Kenny and Baron 4 Step Analysis (1986): A Case of Employee Job Satisfaction as a Mediator Between Ethical Climate and Performance among Sugarcane Transport Smes in Western Kenya

Willis Otuya


Models are frequently estimated by communication researchers. Although there are many methods available for testing hypotheses about intervening variable effects, the most widely-used method is the causal steps approach popularized by Baron and Kenny (1986). This approach requires the researcher to estimate each of the paths in the model and then ascertain whether a variable functions as a mediator by seeing if certain statistical criteria are met. For example, if both a and b paths in a model are statistically significant and c’ is closer to zero than c, then M is deemed a mediator of the relationship between X and Y. Some assess whether one’s data meet these criteria only if there is evidence of a total effect of X (i.e., if c is statistically significant), one of the requirements of mediation outlined by Baron and Kenny. To demonstrate this analysis, three variables were used in a study conducted in Mumias Sugar Belt among Sugarcane transport SMEs. Ethical climate (X), SME performance (Y) and Employee job satisfaction (M) were fitted in Kenny and Baron (1986) step analysis model. Specifically, the study sought to; establish the mediating effect of employee job satisfaction on the relationship between ethical treatment towards employees and enterprise performance. The study was guided by the stakeholder theory and a conceptual model of the same theory aimed at assessing business/stakeholder relationships. Correlational survey design was adopted for the study. The study population was made up of, 1,000 Cane Haulage MSE employees, yielding a sample size of 100n. The employees were selected using simple random techniques. Questionnaires were used to obtain data from employees. Frequencies were used to show distribution of responses. Correlations and regression analysis were used to assess associations between: ethical treatment towards employees and enterprise performance. They were also used to assess the mediating effect of employee satisfaction on the relationship between ethical business practices and enterprise performance. Pearson correlations revealed that good work safety facilities positively correlated with employee loyalty. Similarly, the correlations showed that job security negatively correlated with employee loyalty. On the other hand, logistic regression results showed that job security negatively affected employee loyalty.  Pearson correlations further revealed that job security positively correlated with handling of employees. On the other hand, logistic regression indicated that there was no relationship between job security and handling of employees. Logistic regression analysis revealed that the way employees are handled inconsistently mediated the relationship between job security and loyalty to company. The study recommended that cane transport companies should increase job security for employees.

Keywords: Employee job satisfaction, Ethical climate, SME performance

DOI: 10.7176/JESD/10-14-11

Publication date:July 31st 2019

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