Theoretical approaches to organizational justice and their implications for employee retention: A literature review of microfinance institutions in Kampala, Uganda

Employee retention continues to be a pressing problem for microfinance institutions (MFIs) in developing countries, where the stability of organizations is regularly threatened by factors such as a mobile workforce, competitive dynamics and the perception of workplace inequity. This paper presents a systematic literature review of theoretical perspectives on organizational justice and the potential role in employee retention, in the frame of MFIs in Kampala, Uganda. Using the theoretical lenses of four established organizational justice perspectives, distributive, procedural, interactional and informational justice, the review of global and regional literature demonstrates how perceptions of fairness in reward allocation, decision-making procedures, social interactions and communications impact employees’ commitment, job satisfaction, and turnover intentions. The paper also draws on relevant organizational and behavioral theories to include equity theory, social (exchange) theory and organizational support theory to contribute to a conceptual framework of justice – retention. Specific attention is given to the microfinance industry due to its labor-intensity and reliance upon employee trust, motivation, and ethical behavior. This review reveals enduring lacunae in the extant literature, including a paucity of contextualized studies on Uganda-based MFIs as well as a limited exploration of interactional justice in the context of retention outcomes. The study ends with theoretical contributions and recommendations for future empirical studies to enhance employee retention strategies through promotion of organizational justice in MFIs in Kampala, Uganda.