Linking Distributive Justice and Procedural Justice to Employee Engagement Through Psychological Contract Fulfillment (a Field Study in Karmand Mitra Company Andalan, Surabaya)

Abstract

— As an important role in human resources, employee engagement becomes a competitive advantage factor in the company. The challenge that companies are struggling to survive in today’s industry is how to increase engagement behavior through social exchange relation, one of which is the practice of justice. The purpose of this paper is to determine the effect of distributive and procedural justice to employee engagement with psychological contract fulfillment as a mediating variable. The study draws upon quantitative data collected by means of a questionnaire using partial least square (PLS) to analyze the data with SmartPLS software, that were administered to 52 employees in PT. Karmand Mitra Andalan the manufacturing and service’s chemical company. The results show that both distributive and procedural justice has a positive correlation on employee engagement, while psychological contract fulfillment only mediated the relationship between procedural justice and employee engagement. The implications with respect to organizational functions are discussed.