Abstract
Drawing from research on ethical leadership, psychological capital, and social learning theory, this study investigated the mediating effects of goal congruence and psychological capital in the link between supervisors’ ethical leadership style and followers’ in-role job performance. Data captured from 171 employees and 24 supervisors showed that ethical leadership has a positive effect on followers’ in-role job performance, yet this effect is explained through the role of psychological capital and follower–leader goal congruence, providing evidence of mediation. These findings have significant implications for research and practice.
This is a preview of subscription content, access via your institution.

References
Abbas, M., Raja, U., Darr, W., & Bouckenooghe, D. (2012). Interactive effects of perceived politics and psychological capital on job satisfaction, turnover intentions, and performance. Journal of Management. doi:10.1177/0149206312455243.
Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103, 411–423.
Avey, J. B., Luthans, F., Avolio, B., & Peterson, S. J. (2010). The development and resulting performance impact of positive psychological capital. Human Resource Development Quarterly, 21(1), 41–67.
Avey, J. B., Luthans, F., & Jensen, S. M. (2009). Psychological capital: A positive resource combating employee stress and turnover. Human Resource Management, 48, 677–693.
Avey, J. B., Wernsing, T. S., & Palanski, M. E. (2012). Exploring the process of ethical leadership: The mediating role of employee voice and psychological ownership. Journal of Business Ethics, 107, 21–34.
Avolio, B. J., & Gardner, W. L. (2005). Authentic leadership development: Getting to the root of positive forms of leadership. Leadership Quarterly, 16, 315–338.
Avolio, B. J., Gardner, W. L., Walumbwa, F. O., Luthans, F., & May, D. R. (2004). Unlocking the mask: A look at the process by which authentic leaders impact follower attitudes and behaviors. Leadership Quarterly, 15, 801–823.
Bandura, A. (1986). Social foundations of thought and action: A social cognitive theory. Englewood Cliffs, NJ: Prentice-Hall.
Bandura, A. (1997). Self-efficacy: The exercise of control. New York: Freeman.
Bliese, P. D. (2000). Within-group agreement, non-independence, and reliability: Implications for data aggregation and analysis. In K. J. Klein & S. W. J. Kozlowski (Eds.), Multilevel theory, research, and methods in organizations (pp. 349–381). San Francisco: Jossey-Bass.
Bommer, W. H., Johnson, J. L., Rich, G. A., Podsakoff, P. M., & Mackenzie, S. B. (1995). On the interchangeability of objective and subjective measures of employee performance: A meta-analysis. Personnel Psychology, 48, 587–605.
Bono, J. E., & Judge, T. A. (2003). Self-concordance at work: Toward understanding the motivational effects of transformational leaders. Academy of Management Journal, 46, 554–571.
Brown, M. E., & Mitchell, M. S. (2010). Ethical and unethical leadership: Exploring new avenues for future research. Business Ethics Quarterly, 20, 583–616.
Brown, M. E., & Treviño, L. K. (2006). Ethical leadership: A review and future directions. The Leadership Quarterly, 17, 595–616.
Brown, M. E., Treviño, L. K., & Harrison, D. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97, 117–134.
Butt, A. N., Choi, J. N., & Jeager, A. M. (2005). The effects of self-emotion, counterpart emotion, and counterpart behavior on negotiator behavior: A comparison of individual-level and dyad-level dynamics. Journal of Organizational Behavior, 26(6), 681–704.
Cicourel, A. V. (1973). Cognitive sociology. Harmondsworth: Penguin.
Colbert, A. E., Kristof-Brown, A. L., Bradley, B. H., & Barrick, M. R. (2008). CEO transformational leadership: The role of goal importance congruence in top management teams. Academy of Management Journal, 51, 81–96.
Colbert, A. E., Mount, M. K., Harter, J. K., Witt, L. A., & Barrick, M. R. (2004). Interactive effects of personality and perception of work situation on workplace deviance. Journal of Applied Psychology, 89(4), 599–609.
Conger, J. A. (1999). Charismatic and transformational leadership in organizations: An insider’s perspective on developing streams of research. Leadership Quarterly, 10(2), 145–179.
Cropanzano, R., & Mitchell, M. S. (2005). Social exchange theory: An interdisciplinary review. Journal of Management, 31(6), 874–900.
Dakhli, M., & De Clercq, D. (2004). Human capital, social capital, and innovation: A multi-country study. Entrepreneurship and Regional Development, 16, 107–128.
Dansereau, F., & Yammarino, F. (1998). Leadership: The multiple-level approaches. Stamford, CT: JAI Press.
De Clercq, D., & Sapienza, H. J. (2006). Effects of relational capital and commitment on venture capitalists’ perception of portfolio company performance. Journal of Business Venturing, 21, 326–347.
De Clercq, D., Thongpapanl, N., & Dimov, D. (2009). When good conflict gets better and bad conflict becomes worse: The role of social capital in the conflict–innovation relationship. Journal of the Academy of Marketing Science, 37, 283–297.
De Hoogh, A. H. B., & Den Hartog, D. N. (2008). Ethical and despotic leadership, relationships with leader’s social responsibility, top management team effectiveness and subordinates’ optimism: A multi-method study. The Leadership Quarterly, 19, 297–311.
Epitropaki, O., & Martin, R. (2005). From ideal to real: A longitudinal study of the role of implicit leadership theories on leader–member exchanges and employee outcomes. Journal of Applied Psychology, 90, 659–676.
Ferris, G. R., Yates, V. L., Gilmore, D. C., & Rowland, K. M. (1985). The influence of subordinate age on performance ratings and causal attributions. Personnel Psychology, 38, 545–557.
Fineman, S. (2006). On being positive: Concerns and counterpoints. Academy of Management Review, 31, 270–291.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
Frederickson, B. L. (2001). The role of positive emotions in positive psychology. The broaden-and-build theory of positive emotions. American Psychologist, 56, 218–226.
Gardner, W. L., Avolio, B. J., Luthans, F., May, D. R., & Walumbwa, F. O. (2005). Can you see the real me? A self-based model of authentic leader and follower development. Leadership Quarterly, 16, 343–372.
George, B. (2003). Authentic leadership: Rediscovering the secrets to creating lasting value. San Francisco, CA: Jossey Bass.
Gooty, J., Gavin, M., Johnson, P. D., Frazier, M. L., & Snow, D. B. (2009). In the eyes of the beholder: Transformational leadership, positive psychological capital, and performance. Journal of Leadership & Organizational Studies, 15, 353–367.
Hobfoll, S. E. (2001). The Influence of culture, community, and the nested-self in the stress process: Advancing conservation of resources theory. Applied Psychology, 50, 337–370.
Hobfoll, S. E. (2002). Social and psychological resources and adaptation. Review of General Psychology, 6, 307–324.
Howell, J. M. (1988). Two faces of charisma: Socialized and personalized leadership in organizations. In J. A. Conger & R. N. Kanungo (Eds.), Charismatic leadership: The elusive factor in organizational effectiveness. San Francisco: Jossey-Bass.
Howell, J. M., & Avolio, B. J. (1992). The ethics of charismatic leadership: Submission or liberation? Academy of Management Perspectives, 6, 43–54.
Howell, J. M., & Hall-Merenda, K. E. (1995). The ties that bind: The impact of leader–member exchange, transformational and transactional leadership, and distance on predicting follower performance. Journal of Applied Psychology, 84, 680–694.
Hox, J. J., Mass, C. J. M., & Brinkhuis, M. J. S. (2010). The effect of estimation method and sample size in multilevel structural equation modeling. Statistica Neerlandica, 64, 155–170.
Jamal, A., & Al-Marri, M. (2007). Exploring the effect of self image congruence and brand preference on satisfaction: The role of expertise. Journal of Marketing Management, 23, 613–629.
James, L. R., Demaree, R. G., & Wolf, G. (1993). r wg : An assessment of within-group interrater agreement. Journal of Applied Psychology, 78, 306–309.
Kark, R., & Van Dijk, D. (2007). Motivation to lead, motivation to follow: The role of the self-regulatory focus in leadership processes. Academy of Management Review, 32, 500–528.
Kenny, D. A., Korchmaros, J. D., & Bolger, N. (2003). Lower level mediation in multilevel models. Psychological Methods, 8, 115–128.
Khilji, E. (2002). Modes of convergence and divergence: An integrative view of multinational practices in Pakistan. International Journal of Human Resource Management, 13, 232–253.
Kirkman, B. L., Chen, G., Farh, J., Chen, Z. X., & Lowe, K. B. (2009). Individual power distance orientation and follower reactions to transformational leaders: A cross-level, cross-cultural examination. Academy of Management Journal, 52, 744–764.
Klein, K. J., & Kozlowski, S. W. J. (2000). From micro to meso: Critical steps in conceptualizing and conducting multilevel research. Organizational Research Methods, 3, 211–236.
Lazarus, R. S. (2003). Does positive psychology movement have legs? Psychological Inquiry, 24, 93–109.
LeBreton, J. M., & Senter, J. L. (2008). Answers to 20 questions about interrater reliability and interrater agreement. Organizational Research Methods, 11, 815–852.
Lewin, K. (1943). Defining the ‘field at a given time’. Psychological Review, 50(3), 292.
Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation. American Psychologist, 57(9), 705–717.
Luthans, F. (2002). The need for and meaning of positive organizational behavior. Journal of Organizational Behavior, 23, 695–706.
Luthans, F., Avey, J. B., Avolio, B. J., & Peterson, S. J. (2010). The development and resulting performance impact of positive psychological capital. Human Resource Development Quarterly, 21, 41–67.
Luthans, F., & Avolio, B. J. (2003). Authentic leadership development. In K. S. Cameron, J. E. Dutton, & R. E. Quinn (Eds.), Positive organizational scholarship (pp. 241–258). San Francisco: Berrett-Koehler.
Luthans, F., Avolio, B., Avey, J., & Norman, S. (2007a). Positive psychological capital: Measurement and relationship with performance and satisfaction. Personnel Psychology, 60, 541–572.
Luthans, F., Norman, S. M., Avolio, B. J., & Avey, J. B. (2008). Supportive climate and organizational success: The mediating role of psychological capital. Journal of Organizational Behavior, 29, 219–238.
Luthans, F., Youssef, C. M., & Avolio, B. J. (2007b). Psychological capital. New York: Oxford University Press.
Manz, C. C., & Sims, H. P, Jr. (1993). Business without bosses: How self-managing teams are building high performance companies. New York: Wiley.
Masten, A. S. (2001). Ordinary magic: Resilience processes in development. American Psychologist, 56, 227–238.
Masten, A. S., & Reed, M.-G. J. (2002). Resilience in development. Handbook of positive psychology (pp. 74–88). London: Oxford University Press.
Mayer, D. M., Aquino, K., Greenbaum, R. L., & Kuenzi, M. (2012). Who displays ethical leadership, and why does it matter? An examination of antecedents and consequences of ethical leadership. Academy of Management Journal, 55, 151–171.
Mayer, D. M., Kuenzi, M., Greenbaum, R., Bardes, M., & Salvador, R. (2009). How does ethical leadership flow? Test of a trickle-down model. Organizational Behavior and Human Decision Processes, 108, 1–13.
Merlo, O., Bell, S. J., Menguc, B., & Whitwell, G. J. (2006). Social capital, customer service orientation and creativity in retail stores. Journal of Business Research, 59(12), 1214–1221.
Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23, 242–268.
Ng, T. W. H., & Feldman, D. C. (2010). Organizational tenure and performance. Journal of Management, 36, 1220–1250.
Norman, S. M., Avolio, B. J., & Luthans, F. (2010). The impact of positivity and transparency on trust in leaders and their perceived effectiveness. Leadership Quarterly, 21, 350–364.
OECD. (2013). OECD Factbook (2013): Economic, environmental and social statistics. OECD Publishing. doi: 10.1787/factbook-2013-en.
Peterson, C. (2000). The future of optimism. American Psychologist, 55, 44–55.
Peterson, S. J., Luthans, F., Avolio, B. J., Walumbwa, F. O., & Zhang, Z. (2011). Psychological capital and employee performance: A latent growth modeling approach. Personnel Psychology, 64, 427–450.
Piccolo, R. F., Greenbaum, R., Den Hartog, D. N., & Folger, R. (2010). The relationship between ethical leadership and core job characteristics. Journal of Organizational Behavior, 31, 259–278.
Pillai, R., Schriesheim, C., & Williams, E. (1999). Fairness perceptions and trust as mediators for transformational and transactional leadership: A two-sample study. Journal of Management, 6, 897–933.
Podsakoff, P. M., Mackenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommendation remedies. Journal of Applied Psychology, 88, 879–903.
Raja, U., & Johns, G. (2010). The joint effects of personality and job scope on in-role performance, citizenship behaviors, and creativity. Human Relations, 63, 981–1005.
Raja, U., Johns, G., & Filotheos, N. (2004). The impact of personality on psychological contracts. Academy of Management Journal, 47, 350–367.
Raudenbush, S. W., Bryk, A. S., Cheong, Y. F., Congdon, R., & Du Toit, M. (2011). HLM 7: Hierarchical linear and nonlinear modeling. Lincolnwood, IL: Scientific Software International.
Rego, A., Sousa, F., Maeques, C., & Pina e Chuna, M. (2012). Authentic leadership promoting employees’ psychological capital and creativity. Journal of Business Research, 65, 429–437.
Roth, P. L., Purvis, K. L., & Bobko, P. (2012). A meta-analysis of gender group differences for measures of job performance in field studies. Journal of Management, 38, 719–739.
Ruiz, P., Ruiz, C., & Martinez, R. (2011). Improving the leader-follower relationship: Top manager or supervisor? The ethical leadership trickle-down effect on follower job response. Journal of Business Ethics, 90, 587–608.
Salancik, G. R., & Pfeffer, J. (1978). A social information processing approach to job attitudes and task design. Administrative Science Quarterly, 23, 224–253.
Schaubroeck, J. M., Lam, S. S. K., & Cha, S. E. (2012). Embracing transformational leadership: Team values and the impact of leader behavior on team performance. Journal of Applied Psychology, 92, 1020–1030.
Schaubroeck, J., Lam, S. S. K., & Peng, A. C. (2011). Cognition-based and affect-based trust as mediators of leader behavior influences on team performance. Journal of Applied Psychology, 96(4), 863–871.
Seligman, M. E. P. (1998). Learned optimism. New York: Pocket Books.
Shamir, B., & Lapidot, Y. (2003). Trust in organizational superiors: Systemic and collective considerations. Organization Studies, 24(3), 463–491.
Shamir, B., Zakay, E., Breinin, E., & Popper, M. (1998). Correlates of charismatic leader behavior in military units: Subordinates’ attitudes, unit characteristics and superior appraisals of leader performance. Academy of Management Journal, 41, 387–409.
Snyder, C. R. (2000). Handbook of hope: Theory, measures, and applications. San Diego, CA: Academic Press.
Snyder, C. R. (2002). Hope theory: Rainbows in the mind. Psychological Inquiry, 13, 249–276.
Stajkovic, A. D., & Luthans, F. (1998). Self-efficacy and work-related performance: A meta-analysis. Psychological Bulletin, 124(2), 240–262.
Thomas, T., Schermerhorn, J. R, Jr, & Dienhart, J. W. (2004). Strategic leadership of ethical behavior in business. Academy of Management Executive, 18(2), 56–66.
Toor, S. R., & Ofori, G. (2009). Ethical leadership: Examining the relationships with full-range leadership model, employee outcomes, and organizational culture. Journal of Business Ethics, 90, 533–547.
Treviño, L. K., Weaver, G. R., & Reynolds, S. J. (2006). Behavioral ethics in organizations: A review. Journal of Management, 32, 951–990.
Tsai, W., & Ghoshal, S. (1998). Social capital and value creation: The role of intrafirm networks. Academy of Management Journal, 41(4), 464–476.
Tsui, A. S., Nifadkar, S. S., & Ou, A. Y. (2007). Cross-National, Cross-Cultural organizational behavior research: Advances, gaps, and recommendations. Journal of Management, 33(3), 426–478.
Tyler, T. R. (1997). The psychology of legitimacy: A relational perspective on voluntary deference to authorities. Personality and social psychology review, 1(4), 323–345.
Vancouver, J. B., & Schmitt, N. W. (1991). An exploratory examination of person organization fit: Organizational goal congruence. Personnel Psychology, 44, 333–352.
Walumbwa, F. O., Avolio, B. J., Gardner, W. L., Wernsing, T. S., & Peterson, S. J. (2008). Authentic leadership: Development and analysis of a multidimensional theory-based measure. Journal of Management, 34, 89–126.
Walumbwa, F. O., Luthans, F., Avey, J. B., & Oke, A. (2011a). Authentically leading groups: The mediating role of collective psychological capital and trust. Journal of Organizational Behavior, 32, 4–24.
Walumbwa, F. O., Mayer, D. M., Wang, P., Wang, H., Workman, K., & Christensen, A. L. (2011b). Linking ethical leadership to employee performance: The roles of leader–member exchange, self-efficacy, and organizational identification. Organizational Behavior and Human Decision Processes, 115, 204–213.
Walumbwa, F. O., Morrison, E. W., & Christensen, A. L. (2012). Ethical leadership and group in role performance: The mediating roles of group conscientiousness and group voice. Leadership Quarterly, 23, 953–964.
Walumbwa, F. O., & Schaubroeck, J. (2009). Leader personality traits and employee voice behavior: Mediating roles of ethical leadership and work group psychological safety. Journal of Applied Psychology, 94(5), 1275–1286.
Walumbwa, F. O., Wang, P., Wang, H., Schaubroeck, J., & Avolio, B. J. (2010). Psychological processes linking authentic leadership to follower behaviors. Leadership Quarterly, 21, 901–914.
Williams, L. J., & Anderson, S. E. (1991). Job satisfaction and organizational commitment as predictors of organizational citizenship and in-role behaviors. Journal of Management, 17, 601–617.
Wright, T. A. (2003). Positive organizational behavior: An idea whose time has truly come. Journal of Organizational Behavior, 24, 437–442.
Zhang, Z., Wang, M., & Shi, J. (2012). Leader-follower congruence in proactive personality and work outcomes: The mediating role of leader–member exchange. Academy of Management Journal, 55, 111–130.
Zhang, Z., Zyphur, M. J., & Preacher, K. J. (2009). Testing multilevel mediation using hierarchical linear models: Problems and solutions. Organizational Research Methods, 12, 695–719.
Zhu, W., Newman, A., Miao, Q., & Hooke, G. (2013). Revisiting the mediating role of trust on transformational leadership effects: Do different types of trust make a difference? Leadership Quarterly, 24, 94–105.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Bouckenooghe, D., Zafar, A. & Raja, U. How Ethical Leadership Shapes Employees’ Job Performance: The Mediating Roles of Goal Congruence and Psychological Capital. J Bus Ethics 129, 251–264 (2015). https://doi.org/10.1007/s10551-014-2162-3
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-014-2162-3