An engagement story : engaging employees through ethical leadership

The article explores how leaders’ ethical behavior influences employee engagement in presence of moral intensity. Furthermore, it also explores the impact that transparency of leader’s policies and decisions can have on employees’ organizational citizenship. Two conceptual models were used to explore the constructs in light of social learning and social exchange theory. Data from 205 faculty members, working in higher education sector of Islamabad and Rawalpindi, was collected through structured questionnaires. Results revealed a significant positive association between ethical leadership as well as organizational citizenship behavior of an employee when mediated by moral intensity. Subsequently, a similar pattern of significance was observed between ethical leadership and moral intensity when transparency moderated the relationship. The study will contribute towards the understanding of how perception of faculty members regarding their leaders’ ethical behavior can have an effect on the implementation of policies. Furthermore, it also leads to exploration of how leader’s transparency of ethical conduct can drive extra performance of faculty members and lead to benefit of the institution as a whole. 1. Introduction In the 21st century higher education sector is at the forefront of helping a country improve its economic sustainability. Due to this, Higher educational institutes are challenged with the task of producing individuals that not only contribute to the employment market but also benefit the society at large (Yadav, 2004). These outcomes are a product of instructional processes, which are mainly set in place by the leaders of the academia. However, how educators perceive the decision making behavior of their leaders affect educators’ moral consciousness, and in turn the quality of their classroom instructions and engagement towards the organization (Gerpott et al., 2016; Shapiro and Stefkovich, 2016). Role of academic leaders and their ethical behavior in shaping the quality of classroom instruction is now being extensively debated in the contemporary world (Shapiro and Stefkovich, 2016; Rubin, Dierdorff and Brown, 2010). The debate on academic leaders’ ethical conduct has come under the limelight due to scandals of ethical delinquency in the corporate world. Leaders are now being held accountable for their actions as it directly impacts the company’s bottom line (Caroll, 2004; Trevino and Brown, 2006; Manz et al., 2008; Revell, 2003; Mehta, 2003). With greater attention being given to academic leaders and their role in shaping employees’ actions, employees have also become more prudent towards the decision making processes being adopted by their leaders. Employees in the education sector look up to their leaders for defining their own actions. Employees judge the morality of their leaders based on leaders’ just treatment and provision of autonomy to employees in decision-making. When employees perceive their leaders to be ethical, they are able to trust their work systems and even commit to taking extra initiatives to benefit the organizational goals (Detert, Trevino and Sweitzer, 2008). Thus, the purpose of this research is to explore how ethical leadership impacts employee engagement and in turn their organizational citizenship behavior. The Business and Management Review, Volume 8 Number 4 April 2017 6th International Conference on Business & Economic Development (ICBED), New York, USA 127 2. A Brief Survey of Literature Review a) Ethical Leadership: Leaders are being held accountable for the role their decision-making plays in defining the organization’s success and its ethical culture (Resick et al., 2011). Several studies have been conducted in the past to explore ethical leadership from various dimensions (Marquardt et al., 2016; Ciulla 1995; Bass and Steidlmeier 1999; Price, 2003; Brown and Trevino, 2006). A study considered important in research on ethical leadership is ‘traits’ framework. This study attempts to deconstruct leadership by explaining the various traits that can help determine morality of a leader. Most dominant amongst these traits are sincerity, reliability and dependability traits of leaders (De Hoogh and Den Hartog, 2008). A major body of researchers has dedicated their efforts in conceptualizing ethical leaders in relationship to their work environment. This transactional relationship of leaders with their environment is thought to have a direct impact on employees’ satisfaction, their higher performance and their commitment towards their organizations. (Jones and Ryan, 1998; Trevino, Butterfield and Mcabe, 1998; Trevino and Weaver, 2001; Valsania et al., 2012). Building on earlier studies conducted on ethical leadership, Trevino (1998, 2001) described ethical leaders as individuals who demonstrated some specific characteristics. Prominent among these were honesty, trustworthiness, fairness, and empathy for the society. Further studies conducted by Trevino et al. (2000, 2003) defined ethical leaders as a product of two dimensions: moral person and moral manager. In addition to studies conducted by Trevino (2003), study conducted by Brown (2013) brought to surface three aspects of ethical leaders. These were: setting an example of ethical conduct, just treatment of employees, and strong prudence towards internal moral consciousness. For the given study, ethical leadership has been operationalized into three dimensions: Role Modeling, Fairness, and shared power. The first dimension, role modeling, has been selected for this study because leaders as role models help in giving direction to their employees’ decision making (Latham &Pinder, 2005). Latham and Pinder (2005) defined leaders as effective role models when leaders demonstrate the transparency of their actions through written edicts, documents and observable actions . For the second dimension, fairness, we have built on the concept put forward by Stouten, Dijke and Cremer (2012). Fairness has been considered an important construct in understanding ethical leadership (Brown, Trevino and Harrison, 2005; De Hoogh and Den Hartog, 2008; Trevino, Brown and Hartman, 2003). According to Stouten, Dijke and Cremer (2012) fairness can be sub divided into dimensions of procedural, distributive, and interpersonal fairness. The third and last dimension of ethical leadership put forward in this paper is power sharing. De Hoogh and Den Hartog (2008) advocated that leaders perceived as ethical by their employees establish power sharing by providing their subordinates with autonomy and mechanisms for giving input in organizational matters. b) Engagement: Employee engagement is considered a significant aspect in enhancing organizational effectiveness. Employees who are considered highly engaged tend to have higher internal motivation and exhibit more efforts in goal accomplishments. They also exhibit positive attitude towards their organizations. Engaged employees are more keen on providing input and encouraging team building initiatives to benefit the organizational goals (Ariani, 2013, 2014). Various studies have been conducted to define employee engagement and its importance towards organizational effectiveness. (Macey and Schneider, 2008; Robinson, Perry and Hayday, 2004; May, Zhu and Avolio, 2004; Maslach, Schaufeli and Leitere, 2001). For this study we have built on the definition put forward by Kahn (1990). According to the study conducted by Kahn (1990) engagement can be defined as “behaviors by which people bring in or leave out their personal selves during work role performances”. The Business and Management Review, Volume 8 Number 4 April 2017 6th International Conference on Business & Economic Development (ICBED), New York, USA 128 Moreover this study further conceptualizes engagement as employees’ organizational citizenship behavior. Various studies associate engagement with organizational citizenship behavior i.e. behaviors that are not part of employees formal job description and that benefit the organization as whole (Peter, 2016; George, 2015; Srivastava and Madan , 2017; Rastogi, 2013; Thomas, 2016). c) Organizational Citizenship Behavior: OCB has been defined by Organ, Podsakoff and MacKenzie (2006) and Borman (2004) as individual behavior that is not restricted to job description, is not solely driven by organizational rewards, and when collectively put drives the effective performance of the organization. Examples of such actions may include idea and information sharing, formal and informal collaboration with other employees, and committing to extra work voluntarily (Jim et al., 2013). Williams and Anderson (1991) explored five dimensions related to OCB. These were further classified into two streams of OCB: OCBI and OCBO. Kumar and Renugadevi (2013) explained OCBI focused on the individual employee behavior whereas, OCBO focused on the organizational aspect. For this study, citizenship behavior has been operationalized using OCBO dimension , and has been defined using three elements, which include: civic virtue, sportsmanship and conscientiousness (Kumar and Renugadevi, 2013). d) MediatorMoral Intensity: Most studies have conceptualized moral intensity as the extent to which an action is perceived to be ethical or unethical. For this study moral intensity has been sub categorized into two dimensions. These are: magnitude of consequences and social consensus (Butterfield, Trevino and Weaver, 2000; Frey, 2000; May and Pauli, 2003; Singhapakdi, Vitell and Kraft, 1996; Bhal, 2011; Feng, 2013). The magnitude of consequences, according to Jones (1991), is the expected degree of harm of the outcome of any action. Social consensus on the other hand has been defined as the collective agreement of members over the fact whether the action under consideration is either morally good or unacceptable (Jones, 1991). e) ModeratorTransparency: Brown, Trevino and Harrison (2005) highlighted that leaders who are perceived as ethical by