Does Unethical Leadership Decrease a Follower's Performance?

Many, and I hope most, aspiring business leaders see the value in being ethical for the sake of ethics alone. In my view, personal and professional integrity are values worth upholding regardless of the outcome. Indeed, character is one of the key principles that drive our efforts at Cornell's Johnson Graduate School of Management to develop the world’s future leaders—it joins competence, compassion, and courage as one of our 4Cs of Leadership.

That said, allow me to add a more strategic reason for why you should care about ethical leadership: unethical leadership can reduce employee performance.

Specifically, along with Maryam Kouchaki (Kellogg School of Management) and Justin Wareham (University of Utah), I have recently begun to examine the negative performance consequences of receiving unethical requests. By unethical request, we mean being asked to engage in behavior that is unethical or morally questionable. For instance, in a recent survey we collected, employees provided numerous examples of unethical requests they had received at work: an engineer was asked to approve a project that was known to be at risk for structural failure; a sales representative was asked to grant credit approval to unqualified customers who were friends of her supervisor; a field technician was asked to close telephone repair tickets of elderly customers whose phones had yet to be fixed; and the list goes on.

But can unethical requests such as these actually affect an employee’s performance? The results of our preliminary research say, “yes.”

My colleagues and I have found that receiving unethical requests can undermine a person’s performance in both the short term and the long run. For example, in a laboratory experiment, we asked participants to complete a short memory task. Before starting the task, however, half of the participants received an ethically questionable request (i.e., to sign their name on a form—after completing their task—to verify that the research assistant had remained in the room to oversee the computer equipment, when, in fact, she had not). Not surprisingly, on average, those who had received the unethical request performed worse on the subsequent memory task. Their thoughts and mental effort were likely diverted from the memory task toward the impending ethical decision of whether or not to sign the form.

However, if unethical requests only hinder performance because they are mentally distracting in the short term, ill-intending managers could avoid such negative consequences by simply ensuring that the timing of their unethical requests does not coincide with employees’ cognitively demanding tasks. To such managers, we warn, “not so fast.”

In an analysis of surveys we collected from 298 managers and subordinates (in occupational categories as diverse as accounting, consulting, technology, customer service, education/training, marketing, etc.), we found that subordinates who receive unethical requests at work are rated by both themselves and by their supervisors as having lower overall job performance than those who do not receive unethical requests. Not only that, those who receive unethical requests are also much less likely to engage in what management researchers refer to as organizational citizenship behaviors (i.e., behaviors that are helpful to the organization but are generally not formally rewarded or included in an employee’s actual job description). Furthermore, we found that one potential reason for these longer-term performance consequences of unethical requests was a reduction in job motivation. That is, people who receive unethical requests at work report being less motivated at work—and decades of research have shown that lower motivation almost always means lower performance. Indeed, in the parlance of statistical analysis, we found that job motivation partially mediated the negative relationship between unethical requests and job performance at a statistically significant level. In everyday English, we found that, on average, those who received unethical requests were less motivated by their work, and thus received lower performance ratings from their supervisors.

In short, if subordinate performance is an important metric for evaluating leadership success, leaders would do well to remember that while unethical requests may increase profits in the short term, they can also undermine employee performance in the long run. It is often argued that organizations and their leaders can do well by doing good (referencing the potential reputational and even financial benefits of “giving back” to society). To this, we add a less optimistic corollary: organizations and their leaders can do poorly by doing bad. Leaders should be careful what they ask for.

* * *

An earlier version of this post appeared on the Leadership Blog of Cornell University's Johnson Graduate School of Management.

Photo credit: kev-shine, obtainted via Flickr under the Creative Commons Attribution 2.0 Generic license.