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

Ethical leadership is crucial for cultivating a committed and engaged workforce, but the specific psychological processes behind this link are not fully understood. Drawing on social learning and relational identity theories, we propose a multi-stage model where ethical leadership boosts employee engagement by first increasing supervisor–employee value congruence and then strengthening organizational identification. Using data from 444 employees and 375 supervisors, we found that ethical leadership indirectly influences employee engagement through this sequential process. This study confirms that ethical leadership fosters shared values between supervisors and employees, which in turn enhances an employee’s sense of belonging to the organization. This value congruence was found to be a full mediator between ethical leadership and organizational identification. This research contributes to leadership theory by detailing the psychological path from ethical leadership to employee engagement. Our findings also offer practical insights for organizations, emphasizing the need to focus on value alignment and leadership development to create a highly engaged workforce.