TITLE:
The Impact of Ethical Leadership on Job Satisfaction and Employees Performance in the Saudi Market
AUTHORS:
Talhat Alhaiou, Sarah Aldayel
KEYWORDS:
Ethical Leadership, Job Satisfaction, Employee Performance, Integrity, Role Modeling, Ethical Decision-Making
JOURNAL NAME:
Open Journal of Business and Management,
Vol.13 No.5,
September
4,
2025
ABSTRACT: The research investigates the substantial impact of ethical leadership on job satisfaction and employee performance in Saudi Arabian organizations during the Vision 2030 transformation period. A workplace environment develops positively through ethical leadership which combines integrity with role modeling and ethical decision-making. These characteristics create effects that influence both employee conduct and organizational cultural development. Ethical leadership stands as a fundamental driver of sustainable development and workforce engagement because Saudi Arabia needs it to boost efficiency and transparency and accountability in both public and private sectors. A quantitative research design used structured electronic questionnaires to obtain data from 277 employees who worked in different sectors. The research demonstrates that ethical leadership produces substantial improvements in employee satisfaction which in turn leads to better employee performance. Ethical leadership impacts performance indirectly through its effect on job satisfaction which serves as a mediating variable. The mediating effect shows the need for organizations to build work environments which support ethics. The research divides ethical leadership into three separate elements which include integrity alongside role modeling and ethical decision-making. The three components of ethical leadership produce meaningful positive effects on job satisfaction. Through their display of integrity leaders build trust along with psychological safety while their ethical modeling helps reinforce positive work behaviors. Organizational job satisfaction and emotional commitment are strengthened through ethical decision-making which establishes transparency as well as justice and fairness. The evolving Saudi labor market needs ethical behaviors as practical leadership standards for performance evaluation. The research outcomes provide Saudi Arabia’s HR departments and business leaders with practical advice for management. Business leaders together with HR departments in Saudi Arabia should implement ethics-focused training alongside performance evaluations within their leadership development programs. Organizations which build their culture around fairness alongside integrity and ethical decision-making processes will develop motivated employees who remain highly engaged and productive. The practice of ethical leadership functions both as a moral obligation and as a strategic tool for achieving lasting sustainable business expansion. Empirical findings confirm ethical leadership enhances job satisfaction and performance. Developing trustworthy leaders is essential for promoting employee well-being and advancing Saudi Arabia’s development goals.