Ethical leadership characterized by honesty, fairness, and trustworthiness in interpersonal relationships (Özsungur, 2019) starts with self-reflection, progresses to strong dedication in employees, and leads to a commitment to change (Shakeel et al, 2019). “Ethical leadership is the implicit and explicit pursuit of desired ethical behavior for self and followers through efforts governed by rules and principles that advocate learning motivation, healthy optimism and clarity of purpose to uphold the values of empowerment, service to others, concern for human rights, change for betterment and fulfilling duty towards society, future generations, environment, and its sustainability.” (Shakeel et al, 2020). Trust, justice, and a feeling of purpose are all fostered by ethical leadership, which immediately raises employee motivation (Al Halbusi et al, 2024; Burhan et al, 2023; Elsaied, 2018). Leaders develop a polite, values-based workplace that increases intrinsic motivation (Ahmad et al, 2023; Al Halbusi et al, 2024; Burhan et al, 2023) by acting morally and showing real concern for their staff (Ahmad and Umrani, 2019; Ahmad et al, 2023; Baer and Frese, 2003). Ethical leaders encourage dedication and extra effort by promoting equity, establishing clear objectives, and recognizing ethical conduct (Abid et al, 2018; Ahmad et al, 2019; Al Halbusi et al, 2024). This increases motivation and accelerates business success (Ahmad and Umrani, 2019; Ahmad et al, 2019; Burhan et al, 2023; Hair et al, 2010). A positive trajectory and ongoing personal development are necessary for one to thrive at work (Carmeli and Spreitzer, 2011). Thriving is characterized by qualities such as commitment, participation, creativity, innovation, motivation, and learning drive (Burhan et al, 2023; Talib et al, 2019), which increases employees’ self-confidence and encourages them to share and implement new ideas (Burhan et al, 2023). Ethical leadership is a predictor of various outcomes, including how effective leaders are perceived to be, the job satisfaction and commitment levels of followers, as well as their readiness to raise concerns with management (Brown et al, 2005). Employees continue to exhibit positive behaviors because ethical leaders treat their workforce with respect and genuinely care about their well-being (Shafique et al, 2020). To be thriving at work, ethical leaders create an environment of transparency and empowerment (Abid et al, 2018; Ahmad et al, 2019), encouraging their employees to grow, meet challenges, and be involved (Inceoglu et al, 2018). When employees feel appreciated and encouraged, their vitality, learning, and workplace engagement increase (Ibeawuchi et al, 2020).

H1: Ethical leadership is directly and positively associated with employees’ thriving at work.

Psychological safety is conceptualized as the ability to express and engage one’s authentic self without the apprehension of detrimental effects on self-image, status, or career progression (Ahmad and Umrani, 2019; Kahn, 1990). When employees feel psychologically safe, they share their opinions, give each other constructive feedback, take risks to put new ideas into practice, and take responsibility for their errors (Lee, 2022), completely engaged in the objectives of the business (Shafique et al, 2020; Wen et al, 2021). Therefore, psychological safety is important for personal growth (Ahmad et al, 2023). Leadership style is an important contextual factor. Edmondson and Lei (2014) emphasized that the degree of psychological safety which employees observe is strongly identified with the states of mind and practices of leaders in the organization (Talib et al, 2019). When leaders act ethically, they foster a culture where employees are free to take chances, share ideas, and voice concerns (Ahmad et al, 2023; Kim et al, 2023) without worrying about the repercussions (Kim et al, 2023). Empirical research has also shown the relationship between ethical leadership and psychological safety (Liu et al, 2024; Newman et al, 2017). Furthermore, a meta-analysis by Hoch et al (2018) demonstrated the strength of this association by confirming that ethical leadership and psychological safety are highly correlated across a range of sectors. Ethical leaders encourage open communication and enable employees to take risks, share ideas, and voice concerns without fear of negative consequences (Kim et al, 2023; Yousaf et al, 2019). This organizational environment created by the ethical leader helps increase the psychological safety of employees and encourages individual learning and therefore thriving at work. In this case, employees are more likely to seek help from their leaders to avoid mistakes, improve their skills, and build trust through learning (Spreitzer and Porath, 2014). On the other hand, leaders’ attitudes of advice, respect and trust can increase employees’ psychological safety, promote positive emotions and enhance work growth. In addition, psychological safety can help employees overcome learning anxiety (Zeng et al, 2020). Previous studies have also shown that psychological safety has a mediating role in the effect of leadership style on employee behavior (Ahmad and Umrani, 2019; Ahmad et al, 2023; Elsaied, 2018).

H2: Psychological safety plays a mediating role in the relationship between ethical leadership and thriving at work. In other words, ethical leadership is indirectly and positively related to thriving at work through psychological safety.

Research on the mental health outcomes associated with ethical leadership remains sparse (Haar et al, 2022). A meta-analysis by Ng and Feldman (2015) found that employees trust ethical leaders, which results in more positive work behaviors and better job performance. Bedi et al (2016) suggested that ethical leadership affects mental health. Because ethical leaders’ commitment to integrity will contribute to employees’ positive emotional experiences in the workplace. Chughtai et al (2015) found a negative relationship between ethical leadership and emotional exhaustion. Haar et al (2022) demonstrated that ethical leadership positively influences employee mental health, as employees are more inclined to trust in ethical leaders’ commitment to fairness and their capacity to effectively manage workloads and allocate resources. Mentally well employees are more resilient, engaged, and productive (Sasaki et al, 2022). They can handle obstacles, adjust to changes, and keep a positive outlook on their responsibilities and coworkers (Iqbal et al, 2020; Kalshoven and Boon, 2012; Shafique et al, 2020; Yousaf et al, 2019). They have high levels of job satisfaction and are apt to make worthwhile contributions to the business (Burhan et al, 2023; Elahi et al, 2019). Employees with good mental health are better at managing stress (Ahmad et al, 2019; Poddar and Chhajer, 2024; Shafique et al, 2020), adjusting to changes, and keeping a positive attitude toward their work and relationships (Talib et al, 2019). Poor mental health can lead to reduced motivation, higher absenteeism, and lower productivity. Organizations that prioritize the mental health of their employees establish a foundation for fostering a thriving and innovative workforce. Empirical studies have shown that mental health and thriving at work are related. Porath et al (2012), for instance, discovered that employees in excellent mental health had greater levels of vitality and engagement. Similarly, Warr and Inceoglu (2018) found that employees who experience fewer mental health challenges are more likely to seize opportunities for learning and development. Additionally, Ryff and Singer (2008) demonstrate that mental health is critical for promoting proactive behaviors and resilience. Ethical leaders create a psychologically safe and encouraging workplace (Djaya et al, 2024) which lowers stress, anxiety, and mental fatigue while fostering resilience and well-being (Gupta et al, 2024; Haar et al, 2022). Better mental health increases employees’ likelihood of feeling enthusiastic, engaged, and motivated to learn and grow (Kalshoven and Boon, 2012; Kashyap and Singh, 2017), which are the critical elements of thriving at work. Consequently, thriving at work is indirectly facilitated by ethical leadership, which is demonstrated by the greater levels of vitality displayed by mentally healthy employees.

H3: Employees’ mental health plays a mediating role in the relationship between ethical leadership and thriving at work. In other words, ethical leadership is indirectly and positively related to thriving at work through employees’ mental health.

Ethical leadership promotes employees’ psychological safety, mental health and overall thriving at work (Ansong et al, 2023; Talib et al, 2019; Haar et al, 2022; Tsai, 2024). It boosts job satisfaction and motivates employees to work with more dedication, raising engagement and productivity (Iqbal et al, 2020; Jeong et al, 2024). Such an environment created by ethical leaders provides psychological safety (Ahmad et al, 2023; Sumanth et al, 2024). Psychological safety also improves employees’ mental health (Ahmad and Umrani, 2019; Ahmad et al, 2023; Ibeawuchi et al, 2020; Jin et al, 2022; Teimouri et al, 2018). Indeed, psychological safety has positive effects on mental health. For example, Newman et al (2017) discovered that employees who feel psychologically safe report less stress and anxiety, which promotes better mental health outcomes. Edmondson and Lei (2014) demonstrated that burnout and absenteeism are reduced in organizations with a strong culture of psychological safety. Additionally, Baer and Frese (2003) found that psychological safety, especially in high-pressure environments, enhances job satisfaction and reduces emotional exhaustion, thereby contributing to improved mental health. At the same time, psychological safety prevents negative mental health outcomes such as burnout, stress, and reduced well-being (Özsungur, 2019; Poddar and Chhajer, 2024; Ulusoy et al, 2016). Consequently, better mental health directly impacts employees’ ability to perform well at work (Ibeawuchi et al, 2020). Therefore, ethical leaders, by ensuring care and integrity, reduce workplace stress, improve employees’ well-being (Teimouri et al, 2018), boost their commitment and personal growth, and help them to thrive at work (Talib et al, 2019). By establishing trust, upholding justice, and advocating transparency (Ahmad et al, 2019; Burhan et al, 2023), ethical leaders foster a psychologically safe workplace where employees are free to share their opinions and take calculated risks (Burhan et al, 2023). Such safety promotes perseverance and minimizes stress, improving mental health. Employees with good mental health are therefore more active, forward-thinking, and motivated (Gupta et al, 2024), which raises their levels of thriving at work (Hoch et al, 2018). Therefore, ethical leadership initially fosters psychological safety, which in turn enhances mental health, ultimately leading to employee thriving through this sequential mediation process.

H4: Psychological safety and employees’ mental health play a serial mediating role in the relationship between ethical leadership and thriving at work. In other words, psychological safety is positively related to employees’ mental health, and ethical leadership is indirectly related to thriving at work through the chain mediating path of “psychological safety employees’ mental health”.

The theoretical model (Fig. 1) exhibits a direct relationship between ethical leadership and employees’ thriving at work. By putting forth a serial mediation framework, this research posits that psychological safety is improved by ethical leadership. Ultimately, employees’ mental health is enhanced which results in a substantial increase in thriving at work. This model offers a deeper understanding of the mechanisms underlying the relationship between leadership and thriving. Ethical leadership fosters an environment of psychological safety and improves employee mental health. As employees’ experience better mental health and feel safe to express themselves, they are more likely to thrive at work. The model illustrates how ethical leadership indirectly fosters employees’ thriving at work by sequentially promoting psychological safety and supporting mental health as mediating factors.

Fig. 1.

Graphical representation of proposed hypothesized theoretical model.

To tie the whole idea: Study aims to contribute to the literature through the following: First, we employed a framework that methodically examines how ethical leadership causes employees’ thriving at work. Secondly, we comprehensively discussed the impact of ethical leadership on employees’ psychological safety. Following a rigorous examination of the indicator’s mediating role, a subsequent strong influence on employees’ mental health is observed. By employing this novel approach, the study addresses a gap in the literature, elucidating the pathway through which ethical leadership fosters employee thriving at work.

The sample of the study consists of the employees of a company operating as an electronic retailer in Turkey in Istanbul. Convenience sampling method was preferred for data collection. Initially, the human resources managers of the company were approached to explain the objectives of the research, and consent was obtained to administer a survey among the employees. Upon securing the required approvals, an on-site survey was administered to the participants. To facilitate transportation considerations, the survey was carried out with employees from six different stores of the same brand. The study collected data from 367 surveys. The responses were reviewed by the researchers, and 12 surveys deemed incomplete or invalid were excluded from the analysis. Consequently, the final dataset comprising of 355 valid survey responses were collated for further analysis.

Among the participants, 174 were female and 181 were male. Regarding marital status, 209 participants were single, while 146 were married. In terms of age distribution, 199 participants were under the age of 30, 120 were between the ages of 30 and 45, and 36 were aged 46 or older. Of the participants, 39 had a high school education or lower, 239 held an associate’s or bachelor’s degree, and 77 had completed postgraduate education. In terms of work experience, 205 participants had 5 years or less, 119 had between 6 and 10 years, and 31 had more than 11 years of professional experience.

Data analysis was performed using AMOS 22.0 and SPSS 27.0 software (IBM Corp., Armonk, NY, USA). In the initial phase of the analysis, the potential presence of Common Method Bias (CMB) was evaluated to assess its possible impact on the study. Subsequently, analyses were conducted to examine the demographic characteristics of the participants and to assess the validity and reliability of the scales employed in the research. Prior to testing the hypotheses, the relationships between the variables were explored, and hypothesis testing was carried out thereafter. The Process Macro (Model 6) was utilized for hypothesis testing (Hayes, 2018). Within the Process Macro framework, analyses were performed using the bootstrap method with 5000 resamples and a 95% confidence interval.

To operationalize the constructs, this study employed scales that have been widely utilized in previous research and have demonstrated established validity and reliability. All scales were rated on a 1 to 5 scale.

Psychological Safety: The scale developed by Edmondson (1999) was used to measure the psychological safety of employees. The five-point Likert-type scale (1 = strongly disagree, 5 = strongly agree) has 7 items. Example items include “Members of this team are able to bring up problems and tough issues” and “It is safe to take a risk on this team”.

Ethical Leadership: The scale developed by Brown et al (2005) was used to measure employees’ perceptions of ethical leadership towards their leaders. The five-point Likert-type scale (1 = strongly disagree, 5 = strongly agree) has 10 items. Example items include “This team leader disciplines employees who violate ethical standards”.

Employee Mental Health: The scale developed by Kashyap and Singh (2017) was used to measure employees’ mental health. The 5-point Likert-type scale (1 = better than usual, 5 = much less than usual) has 12 items. Example items include “I always could not concentrate when I do something” and “I am always very nervous and feel stressed”, “I always feel unhappy or depressed”.

Thriving at Work: The scale developed by Porath et al (2012) was used to measure employees’ thriving at work. The 5-point Likert-type scale has 10 items (1 = not at all, 5 = to agreat extent). Example items include “I find myself learning often” and “I have energy and spirit”.

The fact that the data were collected from a single source in the study is a significant concern for common method bias (CMB) (Sürücü et al, 2023). Therefore, CMB was first checked in the analyses. For this purpose, Harman’s single factor test showed that there was no factor exceeding the 50% threshold (Podsakoff et al, 2003). In addition, the correlation analysis revealed that the correlation coefficient (r) values between both variables were less than 0.90 (Bagozzi et al, 1991). The findings indicate that there is no significant problem related to CMB in this study (Bagozzi et al, 1991; Podsakoff et al, 2003). Additionally, to avoid the potential biases in the data set the following steps were taken. First, participants were assured that their responses would be both confidential and anonymous to avoid social desirability bias. Second, participants were informed that their own opinions were important. Finally, participants were assured that their data would not be shared with third parties and that confidentiality would be maintained. This increased the likelihood that participants would respond honestly (Podsakoff et al, 2003).

In the preliminary analysis, the validity and reliability of the scales were tested and the results are presented in Table 1.

The results exhibit that the factor loadings of the items belonging to the scales are higher than 0.5 and that the items have the ability to represent the relevant factor well (Sürücü et al, 2022). The Cronbach’s Alpha coefficient and Composite Reliability (CR) values, both exceeding 0.7, indicate that the scales demonstrate satisfactory reliability. Although the average variance extracted (AVE) values for each construct exceed 0.5, they remain lower than the corresponding composite reliability values. These findings indicate that the constructs have satisfactorily establish the convergent validity. In addition to these results, the fact that the square of the AVE coefficient is smaller than the correlation value between each construct (Table 2) confirms that discriminant validity is established between the factors (Fornell and Larcker, 1981; Hair et al, 2010).

Finally, we checked the tolerance value and its equivalent variance inflation factor (VIF) to assess multicollinearity problems. The results show that the tolerance value varies between 1.451 and 2.522, and the VIF value is greater than 0.1, indicating that there is no evidence of multicollinearity problems.

Prior to testing the hypothesized model, a correlation analysis was conducted to examine the relationships between the variables. Table 2 presents the means, standard deviations and correlations for all variables.

The results show that there is a positive relationship between the constructs. Accordingly, ethical leadership has a positive relationship with psychological safety (r = 0.549, p 0.05), employee mental health (r = 0.478, p 0.05) and thriving at work (r = 0.560, p 0.05). In addition to these findings, it was determined that psychological safety has a positive relationship with employee mental health (r = 0.609, p 0.05) and thriving at work (r = 0.637, p 0.05).

Fig. 2 presents the graphical illustration of serial mediation analysis where ethical leadership was considered as the independent variable (X), psychological safety as the first mediator variable (M1), employee mental health as the second mediator variable (M2) and thriving at work as the dependent variable (Y). The analysis was conducted with the PROCESS Model 6 developed by Hayes (2018). The analysis results showing that proposed hypotheses are supported in Fig. 2.

Fig. 2.

Graphical representation of serial mediation model of psychological safety and employee mental health in the relationship between ethical leadership and thriving at work. ** p 0.05.

Table 3 shows the results of the serial mediation model linking ethical leadership and thriving at work. Within the tested model, it was found that ethical leadership has a direct effect on thriving at work ($\beta$ = 0.201, p 0.05, [Confidence Interval (CI)= (0.159, 0.268)]). This finding indicates that ethical leaders significantly foster the thriving at work, thus supporting the (H1). In addition, findings of study confirmed that psychological safety ($\beta$ = 0.132, p 0.05, [CI = (0.094, 0.185)]) and employee mental health ($\beta$ = 0.082, p 0.05, [CI = (0.065, 0.124)]) separately mediated the relationship between ethical leadership and thriving at work. Since the Bootstrap confidence interval values ​​do not include zero (0), it is stated that there is a mediation effect on the variables. In another words, analyzes conducted to evaluate the (H2) show that psychological safety plays a mediation role in the relationship between ethical leadership and thriving at work. The same goes for employees’ mental health. Therefore (H2) and (H3) are supported. In addition, results revealed that serial mediation roles of psychological safety and employee mental health ($\beta$ = 0.078, p 0.05, [CI = (0.057, 0.120)]) were found to be statistically significant. In line with this finding, (H4) is supported.

The findings of this study contribute to the literature on ethical leadership by clarifying the chain of events that, via the mediating roles of psychological safety and employees’ mental health, related to ethical leadership to employees’ thriving at work. In order to address the influence of ethical leadership on employees’ outcomes, this research first expands on pre-existing theoretical frameworks by including psychological safety and mental health. Ethical leaders may influence employee behavior by setting a good example; this creates an atmosphere that promotes psychological safety (Ahmad et al, 2023; Sumanth et al, 2024). Secondly, the research highlights the importance of psychological safety as a crucial bridge in the link between ethical leadership and thriving at work. Therefore, it underscores the significance of psychological safety as a construct in organizational behavior by illustrating its impact on employees’ mental health. This finding is consistent with previous research that connected psychological safety to a range of favorable workplace outcomes (Edmondson and Bransby, 2023; Shafaei et al, 2024). It expands the theoretical understanding of leadership impacts within organizational settings by adding to the growing body of research indicating that ethical leadership practices promote both a thriving workforce and improved organizational performance (Ahsan, 2024; Dartey-Baah et al, 2024).

This study has insightful implications for managers and organizational leaders. Organizations should prioritize developing ethical leadership practices as a first step toward improving employees’ performance and organizational positive outcomes. Leaders may be given the tools they need to establish a psychologically secure work environment for their staff by participating in training programs emphasizing justice, ethics, and transparency (Abuzaid et al, 2024; Al Halbusi et al, 2024; Moon and Kang, 2024). Second, the results emphasize how critical it is to promote psychological safety in teams. Establishing programs that promote candid dialogue, constructive criticism, and teamwork may help organizations foster a culture where employees feel comfortable sharing their ideas and worries. This culture may be developed through regular seminars and team-building exercises, which will improve employees’ mental health and overall organizational performance (Gupta et al, 2024; Malik et al, 2024). Finally, in order to guarantee that employees have access to the resources they require to maintain their mental health, organizations should make investments in mental health services and support networks. This might entail providing wellness initiatives, mental health awareness campaigns, and counseling services. Organizations may build a robust workforce with greater resilience and adaptability that can handle the stress and change more proactively, allowing them to navigate challenges and creativity by placing a high priority on employees’ mental health (Ahmad et al, 2023; Bartram et al, 2024; Gupta et al, 2024).

Although this study provides implications, however it should be noted that it is not free from certain limitations. First, the convenience sampling method was used. This could potentially limit the applicability of the results. Second, the data were collected from employees of an electronics manufacturer operating in Turkey. In this respect, we cannot generalize the results of the analysis to all employees. Third, the cross-sectional design of the study makes it more difficult to determine the causal relationships between the variables. Longitudinal research may provide insights into the causal relationships between psychological safety, employee mental health, job success, and ethical leadership. Finally, the study did not take into account relevant external factors such as organizational policies or market conditions that may affect the relationships examined. The following suggestions can be made for future studies: A longitudinal study can be designed. The study can be expanded to include different sectors and different cultural contexts. Investigating possible moderating variables such as employee demographics or organizational climate can shed more light on the interactions between various variables within this framework.