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Mohammad 2018
Mohammad 2018
Mohammad 2018
The relationship between Islamic work ethic and workplace outcome: A partial
least squares approach
Jihad Mohammad, Farzana Quoquab, Fazli Idris, Mohammed Al-Jabari, Nazimah Hussin, Raed
Wishah,
Article information:
To cite this document:
Jihad Mohammad, Farzana Quoquab, Fazli Idris, Mohammed Al-Jabari, Nazimah Hussin, Raed
Wishah, (2018) "The relationship between Islamic work ethic and workplace outcome: A partial least
squares approach", Personnel Review, https://doi.org/10.1108/PR-05-2017-0138
Permanent link to this document:
https://doi.org/10.1108/PR-05-2017-0138
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IWE and
The relationship between workplace
Islamic work ethic and outcome
workplace outcome
A partial least squares approach
Jihad Mohammad and Farzana Quoquab Received 1 May 2017
Revised 31 December 2017
International Business School, University of Technology, Malaysia, 22 January 2018
Kuala Lumpur, Malaysia 7 February 2018
Accepted 4 March 2018
Fazli Idris
UKM Graduate School of Business, National University of Malaysia,
Bangi, Malaysia
Mohammed Al-Jabari
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Abstract
Purpose – The purpose of this paper is to examine the relationship between Islamic work ethic (IWE) and
employees’ attitude and behaviour in term of perceived organisational justice, psychological ownership (PSY),
and employees’ performance in the Islamic financial institutions in Malaysia.
Design/methodology/approach – This study used a sample of 301 employees of Islamic financial institutions
and employed structural equation modelling-partial least square technique in order to analyse the data.
Findings – The findings demonstrated that IWE has both direct and indirect effects on attitudinal as well as
behavioural outcomes.
Practical implications – Managers who want to enhance their employees’ attitude and behaviour are
strongly advised to give proper attention to the concept work ethic. Moreover, they need to conduct training
programs to instil these values and to emphasise its crucial role in enhancing the effectiveness and efficiency
of the organisation.
Originality/value – This study contributes to the body of knowledge on IWE by: testing its ability to predict
employees’ performance, their perception of organisational justice, and their feeling of PSY, and examining the
mediating effect of perceived organisational justice and PSY between IWE and employees’ performance.
Keywords Quantitative, Advanced statistical, Islamic work ethic, Psychological ownership,
Employees performance, Perceived organizational justice
Paper type Research paper
1. Introduction
Ethical employees with constructive, optimistic and positive work behaviours are crucial
assets for any organisation to prosper and sustain. Attracting and retaining such employees
can enhance and advance organisational image in the eyes of their customers. In contrast,
employees’ unethical behaviours can tarnish the reputation of organisation and lead to poor
working environment for others to work in. Work ethic refers to a dispositional variable that
varies among individuals and is formed in the early stage of human life, which also has a
profound influence on employees’ attitudes and behaviour at work (Saks et al., 1996). Personnel Review
It contributes positively to job performance and productivity (Noe et al., 2000), reduces © Emerald Publishing Limited
0048-3486
absenteeism, counterproductive behaviours and employee turnover (Sheehy, 1990). DOI 10.1108/PR-05-2017-0138
PR Hence, the work ethic construct was given significant research attention and research in this
field is still growing (see Chang, 2017; Khan et al., 2013; Tipu and Ryan, 2016). Nevertheless,
the bulk of the research were focused primarily on the concept of Protestant work ethic
(PWE) and less attention was given to assess the notion of Islamic work ethic (IWE)
(Mohammad et al., 2016).
Both IWE and PWE concepts differentiates between good and bad and right and wrong,
both of them encourage and advocate ethical behaviours in the workplace, such as honesty,
commitment, loyalty, cooperation, integrity, fidelity, persistence, diligence, etc. (Ali, 1992,
2010). Moreover, IWE and PWE consider work as a religious duty and perceive it as right
way to develop oneself and advance the social welfare (Mohammad and Quoquab,
2016). Nevertheless, IWE emphasise more on intentions of behaviour rather than
its outcome when compared to PWE (Khan et al., 2013). Moreover, the notion of IWE has its
foundation in the Quran and the Sunnah (Ali, 2005), whereas PWE originated from
Protestant thoughts and philosophy. Furthermore, when compared to PWE, IWE strictly
adheres to the principles of Islam in terms of halal (Permissible) and haram (prohibited) in
every aspect related to human being’s life and living, such as consumption pattern, work,
family and social life (Mohammad and Quoquab, 2016).
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researchers’ knowledge of the crucial role of IWE in boosting employees’ attitude and
behaviour at workplace, thus motivating more research in this filed. Moreover, this study
is expected to identify the nature of the relationships between the first order (IRB and
ERB) and second orders (employee performance) based on theoretical argument and
logical explanation. This will motive future research to measure the construct of employee
performance at higher order, thus reducing model complexity and solving some
methodological issues (Hair et al., 2014).
Practically, this study can benefit human resource managers especially at offshore
companies that operate in Islamic countries (republics and kingdoms) with valuable
information to make a wise decision with respect to recruit and select of the right candidate
that can be asset rather than being liability. More clearly, individuals who follow IWE will
refrain from disrespectful, shameful, disgraceful and immoral behaviours that can harm the
organisation and its reputation. Thus, HRM ability to attract and hire those individuals is
likely to help the organisation to be more effective, efficient and capable to sustain to the
future smoothly and successfully. Additionally, the result of this study is expected to
encourage HRM to incorporate the guidance of IWE as a part of their internal constitution
and strategic direction to attain excellent job outcomes (e.g. Perceive workplace as fair,
consider their organisation as their own property, work hard with dedication and
perseverance to accomplish their main duties, and go the extra mile to help their
organisation). Moreover, this study is expected to motivate HRM to evaluate employees’
performance at different level; particularly, to consider both in role and ERB as well as their
overall performance.
The rest of the paper is organised as follows. The following section rigorously reviews
relevant literature and develops a conceptual framework. Next, the research methodology
utilised in this study is briefly discussed followed by the study findings. In the following
section, a conclusion and managerial implications are provided. It also acknowledges the
study limitations and provides suggestions for future research directions.
sustainability (see Abeng, 1997; Kumar and Rose, 2009; Jalil et al., 2010). At the individual
level, researchers found IWE to be a robust predictor of employees’ attitude and behaviour;
for example, Yousef (2000a, b) found that IWE plays a vital role as a predictor of job
satisfaction, organisational commitment, role ambiguity and locus of control. Additionally,
Ahmad (2011) found that employees who are high on IWE are more loyal to their
organisation compared to those who are low on IWE; hence, they are less likely to leave their
organisation. Moreover, Khan et al. (2013) contended that IWE is a strong predictor of
employees’ involvement at the workplace.
From the above-mentioned discussion, it is clear that IWE is pivotal in predicting
workplace attitude and behaviour. Therefore, this study attempts to contribute to the
existing knowledge by predicting its effect on important job outcomes, i.e. IRB, POJ and
PSY. To accomplish these objectives this study operationalise IWE as set of values
(honesty, integrity, transparency, patience, hard work, dedication, fairness, avoidance of
unethical ways of accumulating wealth) that stem from the Islamic scriptures that guide
individual to differentiate between right and wrong, good and bad at workplace (Ali, 1988;
Al-Ghazali (cited in Quasem, 1978; Mohammed et al., 2017; Mohammad et al., 2016)).
leadership behaviour, and showed more interest in their work. In another study, Merrens
and Garrett (1975) demonstrated that those who are high on PWE were more dedicated
towards accomplishing their tasks. Nevertheless, there is a lack of studies that address the
effect of IWE on employee performance. On the basis of previous discussion and
assumption, the following hypothesis is developed:
H1. IWE will be positively associated with employee’s performance.
Within an organisational context, the feeling of PSY can be developed the same as it
does in other context, and entails granting employees opportunities to exercise control
over several targets, such as their job, task and workplace (Pierce et al., 2004). Avey et al.
(2009) contended that employees’ sensation of PSY is likely to lead to positive and
beneficial attitudinal and behavioural outcomes for themselves and their organisations.
Moreover, Dittmar (1992) claimed that a feeling of ownership causes people to view
tangible and intangible objects to be part of the extended self that triggers a sense of
responsibility of one’s entity. Additionally, Porteous (1976) demonstrated that a feeling
of ownership provides people a sense of place, belonging and personal space. Therefore, it
is crucial to understand the variables that can enhance employees’ feelings of PSY inside
an organisation.
Guided by other orientation theory, this study proposed IWE as crucial antecedent that
can affect employees’ feeling of PSY. Based on this theory, individuals who are high on
IWE are more likely to develop positive feelings towards their job and their organisations
in terms of PSY. These feelings trigger employees to view their job and/or organisation as
their own, which increases their feeling of responsibility. In addition to the theoretical
justification, empirical support also exists. For example, past research found a positive
relationship between work ethic and employees’ attitude, such as satisfaction
commitment, locus of control, self-efficacy, etc. (see Wayne, 1989). Nevertheless, there is
a lack of studies that address the relationship between work ethic from an Islamic
perspective and PSY. Therefore, in this study, it is assumed that individuals who are high
on IWE are more prone to feel that their job and/or organisation are their personal
psychological property. By taking into consideration this assumption, the following
hypothesis is developed:
H3. IWE will be positively associated with PSY.
3. Research methodology
In this study, a quantitative approach was utilised to achieve the research objectives and
data that were collected through a survey questionnaire. The unit of analysis was the
employees of Islamic financial institutions (Islamic banks and insurance Takaful
companies). Because it was difficult to get a list of all elements of the population,
non-probability judgmental sampling was employed. Within the organisational context,
using this type of sampling is a good choice because it permits a theoretical generalisation of
the findings (Calder et al., 1981).
The scales used to measure the study variables were borrowed from existing literature.
ERB and IRB were measured using ten items adapted from Williams and Anderson (1991)
(e.g. I assist others with their duties, I express loyalty towards my organisation, I perform
task that are expected of me). Additionally, POJ was measured by using six items adapted
from Ambrose and Schminke (2009) (e.g. Overall, I’m treated fairly by my organisation,
PR In general, I can count on this organisation to be fair). Furthermore, PSY was measured by
using seven items adapted from Pierce et al. (2001) (e.g. This is my organisation, I sense that
this is my company). Moreover, IWE was measured by using a short version of Ali’s (1992)
instrument, which consisted of 17 items (e.g. Laziness is a vice, Dedication to work is a
virtue, Good work benefits both one’s self and other). Respondents were asked to indicate
their level of agreement for each statement by using a seven-point Likert scale where
1 ¼ “strongly disagree” and 7 ¼ “strongly agree”.
As a guideline, the recommended number of respondents are to have five times
observation as the number of variables to be analysed (Hair et al., 2006). Following this rule,
the minimum number of respondents in this study were required to be 200 (40 × 5). In total,
400 questionnaires were handed personally to 14 organisations that agreed to participate in
this study (eight Islamic banks and six Insurance Takaful companies). Of the 400
questionnaires, 320 were returned and 301 were found usable for further analysis.
The demographic result (Table I) revealed that respondents were almost equal in gender
in which 45.5 per cent were males and 54.5 per cent were females. The majority of the
respondents (79.7 per cent) were 35 years old and less. With respect to ethnicity, the majority
were Malay (97.7 per cent). The results of descriptive analysis showed that 45.8 per cent of
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the participants were administrative staff. With regards to respondents’ work experience,
75.1 per cent of the respondents had 10 years work experience and 78.4 per cent of the
respondents had a ten-year work experience in the same organisation. With respect to
participants’ monthly income, 72.8 per cent earn less than RM3000.
4. Results
4.1 Model evaluation
Before evaluating the model, this study examined the presence of common method variance
(CMV ), which refers to the variance explained due to measurement methods rather than the
Gender
Male 137 45.5
Female 164 54.5
Age
35 and below 240 79.7
36 and above 61 20.3
Ethnicity
Malay 294 97.7
Chines 3 1.0
Indian 2 0.7
Other 2 0.7
Income
3,000 and below 219 72.8
3,001 and above 82 27.2
Tenure
10 years and below 236 78.4
11 years and above 65 21.6
Table I. Experience
Demographic profile 10 years and below 226 75.1
of the respondents 11 years and above 75 24.9
constructs of interest (Podsakoff et al., 2003). The CMV exists when one factor explains more IWE and
than 50 per cent of the variance (Podsakoff et al., 2003). In this study, CMV was assessed workplace
using Harman’s single factor test as proposed by Podsakoff et al. (2003). The outcome of this outcome
test indicated that none of the five constructs explained more than 50 per cent of the total
variance. This result assured that CMV was not a serious problem in this study.
The hypotheses developed in this study were tested using structural equation modelling.
In this regard, partial least squares (PLS) was utilised since the main focus of PLS is
consistent with the research objectives, i.e. to predict the relationships in the inner model
using multiple regressions (Gefen et al., 2000). The software SmartPLS version 3.0 (Ringle
et al., 2015) was used to analyse the data. Moreover, non-parametric bootstrapping with
5,000 replications was used to obtain the standard errors of the estimates (Chin, 1998).
Following Anderson and Gerbing’s (1988) two stages procedure to assess the model
(Figure 1), in the first stage the validity of measurement model was evaluated followed by
testing the theoretical relationships in the structural model.
The measurement model identifies the relationships between indicators and their respective
constructs (Ringle et al., 2010). The evaluation of measurement model is decided based on
reliability, convergent and discriminate validity (Chin, 2010).
IWE2
IWE3 PSY
ERB1
IWE4
ERB2
IWE5
ERB3
IWE6 ERB
ERB4
IWE7
ERB5
IWE8
IWE9 IWE EP
IWE10
ERB1
IWE11
IWE12 IRB2
IRB
IWE13 ERB3
IWE14 ERB4
ERB5
IWE15 POJ
IWE16
Ringle et al. (2012) this study argued that employees’ performance is characterised as higher
order, multidimensional latent construct in the form of second-order reflective-formative type.
First, the direction of causality start at dimensions and end at higher order construct because
the employees’ performance is defined by IRB and ERB. Therefore, dropping or changing any
of these two dimensions will change the conceptual meaning of the underlying construct of
employees’ performance. Second, the measurement items of IRB are not interchangeable with
items measuring ERB because they do not have similar content or share common theme.
For example, items measuring IRB cannot be replaced by items measuring ERB. Third,
indicators are not necessary to covary. For instance, items measuring IRB are not necessary to
correlate with items that measure ERB. Intercorrelations among formative indicators are
neither necessary nor desirable because it can lead to the occurrence of Multicollinearity
problem (Edwards, 2001). Therefore, internal consistency among indicators is not relevant for
formative construct ( Johnson et al., 2011).
Based on the above discussion, the second-order formative model was evaluated based
multicollinearity, significance level of outer weight and outer loading (Hair et al., 2016).
As shown in Table IV the factors’ weight were greater than 0.10 (Andreev et al., 2009).
All the factors are positively and significantly associated with employee performance which
IRB 0.865
IWE 0.429 0.772
ERB 0.383 0.223 0.757
POJ 0.406 0.308 0.316 0.878
PSY 0.336 0.316 0.201 0.317 0.836 Table III.
Note: Diagonals represent the square root of AVE while off-diagonals represent the correlations Discriminant validity
two-stage approach was implemented to assess the structure model. The structural model
represents the theoretical relationships among the constructs. Its predictive power was
decided based on the significant level of path coefficients and the amount of explained
variance (R2) in the endogenous constructs (Sang et al., 2010). Moreover, these two values, i.e.
R2 and path coefficients together indicate to which extent the discrepancy between data and
conceptual model is minimised (Chin, 1998). PLS algorithm and bootstrapping procedure
with 5,000 resample was applied to generate the path coefficients and their corresponding
t-values to determine whether these paths are significant or not (Hair et al., 2013). Because all
direct relationships developed in this study were positive, a one-tailed test for t-student
POJ
POJ
ERB
IWE IWE EP
IRB
PSY
PSY
Figure 2.
Two stage analysis Notes: EP, employee performance; POJ, perceived organizational justice; PSY, psychological
ownership
distribution was applied. According to Hair et al. (2011), critical t-values for one-tailed test IWE and
were 1.28 ( p o0.10), 1.645 ( p o0.05) and 2.33 ( po 0.01). workplace
Results illustrated in Table VI show all path coefficients, standard error, corresponding outcome
t-values, and the explanatory power of estimated model as indicated by R2 values. Falk and
Miller (1992) suggested that R2 must be greater than 0.10 in order for the model to have
predictive power. In this study, 30.3 per cent of the variance in EP, 10.05 per cent of the
variance in PSY, and 10.11 per cent of the variance in POJ can be explained by the model,
thus satisfying the criteria of Falk and Miller (1992). Moreover, IWE was found to be
significantly associated with EP ( β ¼ 0.274, p o0.001), POJ ( β ¼ 0.316, p o0.001) and PSY
( β ¼ 0.303, p o0.001), respectively, hence supporting H1, H2, and H3. Moreover, POJ was
found positively associated with EP ( β ¼ 0.305, p o0.001) and PSY ( β ¼ 0.159, p o0.05),
respectively, thus supporting H4 and H5. Additionally, the model’s ability to predict (Q2)
was examined using blindfolding procedures (Geisser, 1975; Stone, 1974). Models with Q2
values greater than zero imply that the model has predictive relevance (Fornell and Cha,
1994). In this study Q2 values of EP, POJ, and PSY were greater than zero, therefore, it can
be concluded that the structural model has predictive relevance Table V.
To examine the presence of a mediation effect, bootstrapping procedures were
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implemented as suggested by Preacher and Hayes (2004, 2008). First, PLS algorithm was
run to get the path coefficient, followed by bootstrapping procedures with 5,000 resample
being run on the full model to obtain the significant level of these paths. The bootstrapping
analysis (Table VI) showed that the indirect effect of β1 ¼ 0.316 × 0.305 ¼ 0.096 was
significant with a t-value of 3.69, p o0.001, 95% CI: [0.045-0.146]. Moreover, the indirect
effect of β2 ¼ 0.303 × 0.159 ¼ 0.048 was significant with a t-value of 2.28, po0.05, 95% CI:
[0.006-0.0.091]. These results showed evidences for the mediation effect of POJ and PSY
between IWE and EP respectively. Therefore, H6 and H7 were accepted.
5. Discussion
This study empirically tested the direct and indirect effects of IWE on employees’ attitude
and behaviour at Islamic financial institutions in Malaysia. A brief discussion on the results
is presented below.
2012). According to this model, individuals difference (age, gender, education, religion, work
experience, value orientation, etc.) have great effect of their attitude. For example,
Individuals who are high on Islamic values are more likely to perceive workplace fairness
positively compared those individuals who are low on IWE.
IWE was also theorised to be positively related to PSY. Result demonstrated that IWE
predicted PSY and explained high portion of its variance. This result was consistent with
the other orientation theory, which suggested that individuals who are high on other
oriented values tend to be responsible and accountable towards their job and organisation.
These feelings of responsibility and accountability were reflected in their possessive feeling
towards their organisation in the form of “this is my organisation”, “I sense this company is
mine”, and “I feel a high degree of personal ownership for this organisation”. This result was
also consistent with Van Dyne and Pierce’s (2004) argument that PSY can be increased and
decreased by the influence of personal and organisational variables. Therefore,
organisations could enhance their employees’ level of possessive feelings by following
and applying the values of Islam in the workplace. Additionally, this result also consistent
with the ethical behaviour model (Collins, 2012). This model argued that individuals’
dispositional variables in terms of age, gender, religion, work value orientation, etc. can
exert positive effect on their attitude at workplace. For example, individuals who are high on
Islamic values are more inclined to develop possessive feeling towards their job and
organisation compared to those who are low on IWE.
6. Theoretical contribution
This study contributes significantly to the body of knowledge by being a pioneer study to
develop relatively new linkages in relation to IWE, i.e. the effect of IWE on employees’
performance, their perception of justice and their feeling of ownership. The findings of this
research show that IWE positively and significantly affect workplace outcomes, which
emphasise the important role of individual difference variables in explaining the variance in
attitudinal and behavioural variables. Accordingly, it is advisable to incorporate IWE with
present theories that can explain human behaviour such as theory of reasoned action, and or
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theory of planned behaviour. This inclusion may enhance and advance researchers’ and
academicians’ understanding about employees’ ethical behaviour at workplace. Furthermore, the
current study contributes significantly to the theoretical work of IWE and EP by incorporating
the mediating role of POJ and PSY. The findings demonstrate that these two variables were able
to mediate and explain the relationship between IWE and employees’ performance. This result
stresses the essential role of attitudinal variables as a mediator, and it suggest researchers to
consider other attitudinal variable as a mediator to explain the relationship between IWE and
employees’ behaviour. Moreover, this study highlights the important role of other orientation
theory and social exchange theory in explaining the relationship between dispositional variables
with attitudinal and behavioural variables in Asian context. Lastly, this study confirms the
reliability and validity of employees’ performance as latent variable measured at second order.
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Further reading
Schminke, M., Amborse, M.L. and Noel, T.W. (1997), “The effect of ethical frameworks on perceptions
of organisational justice”, Academy of Management Journal, Vol. 40 No. 5, pp. 1190-1207.
and PhD in Islamic Finance from Durham University UK. She is also a Fellow of the Higher Education
Academy UK. She has presented papers at local and international institutions including LSE, KYOTO
Durham University and University of Wales, Lampeter.
Raed Wishah is Assistant Professor at the King Talal Faculty of Business and Technology, Princess
Sumaya University for Technology, Amman, Jordan. He obtained his Bachelor of Art degree from Eastern
Illinois University, Charleston, IL 2006. He received his Master’s Degree in Business Administration
focusing on finance from Argosy University 2008, and his PhD in Business Administration focusing on
HRM and information systems, Chicago 2012.
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