Does Ethical Orientation of HRM Impact on Employee Ethical Attitude and Behavior? Evidence from Sri Lankan Commercial Banks

  •  Viruli de Silva    
  •  H.H.D.N.P. Opatha    
  •  Aruna Gamage    


Employee ethical behavior (EB) has been recognized as the behavior that organizations pursue to drive performance and success. Despite many positive consequences of EB, corrupt business practices and unethical behavior are common in organizations. How Ethical Orientation of Human Resource Management (EOHRM) or ethical criteria embedded HRM functions directed as a ‘bundle’ could address this problem has not been empirically tested in research. This study examined how EOHRM could influence employee EB in organizations through an identified mediator employee Ethical Attitude (EA). A three-construct integrated model was developed based on literature gaps and tested empirically. The type of investigation was correlational, cross-sectional in the time horizon and unit of analysis was individual. A stratified random sample of 550 senior and middle-level managers was selected from 11 domestic Licensed Commercial Banks (LCBs) in Sri Lanka. A pre-tested structured questionnaire (with 5-point Likert Scale) was used to collect primary data. Using SPSS Version 23.0, correlation and regression analysis were performed on 360 usable responses (65%). EOHRM was positively and significantly related to employee EA (0.432, p<.001) and EB (0.494, p<.001). Employee EA partially mediated (0.269, p<.001) the relationship between EOHRM and EB. Results were consistent with the theoretically derived four hypotheses, establishing that EOHRM, or ethical criteria embedded HRM functions directed as a bundle will increase employee EA and EB at work. Theoretical and managerial implications of the findings and directions for further research are discussed.

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