptualization and Colquitt (2001) subsequent construct validation studies, most
organizational scholars do not measure informational and interpersonal justice separately, rather
most of them still measure interactional justice as one construct.

Bies (2015) stated the importance of interactional justice in the form of social account as
follows:

Interactional justice, in the form of social accounts, has been found to be an important
variable for understanding individual reactions to a variety of decisions across different
organizational processes including: (a) organizational entry—corporate recruitment
practices and employee selection; (b) resource allocation—the refusal of requests; (c)
feedback and evaluation—giving criticism, and evaluation procedures; (d) negotiation
and conflict—negotiation tactics, deceptive actions, conflict management, and
rebuilding cooperation after opportunistic behavior; (d) counterproductive work
behaviors—employee theft and revenge; (e) change and bad news—worksite smoking
bans, pay cuts, company relocations, organizational change, and the delivery of bad

16
 news; and (f) corporate actions—market exploitation practices and corporate responses
to consumer product complaints (Bies, 2015, P. 91 - 92)

Bies and Moag (1986) conceptualized interactional justice as the perceived fairness of
interpersonal communication, noting that it depends on the fulfillment of the four rules (i.e.
ruthfulness, justification, respect and propriety) that governing the fairness of interactional
justice (Colquitt, 2008; Lather and Kaur, 2015)

2.1.4 Employee Turnover Intention

Employee turnover intention refers the cognitive decision making process of voluntarily to leave
the organization (Campbell, Im and Jeong, 2014; Kim et al., 2017). Due to the fact that turnover
intention leads to actual turnover, many researchers refer to turnover intention as the major
predictor of actual turnover (Campbell, Im and Jeong, 2014; Kim et al., 2017; Cho and Lewis,
2012; Mxenge, Dywili and Bazana, 2014; Agoi, 2015; Remo, 2012).

According to Mxenge, Dywili and Bazana (2014) turnover intention is the employee‘s conscious
and deliberate willingness to leave the organization. As suggested by Shuck et al. (2014)
employees who leave voluntarily their organizations are those who perceived lack of support in
HRD practice from their organization. Similarly Remo (2012) also confirmed that thinking to
quitting is the logical step begins after experiencing dissatisfaction.

As argued by WeiBo, Kaur and Zhi (2010) when the employees personal values, career goals
and plans for the future compatible with the larger corporate culture and the demands of the
organization, employees perceived comfort with an organization and with his or her
environment. According to them the more fit the personal values of the employees with the
organizational value the lesser the probability of employees‘ termination intent. The perceived
fairness of various job outcomes, including compensation conditions, performance evaluations,
and job assignments signals to employees that the organization supports them and has their well-
being at heart (Pare and Tremblay, 2007). According to Shuck et al. (2014) intention to turnover
is important organizational outcome as well as predictor of actual turnover. According to them
voluntary turnover could be reduced by creating higher level employee engagement.

17
According to Flint, Haley and McNally (2013) the fair treatment of employees in the workplace
is grounded in social exchange theory. According to them as stated here below the social
exchange theory used to predict the effect of organizational justice on turnover intention.

“Social exchange theory suggests that employees are capable of engaging in

exchanges with both organizations and supervisors…. If employees find benefits in
these exchanges, they are likely to maintain relationships with the exchange
partners. If not, they are likely to withdraw from future exchanges and one form of
withdrawal is to leave the organization. The nature of the exchange relationships
suggests that individuals may be affected by both organizational and supervisory
level influences (Flint, Haley and McNally, 2013, P. 553).”

As argued by Dominguez et al. (2014) employees with high intention to leave shows negative
attitude. As a result according to Kim et al (2017) organizational justice has negative relationship
with turnover intention. This implies that the higher the perceived justice the lesser the intention
to leave (Dominguez et al., 2014).

2.2 Empirical Review

2.2.1 Organizational Justice and Employee Turnover Intention
Cohen-Charash and Spector (2001) in their meta-analysis study confirmed that turnover intention
strongly and negatively related to distributive and procedural justice. According to them
interactional justice is also has a negative relationship with turnover intention but its significance
is in a lower extent. They argued that if both forms of justice (i.e. distributive and procedural
justices) are fair, employees‘ intention to leave should be minimized. The study results of
Aydogan and Ekmekcioglu (2016) also showed that both interactional justice and distributive
justice have statistically significant and negative relationship with turnover intention. However
according to their study a result, procedural justice is not significantly predict turnover intention.

Recent studies by Suifan, Diab and Abdallah (2017) confirmed that organizational justice has
significant negative effect on turnover intention. Likewise studies by George and Wallio (2017)
also showed that organizational justice particularly distributive justice and procedural justice
have significant effect on an employees‘ intention to leave an organization.

18
Ponnu and Chuah (2010) carried out empirical investigation on the relationship among
organizational justice, and turnover intention. The results of the investigation confirmed that both
distributive and procedural justices have significant negative relationship with turnover intention.
According to them distributional justice plays a more important role in explaining employees‘
turnover intention in comparison to procedural justice. Based on their findings Ponnu and Chuah
(2010) argued as employees will have lower intention to leave their current employer if they
perceived higher fairness in the organization.

In recent studies of determinants of employee turnover intention by Kim et al. (2017)

organizational justice negatively predict employee turnover intention. This implies that
employees who have a positive evaluation of organizational justice are less likely to have
turnover intention. According to them, their research findings also indicated that employee
turnover intention is mainly affected by factors at the organizational level rather than the
interpersonal level. Likewise, Bakri and Ali (2015) also confirmed that organizational justice
negatively predict employee turnover intention.

2.2.2 Organizational Justice and Employee Engagement

Aliv and Abbasi (2012) carried out study to explore the impact of organizational justice on
employee engagement in banking sector of Pakistan. The study result showed that organizational
justice has positive and significant relationship with employee engagement in the banking sector
of Pakistan. According them with respect to the three dimensions of organizational justice
distributive justice and interactional justice predicts employee engagement while procedural
justice is no statistically significant to predict employee engagement.

According to Ghosh, Rai and Sinha (2014) the three dimensions of organizational justice
positively predicted organizational engagement, however, only two of them (i.e. distributive and
interactional justice) were found significant to predict work engagement. According to them ―the
findings of the research can be understood in the framework of the social exchange theory,
which suggests that the relationship between employees and an organization can be reciprocal.
If employees have a better perception of organizational justice, and they feel they are treated
justly, they are likely to reciprocate by increasing their engagement levels” (Ghosh, Rai and
Sinha, 2014, P. 642).

19
Malinen, Wright and Cammock (2013) confirmed in their study that procedural justice is
significant predictor of engagement while distributive justice did not. Likewise Saks (2006)
found that procedural justice predict organizational engagement while distributive justice is not.
Saks‘s (2006) study also suggested that employee engagement can be understood in terms of
social exchange theory. As a result according to social exchange theory employees repay their
organization by engaging themselves to a varying degree in response to the resources and
benefits received from their organization. Likewise the study results of Dirar (2014) also
confirmed that organizational justice significantly predict employee engagement.

2.2.3 Employee Engagement and Employee Turnover Intention

Using social exchange theory as a guiding framework, Shuck et al. (2014) examine the linkages
of HRD practice and employee engagement to turnover intention. According to them the
empirical evidence derived from the study confirmed that intention to turnover reduced by
enhancing the levels of employee engagement. Robyn and Du Preez (2013) stud result showed
that employee engagement has a negative effect on intention to quit. As a result they argued that
the more employees engaged the less likely experience the intention to quit. Similarly Yalabik et
al. (2013) study result also confirmed that work engagement has significant and negative
relationship with intention to quit.

Saks (2006) carried out a study to examine a model of the predictors and outcomes of job and
organizational engagement. The results of the study confirmed that job and organizational
engagement has negative relationship with intention to quit. According to Takawira, Coetzee and
Schreuder (2014) turnover intention can be driven by a disengaged workforce. According to
them the three dimensions of engagement (i.e. vigor, dedication and absorption) correlated
significantly and negatively with turnover intention. Furthermore the study made by Gupta and
Shaheen (2017) also showed that work engagement has significant and negative relationship with
employee turnover intention.

2.2.4 Mediation Role of Employee Engagement

The study results of Saks (2006) confirmed that employee engagement partially mediates the
relationship between antecedents (e.g. procedural justice) and consequences (e.g. turnover
intention). Furthermore, the study made by Malinen, Wright and Cammock (2013) also showed
that organizational engagement partially mediated the relationship between procedural justice

20
perception and turnover intention. According to them employees who feel that they are treated
fairly are more likely to be engaged at work and it also affects the turnover intention through
engagement.

2.3 Conceptual Framework Model of the Study

The available literature review shows that there is statistically significant negative relationship
between organizational justice and employee turnover intention (Cohen-Charsh and Spector,
2001; Aydogan and Ekmekcioglu, 2016; Ponnun and Chauh, 2010; Kim et al., 2017; Bakri and
Ali, 2015; Suifan, Diab and Abdallah, 2017). Likewise the literature confirmed that there is
statistically significant positive relationship between organizational justice and employee
engagement (Aliv and Abbasi, 2012; Ghosh, Rai and Sinha, 2014; Dirar, 2014). The literature
also shows that employee engagement is negatively related with employee turnover intention
(Shuck et al., 2014; Robyn and Dur Preez, 2013; Yalabik et al. 2013; Saks, 2006).

Moreover mediation represents the consideration of how a third variable affects the relation
between two other variables (MacKinnon, Fairchild and Fritz, 2007). The empirical literature
suggests that employee engagement partially mediated the relationship between organizational
justice and employee turnover intention (Saks, 2006; Malinen, Wright and Cammock, 2013).
Therefore, based on the extant literature review a hypothesized conceptual framework model has
been developed for this study. As shown in figure 1 the hypothesized conceptual framework
model shows organizational justice (independent variable), employee engagement (the
hypothesized mediator) and employee turnover intention (dependent variable).

Figure 1 Conceptual Framework Model

21
2.4 Research Hypothesis
The following ten research hypotheses are identified based on the literature review and the
research questions.

H1: Distributive justice is negatively related with employee turnover intention

H2: Procedural justice is negatively related with employee turnover intention

H3: Interactional justice is negatively related with employee turnover intention

H4: Employee engagement is negatively related with employee turnover intention

H5: Distributive justice is positively related with employee engagement

H6: Procedural justice is positively related with employee engagement

H7: Interactional justice is positively related with employee engagement

H8: Employee engagement mediates the relationship between procedural justice and employee
turnover intention

H9: Employee engagement mediates the relationship between distributive justice and employee
turnover intention

H10: Employee engagement mediates the relationship between interactional justice and employee
turnover intention

22
 CHAPTER 3 – RESEARCH METHODOLOGY
3.1 Introduction
This chapter discusses the methods adopted in the study to examine the relationship between
organizational justice and employee turnover intention, and the mediating role of employee
engagement on the relationship between organizational justice and employee turnover intention.
In view of that, the discussion in this chapter focused on the following major points: (i) research
design, (ii) target population and sample size, (iii) data source and collection instruments, (iv)
Validity and reliability and (v) data analysis procedures.

3.2 Research Design

In this study, the researcher employed a cross-sectional survey design to quantitatively assess the
relationship between the three dimensions of organizational justices namely distributive justice,
procedural justice and interactional justice (independent variables), employee engagement (as a
mediator variable), and the employee turnover intention (dependent variable) using a
questionnaire.

According to Creswell (2014) quantitative research is an approach for testing objective theories
by examining the relationship among variables. According to him these variables in turn can be
measured, typically on instruments, so that numbered data can be analyzed using statistical
procedures. Thus to empirically test the hypotheses developed for the study the researcher
employed quantitative research approach.

3.3 Target Population and Sample

The target population for this study is all permanent employees of the Commercial Banks of
Ethiopia who are working in Addis Ababa city. However, from head office and district
managerial and above positions, and from branches Branch manager intentionally excluded from
the study because the assumption that the effect of the leaders on organizational justice is
significant. Furthermore non-clerical staffs (like janitors, security guards, messenger, etc) are
also excluded since majority of the non-clerical staffs of the banks are not permanent employees
of the bank. According to the information obtained from the Bank, the total number of the target
population of the study is 12,310.

23
In order to determine the sample size for the study, three key factors such as confidence interval
(it is also called level of precision or sampling error), confidence level, and the population size
are considered. According to Israel (2009) considering the aforementioned factors Yamane
(1967) formulate the following simplified formula to calculate sample sizes.

Where ‗n‘ is the sample size, ‗N‘ is the population size, and ‗e‘ is the level of precision/
confidence interval.

The study considers a 95% confidence level and a 5% confidence interval. Using the above
portrayed statistical formula, the sample size of the study is determined as follows:

Therefore, the sample size for targeted population of the study is 388 employees.

With regard to sampling procedure, it was assumed that the bank applied the same rewarding,
performance appraisal, recruitment and selection as well as promotion system across the bank.
However, the interpersonal treatment and communication practice may vary from supervisor to
supervisor. Considering the above assumption, in order to get valid representative of the targeted
population 20 branches (i.e. 5 from each district), 5 processes (departments) from head office
and three district offices were randomly selected. Then 388 survey questionnaires were
distributed randomly selected employees among these 20 branches, 5 processes (departments)
and three district offices.

24
3.4 Data Source and Collection Instruments
Primary data used for the purpose of conducting this study. The primary data collected through
questionnaire from the randomly selected sample of individual employees of Commercial Bank
of Ethiopia situated in Addis Ababa city.

Close-ended questionnaire is employed as instrument of data collection. The questionnaire,

which was used as a data collection instrument in this study, consisted of two sections. The first
section included demographic expressions designed to collect the demographic characteristics of
respondents. The second section contained organizational justice, employee engagement and
employee turnover intention measurement scales.

The items included in the second section were presented using a 5-point Likert scale from 1
(―strongly disagree‖) to 5 (―strongly agree‖). The three dimensions of organizational justice was
measured using organizational justice measurement scale developed by Niehoff and Moorman
(1993). Each of the three dimensions of organizational justice namely distributive justice,
procedural justice and interactional justice measured using five items, six items and nine items
respectively. Employee engagement was measured using the 18-item job engagement
measurement scale developed by Rich, Lepine and Crawford (2010). Likewise employee
turnover intention was measured using the three items intention to turnover scale developed by
Colarelli (1984).

As far as the procedure of data collection is concerned the questionnaire was distributed to the
randomly selected sample of individual employees of Commercial Bank of Ethiopia situated in
Addis Ababa and collected physically from the potential respondents at their site by the
researcher and the personnel assigned by the researcher for the purpose of data collection.

3.5 Validity and Reliability

The issue of validity was addressed through the review of literature and adapting instruments
used in previous research works. Reliability tested using Cronbach‘s alpha values for the items in
each construct. According to Sekaran and Bougie (2016) reliabilities less than 0.60 are
considered to be poor, those in the 0.70 range, acceptable, and those over 0.80 good.

25
3.6 Data Analysis Procedure
Given the quantitative nature and the purpose of the study, which is aiming at examining the
relationship between organizational justice (i.e. distributive justice, procedural justice and
interactional justice) and employee turnover intention and the mediating role of employee
engagement in the relationship between organizational justice and employee turnover intention,
the application of statistical techniques is a necessary requirement. Hence, the study data would
be analyzed using Statistical Package for the Social Science (SPSS) version 20.0. Prior to
hypothesis testing preliminary data analysis was conducted.

Prior to undertaking the regression analysis, model specification based on the hypotheses was
performed. In order to test the hypotheses (except H4) multiple linear regression analysis was
conducted while for hypothesis H4 simple linear regression analysis was applied. Furthermore in
order to test the direction of the relationship among the variables correlational analysis also
conducted using SPSS. Characteristics were also analyzed using descriptive statistics including
frequency, mean, and standard deviation.

In order to undertake mediation test Baron and Kenny‘s (1986) model for testing mediation was
used as a guiding framework. Accordingly, mediation was tested through three regression
models (Baron and Kenny, 1986; Field, 2013).

3.7 Ethical considerations

The study has attempted all the necessary precautions to protect the study participants from such
sort of problematic encounters by applying certain measures. Accordingly, the respondents were
notified not to mention their identity, particularly their names while filling questionnaire.
Moreover, they have been assured that no meaningful damage would be inflicted on them
because of their participation in this particular study by boldly explaining to them the apparent
purpose of the study (which is actually for academic purpose) and ensuring the confidentiality of
their identity and whole part of the information they provided for the purpose of undertaking this
study.

26
 CHAPTER 4 – DATA ANALYSIS AND INTERPRETATION
4.1 Introduction
This chapter presents, the results of the study based on the empirical studies conducted to test the
hypotheses. The chapter divides into five major sections. The first section of the chapter is this
introductory part followed by the demographic profiles of the respondents. Third, the preliminary
examination of the descriptive statistics is demonstrated. Fourth section is reliability test. This is
followed by preliminary tests and correlation analysis. The final section discusses the findings
and the results of testing the hypotheses.

4.2 Demographic Profiles of the Respondents

This section addresses frequency analyses of the respondents to the study with regard to gender,
age, educational qualification and service year. The result of the frequency analysis is presented
in Table 1 here below.

From the total respondents of the survey 57.6% were males and 42.4% were females. This
implies that both genders were involved highly in the study and thus the finding of the study did
not suffer from gender bias.

The study results showed 41.2% of the respondents reported belong to 26 to 35 years of age
group and 31.2% of the respondents reported belong to 36 to 45 years of age group. The
remaining 19.8% and 7.7% of the respondents reported they belong to 18 to 25 and above 45
years of age groups respectively. The result indicates that respondents were well distributed in
terms of their age group. This implies that the respondents were comprised of heterogeneous
groups; which in turn enabled the researcher to get varied responses across the sample units
fairly distributed. Hence, again the study did not suffer from age group bias.

The study result also showed that 67.3% of the respondent highest level of educational
attainment was first degree, 29.8% of the respondent reported their highest level of educational
attainment were second degree, 2.3% of the respondents reported their highest level of education
attainment were college diploma and the remaining 0.6% of the respondents also reported their
highest level of educational attainment were third degree. As indicated in table 1 here blow
majority of the respondents had first degree. The overall educational qualification matrix of the

27
respondents implies that the respondents can easily understand the questionnaires designed for
this study and respond properly by providing the necessary information.

Finally, the study result showed that 37.2% of the respondents were have 1 to 5 years of service
at CBE, 27.2% of the respondents reported that they served the bank for a period of raging
between 6 to 10 years, 18.6% of the respondents reported that they had above 15 years of service
at CBE, 16.9% of the respondents also reported that they were have 11 to 15 years of service at
CBE. The frequency analysis result of the employee service year indicates that 62.7% of the
respondents have more than five years of work experience at CBE. This implies that majority of
the respondents have accumulated knowledge about the norms and the values of the
organization.

Table 1 Frequency table of Demographic profile of the respondents

Source: Researcher‘s survey data output (2018)

28
4.3 Descriptive Statistics
The descriptive statistics of the variables are presented in table 2 here below revealing the mean,
standard deviation, max, min, kurtosis and skewness score of the variables. The average score
from the 5-point likert scale with 5 as strongly agree and 1 as strongly disagree for all the
variables as computed to show the proportion of the respondents that either strongly agreed or
disagreed with the items of the variables. Where the mean for the variable is more than half of
the 5 point likert scale (i. e. 2.5) the respondents‘ agreed and where the mean for the variable is
less than half of the 5 point likert scale (i. e. 2.5) the respondents‘ disagreed.

As indicated in table 2 here below the mean score of distributive justice was 2.85 while the
standard deviation (SD) was 0.846. This result indicates that, on average of 5 point likert scale,
the majority of the respondents agreed that they perceive fair distributive justice from their
organization. In other words, majority of the respondents agreed to the fact that the benefits they
receive reflect their effort towards work. Similarly the mean score of procedural justice was 3.07
(SD = 0.799), on average of 5 point likrt scale. The result implies that on average majority of the
respondents do agree with the fact that procedural justice is followed by their organization. In
other words, majority of the respondents believed that the procedures followed in arriving at
decisions by CBE are consistent. The mean score of interactional justice was also 3.18 (SD =
0.926), which is greater than the average score on a 5 point likert scale. This mean score implies
that majority of the employees perceive that their supervisor/organization treats them with
respect and dignity and their supervisor/organization is also fair in information provision and
communication.

Table 2 Descriptive Statistics of variables

Source: Researcher‘s survey data output (2018)

29
With regard to employee engagement and employee turnover intention the mean score was 3.54
(SD = 0.825) and 2.48 (SD = 0.912) respectively. The mean score of employee engagement
greater than the average score on 5 point likert scale. This implies that on average majority of the
employees were engaged in their jobs cognitively, emotionally and physically. In other words,
majority of the employees perceived that their meaningfulness, safety and availability needs are
met. On the other hand the mean score of employee turnover intention is falls slightly on the
average score of 5 point likert scale (i.e. 2.5). This implies that majority of the employees are
neutral with regard to quitting the organization.

Skewness is a measure of symmetry. According to Brown (2016) as a general rule of thumb, if

skewness is between -1 and -0.5 or between 0.5 and 1, the distribution is moderately skewed.
The results in table 2 shows the variables are moderately skewed. Whereas kurtosis is a measure
of whether the data are heavy – tailed or light – tailed relative to the normal distribution. Since
the kurtosis is less than 3 (Brown, 2016) it implies that relatively as compared to normal
distribution its tails are shorter and thinner.

4.4 Reliability Test

According to Sekaran and Bougie (2016) reliability of a measure is an indication of the stability
and consistency with which the instrument measures the concept and helps to assess the
―goodness‖ of a measure. In conducting the reliability test using SPSS version 20 for windows,
the researcher calculated Cronbach‘s alpha values for the items in each construct as indicated
table 3 here below. According to Sekaran and Bougie (2016) reliabilities less than 0.60 are
considered to be poor, those in the 0.70 range, acceptable, and those over 0.80 good.

Table 3 Reliability Analysis

Source: Researcher‘s survey data output (2018)

30
As indicated in table 3 the Cronbach‘s alpha coefficients of for interactional justice and
employee engagement is above 0.80 which shows a good reliability of the variables of
measurement. Similarly, Cronbach‘s alpha coefficient of distributive justice and procedural
justice are also above 0.70 which indicates an acceptable reliability of the variables of
measurement. However, the Cronbach‘s alpha coefficient of employee turnover intention is
below 0.70 but above 0.60. Thus, the overall reliability of the measures used in this study can be
considered to be acceptable.

4.5 Preliminary Test

Prior to applying regression analysis for testing the research hypothesis, a preliminary analysis
was conducted to verify the assumptions of regressions such as multicollinearity, linearity, and
normality tests.
4.5.1 Multicollinearty Test
Multicollinearty refers high correlation among the independent variables. If there is
multicollinearity, it makes the estimation of the regression coefficients impossible (Sekaran and
Bougie, 2016). According to Field (2013) multicollinearity exists when the correlation between
independent variables is greater than 0.8. However, Sekaran and Bougie (2016) and Pallant
(2010) recommended correlation value above 0.7 is a threshold for multicollinearity among
independent variables. The simplest and most obvious way to detect multicollinearity is to check
the correlation matrix for the independent variables (Sekaran and Bougie, 2016; Field, 2013).
From table 4 the result showed that none of the independent variables were highly correlated. In
other words the correlation values are not higher than the threshold value 0.7. This implies that
there is no problem of multicollinearity in this study.

Table 4 Correlation Matrix (only independent variables)

Source: Researcher‘s survey data output (2018)

31
Collinearrity diagnostics were again determined by noting tolerance values and variance inflation
factor (VIF). According to Sekaran and Bougie (2016), Field (2013) and Pallant (2010) the
acceptable value of tolerance and variance inflation factor (VIF) is above 0.10 and below 10
respectively. As we can see from table 5 the tolerance values ranged from 0.542 to 0.752 which
is within the threshold of above 0.10. VIF value also shows ranging from 1.329 to 1.845 which is
within the threshold of below10.

Table 5 Collinearity Diagnosis

Source: Researcher‘s survey data output (2018)

4.5.2 Linearity Test

Linearity refers to the degree to which the change in the dependent variable is related to the
change in the independent variables. To determine whether the relationship between the
dependent variables and the independent variables is linear; scatter plots of the regression
residuals for each model through SPSS software had been used.

The scatter plot of residuals (see figure 2 below) showed in that the points lie in a reasonably
straight line from bottom left to top right. This is, therefore, showed that the assumption of
linearity was not violated.

32
Figure 2 Nominal point plot of standardized residual

Source: Researcher‘s survey data output (2018)

4.5.3 Normality Test

Figure 3 shows the frequency distribution of the standardized residuals compared to a normal
distribution. As you can see, although there are some residuals (e.g., those occurring around 0)
that are relatively far away from the curve, many of the residuals are fairly close. Moreover, the
histograms are bell shaped which lead to infer that the residual (disturbance or errors) are
normally distributed for all models. Thus, no violations of the assumption normally distributed
error term.

Thus, from an examination of the information presented in all the three tests the researcher
concludes that there are no significant data problems that would lead to say the assumptions of
classical linear regression have been seriously violated. Furthermore, according to Field (2013)
and Pallant (2010) the P-P plot (probability–probability plot) is another useful graph for testing

33
normality. As a result figure 2 shows the normal distribution of residuals around its mean of
zero. Hence the normality assumption is fulfilled as required based on figure 2. From this it is
possible to conclude that the inferences that the researcher will made about the population
parameter from the sample is valid.

Figure 3 Frequency Distribution of Standardized Residual

Source: Researcher‘s survey data output (2018)

34
4.6 Correlation Analysis
The purpose of this analysis is to explore the strength as well as the direction of the relationship
among the variables namely the dependent variable (i.e. employee turnover intention),
independent variables (.i.e. distributive justice, procedural justice and interactional justice) and
mediator variable (i.e. employee engagement). The researcher used Pearson correlation analysis
to explore such relationship. The results are presented as follows:

Table 6 Correlation Matrix (with all variables)

Source: Researcher‘s survey data output (2018)

As we can see from table 6 distributive justice was negatively and significantly correlated with
employee turnover intention (-0.452, p = 0.000). Therefore, the result supports the first
hypothesis H1 which stated that distributive justice is negatively related with employee turnover
intention. Similarly as indicated in the correlation matrix table 5 distributive justice was
positively correlated with employee engagement. Thus the result supports the hypothesis H5
which stated that distributive justice is positively related with employee engagement.

According to Cohen (1988) effect size standards, correlational coefficients <± 0.28 are small
effects; medium effects range from ± 0.28 – 0.49; and, large effects are greater than ± 0.49.
Accordingly in both cases the result fell within the medium range. From this it is possible to
generalize that distributive justice has moderate relationship with employee turnover intention
and employee engagement.

The correlation between procedural justice and employee turnover intention was highly
significant (-0.575, p = 0.000). It was a negative correlation. So the results supported the

35
hypothesis H2 which stated that procedural justice is negatively related with employee turnover
intention. Likewise the correlation analysis also confirmed that procedural justice has positive
and significant relationship with employee engagement. According to Cohen‘s (1988) effect size
standard the result suggested a strong and positive relationship between procedural justice and
employee engagement, and strong and negative relationship between procedural justice and
employee turnover intention. This provides empirical support for hypotheses H6 and H2
respectively.

The Pearson correlation analysis results showed that interactional justice has negative and
significant relationship with employee turnover intention (-0.586, p = 0.000). The result also
showed interactional justice has positive and significant relationship with employee engagement.
According to the Cohen‘s (1988) effect size standard both correlation results fell within strong
range. Therefore, interactional justice has strong and negative relationship with employee
turnover intention and strong and positive relationship with employee engagement. It is also
provides empirical support for the hypotheses H3 and H7 respectively.

The correlational matrix indicated in table 6 also showed employee engagement has negative and
significant relationship with employee turnover intention. This supports hypothesis H4 which
stated that employee engagement is negatively related with employee turnover intention.

In summary, results indicated that distributive justice, procedural justice, interactional justice has
significant and negative relationship with employee turnover intention. The three dimensions of
organizational justice also have positive and significant relationship with employee engagement.
Furthermore, the result showed that employee engagement also has negative and significant
relationship with employee turnover intention. Therefore, the results reported in table 6 supports
hypotheses H1, H2, H3, H4, H5, H6 and H7.

4.7 Testing the Research Hypothesis

Each hypothesis proposed empirically tested and discussed in this part. Regression analyses were
used to explore the relationship between the independent and dependent variables while for
testing mediation the Baron and Kenny (1986) model used as a guiding framework. The
coefficients of determination (R square value), the regression coefficients (Beta coefficient) and
the p-values for each of the significant relationships were reported.

36
4.7.1 Regression Model Specification
Model 1

H1: Distributive justice is negatively related with employee turnover intention

H2: Procedural justice is negatively related with employee turnover intention

H3: Interactional justice is negatively related with employee turnover intention

Where: Y = Employee turnover intention, X1 = Distributive Justice, X2 = Procedural Justice, X3

= Interactional Justice, α1 = intercept of employee turnover intention, a1, a2, a3 = coefficients, εy
= the random error.

Model 2

H5: Distributive justice is positively related with employee engagement

H6: Procedural justice is positively related with employee engagement

H7: Interactional justice is positively related with employee engagement

Where: M = Employee engagement, X1 = Distributive Justice, X2 = Procedural Justice, X3 =

Interactional Justice, α1 = intercept of employee engagement, b1, b2, b3 = coefficients, εm = the
random error.

Model 3

H8: Employee engagement mediates the relationship between procedural justice and employee
turnover intention

H9: Employee engagement mediates the relationship between distributive justice and employee
turnover intention

H10: Employee engagement mediates the relationship between interactional justice and employee
turnover intention

37
Where: Y = Employee turnover intention, X1 = Distributive Justice, X2 = Procedural Justice, X3
= Interactional Justice, M = Employee Engagement, α4 = intercept of employee turnover
intention, c1, c2, c3, d = coefficients, εy = the random error.

Model 4

H4: Employee engagement is negatively related with employee turnover intention

Where: Y = Employee turnover intention, M = Employee engagement, α3 = intercept of

employee turnover intention, e = coefficient, εy = the random error

4.7.2 Regression Analysis

Table 7 Model Summary

Source: Researcher‘s survey data output (2018)

As clearly described in table 7 here above R-square value for the regression Model 1 was 0.434.
This indicates that organizational justice (i.e. distributive justice, procedural justice and
interactional justice) in this study explain about 43.4% of the variation in the level of employee
turnover intention.

38
Table 8 ANOVA

Source: Researcher‘s survey data output (2018)

As indicated in the ANOVA table (table 8) here below the p – value (0.000) is less than 0.05
significant level. This implies that the sample data provides sufficient evidence to conclude that
the regression model was well fit. In other words, the p – value (0.000) is highly significant and
can be concluded that organizational justice (i.e. distributive justice, procedural justice and
interactional justice) can predict employee turnover intention significantly.

The regression coefficient result of model 1 shows that (see table 9) there was a significant
negative relationship between distributive justice and employee turnover intention (a1 = -0.192, p
= 0.000). Hypothesis 1 sated that distributive justice is negatively related with employee turnover
intention. Thus the study result supports the hypothesis (H1). The result of this study is therefore
in agreement with the literature which explained by Cohen-Charash and Spector (2001), Moon
(2017) and Ponnu and Chuah (2010).

39
Table 9 Coefficient (Model 1)

Source: Researcher‘s survey data output (2018)

The result in table 9 indicates that there was a significant negative relationship between
procedural justice and employee turnover intention (a2 = -0.341, p = 0.000). Hypothesis 2 sated
that procedural justice is negatively related with employee turnover intention. Thus the study
result supports the hypothesis (H2). The result of this study is therefore in agreement with the
literature which explained by Cohen-Charash and Spector (2001) and Ponnu and Chuah (2010).

The negative relationship between procedural justice and employee turnover intention implies
that if there is an increase in procedural justice there will be a decrease in employee turnover
intention. In other words, the regression coefficient (a2) of -0.341 for procedural justice means
that a unit change in procedural justice will lead to 34.1% change in employee turnover
intention.

The regression coefficient result (see table 9) also showed that there was a significant negative
relationship between interactional justice and employee turnover intention (a3 = -0.305, p =
0.000). Hypothesis 3 sated that interactional justice is negatively related with employee turnover
intention. Thus the study result supports the hypothesis (H3). The result of this study is therefore
in agreement with the literature which explained by Cohen-Charash and Spector (2001) and
Aydogan and Ekmekcioglu (2016).

The negative relationship between interactional justice and employee turnover intention implies
that if there is an increase in interactional justice there will be a decrease in employee turnover
intention. In other words, the regression coefficient (a3) of -0.305 for interactional justice means
that a unit change in interactional justice will lead to 30.5% change in employee turnover
intention.

40
The regression coefficient value for procedural justice is the largest (-0.341) among the three
dimensions of organizational justice, which means that procedural justice makes the strongest
unique contribution to explaining employee turnover intention in Commercial Bank of Ethiopia.

As shown in table 7 R-square value for the regression Model 2 was 0.405. This indicates that
organizational justice (i.e. distributive justice, procedural justice and interactional justice) in this
study explain about 40.5% of the variation in the level of employee engagement.

As indicated in the ANOVA table (table 8) the p – value (0.000) is less than 0.05 significant
level. This implies that the sample data provides sufficient evidence to conclude that the
regression model was well fit. In other words, the p – value (0.000) is highly significant and can
be concluded that organizational justice (i.e. distributive justice, procedural justice and
interactional justice) can predict employee engagement significantly.

Table 10 Coefficient (Model 2)

Source: Researcher‘s survey data output (2018)

The regression coefficient result of model 2 shows that (see table 10) there was a significant
positive relationship between distributive justice and employee engagement (b1 = 0.159, p =
0.001). Hypothesis 5 sated that distributive justice is positively related with employee
engagement. Thus the study result supports the hypothesis (H5). The result of this study is
therefore in agreement with the literature which explained by Aliv and Abbasi (2012) and
Ghosh, Rai and Sinha (2014).

The positive relationship between distributive justice and employee engagement implies that if
there is an increase in distributive justice there will be an increase in employee engagement. In
other words, the regression coefficient (b1) of 0.159 for distributive justice means that a unit
change in distributive justice will lead to 15.9% change in employee engagement.

41
The result in table 10 indicates that there was a significant positive relationship between
procedural justice and employee engagement (b2 = 0.195, p = 0.001). Hypothesis 6 sated that
procedural justice is positively related with employee engagement. Thus the study result supports
the hypothesis (H6). The result of this study is therefore in agreement with the literature which
explained by Malinen, Wright and Cammock (2013) and Saks (2006).

The positive relationship between procedural justice and employee engagement implies that if
there is an increase in procedural justice there will be an increase in employee engagement. In
other words, the regression coefficient (b2) of 0.195 for procedural justice means that a unit
change in procedural justice will lead to 19.5% change in employee engagement.

The regression coefficient result for model 2 also showed that there was a significant positive
relationship between interactional justice and employee engagement (b3 = 0.356, p = 0.000).
Hypothesis 7 sated that interactional justice is positively related with employee engagement.
Thus the study result supports the hypothesis (H6). The result of this study is therefore in
agreement with the literature which explained by Aliv and Abbasi (2012) and Ghosh, Rai and
Sinha (2014).

The positive relationship between interactional justice and employee engagement implies that if
there is an increase in interactional justice there will be an increase in employee engagement. In
other words, the regression coefficient (b3) of 0.356 for interactional justice means that a unit
change in interactional justice will lead to 35.6% change in employee engagement.

The regression coefficient value for interactional justice is the largest (0.356) among the three
dimensions of organizational justice, which means that interactional justice makes the strongest
unique contribution to explaining employee engagement in Commercial Bank of Ethiopia.

R-square value for the regression Model 4 (table 7) was 0.174; this indicates employee
engagement in this study explain about 17.4% of the variation in the level of employee turnover
intention. As indicated in the ANOVA table (table 8) p – value (0.000) is less than 0.05
significant level. This implies that the sample data provides sufficient evidence to conclude that
the regression model was well fit. In other words, the p – value (0.000) is highly significant and
can be concluded that employee engagement can predict employee turnover intention
significantly.

42
Table 11 Coefficient (Model 4)

Source: Researcher‘s survey data output (2018)

The result in table 11 shows that there was a significant negative relationship between employee
engagement and employee turnover intention (e = -0.461, p = 0.000). Hypothesis 4 sated that
employee engagement is negatively related with employee turnover intention. Thus the study
result supports the hypothesis (H4). The result of this study is therefore in agreement with the
literature which explained by Shuck et al. (2014), Robyn and Du Preez (2013), Yalabik et al.
(2013), Saks (2006) and Gupta and Shaheen (2017).

The negative relationship between employee engagement and employee turnover intention
implies that if there is an increase in employee engagement there will be a decrease in employee
turnover intention. In other words, the regression coefficient (e) of -0.461 for employee
engagement means that a unit change in employee engagement will lead to 46.1% change in
employee turnover intention.

4.7.3 Mediation Testing with Regression Analysis

In order to undertake mediation test Baron and Kenny‘s (1986) model for testing mediation was
used as a guiding framework. Accordingly, mediation was tested through three regression
models (Baron and Kenny, 1986; Field, 2013; Hayes, 2013). According to Field (2013) the three
regression models are (i) A regression model that predicts the dependent variable from the
independent dependent variable, (ii) A regression model that predicts the mediator variable from
independent variable, and (iii) A regression model that predicts dependent variable from both the
independent variable and mediator variable. Furthermore, in Baron and Kenny‘s (1986)
mediation testing model four conditions must be met for a variable to be considered as a
mediator. These are (i) the independent variable must be significantly related to the dependent
variable in model 1; (ii) the independent variable must be significantly related to the mediator in

43
model 2; (iii) the mediator must be significantly related to the dependent variable in model 3; and
finally (iv) the independent variable must predict the dependent variable less strongly in model 3
than in model 1 (Baron and Kenny, 1986; Field, 2013; Shuck et al., 2014)

The regression results of model 1 (see table 9) showed that the three dimensions of
organizational justice (i.e. distributive justice, procedural justice and interactional justice) are
negatively related with employee turnover intention [a1 = -0.192, a2 = -0.341, a3 = -0.305, p =
0.000]. Thus the first condition is fulfilled.

The regression analysis result indicated in table 10 shows that there is significant positive
relationship between the three dimensions of organizational justice (i.e. distributive justice,
procedural justice and interactional justice) and employee engagement (the mediator variable)
[b1 = 0.159, b2 = 0.195, b3 = 0.356, p = 0.000]. Therefore, the second condition is satisfied.

Table 12 Coefficient (Model 3)

Source: Researcher‘s survey data output (2018)

The regression analysis result of model 3 as indicated in table 12 here above shows that even
though the regression coefficient for the mediator variable (employee engagement) is negatively
related with the dependent variable (employee turnover intention), it is not statistically
significant. This implies that the third condition is not fulfilled. The fourth condition states the
independent variable must predict the dependent variable less strongly in model 3 than in model
1, however, the regression coefficient did not show any change [see table 10 (a1 = -0.192, a2 = -
0.341, a3 = -0.305, p = 0.000) and table 12 (a1 = -0.192, a2 = -0.341, a3 = -0.305, p = 0.000)].
Therefore, since the third and the fourth condition do not fulfilled the study result does not
support the hypotheses (H8, H9, H10). This implies that employee engagement did not mediate the
relationship between organizational justice (i.e. distributive justice, procedural justice,
interactional justice) and employee turnover intention.

44
 CHAPTER – 5: SUMMARY, CONCLUSION AND
RECOMMENDATION
This chapter outlines brief summary of the study, conclusions of the study in accordance with the
study results and forward recommendations based on the overall results of the study.

5.1 Summary of the Study

The objective of this study was to assess the the mediating role of employee engagement in the
relationship between organizational justices (i.e. distributive justice, procedural justice and
interactional justice) and employee turnover intention in the context of Commercial Bank of
Ethiopia.

The following three research questions guided this study: (a) what is the relationship between
organizational justices (i.e. distributive justice, procedural justice and interactional justice) and
employee turnover intention? (b) What is the relationship between organizational justices (i.e.
distributive justice, procedural justice and interactional justice) and employee engagement? (c)
Does employee engagement has a mediating role in relationship between organizational justices
(i.e. distributive justice, procedural justice and interactional justice) and employee turnover
intention?

Based on the objective of the study, research questions and hypotheses, the questionnaire (survey
instruments) for measuring the research variables were selected and organized. As a result the
organizational justice was measured using (five, six and nine item scale for distributive justice,
procedural justice and interactional justice respectively) measurement scale developed by
Niehoff and Moorman (1993), employee engagement was measured using the 18-item job
engagement measurement scale developed by Rich, Lepine and Crawford (2010) and employee
turnover intention was measured using the three items intention to turnover scale developed by
Colarelli (1984). Of 388 distributed questionnaires 349 (89.95%) questionnaires were collected
and used for analysis. The collected data was analyzed using statistical package for social
science software (SPSS). Regression analyses were employed for testing the hypotheses.

Prior to applying regression analysis for testing the research hypothesis, reliability, correlation
analysis and other preliminary tests (like multicollinearity, linearity, normality test) were
performed. With regard to the reliability, the results showed that all measures except employee

45
turnover intention used in this study had an acceptable level of reliability above 0.70. Even
though the Cronbach‘s alpha coefficient of employee turnover intention was below 0.70, it was
above 0.60. Pearson correlation also indicated no problem with multicollinearity. With regard to
other preliminary testes the results showed that there were no significant data problems that
would lead to say the assumptions of regression analysis had been seriously violated.

The overall results of hypotheses testing indicated that distributive justice, procedural justice,
and interactional justice have significant and negative relationship with employee turnover
intention. Similarly the results also confirmed that the three dimensions of organizational justice
(i.e. distributive justice, procedural justice and interactional justice) have positive and significant
relationship with employee engagement. Employee engagement also has negative and significant
relationship with employee turnover intention. With regard to the mediating role of employee
engagement in the relationship between organizational justice (i.e. distributive justice, procedural
justice and interactional justice) and employee turnover intention the results showed that
employee engagement had partial mediating role on the relationship between distributive justice
and employee turnover intention, and procedural justice and employee turnover intention. But
employee engagement had not mediating role on the relationship between interactional justice
and employee turnover intention. Therefore, the results reported in this study supports
hypotheses H1, H2, H3, H4, H5, H6, and H7 while it rejected hypotheses H8, H9 and H10.

5.2 Conclusion
Based on the results of the study the researcher made the following conclusions:

 Relationship between organizational justice and employee turnover intention: The

results of the study established strong support for the negative relationship between
organizational justice and turnover intention. Specifically, the results showed that the three
dimensions of organizational justice namely distributive justice, procedural justice, and
interactional justice were negatively related to employee turnover intention. Such a
relationship implies that when employees perceive that they have been treated fairly, the
lower the employee‘s intention to leave the organization. The results of the study also
showed that among the three dimensions of organizational justice procedural justice
predicts employee turnover intention in the Commercial Bank of Ethiopia more than the
other dimensions of organizational justice. This implies that fairness and transparency of

46
 the processes how decisions are made in terms of rewards, promotions, resource allocation,
etc are critical aspects that influence the employees of Commercial Bank of Ethiopia.

 Relationship between organizational justice and employee engagement: The results of

the study confirmed that organizational justice (i.e. distributive justice, procedural justice
and interactional justice) has positive relationship. As a result when employees have high
perceptions of justice in their work place, they are more likely obliged to be fair in
performing their roles by giving more of themselves through greater levels of engagement.
On the other hand, low perceptions of fairness are likely to cause employees to disengage
themselves from their work roles. The results of the study also showed that among the three
dimensions of organizational justice, interactional justice and procedural justice was the
better predictor of employee engagement in the Commercial Bank of Ethiopia. This implies
that, interpersonal treatment and communication, and fairness and transparency of the
processes how decisions are made, are important aspects that influence the employees of
Commercial Bank of Ethiopia for engagement.

 Relationship between employee engagement and employee turnover intention: in this

regard the result of the study indicated that employee engagement has negative and
significant relationship with employee turnover intension. As a result the higher level
employee engagement results in lower levels of employee turnover intention.

 Mediating effect of employee engagement: The result of the study confirmed that
employee engagement has no mediating role on the relationship between Organizational
justice and employee turnover intention. This implies that the relationship between
organizational justice and employee turnover intention is direct relationship i.e. there is no
indirect relationship through employee engagement.

5.3 Recommendation
Based on the findings and the conclusions the following recommendations were forwarded:

 To the Commercial Bank of Ethiopia: Since human capital is a source of competitive

advantage (Cook, 2008; Kumar and Renugadevi, 2013), the future success of the
companies will depend on the extent to which companies are able to attract and retain
skilled and talented employees (Schonebeck and Schonebeck, 2016). This will make it
imperative for Commercial Bank of Ethiopia (CBE) to look for other ways to develop

47
 loyalty and commitment among their workforces. The findings of the study suggest that
treating employees with fairness enhances employee engagement level and reduce
employee turnover intention. Therefore, the CBE has to apply the three dimensions of
organizational justice, i.e. applying rules and procedures fairly and consistently to all
employees, and rewarding them based on performance and merit without personal bias in
order to create a positive perception of organizational justice. Fairness and transparency of
the process how decisions are made in terms of rewards, promotions, resource allocation,
etc and interpersonal treatment and communication are critical aspects that the bank has to
give considerable attention in order to reduce employee turnover intention and enhance the
level of employee engagement. In general the working of the bank towards to enhancing
the positive perception of employees in organizational justice leads to a win-win situation.
Meaning employees become more comfortable in their current situation and they are
engaged on their jobs; likewise the bank also will have highly engaged employees and
lower employee turnover.

 For future Research: This study also has recommends the following for further study:

 This is a cross-sectional study; thus any future endeavor in this regard might
employ a longitudinal study that would capture employee attitudes or perceptions at
different time periods offering more rigors as well as any possible variance to the
study findings. This would also help in refining the measurement instruments of
different variables in the proposed model.

 This study is performed only in the Commercial Bank of Ethiopia with a small
sample size; In order to get a comprehensive picture and generalizations of the
study findings, any future study can be carried out with a relatively larger sample
size that should be taken from other industries as well.

48
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 ANNEX:
Questionnaire
ADDIS ABABA UNIVERSITY
COLLEGE OF BUSINES AND ECONOMICS
DEPARTMENT OF MANAGEMENT
EMBA PROGRAM

Dear Respondents:
I am a graduate student at Addis Ababa University College of Business and Economics,
Department of Management. Currently, I am conducting a research titled ‗The Mediating Role
of Employee Engagement in the Relationship between Organizational Justice and
Employee Turnover Intention: In Commercial Bank of Ethiopia‘ as a partial fulfillment of
requirements for the award of Executive Masters of Business Administration.

The purpose of this questionnaire is to gather data for the proposed study, and hence you are
kindly requested to assist the successful completion of the study by providing the necessary
information. Your participation is entirely voluntary and the questionnaire is completely
anonymous. I confirm you that the information you share will stay confidential and only used for
the aforementioned academic purpose only. So, your genuine, frank and timely response is vital
for the success of the study. I want to thank you in advance for your kind cooperation and
dedication of your precious time to fill this questionnaire.

Sincerely Yours;

Belete Kene

Note:
1. No need of writing your name.
2. Put this ‗√‘ or ‗X‘ mark on the appropriate block/cell both for multiple choice and
Likert scale questions.
3. If you need further explanation you can contact me and discuss the matter freely at
(Telephone No. 0911421692 or 0930366276, E-mail kwbelete@yahoo.com ).

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 Part – I: Demographic Information
1. Age: 18-25 years 26-35 years 36-45 years above 45 years
2. Sex: Male Female
3. Educational Qualification:
Below college diploma College diploma First Degree (BSc, BA)
Second Degree (MSc, MA) PHD
4. Year of service at CBE:
1 to 5 years 6 to 10 years 11 to 15 years above 15 years

Part – II: Five point Likert scale questions

Please express your level of agreement in the following questions by putting ‗√‘ or ‗X‘ mark in
the appropriate cell.
1= Strongly Disagree, 2= Disagree, 3= Neutral, 4= Agree, 5= Strongly Agree

Score
No. Statements
1 2 3 4 5
I Organizational Justice
1 Distributive Justice
DJ1 My work schedule is fair
DJ2 I think that my level of pay is fair
DJ3 I consider my work load to be quite fair
DJ4 Overall the rewards I receive here quite fair
DJ5 I feel that my job responsibilities are fair
2 Procedural Justice
PJ1 Job decisions are made by my supervisor in a biased manner
My supervisor makes sure that all employee concerns are heard before
PJ2
Job decisions are made
To make job decisions, my supervisor collects accurate and complete
PJ3
information

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 Score
No. Statements
1 2 3 4 5
My supervisor clarifies decisions and provides additional information
PJ4
when requested by employees
PJ5 All jobs decisions are applied consistently to all affected employees
Employees are allowed to challenge or appeal job decisions made by
PJ6
their supervisors
3 Interactional Justice
When decisions are made about my job, my supervisor treats me with
IJ1
kindness and consideration
When decisions are made about my job, my supervisor treats me with
IJ2
respect and dignity
When decisions are made about my job, my supervisor is sensitive to
IJ3
my personal needs
When decisions are made about my job, my supervisor deals with me in
IJ4
a truthful manner
When decisions are made about my job, my supervisor shows concern
IJ5
for my right as employee
Concerning decisions made about my job, my supervisor discusses with
IJ6
me the implications of the decisions
My supervisor offers adequate justification for decisions made about my
IJ7
job
When making decisions about my job, my supervisor offers
IJ8
explanations that make sense to me
IJ9 My supervisor explains very clearly any decisions made about my job
II Employee Engagement
EE1 I work with intensity on my job
EE2 I exert my full effort to my job
EE3 I devote a lot of energy to my job
EE4 I try my hardest to perform well on my job

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 Score
No. Statements
1 2 3 4 5
EE5 I strive as hard as I can to complete my job
EE6 I exert a lot of energy on my job
EE7 I am enthusiastic in my job
EE8 I feel energetic at my job
EE9 I am interested in my job
EE10 I am proud of my job
EE11 I feel positive about my job
EE12 I am excited about my job
EE13 At work, my mind is focused on my job
EE14 At work, I pay a lot of attention to my job
EE15 At work, I focus a great deal of attention on my job
EE16 At work, I am absorbed by my job
EE17 At work, I concentrate on my job
EE18 At work, I devote a lot of attention to my job
III Employee Turnover Intention
ETI1 I frequently thinking of quitting my job
ETI2 I am planning to search for new job during the next 12 months
If I have my own way, I will be working for this organization one year
ETI3
from now

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