How can financial organizations improve employee loyalty? The effects of ethical leadership, psychological contract fulfillment and organizational identification

Abstract

Purpose

The purpose of this paper is to examine the impact of ethical leadership on the financial professionals’ loyalty by focusing on the mediating effects of perceived psychological contract fulfillment (PPCF) and organizational identification (OI).

Design/methodology/approach

A questionnaire survey was used in this research.

Findings

Financial professionals in Taiwan were recruited for the sample. The results revealed that the professionals’ experiences of ethical leadership positively associated with their loyalty toward their companies. The results further showed that the PPCF and OI significantly mediated the relationship.

Originality/value

Few studies have examined how ethical leadership could stimulate financial professionals’ loyalty. The findings of this study may provide some implications for those involved in the practice of leadership and employee loyalty programs. On the other hand, the focus of Taiwan is unique and helps improve the generalizability of previous studies on the relationship between ethical leadership and employee identification.

Citation

Tseng, L.-M. and Wu, J.-Y. (2017), "How can financial organizations improve employee loyalty? The effects of ethical leadership, psychological contract fulfillment and organizational identification", Leadership & Organization Development Journal, Vol. 38 No. 5, pp. 679-698. https://doi.org/10.1108/LODJ-07-2015-0142