Ethical leadership, trust and individual work performance in the South African context

Abstract

The pressure to compete in the market and increase market share and profits has led to business leaders around the world adopting the mentality of winning at all costs. This has resulted in a record number of ethical scandals being reported on a daily basis in the media, involving some of the biggest corporates in the world. A variety of ethical misdemeanours, including fraud, bribery, corruption, harassment, discrimination, to name but a few, have been reported with regularity. South Africa has been no exception in this regard, with a number of organisations losing market value at rapid speeds due to their implication and involvement in ethical scandals. The central theme in most of these scandals has been the failure of leadership to uphold and adhere to ethical principles and guidelines. As a result, interest in ethical leadership research has been escalating recently as organisations attempt to increase awareness around the importance of ethical leadership. Ethical leaders are honest, fair, compassionate, transparent and accountable for the decisions they take. Such leaders tend to illicit positive responses from the people they lead, such as increased trust. Employees are more likely to trust leaders who display the aforementioned behaviours as they deem this behaviour normatively appropriate. Increased trust in leader can generate positive outcomes, including increased effort and individual work performance. The main objective of the current study was to investigate the relationship between ethical leadership, trust in leader and individual work performance. Furthermore, another objective was to establish if trust in leader had an indirect effect on the relationship between ethical leadership and individual work performance. A cross-section research design was followed; including convenience and snowball sampling. The total sample obtained was 202 (N = 202). The measuring instruments utilised in the current study comprised the Leadership of Ethics Scale, Leader Trust Scale and Individual Work Performance questionnaire. To analyse the data, the research made use of descriptive and inferential statistics, structural equation modelling and Mplus. The models were used to test the research hypotheses and answer research questions. The results of the study showed a positive relationship amongst all the variables. Ethical leadership was found to be positively significant to trust in leader with a large effect, and to individual work performance with a medium effect. Trust in leader showed a positive correlation with individual work performance; furthermore, trust in leader showed an indirect effect on the relationship between ethical leadership and individual work performance. Resulting from these findings, a number of recommendations were made for future research.