Perceived Effect of Ethical Leadership on Employee Performance Among Commercial Banks in Kenya

Abstract

In the present day business environment, characterized by a faster communication system, managers of a firm cannot afford to engage in unethical practices because of its detrimental effect it can have on a firm but also the negative publicity that it will create and the consequent effect on the value. A critical issue in many organizations is practicing ethical leadership from the top management is not on its effect on the firm’s value but also on its employees because unethical leadership might have a negative effect on employee job satisfaction and performance. Therefore, a firm’s leadership is considered a major factor that has an indisputable influence on employee performance in any kind of organization. The objective of the study was to determine the perceived effect of ethical leadership on employee performance among commercial banks in Kenya. The study used cross sectional descriptive research design. The population of the study comprised of all the forty three commercial banks operating in Kenya. The study used stratified sampling because of ease of classifying the population into strata’s. The study used primary data that was collected through self-administered questionnaires. The information gathered was examined utilizing illustrative insights measures of focal propensity and measures of varieties and presented using tables and figures. The study found out that ethical leadership in the bank was achieved through good corporate governance structures, strict bank code of conduct and ethics, creation of ethical control and compliance department that ensure all ethical code of conduct is adhered to by all. The study found out that the leadership of the bank have emphasized trustworthiness, encouragement of the employees uphold the same moral values that they practice and doing what is right to societal and organizational cultural beliefs and values. Integrity in vi the bank was achieved through strong moral principles; moral uprightness in financial transactions, organizations leaders always encourages open and honest communication. Ethical leadership of the management was found to have resulted in increased manager-employee relationship thus preventing corruption and predictability, reducing dishonesty and communication breakdowns, and employee attitude towards the organization.