Proceedings of Annual Tokyo Business Research Conference 15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2 The Role of Transformational Leadership as a Moderating Variable for the Relationship of Justices and CounterProductive Work Behavior at the Public Organization Dian Novrianti and Claudius Budi Santoso This study aims at examining the influence of transformational leadership toward counterproductive work behavior in government institutions. This study perceives that concern of counter-productive work behavior is frequently addressed to government institutions. It happens because the institutions rely on bureaucracy system which work performance has been based on the compliance with standard operating procedure, instead of social interaction and work productivity. Meanwhile, procedural justice and interactional justice enable to drive employee’ counter-productive work behavior (organizational and interpersonal). However, consistency direction of both justices has been varied toward counter-productive work behavior. This study suggests that situational factors, such as transformational leadership would help to reveal that phenomenon. This study has 300 respondents from the regional government institutions in Yogyakarta Special Province, Central Java, Indonesia. With hierarchical regression, this study produces results that procedural justice and interactional justice significantly influence counter-productive work behaviour in varied ways. Furthermore, transformational leadership is not significantly moderating the influences of both justices toward counter-productive work behavior. This study argues that local culture and bureaucracy strongly embeds in the institutions and then enabling to influence the results. Key words: counter-productive work behaviour (organization and interpersonal relation), procedural justice, interactional justice, and transformational leadership Field: Management 1. Background Studies perceive that counter-productive work behaviors highly exist in public sector organizations than private sector organization (Alias et al., 2012). However, studies aiming at revealing factors leading to that behavior have been less emphasized, in particular ini Indonesian government institutions. By using the social exchange theory, this study argues that procedural justice and interactional justice are factors influencing the emerging of the counter-productive work behavior. can be caused by several factors, one of which is organizational justice. Some previous studies state that both organizational justice have firm influence on employee’ work attitude (Cropanzano & Mitchell, 2005; Masterson st al., 2000). A metaanalysis study conducted by Berry, Ones, & Sackett (2007); Cohen-Charash & Spector (20001). Moreover, Dalal (2005) shows that procedural and interactional justice has significant negative influence on counter-productive work behavior. On other side, some studies have shown opposing direction on that matters (Aquino, Lewis, & Bradfield, 1999; Jones, 2009; O’Neill, Lewis, & Carswell, 2011). This study underlines that differed directions of the influence of procedural and interactional justices toward counterproductive work behavior present. ___________________________________________ Dian Novrianti and Claudius Budi Santoso, Faculty of Economics and Business, Universitas Gadjah Mada, Indonesia, Email: bsantoso@ugm.ac.id Proceedings of Annual Tokyo Business Research Conference 15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2 In responding that issue, this study addresses to the organizational factors might control the relationship of both organizational justices and counter-productive work behavior. This study argues that transformational leadership is able to role as a moderating variable to influence the direction of procedural and interactional justices to counter-productive work behavior. In particular, this study investigates Indonesian government institutions for that purpose. 2. Theoretical Framework This study perceives that the social exchange theory enables to describe relationship of employee’s work attitude and organizational treatment. This theory states that interaction between employee and organization or leader is reciprocal and having mutual obligatory pattern. Counter-Productive Work Behavior This counter-productive work behavior has two dimensions, namely firstly, it is directed to organization and secondly, this behavior is directed to supervisor or other employees (Bennet & Robinson, 2000); Berry, Ones, & Sackett, 2007). The Influence of procedural justice on the counter-productive work behavior A number of meta analysis indicates that procedural justice significantly influences negatively the counter-productive work behavior either intended to the organization or the other individual’s interpersonal relationship (Berry, Ones, and Sackett, 2007; Cohen-Charash and Spector; Dalal, 2005). In the perspective of social exchange, employees who perceive procedural justice well will come up with obligation in themselves to repay such a thing by showing a positive working performance that is beneficial for the organization or other members of the organization. H1; procedural justice has negative influence on the counter-productive work behavior (a) intended to the organization and (b) to supervisor . The Influence of interactional justice on the counter-productive work behavior Some previous researches have examined that interactional justice has significant negative influence on the counter-productive work behavior intended either to the organization or to supervisor (Akremi, Vandenberghe, and Camerman, 2010; Devonish and Greenidge, 2010). H2: Interactional justice has negative influence on the counter-productive work behavior (a) intended for the organization or (b) for the supervisor’s interpersonal relationship. The role of transformational leadership as a moderating variable Transformational leader has a role to encourage employees to improve their work attitude in order to be able to increase their levels of work productivity (Wang et al., 2005; Pillai, Schriesheim, & Williams, 1999). By exercising transformational leadership, a leader has power to lead the transformation of employees’ work attitude. In particular, Yao et al.,(2014) reveals a transformational leader justice can play as a buffer or protector for the employees to reduce the counter-productive work behavior, when employee experiences unfair organizational treatment. H3: Transformational leadership moderate the influence of procedural justice on counterproductive work behavior (a) intended to the organization and (b) to supervisor’s interpersonal relationship; also the transformational leadership moderates the influence of interactional justice on counter-productive work behavior (c) intended to the organization and (d) to supervisor’s interpersonal relationship. The negative influence of procedural and interactional justice on both dimensions of counter-productive work behavior intended either to the organization or to supervisor’s interpersonal relationship would be stronger when the transformational leadership is high. Proceedings of Annual Tokyo Business Research Conference 15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2 3. Research Method Data Collection Method The type of data employed is cross sectional data and the unit of analysis used is individual level. Respondents in this study are employees (civil servants) working at the Regional Government of the province of Yogyakarta. Instrument Test The instrument test in this research uses validity test, namely construct validity, using confirmatory factor analysis (CFA), and the reliability test using Cronbach alpha coefficient. Data Analysis Technique In testing the hypothesis, this study applies a method of hierarchical regression analysis. 4. Result and Discussion Generally, the number of questionnaires distributed are 365 questionnaires, and out of the total amount of questionnaires 346 questionnaires were returned (response rate of 94,7 %). Out of the amount of the returned questionnaires, 337 of them can be managed. These research respondents are civil servants who work at some governmental institutions in the Regional Governmental Institution (PEMDA) of Yogyakarta province. In general, most of the respondents in this study are men (55.8%) with 46-50 years of age (22.8%), and with strata one degree (58%) and with tenure of 26-30 until currently. The Result of Instrument Test The coefficient value of Cronbach alpha on each measurement variable is 0,908 for counter-productive work behavior variable intended for the organization; 0,833 for counterproductive work behavior intended to supervisor’s interpersonal relationship; and 0,923 for transformational leadership variable. Descriptive Statistic The descriptive statistic in this research presents mean value, deviation standard, and correlation coefficient among variable as shown on the following table 1: Table 1 Mean, Deviation Standard, and Correlation Coefficient among Variables Variable CPWBO KO CPWBSP KIA PJ IJ TL M 2,1004 1,7847 3,8793 3,9215 4,0445 SD PKKO PKIA 0,5645 0,4812 0,798** 0,5817 - 0,662** - 0,616** 0,5773 - 0,617** - 0,651** 0,4942 - 0,698** - 0,642** KP KI KT - 0,754** - 0,610** - 0,593** ** Correlation is significant at the 0,01 level (2-tailed). CPWBO : Counter-productive work behavior Intended for the Organization CPWBS : Counter-productive work behavior intended to supervisor’s interpersonal relationship PJ : Procedural Justice IJ : Interactional Justice TL : Transformational Leadership Proceedings of Annual Tokyo Business Research Conference 15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2 Table 1 presents that level of counter-productive work behavior is relatively low. The result of correlation analysis displayed on table 1 indicates that procedural and interactional justice has significant negative correlation towards counter-productive work behavior intended for the organization (r= -0,662 and – 0,617; p < 0,01) as well as the counter-productive work behavior intended to supervisor’s interpersonal relationship (r= - 0,616 and – 0,651; p < 0,01). It indicates the presence of strong significant negative correlation between procedural and interactional justice have been found. The Result of Data Analysis H1: The Influence of Procedural Justice on Counter-productive work behavior Based on the regression analysis result, procedural justice significantly has negative influence on both dimension of counter-productive work behavior, namely counter-productive work behavior intended for the organization (β = - 0,457 t = - 7,530 ; p < 0,01) and counterproductive work behavior intended to supervisor’s interpersonal relationship ( β = - 0,291 t = 4,745 ; p < 0,01). This finding is in line with some previous research result, like the one conducted by Akremi, Vandenberghe, and Camerman (2010); Berry, Ones, and Sackett (2007); Cohen-Charash and Spector (2001); Devonish and Greenidge (2010). Besides, this research result also indicates that when an employee perceives a low level of procedural justice, he/she will be inclined to get involved more often in counter-productive work behavior that is harmful to his/her organization than to the supervisor and manager. In social exchange relationship, employee and organization utilize justice judgment to determine whether they must behave cooperatively or non-cooperatively (Lind, 2001). The application of formal organizational procedure in all processes of human resource allocation that is considered uncommon and unbeneficial to the employees can result in the employees’ feeling of being treated unfairly so that they can potentially behave non-cooperatively and get involved in counter-productive work behavior. According to Akremi, Vandenberghe, and Camerman (2010), the unjustice that is perceived by the employee can weaken the quality of social exchange between the organization or the authorized figures that represent the organization and the employees. H2: The Influence of Interactional Justice on Counter-productive work behavior Based on the result of regression analysis, hypothesis 2a and 2b are supported. Interactional justice significantly has negative influence on both dimensions of counterproductive work behavior, that is, counter-productive work behavior intended for the organization (β = - 0,272 t = - 4,492 ; p < 0,01) and counter-productive work behavior intended to supervisor’s interpersonal relationship (β = - 0,431 t = - 7,039 ; p < 0,01). This finding is in line with the previous studies (Akremi, Vandenberghe, and Camerman, 2010; Berry, Ones and Sackett , 2007; Devonish and Greenidge, 2010). This result explains that the employees perceive that the quality of treatment given by their supervisors in each organization upon delivering information and maintaining daily interpersonal relationship gets better, the employees’ tendency to get involved in counterproductive work behavior intended either to the organization or to the supervisor’s interpersonal relationship will be lower. Besides, this result also indicates that when employees perceive a lower level of interactional justice, they will show counter-productive work behavior. Nadisic (2008) in Roy, Bastounis and Poussard-Minibas (2012) state that interactional justice is critical factor triggering the presence of counter-productive work behavior. The elements of interactional justice are in fact relevant with the daily working environment. Colquitt et al., (2001) and Murphy et al.,(2003) mention that supervisors are assumed as responsible persons to create interactional justice. In the perspective of social exchange, employees expect Proceedings of Annual Tokyo Business Research Conference 15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2 their supervisors treat them fairly, honestly and politely. According to reciprocal norm, employees, who feel that they have received a equal quality of interpersonal relationship will show positive working behavior/attitude and then enable to reduce counter-productive work behavior. H3: The Role of Transformational Leadership Moderation This results shows that hypothesis 3a, 3b, and 3c are supported, but hypothesis 3d is not supported. Transformational leadership significantly moderates the influence of procedural justice on both dimensions of counter-productive work behavior intended either for the organization (β = - 1,712 t = - 3,121; p < 0,01) or for the supervisor’s interpersonal relationship (β = - 1,528 t = - 2,553 ; p < 0,05). Also, transformational leadership significantly only moderates the influence of interactional justice on the dimension of counter-productive work behavior intended for the organization (β = - 1,1108 t = - 2,149 ; p < 0,05) and not the one intended for the supervisor’s interpersonal relationship (β = - 0,681 t = - 1,210 ; p > 0,10). Figure 1: Interaction of procedural justice and counter-productive work behavior moderated by transformational leadership Figure 2: Interaction of procedural justice and counter-productive work behavior to organization moderated by transformational leadership Proceedings of Annual Tokyo Business Research Conference 15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2 Both figures demonstrate that the negative influence of procedural justice on both dimensions of counter-productive work behavior and the negative influence of interactional justice on counter-productive work behavior (intended to organization) will be stronger when transformational leadership is high. The high transformational leadership is effective to strengthen to decrease the level of counter-productive work behavior when the employees recognizes procedural and interactional justice well. It is in line with social exchange theory (Pillai, Schriesheim, and Williams, 1999; Tse, Huang, and Lam, 2013; Wang et al., 2005). Meanwhile, one reason for transformational leadership has been failed to moderate the influence of interactional justice to counter-productive work behavior to supervisor is due to the impact of Indonesian collective culture embedding Javanese society, in particular showing respect to seniority. Although both organizational justices are failed to commit in organization, employees keep maintaining good personal relationship with their supervisors, rather than to their organization. They prefer to avoid personal conflict with others, in particular with their supervisors (Herdiyanto and Yuniarti, 2012). 5. Conclusion This study shows that procedural and interactional justice has negative influence on both dimensions of counter-productive work behavior intended for either the organization or the supervisor’s interpersonal relationship. 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