Ethical Leadership, Compensation, and Culture and Employee Performance: Census Sampling Approach
Article Sidebar
Picture in here are illustration from public domain image or provided by the author, as part of their works
Published:
Sep 25, 2022
Keywords:
Leadership, compensation, culture, performance
Main Article Content
Abstract
This study analyzes the effect of ethical leadership, compensation, and organizational culture on employee performance. This research is quantitative with a sample of 42 employees through the census method. The multiple linear regression analysis showed several results. First, ethical leadership has no significant effect on employee performance. Second, compensation has a significant impact on employee performance. Third, organizational culture has a significant negative impact on employee performance. Although the results contradict previous studies, ethical leadership, compensation, and organizational culture still have an essential role in achieving employee performance. The results provide positive implications for improving employee performance through applying for compensation and work culture. However, the implementation of work culture needs to be accompanied by other variables such as good corporate governance.
Article Details
Section
Articles
Copyright (c) 2022 Niki Puspita Sari, Helmi Muhammad, Eko Satya Aliansyah
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Almatrooshi, B., Singh, S. K., & Farouk, S. (2016). Determinants of organizational performance: A proposed framework. International Journal of Productivity and Performance Management, 65(6), 844–859. doi: 10.1108/IJPPM-02-2016-0038
AlShehhi, N., AlZaabi, F., Alnahhal, M., Sakhrieh, A., & Tabash, M. I. (2021). The effect of organizational culture on the performance of UAE organizations. Cogent Business & Management, 8(1), 1980934. doi: 10.1080/23311975.2021.1980934
Austin-Campbell, S. (2021). Wells Fargo: An Examination of a Corporate Scandal and the Economic Impact on the Value of the Stock. SSRN Electronic Journal. doi: 10.2139/ssrn.3895348
Bedendo, M., Cathcart, L., & El-Jahel, L. (2018). Reputational shocks and the information content of credit ratings. Journal of Financial Stability, 34, 44–60. doi: 10.1016/j.jfs.2017.12.003
Bhardwaj, B., & Kalia, N. (2021). Contextual and task performance: Role of employee engagement and organizational culture in hospitality industry. Vilakshan - XIMB Journal of Management, ahead-of-print(ahead-of-print). doi: 10.1108/XJM-08-2020-0089
Boddy, C. R. P., Ladyshewsky, R., & Galvin, P. (2010). Leaders without ethics in global business: Corporate psychopaths. Journal of Public Affairs, 10(3), 121–138. doi: 10.1002/pa.352
Borman, W. C., White, L. A., & Dorsey, D. W. (1995). Effects of ratee task performance and interpersonal factors on supervisor and peer performance ratings. Journal of Applied Psychology, 80(1), 168–177. doi: 10.1037/0021-9010.80.1.168
Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117–134. doi: 10.1016/j.obhdp.2005.03.002
Burak, O. Erdil, & E. Altındağ. (2017). Effect of corporate governance principles on business performance.
Egel, E., & Fry, L. W. (2017). Spiritual Leadership as a Model for Islamic Leadership. Public Integrity, 19(1), 77–95. doi: 10.1080/10999922.2016.1200411
Eisenbeiss, S. A., van Knippenberg, D., & Fahrbach, C. M. (2015). Doing Well by Doing Good? Analyzing the Relationship Between CEO Ethical Leadership and Firm Performance. Journal of Business Ethics, 128(3), 635–651. doi: 10.1007/s10551-014-2124-9
Gardner, W. L., Karam, E. P., Alvesson, M., & Einola, K. (2021). Authentic leadership theory: The case for and against. The Leadership Quarterly, 101495. doi: 10.1016/j.leaqua.2021.101495
Harmoko, & Sulistyo, H. (2014). Peran Kepemimpinan Etis dan Pemberdayaan Psikologi terhadap Kepuasan Untuk meningkatkan kinerja Atlet PPLP Sulawesi Tenggara. Jurnal Ekonomi Dan Bisnis. doi: DOI: http://dx.doi.org/10.30659/ekobis.15.2.45-54
Kalshoven, K., Den Hartog, D. N., & De Hoogh, A. H. B. (2011). Ethical leadership at work questionnaire (ELW): Development and validation of a multidimensional measure. The Leadership Quarterly, 22(1), 51–69. doi: 10.1016/j.leaqua.2010.12.007
Kim, H. S., & Jang, S. (Shawn). (2020). The effect of increasing employee compensation on firm performance: Evidence from the restaurant industry. International Journal of Hospitality Management, 88, 102513. doi: 10.1016/j.ijhm.2020.102513
Kluemper, D. H., DeGroot, T., & Choi, S. (2013). Emotion Management Ability: Predicting Task Performance, Citizenship, and Deviance. Journal of Management, 39(4), 878–905. doi: 10.1177/0149206311407326
Küster, I., & Canales, P. (2011). Compensation and control sales policies, and sales performance: The field sales manager’s points of view. Journal of Business & Industrial Marketing, 26(4), 273–285. doi: 10.1108/08858621111127018
Martin, J. (1992). Cultures in organizations: Three perspectives. New York: Oxford University Press.
Mohd Nasurdin, A., Tan, C. L., & Naseer Khan, S. (2020). Can high performance work practices and satisfaction predict job performance? An examination of the Malaysian private health-care sector. International Journal of Quality and Service Sciences, 12(4), 521–540. doi: 10.1108/IJQSS-06-2019-0090
Moore, A. W., Anderson, B., Das, K., & Wong, W.-K. (2006). Combining Multiple Signals for Biosurveillance. In Handbook of Biosurveillance (pp. 235–242). Elsevier. doi: 10.1016/B978-012369378-5/50017-X
Motowidlo, S. J., & Van Scotter, J. R. (1994). Evidence that task performance should be distinguished from contextual performance. Journal of Applied Psychology, 79(4), 475–480. doi: 10.1037/0021-9010.79.4.475
Muhammad, H., & Sari, N. P. (2021). Implementation of The Synergy of Transformational-Servant Leadership Character In Islamic Boarding School. Journal of Leadership in Organizations, 3(2). doi: 10.22146/jlo.65642
Neubert, M. J., Wu, C., & Roberts, J. A. (2013). The Influence of Ethical Leadership and Regulatory Focus on Employee Outcomes. Business Ethics Quarterly, 23(2), 269–296. doi: 10.5840/beq201323217
Nguyen, N. T. T., Nguyen, N. P., & Thanh Hoai, T. (2021). Ethical leadership, corporate social responsibility, firm reputation, and firm performance: A serial mediation model. Heliyon, 7(4), e06809. doi: 10.1016/j.heliyon.2021.e06809
Nirel, R., & Glickman, H. (2009). Sample Surveys and Censuses. In Handbook of Statistics (Vol. 29, pp. 539–565). Elsevier. doi: 10.1016/S0169-7161(08)00021-7
Pawirosumarto, S., Sarjana, P. K., & Gunawan, R. (2017). The effect of work environment, leadership style, and organizational culture towards job satisfaction and its implication towards employee performance in Parador Hotels and Resorts, Indonesia. International Journal of Law and Management, 59(6), 1337–1358. doi: 10.1108/IJLMA-10-2016-0085
Piccolo, R. F., Greenbaum, R., Hartog, D. N. den, & Folger, R. (2010). The relationship between ethical leadership and core job characteristics: ETHICS AND JOB CHARACTERISTICS. Journal of Organizational Behavior, 31(2–3), 259–278. doi: 10.1002/job.627
Raharjo, K., Nurjannah, N., Solimun, S., & Achmad Rinaldo Fernandes, A. (2018). The influence of organizational culture and job design on job commitment and human resource performance. Journal of Organizational Change Management, 31(7), 1346–1367. doi: 10.1108/JOCM-07-2017-0286
Robbins, S. P., & Judge, T. (2013). Organizational behavior (15th ed). Boston: Pearson.
Santos, A. S., Reis Neto, M. T., & Verwaal, E. (2018). Does cultural capital matter for individual job performance? A large-scale survey of the impact of cultural, social and psychological capital on individual performance in Brazil. International Journal of Productivity and Performance Management, 67(8), 1352–1370. doi: 10.1108/IJPPM-05-2017-0110
Sarwar, H., Ishaq, M. I., Amin, A., & Ahmed, R. (2020). Ethical leadership, work engagement, employees’ well-being, and performance: A cross-cultural comparison. Journal of Sustainable Tourism, 28(12), 2008–2026. doi: 10.1080/09669582.2020.1788039
Schein, E. H. (2004). Organizational culture and leadership (3rd ed). San Francisco: Jossey-Bass.
Schwepker, C. H., & Dimitriou, C. K. (2021). Using ethical leadership to reduce job stress and improve performance quality in the hospitality industry. International Journal of Hospitality Management, 94, 102860. doi: 10.1016/j.ijhm.2021.102860
Scurlock, R., Dolsak, N., & Prakash, A. (2020). Recovering from Scandals: Twitter Coverage of Oxfam and Save the Children Scandals. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 31(1), 94–110. doi: 10.1007/s11266-019-00148-x
Shiah‐Hou, S., & Cheng, C. (2012). Outside director experience, compensation, and performance. Managerial Finance, 38(10), 914–938. doi: 10.1108/03074351211255146
Shin, Y., Sung, S. Y., Choi, J. N., & Kim, M. S. (2015). Top Management Ethical Leadership and Firm Performance: Mediating Role of Ethical and Procedural Justice Climate. Journal of Business Ethics, 129(1), 43–57. doi: 10.1007/s10551-014-2144-5
Sihombing, S., Astuti, E. S., Al Musadieq, M., Hamied, D., & Rahardjo, K. (2018). The effect of servant leadership on rewards, organizational culture and its implication for employee’s performance. International Journal of Law and Management, 60(2), 505–516. doi: 10.1108/IJLMA-12-2016-0174
Taherdoost, H. (2016). Validity and Reliability of the Research Instrument; How to Test the Validation of a Questionnaire/Survey in a Research. SSRN Electronic Journal. doi: 10.2139/ssrn.3205040
Van Scotter, J. R. (2000). Relationships of Task Performance and Contextual Performance with Turnover, Job Satisfaction, and Affective Commitment. Human Resource Management Review, 10(1), 79–95. doi: 10.1016/S1053-4822(99)00040-6
Watson, R. (2015). Quantitative research. Nursing Standard, 29(31), 44–48. doi: 10.7748/ns.29.31.44.e8681
Yaari, M., Blit-Cohen, E., & Savaya, R. (2021). Hybrid Organizational Culture: The Case of Social Enterprises. Journal of Social Entrepreneurship, 12(2), 291–313. doi: 10.1080/19420676.2019.1702581
Yang, Q., & Wei, H. (2017). Ethical leadership and employee task performance: Examining moderated mediation process. Management Decision, 55(7), 1506–1520. doi: 10.1108/MD-09-2016-0627
AlShehhi, N., AlZaabi, F., Alnahhal, M., Sakhrieh, A., & Tabash, M. I. (2021). The effect of organizational culture on the performance of UAE organizations. Cogent Business & Management, 8(1), 1980934. doi: 10.1080/23311975.2021.1980934
Austin-Campbell, S. (2021). Wells Fargo: An Examination of a Corporate Scandal and the Economic Impact on the Value of the Stock. SSRN Electronic Journal. doi: 10.2139/ssrn.3895348
Bedendo, M., Cathcart, L., & El-Jahel, L. (2018). Reputational shocks and the information content of credit ratings. Journal of Financial Stability, 34, 44–60. doi: 10.1016/j.jfs.2017.12.003
Bhardwaj, B., & Kalia, N. (2021). Contextual and task performance: Role of employee engagement and organizational culture in hospitality industry. Vilakshan - XIMB Journal of Management, ahead-of-print(ahead-of-print). doi: 10.1108/XJM-08-2020-0089
Boddy, C. R. P., Ladyshewsky, R., & Galvin, P. (2010). Leaders without ethics in global business: Corporate psychopaths. Journal of Public Affairs, 10(3), 121–138. doi: 10.1002/pa.352
Borman, W. C., White, L. A., & Dorsey, D. W. (1995). Effects of ratee task performance and interpersonal factors on supervisor and peer performance ratings. Journal of Applied Psychology, 80(1), 168–177. doi: 10.1037/0021-9010.80.1.168
Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117–134. doi: 10.1016/j.obhdp.2005.03.002
Burak, O. Erdil, & E. Altındağ. (2017). Effect of corporate governance principles on business performance.
Egel, E., & Fry, L. W. (2017). Spiritual Leadership as a Model for Islamic Leadership. Public Integrity, 19(1), 77–95. doi: 10.1080/10999922.2016.1200411
Eisenbeiss, S. A., van Knippenberg, D., & Fahrbach, C. M. (2015). Doing Well by Doing Good? Analyzing the Relationship Between CEO Ethical Leadership and Firm Performance. Journal of Business Ethics, 128(3), 635–651. doi: 10.1007/s10551-014-2124-9
Gardner, W. L., Karam, E. P., Alvesson, M., & Einola, K. (2021). Authentic leadership theory: The case for and against. The Leadership Quarterly, 101495. doi: 10.1016/j.leaqua.2021.101495
Harmoko, & Sulistyo, H. (2014). Peran Kepemimpinan Etis dan Pemberdayaan Psikologi terhadap Kepuasan Untuk meningkatkan kinerja Atlet PPLP Sulawesi Tenggara. Jurnal Ekonomi Dan Bisnis. doi: DOI: http://dx.doi.org/10.30659/ekobis.15.2.45-54
Kalshoven, K., Den Hartog, D. N., & De Hoogh, A. H. B. (2011). Ethical leadership at work questionnaire (ELW): Development and validation of a multidimensional measure. The Leadership Quarterly, 22(1), 51–69. doi: 10.1016/j.leaqua.2010.12.007
Kim, H. S., & Jang, S. (Shawn). (2020). The effect of increasing employee compensation on firm performance: Evidence from the restaurant industry. International Journal of Hospitality Management, 88, 102513. doi: 10.1016/j.ijhm.2020.102513
Kluemper, D. H., DeGroot, T., & Choi, S. (2013). Emotion Management Ability: Predicting Task Performance, Citizenship, and Deviance. Journal of Management, 39(4), 878–905. doi: 10.1177/0149206311407326
Küster, I., & Canales, P. (2011). Compensation and control sales policies, and sales performance: The field sales manager’s points of view. Journal of Business & Industrial Marketing, 26(4), 273–285. doi: 10.1108/08858621111127018
Martin, J. (1992). Cultures in organizations: Three perspectives. New York: Oxford University Press.
Mohd Nasurdin, A., Tan, C. L., & Naseer Khan, S. (2020). Can high performance work practices and satisfaction predict job performance? An examination of the Malaysian private health-care sector. International Journal of Quality and Service Sciences, 12(4), 521–540. doi: 10.1108/IJQSS-06-2019-0090
Moore, A. W., Anderson, B., Das, K., & Wong, W.-K. (2006). Combining Multiple Signals for Biosurveillance. In Handbook of Biosurveillance (pp. 235–242). Elsevier. doi: 10.1016/B978-012369378-5/50017-X
Motowidlo, S. J., & Van Scotter, J. R. (1994). Evidence that task performance should be distinguished from contextual performance. Journal of Applied Psychology, 79(4), 475–480. doi: 10.1037/0021-9010.79.4.475
Muhammad, H., & Sari, N. P. (2021). Implementation of The Synergy of Transformational-Servant Leadership Character In Islamic Boarding School. Journal of Leadership in Organizations, 3(2). doi: 10.22146/jlo.65642
Neubert, M. J., Wu, C., & Roberts, J. A. (2013). The Influence of Ethical Leadership and Regulatory Focus on Employee Outcomes. Business Ethics Quarterly, 23(2), 269–296. doi: 10.5840/beq201323217
Nguyen, N. T. T., Nguyen, N. P., & Thanh Hoai, T. (2021). Ethical leadership, corporate social responsibility, firm reputation, and firm performance: A serial mediation model. Heliyon, 7(4), e06809. doi: 10.1016/j.heliyon.2021.e06809
Nirel, R., & Glickman, H. (2009). Sample Surveys and Censuses. In Handbook of Statistics (Vol. 29, pp. 539–565). Elsevier. doi: 10.1016/S0169-7161(08)00021-7
Pawirosumarto, S., Sarjana, P. K., & Gunawan, R. (2017). The effect of work environment, leadership style, and organizational culture towards job satisfaction and its implication towards employee performance in Parador Hotels and Resorts, Indonesia. International Journal of Law and Management, 59(6), 1337–1358. doi: 10.1108/IJLMA-10-2016-0085
Piccolo, R. F., Greenbaum, R., Hartog, D. N. den, & Folger, R. (2010). The relationship between ethical leadership and core job characteristics: ETHICS AND JOB CHARACTERISTICS. Journal of Organizational Behavior, 31(2–3), 259–278. doi: 10.1002/job.627
Raharjo, K., Nurjannah, N., Solimun, S., & Achmad Rinaldo Fernandes, A. (2018). The influence of organizational culture and job design on job commitment and human resource performance. Journal of Organizational Change Management, 31(7), 1346–1367. doi: 10.1108/JOCM-07-2017-0286
Robbins, S. P., & Judge, T. (2013). Organizational behavior (15th ed). Boston: Pearson.
Santos, A. S., Reis Neto, M. T., & Verwaal, E. (2018). Does cultural capital matter for individual job performance? A large-scale survey of the impact of cultural, social and psychological capital on individual performance in Brazil. International Journal of Productivity and Performance Management, 67(8), 1352–1370. doi: 10.1108/IJPPM-05-2017-0110
Sarwar, H., Ishaq, M. I., Amin, A., & Ahmed, R. (2020). Ethical leadership, work engagement, employees’ well-being, and performance: A cross-cultural comparison. Journal of Sustainable Tourism, 28(12), 2008–2026. doi: 10.1080/09669582.2020.1788039
Schein, E. H. (2004). Organizational culture and leadership (3rd ed). San Francisco: Jossey-Bass.
Schwepker, C. H., & Dimitriou, C. K. (2021). Using ethical leadership to reduce job stress and improve performance quality in the hospitality industry. International Journal of Hospitality Management, 94, 102860. doi: 10.1016/j.ijhm.2021.102860
Scurlock, R., Dolsak, N., & Prakash, A. (2020). Recovering from Scandals: Twitter Coverage of Oxfam and Save the Children Scandals. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 31(1), 94–110. doi: 10.1007/s11266-019-00148-x
Shiah‐Hou, S., & Cheng, C. (2012). Outside director experience, compensation, and performance. Managerial Finance, 38(10), 914–938. doi: 10.1108/03074351211255146
Shin, Y., Sung, S. Y., Choi, J. N., & Kim, M. S. (2015). Top Management Ethical Leadership and Firm Performance: Mediating Role of Ethical and Procedural Justice Climate. Journal of Business Ethics, 129(1), 43–57. doi: 10.1007/s10551-014-2144-5
Sihombing, S., Astuti, E. S., Al Musadieq, M., Hamied, D., & Rahardjo, K. (2018). The effect of servant leadership on rewards, organizational culture and its implication for employee’s performance. International Journal of Law and Management, 60(2), 505–516. doi: 10.1108/IJLMA-12-2016-0174
Taherdoost, H. (2016). Validity and Reliability of the Research Instrument; How to Test the Validation of a Questionnaire/Survey in a Research. SSRN Electronic Journal. doi: 10.2139/ssrn.3205040
Van Scotter, J. R. (2000). Relationships of Task Performance and Contextual Performance with Turnover, Job Satisfaction, and Affective Commitment. Human Resource Management Review, 10(1), 79–95. doi: 10.1016/S1053-4822(99)00040-6
Watson, R. (2015). Quantitative research. Nursing Standard, 29(31), 44–48. doi: 10.7748/ns.29.31.44.e8681
Yaari, M., Blit-Cohen, E., & Savaya, R. (2021). Hybrid Organizational Culture: The Case of Social Enterprises. Journal of Social Entrepreneurship, 12(2), 291–313. doi: 10.1080/19420676.2019.1702581
Yang, Q., & Wei, H. (2017). Ethical leadership and employee task performance: Examining moderated mediation process. Management Decision, 55(7), 1506–1520. doi: 10.1108/MD-09-2016-0627