Consequence of psychological distress on performance achievement: A social exchange theory perspective

Abstract

Purpose: This study aimed to examine and analyze the consequences of psychological distress on performance achievement of managers and employees in Islamic micro-finance institutions in Indonesia. Design/methodology/approach: A survey was conducted in this study, involving 194 managers and employees in Islamic microfinance institutions in Indonesia. Findings: This study confirmed that the aspects of formal justice and social justice had a significant effect on psychological distress and performance achievement. Another finding showed that psychological distress had a significant effect on performance achievement and served as a mediating variable for the effect of social justice on performance achievement. Research limitations/implications: This study only focused on the effect of psychological distress on the performance achievement of human resources in the context of Islamic microfinance institutions. Besides, in explaining the model, this study only focused on one point of view of the grand theory, i.e., social exchange theory. Originality/value: This study provided information on alternative strategies in managing and minimizing the risks of psychological distress to improve performance achievement in Islamic microfinance institutions.

Keywords

• employee performance, formal justice, psychological distress, social exchange theory, social justice