Performance matters: when supervisors socially accept unethical behavior

Purpose It is generally believed that supervisors would deter employee unethical behavior. However, drawing from social exchange theory and the theory of moral disengagement, we posit that supervisors are more willing to tolerate employee unethical behavior through moral disengagement when the perpetrator is a high performing employee. Design/methodology/approach Study 1, which measured employee unethical behavior in a specific group of doctors through a time-lagged survey, and Study 2, which manipulated employee unethical behavior with a diverse sample by a vignette-based experiment, provided convergent support for our hypothesized 1st-stage moderated mediation model. Hierarchical regression, bootstrapping and ANOVA are used to test our hypotheses. Findings Although supervisors generally showed a low social acceptance of an employee who engaged in unethical behavior, they were more likely to socially accept the perpetrator through moral disengagement when the employee was a high rather than a low performer. Practical implications Given that supervisor's tolerance of employee unethical behavior may be more dangerous than employee unethical behavior itself, organizations should set up an ethics committee to handle top managers' unethical behavior and consider morality equally important with performance in management practice. Originality/value The current research extends research on the interpersonal consequences of employee unethical behavior, explains how moral disengagement promotes social acceptance and identifies the moderating effect of job performance in the process.