Management Representativeness,Ethical Leadership,and Employee Job Satisfaction in the U.S. Federal Government

Abstract

As the proportion of women and racial minorities in managerial positions has increased in public organizations, considerable attention has been paid to how management representativeness shapes employee work attitudes and what leadership styles moderate these relationships. This study explores separate and joint effects of two types of management representativeness (gender and racial representation of management) and ethical leadership on employee job satisfaction using panel data from the U.S. federal government. The statistical results indicate that racial representation of management and ethical leadership have a positive influence on employee job satisfaction. Further analysis shows that ethical leadership significantly moderates the relationships between the two types of management representativeness and employee job satisfaction, such that gender and racial representations of management are more positively related to job satisfaction under high ethical leadership. Theoretical and practical implications of these findings are addressed.

Keywords

management representativeness ethical leadership job satisfaction

A long line of research in public administration has focused on how governments translate the preferences of the general public that they serve into public policy (Meier & Nigro, 1976; Sowa & Selden, 2003). Representative bureaucracy theory illustrates that the interests of any group are represented in policy formulation and implementation when a bureaucracy mirrors the demographic composition of the population (Andrews, Boyne, Meier, O’Toole, & Walker, 2005). Specifically, the identity congruence between bureaucrats and the public leads to improved policy outcomes beneficial to the represented group (Sowa & Selden, 2003). This underlying logic of representative bureaucracy theory can be applied in exploring whether demographic similarity between leaders and followers within an organizational context influences various work-related outcomes (Choi, 2013; Grissom & Keiser, 2011; Grissom, Nicholson-Crotty, & Keiser, 2012). Scholars argue that employees whose backgrounds are similar to those of their managers in gender and race may find that they share common beliefs and life experiences with each other more than others from different backgrounds (Grissom & Keiser, 2011; Grissom et al., 2012). Accordingly, when managers or supervisors (hereafter referred to as managers) are descriptively representative of the workforce, employees would feel included as valued insiders in the organization (Oberfield, 2016). This suggests that gender and racial representation of management creates inclusive work environments that respect and accept employees of all social identity groups and thereby results in positive work attitudes (Andrews & Ashworth, 2015; Choi, 2013).

However, simply promoting management representativeness within the workforce of a public organization does not necessarily mean that employees perceive inclusiveness. Given that leadership styles have been suggested as significant factors that shape employee work attitudes and behavior in the workplace (Hassan, Wright, & Yukl, 2014; Moon, 2016a; Park & Rainey, 2008), leadership traits and behaviors may moderate the relationship between management representativeness and employee work attitudes. Of particular interest is ethical leadership characterized by the combination of high levels of moral standards and fair treatment of employees because ethical leaders enhance employees’ feelings of inclusion in their organizations by simultaneously satisfying the desire for uniqueness and the desire for belongingness (Boekhorst, 2015; Cottrill, Lopez, & Hoffman, 2014; Gotsis & Grimani, 2016b). That is, in an ethical leadership context, all employees regardless of their demographic characteristics such as gender and race are highly valued for their unique identities and group memberships by managers (Gotsis & Grimani, 2015). Conversely, even if the demographic composition of the workforce is representative of all social groups within an organization, employees may be less likely to perceive themselves as esteemed group members with unique values when managers show unfair decision-making, discrimination, and a lack of honest communication toward their employees. As a result, ethical leadership as a potential moderator may be more likely to strengthen employees’ perceived inclusion in representative organizations, which in turn leads to positive work attitudes.

However, surprisingly, few studies have attempted to explore how management representativeness affects employee work attitudes in public organizations (for exceptions, see Andrews & Ashworth, 2015; Grissom & Keiser, 2011; Grissom et al., 2012). Indeed, Andrews and Ashworth (2015) pointed out that despite considerable progress in testing the premise of representative bureaucracy theory, scholars have paid “little attention to the impact of representativeness within public organizations” (p. 285). Furthermore, although previous research revealed that leadership is highly influential in shaping employees’ perceptions of their organizations (Fernandez, 2008) and therefore may moderate the relationship between management representativeness and organizational outcomes, few studies have explored the direct impact of ethical leadership on employee job satisfaction as well as its moderating impact on the relationship in public organizations. In an attempt to fill these research gaps, this study examines how gender and racial representation of management shape employee job satisfaction and how ethical leadership conditions the direction and strength of the relationship. In doing so, this study provides public administration scholars and practitioners with significant insights into the dynamics of gender and racial representation in managerial positions and the ethical leadership roles of public managers, which would help them make employees more satisfied with their work.

This article begins with an overview of the relevant theoretical perspectives and a literature review. Then, based on the literature review, it draws a set of testable hypotheses regarding the separate and combined effects of the two types of management representativeness and ethical leadership on job satisfaction. Finally, the article concludes by considering the theoretical and practical implications of the findings and possible suggestions for future research.

Theories and Hypothesis Development

Management Representativeness and Employee Job Satisfaction

Demographic characteristics of bureaucrats have long been considered important determinants of organizational outcomes in the public sector (Choi, 2009; Choi & Rainey, 2010; Opstrup & Villadsen, 2015; Pitts, 2005). For instance, Pfeffer (1985) argued that “demographic factors are important in understanding and managing organizations because similarity is one of the most important bases of interpersonal attraction” (p. 69). In a similar vein, Riordan and Shore (1997) maintained that “the level of an individual’s similarity or dissimilarity in demographic attributes to the composition of his or her social unit, in turn, is proposed to affect the individual’s work-related attitudes and behaviors” (p. 342). This suggests that demographic (in)congruence between employees and their direct managers is a powerful predictor of organizational functioning and outcomes in public organizations (Choi, 2013; Grissom & Keiser, 2011; Grissom et al., 2012; Oberfield, 2016).

Representative bureaucracy theory has been used to explain how a bureaucracy that proportionally mirrors the demographic characteristics of the population positively influences organizational performance in the public sector. A main premise of this theory is that a bureaucracy should look like the general population with whom it shares particular attributes for the sake of enhancing responsiveness to the public’s needs (Grissom & Keiser, 2011). According to Mosher (1968), when various social groups with regard to gender, race, and social class are well represented in government (passive representation), their preferences and interests will be reflected in public policies and outcome allocations (active representation). This linkage between passive and active representation is based on the assumption that bureaucrats from similar demographic backgrounds have similar values and norms (Dolan & Rosenbloom, 2003; Sowa & Selden, 2003). Consequently, bureaucrats are more likely to make a decision that favors represented groups with similar demographic origins because they inherently understand them better than bureaucrats who have dissimilar demographic backgrounds.

Although representative bureaucracy theory is used mostly to examine the relationship between bureaucrats and the public, scholars have recently begun to apply this perspective to organizational settings (Choi, 2013; Grissom & Keiser, 2011; Grissom et al., 2012; Marvel & Resh, 2015; Oberfield, 2016). Management representativeness represents the proportion of managers who share demographic attributes with their employees (Oberfield, 2016). For example, gender representation of management within public organizations refers to the extent to which managers proportionally represent employees in terms of gender, whereas racial representation of management is defined as the extent to which managers proportionally represent employees in each racial category (Choi, 2013; Oberfield, 2016). This proportional representation is a salient instrument of group identities because public managers and their employees whose gender and race are similar are likely to share common beliefs, activities, and norms (Grissom & Keiser, 2011; Grissom et al., 2012; Oberfield, 2016). For instance, female and racial minority managers have “an advocacy role on behalf of workers with whom they share demographic characteristics, making it more likely that the organization treats them well” (Grissom & Keiser, 2011, p. 559). Conversely, male and nonminority managers may take on such an advocacy role for male and nonminority employees because of similar backgrounds and socialization between the two parties (Roch & Pitts, 2012). Based on the fundamental tenet of representative bureaucracy theory, it is plausible that management representativeness does not necessarily proceed to a zero-sum game (Roch & Edwards, 2017); all employees can benefit from representation regardless of their different racial background (Pitts, 2005). From this point of representative bureaucracy theory, Andrews and Ashworth (2015) have noted that demographic congruence between managers and employees is “a key factor in determining the extent to which employees feel included within the organizations in which they work” (p. 279). In other words, management representativeness may make employees perceive that they are a critical part of the whole because they are respected and welcomed in the organization (Oberfield, 2016). Thus, employees with high levels of perceived inclusion are more likely to be satisfied with their jobs (Shore et al., 2011). Indeed, scholars provided empirical evidence supporting that employees are more likely to be satisfied with their job in a vertical dyad linkage where the proportion of managers well represents that of employees with respect to gender and race (Choi, 2013; Grissom & Keiser, 2011; Grissom et al., 2012). In light of this argument, it is expected that employees report higher levels of job satisfaction in the organization where the demographic composition of the managerial workforce is proportionally representative of all group members. Therefore, the following hypotheses are proposed:

Hypothesis 1: There will be a positive relationship between gender representation of management and employee job satisfaction in U.S. federal agencies.

Hypothesis 2: There will be a positive relationship between racial representation of management and employee job satisfaction in U.S. federal agencies.

Ethical Leadership and Employee Job Satisfaction

Given that leaders lead by example and play a major role in representing an organization, it is important to understand what leadership characteristics influence work-related outcomes (Yukl, 2008). For instance, public administration scholars have recently proposed leaders’ moral virtues and ethical values as significant elements of leadership effectiveness (Hassan, 2015; Hassan et al., 2014; Lu & Guy, 2014). Ethical leadership captures employees’ perceptions of ethical traits and behaviors observed from the leaders’ managerial actions (Piccolo, Greenbaum, Hartog, & den Folger, 2010). Specifically, 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, Treviño, & Harrison, 2005, p. 120). Scholars have sought to further articulate this concept based on two dimensions of an ethical leader: a moral person and a moral manager (Brown & Treviño, 2006; Brown et al., 2005).¹ As a moral person, the leader exhibits personal characteristics such as honesty, integrity, respect, and trustworthiness and certain decision-making styles that reflect ethical principles (Miao, Newman, Yu, & Xu, 2013). As a moral manager, the leader makes proactive efforts such as communicating about ethics and punishing unethical behavior to lead employees toward ethical conduct (Brown & Treviño, 2006).

Scholars argue that ethical leadership influences employee work outcomes through social exchange processes (Brown et al., 2005; Hassan et al., 2014). According to social exchange theory, individuals seek to create social relationships based on positive interpersonal transactions and norms of reciprocity (Blau, 1964). Brown and Treviño (2006) proposed that “the followers of ethical leaders are more likely to perceive themselves as being in social exchange relationships with their leaders because of the fair and caring treatment they receive and because of the trust they feel” (p. 607). When managers show ethical leadership behaviors, employees feel a greater willingness to repay their managers’ support (Miao et al., 2013). In other words, ethical leadership yields a high-quality social relationship between managers and employees, which in turn engenders employees to reciprocate fair and honest treatment by managers in the form of desired attitudes and behaviors (Hassan et al., 2014). The opposite may also be true. If employees perceive that their leaders behave unethically, they may respond with negative attitudes and counterproductive work behaviors toward the managers and organization. In support of this rationale, previous studies have shown that ethical leadership is positively related to employee job satisfaction, organizational commitment, organizational citizenship behavior, innovative work behavior, and performance (Hassan et al., 2014; Kim & Brymer, 2011; Shin, 2012; Yidong & Xinxin, 2013). These results suggest that managers promote a high-quality social relationship with employees by demonstrating ethical behaviors and creating normative standards that employees are motivated to emulate. However, although ethical leadership plays an important role in shaping work-related outcomes, little progress has been made in the field of public administration. Thus, the following hypothesis is proposed:

Hypothesis 3: There will be a positive relationship between ethical leadership and employee job satisfaction in U.S. federal agencies.

The Moderating Effect of Ethical Leadership

In addition to the direct effect of ethical leadership on employee job satisfaction, this study explores the moderating effect of ethical leadership on the relationship between management representativeness and employee job satisfaction. Specifically, because the linkage between management representativeness and employee job satisfaction does not exist in a vacuum, various contextual factors may affect the direction and/or magnitude of the relationship (Baron & Kenny, 1986). In this respect, Johns (2006) referred to organizational context as “situational opportunities and constraints that affect the occurrence and meaning of organizational behavior as well as functional relationships between variables” (p. 386). Leadership is a key aspect of the context that shapes the positive or negative impact of demographic characteristics on work-related outcomes (Moon, 2016a; Nishii & Mayer, 2009). This means that ignoring the moderating role of ethical leadership in the relationship between management representativeness and employee job satisfaction may lead us to wrong conclusions.

Optimal distinctiveness theory provides potential explanations for how ethical leadership may condition the impact of gender and racial representation of management on employee job satisfaction. According to theory, individuals seek to balance countervailing desires for “belongingness” to an in-group and “uniqueness” from others to achieve an optimal level of inclusion in the organization to which they belong (Brewer, 1991; Shore et al., 2011). To be specific, when an employee’s feeling of similarity to the work group increases, the desire for belongingness is satisfied, but the desire for uniqueness is triggered (Brewer, 1991; Moon, 2016b). However, when an employee’s feeling of dissimilarity to the work group increases, the desire for uniqueness is satisfied, but the desire for belongingness is also aroused (Brewer, 1991; Moon, 2016b). By satisfying the two opposing desires at the same time, individuals can achieve an optimal level of inclusion where they perceive that the organization treats all employees as valued organizational members with unique characteristics (Shore et al., 2011).

Ethical leadership may enhance the positive relationship between management representativeness and job satisfaction by enhancing a sense of employee inclusion. Many scholars suggest that inclusion is a key building block to manage a heterogeneous workforce effectively (Shore et al., 2011). Given ethical leaders’ personal traits and actions, ethical leadership may foster workplace inclusion. For example, employees perceive that they are accepted, valued organizational members when leaders employ fair procedures in outcome allocation and listen to their concerns (Nishii & Mayer, 2009; Shore et al., 2011). Ethical leaders’ fair treatment and equal opportunities for all employees are ways of encouraging subordinates to feel a strong sense of emotional attachment and pride in their organization (Shore et al., 2011). Conversely, unfair treatment and employment discrimination are signals to subordinates that their social groups are not valued and respected by the leaders and organizations, which has been revealed to result in low organizational identification (Kreiner & Ashforth, 2004). In this regard, Gotsis and Grimani (2016b) argued that ethical leaders are expected to allow subordinates to feel the highest level of organizational inclusion by engaging in fair decision-making procedures and antidiscrimination against disadvantaged or minority groups within an organization.

In addition, ethical leaders lead employees to feel a high degree of uniqueness by respecting individual differences to improve work processes (Boekhorst, 2015) and building relational transparency (i.e., openness and dignity in interaction with subordinates) that allows diverse work groups to express their suggestions and ideas (Cottrill et al., 2014). Because ethical leaders pay close attention to concerns raised by subordinates, they encourage subordinates to share divergent views and voice opinions (Walumbwa & Schaubroeck, 2009). Indeed, Hassan (2015) found that ethical leadership is effective in promoting government employees’ voice behavior. This means that minority members within those workforces may actively participate in decision-making procedures because they feel comfortable in communicating about work-related issues with ethical leaders who are transparent and trustworthy. Given that uniqueness occurs when all employees have equal opportunity to offer suggestions and believe that managers appreciate their full range of social identities, they have a strong sense of inclusion under ethical leadership (Gotsis & Grimani, 2016a).

In short, building on the theoretical perspectives presented previously, it is logical to assume that ethical leadership characterized as being fair, trustworthy, fair, honest, and listen to subordinates’ concerns strengthens the positive impact of management representativeness on employee job satisfaction by enhancing feelings of inclusion. That is, although employees may have higher job satisfaction when supervised by own-gender or own-race managers, strong ethical leadership could make employees within different social groups more satisfied with their job by satisfying their belongingness and uniqueness desires simultaneously. Figure 1 displays the hypothesized model.

Hypothesis 4: Ethical leadership will moderate the positive relationship between gender representation of management and employee job satisfaction such that the relationship will be stronger when ethical leadership is higher than lower.

Hypothesis 5: Ethical leadership will moderate the positive relationship between racial representation of management and employee job satisfaction such that the relationship will be stronger when ethical leadership is higher than lower.

Figure 1.

The hypothesized model.

Data and Methods

To test the hypotheses, I used two data sources drawn from U.S. federal government subagencies: Federal Employee Viewpoint Survey (FEVS) and Enterprise Human Resources Integration-Statistical Data Mart (EHRI-SDM). The U.S. Office of Personnel Management (OPM) has administered the FEVS annually since 2010 to assess employees’ perceptions of various factors presumed to be related to organizational success in their agencies. Using a stratified sampling approach, the survey was distributed to permanent full- and part-time employees of departments and independent agencies. The number of respondents and response rates of the FEVS were, respectively, 263,475 and 52% (2010), 266,376 and 49.3% (2011), 687,687 and 46.1% (2012), and 376,577 and 48.2% (2013). The response categories ranged from 1 (strongly disagree or very dissatisfied) to 5 (strongly agree or very satisfied). However, because all responses were anonymous, it was impossible to perform panel analysis at the individual level. Instead, I averaged individual responses to conduct a longitudinal analysis at the organizational level using sampling weights that ensure representative survey results (Fernandez, Resh, Moldogaziev, & Oberfield, 2015).² In addition to the four consecutive FEVS, the second data source was drawn from the EHRI-SDM, published by OPM, which includes statistical information about the demographic composition of federal subagencies. Although the EHRI-SDM excludes some agencies working in national security, intelligence, and the postal service, it has been widely regarded as the most comprehensive data warehouse that provides access to workforce information for approximately 96% of federal employees.

Before discussing the main variables of interest, three features of the data should be noted. First, given a set of hypotheses testing the impact of gender and racial representation of management on employee job satisfaction, individual survey responses are limited to non-managerial employees and exclude employees who are in managerial positions—supervisors, managers, and executives. Second, the units of analysis of this study were U.S. federal subagencies. Because not all subagencies were listed in the FEVS across a 4-year period from 2010 to 2013, the data are unbalanced panel data.³ Altogether, the analysis included 118 discrete subagencies in 411 pooled subagency years.⁴ Finally, data for the independent and control variables were drawn from fiscal year (FY) 2010 to FY 2013, whereas data for the dependent variables were drawn from FY 2011 to FY 2014. The 1-year time lags between the variables helped avoid common-source bias within a measurement occasion and yielded more accurate estimates of causal effects (Lee & Whitford, 2012; Ployhart & Vandenberg, 2010).

Employee Job Satisfaction

A single survey item measured employees’ job satisfaction: “Considering everything, how satisfied are you with your job?” This item captures an employee’s overall emotional response toward her or his job. Although single-item measures have often been criticized because of their low levels of internal consistency reliability, some scholars have argued that there is no clear evidence that these measures are less reliable compared with multiple-item measures (Choi & Rainey, 2014). For instance, the meta-analysis by Wanous, Reichers, and Hudy (1997) revealed that a single item-measure of overall job satisfaction is correlated fairly well with multi-item measures of job satisfaction. Thus, I averaged individual responses to the single item to reflect employee job satisfaction at the federal subagency level using the survey sampling weights.

Management Representativeness

Based on previous research, management representativeness indicates the extent to which public managers are representative of their employees’ demographics (Choi, 2013; Oberfield, 2016). Using the EHRI-SDM, I measured the gender representation of management with proportions of non-managerial employees (GS1–GS12) and managers (GS13–GS15) in two groups—female and male. Specifically, the following formula was employed for computing the index of gender representation of management (Pitts, 2005):

G_{t} = [1 - \sqrt{{(F E - F S)}^{2} + {(M E - M S)}^{2}}],

FE is the proportion of female employees in GS1-GS12, FS is the proportion of female managers in GS13-GS15, ME is the proportion of male employees in GS1-GS12, and MS is the proportion of male managers in GS13-GS15

Similarly, racial representation of management was measured with proportions of non-managerial employees and managers in five racial groups—African Americans, Hispanics, Asian/Pacific Islanders, Native Alaskan/American Indians, and Whites:

E_{t} = [1 - \sqrt{{(B E - B M)}^{2} + {(H E - H M)}^{2} + {(A E - A M)}^{2} + {(I E - I M)}^{2} + {(W E - W M)}^{2}}],

BE is the proportion of African American employees in GS1–GS12, BM is the proportion of African American managers in GS13–GS15, HE is the proportion of Hispanic employees in GS1–GS12, HM is the proportion of Hispanic managers in GS13–GS15, AE is the proportion of Asian/Pacific Islander employees in GS1–GS12, AM is the proportion of Asian/Pacific Islander managers in GS13–GS15, IE is the proportion of Native Alaskan/American Indian employees in GS1–GS12, IM is the proportion of Native Alaskan/American Indian managers in GS13–GS15, WE is the proportion of White employees in GS1–GS12, and WM is the proportion of White managers in GS13–GS15

The index ranges from 0 to 1, and it captures how closely each gender and racial group of employees is congruent with managers of the same gender and race at the organizational level. For instance, an index value of 0 represents the perfect gender or racial mismatch between managers and employees, whereas an index value of 1 indicates the perfect gender or racial congruence between managers and employees.

Ethical Leadership

According to ethical leadership literature, the salient characteristics of ethical leaders include integrity/honesty, trustworthiness, and ability to listen to employees’ concerns (Brown & Treviño, 2006; Brown et al., 2005). Based on these personal traits, ethical leadership was measured using the following four ordinal survey items: (a) “My organization’s leaders maintain high standards of honesty and integrity,” (b) “My supervisor/team leader treats me with respect,” (c) “I have trust and confidence in my supervisor,” and (d) “My supervisor/team leader listens to what I have to say.” The Cronbach’s alpha reliabilities of the scale for an ethical leadership range from .87 to .89 across years. I then averaged individual responses to the four to create an ethical leadership index at the federal subagency level using the survey sampling weights.

Control Variables

To improve model specification, the study controlled for various organizational characteristics and managerial practices that may influence job satisfaction. First, the model includes gender and racial diversity within the organization because differences in demographic attributes lead to high levels of interpersonal conflict among employees that decrease job satisfaction (Choi, 2009). Blau indices of variability were used to measure the two dimensions of diversity with the following formula: $1 - \sum_{i = 1}^{k} p_{i}^{2},$ where $p i$ denotes the proportion of group members in the ith category. Drawing from the EHRI-SDM categorization, I classified the gender of the federal employees into two groups—female and male. In addition, I used the five racial categories—Blacks, Hispanics, Asian/Pacific Islanders, Native Alaskan/American Indians, and Whites—to measure racial diversity. Second, it is anticipated that turnover—employees leaving the organization over a given time period—affects work-related outcomes (Oberfield, 2016). More specifically, employee departure damages interpersonal relationships and communication networks, and this may have a negative impact on employee job satisfaction. Turnover rates were computed by dividing the total number of “quits,” “individual transfers,” and “retirements” in a given FY by the total number of employees. Third, the size of the workforce may be related to employee attitudes in that it results in communication difficulties for managers and employees (Andrews, 2017). As such, the model includes workforce size, which was measured using the number of personnel in each subagency. In addition, because physical conditions in the workplace are significant factors that influence levels of employee well-being and comfort (Jung & Lee, 2015), I controlled for job conditions by using a single survey item from the FEVS: “Physical conditions (for example, appropriate noise level, temperature, lighting, cleanliness in the workplace) allow employees to perform their jobs well.” Finally, previous empirical studies have reported that performance-based pay and job role clarity are associated with employee work attitudes. For example, a performance orientation system and diversity management practices place high value on fairness in distributing organizational outcomes and increase employee job satisfaction (Choi & Rainey, 2010). Job role clarification increases job satisfaction because employees know what to do to improve individual performance in their job (Hassan, 2013). The perception of performance-based pay is the response to the survey item, “Pay raises depend on how well employees perform their jobs.” The survey item for job role clarity was “I know what is expected of me on the job.” Table 1 provides descriptive statistics and correlation coefficients among variables.

Table 1.

Descriptive Statistics and Correlations (N = 411).

Variable	1	2	3	4	5	6	7	8	9	10	11
1. Employee job satisfaction	1
2. Gender representation of management	−.219	1
3. Racial representation of management	.047^a	.320	1
4. Ethical leadership	.695	−.186	.047^a	1
5. Performance-based pay policy	.598	−.130	−.189	.618	1
6. Job role clarity	.621	−.319	−.146	.410	.340	1
7. Physical job conditions	.552	−.214	−.007^a	.489	.429	.417	1
8. Turnover rates	−.274	.024^a	−.085^a	−.185	−.223	−.041^a	−.167	1
9. Gender diversity	−.011^a	−.059^a	−.070^a	.180	.236	−.063^a	.130	.198	1
10. Racial diversity	−.130	.125	−.378	−.115	.064^a	.058^a	−.087^a	.030	.093	1
11. Workforce size (1,000)	−.029^a	.106^a	.004^a	−.195	−.179	.105	−.206	−.019	−.092	.100	1
M	3.707	0.757	0.830	3.806	2.606	3.957	3.684	0.066	0.447	0.456	12.912
SD	0.149	0.147	0.108	0.163	0.246	0.128	0.174	0.027	0.050	0.106	27.772
Minimum	3.105	0.341	0.116	3.330	1.950	3.475	3.239	0.021	0.218	0.095	0.097
Maximum	4.164	0.999	0.992	4.277	3.801	4.461	4.256	0.231	0.500	0.684	301.493

Not significant at 95% confidence interval.

Findings

Although the primary advantage of longitudinal data analysis is to offer more accurate inferences of estimation results than cross-sectional or time series data analysis, concerns about the existence of serial correlation and heteroskedasticity in the error term remain (Lee & Whitford, 2012; Oberfield, 2014). The Wooldridge test for autocorrelation showed F statistics of 18.39 (p < .01) for the models, which suggested that the errors were serially correlated. Moreover, the Breusch–Pagan test revealed chi-squares of 13.20 (p < .01) for the models, which were evidence of heteroskedasticity. As a result, to test the suggested hypotheses, I used the feasible generalized least squares (FGLS) regression analysis technique with a heteroskedastic error structure and first-order autoregressive correlation coefficient common to all the panels. Because the model includes the interaction terms between the two types of management representativeness and ethical leadership diversity, the regression diagnostics for multicollinearity yielded high scores of the variance inflation factor (VIF). However, after the mean-centering procedure had been used, the average VIF scores for the models were below 1.67, with no measure exceeding 10 after using the mean-centering procedure, which suggests that multicollinearity was not a problem.

Table 2 presents the results of the FGLS regression analyses of employee job satisfaction. The Wald chi-square test statistics indicated that each of the models fit the data well. First, control variables showed some interesting results in Model 1. For example, performance-based pay and job role clarity were positively related to job satisfaction. These results indicate that employees with perceived fairness in distribution of extrinsic rewards and high levels of role clarification were more likely to feel satisfied with their jobs (Choi & Rainey, 2014; Hassan, 2013). Second, as anticipated, better job conditions enhance the quality of human relations of employees (Jung & Lee, 2015), which in turn lead to higher job satisfaction. The results show that racial diversity is negatively associated with employee job satisfaction. It is possible that employees are less likely to be satisfied with their job because of interpersonal conflicts caused by perceived dissimilarities with respect to race (Choi, 2009). Finally, the loss of employees through turnover is detrimental to interpersonal collaboration and communication (Shaw, Duffy, Johnson, & Lockhart, 2005), and this may negatively influence employee job satisfaction.

Table 2.

FGLS Regression Results.

	Model 1		Model 2		Model 3
	β	SE	β	SE	β	SE
Gender representation of management (GRM)			−.123	.082	−.236***	.078
Racial representation of management (RRM)			.446***	.078	.353***	.083
Ethical leadership (EL)			.334***	.045	.358***	.048
GRM × EL					.455*	.271
RRM × EL					1.050***	.215
Performance-based pay policy	.174***	.027	.115***	.026	.083***	.027
Job role clarity	.262***	.040	.078*	.047	.076	.047
Physical job conditions	.071**	.031	.016	.029	.029	.030
Gender diversity	−.228	.191	−.541***	.160	−.347*	.203
Racial diversity	−.122*	.059	.227**	.090	.148	.110
Turnover rates	−.355***	.120	−.421***	.118	−.584***	.125
Workforce size (1,000)	.001	.010	.055***	.011	.040***	.011
Constant	2.139***	.225	2.619***	.245	2.824	.266
Year-specific effects	Included		Included		Included
Subagency-specific effects	Included		Included		Included
Wald χ²	27,493.80***		30,269.10***		22,662.63***
Observations	411		411		411

Note. FGLS = feasible generalized least squares.

p < .1. **p < .05. ***p < .01.

Hypotheses 1 and 2 proposed that the two types of management representativeness would increase employee job satisfaction. The results of Model 2 showed the coefficient for racial representation of management is significantly and positively related to employee job satisfaction, whereas the coefficient for gender representation of management is not significant. These results indicate that although gender congruence between employees and managers is not an important predictor of employee job satisfaction, employees with a same-race manager perceive higher support and integration and are more likely to have high levels of job satisfaction. Similarly, Model 2 presents that ethical leadership is statistically significant and positively associated with employee job satisfaction in support of Hypothesis 3. When managers display exemplary ethical behaviors and traits, employees feel obligated to reciprocate the managers’ support in the form of high levels of job satisfaction.

To test whether ethical leadership can potentially enhance the positive effects of management representativeness, I included the interactions between the two types of management representativeness and ethical leadership in Model 3. The findings indicated that both coefficients for gender representation of management × ethical leadership and racial representation of management × ethical leadership in the model were statistically significant and positive as expected, supporting Hypotheses 4 and 5. When ethical leadership is high, gender and racial representation of management are more strongly and positively associated with employee job satisfaction, but when ethical leadership is low, these relationships are weaker.

To better understand what these results mean, the moderating effects of ethical leadership are illustrated in the following two figures. Figure 2 confirms that the relative level of ethical leadership is likely to have an important effect on the relationship between gender representation of management and employee job satisfaction. As expected, when ethical leadership is high—that is, one standard deviation above the mean (indicated by the solid line)—the positive effect of gender representation of management on employee job satisfaction is significantly stronger than the condition in which ethical leadership is low—that is, one standard deviation below the mean (indicated by the dotted line). In a similar vein, Figure 3 shows that the positive association between racial representation of management and employee job satisfaction is strengthened when ethical leadership is high. These results suggest that in the organization where all employees of multiple social groups are well represented in bureaucracy, ethical leadership allows employees to have higher levels of job satisfaction by encouraging stronger perceived inclusion. Consequently, the interaction effects are strongly suggestive of benefits to the organization in which employees are proportionally similar in gender and race with their managers, who display ethical behaviors.

Figure 2.

Interaction effect of gender representation of management and ethical leadership on employee job satisfaction.

Figure 3.

Interaction effect of racial representation of management and ethical leadership on employee job satisfaction.

Discussion and Conclusion

Despite the growing attention to the effect of demographic composition and managerial leadership on work-related outcomes in public organizations (Choi & Rainey, 2010; Grissom & Keiser, 2011; Grissom et al., 2012; Moon, 2016a; Park & Rainey, 2008; Pitts, 2005), little is known about the mechanisms through which management representativeness and ethical leadership influence employee job satisfaction. Furthermore, although leadership behavior plays a central role in shaping employees’ identification with the organization (Park & Rainey, 2008), few studies have examined whether the relationships between demographic similarity in the vertical dyad and employee job satisfaction are contingent on ethical leadership. Using multiple theories about representativeness, leadership, and inclusion, the current study sought to fill this gap by exploring how employees respond to the organizational context when managers are demographically representative of the workforce and how ethical leadership moderates the effects of management representativeness on employees’ job satisfaction. The evidence is very encouraging. Specifically, gender and racial representation of management and ethical leadership were positively associated with job satisfaction. More importantly, when moderated by ethical leadership, the positive effect of gender and racial representation of management became even stronger. These results have important implications for theory and practice.

Theoretical Implications

This article offers three primary theoretical contributions. First, consistent with the notion of representative bureaucracy theory, this study demonstrated that employees in organizations where racial minorities and women are well represented in managerial positions were more likely to report high levels of job satisfaction than those in organizations with racial minorities and women underrepresented in managerial positions. The theory suggests that the proportional representativeness in public organizations may encourage managers to adopt policy decisions that advocate for the interests of all groups equally (Marvel & Resh, 2015; Roch & Pitts, 2012). Accordingly, employees who share the same demographic characteristics with their managers will be interpersonally attracted and this attraction allows employees to have a strong perception of inclusion (Andrews & Ashworth, 2015; Oberfield, 2016), which in turn increases employees’ job satisfaction. Considering that most previous studies have mainly focused on the relationship between bureaucratic representation and the quality of democratic governance (Dolan & Rosenbloom, 2003; Kennedy, 2014; Meier & Nigro, 1976; Sowa & Selden, 2003), the findings suggest that management representativeness within public organizations deserves sufficient attention by public administration scholars in that it may lead to positive employee outcomes.

Another theoretical contribution is that social exchange theory appears to serve as useful theoretical lens to understand why ethical leadership positively influences employee job satisfaction. Although public managers are expected to embed their moral beliefs and values into the organization, little empirical attention has been paid to the consequences of ethical leadership (Hassan, 2015; Hassan et al., 2014; Lu & Guy, 2014). Does ethical leadership make a difference in job satisfaction in public organizations? The current analysis provided a positive answer to this question. Specifically, consistent with social exchange theory when leaders act in an honest and trustworthy way (Hassan et al., 2014), the findings indicated that when leaders act in an honest and trustworthy way, employees feel a sense of obligation to reciprocate with high levels of job satisfaction. Given that the literature has given little attention to questions about the effectiveness of ethical leadership in promoting positive employee work attitudes (see Hassan et al., 2014, for an exception), this study contributes to our understanding of potential benefits from ethical leadership in public organizations.

Finally, this study offers initial evidence of how ethical leadership moderates the effect of gender and racial representation of management on employee job satisfaction. The findings supported predictions derived from organizational inclusion theory suggesting that ethical leadership boosts employees’ sense of inclusion by adjusting the two opposing desires for belongingness and uniqueness. For example, ethical leadership satisfies employees’ desires for belongingness to the organization, because leaders’ traits and behaviors that are seen as more moral convey to employees that they are highly valued and respected (Boekhorst, 2015; Cottrill et al., 2014). In addition, ethical leaders foster a sense of uniqueness by offering the opportunity for voice and encouraging open communication among employees. Taken together, when employees perceive their managers as ethical, they achieve an optimal satisfaction level of both desires and thereby are more likely to be satisfied with their job.

Practical Implications

The findings from this study have several important managerial implications. Racial representation of management leads to high levels of employee job satisfaction in the federal government. This supports the claim that federal agencies should pay particular attention to demographic composition wherein employees are proportionally represented by managers of the same race. One way of increasing the degree of demographic congruence in vertical dyads is to recruit and employ public managers who match employees by the racial background. In addition, women and ethnic minority employees have been historically underrepresented in managerial job positions in the federal workforce (Clark, Ochs, & Frazier, 2013). Thus, when a small proportion of women and ethnic minority managers occupy upper-level job positions, agencies may actively promote both women and racial minority employees to positions in higher levels of management.

Given the important role of ethical leaders in positive work-related outcomes, organizational efforts to facilitate ethical leadership could prove fruitful in increasing employee job satisfaction. For example, federal agencies may want to hire more ethical leaders and offer ethics training programs to incumbent leaders (Miao et al., 2013; Zhu, He, Treviño, Chao, & Wang, 2015). This can be achieved by utilizing selection methods that include evaluation of integrity, fairness, honesty, and moral development. Using structured interviews and situational judgment tests that focus on morally intense situations would increase the likelihood of hiring ethical leaders. Moreover, ethics training programs should be designed to develop moral awareness and sensitivity in leaders. For instance, training courses could include subjects such as handling complex ethical issues, rewarding employees whose conduct is ethical, and embedding ethical principles and values in leaders.

Limitations and Suggestions for Future Research

Several limitations of this study need to be addressed. First, the current findings could be affected by the nuances or unique characteristics of the U.S. federal government. In other words, it is likely that empirical research in different nations and at different levels of government (i.e., state and local government) would reveal different results. Second, this study used the data collected over a relatively short period of time (four consecutive years)—that is, a longitudinal examination covering a longer period of time would improve the validity of causal inferences. Third, it should be noted that the measure of ethical leadership was not constructed with the identical items used in previous research; hence, the measure may be criticized in terms of construct validity. This problem is often encountered in the field of public administration when utilizing existing data such as the FEVS, which aims to evaluate federal employees’ job attitudes toward human resource management but not specific dimensions of ethical leadership. I acknowledge that future research can improve the measure of ethical leadership by using more items that accurately capture various dimensions of ethical behavior. Finally, as this study explored unit-level phenomena, one critical caveat is the potential problems of ecological fallacy or aggregation bias in which the findings revealed from unit-level data may not be applicable to the individual level.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Author Biography

Kuk-Kyoung Moon is an assistant professor in the Department of Public Administration, Inha University, Incheon, Korea. His research interests include public organization theory, human resource management, and performance management.

Changhoon Jung is a professor in the Department of Public Administration, Inha University, Incheon, Korea. His research focuses on public budgeting and finance. His recent work has been published in the American Review of Public Administration, Public Budgeting and Finance, International Review of Administrative Sciences, and other journals.

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