ORGANIZATIONAL JUSTICE AND EMPLOYEE WELL-BEING: THE MEDIATING ROLES OF WORK ALIENATION AND PSYCHOLOGICAL DISTANCE AND THE MODERATING ROLE OF MENTAL HEALTH LITERACY

Abstract

Employee well-being has become an important concern for organizations, particularly in work environments where employees are exposed to increasing job demands, complex workplace relationships, and psychological pressures. This study examines the relationships among organizational justice, work alienation, psychological distance, and employee well-being, while also investigating the moderating role of mental health literacy. Drawing on Social Exchange Theory, the study assumes that fair and supportive organizational exchanges strengthen employees’ attachment to the organization and contribute to their well-being, whereas unfair experiences may increase alienation and psychological distance. Data were collected from employees working in private banks across different districts of Punjab, Pakistan, including Lahore, Okara, Sahiwal, Multan, Gujranwala, Gujrat, Sialkot, Kharian, Jhelum, and Narowal. Using convenience sampling, 876 usable responses were obtained through online and paper-based questionnaires and analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM) using SmartPLS 4.0. Results showed that organizational justice significantly reduced work alienation (β = −0.754, p < 0.001) and psychological distance (β = −0.781, p < 0.001), while it had a significant positive relationship with employee well-being (β = 0.240, p < 0.001). Work alienation was negatively related to employee well-being (β = −0.172, p < 0.001), and psychological distance also showed a significant negative relationship with well-being (β = −0.145, p < 0.001). Mental health literacy did not significantly moderate the relationship between work alienation and employee well-being (β = 0.014, p = 0.337). However, it significantly moderated the relationship between psychological distance and employee well-being (β = 0.067, p = 0.025), indicating that employees with higher mental health literacy may be better able to manage the negative consequences of psychological distance. The model also showed satisfactory explanatory and predictive ability, explaining 56.9% of the variance in work alienation, 60.9% in psychological distance, and 44.0% in employee well-being. The overall model fit was acceptable, with an SRMR value of 0.043 and an NFI of 0.80. Overall, the findings suggest that organizational justice plays an important role in protecting employee well-being by reducing feelings of alienation and psychological disconnection from the organization. At the same time, mental health literacy appears to provide employees with a useful psychological resource for dealing with the effects of psychological distance, although it may not be sufficient to overcome the effects of work alienation. The study contributes to the literature on organizational behaviour, human resource management, and occupational psychology by bringing organizational justice, work alienation, psychological distance, mental health literacy, and employee well-being together in a single framework within the private banking sector of Pakistan. The findings also underline the practical importance of fair organizational policies, meaningful work, employee involvement, supportive communication, and mental health awareness initiatives in developing healthier and more supportive workplaces.