IMPACT OF ETHICAL LEADERSHIP ON EMPLOYEE JOB PERFORMANCE Vinita Paneri Research Scholar, Faculty of Management Studies, Pacific University, Udaipur (Raj) ABSTRACT The topic of ethical leadership has received significant attention in recent years due to ample of corporate scandals in and outside the country. Despite the growing concern of researchers in the field of business ethics, cases of unethical practices have continued to manifest in corporate organizations. Corporate leaders engage in decisions that have resulted to lack of trust in the organizations leadership; and lack of commitment to organization s goals. This paper tries to examine the concept of ethical leadership, the characteristics of an ethical leader, ethical leadership and its impact on employee job performance and how organizations can develop leaders that are not only sound in character but sound in action. Leaders are able to enhance and influence different outcomes in their respective organization. They are the role models for employees. Corporate business leaders are expected to be persons of strong characters and serve as role models to their employees; which without, the organization s goals may be undermined. Two important variables; trust and commitment were discussed for better understanding of ethical leadership and employee job performance because ethical leadership is positively related to job satisfaction and commitment to the organization. The study concludes with some suggestions from the literature. 56
INTRODUCTION WHAT IS ETHICAL LEADERSHIP? The ethical leader grows in deep rich soil of fundamental principles: trust, respect, integrity, honesty, fairness, equity, justice and compassion. He understands that positive relationships are the gold standard for all organizational effort. Good quality relationships built on respect and trust not necessarily agreement, because people need to spark off each other are the single most important determinant of organizational success. Stephen Covey (4) calls such principles the laws of the universe. The ethical leader knows that by acting in accordance with these laws, living in harmony with these basic principles, human enterprise flourishes and is sustained. Early last century the German philosopher and theologian, Martin Buber, described these successful relationships as I-Thou relationships, in which people recognize the intrinsic worth and value of others and treat each other with sincerity and respect. In the language of the 18th century German philosopher, Immanuel Kant, this is the principle of always treating the other person as an end and never merely as a means to serve your own personal interests. The ethical leader moves and acts in a world of I-Thou relationships, where in any situation, to the fullest extent possible in the circumstances, the intent is to honour and respect the worth of the other person. In this way the ethical leader embraces the act of service as described by Robert Greenleaf (5) in his concept of servant leadership. The effective leader acts as a servant to others engaged in the enterprise, not in any sense of inferiority, but as one who empowers others to achieve success by focusing on right action. The ethical leader understands the truth of our interconnectedness to each other, and that it is through our willingness to serve each other that we release our combined energy and potential to benefit the greater good of which we are all a part. 57
Why ethical leadership needs to be developed 1. First of all is the fundamental understanding that ethical leadership is principle based. It is anchored in moral or natural laws that are just as real in their effect as physical laws, such as the law of gravity. Moral principles of trust, respect, integrity, honesty, fairness, equity and compassion if honoured will return benefits in many ways; if broken, they will bring negative repercussions that usually affect not only the violator but innocent people as well. 2. It follows from its grounding in moral principles that ethical leadership is focused on service. The ethical leader takes care that other peoples priority needs are being served. This is done by forming I-Thou relationships and always treating the other person in a relationship as an end, never merely as a means to benefit oneself. 3. An organization s work flourishes when leaders throughout the formal structure take responsibility for ensuring that the work performed under their charge is ethically grounded. Of course, it is important that sound ethical behaviour is modelled at the top, but it is the leaders in the middle who will ensure that high ethical standards are set and maintained in the units under their charge. 4. All leadership development begins with the conviction that leadership is a skill that can be learned. Ethical leadership is grounded in a set of competencies that can be strengthened and developed through carefully designed opportunities for reflection, dialogue and practice. 5. Competence in ethical leadership can be measured through changes in perception of the leaders and by objective measures of organizational performance. Leadership development initiatives must be carefully designed to ensure that valid before and after measurements are made. 6. The foundational characteristics of both the human and natural world are unity, interconnection and interdependence. As ethical leaders distributed throughout the organization honour these principles consistently in carrying forward the work of their teams, so things work better in every way throughout the whole. 58
7. When the organization is functioning with good ethical relationships throughout, people are healthier and happier, and productivity measures improve in every way. There is an emotional bottom line that supports the financial bottom line. Ethical leadership honours the emotional needs of people for respect and meaning, which are reflected in quantum leaps in personal and organizational effectiveness. (14) 8. Ethical leadership is a discipline in its own right. It has a body of knowledge to be mastered and standards of practice to achieve. Leadership development practitioners need to look to their own mastery of this discipline to enhance their own effectiveness in fostering ethical leadership. 9. The influence of a well-functioning, ethically grounded organization goes far beyond its own operations. As an integral component of society that functions as a network of institutions, organizations, communities and individuals, the ethical organization has unlimited scope for influencing and promoting the common good. 10. In the 21st century as never before people everywhere are moving forward into a common future of global interdependence. If that future is to be enlivened with hope and the sense of meaning that lies at the core of human experience, it is of critical importance that leaders everywhere be the models of ethical competence that we now know without equivocation to be the source of human well-being and happiness. QUALITIES OF ETHICAL LEADERS 1. Keeps promises and commitments and expects others to keep theirs 2. Maintains loyalty to those not present 3. Apologizes sincerely 4. Acts with honesty 5. Takes responsibility and cleans up after mistakes 59
QUALITIES OF ETHICAL ORGANISATION 1. Creates a safe, healthy, attractive work environment for its workforce 2. Treats members of the workforce with dignity and respect 3. Provides fair and equal opportunity for advancement without regard for ethnicity, gender, age or other distinctions 4. Provides physical and mental health support for members of the workforce 5. Provides meaningful work 6. Encourages self-development for members of its workforce THE IMPORTANCE OF ETHICAL LEADERSHIP Fostering positive relationships provides benefits at three levels of organizational life. It is important to the individual as he or she comes to work every day and engages in activities that can fall anywhere along a spectrum from rewarding and fulfilling to disempowering, toxic and debilitating. No less in need of empowering ethical relationships is the team, large or small, formal or informal, project-focused or maintenance-oriented in every case it depends on supportive relationships among team members. Finally, the organization as a whole with vast spans of communication and disparate areas of responsibility needs a bonding agent to make people feel they are making a unique and valuable contribution to the whole. Ethical leadership across all three levels nourishes the relationships that empower human enterprise. At Individual level- Patricia Aburdene (6) decries the impact on 21st century life of what she calls unconscious capitalism, a human doctrine focused on profit and unmindful of the collateral damage to people, society and the ecology of the planet. The megatrends she describes constitute the rise of conscious capitalism where people let their actions be guided by moral principles. This way of thinking recognizes that in addition to the economy of financial transactions there is an emotional economy where emotional exchanges are registered in our 60
bodies and determine the quality of our mood and performance. Biologist Bruce Lipton (7) and psychologist Daniel Goleman (8) have produced an impressive body of research, which reveals that the internal chemistry that supports our life and well-being is being driven and moulded to a very large extent, and for better or for worse, by others. Just as we can no longer ignore the environmental science on climate change, so we can no longer afford to ignore the human cost that science is revealing about the effect of emotional toxins on our work, family and personal environments. At team level- Modern evolutionary theory outlines the extent to which collaboration and team effort have played a major role in our species rise to dominance. Research by Daniel Goleman (9) illustrates time and time again in workplaces ranging from high tech scientific establishments to manufacturing plants and sports teams that the whole is never the sum of its parts. It will always be greater when people work together, supporting and encouraging each other to achieve their personal best and compound the performance of the team. This kind of team effort derives from relationships where people value the worth of all members and where the leader working with emotional intelligence lubricates the mechanism of the group mind. At organizational level - At the organizational level the best model to emulate for exquisite performance comes from biology in the form of our own physical human body. Here trillions of cells work in perfect harmony and cooperation, somehow knowing what to do to support one another to produce health and well-being of the whole. If an outlaw or cancer cell breaks this code and goes unchecked, it can destroy the body. There is a clear analogy to the business organization. Just as the disease of cancer or other breakdown occurs in the human body if the cells don t work together, so in business organizations if people don t honoureach other s worth and recognize their interdependence, so sub-optimal performance or even breakdown results. 61
BENEFITS TO THE ORGANIZATION An ethical organization is a community of people working together in an environment of mutual respect, where they grow personally, feel fulfilled, contribute to a common good, and share in the personal, emotional and financial rewards of a job well done. There is a shared understanding that success depends on a constellation of relationships, both internal and external, not all of which are under the organization s control, but which it can influence through the way it operates from a platform of ethical principles. It begins by treating its people well, knowing that a satisfied and happy workforce will share that emotional contentment in positive interactions with customers and clients. Similarly, ethical leadership in the organization means that it will maintain positive relationships with its contractors and suppliers thereby reaping the benefit of their good will and service in return. Externally in the community and society at large, the organization operating on ethical principles will have a stellar reputation as a good corporate citizen, honoring its social responsibility and demonstrating a willingness to carry on its activities in accordance with all regulatory requirements. Operating in this way, the organization enjoys the prospects of continuing economic success where its products and services are well received and its reputation engenders good will, which translates into on-going support in the community and in the marketplace. CONCLUSIONS In this article we have said much about the importance of ethical leadership and how it can be fostered and nourished. We do not say that ethical competence is a replacement for good business sense or wise political judgment. Without that clear moral guidance we are on a ship flowing through dangerous waters without chart or compass. All of us are both passengers and crew responsible for each other. We know we can do that best and achieve the gold standard in 62
outcome when our relationships are right. When the organization will function with good ethical relationships throughout, people will be healthier and happier, and productivity will improve in every way. REFERENCES 1. Berghofer, Geraldine Schwartz gold standard for success:ethical leadership and the emotional bottom line 2. Khandelwal,,N.M(.2013).ethics and indian ethos in management. 3. Moss, M. (2002). Spreading the ethical word. Information Management Journal, 36(4), 42. 4. Manz, C., & Sims, H. (1993). Businesses without bosses. John Wiley & Sons. 5. Patricia Aburdene, op cit 6. Patricia Aburdene, Megatrends 2010: The Rise of Conscious Capitalism (Charlottesville: Hampton Roads, 2007) Daniel Goleman, Social Intelligence: The New Science of Human Relationships (New York: Bantam Books, 2006) 7. Stephen R. Covey, Principle-Centered Leadership (New York: Summit Books, 1991)) Robert Greenleaf, The Servant as Leader (Minnesota: The Robert K. Greenleaf Center, 1970) 8. Shukratmoronke bell (june 2012).impact of ethical leadership on employee job performance. International Journal of Business and Social Science, Vol. 3, No. 11 63