Does leaders’ (un)ethicality challenge or threaten employees: A stress-appraisal explanation of leaders' influence on employee well-being

<p class="p1">Fueling (vs. depleting) employee well-being is challenging yet critical for organizations. Leaders&rsquo; ethicality or unethicality is a key contributor to employees' well-being. While research has documented associations between ethical and unethical leadership and employee well-being, the psychological process through which leader behavior influences employees is not as well understood. The present study uses stress appraisal theory to examine how employees' interpretations of (un)ethical leader behaviors affect their stress and self-regulation, which subsequently affects their psychological, physical, and social well-being (through the indicators of work withdrawal, somatic complaints, and depressive symptoms). Using a recall experiment, results found that unethical leadership evoked threat appraisals, which evoked depleted self-regulation and, in turn, worsened well-being outcomes. Ethical leadership was positively associated with challenge appraisals, which were positively related to engagement. However, engagement did not significantly influence the well-being outcomes. Theoretical and practical implications are discussed.