Ethical Leadership, Moral Equity Judgments, and Discretionary Workplace Behavior

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Ethical Leadership, Moral Equity Judgments,
and Discretionary Workplace Behavior
Article in Human Relations · July 2013
DOI: 10.1177/0018726713481633
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human relations
66(7) 951 –972
© The Author(s) 2013
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DOI: 10.1177/0018726713481633
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human relations
Ethical leadership, moral equity
judgments, and discretionary
workplace behavior
Christian J Resick
Drexel University, USA
Michael B Hargis
University of Central Arkansas, USA
Ping Shao
California State University, Sacramento, USA
Scott B Dust
Drexel University, USA
Abstract
The current study examines the role of ethical cognition as a psychological mechanism
linking ethical leadership to employee engagement in specific discretionary workplace
behaviors. Hypotheses are developed proposing that ethical leadership is associated
with employees’ negative moral equity judgments of workplace deviance (a discretionary
antisocial behavior) and positive moral equity judgments of organizational citizenship (a
discretionary prosocial behavior). In addition, hypotheses propose that moral equity
judgments are a key type of ethical cognition linking ethical leadership with employee
behaviors. Hypotheses are tested in a cross-organizational sample of 190 supervisor–
employee dyads. Results indicate that employees who work for ethical leaders tended
to judge acts of workplace deviance as morally inequitable and acts of organizational
citizenship as morally equitable. In turn, these judgments guided employee regulation
of behavior, and mediated the relationships between ethical leadership and employee
avoidance of antisocial conduct and engagement in prosocial behavior.
Corresponding author:
Christian J Resick, Department of Management, Drexel University, Peck PSRC, #213, Philadelphia,
PA 19104, USA.
Email: [e-mail]
481633 HUM66710.1177/0018726713481633Human RelationsResick et al.
2013

952 Human Relations 66(7)
Keywords
ethical judgments, ethical leadership, leadership, organizational citizenship behavior,
workplace deviance
When we see men of worth, we should think of equaling them; when we see men of a
contrary character, we should turn inwards and examine ourselves. (Confucius 551−479
BCE)
When you deal with ethical dilemmas in the years to come, I hope that you will stay true
to yourself by remembering those whose lives your decision will affect. (Mary L Schapiro,
US Securities and Exchange Commission Chairman 2011)
Introduction
Ethical transgressions in business, sports, academic, and even religious organizations
have been well documented over the past decade. While some transgressions are the
result of intentional unethical behavior, many others occur because people fail to con-
sider the ethical consequences of their actions and decisions. For example, the financial
crisis of 2008 resulted from a complex combination of factors including high risk lend-
ing, passing on the risk in secondary markets, and corporate leaders failing to consider
the potential consequences to borrowers, institutions, or markets. In contrast, ethical
misconduct is less likely to occur when people recognize the ethical consequences of
their actions. Organizational leadership plays a prominent role in managing ethical
accountability (Barnard, 1938; Dickson et al., 2001); to so do effectively, leaders must
help employees to understand ethically charged issues, and make appropriate
judgments.
To better understand the linkages between leadership and organizational ethics,
Brown et al. (2005) put forth a social learning-based theory that defined ethical leader-
ship as ‘the demonstration of normatively appropriate conduct through personal actions
and interpersonal relationships, and the promotion of such conduct to followers through
two-way communication, reinforcement, and decision making’ (p. 120). An emerging
body of research provides support for a connection between ethical leadership and
employees’ work-related attitudes and behaviors, such as commitment, psychological
safety, voice, citizenship behaviors, and task performance (e.g. Brown et al., 2005;
Kalshoven et al., 2011; Mayer et al., 2009; Piccolo et al., 2010; Walumbwa and
Schaubroeck, 2009). To date, however, surprisingly little research has examined the link-
ages between ethical leadership and employee ethical cognitions, particularly specific
ethical judgments. This is an important omission as Brown and Treviño (2006) proposed
that employees of ethical leaders should have a heightened awareness of the ethical
implications of their actions and decisions, along with a tendency to make ethically
appropriate decisions. In turn, ethical cognitions, such as ethical judgments, are thought
to guide ethical intentions and behaviors (Hannah et al., 2011; Rest, 1986). That is, ethical
cognition provides a basis for behavior regulation; people are likely to engage in behav-
iors they deem as ethically appropriate and refrain from actions they deem as ethically
inappropriate. As such, we expect that ethical judgments are a psychological mechanism

Resick et al. 953
that sheds new light on the relationships between ethical leadership and employee discre-
tionary behavior. Research is now needed to examine these relationships empirically.
The purpose of the current study is two-fold. First, we propose that employees who
work for ethical leaders form moral equity judgments of discretionary prosocial (organi-
zational citizenship; OCB) and antisocial (workplace deviance; WPD) behaviors. Second,
we propose that these moral equity judgments are a cognitive psychological mechanism
that links, or mediates, the relationships between ethical leadership and employee engage-
ment in discretionary behaviors (both OCB and WPD). In doing so, we seek to contribute
to the ethical leadership literature in two important ways. First, we demonstrate empiri-
cally that employees who work for ethical leaders form a salient understanding of the
ethical implications of both prosocial and antisocial workplace behaviors in the form of
moral equity judgments. Second, we demonstrate that a specific form of ethical cognition,
moral equity judgments, is a psychological mechanism through which employees regu-
late their behavior, which in turn links ethical leadership to employee discretionary acts.
As such, we provide evidence supporting the importance of ethical leadership for
employee ethics-related judgments and behavior. In addition, we seek to contribute to the
behavioral ethics literature by providing empirical evidence that people tend to engage in
behaviors they deem as morally equitable and avoid behaviors they deem as morally
inequitable. That is, moral equity judgments of specific behaviors provide a basis for
understanding the linkages between moral cognition and moral conation (Hannah et al.,
2011). A model of the hypothesized relationships is contained in Figure 1.
Ethical leadership and discretionary behavior
Ethical leaders are moral people and moral managers (Brown and Treviño, 2006; Treviño
et al., 2003) who use their social power to represent the best interests of their organiza-
tion and employees, set a personal and professional example of ethically appropriate
conduct, and actively manage ethical accountability (Brown et al., 2005; De Hoogh and
Den Hartog, 2008; Gini, 1997; Resick et al., 2006). As moral people, ethical leaders
Ethical leadership
Workplace deviance
Moral equity judgments
Organizational citizenship
Moral equity judgments
Workplace deviance
behavior
Organizational citizenship
behavior
H1
H2
H3
H4
Figure 1. Hypothesized model of the relationships between ethical leadership, ethical
judgments, and discretionary behavior.
Note: The analyses also control for employees’ age, gender, and years working for the current supervisor, and
supervisor age and gender.
H = Hypothesis.

954 Human Relations 66(7)
demonstrate honesty, integrity, fairness, a broad ethical awareness, and are considerate
and respectful of others; as moral managers, ethical leaders comply with laws and
regulations, establish ethical expectations and hold employees accountable, and make
decisions reflecting the best interests of employees and the organization (Brown et al.,
2005; Kalshoven et al., 2011; Resick et al., 2011; Treviño et al., 2003).
Brown and colleagues (2005) proposed that ethical leaders are ethical role models
who provide ethical guidance to employees via social learning processes. According to
social learning theory, individuals learn by observing role models’ actions, decisions,
and subsequent consequences, and then emulating what they observed (Bandura, 1977,
1986). To serve as an ethical role model and an ethical leader, Brown et al. (2005)
noted that a leader first needs to be perceived as attractive, legitimate, and credible.
This perception is developed by demonstrating normatively appropriate behaviors, and
explicitly discussing ethical expectations to draw employees’ attention to ethical issues.
Leaders further become attractive and credible by modeling honest and fair behavior,
treating others with consideration, and making decisions aimed at employees’ best
interests. Leaders also become legitimate sources of ethical authority by using rewards
and punishment to manage ethical accountability. All of these behaviors increase the
effectiveness of social learning (Brown et al., 2005). Through these processes, ethical
leaders are expected to influence employee ethical decision making, promote ethical
and prosocial conduct, and inhibit deviant and unethical behavior (Brown and Treviño,
2006).
Several studies have linked ethical leadership with employee prosocial OCBs (e.g.
Kalshoven et al., 2011; Mayer et al., 2009). Citizenship behaviors are important for
both individual and organizational success (Podsakoff et al., 2009), and include actions
that are ‘discretionary, not directly or explicitly recognized by the formal reward sys-
tem, and that in the aggregate, promotes the efficient and effective functioning of the
organization’ (Organ, 1988: 4). There are generally considered to be two broad dimen-
sions underlying OCBs. One dimension is targeted at co-workers and includes passing
along helpful information and going out of one’s way to help other employees. The
second dimension is targeted at the organization itself and includes adhering to infor-
mal rules and promoting the organization’s products or services to others (see Dalal,
2005; Williams and Anderson, 1991). Consistent with Mayer et al.’s (2009) work, we
specifically focus on interpersonal-focused OCBs. This set of OCBs are most relevant
to our model because they are a reflection of a broad concern for others, they signal the
importance of the work environment to the employee, and they are the most frequently
studied OCBs (Podsakoff et al., 2000).
Workplace deviance is a contrasting set of discretionary behaviors that nearly all
organizations must confront, and involves ‘voluntary behavior that violates significant
organizational norms and in so doing threatens the well-being of an organization, its
members, or both’ (Robinson and Bennett, 1995: 556). WPD includes overt actions such
as damaging property and instigating a confrontation, along with covert actions such as
withholding effort or sabotaging a project (Bennett and Robinson, 2000; Robinson and
Bennett, 1995). There are two underlying dimensions of WPD behaviors, with one dimen-
sion targeted at harming co-workers through actions such as behaving rudely or publi-
cally embarrassing someone, and one dimension targeted at harming the organization by

Resick et al. 955
engaging in acts such as taking supplies, damaging property, or discussing confidential
information with unauthorized personnel (Bennett and Robinson, 2000; Robinson and
Bennett, 1995). Both dimensions have been found to be highly intercorrelated (Dalal,
2005; Dunlop and Lee, 2004). In prior studies, Mayer and colleagues have found ethical
leadership to be directly and negatively related to organization-focused WPD (Mayer
et al., 2009) and unethical behaviors (Mayer et al., 2012). However, Detert et al. (2007)
found that ethical leadership was unrelated to objective indicators of counterproductive
behaviors. In the current study, we focus on the full set of WPD behaviors to understand
the implications of ethical leadership for inhibiting antisocial behaviors directed at both
co-workers and the organization in general.
Ethical leaders are thought to influence the employee’s ethical understanding and
decision making (Brown and Treviño, 2006); in turn, these ethical cognition provide a
basis for behavior regulation (Hannah et al., 2012; Rest, 1986; Rottig et al., 2011). As
such, we expect that ethical judgments are a psychological mechanism that sheds new
light on the relationship between ethical leadership and both OCB and WPD discretion-
ary workplace behaviors.
Several studies have provided insights into the psychological mechanisms linking
ethical leadership and employee behavior (both prosocial and antisocial). Focusing on
prosocial and general work-related behaviors, studies have found that motivation-related
mechanisms such as effort, task significance, self-efficacy, and organizational identifi-
cation mediate relationships between ethical leadership and both task and citizenship
forms of performance (Piccolo et al., 2010; Walumbwa et al., 2011). Similarly,
Walumbwa and Schaubroeck (2009) found that employees’ psychological safety partially
mediates the relationship between ethical leadership and constructive voice behavior.
In contrast, the psychological mechanisms linking ethical leadership with employee
avoidance of deviance or ethical transgressions is somewhat less clear. Several studies
provide some indication that ethical leadership inhibits antisocial behavior through its
impact on the unit’s psychosocial environment, including ethical climates (Mayer et al.,
2012) and ethical culture (Schaubroeck et al., 2012). Given the social learning basis of
ethical leadership, surprisingly little research has examined the relationships between
ethical leadership and the extent to which employees form judgments about the types of
behaviors that are fair, just, and morally appropriate or inappropriate, and use these
judgments to regulate behavior. We examine the intervening role of moral equity judg-
ment in the next section.
Ethical leadership and ethical judgments
Ethical judgments
Reidenbach and Robin (1990) posited that individuals use multiple philosophical per-
spectives of ethics and morals (e.g. justice, relativism, egoism, utilitarianism, and
deontology) when making ethical judgments, and developed a scale to assess ethical
judgments from three perspectives, including moral equity, contractualism, and relativ-
istic judgments. The moral equity perspective focuses on evaluations of decisions or
actions in terms of their moral rightness, justice, and fairness. Contractualism focuses on