THE ROLE OF ETHICAL LEADERSHIP IN ENHANCING EMPLOYEE INNOVATION AND JOB EMBEDDEDNESS

Abstract

This study aims to examine and analyse the influence of self-efficacy and ethical leadership on employee innovation behaviour, both directly and indirectly through job embeddedness. This study uses a causal approach with quantitative methods. The study population consisted of all employees of PT PLN (Persero) ULP Medan Selatan, with a saturated sampling technique yielding 102 respondents. Data analysis was conducted using the Structural Equation Modelling–Partial Least Squares (SEM-PLS) approach, which includes testing the outer model, inner model, and hypothesis testing. Data processing was performed using the SEM-PLS software. The results indicate that self-efficacy, ethical leadership, and job embeddedness have a positive and significant impact on employee innovation behaviour. Additionally, self-efficacy and ethical leadership were found to have a significant impact on job embeddedness. Furthermore, the results of the indirect effect analysis confirmed that job embeddedness serves as an essential mediating variable in the relationship between self-efficacy and ethical leadership, influencing employee innovation behaviour. This finding confirms that increasing employee innovation is not only determined by individual factors and moral leadership, but is also greatly influenced by the level of employee engagement with their work and organisation.