Ethics Institutionalization and Employees Performance in Pakistan: The Role of Work-Life Quality

Abstract

In recent years, ethics, quality of work-life (QWL), and job satisfaction are increasingly being identified as progressive indicators related to the function and sustainability of business organizations. Ethical cultures create trust within and outside corporations. Trust encourages appropriate risk-taking, which leads to innovation, which propels progress—and ultimately profitability. LRN(2006). However, little is known about ethics QWL nexus and how it impacts performance outcomes. This study aims to investigate the association between the institutionalization of ethics, QWL, and employee job-related outcomes and motivation to contribute to society (WMCS) in Pakistan. We proposed a theoretical framework modifying Koonmee et. al. (2010) model to include social responsibility factors. We hypothesize that Ethics institutionalization (in 1. Implicit and 2. Explicit form), as well as Social responsibility toward workers, positively affect employees QWL. And QML would in turn improve Job satisfaction, Organizational commitment, Team spirit, and Motivation to contribute to society. Empirical validity was established by conducting a survey using a close-ended questionnaire. Data was collected from 300 human resource managers of companies listed on the Pakistan Stock Exchange (PSX). It was analyzed using confirmatory factor analysis and structured equation modeling. Our study results reveal a positive relationship between both forms of ethics institutionalization, as well as Social responsibility towards workers, on QWL. Whereas, QWL seems to have a positive effect on all four outcomes i.e. Job satisfaction, Organizational commitment, Team spirit, and Motivation to contribute to society. Hence, QWL positively mediated the effect of both implicit and explicit ethical institutionalization along with Social responsibility towards workers, on all four outcomes. We also witnessed a direct effect of explicit form on Job satisfaction, and Motivation to contribute to society, and a similar direct effect of implicit form on Organizational commitment, and Team spirit. Implications and limitations of the study are discussed.