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All Journal Emerging Markets : Business and Management Studies Journal
Aisyah, Dira Agusti
Unknown Affiliation
Humanities Decision Sciences, Operations Research & Management Economics, Econometrics & Finance Languange, Linguistic, Communication & Media Social Sciences

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THE MEDIATING ROLE OF PSYCHOLOGICAL SAFETY IN THE EFFECTS OF ETHICAL LEADERSHIP ON EMPLOYEE PERFORMANCE Aisyah, Dira Agusti; Aritonang, Janice Abigail; Maharani, Anita
Emerging Markets : Business and Management Studies Journal Vol. 12 No. 2 (2024): Vol. 12 No. 2 (2024)
Publisher : Directorate of Academic Research and Community Services

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.33555/embm.v12i2.240

Abstract

This study aims to examine the relationship between ethical leadership and employee performance, with a specific focus on investigating the mediating role of psychological safety within Jakarta's financial services industry. A quantitative approach was employed using survey data collected from 30 employees in Jakarta's financial services sector. The study utilized Partial Least Squares Structural Equation Modeling (PLS-SEM) to test the hypothesized relationships. The results reveal that ethical leadership has a significant positive influence on psychological safety but does not directly affect employee performance. While psychological safety does not demonstrate significant mediating effects on the relationship between ethical leadership and employee performance, the study found a strong direct relationship between ethical leadership and the creation of a psychologically safe environment. The study's relatively small sample size limits its generalizability. Future research should consider larger samples and explore additional variables that might influence these relationships in the financial services context. Organizations in Jakarta's financial services sector should focus on developing ethical leadership capabilities to foster psychologically safe work environments. While ethical leadership may not directly impact performance, its role in creating supportive workplace conditions suggests it remains crucial for organizational effectiveness. This study contributes to the limited research on ethical leadership and psychological safety in Indonesia's financial services sector, offering insights into how these constructs operate in a non-Western context.
Co-Authors Anita Maharani Aritonang, Janice Abigail