The Role of Organizational Justice, Trust and Commitment in a Management Control System (MCS)- Gain Sharing

Abstract

The main purpose of this study is to examine the relationship between the roles of organizational justice, trust and organizational commitment in a specific type of management control system (MCS), gain-sharing. Based on the proposed theory hypothesis, employee perceptions involving the procedural justice of the gain-sharing plan to influence the employee trust in manager’s, organizational commitment and their performance. Positive perceptions of fairness and equality lead to enhance trust and organizational commitment, which, in turn, has positive consequences for the employee performance. To examine these matters, a survey technique was administered to employee in public and private bank in Ambon city. The result analysis of the Partial Least Squares approach indicates that employee perceptions regarding the fairness and equality of the gain-sharing plan are positively significant related to employee trust in manager’s, organizational commitment and their performance. Further, employee trust in manager and organizational commitment has a positive influence to employee performance. Also, this study gives an evidence that there is no significant different between gender on such relationships.