Abstract
Reporting peers’ counterproductive work behaviors (CWBs) is important for maintaining an ethical organization, but is a significant and potentially risky action. In Bandura’s Theory of Moral Thought and Action (Bandura, 1991) he states that such acts require significant moral agency, which is generated when an individual possesses adequate moral self-regulatory capacities to address the issue and is in a context that activates and reinforces those capacities. Guided by this theory, we assess moral potency (i.e., moral courage, moral efficacy, and moral ownership) as key capacities predicting peer reporting intentions and assess three contextual factors influencing the generation and effects of moral potency: whether a potential informant (1) works for an ethical leader, (2) is embedded in a psychologically safe climate promoting interpersonal risk-taking, and (3) operates in a more normal or extreme context. We assess the proposed model across three field studies entailing both normal and extreme (i.e., firefighting units) contexts. Results show that ethical leaders raise employees’ moral potency, promoting greater willingness to report their peers’ CWBs. In normal work contexts, psychological safety positively moderated both the relationship between ethical leadership and moral potency and between moral potency and peer reporting intentions. However, psychological safety had the opposite effects in more extreme work contexts. Whereas psychological safety strengthens the positive association between moral potency and peer reporting intentions in normal work contexts, in contexts where individuals are more frequently exposed to extreme events, psychological safety weakens this relationship, thus highlighting the unforeseen downsides of psychological safety in extreme contexts.
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Introduction
Research shows that employees engage in various violations of rules, ethics, or norms in workplaces every day (Welsh et al., 2015). Whether it be stealing office supplies for home use, falsifying expense vouchers, or taking unauthorized long lunches, these examples of counterproductive work behaviors (CWBs), also known as deviant workplace behaviors (Bennett & Robinson, 2000) or detrimental citizenship behaviors (Pierce & Aguinis, 2015), are voluntary employee behaviors that undermine the goals of employers (Gruys & Sackett, 2003; Martinko et al., 2002; Robinson & Bennett, 1995). Such acts can be directed either interpersonally (e.g., aggressive behavior toward another employee) or organizationally (e.g., slacking off at work) (Bennett & Robinson, 2000) and carry significant costs. If left unmonitored or unreported, seemingly minor CWBs can lead employees down a slippery slope toward more significant violations and a work climate in which egregious behavior can become normalized over time (Bazerman & Tenbrunsel, 2011; Welsh et al., 2015), ultimately leading to poorer firm financial performance.Footnote 1
Given that failure to report CWBs can have a sizeable negative impact on organizations, scholars have sought to understand its antecedents and how leaders can attenuate it (Holtz & Harold, 2013; Mount et al., 2006; Ng & Feldman, 2015; Spector et al., 2006a). One commonly recommended strategy is for leaders to increase employees’ willingness to report their co-workers’ CWBs to organizational authorities, which scholars have defined as peer reporting intentions (Tenbrunsel et al., 2003). Because employees typically try to hide their CWB from their supervisors (Connelly et al., 2012; Treviño & Victor, 1992), co-workers can operate as proximal guardians of ethical workplace norms and standards, relieving managers from being the sole observers and enforcers of employee conduct. In this way, peer reporting can contribute to a culture in which standards and norms become more broadly enforced (Treviño & Victor, 1992).
Yet, extant research suggests many employees are afraid and unwilling to report their peers’ CWBs for several reasons (e.g., Ayers & Kaplan, 2005; Kish-Gephart et al., 2009; Miceli et al., 2008; Treviño & Victor, 1992). Some employees may simply lack the fortitude needed to speak up (Detert & Bruno, 2017; Kish-Gephart et al., 2009; Morrison & Milliken, 2000) due to the personal risks involved, such as potential retaliation or ostracism (Miceli et al., 2008). Alternatively, employees may perceive that their leaders and/or work climate do not welcome or encourage peer reporting (Schaubroeck et al., 2012). Indeed, research has shown that leaders play a key role in shaping their followers’ attitudes and behaviors, including their willingness to speak up about wrongdoing (Chamberlin et al., 2017; Liu et al., 2015), even if how they do so is not yet well understood. Finally, employees may also worry that the relational conflicts created by peer reporting may jeopardize their ability to work closely with and depend upon their peers for important tasks (Jehn, 1995; Treviño & Victor, 1992), making them less willing to report their peers.
Given these great benefits of peer reporting to organizations but great risks to the informants themselves, our investigation seeks to provide further insight into the important question: which individual and contextual factors generate the requisite moral agency needed for employees to report their peers’ CWBs? To address this question, we draw upon Bandura’s (1991) Theory of Moral Thought and Action as our overarching conceptual framework, and most directly, that theory’s emphasis on the generation of moral agency. As noted by Bandura (1991), “The relationship between [ethical] thought and conduct is mediated through the exercise of moral agency” (p. 67), which he describes as a major self-regulatory process whereby individuals generate the needed capacity to exercise control over their motivation, thoughts, and actions when faced with ethical challenges. The role of moral agency in translating thought into action is critical in the current study because, as noted above, co-workers are often aware of their peers’ CWBs and would thus form judgments as to the unethical nature of those actions, but often fail to act (Rest et al., 1999), creating what scholars have called the judgment-action gap (Jennings et al., 2015; Walker, 2004). Research has thus far focused on what reduces or negates the generation of moral agency, which has been termed moral disengagement (e.g., Bandura et al., 1996; Bandura, 2002b). There is limited research on which factors instead bolster moral agency, which may in part be due to a prior lack of measures to directly operationalize aspects of moral agency.
To promote research that addresses that gap, Hannah et al. (2011) created the construct of moral potencyFootnote 2 to operationalize key self-regulatory capacities they theorized would generate moral agency. Hannah and Avolio (2010) defined moral potency as “a psychological state marked by an experienced sense of ownership over the moral aspects of one’s environment, reinforced by efficacy beliefs in the capabilities to act to achieve moral purpose in that domain, and the courage to perform ethically in the face of adversity and persevere through challenges” (pp. 291–292). They theorized that, together, this triad of moral ownership, moral courage, and moral efficacy operates to generate moral agency. Yet, Bandura (1991) notes that “The self-regulation of conduct is not entirely an intrapsychic affair as the more radical forms of cognitivism might lead one to believe. Nor do people operate as autonomous moral agents impervious to the social realities in which they are enmeshed” (p. 20). Bandura’s (1991) Theory of Moral Thought and Action thus holds that the generation and application of moral agency is socially embedded. Indeed, emerging research has shown that moral potency, particularly the dimension of moral efficacy, as a form of moral agency, is an important antecedent of numerous ethically focused individual outcomes, including ethical voice, ethical taking charge (Gok et al., 2023), moral voice (Lee et al., 2017) and ethical silence (Wang et al., 2023), as well as team ethical outcomes such as team ethical voice and team organizational citizenship behaviors (OCBs) (Kim & Vandenberghe, 2020).
Yet despite these advances, extant research has not adequately assessed both sources of influence (psychological states and facilitating contextual factors) that bolster moral agency in tandem (Jennings et al., 2015). To that end, we theorize that three powerful contextual antecedents—ethical leadership (Brown et al., 2005), psychological safety (Edmondson, 1999), and the extent to which the context is characterized as extreme—will interact to influence individuals’ moral potency and thereby affect their peer reporting intentions. Ethical leadership is defined 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” (Brown et al., 2005, p. 120). As ethical role models who regularly communicate an ethics-first message to their followers (Brown et al., 2005), ethical leaders should strengthen followers’ moral potency, enhancing their willingness to report their peers’ CWBs. This is consistent with the theorizing of moral potency as being state-like and malleable (Hannah & Avolio, 2010; Hannah et al., 2011).
The influence of psychological safety in our model, however, is quite nuanced based on a third contextual factor: whether the individual operates in a more normal or extreme context. Psychological safety is defined as “a shared belief that the team is safe for interpersonal risk-taking” (Edmondson, 1999, p. 354). We theorize that the indirect relationship of ethical leadership on peer reporting intentions via moral potency in traditional work settings should be strengthened in a climate of transparency and interpersonal risk-taking (i.e., higher psychological safety—(Edmondson, 1999), which should reduce the perceived risk of reporting a peer. However, individuals in more extreme work contexts (such as the firefighting units studied in this paper) where the threat of physical danger to oneself and one’s peers is paramount, psychological safety may operate in an opposite way. We theorize that in more extreme contexts, high levels of psychological safety may create a permissive context that discourages the reporting of peers’ CWBs, particularly given the high levels of interdependence required in the life and death situations they encounter (Burke et al., 2018; Geier, 2016). Coupled with the relatively low moral intensity (Jones, 1991) of CWBs compared to more extreme ethical issues such organizations face (e.g., life or injury), this may promote overlooking such relatively ‘minor’ transgressions. We thus highlight the unforeseen downsides of psychological safety in more extreme work situations.
In sum, driven by the tenets of Bandura’s (1991) theory holding that the generation and enactment of moral agency is enmeshed in a complex set of individual moral capacities bounded by contextual factors, we examine the interactive effects of two social contextual factors (ethical leadership and psychological safety) on the generation of moral potency (i.e., moral efficacy, moral courage, and moral ownership) as key drivers of employees’ peer reporting intentions, and we examine how these relationships may operate differently across a third objective contextual factor: whether the team operates in a more normal or extreme work environment. This multifactor approach is consistent with Bandura’s (1991) statement in discussing moral agency that there is “a difference between possessing self-regulatory capabilities and being able to apply them effectively and consistently under the pressure of contravening influences” (p. 69). Figure 1 provides an overview of our conceptual model and proposed hypotheses.
Conceptual model and hypotheses
Through this investigation, we seek to make three significant theoretical contributions. First, we provide needed operationalization and empirical testing of parts of Bandura’s (1991) theory of moral thought and action. We operationalize that theory’s centerpiece, moral agency, through the construct of moral potency (Hannah & Avolio, 2010), and aligned with Bandura’s theory, test key contextual factors that may both generate and affect the manifestation of moral potency in peer reporting intentions. We thus also contribute to emerging research on moral potency itself by providing needed empirical evidence of its nomological network of antecedents and outcomes. Although limited individual-level empirical research has positively linked one or more of the three moral potency factors to followers’ adherence to organizational values, their level of intolerance for unethical behavior, and their intentions to report peers for unethical actions (Gok et al., 2023; Lee et al., 2017; Schaubroeck et al., 2010; Wang et al., 2023), and team-level research has shown how group moral potency (with the group as the referent) positively relates to group whistleblowing (Zhang et al., 2016), empirical research on moral potency, particularly research including all three of its components, is still in its infancy. As little is known about the factors that drive ethical judgments forward into intentions to act in general (Blasi, 1980; Jennings et al., 2015; Rest et al., 1999) a deeper understanding of the generation of moral agency can illuminate a key factor that reduces the judgment-action gap (Walker, 2004).
Second, despite the proliferation of research on ethical leadership (see Brown and Mitchell (2010) and Ng and Feldman (2015) for reviews), including the uncovering of its associations with reduced CWBs (Detert et al., 2007; Mayer et al., 2010) and employee voice behavior (relevant here as peer reporting is a specific form of voice) (Lee et al., 2017; Walumbwa & Schaubroeck, 2009), relatively little is known about the mechanisms through which, or the conditions under which, ethical leadership wields its positive influence. In their meta-analysis of the antecedents and consequences of ethical leadership, Ng and Feldman (2015, p. 948) stated that, “although both social learning theory and social exchange theory have helped explain the general dynamics underlying the positive effects of ethical leadership on employees (Brown & Treviño, 2006), we know far less about the mediating psychological process through which ethical leadership elicits these effects.” Thus, linking ethical leadership to peer reporting intentions via moral potency, under varying conditions of psychological safety, advances understanding of how ethical leadership operates.
Third, through three unique field studies of full-time employees working in both normal (i.e., business professionals and academic institution staff) and relatively more extreme work environments (i.e., professional firefighters) we shed new theoretical insights into how ethical leadership and psychological safety may function differently in influencing the generation and application of moral agency across these contexts (Mesmer-Magnus & Viswesvaran, 2005; Victor et al., 1993). By examining our model in both normal and extreme contexts (Burke et al., 2018; Geier, 2016), we thus not only respond to calls for research to better understand non-traditional and extreme contexts in general (e.g., Bamberger & Pratt, 2010), but also provide greater theoretical insight into the highly contextualized nature of the generation and enactment of moral agency, as theorized by Bandura (1991).
Theory & Hypotheses
Distinguishing Between Peer Reporting and Whistleblowing
The importance of employees speaking up to improve the status quo at work has been written about extensively in recent years (Miceli et al., 2008; Morrison, 2011, 2014; Wilkinson et al., 2020). Here, we briefly describe how individuals’ intent to engage in peer reporting is closely related to whistleblowing (with which peer reporting shares the most conceptual overlap among the ‘speaking up’ constructs). According to Tenbrunsel et al. (2003), peer reporting occurs when an employee reports their co-workers’ CWBs to organizational authorities. In this way, peer reporting is a specific form of whistleblowing (Treviño & Victor, 1992), defined as “the disclosure by organization members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action” (Near & Miceli, 1985, p. 4) (cf. Near & Miceli, 2016). What primarily distinguishes peer reporting from whistleblowing is the perceived severity of the ethical violation (Valentine & Godkin, 2019). As theorized by Jones (1991), the perceived severity or moral intensity of an issue often drives individuals’ ethical decision-making process and resultant ethical behavior. When employees choose to or intend to blow the whistle, they often do so because they perceive the offense as considerable and posing significant harm/risk to the organization and/or external stakeholders. In contrast, peer reporting (and the intent to do so) typically involves speaking up about what employees perceive as “lesser” violations (e.g., taking long lunch breaks, stealing office supplies, falsifying expense reports, etc.). Another key difference is that peer reporting occurs within the organization, whereas whistleblowing involves reporting to entities outside of the organization (e.g., the press, regulators, and/or other authorities). According to Bowling and Lyons (2015):
With whistle-blowing, the organization is typically the perpetrator, society is often the victim, the misbehavior is criminal, and an external entity—such as a government agency—investigates the reported behavior…With peer reporting, on the other hand, one or more employees is typically the perpetrator, either another employee or the organization as a whole is often the victim, the misbehavior may or may not be criminal, and the organization investigates the report… (p. 81).
Thus, compared to whistleblowing, peer reporting tends to be a more internally focused behavior driven by proximal contextual factors (e.g., leadership and climate on which we focus in this paper), versus more distal factors (e.g., protecting investors or customers). Moreover, employees typically report their peers to supervisors. Thus, peer reporters may lack the veil of anonymity that whistleblowers often enjoy, making it potentially riskier. Given our interest in understanding what fuels employees’ willingness to report their peers’ CWBs, and the practical difficulties associated with capturing peer reporting behavior (see the Discussion for further explanation) we focus here on peer reporting intentions rather than whistleblowing intentions. Regardless, while whistleblowing has been studied extensively, but peer reporting has not (Bowling & Lyons, 2015), we can better contribute to this growing literature by highlighting peer reporting’s key individual and contextual antecedents.
Moral Potency as an Antecedent of Peer Reporting Intentions
Rest and colleagues developed a four-stage model (Rest, 1986; Rest et al., 1999) proposing that four “inner psychological processes together give rise to outwardly observable [ethical] behavior” (p. 101): moral sensitivity, moral judgment, moral motivation/intentions to act, and moral action. While individuals often make moral judgments about matters (e.g., determining that a co-worker’s harassment of another peer is wrong), the formation of intentions to personally act on those judgments (e.g., intending to report the perpetrator’s actions oneself) are, on average quite rare (Blasi, 1980; Jennings et al., 2015; Rest et al., 1999). Bandura (1991) states that the formation of such intentions requires the generation of significant moral agency.
We propose that moral potency (Hannah & Avolio, 2010) is a key psychological mechanism generating such moral agency that drives employees’ peer reporting intentions. Moral potency comprises three dimensions—moral efficacy, moral courage, and moral ownership. The construct was created with the espoused purpose of identifying factors which explain individual differences in translating moral judgments into moral intentions and action (Hannah & Avolio, 2010). Hannah et al. (2011) defined the three components as follows. Moral efficacy is “one’s belief in his or her capabilities to organize and mobilize the motivation, cognitive resources, means and courses of action needed to attain moral performance, within a given moral domain, while persisting in the face of moral adversity” (p. 676). Moral ownership is “the extent members feel a sense of psychological responsibility over the ethical nature of their own actions, those of others around them, their organization, or another collective” (p. 674). Finally, moral courage is “(1) a malleable character strength, that (2) provides the requisite conation needed to commit to personal moral principles, (3) under conditions where the actor is aware of the objective danger involved in supporting those principles, (4) that enables the willing endurance of that danger, (5) in order to act ethically or resist pressure to act unethically as required to maintain those principles” (p. 676). Importantly, the three moral potency components are conceptualized as psychological states rather than stable traits, and thus are malleable (Hannah et al., 2011). We first theorize the mediating effects of moral potency between ethical leadership and peer reporting intentions, and then propose the moderating effects of workgroup psychological safety climate and of more extreme contexts on those relationships.
Mediation of Moral Potency in the Ethical Leadership-Peer Reporting Relationship
Prior research has found that a key influence on employees’ willingness to speak up about organizational wrongdoing is their perception of their manager’s responsiveness to employees’ concerns (Lowe et al., 2015), or more generally, the presence of supportive and ethical leaders (Near & Miceli, 2016). Specifically, employees tend to raise the alarm when they think their supervisors want to learn about the wrongdoing and will intervene if warranted (Near & Miceli, 2016). In this way, leaders signal to followers their openness to hearing “bad news” and valuing proper conduct. Indeed, research has shown that employees’ beliefs about their leader’s ethicality raises their likelihood to report wrongdoing (Liu & Hong, 2017). Followers of more ethical leaders also tend to speak up more proactively about work-related issues in general (Avey et al., 2012; Walumbwa & Schaubroeck, 2009). Taken together, this evidence suggests that leaders who exhibit ethical leadership should increase employees’ willingness to report their peers’ CWBs.
Yet, why ethical leaders promote their employees to act in ethical ways is unclear, given the sparse research on the psychological mechanisms through which ethical leadership wields its positive effects (see Ng & Feldman, 2015). We propose that ethical leadership drives higher peer reporting intentions through increasing followers’ moral potency (Hannah & Avolio, 2010). Research has begun to establish links between ethical leadership and both group-level moral potency (Zhang et al., 2016), and one or more of the three components of individual-level moral potency (Gok et al., 2023; Lee et al., 2017; Schaubroeck et al., 2010). Research also suggests that abusive supervision and exploitative leadership—which are in ways counter to ethical leadership—reduce followers’ moral potency in general (Wang et al., 2023) and moral courage singularly (Hannah et al., 2013). Below, we build theory on the mediating effects of ethical leadership—through all three components of moral potency—on peer reporting intentions.
Moral Efficacy
A key antecedent of self-efficacy is the influence of role models who show what ‘right looks like’ in action and provide positive persuasion (Bandura, 1997). By role modeling ethical actions for their followers, ethical leaders show followers how they can and should act in ethical ways even when it may be difficult, thereby enhancing their moral efficacy (a form of self-efficacy). Witnessing their leaders act as moral managers by (a) communicating an ethics-first message, (b) considering the ethical implications of their decisions, and (c) establishing ethical practices that foster an ethical climate (Brown et al., 2005), employees are likely to learn behavioral scripts and skills that make them more confident that they can make difficult ethical decisions and take corresponding actions (e.g., reporting their peers’ CWBs). Ethical leaders also attempt (a) to inspire in followers a desire to act ethically, (b) to persuade their followers that they can act ethically, and (c) to highlight the importance of taking ethical action. Such affective arousal and persuasion are also key drivers of forms of self-efficacy, such as moral efficacy (Bandura, 1997). Bandura (1991) thus states that moral efficacy is a key factor in the generation of moral agency because “self-regulation of conduct requires not only self-regulatory skills but also strong self-belief in one's capabilities to effect personal control (p. 69).
Moral Ownership
Individuals also vary in the extent to which they feel personally responsible for reporting wrongdoing, which is a key psychological antecedent of peer reporting (Ayers & Kaplan, 2005; Gao et al., 2015; Lowe et al., 2015; Near & Miceli, 2016). Building from the general concept of psychological ownership (Pierce et al., 2003), moral ownership captures a sense of personal responsibility for ethical matters in one’s environment, which Kohlberg and Candee (1984) argue is necessary before people will take ethical action themselves. In their inductively created model of courageous behavior, Schilpzand et al. (2015) similarly propose that individuals must experience “felt responsibility” before they will act in situations requiring courage (e.g., peer reporting). Such moral ownership requires individuals to believe that they should act and not be an ethical bystander. Ethical leaders speak of the importance of maintaining ideals, values, and beliefs in the workplace, and they put reinforcements in place to encourage followers to embrace responsibility for ethics (Brown et al., 2005). Ethical leaders should thus be instrumental in fostering higher felt accountability in their followers. This is critical because when individuals lack felt ownership, they tend to disengage their moral agency, such as by justifying why they are not acting, discounting the level of harm being done, diffusing responsibility to others, or blaming the victim (Bandura et al., 1996; Bandura, 1991, 2002b).
Moral Courage
Finally, peer reporting requires assuming personal and social risk, and individuals must therefore face, overcome, and act in the presence of threat or fear, thus requiring moral courage. Walker and Henning (2004) argued that observing moral exemplars, such as ethical leaders, will enhance observers’ moral courage through social learning processes. Observing leaders act ethically across situations where they face the challenge of choosing the “harder right” over the “easier wrong” should bolster their courage to face the risk of enforcing peer accountability. In addition, ethical leaders make ethical behavior (and the enforcement of such behavior) normative in the group (Brown et al., 2005; Schaubroeck et al., 2012). As such, followers should tend to believe that the leader will sanction and support their acts of moral courage, prompting them to risk acting against peers’ transgressions. In speaking of the need for moral courage to drive ethical behavior in organizations, Sekerka et al., (2009, p. 566) note that such “strength of will is needed to face and resolve ethical challenges and to confront barriers that may inhibit the ability to proceed toward right action [and thus is] a quality or attribute necessary for ethical behavior in organizational settings.”
Moral Potency as a Composite Construct
Hannah et al. (2011) proposed that the three moral potency dimensions work together to create moral conation—the impetus to act ethically. In describing this interdependency, Hannah et al., (2011, p. 677) stated that “Individuals may feel responsible to act (i.e., have moral ownership) and believe that they have the capacity to do so (i.e., have moral efficacy), yet still have insufficient courage to overcome the threat being faced and to act. Moral ownership, efficacy, and courage are thus each necessary yet not sufficient.” Consistent with this approach and with other research using the construct (e.g., West et al., 2019; Zhang et al., 2016), we operationalize moral potency as a single, holistic construct. Based on the logic presented above stemming from Bandura’s (1991) Theory of Moral Thought and Action and its focus on contextual factors (e.g., leadership) that influence the extent to which individuals generate moral agency, we propose that ethical leadership will activate followers’ moral potency, increasing their willingness to report their peers’ CWBs.
Hypothesis 1
Moral potency mediates the positive relationship between ethical leadership and employees’ intent to report their peers’ CWBs.
The Moderating Role of Psychological Safety in Normal Work Contexts
Research suggests that a psychologically safe work climate increases the likelihood of employees’ willingness to blow the whistle internally (Liu et al., 2015) and report their peers for sexual harassment (Walker et al., 2019). As multiple contextual factors interact with individual factors to produce moral agency (Bandura, 1991), we theorize that psychological safety will bolster the effects of ethical leadership on followers’ moral potency, as well as bolster the effects of follower’s moral potency on their willingness to report their peers’ CWBs. Below we first theorize these bolstering effects for employees operating in more normal (i.e., non-extreme) work contexts. We then theorize opposite moderating effects of psychological safety for employees operating in more extreme contexts.
Psychological safety fosters a sense of transparency, and centers on “the importance of creating a workplace in which perceptions of interpersonal risk are minimized” (Frazier et al., 2017, p.116). In normal work contexts, when employees perceive lower risks for acting in ways that may challenge or disrupt interpersonal relationships or the status quo, psychological safety helps to increase employees’ confidence, courage, and motivation to engage in behaviors that they might not otherwise exhibit (Chaleff, 2009; Pury et al., 2007). Higher levels of psychological safety are positively associated with employees voicing ideas, suggestions, and/or concerns to those in positions of authority (Detert & Burris, 2007; Liang et al., 2012; Walumbwa & Schaubroeck, 2009). Yet, managers do not always value voice (Burris et al., 2017; Fast et al., 2014) and a perceived lack of psychological safety can lead employees to believe that speaking up is likely to result in retaliation by more powerful team members or leaders (Schein & Bennis, 1965; Sumanth et al., 2011). Thus, the risks to employees of speaking up may outweigh the perceived benefits, causing employees to remain silent (Morrison, 2011) and turning a blind eye to their peers’ CWBs, despite their desire to uphold an ethical work environment (Mayer et al., 2013).
Psychological safety may be somewhat influenced by one’s immediate supervisor, but it is more widely influenced by a varied and broader set of factors in the work environment, including supportive organizational practices (e.g., mentoring, diversity) (Carmeli & Zisu, 2009; Chen et al., 2014; Singh et al., 2013), network and relationship ties (Burris et al., 2009; Gu et al., 2013), team characteristics (Bresman & Zellmer-Bruhn, 2013; Chen & Tjosvold, 2012; Faraj & Yan, 2009), and various individual differences (Bienefeld & Grote, 2014; Frazier et al., 2017; May et al., 2004). Given these manifold causes, we model psychological safety as an exogenous moderating variable while accounting for the direct influence of ethical leadership on psychological safety in our empirical analyses. Furthermore, consistent with our approach, a recent review of the psychological safety literature shows that a growing body of research has begun to position psychological safety as a moderator (see Newman et al., 2017, p. 528), thus lending further credence to its exogenous position in our model.Footnote 3
We first theorize that psychological safety will bolster the effect of ethical leadership on employees’ moral potency. While role modeling ethical behavior, regularly communicating with followers about the importance of upholding ethical values, and providing ethical reinforcements are likely to strengthen employees’ perceived moral potency, a psychologically safe work climate that explicitly sanctions and affords employees the freedom to take such risks should be consistent with and thus heighten these positive leadership effects. As psychological safety stems from more than just one’s direct leader as described above, it provides a more generalized transparent environment that should bolster the effects of ethical leadership in promoting followers’ felt potency that they can exercise moral agency in their group (Bandura, 1991). In a less psychologically safe context, countervailing factors could suppress the effects of ethical leadership on followers’ moral potency. For example, powerful informal leaders in the group who seek a monopoly on who can challenge others in the group may limit the effect of the formal ethical leader in building followers’ moral ownership to act. Further, weak systems and processes at higher levels of the organization not under the control of the immediate leader (e.g., lack of systems or policies for protecting peer reporters) may leave individuals feeling unprotected and thereby reduce leaders’ ability to infuse moral potency in their followers. Indeed, a context low in psychological safety can signal one should ‘stay in your lane,’ ‘don’t rock the boat’ or speak your mind. Thus, employees who work for a highly ethical leader should feel more courageous and confident in their ability to uphold moral principles at work, and due to the consistent ‘speaking up’ signaling gained from a more psychologically safe work climate, feel a deeper sense of ability and responsibility to act in ways that serve the organization’s long-term interests (Hannah & Avolio, 2010; Van Dyne & Pierce, 2004). In this way, psychological safety would strengthen the positive relationship between ethical leadership and moral potency.
Hypothesis 2a
Psychological safety moderates the positive relationship between ethical leadership and moral potency in normal work contexts, such that the relationship will be stronger when psychological safety is high.
In addition to proposing that psychological safety bolters the effects of ethical leadership on moral potency (i.e., stage one of the model in Fig. 1), we also propose that psychological safety positively moderates the effects of employees’ moral potency on their peer reporting intentions (i.e., stage two of the model in Fig. 1) in normal work contexts. Specifically, when individuals are in a heightened psychological state of moral potency, they generally possess a greater impetus to act in ethical ways (Hannah & Avolio, 2010; Hannah et al., 2011). Although individuals may feel capable of acting (i.e., moral efficacy and courage) and that they should act (i.e., moral ownership), this does not necessarily mean that they will uniformly carry forward that moral agency into action. Instead, as described above, personal self-regulatory capacities such as moral potency interact with environmental factors to produce behaviors (Bandura, 1991, 2002a). Research also suggests that moral attitudes toward a given ethical occurrence (e.g., that a peer did something wrong and that reporting them is appropriate) are distinct from attitudes toward corresponding behavioral actions (e.g., peer reporting) (Vallerand et al., 1992). As such, while individuals may feel morally potent (i.e., capable and responsible) to report a peer, the formation of corresponding intentions to act may be deterred based on the extent to which an individual forms a negative attitude against the action itself because of other factors (e.g., norms against ‘tattling,’ or an attitude that it is the ‘leader’s job’ to enforce ethics, etc.).
We thus propose that within more normal work contexts, a high psychologically safe climate will bolster the relationship between moral potency and individuals’ willingness to report their peers’ CWBs. A psychologically safe environment will promote positive attitudes toward the act of peer reporting itself, by welcoming and setting norms of open and transparent communication, and by providing a context in which speaking one’s mind and expressing values and beliefs is appreciated and encouraged. Thus, high psychological safety should increase the propensity to report one’s peers when one otherwise feels potent to do so. In sum, given the risks and challenges of reporting peers’ wrongdoing (Treviño & Victor, 1992; Victor et al., 1993), a psychologically safe work climate that encourages and even welcomes honest communication should promote employees’ willingness to report, and thus help to bolster the relationship between moral potency and peer reporting intentions.
Hypothesis 2b
Psychological safety moderates the positive relationship between moral potency and peer reporting intentions in normal work contexts, such that the relationship will be stronger when psychological safety is high.
Tying the model together, within more normal work contexts, ethical leadership fosters employees’ moral potency, which in turn increases their willingness to report their peers’ CWBs. Further, this indirect effect is conditional upon the level of perceived psychological safety, in that higher levels of psychological safety strengthen the relationship between ethical leadership and employees’ moral potency and between their moral potency and subsequent willingness to engage in peer reporting. When organizations create an environment in which leaders act ethically and employees are free to speak up and challenge others in the workplace, employees in normal work contexts are likely to experience higher levels of moral potency (i.e., courage, efficacy, and ownership), equipping them with the moral agency (Hannah et al., 2011) needed to report their peers’ CWBs. This is consistent with Bandura’s (1991) Theory of Moral Thought and Action, wherein a combination of powerful self-regulatory capacities (i.e., moral potency) are influenced by significant contextual factors (i.e., ethical leadership and psychological safety), to generate moral agency, in this case individuals’ willingness to report peers’ CWBs. This dual stage moderated mediation model is reflected in this hypothesis:
Hypothesis 3
The indirect effect of ethical leadership on employees’ peer reporting intentions through the mechanism of moral potency is moderated by psychological safety, such that high levels of psychological safety in normal work contexts will strengthen the relationship between ethical leadership and moral potency and the relationship between moral potency and peer reporting intentions.
The Moderating Roles of Psychological Safety in Extreme Work Contexts
To this point, we have argued for why psychological safety should have a positive moderating influence on individuals’ moral potency and peer reporting intentions. However, in teams having more extreme context exposure (ECE—Schaubroeck et al., 2012), we expect psychological safety’s moderating impact to operate in an opposite manner. That is, we expect psychological safety to attenuate (versus bolster) the effects of ethical leadership on followers’ moral potency, as well as the effects of moral potency on peer reporting intentions. High ECE thus highlights a second boundary condition in the current model. In understanding the variance in the ECE variable, it is important to understand that even individuals operating in extreme contexts, such as the firefighters studied here, still personally experience quite varied levels of exposure to actual extreme events (Hannah et al., 2009). For example, some police officers never unholster their weapon in the line of duty during their entire career, while others may do so repeatedly. Some firefighters will engage in more significant and dangerous structural fires than will others, and some will observe many more peers or civilians injured or killed than will others. As such, while most firefighters in our study operate in relatively more extreme contexts than individuals in our ‘normal context’ samples, we expect significant variance in ECE across those firefighters and our theorizing focuses on the effects expected between higher and lower levels of ECE.
Moderating the Ethical Leadership-Moral Potency and Moral Potency-Peer Reporting Linkages
We theorized in Hypothesis 2a that in normal contexts high psychological safety will reinforce (vs. counter) the ethical leader’s messaging and normative influence prompting followers to ‘police’ each other’s behaviors, thereby increasing their moral potency. A significant amount of psychological safety research has focused on its role in promoting follower voice, consistent with reporting a peer (Frazier et al., 2017; Newman et al., 2017). Yet, it is important to understand that climates with high levels of psychological safety also entail a permissive environment in which it is not only acceptable to speak one’s mind, but also to some extent ‘be who you are’ and ‘act as you want’ with less fear of consequences or reprisals from others (Carmeli & Gittell, 2009; Edmondson, 2004), for reasons described below. The primary measure to assess psychological safety (Edmondson, 1999) used here includes items such as “It is safe to take a risk in this work unit,” and “No one in this work unit would deliberately act in a way that undermines my efforts.” Because reporting a peer can potentially be construed as being antithetical to such a permissive context, a high psychological safety climate may be construed as a ‘go along to get along’ climate in which members experience less moral agency to address transgressions within the team.
This form of psychological safety may particularly manifest in teams facing higher ECE. Such teams, due to the highly interdependent nature of their work—their lives may be in each other’s hands—often build significant levels of camaraderie (Hannah et al., 2009; Kollett, 1982; Little, 1964) that could be damaged through confrontation. Given the significant interdependencies for each other’s safety and wellbeing, teammates in such contexts also form strong norms for behavior and elevated levels of cohesion (Anderson et al., 1999; Courtright et al., 2015; Grossman, et al., 2022; Myers & McPhee, 2006). We propose these norms and the associated desire to maintain strong cohesion will operate as powerful boundary conditions constraining the effects of leadership by discouraging individuals from acting against their peers for minor transgressions—those that do not directly impact the core mission of the team. Reporting minor infractions could thus be perceived as detracting from this sense of unity or diverting attention from more critical tasks, leading high-ECE firefighters to prioritize team cohesion over enforcement of rules for relatively minor transgressions (Ferguson & Barry, 2011; Stewart et al., 2012; Sweeney et al., 2022). For the subset of firefighters’ operating in more extreme contexts, their powerful desire to maintain harmony within the team amid concern that reporting peer wrongdoing could disrupt team dynamics or damage team trust might encourage less peer reporting. In contrast, office workers and those firefighters operating in low-ECE contexts may not be as interdependent or reliant on their peers for safety and thus may be more inclined to report minor infractions without the same concern for harming team cohesion (Bergemann & Aven, 2023; Gully et al., 2002). Since firefighters are overwhelmingly male, gender homogeneity (in this case perhaps typified as a ‘good old boys club’) could further promote such a ‘go along to get along’ climate under conditions of high psychological safety. Indeed, research on gender differences in teams shows that gender-diverse groups tend to behave more ethically because individuals worry about being reported by the gender outgroup for bad behavior (Francoeur et al., 2019).
Ultimately, the normative influence from such a ‘go along to get along’ context produced under high levels of psychological safety in extreme teams would work against or counter the messaging and normative influence attempts of an ethical leader as they seek to get followers to take moral ownership and build the moral courage and efficacy needed to maintain ethics within the team, reducing their influence on follower moral potency. Similarly, the more permissive context created by high psychological safety in teams operating in more extreme contexts would also make members less likely to confront each other, at least for transgressions not significantly impacting the functioning of their core mission, such as those assessed in common CWB measures (e.g., stealing office supplies). This reinforces Bandura’s (1991) theorizing that just because an actor has high levels of moral capacities (operationalized in our studies as moral potency), contextual factors influence whether they activate those capacities in each situation to generate moral agency. High psychological safety would thus also influence the second stage of the current model, reducing the relationship between followers’ moral potency and their formation of intentions to report their peers. An actor may feel highly potent to report a peer, but the context influences them to choose not to, due to the potential negative effects on the highly cohesive unit in doing so. This logic suggests there may be unforeseen downsides to psychological safety for those individuals operating within more extreme contexts, relative to reporting more minor infractions, leading to the following hypotheses:
Hypothesis 4a
Psychological safety moderates the positive relationship between ethical leadership and moral potency in highly extreme work contexts, such that the relationship will be stronger when psychological safety is low.
Hypothesis 4b
Psychological safety moderates the positive relationship between moral potency and peer reporting intentions in highly extreme work contexts, such that the relationship will be stronger when psychological safety is low.
Hypothesis 5
The indirect effect of ethical leadership on employees’ peer reporting intentions through the mechanism of moral potency is moderated by psychological safety, such that low levels of psychological safety in highly extreme work contexts will strengthen the relationship between ethical leadership and moral potency and the relationship between moral potency and peer reporting intentions.
The Three-Way Moderation of Moral Potency, Psychological Safety, and ECE on Peer Reporting
The theorizing for Hypotheses 4a, b, and 5 addresses extreme contexts (versus less extreme or “normal” contexts) in general. However, we noted above that even in extreme contexts, different individuals face varying levels of exposure to actual extreme events (i.e., ECE). Hannah et al. (2009) noted that higher levels of ECE inherently involve higher levels of moral intensity (e.g., potential death or injury). Jones (1991) described his construct of moral intensity as the level of actual or perceived ‘intensity’ of the ethical issues being faced. Issues are more morally intense when they have higher probability and magnitude of effects, those effects may occur more immediately, and the impact will occur to, or near, the focal individual. Empirical research (Valentine & Bateman, 2011; Valentine & Godkin, 2019; Valentine & Hollingsworth, 2012) suggests that ethical issues of higher (lower) perceived moral intensity can increase (decrease) individuals’ willingness to engage in ethical reasoning and blow the whistle. Commensurately, Jones (1991) argues that when an ethical issue has lower perceived moral intensity, individuals will be less likely to form intentions to act on their moral judgments. As such, it is important to understand that the CWBs assessed here are those commonly studied in CWB research (e.g., taking home office supplies, taking long breaks). These CWBs would likely be of relatively lower perceived moral intensity to individuals facing the more morally intense issues inherent during extreme events (e.g., who to save first in a fire or the extent to put oneself at risk to save a teammate). This would be consistent with research showing that the perceived severity and nature of the offense influences observers’ willingness to report it (Ayers & Kaplan, 2005; Gao et al., 2015; Kaplan & Schultz, 2007). Thus, individuals operating in more extreme contexts may ‘calibrate’ the level of moral intensity of CWBs differently (as relatively less intense) compared to those less exposed to such contexts. As theorized by Jones (1991), they would then be less likely to form intentions to report their peer’s more mundane CWBs.
Further, we noted above that teams like the firefighter teams in our study must work in a highly interdependent manner while operating in the face of extreme risks, requiring them to create high levels of social cohesion and camaraderie (Burke et al., 2018; Kollett, 1982; Little, 1964). Firefighters also often cultivate a culture of self-reliance and resilience (Stergiou-Kita et al., 2015), emphasizing the ability to handle challenges within the team rather than involving external authorities or reporting minor infractions to higher-ups. This self-reliance may discourage firefighters from reporting co-worker wrongdoing unless it poses a significant threat to safety or mission effectiveness (Barker, 1993; Liao et al., 2004). Finally, firefighting organizations often have strong, ingrained authority dynamics and norms of behavior, more so than traditional work environments which are increasingly becoming more diverse and egalitarian in their work structures. These authority dynamics become more salient when operating in more extreme situations (Hannah et al., 2009). Thus, those firefighters facing high ECE may thus be less inclined to challenge or question the actions of their peers (or superiors), particularly in non-life-threatening situations since as Bollmann and Krings (2016, p.189) note: “…social disapproval from colleagues has a more proximate effect on individuals than formal control mechanisms (Falkenberg & Herremans, 1995; Hollinger & Clark, 1982).” As noted above, peer reporting can create relational conflicts that would jeopardize the ability to work closely with and depend upon peers for important tasks (Jehn, 1995; Treviño & Victor, 1992). A peer’s transgression would then need to rise to an ample level of moral intensity before a teammate would risk upsetting the social order by reporting a fellow peer in higher ECE teams. As noted above, common CWBs would be less likely to rise to that level.
Together, the lower relative moral intensity perceived, coupled with the stronger normative pressure to not damage the social order by reporting peers at higher levels of ECE would further exasperate the negative moderating effects of psychological safety stated in Hypothesis 4b. As such, the combination of the two phenomena (high ECE and high psychological safety) would significantly reduce the effects of moral potency on team members’ willingness to report their peers’ CWBs. This again reinforces Bandura’s (1991) theorizing that one may possess moral self-regulatory capacities, but the activation of those capacities is bounded by the context. This leads to our final hypothesis:
Hypothesis 6
There will be a three-way interaction of moral potency, psychological safety, and extreme context exposure in predicting peer reporting intentions in more extreme work contexts, such that the positive association between moral potency and peer reporting intentions will be negative when psychological safety and extreme context exposure are higher.
Methods
To test our hypotheses, we conducted three unique field studies of full-time employees (working professionals, academic staff, and professional firefighters). Study 1 first sought to establish the core mediation model (the effects of ethical leadership on peer reporting intentions mediated through moral potency). After establishing the initial plausibility of that core model, Study 2 then introduced the moderating effects of psychological safety. Study 3 sought to replicate the full model tested in Study 2 using time-separated measures, but also utilized a distinct group (firefighters) who operate in a non-traditional work environment to showcase how an extreme context might reverse the positive, moderating impact of psychological safety. In Studies 1 and 2, we attempted to limit the potential for common method variance (CMV) by separating our predictor (i.e., ethical leadership) and criterion variables (e.g., peer reporting intentions) and placing other survey measures and distraction tasks between them. In Study 3, we enhanced the rigor of the study design by collecting data at two separate time periods.
Study 1
Participants
In response to in-class solicitations, 170 graduate-level working professional business students at a US University volunteered to participate in this study outside of class in exchange for $20. We removed five cases because of missing data on measures of interest, leaving a final sample size of 165 participants (59% male, 41% female). Participants were, on average, 31.4 (SD = 5.8) years of age and predominantly Caucasian (77% Caucasian, 14% African American, and 9% other). Additionally, 98% were currently employed with an average of 9.5 (SD = 6.2) years of prior work experience.
Measures
We collected demographic information and our variables of interest in a hard copy packet in person. First, participants completed the 10-item measure of ethical leadership (Brown et al., 2005) on a “1” (not at all) to “5” (frequently, if not always) scale in which we asked them to rate the leadership style of their immediate supervisor (α = 0.91). Example items included “My immediate supervisor…” “conducts his/her personal life in an ethical manner,” and “defines success not just by results, but also the way that they are obtained.” Next, participants completed the 12-item measure of moral potency (Hannah & Avolio, 2010) on a “1” (strongly disagree) to “5” (strongly agree) scale (α = 0.81). Example items included “I will confront my peers if they commit an unethical act (moral courage),” “I will assume responsibility to take action when I see an unethical act (moral ownership),” and “I am confident that I can confront others who behave unethically to resolve the issue (moral efficacy).” Finally, participants completed a 6-item measure of co-worker reporting intentions (Spector et al., 2006a, 2006b) using a “1” (highly unlikely) to “5” (highly likely) scale (α = 0.80). Participants then rated the likelihood that “I would report a co-worker if I saw him/her” committing specific unethical acts, such as “use work time for personal errands without taking time off,” “take home office supplies for personal use,” and “report more hours of time on a timecard than actually worked.”
Confirmatory Factor Analysis (CFA)
Prior to hypothesis testing, we used AMOS Version 28 to conduct confirmatory factor analysis (CFA) to ensure the validity of our measures. We included the constructs of ethical leadership, moral potency, and peer reporting intentions in a measurement model. Following the recommendations of Hannah and Avolio (2010) and precedence in other prior research (e.g., West et al., 2019; Zhang et al., 2016), we modeled moral potency as a second-order factor, with three first-order dimensions (moral courage with 4 items, moral ownership with 3 items, and moral efficacy with 5 items). Based on the theorizing of Brown et al. (2005) and Brown and Treviño (2006), we also modeled ethical leadership as a second-order factor, with two first-order dimensions (moral manager with 5 items, and moral person with 5 items). In reviewing the CFA results, one item from the 4-item moral courage scale of moral potency and one item from the 6-item peer reporting intentions measure loaded poorly onto their respective constructs. Thus, we removed these two items.Footnote 4 With these changes, the measurement model CFA fit indices were adequate (see Table 1).Footnote 5
Preliminary Analyses
We attempted to limit the potential for common method variance (CMV) in Study 1 by separating the measures of ethical leadership from the outcome measures by placing other survey measures and distraction tasks between them. We also assessed potential CMV using Harman’s single-factor test (Podsakoff et al., 2003). We included the measures of ethical leadership, moral potency, and peer reporting intentions into an exploratory factor analysis using maximum likelihood estimation. If CMV were a problem, we would see items loading onto a single factor explaining at least 50 percent of the total variance. Instead, in Study 1, we found the data contained five components with eigenvalues greater than 1.0, collectively explaining 60.5 percent of the total variance, and the single factor with the largest amount of variance was only 20.7 percent, thus suggesting CMV is not a major concern.
Hypothesis Testing
Hypothesis 1 predicts that moral potency mediates the relationship between ethical leadership and employees’ intentions to report their peers’ CWB. Descriptive statistics and correlations are shown in Table 2. To test for mediation, we used Model 4 of the PROCESS macro (Hayes, 2018). We controlled for age, gender, tenure with the current supervisor (months), total work experience (months), and ethnicity, given prior research suggesting that age (Berry et al., 2007), gender (Hershcovis et al., 2007), and tenure (Ng & Feldman, 2013) are related to CWBs. As indicated in Model 2 of Table 3, the path estimate from ethical leadership to moral potency is positive and statistically significant (b = 0.18, p = 0.001), as is the path estimate from moral potency to peer reporting intentions (b = 0.70, p < 0.001) (Model 4). Further, the direct effect of ethical leadership on peer reporting intentions was not significant (b = − 0.12, p = 0.168), as evidenced by the 95% bias-corrected confidence interval including zero (− 0.288 to 0.051), while the indirect effect of ethical leadership on peer reporting intentions through moral potency was significant (b = 0.13), and the 95% bias-corrected confidence interval of 0.052 to 0.223 excluded zero, thus providing support for full mediation (MacKinnon et al., 2002). Thus, Hypothesis 1 was supported.
Study 1 thus provided initial validation for the core mediation model. We then conducted Study 2 to replicate this core model and to assess the proposed moderating effects of psychological safety in a normal work context.
Study 2
Participants
In response to a campus announcement, 218 staff members at a US University (e.g., employees from university finance, logistics, facilities, program staff, etc.) participated in this study in exchange for $20. We removed 37 cases because of missing data on key measures, leaving a final sample size of 181 participants (43% males, 57% females). Participants were, on average, 38.0 (SD = 11.6) years of age, predominantly Caucasian (85% Caucasian, 10% African American, and 5% other), and had an average of 15.4 (SD = 11.4) years of work experience. Among survey participants, 7% had a high school diploma, 54% possessed a bachelor’s degree, 33% held a Master’s degree, and 6% beyond a Master’s degree.
Measures
Just as in Study 1, we gave each participant a hard copy survey packet, consisting of demographic items and our focal measures of interest. Unless otherwise stated, we captured all measures using a “1” (strongly disagree) to “5” (strongly agree) Likert scale. Participants first completed the same (as in Study 1) 10-item measure of ethical leadership (Brown, et al., 2005) on which they rated the leadership style of their immediate supervisor (α = 0.93). Next, participants completed a 7-item measure of psychological safety (Edmondson, 1999) on which they assessed the climate of their work group/department (α = 0.79). Example items included “Members of this work unit are able to bring up problems and tough issues,” “It is safe to take a risk in this work unit,” and “No one in this work unit would deliberately act in a way that undermines my efforts.” Participants then completed the same 12-item measure of moral potency (Hannah & Avolio, 2010) (α = 0.87) and the same 6-item measure of co-worker reporting intentions (Spector et al., 2006a, 2006b) (α = 0.85).
Confirmatory Factor Analysis (CFA)
We conducted a CFA to ensure the validity of our measures prior to hypothesis testing. Ethical leadership, moral potency, peer reporting intentions, and psychological safety were included in a measurement model. As in Study 1, we modeled moral potency and ethical leadership as second-order factors. We modeled psychological safety (7 items) and reporting intentions (6 items) as unidimensional constructs. As in Study 1, the same single item from the 4-item moral courage scale of moral potency and the same single item from the 6-item peer reporting intentions measure loaded poorly onto their respective constructs and were thus removed. Additionally, the three reverse-coded items in the psychological safety measure showed consistently low loadings, which research suggests may produce artefactual response factors (Harvey et al., 1985) and serve as a source of method bias (Podsakoff et al., 2003). Thus, consistent with the precedence of using shortened psychological safety measures (Nembhard & Edmondson, 2006; Tucker et al., 2007), particularly when experiencing low loadings/model fit (Tucker, 2007), we removed the three reverse-coded psychological safety items. These changes resulted in adequate measurement model CFA fit indices (see Table 1).Footnote 6
As in Study 1, we used Harman’s single-factor test (Podsakoff et al., 2003) to examine our data for evidence of common method variance. We found that the data contained six components with eigenvalues greater than 1.0, collectively explaining 65.7 percent of the total variance, and the single factor with the largest amount of variance totaled 25.9 percent. This offered confidence that CMV was once again not a major concern.
Hypothesis Testing
We tested our hypotheses using data collected from full-time university staff. Descriptive statistics and correlations are provided in Table 4, and hypothesis test results are shown in Table 5. As in Study 1, we controlled for age, gender, tenure with the current supervisor (months), total work experience (months), and ethnicity. The path estimates from ethical leadership to moral potency (Model 2) (b = 0.25, p < 0.001), and from moral potency to peer reporting intentions (Model 5) (b = 0.71, p < 0.001) were positive and statistically significant, but the direct effect of ethical leadership on peer reporting intentions was not (b = − 0.06, p = 0.512; 95% CI − 0.235 to 0.118). However, the indirect effect of ethical leadership on peer reporting through moral potency (b = 0.17) was significant, evidenced by the 95% bias-corrected confidence interval (0.081 to 0.282) not including zero, thus providing evidence of full mediation. Taken together, these results provide further support for Hypothesis 1.
Hypothesis 2a predicts that in normal (non-extreme) contexts psychological safety bolsters the positive relationship between ethical leadership and moral potency. Given that peer reporting intentions is theorized and operationalized as an individual construct, we utilized individual (versus aggregate) perceptions of psychological safety in our analyses, consistent with early conceptualizations of the construct (see Kahn, 1990). We used PROCESS (Hayes, 2018) Model 7. Results are shown in Table 5, with the interaction plot shown in Fig. 2A. As noted in Model 3 of Table 5, we find evidence of a significant positive interaction between ethical leadership and psychological safety (b = 0.26, p < 0.001) predicting moral potency. Simple slope tests revealed that the slope for low psychological safety was not statistically significant (t = − 0.38, p = 0.705), but the slope for high psychological safety was statistically significant and positive (t = 4.10, p = 0.000). Thus, the ethical leadership-moral potency relationship was only significant under conditions of high psychological safety. Thus, Hypothesis 2a was supported.
A Interaction of ethical leadership and psychological safety predicting moral potency (Study 2). B Interaction of moral potency and psychological safety predicting peer reporting intentions (Study 2). Controls include age, gender, time with supervisor, work experience, and ethnicity
Hypothesis 2b predicts that in normal contexts psychological safety bolsters the positive relationship between moral potency and peer reporting intentions. To test this model, we used PROCESS (Hayes, 2018) Model 14. Results are shown in Table 5, with the interaction plot shown in Fig. 2B. As noted in Model 6 of Table 5, we find evidence of a significant positive interaction between moral potency and psychological safety (b = 0.24, p < 0.05) predicting peer reporting intentions. The simple slope test for low psychological safety was statistically significant (t = 3.39, p = 0.001), while the simple slope for high psychological safety was also statistically significant yet higher (t = 6.22, p = 0.000). Thus, Hypothesis 2b was supported.
Hypothesis 3 predicts that the indirect effect of ethical leadership on employees’ peer reporting intentions via moral potency is moderated by psychological safety, such that psychological safety will strengthen both the relationship between ethical leadership and moral potency and the relationship between moral potency and peer reporting intentions in normal work environments. We tested this hypothesis using PROCESS (Hayes, 2018) Model 58 (which provides the same results as the combination of Model 7 and Model 14). Results are shown in Table 5. The interaction of ethical leadership and psychological safety was found to be positive and statistically significant (b = 0.26, p < 0.001; Model 3 of Table 5). Similarly, the interaction of moral potency and psychological safety was also positive and significant (b = 0.24, p < 0.05; Model 6 of Table 5). Importantly, the direct effects of ethical leadership on peer reporting intentions were not significant (b = − 0.095, p = 0.383), but the conditional indirect effects of ethical leadership on peer reporting intentions via moral potency were significant at high levels of psychological safety (b = 0.38, 95% bias-corrected confidence interval of 0.183 to 0.601 excluded zero), providing support for full moderated mediation. Thus, Hypothesis 3 was supported.
In sum, Study 2 replicated the core mediation model in an independent study and provided an initial test of the positive moderating role of psychological safety in a normal context. We then conducted Study 3 to assess how the model operates in an extreme (firefighter) context and to test Hypotheses 4–6.
Study 3
Participants
We partnered with a large fire department in the Southeastern U.S. to obtain data in two waves. The researchers collected the data when the firefighters were assembled for two different sessions of a firefighter skills training course (e.g., rescue techniques). The technical training was unrelated to the study but served as an effective venue to administer the surveys. Research team members briefed firefighter attendees on the study and invited them to voluntarily participate in the study. All firefighters in the course (one hundred and seventy-three) volunteered for the first wave. Of these, 122 firefighters also completed the second survey conducted approximately nine weeks later during another scheduled firefighter skills training course. We again used hard copy surveys handed out personally in both phases. We removed 21 cases because of excessive missing values on our variables of interest. The final 101 participants were, on average, 37.0 (SD = 9.3) years of age, predominantly Caucasian (73% Caucasian, 20% African American, and 7% other), and had an average of 9.9 (SD = 7.2) years of professional firefighting experience with their department. Some college credit but no degree earned (38.6%) was the most frequent educational level, followed by 25.7% Bachelor’s degree, 13.9% Associate’s degree, 13.9% high school graduate (diploma or the equivalent (e.g., GED)), and 8.0% other. Consistent with the gender mix of this profession, participants included 100 males and one female.
Time 1 Measures
At Time 1, participants completed a printed survey packet providing their demographic information and ratings on our predictor variables of interest. As in prior studies, we asked participants to rate the ethical leadership of their immediate supervisor using the Brown et al. (2005) ten-item measure of ethical leadership (α = 0.92). Given that firefighters also operate in a dangerous context in which the threat of injury or even death is significantly higher compared to other traditional, office-based work environments, we also asked firefighters to assess the extent to which they had experienced extreme context exposure (ECE) (α = 0.74). To assess ECE, we followed Schaubroeck et al. (2012) technique by asking firefighters the number of times they had been exposed to certain extreme events while serving in their current unit and while serving with their current immediate supervisor. Specifically, firefighters were asked to report the number of times they were exposed to or experienced (a) “the threat of physical danger,” (b) “the traumatic events of others (i.e., injury or death of another person),” and (c) “another firefighter being injured in the line of duty.” Senior firefighter leaders reviewed these questions for ecological validity prior to the study.
Time 2 Measures
Nine weeks later we returned to collect data on our other measures at a second training course, using the same measures as in Studies 1 and 2. Participants completed the 12-item measure (α = 0.92) of moral potency (Hannah & Avolio, 2010) and the 7-item measure (α = 0.73) of psychological safety (Edmondson, 1999), and the 6-item measure of co-worker reporting intentions (Spector et al., 2006a, 2006b) (α = 0.88).
Confirmatory Factor Analysis (CFA)
Confirmatory factor analysis (CFA) was conducted prior to hypothesis testing. Measures of ethical leadership, moral potency, peer reporting intentions, psychological safety, and extreme context exposure were included in the measurement model. Just as in Studies 1 and 2, the same single item from the 4-item moral courage scale of moral potency, and the same three reverse-coded psychological safety items were removed, resulting in adequate measurement model fit (see Table 1).Footnote 7 We again used Harman’s single-factor test (Podsakoff et al., 2003) to assess the potential for CMV and found that the data contained seven components with eigenvalues greater than 1.0, collectively explaining 71.1 percent of the total variance, and the single factor with the largest amount of variance did not exceed 21.5 percent, suggesting CMV was not a major issue.
Hypothesis Testing
Descriptive statistics and correlations for Study 3 are provided in Table 6, and the results of our hypothesis tests are shown in Table 7. In this study, we controlled for age, the number of months of work experience with the fire department, and ethnicity. Since only one respondent was female, we omitted gender as a control, unlike in Studies 1 and 2. Also, the correlation between months of experience with the department and total work experience was very high (> 0.90) so, for parsimony, we only included tenure with the department.
As in the prior two studies, the path estimate from ethical leadership to moral potency was positive and statistically significant (Model 2) (b = 0.21, p < 0.05), as was the path estimate from moral potency to peer reporting intentions (Model 5) (b = 0.41, p < 0.05). As in Studies 1 and 2, the direct effect of ethical leadership on peer reporting intentions was not significant (b = − 0.06, p = 0.665; 95% CI − 0.341 to 0.219). However, the indirect effect of ethical leadership on peer reporting through moral potency (b = 0.08), was again significant, evidenced by the 95% bias-corrected confidence interval (0.003 to 0.206) not including zero, thus providing evidence of full mediation. Thus, Hypothesis 1 was supported.
Hypothesis 4a theorizes that in more extreme contexts psychological safety would reduce the effects of ethical leadership on followers’ moral potency. We used PROCESS (Hayes, 2018) Model 7 to test this hypothesis. As shown in Model 3 of Table 7 and in Fig. 3A, the interaction between ethical leadership and psychological safety was statistically significant (b = − 0.24, p < 0.01). The simple slope test for the gradient of the slope for low psychological safety was statistically significant (t = 2.64, p = 0.01), but the simple slope for high psychological safety was not (t = − 1.40, p = 0.165). Importantly, as hypothesized, but contrary to our findings in Study 2, the result of the interaction term was negative, not positive. Thus, Hypothesis 4a was supported.
A Interaction of ethical leadership and psychological safety predicting moral potency (Study 3). B Interaction of moral potency and psychological safety predicting peer reporting intentions safety (Study 3). C Three-way interaction of moral potency, psychological safety, and extreme context exposure (ECE) predicting peer reporting intentions (Study 3). Controls include age, time with the fire department, and ethnicity
Hypothesis 4b theorizes psychological safety reduces the effects of followers’ moral potency on their peer reporting intentions in more extreme contexts. We used PROCESS (Hayes, 2018) Model 14 to test this hypothesis. As shown in Model 6 of Table 7 and Fig. 3B, the interaction term between moral potency and psychological safety was significant (b = − 0.26, p < 0.05). Like the test of Hypothesis 4a, the slope for low psychological safety was significant (t = 3.43, p = 0.001), but the slope for high psychological safety was not (t = − 0.01, p = 0.994). As predicted, the interaction was negative, not positive. Thus, Hypothesis 4b was supported.
We then tested Hypothesis 5 using PROCESS (Hayes, 2018) Model 58 (which provides the same results as the combination of PROCESS Models 7 and 14). Results are shown in Table 7. In line with Hypothesis 5 (yet contrary to the findings in Studies 1 and 2), the interaction of ethical leadership and psychological safety was negative and statistically significant (b = − 0.24, p < 0.01; Model 3 of Table 7). Similarly, the interaction of moral potency and psychological safety was also negative and statistically significant (b = − 0.26, p < 0.05; Model 6 of Table 7). Importantly, the direct effect of ethical leadership on peer reporting intentions was not significant (b = 0.070, p = 0.642). However, the conditional indirect effects of ethical leadership on peer reporting intentions via moral potency was significant only at low levels of psychological safety (b = 0.16, 95% bias-corrected confidence interval of 0.028 to 0.368 excluded zero), not moderate or high levels. Thus, Hypothesis 5 was supported.
Finally, Hypothesis 6 proposes a three-way interaction of moral potency, psychological safety, and extreme context exposure in the second stage of the model. We proposed that ECE plays a key moderating influence on individuals’ willingness to engage in peer reporting in the presence of psychological safety. We used PROCESS (Hayes, 2018) Model 70 to test the three two-way interactions (1. moral potency × psychological safety, 2. moral potency × ECE, 3. psychological safety × ECE) and the three-way interaction of moral potency, psychological safety, and ECE predicting peer reporting intentions. Results are shown in Table 7 (Model 7), and the interaction plot is shown in Fig. 3C. As seen in Table 7, the three-way interaction between moral potency, psychological safety, and ECE was negative and statistically significant (b = − 0.25, p < 0.01), while the two-way interactions involving ECE were not.
As depicted in Fig. 3C, for those firefighters who were exposed to low levels of ECE, higher levels of psychological safety increased the effects of moral potency on peer reporting intentions (line 2, t = 1.89, p = 0.063) compared to lower levels of psychological safety (line 4, t = − 0.82, p = 0.417) (i.e., compare line 2 (“High Psychological Safety, Low Extreme Context Exposure”) to line 4 (“Low Psychological Safety, Low Extreme Context Exposure”). This result is generally consistent with what we found in Study 2 in a more normal context. Results for firefighters who have experienced high levels of ECE, however, are contrary to the effects found in Study 2 and much more varied. For those members facing high ECE, we see that high levels of psychological safety significantly decreased the effects of moral potency on peer reporting intentions, whereas low levels of psychological safety significantly increased the impact of moral potency on peer reporting intentions (compare the “High Psychological Safety, High Extreme Context (line 1)” slope to the “Low Psychological Safety, High Extreme Context (line 3)” slope). The slope of line 1 is statistically significant (t = − 1.97, p ≤ 0.05), as is the slope of line 3 (t = 2.58, p ≤ 0.01). Further, the slope difference between lines 1 and 3 is also statistically significant (slope difference = − 3.74, t = − 3.08, p = 0.003). These results suggest that in a more normal work context (university employees) and in firefighting units in which individuals have faced fewer extreme events, having a psychologically safe environment strengthens the relationship between moral potency and peer reporting intentions. Yet when firefighters experience a greater frequency of extreme events, the effect of psychological safety is reversed, inverting the positive effect of moral potency on peer reporting intentions. Thus, Hypothesis 6 was supported. We discuss the theoretical and practical implications of these findings across all three studies below.
Supplemental Analysis
As noted above, there is a growing body of research modeling psychological safety as a moderator (rather than a mediator), as we have done here (see Newman et al., 2017). We have provided theoretical justification for this choice, given that several factors influence psychological safety beyond leadership (Frazier et al., 2017; Kahn, 1990). To provide additional empirical support for this choice, we also conducted supplemental analyses.
Study 2: We ran two hierarchical regression models to test for the potential mediating impact of psychological safety on peer reporting intentions. In Step 1, we included controls (age, gender, time with supervisor, overall experience, and ethnicity), ethical leadership, and moral potency in the model. The adjusted R2 for this model was 0.20, and the influence of moral potency on peer reporting intentions was strong (standardized path estimate of 0.46) and statistically significant at p < 0.001. Ethical leadership, however, did not provide a statistically significant influence on peer reporting intentions. In Step 2, we added psychological safety as a predictor. The adjusted R2 for this model remained 0.20, and the influence of moral potency remained strong (standardized path estimate of 0.46) and statistically significant at p < 0.001, while psychological safety did not provide a statistically significant influence (standardized path estimate of 0.01). This provides evidence that psychological safety did not operate as a mediating influence on peer reporting intentions beyond the influence of moral potency.
Study 3: To assess the possible mediating influence of psychological safety on peer reporting intentions in Study 3, we once again ran two hierarchical regression models with peer reporting intentions as the dependent variable. In Step 1, we included our controls (age, department tenure, and ethnicity), ethical leadership, and moral potency. The adjusted R2 for this model was 0.09, and the influence of moral potency was strong (path estimate of 0.41) and statistically significant (p = 0.013), while ethical leadership did not provide a statistically significant influence (b = − 0.06, p = 0.665). In Step 2, we added psychological safety as a predictor. The adjusted R2 for this model was 0.12, and the influence of moral potency remained strong (b = 0.46, p = 0.005), while ethical leadership continued to exert no significant influence (b = 0.07, p = 0.665). Importantly, the coefficient for psychological safety was negative (b = − 0.21), and not statistically significant (p = 0.055). Thus, psychological safety did not exert a strong mediating effect on peer reporting intentions, unlike moral potency. Together these supplemental tests of the Study 2 and 3 data support our modeling of psychological safety as an exogenous variable.
Discussion
Employees typically attempt to hide their CWBs from their leaders (Connelly et al., 2012; Treviño & Victor, 1992). As a result, co-workers are often the best, if not the only ones, to become aware of peers’ CWBs, and thus must determine—should I report this person or not? Choosing to do so requires the generation of significant moral agency. We utilized Bandura’s (1991) Theory of Moral Thought and Action to build and test a model in which individual and contextual factors interact to drive such agency, manifesting in employees’ willingness to report their peers’ CWBs. We operationalized the model by testing, across three diverse work settings, the individual self-regulatory capacity of moral potency in generating the agency required to report one’s peers, while considering the direct and interactive effects of three contextual factors on the generation and application of such moral potency—whether a potential informant (1) works for an ethical leader, (2) works in a psychologically safe work climate, and (3) operates in a more normal or extreme context. Across three distinct studies of employees, we found that ethical leaders raise the moral potency of their followers which, in turn, increases their willingness to report their peers. Within a university setting (Study 2), psychological safety bolstered the relationships between ethical leadership and moral potency and between moral potency and peer reporting intentions. However, in a professional firefighting environment (Study 3), for that subgroup of firefighters who faced high ECE, the positive moderating effect of psychological safety inverted to become negative, thus highlighting a critical boundary condition of psychological safety.
Theoretical Implications
This research has three major implications for theory. The first is to provide needed operationalization and theory-testing of Bandura’s (1991) Theory of Moral Thought and Action and to apply it to peer reporting intentions. Bandura (1991) built this theory drawing from key tenets of both his Social Cognitive Theory (Bandura 2002a) and Social Learning Theory (Bandura 1997), not only applying those tenets to the domain of morality, but also by building out the critical role of moral agency in driving ethical intentions and behaviors. While Bandura theorized that moral agency is generated through individual moral self-regulatory capacities interacting with multiple contextual factors that place external regulation on the individual, his theory is a general process theory and thus largely does not identify the specific constructs operating in the process. Although Bandura (1991) did identify moral efficacy as one key individual self-regulatory capacity, as noted by Hannah et al. (2011), moral efficacy is not in itself sufficient, as effective moral self-regulation requires that one not only feel efficacious to act but also to have the sense of ownership to embrace the responsibility to act and to have the courage to face the risks involved. We thus utilized the construct of moral potency (Hannah & Avolio, 2010) to operationalize Bandura’s (1991) theory and test a broad set of key self-regulatory capacities that generate moral agency. Yet, Bandura (1991) proposed that such personal self-regulatory capacities do not operate alone, but instead operate in a network of social influences that simultaneously impose facilitative external regulation on the individual. Bandura (1991), however, left to future researchers the task of identifying those specific external forces. Here, we built theory proposing that the generation of moral agency required for peer reporting stems from the individual self-regulatory capacity of moral potency interacting with three external factors: ethical leadership, psychological safety, and ECE. As such, we provide needed operationalization and testing of Bandura’s theory, and its application to the important outcome of peer reporting intentions. This theory development is important as research has thus far focused on the disengagement of moral agency (e.g., Bandura et al., 1996; Bandura, 2002b) versus what bolsters it. Our findings, across three distinct field studies, reinforce that such a manifold approach to understanding the factors promoting individuals’ moral agency to report their peers is necessary, and thereby also significantly advances the peer reporting body of research.
Our second contribution is to deepen the understanding of both the mechanisms through which—and the conditions under which—ethical leadership imposes its positive effects, thus responding to calls for research in these areas (Brown & Mitchell, 2010; Ng & Feldman, 2015). As a newer construct, empirical research on moral potency is nascent, and the current research thus provides empirical support for the construct as an individual moral self-regulatory capacity that ethical leadership can influence to raise followers’ impetus to act when faced with moral challenges or opportunities. Understanding this effect is important, given that individuals often make moral attributions, judgments, or determinations without personally acting on them (Rest et al., 1999; Treviño et al., 2006). We show that moral potency thus helps explain how ethical leaders influence followers to be more willing to take ethical action, at least in the form of reporting their peers—thus helping to close the critical gap between moral judgment and the willingness to take moral action (Jennings et al., 2015; Walker, 2004).
We also provide additional understanding of the contextualized nature of the mediated effects of ethical leadership on peer reporting intentions. Research on ethical leadership has largely utilized Bandura’s Social Learning Theory (Bandura 1997) to theorize its effects, suggesting that followers, through observations of and interactions with the leader, tend to learn and to replicate the ethicality of the leader. Here, we add additional understanding of this process by demonstrating that this relationship between ethical leadership and followers’ moral potency is conditional on levels of psychological safety (Edmondson, 1999), thereby highlighting an important boundary condition. While Bandura (1991) integrated his theorizing on social learning into his Theory of Moral Thought and Action, he theorized that such moral learning operates in the context of a broader set of contextual factors that can facilitate or disrupt that learning process. We built theory proposing that while leaders are a key source of follower learning, followers also learn norms from their group context about whether they should activate their moral agency or remain more passive. We found that psychological safety may facilitate (in normal and low-ECE contexts) or disrupt (in high-ECE contexts) this process, whereby in normal and low-ECE contexts (high-ECE contexts), higher psychological safety reinforces (reduces) the messaging and modeling of the leader and bolsters (attenuates) the generation of follower moral potency.
Tests of Hypothesis 3 also demonstrate that psychological safety not only moderates whether ethical leadership generates moral potency, but also influences whether followers will then activate that moral potency to assume the moral agency needed to report peers in the second stage of the proposed model (Fig. 1). This is again aligned with Bandura’s (1991) theory, in which the context influences whether individual self-regulatory capacities are activated and employed. These dual moderating roles of psychological safety thus expand understanding of the direct and indirect effects of ethical leadership, particularly in the realm of peer reporting. Furthermore, given psychological safety’s extensive modeling as a key contextual mechanism in the voice literature (e.g., Detert & Burris, 2007; Detert & Treviño, 2010; Liang et al., 2012), examining its moderating role helps to deepen our conceptual and practical understanding of how the construct operates (cf., Frazier et al., 2017; Liu et al., 2015).
The third major theoretical implication of this research concerns the role of ECE as an additional boundary condition. Scholars have lamented that little leadership research has incorporated the role of the context in general (e.g., Porter & McLaughlin, 2006) and in extreme contexts specifically (e.g., Bamberger & Pratt, 2010; Burke et al., 2018; Hannah et al., 2011). Extreme contexts impose significant risks and volatility which can alter the interdependencies and social interactions occurring between team members. As noted above, teammates in such contexts have significant interdependencies for each other’s safety and well-being and thus form strong norms and cohesion (Anderson et al., 1999; Courtright et al., 2015; Grossman, et al., 2022; Myers & McPhee, 2006). These norms appear to operate as boundary conditions constraining the effects of leadership by discouraging individuals from acting against their peers for minor transgressions—those that do not directly impact the core mission of the team. Specific to the current research, Bandura’s (1991) theory emphasizes the contextualization of moral self-regulation. He states that “In dealing with moral dilemmas people must, therefore, extract, weigh, and integrate the morally relevant information in the situations confronting them. Factors that are weighed heavily under some combinations of circumstances may be disregarded or considered of lesser import under a different set of conditions” (p. 69). Building on Bandura’s logic, we theorized that high-ECE contexts have inherently high levels of perceived moral intensity (Jones, 1991), in which common CWBs (e.g., stealing office supplies) would lose importance relative to the more intense challenges faced (e.g., death or injury). Consistent with the empirical work of Valentine and colleagues (Valentine & Bateman, 2011; Valentine & Godkin, 2019; Valentine & Hollingworth, 2012), and similar research (Ayers & Kaplan, 2005; Gao et al., 2015; Kaplan & Schultz, 2007), our findings suggest that individuals are less willing to report such relatively minor transgressions in higher-ECE contexts.
Our focus on ECE also sheds light into the social learning occurring in the generation of moral potency. Our results suggest that, in normal contexts, higher psychological safety is consistent with and reinforces the messaging and effects of ethical leadership on follower moral potency. Conversely, in highly extreme contexts, psychological safety appears to counter the messaging of ethical leadership, thus attenuating its effects on follower moral potency. These results shed light on the extreme social forces operating within highly cohesive teams in more extreme contexts that may disrupt the intended effects of leadership. Teammates in such contexts have significant interdependencies for each other’s safety and well-being and thus form strong norms and cohesion (Anderson et al., 1999; Courtright et al., 2015; Grossman, et al., 2022; Myers & McPhee, 2006). This deference to strong peer social norms coupled with the need to maintain high team cohesion and trust could deter high-ECE firefighters from reporting co-worker wrongdoing, even when they feel otherwise psychologically safe and morally potent to raise concerns or suggestions that go against the organizational status quo (Hu et al., 2024). Finally, the specific firefighting teams that we studied also had near complete gender homogeneity, which may strengthen these effects (Francoeur et al., 2019). Future research should thus attempt to replicate and to test this model with participants operating in extreme contexts that have greater gender diversity.
We also provide requisite empirical understanding of the fact that not all extreme contexts are equal. Hannah et al. (2009) delineated the difference between extreme contexts and extreme events. Although individuals may operate within the same extreme context (e.g., firefighting), they may be personally exposed to varying frequencies of exposure to extreme events (e.g., some will participate in more major structural fires). To offer deeper insight into the effects of extreme contexts, we directly measured personal frequency of exposure to extreme events (ECE). It is remarkable that within the firefighter study (extreme context), for those firefighters personally exposed to lower ECE (infrequent extreme events), psychological safety bolstered the relationship between moral potency and peer reporting intentions (as illuminated in Fig. 3c), consistent with what we found in the normal work context in Study 2. However, for firefighters operating under high ECE, the moderating effect of higher psychological safety on the moral potency-peer reporting relationship fully inverted to impose a negative effect. In fact, the right intercept of slope 1 in Fig. 3c shows that at the highest combined levels of moral potency, ECE, and psychological safety, the level of reporting peers’ CWBs nears zero.
Conversely, the highest absolute level of peer CWB reporting occurred under the highest levels of moral potency and ECE, combined with low psychological safety (right intercept of slope 3 in Fig. 3c). This latter finding was not specifically theorized but is consistent with our theorizing. We theorized that under conditions of high-ECE, psychological safety reflects a permissive context in whichindividuals can act in the ways that they want so long as it does not jeopardize the team’s mission, and thereby encourages norms against ‘tattling.’ That suggests that a climate of low psychological safety could then be construed as one with higher normative influence in which it is ‘less OK to be, to say, or to act, however, you want.’ In such a context, members may be more inclined to call each other out more readily for transgressions. When such low psychological safety is combined with high ECE, individuals might be more motivated to report peers to enforce standards, understanding that even minor infractions can escalate to damage the team and its ability to operate in extreme situations in which there is no room for failure. These findings are important because psychological safety has not been well applied to peer reporting, and we thus have little empirical understanding of its effects on this outcome, whether in normal or extreme contexts. Overall, an open question is whether under extreme conditions, there are downsides to higher psychological safety on peer reporting intentions and behavior. Together this pattern of findings concerning the effects of psychological safety in low versus high ECE should not be interpreted as simply reflecting between-sample differences between the normal (university) and the relatively more extreme (firefighter) sample contexts. Instead, we observed within-sample differences based on levels of ECE, and notably, the low-ECE firefighters responded to psychological safety similarly to participants in the “normal” sample.
We do want to be explicitly clear that we are not proposing individuals or teams operating in high-ECE contexts are less ethical. To the contrary, we expect generally high levels of duty, honor, integrity, and other facets of morality in this population. Our research simply highlights the practical nature of this work context, in which individuals resist reporting their peers for issues of relatively lower moral intensity (CWBs), given the more intense issues teammates face—issues not typically faced by individuals in more normal work settings.
Practical Implications
CWBs can undermine organizations’ culture, profitability, and ability to accomplish goals and objectives (Chen & Spector, 1992; Lee & Allen, 2002; Marcus & Schuler, 2004). If left unreported, seemingly small CWBs can create a slippery slope toward bigger ethical violations and a work climate in which unethical behavior becomes normalized (Bazerman & Tenbrunsel, 2011; Welsh, et al., 2015). Because CWBs are typically hidden from leaders but may be more observable by peers (Connelly et al., 2012; Treviño & Victor, 1992), determining which factors increase individuals’ willingness to report their organizational peers takes on greater practical importance. Our research suggests one specific way organizations can do this is by selecting and/or developing leaders based on ethical leadership. Utilizing integrity tests and/or measures of ethical leadership to assess leaders’ ethical capabilities is a relatively simple and cost-effective way to identify ethical leaders, and emerging neuroscience assessments also show promise in identifying more ethical leaders (Waldman et al., 2017). Further, with the caveat that it may apply only to those operating in normal and low-ECE environments, organizations should work to increase levels of psychological safety. Beyond bolstering the relationships in the current model, research shows that higher levels of psychological safety are associated with other positive individual and organizational outcomes such as better task performance, a greater amount and frequency of voiced ideas, enhanced organizational learning, creativity, and innovation (Edmondson & Bransby, 2023). Thus, encouraging managers to measure perceptions of psychological safety within their teams (using Edmondson’s (1999) established measure) and then engaging in behaviors known to foster it (e.g., sharing personal stories, inviting feedback on their performance, acknowledging individuals’ implicit voice theories as a barrier to feeling safe) (Coutifaris & Grant, 2022; Edmondson, 2018) can help foster the type of (normal/low ECE) work environments that are conducive to higher levels of effectiveness and performance. Blameless reporting training (Nembhard & Edmondson, 2006; Tucker & Edmondson, 2003) may also be a powerful tool that managers can use to foster higher levels of psychological safety and peer reporting.
Beyond its role in mediating the effects of ethical leadership, the direct effect of moral potency on peer reporting intentions found in this paper is also of practical relevance. Being willing to report a peer typically demands great moral agency (Bandura, 1991) that prompts the potential reporter to feel a sense of ownership that s/he should enact the reporting, have the courage to overcome the inherent fear/risks of doing so, and feel sufficiently efficacious to perform the act. For example, organizations might benefit from proactively developing employee training programs that help their managers develop greater courage in followers for situations in which speaking up can feel risky and challenging to one’s career trajectory, status, and/or job security (Sekerka & Godwin, 2010). Moral potency has been theorized to be state-like and thus malleable (Hannah & Avolio, 2010; Hannah et al., 2011). Beyond providing ethical leadership and psychological safety, for example, ethical climate has been shown to be positively associated with the moral efficacy component of moral potency (Schaubroeck et al., 2012), while abusive supervision has been negatively related to the moral courage component (Hannah et al., 2013), thereby suggesting that organizations should enhance and limit those factors, respectively.
Further, our results suggest that leaders of teams operating in extreme contexts should monitor the climate concerning levels of psychological safety. They should ensure that felt “safety” does not take on a form that promotes a ‘go along, get along’ context that deters peer accountability and reporting of CWBs. Leaders should also understand that, as we described above, they may influence but do not control the nature of that felt safety, as it is influenced by intra-group and organizational-level processes and other factors. This may require that they work with informal leaders in the team to influence the climate, and work with higher level leaders to change policies and processes. They should also understand that their effects as individual ethical leaders may be attenuated under high ECE, which may require them to enact even higher levels of ethical leadership to achieve the desired effects.
Finally, to enhance the extent that moral potency results in peer reporting, organizations might create systems, processes, and procedures that make it easier to speak up about peers’ transgressions. Whether through creating formal mechanisms (e.g., ombudsperson, ethics hotline) or informal ones (e.g., an open, trusting relationship with one’s supervisor), leaders can help to create the contextual conditions necessary for peer reporting. As stated, they may also promote blameless reporting (Nembhard & Edmondson, 2006; Tucker & Edmondson, 2003). As noted above, such actions are particularly important in high-ECE contexts in which strong norms may discourage peer reporting.
Strengths, Limitations, and Future Research
A notable and significant strength of this paper is that we were able to replicate the indirect effect of ethical leadership on peer reporting intentions via moral potency across three distinct field studies, raising our confidence in the stability and generalizability of that indirect effect. Further, we were able to test the moderating effects of psychological safety in both Studies 2 and 3 to highlight important boundary conditions. Although we were unable to temporally separate measures in Studies 1 and 2 due to participant availability, we were able to overcome this limitation by separating measures by nine weeks in Study 3 (firefighters), based on the model’s theoretical temporal separation. Doing so in at least one study was important because moral potency and peer reporting intentions are inherently self-reflective constructs reported by the subject. This more rigorous multi-wave design also gives us greater confidence that the interesting, significant three-way interaction we found in Study 3 is not the result of a statistical artifact. Additionally, our tests of potential common method variance (CMV) suggest that CMV is not of significant concern in any of the three studies. Further, peer reporting is a very personal and idiosyncratic act. We thus believe that individuals’ perceptions of the extent to which their leader enacts ethical leadership and the extent to which they perceived their climate as being psychologically safe were the appropriate focus. Yet, we acknowledge that it is possible for results to differ if other scholars’ research questions prompt the usage of other rating sources.
Finally, we assessed peer reporting intentions versus actual peer reporting behavior. Although prior research has established a moderate meta-analytic correlation between intentions and actual behaviors in general (r = 0.47) (Armitage & Conner, 2001), measuring both peer reporting intentions and behaviors would be beneficial for future research. Yet, there are two limitations to doing so. First, Institutional Review Board restrictions protecting the anonymity of peer reporters makes collecting actual peer reporting data difficult to obtain in organizational field settings, and thus may require lab studies with less ecological validity. Second, there are potential confounds in using actual peer reporting, because participants in any given study are not equally likely to have the opportunity or reason to report their peers. This is because workers will be exposed to both different frequencies and levels of severity of their peers’ transgressions, while some will not observe any transgressions at all. Thus, any measure of actual peer reporting is inherently confounded by the context, given that reporting levels may be based at least in part on the actual frequency of observed transgressions (a difficult factor to capture, given that many transgressions are hidden). Focusing our investigation on intentions enabled all participants to equally respond as to whether they would report their peers for their workplace transgressions.
Our findings concerning ECE are very novel and thus should be considered as preliminary. Further, the need for parsimonious measures restricted our ability to directly measure the unique phenomenon occurring in high ECE. Future research should directly assess the factors theorized (e.g., levels of relative perceived moral intensity, social cohesion, and norms against tattling for relatively minor transgressions). We also noted above that the firefighters we surveyed were predominantly male, consistent with the demographic makeup of that population. This gender imbalance could have influenced the different moderating effects of psychological safety found between Studies 2 and 3. Yet, the 3-way tests showed that even in the male-dominated Study 3, those males experiencing low ECE showed similar patterns of effects to those in the gender-diverse Study 2 (i.e., psychological safety had positive moderating effects). Researchers should thus replicate this study across different extreme contexts and more diverse participants and measure different explanatory variables that may illuminate the basis for the unique moderating effects of psychological safety found in high-ECE conditions.
While we focused on psychological safety as the work climate variable, there are other climate and contextual variables that may moderate the indirect relationships in our model. Future research should assess other potential moderators such as ethical climate (Schaubroeck et al., 2012), and team norms for moral approbation (Jones & Ryan, 1997) (i.e., norms for how members praise and condemn each other’s actions). Further, team emotional intelligence climate may influence group members’ approach to and reactions to conflict (Ayoko et al., 2008), and could thus potentially influence conflict in the form of peer reporting.
Finally, we highlighted the theoretical distinction between peer reporting and whistleblowing, choosing to focus on the former in the current study. Yet, we have no reason to expect that the proposed model would not operate similarly to predict whistleblowing in normal contexts. Yet, we would not expect to find the same inversion of the moderating effects of psychological safety on whistleblowing in high-ECE contexts. Our theorizing concerning that inversion effect was based on the relative lower moral intensity of common CWBs and the need not to disrupt social cohesion by reporting peers in highly interdependent teams who must operate together in dangerous situations. Whistleblowing, however, often concerns more major transgressions, the reporting often does not concern an act of one’s peers, and the reporting is often to outside parties to whom the reporting individual maintains anonymity (Bowling & Lyons, 2015; Near & Miceli, 1985; Treviño & Victor, 1992; Valentine & Godkin, 2019). Future research should thus extend the current model to investigate whistleblowing in normal contexts.
Conclusion
This research sheds new insight into Bandura’s (1991) Theory of Moral Thought and Action and its application to the growing body of work on peer reporting of unethical behavior. We contribute more specifically to research on the generation of individuals’ moral agency in driving peer reporting intentions. We demonstrate that such agency is generated as individual self-regulatory capacity (moral potency) interacts with contextual factors (ethical leadership, psychological safety, and extreme context exposure) to generate the willingness to report peers’ counterproductive work behaviors.
Notes
A study by the Association of Certified Fraud Examiners (2014) showed that employee deviance costs organizations 5% in median revenues, equating to approximately $3.7 trillion in annual losses.
Hannah et al. (2011) first created the three-component construct inclusive of moral courage, ownership, and efficacy, noting these components combine to create moral conation, defined as the agentic impetus to act morally. Hannah and Avolio (2010) operationalized and applied the term moral potency to the construct.
See our supplemental analysis presented in the Results section where we also demonstrate that psychological safety does not operate as a significant mediator in our model.
The one item we removed from the Moral Courage scale of the moral potency measure (I will “go against the group’s decision…”), displayed a substantially lower mean than the other three Moral Courage items in two of the three studies. From a theoretical perspective, this item refers to acting against the group (i.e., going against the group’s decision…), while the other three items refer to expressing one’s ethical views. For this reason, we removed it. Similarly, the item we removed from the Reporting Intentions measure (i.e., “Report a co-worker if they make racial or sexist comments”) is conceptually different from the other five items, and is perhaps a more emotionally charged item in the current social culture in that many respondents viewed this as a more severe action (as reflected in a substantially higher mean than the other five items). For that reason, we felt it was appropriate to remove this item not only from a theoretical perspective but also to increase construct convergent validity.
No modification indices were consulted to improve model fit, nor were any error terms correlated.
No modification indices were consulted to improve model fit, nor were any error terms correlated.
The SRMR for the congeneric model of 0.075 suggests good model fit while the CFI of 0.88 and RMSEA of 0.072 are marginally below arbitrary cutoffs some scholars apply to assess fit. Yet using such cutoffs as “golden rules” is questionable, particularly in smaller samples and more complex models as we test here (for discussion see Marsh et al., 2004; McNeish & Wolf, 2023). By using existing validated scales, our primary focus is to test the fit of the congeneric model against that of alternate models to ensure we are testing the best fitting model possible. We thus conducted CFA tests on all possible 2, 3, 4, 5, and 6-factor models combining different possible combinations of the variables. The next best fitting model (χ2 = 1041.78, CFI = .83, RMSEA = .078, and SRMR 0.081) showed significantly less fit to the data compared to the hypothesized congeneric model.
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Sumanth, J.J., Hannah, S.T., Herbst, K.C. et al. Generating the Moral Agency to Report Peers’ Counterproductive Work Behavior in Normal and Extreme Contexts: The Generative Roles of Ethical Leadership, Moral Potency, and Psychological Safety. J Bus Ethics (2024). https://doi.org/10.1007/s10551-024-05679-y
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DOI: https://doi.org/10.1007/s10551-024-05679-y