How Ethical Leadership Supports Employee Performance: The Role of Psychological Capital and Employee Engagement

This research investigated the relationship between ethical leadership and employee performance using data from the employees in Vietnamese service firms. We examined four dimensions of psychological capital (efficacy, hope, resilience, and optimism), and employee engagement as mediators of the ethical leadership to two dimensions of employee performance (task performance and contextual performance) relationship. Results from 563 respondents of 73 service firms revealed that ethical leadership was positively and significantly related to task performance and contextual performance and that this relationship was mediated by four dimensions of psychological capital and employee engagement, and work experience and education level, controlling for task performance and contextual performance. We discuss implication of our findings for theory and practice.