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Article

Employees’ Perception of Corporate Social Responsibility Impact on Employee Outcomes: Mediating Role of Organizational Justice for Small and Medium Enterprises (SMEs)

by
Muddassar Sarfraz
1,*,
Wang Qun
1,
Muhammad Ibrahim Abdullah
2 and
Adnan Tariq Alvi
2
1
Department of Management and HR, Business School, Hohai University, Nanjing 211100, China
2
Department of Management Sciences, COMSATS Institute of Information Technology Lahore, Lahore 54000, Pakistan
*
Author to whom correspondence should be addressed.
Sustainability 2018, 10(7), 2429; https://doi.org/10.3390/su10072429
Submission received: 3 June 2018 / Revised: 24 June 2018 / Accepted: 3 July 2018 / Published: 12 July 2018
(This article belongs to the Special Issue Corporate Social Responsibility (CSR) in Developing Countries: Current Trends and Development)
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Versions Notes

Abstract

:
Corporate social responsibility is emerging topic in the modern business world. Employees are vital assets for any organization. Corporate Social Responsibility practices have a significant influence on employee’s performance. The study aimed to investigate the relationship between employee perception of corporate social responsibility (CSR) and employee’s outcome in Pakistan for SMEs. Additionally, it examined the relationship of Employee’ Perception of CSR as an independent variable. Further, this study considers mediating role of organizational justice between employee’s perception of CSR and employee’ outcomes. The quantitative method was used to collect data from 300 SME’s. Hypotheses were tested by using statistical software (SPSS). Correlation analysis shows the significant relationship between variables, i.e., employee’s perception of CSR and employee outcomes. Moreover, regression analysis was performed for mediation analysis. The results show that organizational justice partially mediated between employee’s perception of corporate social responsibility and employee’s outcomes. Practical implications were discussed, and future research directions were recommended.

1. Introduction

Corporate social responsibility (CSR) has become one of the emerging topics in today’s business environment. An increase in CSR perspective is due to two reasons; first is free media, global trade, and information sharing. Society requires the corporation to be more responsible towards social problems, and the government had to provide solutions to such problems [1]. Such actions fall under the CSR umbrella; where strategies will embed innovation, stakeholder engagement practices, risk management, environmental protection, social inclusion, and economic development holistically.
CSR typically follow the triple bottom line approach where the environment, society, and economic dimensions are considered when designing and implementing CSR strategies. Firms implement CSR through various practices. Few examples of CSR practices are described, such as Vodafone, have designed a series of awareness programs on CO2 emission, IKEA has raised awareness to suppliers in order to prohibit child labor, Unilever address the issues of health and safety in the workplace, and Shell focuses on the human rights and environmental issues in its operations [2]. CSR activities produce numerous advantages to organization performance, such as employee satisfaction, customer loyalty, reputation, and risk management. The rapid flow of CSR practices around the globe has a positive impact on the business. Prior studies that are mainly concerned about CSR effect on the external environments, such as corporate reputation and corporate image [3,4]. Fewer studies have been conducted on employees CSR perception relationship with the extra-role behaviors, such as organizational citizenship behavior (OCB). Organization citizenship behavior can be defined as “the behaviors of individuals that promote efficiency in the organization”. Such kinds of behaviors enrich the employee satisfaction.
Studies indicates OCB and job satisfaction have positive contact [5,6]. Schappe and Williams found no relationship between organizational citizenship behavior and job satisfaction [7,8]. There is need to conduct further studies on the perceived CSR relationship with organizational citizenship behavior, job satisfaction, and turnover intention. This study will consider mediating role of organizational justice between perceived corporate social responsibility and employee outcomes. There is significant research gap among employees’ CSR perceptions and employee’ outcomes while considering the organizational justices as moderating role in Pakistani SMEs [9,10]. Outcomes of the present study will have a significant contribution to the literature. This study contributes to the idea of CSR priority by understanding corporate social responsibility impact on employee’ behaviors, and the influence of organizational justice on the employment outcomes. Social responsibility and philanthropy are not new concepts in the developed countries. American companies have practiced social responsibility since the 17th century. However, it is a new concept in developing nations, such as Pakistan.
Corporate social responsibility (CSR) definition and its implementation in the corporations have been under discussion for last few decades. According to Brundtland [11], the economics and social goals must be considered regarding sustainable development. CSR can be a tool for organizations to incorporate social and environmental concerns into their operations [12]. It can create a competitive advantage for the company in the long run [13]. Corporate social responsibility has arisen as a vital topic in public policy across the world. There are different views on corporate social responsibility. Business activities can have a positive and negative influence on the society and the environment. Corporate social responsibility can play its role in the minimization of negative external implications. Society expectation from the business has grown a lot from past few decades. Environmentally, socially, and legally responsible enterprises are getting more appreciation. Researchers are paying more attention on corporate social responsibility due to its impact on the stakeholders [14,15,16]. CSR practices apply to shareholders, customers, employees, environment, and community [16]. Organizations involvement in CSR practices ensures sustainable development [17]. CSR provides an opportunity to maintain equilibrium between environmental, social, and economic goals, as well as dealing with stakeholder expectations and raising shareholder value [18]. Corporate social responsibility has the perspective to influence employees’ attitudes and behaviors, such as organizational identification [19,20], job satisfaction and commitment [21], and employee attraction [22,23]. Previous research shows that employees are more engaged and organization citizenship behavior is high, as shown by perceiving corporate social responsibilities actions [24,25].
Corporate governance and corporate social responsibility have parallel standing for organizational performance achievement towards goodness of society [26]. Corporate social responsibility is also treated as corporate citizenship. Corporate citizenship is an American concept, built around the idea that “businesses should accept and abide by four types of responsibility”. Board of directors has a vital role in CSR implementation and disclosure. A large board of director leads towards higher corporate social responsibility disclosure [27]. The Pakistani economy is an emerging market and has a weak legal system. Pakistani enterprises need to adopt CSR tool to show the adherence towards international market standards. Most of the studies are conducted on the relationship between concentrated ownership structure and firm performance. Corporate governance has a positive influence on CSR policies. Pakistani organizations have low performance in this regard.
SMEs are not considering the fundamental rights of the employees, like equal pay, education, security, health, and safety in Pakistan [9], which convert the employees’ CSR perceptions towards negative consequences. Pakistani SMEs employees feel uncomfortable at workplace due to inadequate working facilities, which lead towards lower turnover and job dissatisfaction [28]. Organizational justice is defined as the distribution of reward, resources, and information sharing in the decision-making process. Organizational justice creates a sense of justice among the employee that result in job satisfaction and low level of turnover intention.

Institutional Background

The concept of corporate social responsibility is still at an underdeveloped stage in the Pakistani context. Most businesses consider CSR as altruism or philanthropic activities. Multinational and large organizations have CSR policy. Limited laws and regulations that are related to corporate social responsibility exit in Pakistan. CSR practices emulate different business opportunities in Pakistan in several ways. Therefore, companies have the prospect to fulfill the demands of their customers and attract different stakeholder’s intentions towards the company’s strategy. CSR awareness is lower in Pakistan as compared to other countries. It influences the Pakistani economy in terms products standing across the world. Companies should be more aware of CSR, and it will help to conduct business operations ethically [29]. Pakistan has been selected for this study, as it is a developing country, where CSR practices are not as standard as within developing countries. Pakistan could benefit from environmental awareness, social equality, and economic development. Now, a day 9/10 businesses in Pakistan belong to small and medium enterprises except crop growing according to small and medium enterprises development authority (SMEDA). It adds in 2/5 of total GDP of the whole national economy and 4/5 of employment generation in the country. This study aims to provide a complete framework for the relationship between the employee’ perception of CSR, organization outcomes, and justice to improve the research on CSR in the HRM/OB literature.

2. Literature Review

Corporate social responsibility (CSR) has vital importance for small and medium enterprises (SMEs). The last two decades have triggered an enormous change in societies perceptions. The concept of social responsibility has grown to be a commonly debated issue that has attracted considerable media attention during the last ten years. In developing countries, research on CSR in SMEs is still not mainstreamed nor found relevant. People are not fully aware of the CSR concept and its measures. Besides not having a general knowledge, they have naturally adopted several ways and means of being responsible to their community and society and Fareeha [9] study support these arguments. SMEs are not familiarized with the concept of CSR. CSR is essential for all types of business, but SME´s especially benefit from CSR measures, as it is their assurance towards innovation, long-term survival, and adaptation to the new world scenarios.
In developing countries, SMEs are not adequately engaged in CSR practices and entrepreneurs are not well educated nor trained on such topics. CSR practices are not typically embedded into business strategies in such situations. However, there are some companies those are involved in CSR activities, but non-financial departments mainly drive them. These activities are typically fundamental and linked to philanthropic efforts, like donations (charity or welfare fund) or volunteering. SME´s present a particular set of features that enable them to incorporate sustainability better than large companies. SME´s, as more flexible, they can address change quicker and they have fewer risks severity. SMEs can highly benefit from well-implemented CSR measures. Some of the benefits they can take advantage of are an improvement in employee engagement, workplace culture, the motivation of employees, commitment, trust, and frater ethical behavior [30]. Companies those invest in CSR are gaining more economic profit. [31]. CSR practices enhance employee performance [32]. The standards and legal system of every country profoundly influence cultural traits, economic, environmental, and social criteria. Most importantly, they set the basis for the level of commitment, and best practices strived for and implemented by business, as stated by Aguilera [33].
This study aims at providing a complete framework for the relationship between the employee’s perception of CSR, organization outcomes, and justice to improve the research on CSR in the HRM/OB literature. It aims at providing insights and proof for developing countries, starring Pakistan as the example of this study, of the benefits and opportunities that arise from CSR implementation.

2.1. Social Identity and Affective Event Theory

Tajfel’s represented idea of social identity theory, which is considered to be the most significant achievement in psychology. People belong to several groups; belonging to such groups can create a sense of social identity, according to Tajfel (1979). Employees considered them more related and associated with the organization when they spot themselves as a vital member of the group [34]. Social identity theory explained that self-concept of individuals is their identity related to their abilities and interests, which become the base for social identity classifications [35]. Individuals classify themselves and others into various standard groups after self-concept and self-evaluation through the prototypical characteristics perceived by themselves or by outsiders [35]. This process of social identification makes the employees share a common destiny and experience whether in the form of successes or failure [36].
Previous studies show the positive relationship of employees work attitudes with the organization [37,38]. Organization involvement in corporate social responsibility activities boosts organization repute [3]. Current study model is based on two theories (affective events theory and social identity theory). The key purpose is to envisage employees’ attitudinal and behavioral responses to corporate social responsibility. Affective event theory also discusses work events impact on the employees’ subjective emotional reactions those shape employee attitudes and behaviors [39].

2.2. Organizational Justice

Organizational justice has three key components: distributive justice, procedural justice, and interactional justice [40]. Distributive justice is regarding decisions fairness in the organization. Distributive justice conjectures that employees are equally treated in rewards distribution from job outcome [41]. Distributive justice discusses resources distribution, while keeping employees’ participation and rewards [42]. Procedural justice is related to the employee’s perceived organization decision making process fairness [43]. Interactional justice talks about employees’ relationship with organization and organization treatment regarding employees respect [44]. Interactional justice is separated into two key sections. Corporate social responsibility can be considered as a part of organizational ethics [45].

2.3. Employee Perceptions of CSR (EPCSR) and Organizational Justice

Corporate social responsibility and organizational justice concepts are based on an ethical assumption of standard treatment [46]. CSR oriented organizations treat employees and societies on fairness and ethically [47]. It is based on organizational justice research [43,48]. Organization corporate social responsibility actions expressively affect members’ observations regarding the organization’s fairness. Social justice can also be explained by organization involvement in CSR. Employees are likely to think that organizational fairness is present when the firms implement CSR initiatives. These directed actions include taking care of issues that are related to employee well-being, fair compensation environment, and non-discrimination policies [26]. CSR actions have an impact on worker perceptions of administrative fairness.
Organizational justice is used as a criterion by the employee’s evaluations of organizations [45,49]. Previous literature shows that there is a clear relationship between employee’s perception of CSR and organizational justice. Employees understanding of CSR directly influences their perception of fairness and organization’s justice [10]. Empirical research has demonstrated that employees’ perception of CSR is positively related to both job satisfaction and organizational justice [33]. CSR and organizational justice are closely linked [37].

2.4. Job Satisfaction

One of the earliest definitions given to job satisfaction is as “a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience” [50]. A more straightforward interpretation is “the extent to which people are satisfied with their work” [51]. Job satisfaction is also explained in terms of a job’s agreeability [52], as well as in terms of employees’ positive sensations and the predilection for the work itself [53]. Job satisfaction is most widely considered to be one of the key elements in the organizational success. There are several factors in job satisfaction. Carroll established four pillars of CSR; economic, ethical, discretionary, and legal [54]. The perception of CSR is how individuals think an organization is responsible towards all of these factors [37]. Employees are one of the most vital stakeholder group in the organization [55]. Employee perceived CSR might enhance their positive work attitudes such as job satisfaction. In the past, most of the studies were conducted on the relationship between employee perception of CSR and their job satisfaction [56]. Higher perceived CSR have a higher influence on Job satisfaction [45]. Job satisfaction creates a better working climate and environment. Whereas, Mottaz focused more on the conventional components and regarded job satisfaction as an adequate response resulting from an evaluation of the work situation. Overall, it is widely accepted that job satisfaction is a function of work-related rewards and values. This study will focus on an overall qualitative measure of satisfaction.
Hypothesis 1.
Employees’ perception of Corporate Social Responsibility is positively related to job satisfaction.

2.5. Employee Perception of CSR and Organizational Citizenship Behavior

Robinson [57] stated that engagement contains several elements of commitment and organization citizenship behavior. Organizational commitment refers to a personal attitude and attachment towards the organization. Engagement is not an attitude; it is the degree to which an individual is attentive and absorbed in the performance of their roles. Such qualities and features of the relationship between the employee and the organization can be divided into in-role behaviors (expected and included in the subject role and responsibilities) or extra-role behaviors (proactive approaches by the subject). Literature shows that employees not only react to how they are treated themselves at work, but they also respond to how others are treated [58,59]. Organization citizenship behavior variables are encountered in day-to-day reactions, depending on the context. Demotic (justice) reactions tend to present right at the time when the injustice is revealed; they tend to be quick and reactive [60]. This specific type of responses began to be measured psychologically via workplace behaviors, e.g., withholding citizenship in productive work behavior [61,62]. Previous studies show that corporate social responsibility helps to increase subjective psychological well-being [63], as it increases the self-confidence, self-esteem, and overall life satisfaction of employees [64].
Corporate social responsibility has proven to have a positive impact on the service-oriented citizenship and customer loyalty [65]. As stated in an Indian study; a medical sales representative found that CSR had fostered customer loyalty [66]. Corporate social responsibility is thus boosting pleasant feelings amongst employees, and at the same time preventing the negative ones to flourish. It is also found to have the power of creating an organization citizenship behavior.
Hypothesis 2.
Employees perception of corporate social responsibility is positively related to organizational citizenship behavior.

2.6. Employee Perception of Corporate Social Responsibility and Turnover Intentions

Mobley comprehensively explained the mental process underlying withdrawal. A particular decision process is triggered by dissatisfaction indications, which lead towards or end with feelings about leaving/quitting. There are several steps between dissatisfaction and going. The feeling of dissatisfaction tends to stimulate emotion and senses towards leaving. These steps also take into consideration the cost-benefits of such decision confronting the cost of leaving and the efforts that are required to look for another job. On the corporate side, this effect triggers behavior traces that are linked towards substitution processes. If another possibility is accessible, a calculation of these possible substitutes is triggered. Evaluation of the current job starts and the assessment of alternatives for the replacement is set up. There is a straight influence of corporate social responsibility on employee’s creative performance [67].
Aguilera’s [33] research indicates a straight relationship between the corporate social responsibility implementation and turnover rates. CSR deployment needs funds from the organizations to subsist. Organizations invest in defining the cost-benefits of corporate social responsibility implementation. Higher wages are considered as a tool to reduce turnover rates [68]. CSR offers an integrated solution that addresses several challenges. Employees that give value to CSR activities would like to stay longer in the organization [32].
The widespread use of employment contracts strengthens trust between the company and its employees, which reduces companies’ long-term employees stabilize costs [69].
Hypothesis 3.
Employee perception of corporate social responsibility is negatively related to turnover Intention.

2.7. Organizational Justice as a Mediator

Meta-analysis has provided an empirical indication that understanding of justice leads to favorable employee outcomes [40]. Podsakoff [70] studied organizational justice and the OCB relationship and found that employees tend to exhibit organization citizenship behavior more often when they perceive procedural justice in the workplace.
Organ [71] gave a compelling reason for why justice could predict organization citizenship behavior. He stated that when employees are confronted with conditions of unfairness, they tend to protest (in a safer manner) by changing their organizational citizenship behavior. Moorman [72] tested the relationship between organizational citizenship behavior and organizational justice; organization citizenship behavior was assessed via Organs [73] five-dimension model. He established supporting evidence that there is a causal relationship between the perceptions of organizational justice and organization citizenship behavior. Researchers have found that the person-organization fit was a significant factor in predicting turnover intentions [49,74].
Employees justice perception theory [43] stated that employees rate organizational justice, according to the degree of justice. According to the social identity theory, firm socially responsible perception is likely to enhance employees’ self-image. These feelings have a positive impact on work attitudes such as job satisfaction [37,75]. Perception of a work environment is essential, and it has a positive effect on the employee’s organizational commitment and job satisfaction [76].
Hypothesis 4.
Organizational justice mediates the relationship between employees’ perception of CSR and job satisfaction.
Hypothesis 5.
Organizational justice mediates the relationship between employees’ perception of CSR and organizational citizenship behavior (OCB).
Hypothesis 6.
Organizational justice mediates the relationship between employees’ perception of CSR and their turnover intentions.

3. Theoretical Framework and Research Methodology

Figure 1 shows the direct effects of overall employee’ perception of corporate social responsibility on job satisfaction, organizational citizenship behavior, and turnover intention accompanied by direct effects of organizational justice on job satisfaction, organizational citizenship behavior, and turnover intention. It is worth stating that the mediating effects of organizational justice on employee’s outcome (job satisfaction, organizational citizenship behavior, and turnover intention) will also be investigated as proposed in research framework presented.
Figure 1 describe dependent and independent variables of study. Organizational justice is moderating variable between employees’ perception of CSR, job satisfaction, organizational citizenship behavior and turnover intention.

3.1. Research Methodology

The principal objective of this study is to observe the relationship between employees’ perception of corporate social responsibility and employees’ outcomes. The study has adopted the quantitative method. In edict to develop meaningful result, this research practice employs statistical techniques. The hypotheses have been verified by the collection and investigation of quantitative data gained from the applicable respondents to create causal relationship among the variables and thus to explain the nature of relationships among those variables. A numerical approach is appropriate for this study to control biases, decrease errors, and conduct the analysis.
This study uses cross-sectional survey design. Five Likert scales are used for research questions. Another advantage is that the participant may feel more relaxed about replying to sensitive nature questions on personal matters, such as perception of CSR and employee outcomes, rather than in a face to face interview [77]. The study collects the employee’s experiences of their spirit at work, psychological well-being, and perceptions of their organizational culture. Appendix A shows employees’ perception of CSR, organizational justice, organization citizenship behavior and turnover intention measurement scale questions.

3.2. Employee Perception of CSR Scale

Previous studies overlooked the multidimensional nature of CSR perception scale. The multi-dimension construct study was employed to measure employee perception of CSR. Maignan and Ferrell [37,78] corporate social responsibility perception scale was adopted, which includes 12 items that are based on ethical, legal, economic, and discretionary. These items were asked in part A of the questionnaire. This specific CSR scale has been adopted in recent years in most of the CSR related literature, and it is a recognized mechanism for measuring an organization’s socially responsible activities from the employees’ perception.

3.3. Organizational Justice Scale

Organizational justice is vital for the organization successes. Justice fundamental principles should exist in the organization [48]. Workplace fairness and openness is also a source of motivation for employees. The current study focuses on the three types of justice, such as distributive, procedural, and interactional justice. It was determined and measured through Niehoff and Moorman scale [79]. There are 20 questions in the Niehoff scale, including five items of distributive, six items of procedural, and 11 items of interactional justice. These statements were measured on 5 type Likert scale.
Job satisfaction was measured by establishing employees’ perception of their organization job. It was estimated by using a five-point Likert-type scale. Employees general job satisfaction rate was obtained to get an overall work attitude response. Cammann [80] job satisfaction scale is adopted in this study.

3.4. Organizational Citizenship Behavior Scale

OCB refers to the individual behavior that is discretionary and not directly or explicitly recognized by the formal reward system [81]. OCB is categorized as altruist behaviors that occur without any external reward [6]. Such behavior indirectly contributes to the organization [7]. OCB is essential, as they improve the efficiency and effectiveness of the organization through the versatile tapping of resources, which increases innovation and the high adaptability of employees.
Organizational citizenship behavior was measured by using Lee and Allen scale [42], in which four items were measured. Sample from these items is “Take action to protect the organization from potential problems”. Respondent for all above scale was measured in five-point Likert-type scale (5) strongly agree to (1) strongly disagree.

3.5. Turnover Intention Scale

Employee turnover plays a vital role in the organization success. Higher employee turnover will incur several challenges for the organization. It is an exciting and vital phenomenon in the context of the workplace. Fishbein [82] presented forecasting model to measure actual turnover, which includes attitudes, intentions, and behavioral aspects. Actual turnover has been endorsed in the literature [83]. Mobley’s model explains if employees are not satisfied then it will lead them to search for a new job. Bluedorn’s [84] studies describe that there is a strong positive relationship between turnover intentions and actual leaving behavior. In this study, Colarelli’s [85] method was adopted to measure turnover intention. A sample of these items is, “I am planning to search for a new job during the next twelve months”, which is also used by bushed [86].

4. Results and Discussion

The Table 1 shows that out of 300 respondents, 61.6% (185) were male and 38.4% (115) were female. Female respondents’ rate is less than male respondents, but still, there are a large number of women in SMEs, which indicates that the women participation is in this sector. The table also illustrates the respondents’ nature of employment. 33.334% (100) respondents working on contract bases, while 60% (180) of respondents have permanent jobs, whereas remaining 6.67% (20) respondents fall in others category. We have considered all within the framework even though research suggests evident variations within the commitment of employees based on the type of contract they have. For this study, we have considered CSR practices influence for SMEs, and thus given the specific nature of this type of business. It presents as a limitation of the study.

4.1. Normality Tests

Normality was analyzed through kurtosis, skewness, and histograms. Employees’ perception of CSR, organizational justice, job satisfaction, organizational citizenship behavior, and turnover intention were normally distributed, and skewness was well in the range −2 to +2. Hence, results show the normality of the data. George and Mallery [87] anticipated that values for kurtosis and skewness between −2 to +2 are acceptable to prove the normal distribution.
Table 2 presents the descriptive statistics such as mean values, standard deviation, and skewness of the variables.
In Table 3, Partial least squares structural equation modeling is used to for factor loading value, Cronbach’s alpha and average variance extracted. Cronbach’s alpha value was measured on five Likert scales. Cronbach alpha method is used to measure scale reliability [88].
Table 4 signifies the correlation between employee perception of CSR, organizational justice, job satisfaction, organizational citizenship behavior and turnover intention.
Correlation matrix identifies that employee perception of corporate social responsibility has a highly significant positive relationship with job satisfaction (r = 0.42, p < 0.05) [45] and organizational justice [37]. Similarly, employee perception of CSR has a highly significant positive correlation with organizational justice (r = 0.47, p < 0.05) [89]. CSR has a positive relationship with citizenship behavior [66]. Organizational justice has a negative relationship with turnover intention [90].

4.2. Regression Analysis

A regression analysis was conducted to examine the hypothesized relationship between independent and dependent variables. Simple linear regression analysis is applied in order to explore the direct effect of all independent variables on dependent variables. This section is divided into three steps. In the first step, linear regression is used to support the hypothesis. In the second step, moderation and mediation analysis are conducted by applying Baron & Kenny method. Table 5 describe regression analysis of Hypotheses 1, Hypotheses 2 and Hypotheses 3.
Employees perception of CSR and job satisfaction results shows that employee’s perception of CSR significantly and positively influences the job satisfaction (R2 = 17%, p < 0.05). p value for the beta coefficient of employee perception of CSR is 0.000. Hypothesis 1 has been supported by results, which described that there is a definite relationship between employee’s perception of CSR and job satisfaction. Regression analysis of employee perception of corporate social responsibility and OCB show that employee’s perception of CSR significantly and positively influences the organizational citizenship behavior (R2 = 12%, p < 0.05). Employee perception of corporate social responsibility and turnover intention results shows that employee’s perception of CSR significantly and negatively influences the Turnover Intension (R2 = 17%, p < 0.05). Hypothesis 3 has been supported by results that described that there is a negative relationship between employee’s perception of CSR and turnover intention.

4.3. Regression Analysis for Mediation

The widely used analytical technique for testing mediation is hierarchical regression, which is an absolute shortest method of testing direct effects, as well as in enlightening mediating mechanism. Hierarchical regression was used to test the hypothesis and to comprehend the variance that is contributed by the mediator and independent variables. R. M. Baron and D. a Kenny [91] process were followed by examining the mediating effects of organizational justice on job satisfaction, organizational citizenship behavior, and turnover intention. Figure 2 represents conceptual model of mediated analysis. Organizational justice is mediated variable in this study.
Table 6 results revealed that employees perception of corporate social responsibility (independent variable) has a significant association with organizational justice (mediator) with (R2 = 0.1832, p < 0.05) and support to H4. Organizational justice is a mediator between employee perception of CSR and job satisfaction. The relationship between these variables is also tested.
In Table 7, results divulged that the direct effect of employee perception of CSR on job satisfaction was (β = 0.4279). While adding the organizational justice as mediator enhanced the total impact of employee perception of CSR on job satisfaction with (β = 0.4934, p < 0.05), which indicated that organizational justice significantly and partially mediate the relationship between employee perception of CSR and job satisfaction. These findings supported H4. Mediation results proposed that effective organizational justice play its significant role to boost up the effect of employee perception of CSR on job satisfaction.
The Table 8 shows a significant relationship between employee perception of corporate social responsibility and organization citizenship behavior with (β = 0.2909, R2 = 0.12, p < 0.05). Similarly, organizational justice is significantly associated with organizational citizenship behavior with (b = 0.27, R2 = 0.12, p < 0.05). H5 hypotheses are accepted.
Table 9 shows a direct effect on employee perception of CSR on organization citizenship behavior was (β = 0.2909). While adding the organizational justice as mediator enhanced the total impact of employee perception of CSR on organization citizenship behavior with (β = 0.3603, p < 0.05), which indicated that organizational justice significantly and partially mediate the relationship between employee perception of CSR and organization citizenship behavior. These findings are supporting hypotheses 5. Mediation results proposed that effective organizational justice play its significant role to boost up the effect of employee perception of CSR on organizational citizenship behavior.
The Table 10 shows a significant correlation between employees’ perception of corporate social responsibility and turnover intention with (β = −0.3668, R2 = 0.26, p < 0.05), and these finding supported to H6. Similarly, organizational justice also significantly associated with turnover intention with (b = −0.23, R2 = 0.26, p < 0.05). Hypothesis 6 of this study is accepted.
Table 11 shows direct and indirect effect of X on Results divulged that direct effect of employee perception of CSR on turnover intention was (β = −0.4668) and it enhanced the total impact of employee perception of CSR on the turnover intention with (β = −0.5316, p < 0.05) after adding organizational justice as mediator. It indicates that organizational justice significantly and partially mediates the relationship between employee perception of CSR and turnover intention.
The purpose of this research is to find the relationship between employee CSR perception, job satisfaction, organizational citizenship behavior, and turnover intention. Regression analysis examined these relationships. First, hypothesis has determined that employee perception of CSR is positively related with job satisfaction. The correlational analysis examined this relationship. Results confirmed the significant positive correlation between employee perception of corporate social responsibility and job satisfaction variables (β = 0.423, p < 0.00). These results have positive impact/effect on employee job satisfaction [92]. It shows that highly social responsible attitude organizations contain higher job satisfaction [56,93]. The prior research proposed that organizational moral values have positive outcome on job satisfaction.
The relationship between employee’s perception of corporate social responsibility and OCB was investigated through regression analysis. Results confirm the positive relationship between these two variables (β = 0.290, p = 0.000). The result in the present study is consistent with the research of Jain [66], who also examined the relationship among employee perception of corporate social responsibility and OCB. Ajay K. Jain [94] also confirmed these results in his studies. The relationship among employee’s perception of corporate social responsibility and turnover intention was inspected through regression analysis. These results are supporting the H3 hypothesis. Corporate social responsibility and OCB has positive relationship between (β = −0.42, p = 0.000). The outcome of the current study is reliable for the study of Thomas [95], Chepkwony [12], and Donald F. Vitaliano [96]. The premise of H4 was that organizational justice would mediate between employee’s perception of corporate social responsibility and job satisfaction. Firstly, job satisfaction was regressed on employee perception of corporate social responsibility and the result showed a significant relationship between employee perception of corporate social responsibility and job satisfaction (β = 0.425, p < 0.05). Secondly, the mediating variable organizational justice was regressed on employee’s perception of corporate social responsibility and result showed the significant positive relationship between the mediator and employee perception of corporate social responsibility (β = 0.22, p = 0.028). Results revealed that organizational justice mediated between employee perception of CSR and job satisfaction. These findings were consistent with several researchers [21,97,98,99].
Hypothesis 5 was tested in two ways. Firstly, OCB was regressed on employee perception of corporate social responsibility and the result showed a significant relationship between employee perception of corporate social responsibility and job satisfaction (β = 0.2909, p < 0.05). Secondly, the mediating variable, organizational justice, was regressed on employee perception of CSR and the result showed the significant positive relationship between the mediator and employee perception of corporate social responsibility (β = 0.22, p = 0.028). Thirdly, both the independent and mediating variables were entered together, and the findings show that employee perception of corporate social responsibility becomes insignificant (β = 0.3603, p = 0.000).
The premise of H6 was that organizational justice would mediate between employee’s perception of corporate social responsibility and turnover intention. Regression analyses were performed to check the role of the four step approach, as given by Baron Kenny [91]. Firstly, the turnover intention was regressed on EPCSR and the result showed a significant relationship between employee perception of corporate social responsibility and turnover intention (β = −0.3668, p = 0.000). Secondly, the relationship between organizational justice was regressed on employee’s perception of corporate social responsibility, and the result shows a significant association between mediator and employee’s perception of corporate social responsibility (β = 0.22, p = 0.0168). The results verified the significant positive correlation between these two variables (β = 0.48, p = 0.000) after running regression analysis between organizational justice and employee’s perception of CSR. Results are consistent with Maignan studies [37]. Present study result is consistent with Caroline D & Ditlev-Simonsen [100], Shabnam [101], Baldo [102], and Bourdeau [103] studies.

5. Conclusions

Current research explores the link between employees CSR perception, job satisfaction, and organizational citizenship behavior. Partial mediation takes place between employee perception of CSR and employees outcomes. CSR perceptions are highly significant to the employee outcomes. Constructing positive and pro-social spitting business image has a significant influence on the employee outcomes. The study establishes that CSR does not only improve a corporation reputation for potential employees, but also impacts on employee job performance. CSR stresses employees’ identification with their corporation by enhancing corporate prestige and organizational image in the judgments of external viewers. CSR can strengthen employees’ self-definition. CSR is a robust management and communication tool for HRM (human resources managers). The study model merges the micro and macro aspects of CSR. It classifies several structures that how macro-level concept of CSR impacts on the micro-level concept (employees’ behaviors and attitudes). It proposes that CSR-fostered social exchange and identification can strengthen employees’ behaviors and attitudes. In the coming years, the researcher can use this kind of model to discover the role of employees CSR outlooks in altering psychological agreements with their employers, simplifying from industry ethics study [104], and the construction of new emotional contract theory [105]. Employees perceived higher satisfaction and outcome when organizations are involved in corporate social responsibility activities. The current study results have implications for organization managers and policymakers. The organization should discover new ways to enhance corporate social responsibility perceptions. Enrichment of CSR will help to achieve organizational sustainability through higher employees’ outcome. The government can design favorable policy for socially responsible firms.

Study Limitations and Opportunities for Future Research

This study is a correlation analysis, and it presents some inherent limitations. The analysis is based on the given variables and it does not include any other variable effect. The hypotheses comprised in this research focus on individual cognition, perceptions, and attitudes. The study was conducted on SMEs in Pakistan, and further study can be comparative. A future study could re-examine the expressed relationships [106]. Researchers [107] pointed out that the use of longitudinal study design is still uncommon. CSR is a mainstream business practice, and it should have a presence in the mainstream literature of organizational behavior. CSR and human resources had a great symbiosis and are related to employee psychology, safety, and security, group distinctiveness, sense of belongingness, purpose, and meaning. Studies aiming at employees’ organization identification framework would be valuable. There might be some other factors those can affect the dependent variable. This research considers employees CSR perception and works attitudes. The researcher can consider other moderators or mediators (e.g., personality). This study is a vital step towards linking individual perception of CSR with social action and work attitudes.

Author Contributions

W.Q conceived, designed and M.S wrote this paper. Conceptualization, W.Q. and M.I.A.; Methodology, M.S. and A.T.A.; Software, validation, M.S. and M.I.A.; Formal Analysis, M.S.; Writing-Original Draft Preparation, M.I.A.; Writing-Review & Editing, M.S.; Visualization, W.Q. and M.I.A.; Supervision, M.I.A.; Project Administration, W.Q.; Funding Acquisition.

Funding

This study was supported by The National Social Science Fund of China (Grant No-17BGL093).

Acknowledgments

The author is grateful to the editor of the special edition and four anonymous reviewers for their constructive and helpful comments and suggestions.

Conflicts of Interest

The authors declare no conflict of interest.

Appendix A. Measurement Items

Table
Employees CSR Perception
1.  Our business has a procedure in place to respond to every customer complaint.
2.  We continuously improve the quality of our products.
3.  The managers of this organization try to comply with the law and regulations.
4.  Top management establishes long-term strategies for business.
5.  Our company seeks to comply with all laws regulating hiring and employee benefits.
6.  We have programs that encourage the diversity of our workforce.
7.  Our business has a comprehensive code of conduct.
8.  Members of our organization follow professional standards.
9.  Top managers monitor the potential negative impacts of our activities on our community.
10. Our business encourages employees to join civic organizations that support our community.
11. Flexible company policies enable employees to better coordinate work-personal life.
12. Our business gives adequate contributions to charities.
Organizational Citizenship Behavior (OCB)
1.  Willingly give your time to help others who have work-related problems.
2.  Adjust your work schedule to accommodate other employees’ requests for time off.
3.  Have time to help others who have work or non-work problems.
4.  Assist others with their duties.
5.  Attend functions that are not required but promote the organizational image.
6.  Offer ideas to improve the functioning of the organization.
7.  Take actions to protect the organization from potential problems.
8.  Defend the organization when other employees criticize it.
Turnover Intentions
1.  I frequently think of quitting my job.
2.  I am planning to search for a new job during the next 12 months.
3.  If I have my own way, I will be working for this organization one year from now (R).
Job Satisfaction
1.  All in all, I am satisfied with my job.
2.  In general, I do not like my job (R).
3.  I like working here, and the environment is friendly.
Organizational Justice
1.  All job decisions are applied consistently across all affected.
2.  Managers make job decisions in an unbiased manner.
3.  My manager makes sure that all employee concerns are heard before job decisions are made.
4.  I consider my workload to be fair.
5.  Overall, the rewards I receive here are quite to be fair.
6.  My work schedule is fair.
7.  I think my salary is fair enough according to my capabilities and abilities.
8.  I feel that my job responsibilities are fair.
9.  Manager clarifies decisions and provides additional information when requested by the employee for decision making.
10. General manager collects accurate and complete information for job decision making.
11. Employees are allowed to challenge or appeal Job decisions made by the manager
12. When decisions are made about my job, the manager treats me with kindness and consideration.
13. When decisions are made about my job, the manager treats me with respect and dignity.
14. When decisions are made about my job, the manager is sensitive to my personal needs.
15. The manager truthfully deals with me after decision making in my job.
16. The manager shows concern for my right as an employee after my job decisions.
17. Concerning decisions made about my job, the manager discusses with me the implications of the decisions.
18. The manager offers adequate justification for decisions made about my job.
19. When making decisions about my job, the manager offers explanations that make sense to me.
20. My manager explains very clearly any decisions made about my job

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Sustainability 10 02429 g001 550
Figure 1. Theoretical Framework.
Figure 1. Theoretical Framework.
Sustainability 10 02429 g001
Sustainability 10 02429 g002 550
Figure 2. Conceptual Model of Mediated Regression Analysis.
Figure 2. Conceptual Model of Mediated Regression Analysis.
Sustainability 10 02429 g002
Table
Table 1. Respondents Profile.
Table 1. Respondents Profile.
CategoryFrequencyPercentageCumulative Percentage
Male18561.6961.6
Female11538.31100
Nature of Employment
Contractual10033.33433.34
Permanent1806093.34
Others206.67100
Respondent profiles including gender and nature of employment. The sample size is 300 in this study.
Table
Table 2. Descriptive Statistics.
Table 2. Descriptive Statistics.
VariablesMeanS.DSkewnessKurtosis
EPCSR4.19310.44835−0.7650.263
Organization justice3.46391.20265−0.707−1.187
Job satisfaction4.10110.44688−0.9791.152
OCB4.22100.36860−1.0791.388
Turnover intention2.36890.978130.813−0.417
Table
Table 3. Measurement Model Outcomes with Reliability.
Table 3. Measurement Model Outcomes with Reliability.
Model ConstructConstruct’s ItemsFactor Loading ValueCronbach’s AlphaComposite Reliability
Employees CSR perceptionEPC10.7230.7920.842
EPC20.687
EPC30.631
EPC40.659
EPC50.707
EPC70.757
EPC100.781
EPC120.742
Organizational JusticesOJ10.7010.7680.821
OJ20.822
OJ30.838
OJ60.615
OJ70.661
OJ90.720
OJ100.811
OJ110.723
OJ140.759
OJ160.810
OJ170.741
OJ190.790
OJ200.615
Job SatisfactionJS10.7960.7210.856
JS20.891
JS30.749
Turnover IntensionTI10.7220.7190.801
TI20.711
TI30.734
Organization citizenship behaviorOCB10.7600.7250.890
OCB20.807
OCB30.768
OCB40.661
OCB70.711
OCB80.729
Table
Table 4. Correlation Matrix.
Table 4. Correlation Matrix.
12345
Employee perception of CSR1
Organizational Justice0.4761
Job satisfaction0.425 **0.417 **1
Organization citizenship behavior0.353 **0.5210.379 **1
Turnover Intention−0.422 **−0.322 **−0.228 **−0.16 **1
Note: ** denote values at 0.005
Table
Table 5. Regression Analysis.
Table 5. Regression Analysis.
HypothesesVariablesBSEβtSig.p
Employee Perception of CSR with Job SatisfactionConstant2.3260.22010.550.0000.000
EPCSR0.4230.0520.4258.1010.000
Employee Perception of CSR with Organizational Citizenship BehaviorConstant3.0040.18815.980.0000.000
EPCSR0.2900.0450.3536.5140.000
Employee Perception of CSR and Turnover IntentionConstant−1.4890.483−3.080.0020.000
EPCSR−0.4200.115−0.422−8.030.000
Table 5: Three hypotheses are tested through simple linear regression and results represents significant p-value.
Table
Table 6. Model Summary.
Table 6. Model Summary.
RR2FDf1Df2p
0.42810.183225.35742.0000297.00000.00000
Table
Table 7. Total direct and indirect effect of X on Y.
Table 7. Total direct and indirect effect of X on Y.
EffectSEtpLLCIULCI
0.49340.05977.08790.00000.30590.5410
Direct Effect0.42790.06010.00000.00000.30960.5461
Table
Table 8. Model Summary.
Table 8. Model Summary.
RR2FDf1Df2p
0.35320.124714.15442.0000297.00000.0000
Table
Table 9. Total direct and indirect effect of X on Y.
Table 9. Total direct and indirect effect of X on Y.
EffectSEtpLLCIULCI
0.36030.05445.33590.00000.18320.3973
Direct Effect0.29090.05505.28900.00000.18260.3991
Table
Table 10. Model Summary.
Table 10. Model Summary.
RR2FDf1Df2p
0.51020.260459.73202.00000297.0000.0000
Table
Table 11. Total direct and tndirect effect of X on Y.
Table 11. Total direct and tndirect effect of X on Y.
EffectSEtpLLCIULCI
−0.53160.10248.98690.00000.71861.1216
Direct Effect−0.46680.09788.66680.00000.67441.0592

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MDPI and ACS Style

Sarfraz, M.; Qun, W.; Abdullah, M.I.; Alvi, A.T. Employees’ Perception of Corporate Social Responsibility Impact on Employee Outcomes: Mediating Role of Organizational Justice for Small and Medium Enterprises (SMEs). Sustainability 2018, 10, 2429. https://doi.org/10.3390/su10072429

AMA Style

Sarfraz M, Qun W, Abdullah MI, Alvi AT. Employees’ Perception of Corporate Social Responsibility Impact on Employee Outcomes: Mediating Role of Organizational Justice for Small and Medium Enterprises (SMEs). Sustainability. 2018; 10(7):2429. https://doi.org/10.3390/su10072429

Chicago/Turabian Style

Sarfraz, Muddassar, Wang Qun, Muhammad Ibrahim Abdullah, and Adnan Tariq Alvi. 2018. "Employees’ Perception of Corporate Social Responsibility Impact on Employee Outcomes: Mediating Role of Organizational Justice for Small and Medium Enterprises (SMEs)" Sustainability 10, no. 7: 2429. https://doi.org/10.3390/su10072429

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