1. Introduction
Corporate social responsibility (CSR) has been recognized as a key issue in business and in the academic literature of management, environment, and psychology [
1,
2,
3]. CSR can be defined as “the policies and practices that mainly deal with an organization’s voluntary relationships with its community and societal stakeholders” [
4]; it considered the firm’s socially responsible business strategies and practices that create macro- or organizational-level outcomes [
5].
Empirical evidence has shown that CSR is important to internal stakeholders, particularly individuals working in organizations [
1,
2,
3]. In this sense, there is evidence of the influence of CSR on job outcomes, such as job satisfaction [
6,
7,
8], organizational commitment [
1,
9,
10], turnover intention [
11], organizational identification [
12], organizational citizenship behavior [
13,
14], and work engagement [
15]. However, despite the recent positive evidence of the impact of employees’ perceptions of CSR on a variety of job outcomes, studies on the influence of CSR on individual outcomes, such as attitudes and behaviors, have been largely absent [
16], and there have been calls to fill this void in the literature.
First, even though several studies have examined the influence of CSR and organizational citizen behavior (OCB) of employees and of CSR and employee work engagement, both separately and jointly, there are still calls for more research into the influence of CSR on such attitudes and behaviors [
11,
15,
17]. Thus, continuing to investigate these individual-level outcomes of CSR would be significant. Second, researchers have pushed for more studies to understand the mediating mechanisms underlying the relationship between CSR and employee outcomes [
18]. Third, there is a need to examine the mechanism by which CSR can be linked with OCB and work engagement [
19,
20]. Fourth, very much related to the previous gap [
19,
20,
21], there is a need to analyze the mechanism by which CSR can be linked with OCB and work engagement in greater depth. Fifth, considering the significant association between work engagement and OCB, a limited number of studies have been conducted on examining this association [
22,
23,
24]. Finally, in line with those authors, we believe that there are gaps in the research related to the moral and psychological aspects that remain unresolved. Although several studies have recognized the connection between CSR and justice, only a limited number of studies have empirically tested it [
25].
To fill these gaps, through the theoretical lens of social exchange theory [
26] and the crucial role of organizational justice, which influences employee perception of job attitudes and behaviors [
27], the current research examines the influence of employees’ perceptions of CSR related to OCB and work engagement through the mediation of distributive and procedural justice (a moral and psychological component). Rupp, Wright [
28] argue that CSR and justice share the same structure of human needs. Therefore, it would be beneficial to understand how these two dissimilar organizational strategies with the same psychological background interact with each other. In addition, the study also examines the association between work engagement and OCB.
Finally, the current study examines the relationship in the context of developing economies, specifically Pakistan, and in the banking sector. This choice responds to the importance of the service industry in developing the economic life of a country [
29], and its dynamic and useful role in the growth and strength of a developing country like Pakistan, where the banking sector is considered as a backbone of the national economy [
30]. This contributes a new aspect to the existing literature, because previous studies investigated the employee perception of CSR and were predominantly conducted in the West or in the context of developed countries [
2,
13]. The banking sector of Pakistan provides a thought-provoking context for the analysis of these issues, because this sector has been studied from many different financial perspectives but, to the best of our knowledge, not from the perspective of the influence of socially responsible practices on employees. The banking sector plays a significant role in boosting the overall growth of a country’s economy. Empirical evidence reveals that due to the large amount of private banking in Pakistan, the sector is facing tough competition [
31]. Further, due to the ongoing competition, most of the banks in this sector have expanded their boundaries by initiating Islamic banking and online banking services. In addition, past research findings reveal that when firms face such tough competition, they also seek supplementary marketing techniques in order to attain favorable customer attitudes and behaviors [
32]. In order to achieve customer satisfaction and improve the company’s results, it is important to have employees who feel comfortable and committed and perform well for the betterment of the company. Thus, the present research is an attempt to examine employee’s perceptions of CSR and its influence on workplace behaviors. This implies that the results are relevant not only to Pakistan, but also to other countries with a similar socioeconomic and cultural context.
We observed a positive impact of CSR on employees, in that it encourages them to exhibit more cooperative behavior and show more engagement in their work. In addition, we also found that justice plays vital role in determining the relationship between CSR, OCB, and work engagement. This study makes a vital theoretical contribution to research on CSR, OCB, and work engagement by incorporating the mediating effects of distributive and procedural justice. The findings highlight the vital role of attitudinal variables (distributive and procedural justice) in affecting the relationship between CSR, OCB, and work engagement. The current study model also shows that employees’ perceptions of CSR affect their behavior, because pertinent CSR initiatives enlighten employees about organizational fairness, and thus, enhance their levels of OCB. From this perspective, we recommend that organizational management can play a vital role in nurturing the bond between the organization and its employees. In addition, firm management should provide shareholder-friendly governance to incentivize managers to engage in CSR-related activities.
The paper proceeds as follows. After this introduction, it develops the conceptual framework and the hypotheses. Then, in
Section 3 and
Section 4, it discusses the methodology and the results. Finally, it presents a discussion and conclusions.
5. Discussion
In the current study, we explored the positive effect of employees’ perceptions of CSR on OCB and work engagement and the positive mediating effect of distributive and procedural justice in the banking sector of Pakistan. We found a significant positive relationship between employees’ perceptions of CSR, OCB, and work engagement. We also found a mediating effect of distributive and procedural justice on this relationship.
This study broadens our understanding of employees’ perceptions of CSR and its theoretical underpinning by contributing to the CSR literature in the field of psychology in two prominent ways. First, past studies analyzed the effects of employees’ perceptions of CSR on different employee attitudes and workplace behaviors, such as organizational commitment [
9,
10], turnover intention [
11], and organizational identification [
12]. OCB and work engagement are important behavioral measures that play vital roles in boosting organizational performance [
39,
50]. Considering these vital roles, scholars have begun to show more interest in employees’ perceptions of CSR and its effects on OCB and work engagement [
11,
15,
17,
85]. We extended the studies concerning employees’ perception of CSR by exploring its effects on OCB and work engagement in Pakistan. Second, in line with past studies [
23,
24], we also found a positive association between work engagement and OCB. From the social exchange theory of Blau [
26], we argue that when individuals perceive a firm’s CSR-related activities and policies as fair, they show more engagement in their work and are more likely to go beyond their formal duties by showing behaviors that benefit the overall firm. In addition, social exchange theory makes an important theoretical contribution to the literature in the field of psychology, as it is used extensively to clarify the studied association.
Third, identifying organizational justice dimensions (distributive and procedural justice) as an important underlying mechanism by linking employees’ perception of CSR with OCB and work engagement, this study responds to recent calls to examine the mediating mechanisms linking employees’ perceptions of CSR with individual-level job outcomes [
19,
20]. Our findings also provide empirical support for the role of organizational fairness in the perspective of CSR suggested by Rupp, Shao [
2] and [
7]. Additionally, these findings extend Jung and Ali [
86] empirical results examining the mediating effect of distributive and procedural justice to highlight the connection between employees’ perceptions of CSR and job outcomes.
5.1. Theoretical Implications
The current study has several theoretical implications. It contributes significantly to the current literature [
87,
88] by introducing a way to cultivate new linkages between CSR, organizational justice, OCB, and work engagement in the context of the Pakistani banking sector. The findings reveal that CSR positively influences employees’ workplace behaviors (work engagement and OCB). This study also makes a theoretical contribution regarding CSR, OCB, and work engagement by incorporating the mediating effects of distributive and procedural justice. The findings highlight the vital role of attitudinal variables (distributive and procedural justice) in affecting the relationship between CSR, OCB, and work engagement. Last but not least, the study reveals the significant role of social exchange theory in explaining the relationship between dispositional variables with attitudinal and behavioral variables in Pakistan.
5.2. Practical Implications
This study also has several practical implications. First, we explored the positive impact of employees’ perception of CSR in terms of encouraging them to exhibit more cooperative behavior and show more engagement in their work. As workers are the prominent internal stakeholders [
89], firms must pay more attention to their internal CSR-related activities. In addition, CSR activities directly influence employees, and they reciprocate with positive behavior. Hence, the top management must conduct its affairs with employees fairly to achieve sustainable development. The current study model also revealed that employees’ perception of CSR affects their behaviors because pertinent CSR initiatives enlighten employees about organizational fairness and thus enhance their levels of OCB. From this perspective, we recommend that organizational management can play a vital role in nurturing the bond between the organization and employees. As the literature identifies CSR contract as an important variable to improve firm performance [
90], we suggest that firms must focus on CSR contract. We also suggest that firms should provide incentives for CSR for managers, which can be vital in boosting firm performance. Finally, this study will help future researchers to advance the association between employees’ perception of CSR, organizational justice, OCB, and work engagement.
5.3. Limitations and Future Suggestions
This study is not without limitations. First, the data collection was limited to only one sector. Future studies should examine and extend to other industries. Second, for data collection, a cross-sectional study design was used, which makes it difficult to generalize the results. Future research could use a longitudinal study design to avoid the uncertainty of causal relationships. Third, this study was conducted in Pakistan. To increase the generalizability of the findings, studies should replicate this study model in other developing countries. Fourth, our study claims causal effects but is weak in addressing the endogeneity problems. Future researchers should focus on instrumental variables such as firm size when examining the said relationship. Finally, researchers should examine the effect of CSR on other organizational and individual variables such as employees’ intention to stay, work ethic, happiness, and organizational culture.