Impact of Ethical Leadership on Employee Turnover Intentions in the Construction Industry

Abstract

Construction projects are cost-intensive, complex, and challenging ventures that often place employees in a harsh work environment filled with safety hazards. Employees facing such rigid characteristics must also adhere to strict time schedules to complete construction tasks; as a result, construction employees experience high stress that can deplete their psychological resources. Consequently, construction employees develop intentions to quit the organization, commonly known as turnover intentions. This study evaluates the role of ethical leadership in reducing employee turnover intentions in the construction industry. In this study, work exhaustion and psychological contract breach are considered prime antecedents of employee turnover in the construction industry. We collected data from satellite town development projects in Pakistan and performed regression path analysis to assess hypothesized relationships between construction employee turnover intention and its antecedents. The moderating effects of ethical leadership in reducing the impacts of work exhaustion and psychological contract breach were studied. Results revealed that work exhaustion and perceived psychological contract breach positively correlate with construction employee turnover intention; however, ethical leadership significantly reduced the impacts of work exhaustion and psychological contract breach on employee turnover intention. The findings and practical implications of this study can be used to help construction managers act ethically in their managerial duties to retain employees and continue to motivate employees to complete project tasks.