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Effect of Fairness on Employee Outcome: An LMX Perspective on Indian Banks

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  • Shalini Sahni
  • Chandranshu Sinha

Abstract

The current study is proposed to test the mediated effect of social exchange mechanism of leader–member exchange (LMX) between organizational justice and employee outcomes in the Indian banking industry. Stratified random sampling was used to collect the data from 346 employees of two Indian public and two Indian private banks listed in the CNX index. Data were analysed using confirmatory factor analysis and path analysis of the proposed model. Findings reveal that LMX partially mediated between all justice dimensions and employee outcomes. However, procedural justice is the strongest predictor of employee outcomes in public sector banks and weakest in private sector banks. This study has implications for both academicians and practitioners and adds to the previous literature by testing the projected model in the Indian settings, thus providing some empirical validity to justice–LMX–employee outcomes relationships.

Suggested Citation

  • Shalini Sahni & Chandranshu Sinha, 2020. "Effect of Fairness on Employee Outcome: An LMX Perspective on Indian Banks," Global Business Review, International Management Institute, vol. 21(4), pages 1113-1126, August.
    • Handle: RePEc:sae:globus:v:21:y:2020:i:4:p:1113-1126
    DOI: 10.1177/0972150918779276
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    References listed on IDEAS

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    1. Michael S. Cole & Jeremy B. Bernerth & Frank Walter & Daniel T. Holt, 2010. "Organizational Justice and Individuals' Withdrawal: Unlocking the Influence of Emotional Exhaustion," Journal of Management Studies, Wiley Blackwell, vol. 47(3), pages 367-390, May.
    2. Boselie, J.P.P.E.F. & van der Wiele, A., 2001. "Employee Perceptions of HRM and TQM and the Effects on Satisfaction and INtention to Leave," ERIM Report Series Research in Management ERS-2001-42-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
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