How does ethical leadership enhance employee creativity during the COVID-19 Pandemic in China?

ABSTRACT In the context of the COVID-19 pandemic, leaders are facing an ethical dilemma and a tense tradeoff between employees’ health and economic performance. From the perspective of employees’ perceptions of the work situation, this study examines the way ethical leadership enhances employee creativity during the COVID-19 pandemic by using leader-member exchange (a perceived social factor) and organizational ethical climate (a perceived contextual factor) as mediators. The sample included 308 supervisor-employee pairs from 20 high-tech companies in eight provincial regions of China. Structural equation modeling was used to test the proposed hypotheses. Results indicate that ethical leadership can significantly enhance employee creativity through the fully mediating roles of employees’ perceptions of leader-member exchange and organizational ethical climate. Moreover, leader-member exchange affects employee creativity directly as well as indirectly through the mediating role of organizational ethical climate. This study offers insights into the process linking ethical leadership to employee creativity and provides practical suggestions on ways of enhancing employee creativity in situations like the COVID-19 pandemic crisis.