Investigating the Relationship between Core Self-Evaluation and Ethical Leadership with Organizational Financial Performance and Job Performance of Finance Staff

Due to the increasing demand for ethical standards in the current business environment, ethical leadership has particularly been taken into consideration. Thus, in this study based on self-verification theory, the effect of leaders’ core self-evaluation on the display of ethical leadership and applying social learning theory and social exchange theory the effect of leaders’ core self-evaluation and ethical leadership on organizational financial performance and the job performance of finance staff have been examined. This research is applied in terms of purpose and is cross-correlation regarding the method. The sample includes 61 pairs of employee and direct manager who were randomly selected through convenience sampling from finance staff working in public and private organizations of Fars province in 2016. The data was collected by the questionnaire and analyzed through structural equation modeling. The results of this study are consistent with self-verification theory and they indicate a positive and significant relationship between leaders’ core self-evaluation and ethical leadership as well as financial performance. Furthermore, the findings suggest that there is no significant relationship between leaders’ core self-evaluation and financial performance.  Leaders’ positive self-concept promotes ethical leadership which plays a key role in encouraging employees to enhance their in-role and extra-role performance. To this end, it is suggested that some training courses should be held in the organizations to improve the relationships between managers and employees (ethical leadership) and to raise the leaders’ core self-evaluation. Also, the level of ethical leadership and core self-evaluation should be measured to choose the leaders.