Ethical Leadership: A Multi-Stage Mediation Model of Value Congruence and Organizational Identification on Employee Engagement

While previous research has established a link between ethical leadership and positive employee outcomes, the specific psychological mechanisms connecting them have remained under-explored. This study addresses these gaps by proposing a multi-stage mediation model that traces the path from ethical leadership to employee engagement through two key intermediate variables: supervisor–employee value congruence and organizational identification.

The author argues that ethical leadership functions as a catalyst for value alignment. By modeling ethical behavior and promoting normative conduct, leaders influence their subordinates' values. When employees perceive a strong alignment of values with their direct supervisor, they are more likely to identify with the organization as a whole. This organizational identification, in turn, fuels the emotional and cognitive energy that characterizes true employee engagement.

Analyzing matched survey data from 444 employees and 375 supervisors, the study demonstrates that value congruence acts as a full mediator between ethical leadership and organizational identification. This indicates that ethical leadership does not automatically create a sense of organizational belonging on its own; rather, it is effective only insofar as it creates a shared value system between the leader and the follower. This finding challenges earlier models that assumed a direct, simplified link between ethical leaders and organizational identification.

For practitioners, this research highlights that leadership development should focus on more than just behavioral modeling. To truly boost engagement, managers must be intentional about cultivating shared values through transparent communication and inclusive value-setting processes, particularly in the increasingly complex environment of remote or hybrid work.