Leadership and Human Resources Management Practices: The mediating role of organizational virtues^*

Liderança e Práticas de Gestão de Pessoas: O papel mediador das virtudes organizacionais

Abstract

Considering the unexplored relationship between leadership, organizational virtues, and human resource management practices, the purpose of this paper is to test a structural model of mediation between leadership and human resource management, being organizational virtues the mediating variable. We performed a survey with 673 employees in Brazil, resorting to Structural Equation Modeling to analyze the data. Findings show that organizational virtues mediate the relationship between leadership and HRM practices. We confirm the positive effect of leadership on organizational virtues, the influence of organizational virtues on HRM practices, and the impact of leadership on HRM practices. This paper contributes to the literature on human resource management and organizational behavior, particularly concerning investigations that deal with antecedents of HRM practices.

Keywords:
human resources management practices; organizational virtues; leadership

Resumo

Considerando a relação inexplorada entre liderança, virtudes organizacionais e práticas de gestão de pessoas, o objetivo deste artigo é testar um modelo estrutural de mediação entre liderança e gestão de pessoas, sendo virtudes organizacionais a variável mediadora. Fizemos uma survey com 673 colaboradores no Brasil, recorrendo-se à Modelagem de Equações Estruturais para analisar os dados. Resultados mostram que as virtudes organizacionais mediam a relação entre liderança e práticas de GP. Confirmamos o efeito positivo da liderança nas virtudes organizacionais, a influência das virtudes organizacionais nas práticas de GP e o impacto da liderança nas práticas de GP. Este estudo contribui para a literatura em gestão de pessoas e comportamento organizacional, no que se refere aos antecedentes das práticas de GP.

Palavras-chave:
práticas de gestão de pessoas; virtudes organizacionais; liderança

Among the many challenges faced by human resource management (HRM), there is the promotion of healthier work environments, with the aim to improve employees’ performance level without jeopardizing the work balance (Zheng et al., 2020). With a complementary approach to HRM, positive psychology studies focus on health and quality of life, providing workers a special type of support that comprises mental, social, and emotional aspects (Areskoug Josefsson et al., 2018; Singh et al., 2018). This stream of research has been a useful path for HRM literature, due to its contribution in the search for business growth combined with greater personal and professional (Thompson et al., 2020).

Leadership is a major element in this scenario, as it orchestrates organizational strategies, policies, and practices (Ayentimi et al., 2018), demanding leaders to be a model of inspiration and good examples for employees (Buengeler et al., 2018; Insan & Yasin, 2021). Some scholars argue that the leaders’ practices must promote organizational virtues (Cugueró-Escofet & Rosanas, 2020; Rego et al., 2010), as they positively affect work performance (Magnier et al., 2020). Conceptually, organizational virtues are employees’ beliefs regarding the organization’s ethical and moral conduct, a concept that can be translated as positive behaviors at work, thus benefitting workers and the management practices (Cameron et al., 2004; Gomide Jr. et al., 2016).

Together, leadership and HRM practices play an essential role in promoting positive attitudes, motivation, and engagement in the workplace (Aktar & Pangil, 2018; Nazarian et al., 2021). In the present article, we understand HRM practices as propositions articulated and integrated with organizational strategy in dealing with human relations, with the main purpose of assessing the best results for companies and workers (Demo et al., 2020).

Despite the scientific literature consideration of leadership, organizational virtues, and HRM practices as paramount elements for a healthy and efficient organizational operation, the association of these three variables remains underexplored. In order to fulfill such a gap, in this study we propose a research model encompassing the three variables. Tuhs, the main purpose of the present paper is to test a structural model of mediation between leadership and HRM practices, setting organizational virtues as a mediating variable. Additionally, this exam aloows us to evaluate the relation between (a) leadership and organizational virtues, (b) organizational virtues and HRM practices, and (c) leadership and HRM practices.

Literature Review and Hypothesis Development

Literature on human resource management (HRM) has evolved through the years based on contributions from business studies, economics research, and psychology, sheding light into the behavioral perspective, that addresses the combination between different organizational strategies to guide individuals’ behaviors (Bianchi et al., 2017). Based on the paradigm initiated by Legge (1995), who advocates that employees are more than resources, Demo et al. (2018) encourages the adoption of the perspective that sets workers as protagonists in the workplace, defending this is the path to better results. Thus, HRM takes on a strategic role, moving towards the concept of human capital, where people are the source of knowledge and the drivers of goals’ achievent, constituting essential competences (Demo et al., 2018; Khan et al., 2021).

In this context, leadership results from the relationship between leaders ansd subordinates, a topic of major interest of HRM research, given that the leader connects organizational strategy and HRM (Bianchi et al., 2017). In this sense, we follow the perspective that embraces leadership and management style as synonyms (Bianchi et al., 2017; Melo, 2004). From the authoritarian posture used to influence behavior, the contemporary definitions for leadership embraces the interdependence between individuals and collaboration (Bianchi et al., 2017). As proposed by Yukl (2012), leadership is the exercise of influence over people in organizations so that collective efforts reach shared goals. In this article, we follow the definition proposed by Bass (1990, p. 11), in which leadership is “a power relationship, as an instrument to achieve goals, as an interaction effort, as a role differentiated, such as the initiation of the structure and as many combinations of these definitions”.

Considering organizational virtues as the capacity of an organization to manage its relations truthfully, integrating organizational and employees’ interests (Gomide Jr. et al., 2016), enclosing individual and collective actions, organizational culture, and organizational processes (Cameron et al., 2004), enabling organizations to deal with adverse situations that could be detrimental to performance (Bright et al., 2006). In the present research, we depict organizational virtues’ contribution for the healthier development of the workplace and the social relations it encompasses (Bright et al., 2006; Cameron et al., 2004; Caza, 2004).

Leadership and Organizational Virtues

Organizational literature has already confirmed the importance of organizational internal strengths to the delivery of better outcomes, point out the need of further investigation on well-being at work and employees’ quality of life (Cunha et al., 2013; Magnier et al., 2020), leading us to address the work environment in which performance takes place, particularly looking into the role of leaders.

Research already considers virtues as the basis of a responsible leadership, conducting employees to feel better at work and to properly perform, engendering benefits for all the members and the organization (Cameron, 2011). The concept of organizational virtues has brought new meanings to the process of leadership development, either through attitudes and behaviors or by the adoption and valorization of strengths of character (Gotsis & Grimani, 2015). Under this new approach, leaders must engage in virtuous actions, providing support for the employees and prioritizing the well-being of the team over financial performance.

Strongly connected to ethics and morals in the organizational environment (Caza et al., 2004; Rego et al., 2010), it is reasonable to expect that the behavior of leaders promote a virtuous workplace (Manz et al., 2008). In this sense, it is expected from leaders to establish and disseminate behaviors that translate the concept of organizational virtues (Karakas et al., 2017). Howerver, the relation between leadership and organizational virtues is still scarce (Ahmed et al., 2018). Considering the possibility of such an association in promoting benefits for leaders, employees, and the organization as a whole (Cugueró-Escofet & Rosanas, 2020; Shahid & Muchiri, 2018; Zhang & Liu, 2019), our first hypothesis of this study is presented:

Hypothesis 1 (H₁): leadership is positively associated with organizational virtues.

Organizational Virtues and HRM Practices

Research recognizes that organizational virtues acts as a mechanism that enables HRM practices to reach a higher level of positive behavior in the workplace (Pires & Nunes, 2018), once organizational virtues enhance the perception of organizational practices (Luo & Chen, 2010). Considering that values and virtues are at the core of organizational culture, thus influencing the perception of organizational practices (Demo, 2010), it is reasonable to thing that HRM practices affect organizational practices. For Pires and Nunes (2018), since organizational virtues reflect the moral nature and the virtuous aspects of the work context, virtues should precede practices.

Additionally, as the research agenda proposded in Demo et al. (2018), scholars shoud address the antecedents of HRM practices. Similarly, Hamrahi et al. (2015) suggest the possibility of a positive association between virtues and HRM practices, since programs that aim to promote ethics and virtues in organizations can establish guidelines for strategic human resources management, encompassing its politics and practices.

Nevertheless, despite the fact that HRM practices predict organizational virtues, the effect of organizational virtues in HRM practices has not been scientifically reported yet, directing our second hypothesis:

Hypothesis 2 (H₂): organizational virtues are positively associated with human resource management practices.

Leadership and HRM Practices

The process of human resource management requires a constant and recurrent interplay between strategy, policies, practices, and leadership (Bianchi et al., 2017; Nazairan et al., 2021). In this perspective, the collective behavior follows the organizational objectives only when individuals see the leader as a translator of organizational politics and practices. To contribute to this framework, we focus on the relationship between leadership and HRM practices.

HRM practices enhances the level of employee engagement when introduced and managed by a leader that contributes to organizational effectiveness (Aktar & Pangil, 2018). The match between HRM practices and leadership enables a positive relation between employee and employer, translated in workers’ commitment to achieve collective goals (Neves et al., 2018). However, when HRM practices are ineffective, failures are ascribed to internal communication problems or to the behavior of leaders (Buengeler et al., 2018). Hence, lealders must adopt and implement practices that fosters performance (Wickramasinghe & Dolamulla, 2017) and, at the same time, equalizes career growth and the employee's well-being (Demo, 2016; Nazarian et al., 2021).

Even though prior literature foresees the relationship between leadership and HRM practices, the nature of such a relationship is still a research gap. About this, Bianchi et al. (2017) claim the absence of efforts in depicting the role of leaders in the implementation of a strategic human resource management area. We aim to fulfill this gap by examining the micro-level of human resource management, meaning the HRM practices (Martin-Alcázar et al., 2005), exploring the impact of leadership on HRM practices, based on the idea that leadership should encourage the integration between such practices (Ahmed et al., 2018). On that basis, the third hypothesis follows:

Hypothesis 3 (H₃): leadership is positively associated with human resources management practices.

Leadership, Organizational Virtues, and HRM Practices

The main purpose of this study is the test of a mediation model encompassing the relationships between organizational behavior variables that can increase the effectiveness of human resource management, as suggested by Armstrong (2014), including positive perspective variables (Singh et al., 2018). Considering this approach, for HRM practices to be perceived by employees, organizations need to be places in which virtues are necessary for good leadership development (Cameron et al., 2004; Gomide Jr. et al., 2016). Furthermore, the association of HRM practices with greater organizational effectiveness is already widely supported in the scientific literature (Engelsberger et al., 2021; Gomide Jr & Tanabe, 2012; Kim & Lee, 2012).

In the next hypothesis, we explore the research variables that affect HRM practices in order to contribute to the progress of the HRM literature (Bianchi et al., 2017; Boon et al., 2019; Demo et al., 2015). The test of models focused on mediation, addressing the antecedents of HRM practices, particularly those associated with organizational culture such as virtues, are relevant and necessary (Demo et al., 2018). The following hypothesis focus on the relationship between leadership, organizational values, and HRM practices in the same research model. We developed this hypothesis based on the idea that leadership has a major influence on HRM practices (Aktar & Pangil, 2018; Bianchi et al., 2018; Neves et al., 2018).

Given that scholars point out a connection between organizational virtues and leadership (Gotsis & Grimani, 2015; Karakas et al., 2017) and the association between organizational virtues and HRM practices (Pires & Nunes, 2018), we foresee the possibility of organizational virtues as the mediating variable between leadership and HRM practices. In order to employees perceive HRM practices, the organization must be a place where virtues are necessary to the development of the leadership (Cameron et al., 2004; Gomide Jr et al., 2016).

This final discussion lead to the fourth and last hypothesis of this study:

Hypothesis 4 (H₄): organizational virtues mediate the association between leadership and human resources management practices.

Method

We tested the hypotheses using structured survey data gathered in Minas Gerais, Brazil. We administered questionnaires face-to-face to a non-probabilistic sample of employees from different sectors of the economy (by convenience). As Cohen (1992) indicates, statistical power of 0.80 was used to calculate the sample size. Using the G-Power software and considering the antecedent variables (leadership as a predictor variable and organizational virtues as a mediating variable) and five factors, a sample of 92 subjects were recommended for a statistical power of 0.80. For a statistical power of 0.95, the minimum sample recommended was 138 subjects.

Data collection encompassed the distribution of 1200 questionnaires in private and public companies, with a total of 771 responses. Data was transferred to the software Statistical Package for the Social Sciences (SPSS). In the data treatment stage, 13 questionnaires were excluded for missing values, as well as 85 outliers. The final sample was composed of 673 subjects, sufficiently large to perform Structural Equation Modeling - SEM, as literature demands a minimum sample between 100 and 200 subjects (Byrne, 2016; Hair et al., 2016; Kline, 2015). Most of the participants work in the service, commerce, and industry segments, and public sector. Sample was mostly composed by female (51%), ranging from 38 to 47 years old (36%), with Masters’ Degree (29%), and an average time of employment between 1 and 5 years (39%).

Next, we verified tolerance values (all above 0.1) and the variance inflation factor - VIF (all less than 10), confirming no problems in sample singularity and multicollinearity (Myers, 1990). To evaluate the assumptions for multivariate analysis, we followed Field’s (2018) protocol, accessing linearity, homoscedasticity, and normality of the data distribution. We used residual graphs and normal probability graphs, as recommended by Hair et al. (2016). No problems were detected. The analysis of multivariate normality was also verified in the AMOS software, without problems, as the asymmetry and kurtosis values ​​were as expected, that is, │Sk│ <3 and │ku│ <10 (Marôco, 2010).

About the level of analysis of the constructs, the scales used for this research address perceptions, representing constructs at the individual level. Perception is a psychological concept, translated into a meaningful and coherent image (Endo & Roque, 2017), being a possible, apprehensible, and measurable reality for studying phenomena (Berkeley, 2010). Therefore, we selected three scientifically validated scales to compose the questionnaire. The scales for organizational virtues and HRM practices are the most recent in the Brazilian context. All the scales, including the leadership one, present reliable psychometric indices, as shown in Table 1.

Table 1.
Psychometric Indices of the Scales

Scale	Factors	Number of items	Reliability Index (Cronbach's alpha)
SEMS	Task (T)	6	0.72
	Relationship (R)	9	0.94
	Situational (S)	4	0.82
SOMVP	Organizational Goodwill (OG)	17	0.95
	Organizational Trustworthiness (OT)	7	0.92
HRPPS	Recruitment and Selection (RS)	6	0.81
	Involvement (I)	9	0.91
	Training, Development, and Education (TDE)	3	0.82
	Work Conditions (CT)	5	0.81
	Performance Evaluation and Competencies (PEC)	5	0.86
	Remuneration and Rewards (RR)	4	0.84

For leadership measurement, we resorted to the 19 items of the Scale of Evaluation of the Managerial Style - SEMS (Melo, 2004). For HRM practices measurement, we used the 32 items of the Human Resource Policy and Practice Scale - HRPPS (Demo et al., 2014). Lastly, as for the organizational virtues measurement, we used the 24 items of Organizational Goodwill and Organizational Trustworthiness factors from the Scale of Organizational Moral Virtues Perception Scale - SOMVP (Gomide Jr et al., 2016). The final questionnaire had 79 items, sociodemographic questions included.

Concerning the ethical procedures, this study follows the Sole Paragraph of Article 1, Resolution 510/16 of the National Health Council (CNS) of Brazil, which states that in consultative public opinion surveys that have their samples composed of unidentified subjects and the confidentiality of data ensured, as in this investigation, are exempt from ethical analysis by the Research Ethics Committees (CEP) and the National Research Ethics Commission (CONEP) in Brazil.

Data analysis followed two stages. First, in order to evaluate the fit of the measurement models for the variables leadership, organizational virtues, and HRM practices, we performed confirmatory factor analysis, via Structural Equation Modeling (SEM). Second, we resorted to path analysis to specify and estimate the models of linear relationships between variables to test H_{1 ,} H₂ and H₃.

Path analysis was performed by SEM as well, in the program AMOS, using the maximum likelihood test, a more robust test regarding violations of normality (Hair et al., 2016; Kline, 2015). Based on the 66 observations and 25 parameters of the model, we reached 41 degrees of freedom, demonstrating that our research model is a recursive model, classified as identified (just identified). This means that the model is suitable for testing by structural equation modeling. To test the structural model of mediation (H₄), we once again resorted to path analysis since it uses bivariate correlations to estimate the relations in a model of structural equations.

To answer the hypotheses, the relation between the variables were tested using Structural Equation Modeling, which is formed by two components: (1) the measurement model that demonstrates the way the constructs are represented; and (2) the structural model, that represents the way the constructs relate to each other (Hair et al., 2016). The measurement model is the first step of the structural model, demonstrating how the variables are represented (Hair et al., 2016). Finally, we performed a Confirmatory Factor Analysis for the three variables of this study to access the measurement model, its internal validity, reliability, and construct validity (convergent validity, divergent validity, and nomological validity).

Results

The Leadership Measurement Model

To access the model fit, we excluded item L4 because of its factor load under 0.5 (Hair et al., 2016). In the following, we evaluated the Modification Indexes (MI), adding two correlations between errors to improve the fit. The correlation between E10 and E11 - about L10 (Stimulates the teams’ members to share their opinions about work) and L11 (Stimulates the presentation of new ideas at work) - finds theoretical support in the visited literature. As Brown et al. (2005) indicate, freedom for communication emerges in contexts where the decision making process acknowledges the leader and the employess’ participation, and the leader is an inspiration figure (Brow et al., 2005).

Regarding the correlation between the errors E16 (Finds time to listen to the members of the group) and E17 (Seems to be accessible to subordinates), Kimura and Nishikawa (2016) suggest that the relationship between the leader and the employee is build based upon availability and accessibility, attitudes of consideration, mutual respect, justice, collective guidance, and openness/flexibility.

Hair et al. (2016) explain that a model has enough information when it presents a normed χ2 value (CMIN/DF or NC, being CMIN the statistic of the χ² and DF the degrees of freedom), Comparative Fit Index (CFI) and the Root Mean Square Error of Approximation (RMSEA). As Kline (2015) indicates, the values for a satisfactory fit in a structural model should be: NC (CMIN/DF) of 2.0 or 3.0, up to 5.0; CFI equals or above 0.90; and RMSEA bellow 0.5 or, at the maximum, up to 1.0. Moreover, the SRMR (Standardized Root Mean Square Residual) shows the difference between the observed normalized correlation and the predictable one, being an absolute measure <0.1 (Byrne, 2016; Marôco, 2010).

After the introduction of these alterations, the results indicated that the unifactorial model presented worst fit indexes (NC=11.01; CFI=0.81; RMSEA=0.12; SRMR=0.07) in comparison to the multifactorial model (NC=6.51; CFI=0.90; RMSEA=0.09; SRMR=0.05). The three-factor model has a satisfactory fit, as the values for CFM, RMSEA and SRMR meet the criteria. The NC was not in the reference values since this index is sensitive to sample size and tends to be inflated for bigger samples (Hair et al., 2016), without compromising the analysis.

In the following, in order to access interval validity of the scales, or the quality of its items, we must observe the factorial loads as Comrey and Lee (1992) indicate: under 0.32 are poor; between 0.32 and 0.54 are reasonable; between 0.55 and 0.62 are good; between 0.63 and 0.7 are very good, and above 0.7 are excellent. In the analysis of the SEMS, item L4 was excluded due to poor factorial load (<0.5). The other 18 items vary between 0.63 and 0.82, being 10 excellent and 8 very good, attesting to the quality of the items and the internal validity of the scale. All variables were significant considering the p-value <0.01 and the Critical Ratio (CR) greater than | 1.96 |.

Reliability of the factors was accessed by the Jöreskog Rho, a more precise measure for SEM when compared to Cronbach alfa, based on factor loads and not on the observed correlations between variables (Chin, 1998). Values above 0.7 are considered satisfactory and above 0.8 very satisfactory. The analysis of the Jöreskog Rho for the SEMS’s factors indicated ρ=0.8 for Task; 0.91 for Relationship; and 0.81 for Situational. All the values are very satisfactory (Chin, 1998), confirming the reliability of the scale.

To analyze the construct validity of the scale, we accessed its convergent validity, divergent validity, and nomological validity. The quality of the items that compose the variable, the Jöreskog Rho, and the average variance extracted are considered evidence of convergent validity (Hair et al., 2016). In the case of SEMS, all the items had factorial loads above 0.50. The Jöreskog Rho was above 0.70 for all the factors. The extracted variance was 0.45 for Task, 0.55 for Situational, and 0.51 for Relationship. Although the factor Task reached 0.45, this is acceptable result, although not ideal (Hair et al., 2014). Thus, we confirm the convergent validity for the three dimensions of leadership. We also confirm divergent validity, based on the explanation of Fornell and Lacker (1981): the estimated extracted variance of each factor was greater than the square value of the covariance between them, proving that the three factors on this scale measure different constructs.

Finally, to test the nomological validity, the correlation between leadership and organizational virtues was observed, being significant (r=0.52, p<0.01) and consistent with the findings from scientific literature (Bischak & Woiceshyn, 2016; Caza et al., 2004; Gotsis & Grimani, 2015). In the case of the association between leadership and HRM practices, there is also a significant correlation (r=0.51, p<0.01). Additionally, there are well-founded theoretical reasons that confirm this finding (Aktar & Pangil, 2018; Legge, 2006; Neves et al., 2018).

The Organizational Virtues Measurement Model

When analyzing the modification items (MI), we identified two correlations between errors. The relation between E3 (Acts in an ethical way) and E4 (Distinguishes what is right and wrong), and it is associated with the growing emphasis on ethical and moral in the workplace, demanding the improvement of organizational virtues (Malik & Naeem, 2016). This context asks for the adoption of attitudes and behaviors that reflect positivity, protecting the institution from negative consequences (Caza et al., 2004). Furthermore, McCullough and Snyder (2000) consider moral goodwill as a key attribute of organizational virtues.

The errors E6 and E7 are connected to the items V6 (Provides precise information about its reality) and V7 (Provides true information about its reality). The purpose of linking good faith and veracity is because organizations must be managed with the maximum of truth, authenticity, transparency, honesty, and integrity (Comte-Sponville, 2009). In this perspective, we can state that positive psychology and its focus on virtues should go beyond fixing what is wrong, emphasizing what is right (Seligman, 2002).

After the inclusion of the MI, the unifactorial measurement model for Organizational Virtues showed unsatisfactory indexes (NC=15.43; CFI=0.77; RMSEA=0.15; SRMR=0.07) in comparison to the multifactorial model (NC=7.22; CFI=0.90; RMSEA=0.09; SRMR=0.05). About the absolute index NC, although the result does not fit the criteria, we consider the same justification presented for SEMG's AFC. The NC, as it is very sensitive to size sample, tends to reveal a high value (Hair et al., 2016), which is the case of the present study (N>600).

The CFA performed to access the Scale of Organizational Moral Virtues Perception - SOMVP (Gomide Jr. et al., 2016) revealed that all the items were between 0.67 and 0.90. Two items classified as very good and 22 items as excellent, confirming the quality of the items and the internal validity of the scale. All the items were significant at the 0.01 level and that the CR> | 1.96 |.

To attest reliability, Organizational Goodwill had a Jöreskog Rho of ρ=0.96, and Organizational Trustworthiness has reached ρ=0.95, all above 0.7, being considered very satisfactory (Chin, 1998).

By contemplating the quality of the items (factorial loads above 0.5), the Jöreskog Rho above 0.7, and the extracted variance above 0.5 (Organizational Goodwill = 0.96; Organizational Trustworthiness = 0.95), convergent validity is confirmed. These results also allow us to attest divergent validity, since that, considering the Fornell-Larcker criteria (1981), the two factors measure different constructs.

As for the nomological validity, the correlations between organizational virtues and leadership (r=0.52, p<0.01) and between organizational virtues and HRM practices (r=0.71, p<0.01) were significant, as also indicated by the scientific literature. The first association has already been addressed in the previous section. The second one is supported by the studies of Luo and Chen (2010) and Pires and Nunes (2018).

The Human Resource Management Practices Measurement Model

The following actios was the verification of the modification items (MI) with the aim of improving the model fit. In the factor Recruitment and Selection, P5 (The organization where I work discloses to candidates’ information about the phases and criteria of the selection process) and P6 (The organization where I work communicates to candidates their performance at the end of the selection process) revealed a positive correlation. As they indicate the first and the last stages of the process, this analysis demonstrate that recruitment processes should emphasize an ethic and moral posture (Dressler, 2010).

Concerning the factor Involvement, we have identified three correlations. The first one is between P7 (The organization where I work is concerned with my well-being) and P8 (The organization where I work treats me with respect and attention). These items indicate a fair, respectful, and conscientious treatment in all organizational levels, which, in turn, translates into greater trust in the organization and well-being at work (Horta et al., 2012). The second association is between P12 (In the organization I work, employees and their managers enjoy the constant exchange of information for the good performance of functions) and P13 (In the organization I work, there is a climate of understanding and trust from the bosses in relation to the employees). This correlation follows Wang et al. (2017), for whom organizations must demonstrate involvement, information sharing, and participation in decision-making, a scenario in which trust guides the practice.

The connection between P13 (In the organization I work, there is a climate of trust and cooperation between coworkers) and P14 (In the organization where I work, there is a climate of trust and cooperation among co-workers) indicates the climate of collaboration between bosses and employees and among co-workers. In an environment marked by stress and pressure for results, engagement practices are seen as an effort by the organization to seek healthier relationships between employees and their work (Costa et al., 2019).

In the factor Work Conditions, there is a connection between P19 (The organization where I work is concerned with my health and quality of life) and P21 (In the organization I work, there are actions and programs to prevent accidents and deal with incidents). Such connection concerns the appropriate conditions of the workplace so the teams can perform their activities, considering the physical and mental health of the employees (Tiecher & Diehl, 2017). According to the authors, the continuous improvement of work conditions tends to cause greater satisfaction among employees. The second connection is between P20 (The organization where I work offers me basic benefits; ex: health insurance, transportation aid, food aid, etc.) and P21. These items seem to be essential and required by law in order to enable the healthy functioning of the organization as well as preventing risks (Lírio et al., 2020).

After the inclusion of the MI, the unifatorial model (NC = 12.54; CFI = 0.64; RMSEA = 0.13; SRMR = 0.10) presented fit indexes worse than the multifactorial one (NC = 4.41; CFI = 0.90; RMSEA = 0.07; SRMR = 0.06). From this, we state that the six-factor structure has a good fit, since all parameters are within the recommended criteria.

The 32 items from the Human Resource Policy and Practice Scale - HRPPS (Demo et al., 2014) presented factorial loads between 0.52 and 0.88 (two were reasonable, five very good, and 25 excellent). All the items were significant at the 0.01 level, with CR> | 1.96 |.

The reliability of the multifactorial structure was analyzed by Jöreskog Rho. The results show very satisfactory indices (Chin, 1998): ρ=0.88 for the RS factor; ρ=0.93 for the I factor; ρ=0.86 for the TDE factor; ρ=0.85 for the WC factor; ρ=0.86 for the PEC factor; ρ=0.92 for the RR factor.

Concerning convergent validity, all the conditions were satisfied, since the extracted variances were all above 0.5: RS=0.55; I=0.58; TDE=0.68; WC=0.53; PEC=0.55; and RR=0.60; the factorial loads were greater than 0.50; and all the Jöreskog Rhos were greater than 0.70. Following the recommendation of Fornell-Larcker (1981), we confirmed that the six factors of the scale are, in fact, distinct. Thus, we attest divergent validity.

Finally, the correlations between HRM practices and leadership (r=0.51, p<0.01), as well as between HRM practices and organizational virtues (r=0.71, p<0.01) were strong (Cohen, 1992) and significant, in line with the literature visited (Ahmed et al., 2018; Bischak & Woiceshyn, 2016; Caza et al., 2004; Gotsis & Grimani, 2015; Luo & Chen, 2010; Pires & Nunes, 2018). On that basis, we confirm the nomological validity of HRPPS. Additionally, we performed a discriminant analysis to attest the conceptual independence of the constructs, through exploratory factor analysis with three factors, with promax oblique rotation (Brakus et al., 2009). With this analysis, presented in Table 2, we verified that the items of each variable (leadership, organizational virtues, and HRM practices) coalesced into their respective factors. Therefore, regardless certain similarities between the concepts, the three scales represent different constructs.

Table 2.
Discriminant Analysis of the Constructs

Items	Factor
	1	2	3
V23	0.883
V15	0.856
V17	0.851
V16	0.848
V13	0.847
V22	0.847
V12	0.839
V20	0.824
V24	0.824
V19	0.816
V5	0.813
V7	0.801
V8	0.799
V21	0.799
V6	0.798
V11	0.788
V9	0.779
V14	0.778
V4	0.758
V10	0.735
V2	0.716
V3	0.683
V18	0.666
V1	0.610
P25		0.789
P30		0.765
P26		0.751
P31		0.735
P27		0.677
P29		0.664
P6		0.660
P5		0.653
P2		0.648
P28		0.639
P3		0.634
P32		0.628
P4		0.625
P24		0.614
P18		0.569
P11		0.544
P10		0.539
P17		0.534
P20		0.532
P9		0.523
P7		0.513
P1		0.508
L6			0.777
L11			0.772
L10			0.770
L1			0.767
L9			0.756
L17			0.737
L13			0.735
L19			0.731
L16			0.702
L5			0.699
L3			0.647
L2			0.643
L15			0.635
L12			0.615
L18			0.572
L14			0.545
L8			0.543
L7			0.516

The Structural Model of Mediation

The structural model demonstrates the relationship between the variables in a model (Hair et al., 2016; Kline, 2015). The findings presented in this section allow us to understand (a) the effect of leadership on organizational virtues, (b) the effect of organizational virtues on HRM practices and (c) the effect of leadership on HRM practices. These findings also enable us to confirm or reject the research hypotheses.

A mediation model explains the different ways in which the antecedent variable influences the criterion variable, being characterized by a relationship that changes the influence of the antecedent variable more or less on the criterion variable (Sousa & Mendonça, 2009). After performing CFA for each variable of the model (all significant, p-value<0.01), we analyzed the modification indexes to access the model fit. We have found a high MI between E10 and E11, the reason why we inserted an arrow between the variables (Figure 1).

Figure 1.
Structural Model of Mediation

The association between E10 and E11, which correspond respectively to the items Performance Assessment and Competencies (PEC) and Remuneration and Rewards (RR), has support in the scientific literature. The evaluation of performance and competencies needs to be carried out continuously and systematically, in an impartial way, pointing out aspects that can promote not only the development of employees but also their remuneration (Qazi & Jeet, 2017). When performance evaluation contributes to an effective competence development plan that affects the system of remuneration and rewards, instead of being merely punitive, there is a substantial improvement in employee commitment, satisfaction, and productivity (Javed et al., 2019).

Afterwards, we constructed the path model to test if the variable organizational virtues (OV) mediates the relationship between leadership (L) and human resource management practices (HRMP) - H₄. The validation of the mediation model enabled us to test four conditions simultaneously, as proposed by Baron and Kenny (1986). First, we test if the antecedent variable significantly predicts the mediating variable (the effect of leadership on organizational virtues - H₁). In the following, we test if the mediating variable predicts the criterion variable significantly (the effect of organizational virtues on human resource management practices - H₂). Third, we test if the antecedent variable significantly predicts the criterion variable (the effect of leadership on human resource management practices - H₃). Finally, we test if, in the presence of the antecedent variable and the mediating variable, the relationship previously found to be significant between antecedent and criterion decreases or disappears (H₄).

The four research hypotheses were confirmed based on the results for H₁ (β=0.51; R²=27%; p-value <0.01), H₂ (β=0.77; R²=59 %; p-value <0.01), and H₃ (β=0.50; R²=25%; p-value <0.01). Concerning H₄, the relationship between leadership and HRM practices (β=0.14; p-value <0.01) and between organizational virtues and HRM practices (β=0.70; p-value <0.01) were also significant. The partial mediation was confirmed and the indirect effect was significant (p-value <0.01) and estimated at 0.37. The R² regression coefficient was 62%. In other words, leadership and organizational virtues explain 62% of the dependent variable, human resource management practices. According to Cohen (1992), this prediction has a great effect, as it was greater than 26%.

Table 3 presents the results and Figure 1 illustrates the mediation model.

Table 3.
Hypothesis Test

Hypotheses	Relation	β	R²	Result
H1	L → OV	0.51**	27%	Confirmed
H2	OV → HRMP	0.77**	59%	Confirmed
H3	L → HRMP	0.50**	25%	Confirmed
H4	L → HRMP	0.14**	62%	Confirmed
	OV → HRMP	0.71**

• Note. **p-value<0.01

Briefly, according to the results, the direct relationship between leadership and HRM practices weakens in the presence of the mediating variable, confirming the last condition proposed by Baron and Kenny (1996). In other words, the relationship between leadership and HRM practices is not direct, as it is mediated by organizational virtues.

Discussion, contributions, limitations and future research

The main objective of the present article was to test a structural model of mediation between leadership and HRM, with organizational virtues as a mediating variable. All the research hypotheses were confirmed and, consequently, the structural model was validated. Through the results, it was possible to confirm that organizational virtues mediate the relationship between leadership and HRM practices. Such considerations indicate that the leader has the function of celebrating, promoting, and highlighting virtuous actions (Cameron et al., 2003), as he must, in addition to ethical behavior, encourage virtuosity (Caza et al., 2004; Karakas et al., 2017; Rego et al., 2010), making management practices more effective in the perception of employees. In addition, organizational virtues must be recognized and supported by a significant leadership process (Manz et al., 2008), which is essential for a favorable relationship between the leader and his subordinates.

The results also fulfill a literature gap presented by Ahmed et al. (2018), confirming that leadership influences organizational virtues. Thus, the findings indicate that the leader should encourage the expansion of organizational virtues, promoting an improvement in the work environment of his/her team (Karakas et al., 2017). As a result, the perception of organizational virtues will raise the perception of organizational practices, including HRM practices (Luo & Chen, 2010). Additionally, organizational virtues play an important role in acting as a mechanism through which HRM practices promote a higher level of commitment (Pires & Nunes, 2018). When there is an alignment between HRM practices and the leader's behavior, this situation reinforces the employee's willingness to increasingly contribute to the organization's performance (Neves et al., 2018), fostering organizational growth (Aktar & Pangil, 2018; Thompson et al., 2020).

With regard to theoretical contributions, this investigation presents an unexplored model in the scientific literature, highlighting a mediation test. In this way, it contributes to the research streams of HRM and organizational behavior, especially by highlighting antecedent variables of HRM practices, as this construct is usually studied as a predictor variable (Demo et al., 2018). Also, according to the agenda outlined for future studies by Bianchi et al. (2017), the present study covered the relationship between leadership and HRM practices, signaling their drivers related to organizational behavior.

In terms of managerial implications, the present discussion works as a diagnosis that can inspire managers so that, through more effective leadership, they promote more strategic HRM (Bianchi et al., 2017). In this context, the permanence of strong leadership tends to influence the organizational culture, corroborating the associations between the variables that comprise it, such as organizational virtues and HRM practices. According to Pires and Nunes (2018), management strategies, policies, and practices whose contents are shown to be guided by altruistic reasons help to extract a richer meaning from the functions performed by the employee. As social implications, we foresee that healthier workplaces, which advocate inspiring leadership, virtuous work environments, and HRM practices that recognize and develop employees, will translate into better inter-organizational relationships and more effective service delivery to customers, citizens, and society in general.

As the limitation of this study, the cross-sectional nature of the investigation is pointed out, so that the results generated are restricted to the sample studied, which prevents generalizations. Nevertheless, the variance of the common method alone did not explain the results, since the one-factor measurement models tested did not show a good fit, which, according to the guidelines proposed by Byrne (2016), eliminates the common variance problem of the common method.

Furthermore, the quantitative nature of the research did not allow capturing particularities of the model that would be essential for understanding the phenomena treated in question, in addition to the relationships between leadership, organizational virtues, and HRM practices that make up the model. In this way, we suggest that further investigations use longitudinal temporal cuts and multi-method research strategies, seeking the so-called triangulation as a way to better approach and understand the research objects. Additionally, it would be interesting to compare the results obtained in the public and private sectors. The last limitation lies in the scales used, which were not customized for the public and private sectors. In a complementary way, then, it is suggested that in order to contemplate the particularities of each sector, specific scales are validated with each variable per sector.

Finally, we suggest the adaptation and improvement of the model tested in this investigation, seeking to research both the predictive role of organizational virtues and the mediating role of the virtues and practices of HRM in different predictive relationships, involving other variables such as identity, organizational citizenship, and resilience in the workplace. work, as previously pointed out by Gomide Jr. et al. (2016).

Conclusion

This study has achieved the proposed general objective since the four hypotheses of the research model were confirmed, revealing the effect of leadership on organizational virtues and the effect of organizational virtues on HRM practices, in addition to confirming the mediating role of organizational virtues in the relationship between leadership and HRM practices. This investigation represents a seminal step in researching the joint relationship between these variables, through a structural model of mediation, and intends to inspire new studies that consolidate the tests of relationships between different variables of organizational behavior. In addition to the contributions of this article, our findings bring possibilities for new perspectives and different opportunities to relate leadership to organizational variables, indicating potential mediators and, from that, promoting more effective HRM practices. In organizational contexts where more and more crises need to be faced, virtues need to be fostered and people need to be increasingly valued. Better results, both at an individual and organizational level, will be the result of an increasingly humanized, strategic, and responsible human resources management.

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• *
  This article originates from a doctoral thesis by the first author.

Publication Dates

• Publication in this collection
  07 Nov 2022
• Date of issue
  2022

History

• Received
  02 Feb 2021
• Accepted
  23 July 2021