J Bus Ethics
DOI 10.1007/s10551-014-2433-z
Frequent Change and Turnover Intention: The Moderating Role
of Ethical Leadership
Mayowa T. Babalola • Jeroen Stouten •
Martin Euwema
Received: 23 August 2013 / Accepted: 14 October 2014
Ó Springer Science+Business Media Dordrecht 2014
Abstract In a multi-source study, we examine how fre-
quent change interacts with ethical leadership to reduce
turnover intentions. We argue that ethical leaders enhance
employees’ state self-esteem, which explains the moder-
ating effect of ethical leadership. Results from 124
employee-coworker-supervisor triads revealed that ethical
leadership moderated the relationship between frequent
change and turnover intention such that the relationship
was positive only when ethical leadership was low. The
moderating relationship could be shown to be mediated by
employees’ state self-esteem.
Keywords Ethical leadership
Frequent change
State
self-esteem
Turnover intention
Frequent Change and Turnover Intention: The
Moderating Role of Ethical Leadership
For several decades, addressing employee voluntary turn-
over remains a critical challenge for both scholars and
practitioners. This is to a large extent due to high personal
and organizational costs associated with voluntary turn-
over, such as costs of losing organization-specific human
capital, recruiting and training substitute employees,
reduced service quality, and other related costs (Allen et al.
2010; Glebbeck and Bax 2004; Hancock et al. 2013;
Mitchell et al. 2001; Wright and Bonett 2007). In this
regard, employee voluntary turnover has been widely
M. T. Babalola (&)
J. Stouten
M. Euwema
Research Group Occupational, Organizational Psychology and
Professional Learning, University of Leuven, Tiensestraat 102
box 3725, 3000 Leuven, Belgium
e-mail: mayo.babalola@gmail.com
considered a negative indicator of organizational effec-
tiveness (e.g., Glebbeck and Bax 2004; Griffeth and Hom
2001). Consequently, a large number of studies have built
on the understanding of turnover intention to address
retention of valuable employees and increase organiza-
tional effectiveness (Hom et al. 2012). This is not sur-
prising as turnover intention (i.e., willingness to voluntarily
leave one’s organization; Tett and Meyer 1993) has been
consistently found to be a predictor of actual turnover
(Fugate et al. 2012; Griffeth et al. 2000; Hom et al. 1992;
Vandenberg et al. 1999). Although the turnover intention—
turnover relation is not perfect, the former signals a
potential withdrawal problem, hence more volatile than the
latter. In accordance, understanding the cause of the turn-
over is essential to build effective retention policies and
organizational effectiveness (cf. Griffeth and Hom 2001).
With such importance and increasing organizational
reliance on employees to successfully adjust to today’s
rapidly changing work environment in order to stay com-
petitive (Chen et al. 2011), research is starting to focus on
how characteristics of our current, unstable work environ-
ment (e.g., frequent change) influences turnover intention,
an important indicator of employees’ adjustment to orga-
nizational change (Amiot et al. 2006). For example, Raff-
erty and Griffin (2006) empirically demonstrated that
employee’s feeling of uncertainty and lack of esteem fully
mediates the effect of frequent change on turnover inten-
tion. Although this previous work has increased our
knowledge on why individual perceptions of frequent
change is related to turnover intention, the finding exem-
plifies that while organizations initiate changes for several
good reasons, the outcome of change sometimes contra-
dicts its good intentions. Thus, a better understanding of
individual and contextual factors that may influence the
impact of frequent change on employee turnover intention
123

is needed. Glick et al. (1995) argued that employees are
unable to pinpoint a clear beginning and end point of
change when they occur frequently. Indeed, employees are
less likely to perceive experienced change as a discrete
event and are more likely to feel that change is unpre-
dictable due to their inability to pinpoint a clear beginning
and endpoint of change and may perceive change as fre-
quent which translates in employees’ estimate of the
severity and impact of the change. Moreover, Lazarus and
Folkman (1984) suggest that this way of viewing change is
subjective, as it does not necessarily link to concrete
objective events. Hence, having a closer look at under
which condition employees may react to this subjective
experience of frequent change is essential to help them
successfully adjust to organizational changes which are
intended to benefit them and enhance organizational
functioning. Such insight is valuable for both leaders and
organizations to address retention of valuable employees
because they determine the ultimate success of change
(Bartunek et al. 2006; Spreitzer and Mishra 2002). In dis-
cussing frequent change, throughout this manuscript we
refer to employees’ perceptions of frequent change.
Burnes and By (2012) recently suggest that all approa-
ches to change and leadership are underpinned by a set of
ethical values that influence actions of leaders and
strengthen or weaken the outcomes of change. In line with
this notion, it seems surprising that to date, research
intending to connect leadership and organizational change
has relatively been one-sided, focusing mainly on the role
of leadership competence and support in managing change
processes (e.g., Battilana et al. 2010; Seo et al. 2012); thus
excluding the ethical aspect of leadership, particularly
perceptions of ethical leadership which might provide new
insights in the relationship between change and important
outcomes, such as turnover intention. Indeed, leaders who
are perceived as ethical more strongly instill trust in
employees and encourage dedication to the change (cf.
Brown et al. 2005). We address these issues in the present
study by focusing explicitly on the linkage between fre-
quent change and turnover intention. In this relationship,
we examine the moderating role of ethical leadership.
Brown et al. (2005) defined ethical leadership as ‘‘the
demonstration of normatively appropriate conduct through
personal actions and interpersonal relationships, and the
promotion of such conduct to followers through two-way
communication, reinforcement, and decision-making’’ (p.
120). Such leaders do not only act as role models to their
followers, but also protect and treat them fairly and make
them equally responsible for the achievement of common
goals (Gini 1997). We argue that frequent change is likely
to influence employee turnover intention especially in low
ethical leadership context, in which there are no ethical cues
and valuable relational exchange to cope with changes. In
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M. T. Babalola et al.
contrast, ethical leaders can acquire trust and attract more
dedicated employees even in the face of frequent change by
providing them with essential resources to cope (e.g., state
self-esteem), thereby reducing turnover intentions.
Here, we also examine the underlying process that might
explain the interaction of frequent change and ethical lead-
ership on turnover intention. Specifically, we focus on
employee state self-esteem as a psychological mechanism in
this relation. State self-esteem is highly relevant in changing
environments as it refers to momentary fluctuations in
people’s feeling about themselves (Heatherton and Polivy
1991). When change occurs frequently, individuals are more
likely to feel fatigued by change and experience increased
anxiety due to inability to identify the start or endpoint of
change (Glick et al. 1995). As such, they are likely to
evaluate frequent change as potential threat to their self-
image, due to the unpredictable nature of such events
(Monge 1995). Research shows that state self-esteem is
characterized by sensitivity to evaluate events such as fre-
quent change, increased concern with self-image, over-reli-
ance on external sources of evaluation, and fluctuations in
mood (Kernis 2005). These fluctuations reflect the degree to
which individuals perceive others to currently value them.
Moreover, frequent change can be seen as positive process
depending on individual perception of ethical leadership.
Thus, in high ethical leadership context, one way such
leaders can mitigate the effect of frequent change on turn-
over intention is by removing threats to employees’ image,
which is mirrored in their state self-esteem. As a result,
employees are likely to become more positively inclined
toward change if leaders are seen as ethical.
Overall, our study contributes to change and ethical
leadership literature in several ways. First, we investigate
the hitherto unidentified direct relationship between fre-
quent change and turnover intention. Second, we identify
ethical leadership as a contextual variable that might
weaken the relationship between frequent change and
turnover intention, a thus far overlooked area in previous
studies connecting leadership and change. That is, frequent
change in itself may not by definition be always negative.
Much depends on how change is implemented and com-
municated and hence, on leadership. In fact, we aim to
contribute by showing that employees’ perceptions of fre-
quent change increase their self-esteem under conditions of
ethical leadership. Finally, we examine the underlying
process that helps us explain this relation. We propose that
the interaction of frequent change and ethical leadership on
turnover intention is mediated by employees’ state self-
esteem, which mitigates the possible harmful effects of
change on people’s intentions to leave the organization (see
Fig. 1). The proposed mediated moderation model was
tested using a multi-source study employing employee—
coworker—supervisor triads.
Change and Ethical Leadership
State Self-esteem
Frequent change × Turnover
Ethical Leadership Intention
Fig. 1 Representation of the tested model
Theoretical Background and Hypotheses
Frequent Change and Turnover Intention
Rafferty and Griffin (2006) identified the frequency of
change, which describes individual perceptions of how
often change occurs in their organization, as an important
feature of change which is pertinent to individuals. More-
over, the timing of change is also extremely crucial if
changes are being implemented (Glick et al. 1995). For
example, in highly busy time frames, initiating new pro-
cedures is quite risky. In fact, employees draw an inference
from the timing as to whether they consider a change to
occur frequently (Monge 1995). Hence, the choice when to
implement changes will be a determinant factor in
employees’ perception of how frequent they are submitted
to changes. Previous evidence has shown that in response
to frequent change, employee experiences high level of
uncertainty which in turn influences their turnover inten-
tion (Rafferty and Griffin 2006), an actual precursor to
quitting eventually (Bluedorn 1982; Hom et al. 1984;
Mobley 1977). The current study extends the work of
Rafferty and Griffin (2006) by examining the direct rela-
tionship between frequent change and turnover intention.
The unfolding model of turnover provides a basis for
understanding how frequent change may relate to
employees’ turnover intention. It suggests that if employ-
ees perceive a ‘‘shock to the system’’ (for example,
change); they will be jarred to voluntarily leave or quit
their jobs (Lee et al. 1996). A shock can be an anticipated
or unanticipated change that prompts employees to reflect
on the current situation and its implication with regard to
their current job and future in the organization. Shocks can
also emanate from an internal or external source, and it can
be negative (e.g., workplace assault or persistent change) or
positive (e.g., as a result of unexpected financial resource).
Lee et al. (1996) described ‘shock’ as incoming informa-
tion, which prompts image evaluation. The unfolding
model of voluntary turnover built on Beach’s (1990) image
theory to explain the decision paths that employees follow
while deciding to leave their job. The image theory states
that incoming information (e.g., frequent change) triggers
employees to compare this information against three
‘images’: value image (employees personal values relating
to the job), trajectory image (employee’s goals that influ-
ences his or her behavior on the job), and strategic image
(employees activities toward achieving their goals). If the
incoming information violates one or more of the
employee’s images (personal value, goals, and strategic
consideration), they will decide to quit their job (Harman
et al. 2007). Mitchell and Lee (2001) indeed argued that a
large number of employees who quit their job do so as a
result of such appraisal as employees are most likely to
experience the change as affecting at least one of the
images.
On the basis of theory and previous evidence, we pro-
pose that appraisal of frequent change is likely to instigate
employees to reflect on their job and hase an impact on
their image, which is expected to increase their turnover
intentions. Therefore, we hypothesize the following
Hypothesis 1 There will be a positive relationship
between frequent change and employees’ turnover
intentions.
The Moderating Role of Ethical Leadership
Given the adverse consequence of frequent change on
employees’ turnover intention, it is important to understand
possible mechanisms that could buffer the adverse effects
associated with frequent change. Thus, understanding
under which condition frequent change is related to turn-
over intention is crucial in this regard. Coyle-Shapiro and
Marrow (2003) noted that leaders play a critical role in
change processes. Considering this, we propose that ethical
leadership has an essential role to play during change
processes. Ethical leaders act in the best interest of their
followers and avoid harming them, which is resembled in
their decision-making and actions (Gini 1998; Kanungo
2001). Ethical leadership can be distinguished from
authentic leadership as authentic leaders tend to focus on
self-awareness and relational transparency (Walumbwa
et al. 2008). Ethical leadership also differs from transfor-
mational leadership because ethical leaders focus on
communicating and encouraging ethical conduct rather
than being a role model only (Brown et al. 2005). Previous
empirical research has shown that ethical leadership
accounts for additional variance in outcomes beyond other
related constructs (cf. Brown et al. 2005; Kalshoven et al.
2011).
Ethical leaders are honest, fair, and trustworthy (Treviño
et al. 2000, 2003) as represented, for example, by
employees’ willingness to report back to their leaders
(Brown et al. 2005). Howell and Avolio (1992) reported
that ethical behavior and honesty are one of the salient
features that characterize ethical leaders. In this way, they
create a trustworthy environment which has an influence on
123

employee’s satisfaction and dedication (De Hoogh and Den
Hartog 2008; Weaver et al. 2005). Honesty, fairness, and
trustworthiness reflect the ethical leader as a moral person
(Treviño et al. 2000, 2003). Employees perceive such
leader as a person who is sincere about his or her own
moral values. Treviño and colleagues further argued that
ethical leadership also entails being a moral manager,
which emphasizes on the leader communicating ethical
standards and being a role model for ethical behavior.
The moderating role of ethical leadership in the rela-
tionship between frequent change and turnover intention
can be explained by social learning and social exchange
theories which give insight about how ethical leaders
influence their followers (Mayer et al. 2009). Social
learning theory argues that ethical leaders influence the
behavior of their employees through role modeling (Ban-
dura 1977, 1986). Consequently, employees model the
behavioral pattern of the leader by observing, emulating
and replicating such behavior if found attractive and
credible. The theory also suggests that people learn from
reward for proper conduct and performance, and discipline
for unethical or inappropriate behavior. Rewards for ethical
behavior and punishment for unethical behavior within and
between groups are a source of learning for employees in
this regard. As noted by Treviño (1986), individuals serve
as an ethical guide for most people. Therefore, employees
ensure that their behavior conforms with acceptable ethical
principles and standards of their organization because they
know their behaviors are valued. Thus, employees feel
more attached to the organization due to clear expectations
of what is acceptable or not (Brown et al. 2005).
Similarly, ethical leaders influence their followers’
outcome through social exchange processes. The social
exchange theory (Blau 1964) based on principles of reci-
procity suggests that a good deed by an exchange partner
engenders the other to feel obligated to reciprocate with
good and positive behaviors (Gouldner 1960). Blau (1964)
differentiated between transactional (exchange of money
and resources) and socio-emotional exchange (fair treat-
ment and trust). We focus on the socio-emotional aspect of
the social exchange theory to explain the role of ethical
leaders when employees perceive threatening frequent
change as they treat employees with fairness and honesty
(Brown and Treviño 2006), which in turn evokes
employees to reciprocate with positive behavioral out-
comes by staying loyal to the organization. Employees who
perceive their leaders to be trustworthy and fair are sup-
portive, dedicated in the change process, and more
importantly willing to stay with the organization (Coyle-
Shapiro and Marrow 2003; Cunningham et al. 2002).
Indeed, some studies have underscored the importance of
trust in organizational change (e.g., Eby et al. 2000; Iver-
son 1996). Ethical leaders, however, create and promote an
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M. T. Babalola et al.
ethical atmosphere which increases employees trust in the
leader as they act as virtuous agents (Flynn 2008). Mulki
et al. (2006) also noted that such employees are more
contented, and less liable to leave their job.
In contrast, there is also a negative norm of reciprocity,
which states that negative acts will be reciprocated with a
reduced motivation to reciprocate (Gouldner 1960). Along
this line, we reason that during frequent change, absence of
fair treatment, honesty, and trust (in the case of low ethical
leadership) engenders employees to reciprocate with a
negative behavioral outcome by refraining loyalty to the
organization and leaving their job.
We argue that ethical leaders are able to mitigate the
potentially harmful effect of frequent change, as they do
not enact harm upon their followers by giving them due
regard and respect (Kanungo 2001). That is, ethical leaders
wish to create fair and secure environment in which they
generate trust in employees with regard to the specific
changes that will be taken place. As such, employees will
be more securely attached to the organization and will
perceive less of a threat. Along this reasoning, we expect
that while employees appraise frequent change, they will
be influenced by the fairness, honesty, and trustworthiness
of an ethical leader and the value ethical leaders place on
them. As such, ethical leaders are likely to mitigate the
different threats to their images as a result of frequent
change. Through social learning ethical leaders model and
encourage employees’ valued behavior regarding their job.
Moreover, employees remain committed to their job
reciprocating ethical leaders’ trust and fair treatment.
Hence, ethical leaders are expected to buffer image threats
as a result of frequent change which will translate in a
lower likelihood of employees leaving their job. In con-
trast, if employees perceive their leader to be less ethical,
frequent change will elicit a threat to one’s image. A threat
to one’s values and goals creates uncertainty which directs
employees to look for alternatives (see Fugate et al. 2012)
and will relate to a higher intention to leave the organi-
zation. In sum, we expect that the relationship between
frequent change and turnover intention will be moderated
by ethical leadership.
Hypothesis 2 Ethical leadership will moderate the rela-
tionship between frequent change and turnover intention so
that for low ethical leaders, the relationship will be more
positive.
In addition to the role of ethical leadership in the rela-
tionship between frequent change and turnover intention,
we also examine the mechanism underlying these relations.
Such insight is essential to determine where exactly in the
process ethical leadership will influence employee’s deci-
sion to remain with the organization in the face of orga-
nizational changes.
Change and Ethical Leadership
Wiesenfeld et al. (2000) posit that self-evaluations
mirrored in self-esteem play a crucial role in employee’s
decision to stay or leave their organization as it is closely
linked to the maintenance or harm for one’s personal
images. Along these lines, Brown and Marshall (2006) also
note that self-esteem is an evaluative emotional response
toward certain significant events. Building on this work and
drawing upon the group engagement model, we suggest
that the interaction of frequent change and ethical leader-
ship influence employee’s turnover intention through
feelings of self-esteem. We will outline this in more detail
below.
As discussed earlier, the perception of frequency of
change has been described as one of the most impactful
features that have adverse effect on individuals (Lazarus
and Folkman 1984). Research has shown that change sig-
nals psychological uncertainty to employees and may
reduce their self-esteem (Ashford et al. 1989; Moyle and
Parkes 1999). Similarly, Brown and Marshall (2006) stress
that valence events (e.g., change) either boost or threaten
people’s self-esteem, especially their feelings of state self-
esteem. For instance, when employees evaluate their image
(value, goals, and strategic consideration) during frequent
change, such evaluations either validate or threaten their
state self-esteem. Research has also shown that employees’
feeling of self-esteem is the result of the perceived fairness
of procedures and decision-making they receive from their
leaders—which is the case in a high ethical leadership
context. Indeed, through ethical leaders’ interpersonal
treatment and fair behavior they signal to employees that
they are valued and respected (Tyler 1997). Tyler and
Blader’s (2003) argue in their group engagement model
that the fair treatment of employees helps them assess the
extent to which they are involved and valued in the orga-
nization. Consequently, employees who experience valued
and fair treatments during frequent change (in the case of
high ethical leadership) experience such feelings of value
and self-worth (Tyler and Smith 1999). Moreover, ethical
leaders care more about processes rather than mere out-
comes (Brown et al. 2005; Walumbwa et al. 2011). Thus,
during frequent change, employee’s self-evaluation
reflected in their state self-esteem is likely to be enhanced
when they feel treated in a fair, valued, and respectful
manner. Brocker (1988)also noted that self-esteem serves
as a resource providing employees with a buffer reducing
the impact of negative conditions. Hence, in times of
insecurity and appraisal of change, ethical leaders’
behavior in terms of, for example, respectful and fair
treatment is an essential resource for maintaining or nur-
turing employees’ feeling of self-esteem (cf. Brockner
et al. 1998; Wiesenfeld et al. 2000). Such feelings of self-
esteem in turn influence their intention to stay with the
organization. Indeed, employees who feel they are
important, valued, and respected are more likely to stay
with their organization and do not think about quitting their
organization (Bowden 2002; Gardner and Pierce 2001;
Riordan et al. 2001). That is, as part of social exchange
processes, the positive return employees get from enhanced
self-esteem is reciprocated by their loyalty to stay with the
organization.
Taken together, as the interaction of frequent change
and ethical leadership predicts turnover intention (see
hypothesis 2); we expect that employees’ feeling of self-
worth (state self-esteem) will mediate the interaction of
frequent change and ethical leadership on turnover inten-
tion results. Thus, in the present study, we proposed a
mediated moderation. Mediated moderation occurs when
the interaction between an independent variable (frequent
change) and a moderator (ethical leadership) affects a
mediating variable, which in turn affects the dependent
variable (turnover intention; Muller et al. 2005).
Hypothesis 3 The interaction between frequent change
and ethical leadership on turnover intention is mediated by
employees’ state self-esteem.
We will test these hypotheses using a multi-source field
study. One of the most important challenges in field studies
is to ensure that the observed relationships between vari-
ables result from meaningful covariation rather than from
common method variance (Podsakoff et al. 2003). In order
to limit this bias, we collected data from three distinct data
sources: employees, as well as their coworkers and direct
supervisor.
Method
Procedure and Sample
We collected data from 250 employees and their matched
coworkers and direct supervisors in different organizations
in Belgium who were going through phases of change.
Respondents are from different sectors including financial,
food service, retail service, insurance, human resource,
telecommunication, manufacturing, government, technol-
ogy, and medical sector. The researchers identified contact
persons in the companies, who delivered the questionnaires
to employees with an accompanying letter explaining the
survey purpose. Respondents were assured anonymity and
confidentiality, as addressed envelopes were included to
return survey directly to the researchers. Moreover,
employees, coworkers, and supervisors received a unique
code to enable to connect the different triads in the data.
A total of 148 responded to all variables of interest
(response rate of 59.2 %), resulting to a final sample of 124
employee-coworker-supervisor triads. Focal employees
123

were 43 % male, (mean age = 38.55 years, SD = 10.81),
with an average tenure in their organization of 11.52 years
(SD = 10.57), 37 % completed secondary school, 58.2 %
obtained a bachelor degree, and 4.8 % obtained a master
degree. Coworkers were 41 % male (mean age = 38.11 -
years, SD = 10.24), with an average tenure in their orga-
nization of 10.53 years (SD = 9.88), 0.7 % completed
elementary school, 34 % completed secondary school,
63.3 % obtained a bachelor degree, and 2 % obtained a
master degree. Supervisors were 50 % male, (mean
age = 42.72 years, SD = 8.71), with an average tenure in
their organization of 14.61 years (SD = 9.31), 12.9 %
completed secondary school, 80.3 % obtained a bachelor
degree, and 6.8 % obtained a master degree.
Measures
Ethical leadership was assessed by the coworkers, mea-
sures of turnover intentions and state self-esteem were
assessed by focal employees, and supervisors indexed
frequent change.
Frequent change
The frequent change scale was measured by Rafferty and
Griffin’s (2006) three item scale. Sample items are:
‘‘Change frequently occurs in my unit,’’ ‘‘It is difficult to
identify when changes start and end,’’ and ‘‘It feels like
change is always happening.’’ Items were assessed using a
5-point scale that ranged from 1 (strongly disagree) to 5
(strongly agree). Cronbach’s alpha was.78.
Turnover Intention
Turnover intention was measured by a four item scale from
Kelloway et al. (1999) using a 5-point scale ranging from 1
(strongly disagree) to 5 (strongly agree). Sample items are:
‘‘I am thinking about leaving this organization,’’ ‘‘I am
planning to look for a new job.’’ Cronbach’s alpha was 0.95.
Ethical Leadership
Ethical leadership was measured by Brown et al. (2005) ten
item ethical leadership scale. Sample items are: ‘‘My
supervisor discusses business ethics or values with employ-
ees,’’ ‘‘My supervisor has the best interest of employees in
mind,’’ and ‘‘My supervisor makes fair and balanced deci-
sions.’’ Cronbach’s alpha of the scale was 0.91.
State Self-Esteem
State self-esteem was measured using Heatherton and
Polivy’s (1991), eight item scale on a 5-point scale which
123
M. T. Babalola et al.
ranges from 1 (strongly disagree) to 5 (strongly agree).
Sample items are, ‘‘To what extent do you feel appreci-
ated,’’ and ‘‘To what extent do you feel valuable.’’ Cron-
bach’s alpha was 0.89.
Control Measures
We used control measures in our analyses: age, gender,
education, and job tenure were included to control for their
effects on turnover intentions (Elvira and Cohen 2001;
Griffeth et al. 2000) as these variables have been argued to
correlate with turnover intention (Meyer et al. 2002).
Results
Table 1 shows the means, standard deviations, scale reli-
abilities, and intercorrelations for all variables.
In Hypothesis 1, we predicted a positive relationship
between frequent change and turnover intentions. Results
indicate that frequent change indeed had a positive direct
relationship with turnover intentions (b = 1.09, p \ .05).
Thus, Hypothesis 1 was supported.
In Hypothesis 2, we predicted that frequent change and
ethical leadership will interact to predict turnover intention.
The results show support for this hypothesis (b = -.25,
p \ .05; see Table 2; Fig. 2). Simple slopes tests showed
that the relationship between frequent change and turnover
intention was significant under conditions of low ethical
leadership (b = .28, p \ .05), but not significant at high
levels of ethical leadership (b = -.07, p [ .10).
Hypothesis 3 stated that state self-esteem will mediate
the interaction of frequent change and ethical leadership on
turnover intention. First, we tested whether the interaction
between the independent variable (frequent change) and
the moderator (ethical leadership) related to the mediator
(state self-esteem) (Edwards and Lambert 2007; Preacher
et al. 2007). Following the approach of Edwards and
Lambert (2007), we checked whether ethical leadership
moderates the relationship between frequent change and
state self-esteem (see Table 2). Results showed that the
interaction effect of frequent change and ethical leadership
on self-esteem is marginally significant, (b = .15,
p \ .06). Give the low statistical power associated with
finding interaction effects in field studies (Aguinis 1995);
we confirm this result as a step forward to test our mediated
moderation hypothesis. Simple slopes revealed that when
ethical leadership was high, the relationship between fre-
quent change and state self-esteem was stronger (b = .14,
p = .06), than for low ethical leadership (b = -.07,
p [ .38).
We examine the indirect effect using bootstrapping
(Preacher and Hayes 2008). Bootstrapping treats the
Change and Ethical Leadership

Table 1 Means, standard M SD 1 2 3 4 5 6 7 8

deviations, scale reliabilities,
and intercorrelations 1. Gendera 1.44 0.50 –
2. Age 38.55 10.81 0.09 –
3. Education 4.75 1.67 0.09 -0.09 –
4. Tenure 11.52 10.57 0.09 0.76** -0.03 –
N = 124. Reliabilities are 5. Frequent 3.14 0.99 0.11 -0.01 0.01 0.02 (0.78)
presented on the diagonal change
a
Coded: 0 male, 1 female. 6. Turnover 1.66 0.98 0.02 -0.25** 0.00 -0.17* 0.10 (0.95)
Education: 1 pre, 2 primary, 3 intention
high school, 4 associate degree, 7. Ethical 3.94 0.67 -0.09 0.07 0.11 -0.07 -0.11 -0.12 (0.91)
5 bachelor degree, 6 master leadership
degree, 7 doctoral degree
8. Self-esteem 4.11 0.61 0.08 0.01 0.16 -0.08 0.07 -0.46** 0.09 (0.89)
* p \ .05, ** p \ .01

Table 2 Regression results (b) for mediated moderation Turnover Table 3 Indirect effect of highest order interaction
Intention and State Self-Esteem
Mediator Effects SE (Boot) Boot LLCI Boot ULCI
Variables State self-esteem Turnover intention
State self-esteem -0.1214 0.0635 -0.2589 -0.0078
Step 1 Step 2
N = 5000 Bootstrapping resamples
Age 0.01 -0.02  -0.01
Gender 0.08 -0.02 0.04
sample as a population and then resamples with replace-
Education 0.08* -0.06 0.01
  ment a number of times and computes relevant statistics for
Tenure -0.02 -0.01 -0.02
each replacement sample (Preacher and Hayes 2004;
Frequent change -0.54  1.09* 0.65
Shrout and Bolger 2002). As this technique does not
Ethical leadership -0.42 0.68 0.33
require a normal distribution of the sample, a confidence
State self-esteem -0.82**
interval is computed. Therefore, to explain the indirect
Frequent change 9 EL 0.15  -0.25* -0.13
effects, we computed the bootstrapped confident intervals
F 2.14* 2.68* 8.42**
using 5,000 replications at different levels of ethical lead-
Total R2 0.11 0.13 0.36
ership. The result reveals support for hypothesis 3, as state
N = 124 self-esteem could be shown to mediate the interaction of
 
p \ .10, * p \ .05, ** p \ .01 frequent change and ethical leadership on employee turn-
over intentions (see Table 3).
In sum, notwithstanding that frequent change was pos-
itively associated with turnover intention; ethical leader-
5 ship can mitigate this relationship. Frequent change was
Low Ethical only associated with turnover intentions when ethical
4.5 leadership
leadership is low and not when it is high. In addition, state
High Ethical
Turnover intention

4 self-esteem mediated the interaction of frequent change

leadership
3.5
and ethical leadership on turnover intention.

2.5
Discussion

2 In this study, we have examined the beneficial role of

1.5
ethical leaders can play in organizations that go through
impactful and frequent changes. Specifically, we have
1 addressed when and how individual perceptions of frequent
Low Frequent change High Frequent change
change affects employees’ turnover intention, by examin-
Fig. 2 Employee turnover intention as a function of frequent change ing ethical leadership as a moderator, and state self-esteem
and ethical leadership interaction as a mediator in this relationship. The hypothesized

123

mediated moderation model was supported by the study
results, indicating that the interplay of frequent change and
ethical leadership in predicting turnover intention is med-
iated by employees’ state self-esteem. This finding
addresses Brown and Treviño’s (2006) call for underlying
processes that may help explain how ethical leaders influ-
ence the outcome of employees by illustrating the hitherto
unidentified mechanisms that play a role in the relationship
between change in organizations and turnover intentions.
Our results contribute to literature in several ways.
Based on our results, frequent change is positively asso-
ciated with the turnover intention of employees. This result
is consistent with the unfolding model of voluntary turn-
over (Lee and Mitchell 1994; Lee et al. 1996), which posits
that ‘‘shocks’’—anticipated or unanticipated—are events
that jar employees to voluntarily decide quitting their jobs.
Although previous research has investigated the relation-
ship between frequent change and turnover intention (e.g.,
Rafferty and Griffin 2006), to our knowledge, this is the
first study to examine frequent change as a direct (rather
than indirect) antecedent of turnover intention. In addition,
prior research has not examined how leadership, specifi-
cally, ethical leadership may mitigate the vast implications
of change in organizations in predicting employee turnover
intention. In this regard, research on organizational change
also has not connected with the insights from ethical
leadership research. Through social learning, ethical lead-
ers indeed encourage employees to maintain ethical
behavior in the work place. Moreover, as part of social
exchange and reciprocity processes, ethical leaders treat
employees in a fair, respectful, and trustworthy manner
which triggers a sense of loyalty in employees. Indeed, our
results show that ethical leadership moderates the rela-
tionship between frequent change and turnover intention.
That is, mainly for low rather than high ethical leaders,
frequent change was related to turnover intentions. This
exemplifies how ethical leaders may encourage sustained
loyalty to the organization even in the most challenging
and enduring times, which is most often the case during
change. Consistent with social learning and social
exchange theories, our findings suggest that while
employees evaluate their image as a result of shock to the
system (frequent change), ethical leaders can influence the
outcome of employees (turnover intention). This is the case
when employees perceive the leader as credible and
attractive thereby role modeling his or her behavior by
learning from rewards and punishment, and the value such
leader places on them.
Our study also added to the change and ethical leader-
ship literature by showing that state self-esteem mediated
the interaction of frequent change and ethical leadership on
employees’ turnover intention. Our results are in line with
the group engagement model (Tyler and Blader 2003)
123
M. T. Babalola et al.
applied to ethical leadership. Based on this theory, we
argued that notwithstanding the potential harmful effect of
the frequency of change on employees’ decision to quit
their job, an ethical leader, however, creates an environ-
ment which employees feel they belong, are treated fairly,
and valued thus boosting their self-esteem. Such that when
employees have high self-esteem, the potentially harmful
effect of frequent change on turnover intention is weak-
ened. Hence, even though frequent change has been often
labeled as inherently negative, this is not necessarily the
case. That is, if leaders are seen as ethical frequent change
actually arouses employees’ feelings of self-worth and
esteem. Hence, leaders have a particularly important role in
encouraging employees to experience frequent change not
as a negative event but as an opportunity for personal
growth and learning. Notably, employees care for being
treated in a fair and ethical manner from which they derive
meaning and a need to belong to the organization (and as
such a lower need to leave the organization). As such,
ethical leaders enable employees’ high level of self-esteem,
which translates into the decision to less likely leave the
organization.
Practical implications
Our study highlights that it is important for organizations to
note that frequent change is mostly associated with turn-
over intention, especially when ethical leadership is low.
But, ethical leaders can, however, reduce the potentially
detrimental effect, which imply that the attention of ethical
leaders is essential during frequent change. Hence, orga-
nizations could provide awareness and skills training to
enable leaders to behave in an ethical manner. Organiza-
tions could also consider hiring ethical leaders and provide
ethical training for current leaders with regard to the
importance of role modeling and ethical standards in the
organization. By doing this, employees can emulate these
behaviors as ethical leaders create a fair environment,
communicate standards, and promote ethical conduct
which will in turn make the employees more committed
and willing to stay with the organization, even in the pre-
sence of persistent change. As noted by Treviño et al.
(2006), frequent communication between employees and
the leader has a positive effect on their behavior in the
organization.
Organizations should also focus on boosting the self-
esteem of their employees. Our findings showed that ethi-
cal leaders could enhance employee’s self-esteem such that
they will still remain in the company even in the face of
frequent change. Organizations could use the influence of
ethical leaders to boost the self-esteem of their employees
by creating a fair and trustworthy environment, and
Change and Ethical Leadership
communicating expected normative standards. In addition,
it is also important to create an environment in which
employees feel they belong. Most importantly, when
employees have low self-esteem, the role of an ethical
leader is inevitable. For example, when employees feel
they are not competent enough or have low value in their
own capabilities, which reflect in their state self-esteem, an
ethical leader can create a fair and trustworthy environment
which employees feel they belong and thus, enhance their
self-esteem. As a result, organizations are able to retain
their human resources and talents.
Limitations and Further Directions
Despite the contributions of this study, there are some
limitations that should be acknowledged. First, even
though our measures were assessed by three different
sources (i.e., employees, coworkers, and leaders), common
source bias is still possible and cannot be completely ruled
out. However, research has shown that interaction such as
between frequent change and ethical leadership, which
constitutes the primary focus of this research, is less liable
to common method bias (Epitropaki and Martin 2005).
Common method variance would make interaction effects
less likely.
In our study, we used a cross-sectional design, which
means that we cannot test for causal relationships. Where
inferred in the mediated moderation prediction, relation-
ship directionality is based on and supported by theory and
existing literature. However, a reserved causality may also
be possible, for instance, we argued that ethical leadership
buffers the effect of frequent change on turnover intention,
there is a possibility that turnover intention interacts with
ethical leadership to predict frequent change. We explored
the plausibility of relationship reversal in our data by
testing a mediated moderation model with turnover inten-
tion as predictor and frequent change as outcome. No
significant interaction effect was found in the result we
obtained, so our data does not fit into a reserved model. In
addition, previous evidence supports the idea of change
being a predictor of turnover intention, rather than the
reverse (Amiot et al. 2006; Daly and Geyer 1994; Lam and
Schaubroek 2000; Martin et al. 2005). However, a longi-
tudinal examination of casual relationship could be utilized
in future research.
Finally, our study focused on ethical leadership only,
while disregarding similar leadership construct (e.g.,
transformational and authentic leadership). This preference
does not conflict with our focus on integrating organiza-
tional change and ethical leadership literature. As Brown
and Treviño (2006) noted, ethical leadership can be clearly
distinguished from similar constructs and in fact explain
additional variance in outcomes compared to other similar
construct (cf. Kalshoven et al. 2011). Yet, future studies
may control for similar leadership styles (for example,
transformational leadership) or examine whether other
mechanisms play a role in this process. Similarly, here we
focused on frequent change as this aspect of change has
been argued to represent employees’ perception of the
impact of change. Nevertheless, other aspects of change
may equally be relevant with regard to ethical leadership.
For example, organizations implementing change are at
risk to create change fatigue in employees. Bernerth et al.
(2011) indeed suggest that too much change could be
experienced as change fatigue, which influences employee
withdrawal. Here, ethical leadership could possibly also
alleviate the risk for change fatigue and arouse constructive
dedication toward the change.
Focusing on ethical leadership and change, the work of
Burnes and By (2012) taps on an important question rele-
vant for the change literature: Which behaviors are seen as
ethical during change. Although, we examined the impor-
tant role employees’ perception of ethical leadership play
in change, future research is needed to examine what
characteristics would encourage employees to perceive
leaders as ethical during change processes. Here, we took a
first step by testing whether ethical leadership is beneficial
for organizations that are implementing change. Yet, the
next step will be to examine in more detail which behaviors
leaders can adopt in order to be perceived as ethical in such
a change process.
Conclusion
Rapidly changing business environment, competition,
governmental rules, and regulation often prompt organi-
zations to change certain aspect of their business operations
and processes from time to time. Our study showed that in
response to individual subjective experience of frequent
change, employees react with a decision to voluntarily quit
their jobs. Results obtained from a multi-source field study
extend our understanding on when and how frequent
change influences turnover intention of employees by
integrating social learning, social exchange, and group
value model. In this regard, we found important roles of
ethical leadership and employees’ state self-esteem. We
demonstrated that ethical leadership behavior through
social learning and social exchange is essential to mitigate
the frequent change-turnover intention association. In
addition, through group engagement, ethical leaders create
an environment in which employees feel they belong
thereby boosting their state self-esteem, which in turn
reduces their turnover intentions during impactful and
frequent changes. Thus, organizations can leverage on the
123

influence of ethical leaders to retain valuable human capital
during change efforts.
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