Mediating Role Of Relationship Orientation On Ethical Leadership And Employee Performance Relation

Abstract

The aim of this study is to determine the relationships among ethical leadership, relationship orientation and employee performance at university hospitals in Turkey, in the Marmara region. In order to test relations among variables survey method was used. Research data was gathered through the implementation of questionnaires to nurses working in different units at university hospitals. During our field research, we reached 500 nurses and 361 nurses answered our research questionnaire. Among these questionnaires there were 275 valid surveys and research analyses were conducted with these valid surveys. The collected data was analysed with SPSS 21 and hypotheses were tested with regression analyses. According to the analyses result, following relationships between research variables were found. Ethical leadership has a direct effect on both relationship orientation and employee performance. Relationship orientation has a direct effect on employee performance and it has a mediating effect on the relationship between ethical leadership and employee performance.

Keywords: Ethical leadershiprelationship orientationemployee performancenurses

Introduction

Nowadays, ethical leadership, relationship orientation and employee performance have been major challenges for organizations. Also, intellectual capital, financial and physical resources are gaining importance for organizations to sustain their assets in a dynamic environment and to gain competitive advantage in achieving organizational goals. Leaders are needed to manage employees in line with organizational purposes. Ethical leadership in today’s organizations is gaining importance. Taking the leading situational variables into account, the most appropriate motivation for employees and their employer should be the behaviour style which also affects the job satisfaction.

The relationship and mutual impact between leadership and performance is important for organizations and employees, because people are social entities and need to be motivated.

Literature Review and Theoretical Framework

Ethical Leadership

Leadership process ability is a theoretical knowledge and requires analytical intelligence. This fact necessitates the fulfilment of situational conditions and does not consider universal bases. Leadership attitudes and decision –making are important in the leadership approach. (Yukl, 2010). Leaders also have an important influence in guidance of the behaviours of the spectators (Yukl, 2010). The basic question is that how does the leaders use their power to achieve work ethics. Especially to prevent scandalous behaviours and movements, the notion of ethical leadership has to be studied both by academicians and private sector managers.

Brown, Trevino, and Harrison (2005) adopted a two –dimensional approach to explain the nature of the ethical leadership. In the first dimension of this work, the features, behaviours, and decision –making processes that the leaders have are defined. Becoming an ethical person has been accepted as the basis of ethical leadership. However, the transfer of ethical behaviour to the followers and perception of the leader as ethical is expressed as the most difficult task. The second dimension of this work is expressed as moral management. This dimension supports the idea that the leader demonstrates his empowerment approach as a role model with his actions. In addition, the leader puts forward an understanding of management that conveys ethical values to employees by reinforcing them with two – way communication of management.

Another study of ethical leadership deals with a 4 dimensional approach (O’Connell & Bligh, 2009). At first it appears that the ethical leader acts as a leans. In other words, the ethical leader behaves in the framework of transparency. The second dimension mentions that the ethical leader influences followers in an effort to raise awareness of their behaviours. In the third dimension, it is mentioned that ethical leaders show virtuous behaviours in his professional and personal life and adopt justice and righteousness as the basic principles. The final dimension states that leaders guide the followers by taking social values in to consideration.

Ethical leaders focus on how to use their strengths while making decisions and influencing followers. A comprehensive empirical study was conducted by Resick, Hanges, Dickson & Mitchelson, (2006). In this study, six basic features of ethical leadership are put forward. These features are given below:

  • Character and Honesty

  • Ethics Awareness

  • Community / İndividual Focus

  • Motivation

  • Strengthening

  • Ethical Responsibility Management

De Hoogh and Den Hartog (2008) have contributed to literature with another work. This work utilized from 3 sub dimensions of ethical leadership: morality and fairness, role clarification, and power sharing. In our study, we utilized from the study of De Hoogh and Den Hartog, (2008) to measure ethical leadership. Related information about sub-dimensions of ethical leadership is given below.

Ethics and Justice: This dimension emphasized by Trevino and others in the way of ethical leaders’ approach to honesty, reliability, justice and employees. These leaders shape the structure of the organization with primitive and fair elections in decision –making processes. The fair and ethical behaviours that express the central values of the ethical leaders are defined by the authors as the dimension of morality and justice.

Openness of Duties / Roles: In addition to the dimension of morality and justice, openness of duties / roles are determined by the ethical leaders’ behaviours such as adoption of open communication, encouragement and rewarding of ethical behaviours of followers and clarification of expectations and responsibility of followers. Followers emphasize the significance of ethical leaders for clear understanding and meeting of their expectations.

Power Sharing: The last dimension of the ethical leadership is power sharing. This dimension is related to ethical leaders’ participative attitudes. It is related to giving chance to followers to make their voices heard in decision making processes and listening ideas and concerns of followers. Power sharing has an important place in leadership literature, because it is also important for making employees’ work more meaningful. Ethical leaders realize power sharing by supporting followers to participate in decision making processes.

In the light of these studies, ethical leaders are described as individuals who have fairness, honesty, morality and justice. In addition, ethical leadership features include ethical guiding, being principle to communicate ethical values to employees, consolidating positive ethical behaviour and punishing unethical behaviours.

Relationship Orientation

Trust, respect, value and good relationships that leaders show to their followers are known as the behaviours of consideration of the person (George & Jones, 2005) The relationship-focused leader opens communication channels, delegates responsibilities, and powers subordinates to use their powers in bilateral relations between himself and his employees (Eren, 2001). Work-oriented behaviour aims to satisfy the social and emotional needs of employees (Bloisi et al., 2003).

A leader who takes into consideration the individual, showing common trust, respect and closeness to employees, is often described as (Reitz, 1977):

  • Employees who help in personal problems,

  • Employees' proposals,

  • Equal treatment of employees,

  • Supporting employees.

The relationship-oriented leader is very interested in the human element (Francis & Milbourn, 1980). It is important for leaders to take account of the situation, to be friendly and approachable, to do personal goods for employees, to support their subordinates, to consult important employees before beginning, to accept the proposals, to observe individual welfare and to treat equally. These are the tasks that relationship-oriented leaders must attach importance to. (Kılıç, 2006).

In many studies it has been seen that the behaviours of the leaders influence the behaviours of others. (Mc Neese & Smith 1999; Sellgren, Ekvall & Tomson, 2008; Wong & Laschinger, 2012). It is important for leaders to display appropriate policies and behaviours in order to speed up the transfer of personnel, which is a major problem in healthcare organizations, to reduce work stress, to increase job satisfaction and to increase organizational commitment of employees. Leadership behaviours of health care managers influence nurses' job stress, organizational commitment and job satisfaction. It can be stated that the nurses have direct or indirect effects on individual health and patient care.

Employee Performance

Performance is an important criterion that quantitatively and qualitatively indicates what an individual or a group is doing at work. It is an important indicator to understand whether individuals or groups accomplish and achieve expectations of their employers. Also, it is an important indicator for organizations to understand how and to what extent the employees can reach the goals and objectives of organizations. The better the performance of the employees, the better the performance of the organizations (Şehitoglu & Zehir, 2010).

Employee performance is a key factor for managers and employees. Organizations need high performing workers in their fields to achieve their goals and objectives and to compete in the sectors around their environment. High employee performance is important for both employers and employees (Yelboga, 2006). For example; high employee performance provides employees important benefits such as higher income, better career choices, social status, pride, satisfaction and motivation for gaining new skills.

All the actions that employees perform during their work can be described as their performance indicators. From this point of view, all activities performed by employees for their positive or negative opinions, movements, and knitting about the organization will be confronted as a tool to determine their performance level (Şehitoglu & Zehir, 2010).

The purpose of this study is to reveal the mediating effect of relationship orientation on the relationship between ethical leadership behaviour and employee performance.

H1: Ethical leadership has positive effect on employee performance.

H2: Ethical leadership has positive effect on relationship orientation.

H3: Relationship orientation has positive effect on employee Performance.

H4: Relationship orientation mediates the relationship between ethical leadership and employee performance.

Research Method

Sample and Data Collection

Research data were obtained from questionnaires conducted on nurses working at university hospitals. Random sampling was chosen as sampling method. During our field research, we reached 500 nurses and 361 nurses answered our research questionnaire. Among these questionnaires there were 275 valid surveys to conduct research analyses. The obtained data were analysed with SPSS 21 and the hypotheses were tested with regression analyses.

In order to measure variables, we utilized from previously used scales in the literature. To measure ethical leadership 17 items scale developed by De Hoogh and Den Hartog (2008) was used. This scale has 3 sub dimensions: ethics and justice, opening tasks/roles and power sharing.

Relationship orientation was measured with a 15 items scale developed by Sin et al. (2002). The scale was tested in a follow-up study and found valid and reliable (Sin et al., 2004). This scale includes 4 sub dimensions: communication (Anderson & Narus, 1990) empathy (Berry, Zeithaml & Parasuraman, 1990) trust (Morgan & Hunt; 1994) and shared value (Evans & Laskin; 1994).

Employee Performance scale was adapted from the studies of Erdoğan (2011); Kirkman and Rosen (1999); Fuentes, Saez and Montes (2004) and Rahman and Bullock (2004). It was measured with 6 items. All of the variables are measured by five-point Likert scales ranging from (1) strongly disagree to (5) strongly agree.

Analyses

Various demographic information about the respondents is given in below Table 1 .

Table 1 -
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In order to reveal sub dimensions of the scales used in this research exploratory factor analysis and principal components analysis with promax rotation were used. The Bartlett sphericity test and the Kaiser-Meyer-Olkin (KMO) sample proficiency test were used to test whether the data set analysed is suitable for factor analysis. It is seen that KMO values are greater than 0.5 and the results of the Barlett test are significant. Thus, the data set is sufficient for factor analysis (Field, 2009; Alpar, 2010). The results of factor analysis are given in Table 2 .

Factor reliability is also given in Table 2 . Cronbach's Alpha values ​​are higher than the acceptable lowest value of 0.70. Cronbach's Alpha score is 0.94 for all questions. For ethical leadership, Cronbach's alpha was found 0.917 and for relationship orientation, Cronbach's alpha was found 0.943. Values of Average Variance Extracted (AVE) (Roldán & Sánchez-Franco, 2012; Fornell & Larcker, 1981) and Scale Composite Relability (SCR) (Bagozzi & Yi, 1988) were also calculated to test the reliability of factor structures. In order to ensure the convergence validity and reliability of the factors, the AVE value must exceed 0,50 and the SCR value must exceed 0,70. When Table 2 is examined, it is seen that these values provide validity and reliability conditions. As a result, it has been determined that the factors used in this study have internal consistency, reliability and validity. Question 2 of the ethics and justice sub-dimension, and questions 2 and 4 of the power-sharing sub-dimension were removed from the analysis due to the low factor value.

Table 2 -
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The mean, standard deviation and correlation values of the variables are given in Table 3 . According to this table mutual relations between variables are statistically significant. As can be seen from the table, the correlation values are positive.

Table 3 -
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Table 4 -
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When the results of the regression analysis performed to test hypotheses are examined, it is seen that all relations are statistically significant. In Model 1 it is seen that ethical leadership has a significant positive effect on performance (β1 = 0.324, p = 0.000). According to this result, H1 is supported. The relationship between ethical leadership and relationship orientation is demonstrated in model 2. As it is seen from model 2, ethical leadership affects relationship orientation positively (β2 = 0.400, p = 0.000) and this result supports H2. In Model 3, in which the hypothesis H3 is examined, it is seen that relationship orientation has a significant positive effect on employee performance (β3 = 0.514, p = 0.000). Thus, H3 is also supported.

Model 4 revealed the mediator effect (Baron & Kenny, 1986) between ethical leadership, relationship orientation and employee performance. When the effect of ethical leadership and relationship orientation on employee performance were examined together, it is understood that they were positively influential on employee performance (β4 = 0.457, p = 0.012, β5 = 0.142, p = 0.000). It is observed that the direct effects given in Model 1 and 3 are changed (decreased) in Model 4.

In Figure 1 , the mediator effect can be seen more clearly. Direct effects are shown with straight lines, mediator effects are examined with interrupted lines. All β coefficients obtained in the models were found significant. As a result of the analyses, the mediator effect was tested with the Sobel Test (Sobel, 1982). The test statistic was found 5.822 *** (p = 0.000). It shows that relationship orientation has a partial mediator effect on employee performance.

Figure 1: Figure 01. Research Model and Mediator Relation Display
Figure 01. Research Model and Mediator
       Relation Display
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5. Conclusion and Discussions

The major theoretical contribution of this study is to show the mediating effect of relationship orientation on the relation between ethical leadership and employee performance. The findings and results of this research provide evidence that ethical leadership is an important element for nurses. When the ethical leadership behaviours of managers increase, nurses show higher employee performance. The quantitative results showed that if the leaders of university hospitals behave more ethically, both workers and managers can be more effective for the organization. The main objective and goal of conducting this research is to provide a general framework from a hospital perspective in which ethical leadership and relationship orientation provide higher employee performance. In this context, outcomes of this study showed that ethical leadership behaviours of managers at all level are significant for leadership effectiveness. The study concludes that leaders of university hospitals in Istanbul should use ethical and effective leadership behaviour in their organizations. Furthermore, according to results of this research, leaders of university hospitals in Istanbul are encouraged to further develop their understandings of ethical and effective leadership behaviour and attempt to learn and develop their skills and knowledge in regard to these forms of leadership behaviour which may benefit them and their organizations. In sum up, this research provides contributions according to framework and findings for understanding ethical and effective leadership behaviour in university hospitals context in Istanbul. This study has some limitations. The study is only conducted in one university hospital; further researchers can test research results in different hospitals or in different sectors to generalize research results. Also, future studies can compare private and public sector results in the context of hospital industry or other industries.

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Publisher

Future Academy

First Online

18.12.2019

Doi

10.15405/epsbs.2019.01.02.71

Online ISSN

2357-1330