THE EFFECT OF ETHICAL LEADERSHIP ON RELIGIOUS COMMITMENT AND EMPLOYEE PERFORMANCE (STUDY ON SHARIA BANKS IN PASURUAN AND PROBOLINGGO CITIES)

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International Journal of Civil Engineering and Technology (IJCIET)
Volume 9, Issue 11, November 2018, pp. 257–269, Article ID: IJCIET_09_11_026
Available online at http://www.iaeme.com/ijciet/issues.asp?JType=IJCIET&VType=9&IType=11
ISSN Print: 0976-6308 and ISSN Online: 0976-6316
© IAEME Publication Scopus Indexed
THE EFFECT OF ETHICAL LEADERSHIP ON
RELIGIOUS COMMITMENT AND EMPLOYEE
PERFORMANCE (STUDY ON SHARIA BANKS
IN PASURUAN AND PROBOLINGGO CITIES)
Iqbal Robbie, Achmad Sudiro, Sumiati and Sunaryo
Economics and Business Faculty, Brawijaya University, Malang-Indonesia
ABSTRACT
The main objective of this paper was to examine and analyze the effect of ethical
leadership on organizational commitment, organizational commitment on employee
performance, organizational commitment as a mediating variable the effect of ethical
leadership on employee performance, religiosity as an moderating effect of ethical
leadership on organizational commitment, and organizational commitment on
employee performance of Islamic banks in Pasuruan and Probolinggo Cities, East
Java Province, Indonesia. This study uses a positivist or quantitative approach to test
the hypothesis. The population was Islamic banking located in Pasuruan City and
Probolinggo City. The status was state-owned and private companies. The samples
were 109 full time employees other than the leadership level in Sharia Bank. This was
a survey research. Validity and reliability testing was presented. Explanatory
research method was examined by PLS to test the hypotheses. Research results show
that ethical leadership has a significant effect on organizational commitment,
organizational commitment has a significant effect on employee performance,
mediating effect of organizational commitment variable was also evident to the effect
of ethical leadership on employee performance, and religiosity variable can moderate
the effect of ethical leadership on organizational commitment and religious ability.
Religiosity variable moderate the effect of organizational commitment on employee
performance. This paper contributes to the company to show the moderating effect of
religiosity to improve the effect of ethical leadership on organizational commitment
and employee performance
Keywords: Religiosity, Ethical Leadership, Organizational Commitment,
Performance, Islamic Banks, Indonesia

The Effect of Ethical Leadership on Religious Commitment and Employee Performance (Study
on Sharia Banks in Pasuruan and Probolinggo Cities)
Cite this Article: Iqbal Robbie, Achmad Sudiro, Sumiati and Sunaryo, The Effect of
Ethical Leadership on Religious Commitment and Employee Performance (Study on
Sharia Banks in Pasuruan and Probolinggo Cities), International Journal of Civil
Engineering and Technology, 9(11), 2018, pp. 257–269.
http://www.iaeme.com/IJCIET/issues.asp?JType=IJCIET&VType=9&IType=11
1. INTRODUCTION
Southeast Asia has countries that dominated by Islam religion. It became an international
concern in relation to the development of Islamic finance. It was started at 1 July 1983 for the
establishment of first Islamic bank in Malaysia, Bank Islam Malaysia Berhad (BIMB).
Indonesia starts to pioneer Islamic banking in 1992, by establishing Bank Muamalat
Indonesia. The first Islamic bank in Brunei was also established in 1992 under the name
Tabung Amanah Islam Brunei (TAIB). Thailand sharia branch was first opened by The
Krung Thai Bank in 2001. Singapore in 2007launched the first bank with fully Islamic bank
concept, Islamic Bank of Asia, which as a joint venture between DBS banks and Middle
Eastern private investors. The emergence of this Islamic bank provides an alternative banking
for community but it also raises a problem because the public generally considers that Islamic
banks will apply sharia principles purely, but in the practices were still similar to
conventional bank. This was because almost 75% of sharia bank directors were graduates of
conventional banks with business-oriented people. This was consistent with Wiwit (2014)
that because the Islamic banks were led by former conventional banks, the practice also
reflects a little sharia principles.
The problem was low discipline of Islamic banks employees which ultimately results in
low performance. There were still many problems in public services, such as the applying for
credit, savings and loans and savings sharing system. It made community as customers were
not satisfied with the services. Some internal problems were also happened at Islamic banks
as late office opening because of many other jobs done, but with tips we get the service. The
function of banking organizations was to serve the interests of wider community.
The performance of Islamic banks was still low. Hakim (2012) shown 5-7% turnover rate
at Bank Muamalat to show very low employee performance, even though the turnover was
due to various things but indicated that something was wrong in Islamic bank.
The employee performance was not only based on employee's personal but also the
leadership factor. Worker commitment was an important factor because it determines the
performance and effectiveness of organization (Lashinger, 2001). Meyer and Allen (1979)
divided organizational commitment into three, namely: affective, normative and continuance
commitments. Affective commitment was an emotional feeling when employees feel a bond
to the organization and confidence to its value. Normative commitment was the attitude of
employees who feel obliged to survive in organization for moral or ethical reasons.
Continuance commitment was the attitude and values felt to survive with organization rather
than leaving the organization. The problems in Islamic banks were all regulations to bind
employees must be based on sharia principle because it was the basis that must be obeyed by
all members.
Shahzad (2010) and Tsai et al. (2010) said that effective leadership also affects employee
commitment, but adversely Shukui and Xiao Min (2009) said that leadership negatively
affects on commitment unless moderated by culture. The main problem of this study was the
performance of Islamic bank employees were identical with Islamic values, but there were
many employees have very low commitment and performance.

One culture in Indonesia was Pandalungan. It refers to an area in north coast region and
eastern part of East Java Province where the majority of population has Madurese cultural
background. Pandalungan was a hybrid society, namely a new cultural society due to the
mixing of two dominant cultures.
In the context of East Java "horseshoe" area, pandalungan culture was a mixture of two
dominant cultures, namely Javanese and Madurese culture. In general, pandalungan people
live in urban areas. Pandalungan cultural areas administratively include Pasuruan,
Probolinggo, Situbondo, Bondowoso, Jember, and Lumajang Regencies.
Pandalungan people were very accommodated and respect differences. These regions
were almost no conflict between ethnic groups. If there was a conflict, root of conflict was
usually in form of social jealousy that has indigenous and non-indigenous nuances, or has
religious nuances. Pandalungan people also do not like small talk, if they feel unhappy, they
will immediately reveal it. Conversely, if they feel happy, they will immediately say it.
People who love it also like to say swear words, both to express irritation or anger or to
accompany congratulations or expressions of joy. Social ethics, such as manners, manners, or
the virtues of a noble person were rooted in values promoted by two colouring cultures,
namely Javanese and Madurese culture.
This research leads to Islamic Bank employees located in Pasuruan City and Probolinggo
City. The city includes Pandalungan area. It was this character and pattern of Islamic values
that reflects the people of area.
This research was done to employees of Islamic banks. We would examine the religious
factor whether it can be a solution to the research gap. The religiosity comprehension
contains an understanding of believe in God and shown by commitment, it leads to individual
employees. This religiosity factor becomes moderation variable to the effect of ethical
leadership on employee commitment and performance.
2. LITERATURE STUDY AND RESEARCH FRAMEWORK
2.1. Previous research
There was several research gaps related to the difference result the effect of leadership on
employee commitment (Shukui and Xiaomin, 2009). Gadot (2007) also said the direct and
indirect relationship of performance and leadership. Therefore further extensive research was
needed. Riaz and Akram (2012) also said that transformational leadership has a positive
effect on affective commitment, but the research results on transformational leadership have
no effect to organizational commitments such as continuance commitment and normative
commitment. Shukui and Xiaomin (2009) found that transformational leadership has a
positive effect on commitment but must be moderated by culture.
Efficient leadership becomes a powerful weapon to find leadership characteristics among
organizational employees. The relationship between performance and leadership can be direct
or indirect (Gadot, 2007). It becomes witnesses that leadership quality can be built between
employees through leadership development programs. Recent research of Sabir (2012) proves
that investment in human resource development was an organization asset to modernize the
capabilities and skills of employees to improve performance and efficiency. The technical
and non-technical education and employee training were important to improve their skills and
abilities (Rowold, 2008)
De Hoogh and Den Dartog (2008) proposed another measure of ethical leadership. It
consists of three dimensions, namely morality and justice, role clarity, and power sharing.
They also note that ethical leadership conceptualization was not different from Brown et al.

(2005). However, to build a measure of ethical leadership, De Hoogh and Den Dartog (2008)
use three scales (morality and fairness, role clarity, and power sharing) adapted from Multi
Culture Leader Behavior Questionnaire (MCLQ) (Hanges and Dickson, 2004). De Hoogh
and Den Dartog (2008) showed that ethical leadership was negatively related to despotic
leadership, but was positively and significantly related to the effectiveness of management
teams and subordinates.
The study results have shown the relationship between ethical leadership behavior and
organizational commitment (Hakim, 2012). Some of these studies showed that ethical
leadership behavior was associated with a higher level of employee commitment (Ponnu &
Tennakoon, 2009; Upadhyay & Singh, 2010). There was a positive relationship about the
effect of leaders on employee behavior regarding the level of commitment to the organization
(Mize, 2000 cited in Zhu, Mei & Avolio, 2004). Employee commitment was also related to
product quality improvement, improved customer loyalty, and lower costs due to a decrease
in employee turnover. But the research presented by Maignan (1997) cited in Ferrell &
Ferrell, (1999) showed a difference between the research proposed by Mize et al. (2000) To
find a positive relationship between corporate citizenship (defined as economic, legal, ethical
and activity policy) and employee commitment to the company
Allport and Ross (1967) showed two religiosity concepts: extrinsic religious orientation
and intrinsic religious orientation. Extrinsic religious orientation was a person's religious to
shows cooperation or affiliation with others to seeks perfection for self-practice. Extrinsic
orientation shows affiliation with others, it later will be known how the effect of leadership
on employee commitment (Mansoor, 2014)
2.2. Ethical Leadership
Brown et al. (2005) explained that "Moral person" was a person behavior to uphold the norm
to become honest, trustworthy, credible, fair decisions making, care and ethical principles.
The "Moral Manager" in dimensions of ethical leadership means that leaders openly speak
ethically and empower employees fairly. This aspect also shows the proactive efforts of a
leader to influence employees' actions regarding strong beliefs about ethical behavior. Such
moral managers demonstrate strong ethics in their behavior to use a strengthening work
mechanism as reward and discipline and to make them accountable for their actions and
decisions. Abeng (1997) examine the ethical leadership from a religious point of view. Some
people have discussed ethical issues in relation to the organizational environment and their
effects on employee satisfaction, performance, commitment, or employee behavior (Graham,
1995; Jones and Ryan, 1998; Trevino et al., 1998; also see Trevino et al., 2000; Weaver and
Trevino, 2001). Some recent researches also focus on dimensions of ethical leadership in
business (Thomas et al., 2004). Trevino et al. (2000, 2003) carried out most prominent
empirical works on leadership ethics.
There was several research gaps related to the effect of leadership on employee
commitment. In addition a positive effect there was also negative effects (Shukui and
Xiaomin, 2009).
2.3. Organizational Commitment
Mathis and Jackson (2000) defined that ―organizational commitment is the degree to which
employees believe in and accept organizational goals and desire to remain with the
organization―. Robbins (1989) defined organizational commitment as an attitude to reflects
the like or dislike feeling of employees to the organization. Steers and Porter (1983) said that

commitment was not only a passive loyalist, but also involves an active relationship with
work organizations with aim to provide all effort for organization success.
Theoretically, organizational commitment has three components (Meyer and Allen,
1991): (a) Affective commitment was mentioned as an employee emotional attachment to the
organization, (b) Continuous commitment was the economic value perceived by organization
when employees remain in an organization compared with leaving because they require
salary or other benefits, (c) Normative commitment was the obligation to remain with
organization for moral or ethical reasons based on employee values. Employees survive as
organization members because the awareness that they should commits the organization.
Iltizam was a word that can be interpreted as a commitment to religion or other. It term
was fixed as Istiqomah (sustainable) meaning above the Sharia and clings to religion. Iltizam
was Al Istiqomah. Allah says: " Those who say, ‗Our Lord is Allah,‘ then lead a righteous
life—they have nothing to fear, nor shall they grieve " (Surat al-Ahqaaf: 13). Istiqomah
means a straight way that does not turn also does not deviate. Commitment in Islamic law
was called Istiqomah, which was consistent behavior to keep going on a straight path despite
many obstacles (Tsamara, 2010). Consistent behavior has given birth to strong confidence
and integrity, they were able to see challenges as fun. Researchers in this study will use
several items that will be used to measure employee work commitments sourced from Qur'an
and Hadith and Munawaroh (2012) below.
1. Heart Istiqomah was always firm to maintain the faith sanctity by maintaining the
heart purity from envious, away from blemishes such as riya' (show off) and nourish the heart
with praiseworthy qualities, especially sincerity. In other words, heart Istiqomah intends to
have a firm belief in truth.
Allen and Meyer (1979) proposed organizational commitment concept that same as heart
Istiqomah, especially for Normative Commitment, a person or individual desire to stay in a
company because of ethics.
2. Oral Istiqomah was to maintain oral or spoken words from nonsense so as to always
say right and honest, in harmony with heart that adheres to the principle of truth and does not
pretend. Oral Istiqomah was only owned by people who believe and dare to declare and
defend the truth and only fear to Allah
The Affective commitment as dimension of organizational commitment proposed by
Allen and Meyer was similar to Oral Istiqomah. It was the employees desire to stay in
company because of emotional bond.
3. Deeds Istiqomah was working or doing deeds diligently and every effort to achieve
the glory was blessed by Allah. In other words, deeds Istiqomah was a dedication attitude to
work or struggle to uphold the truth without feeling disappointed, lacking enthusiasm or
despair.
Allen and Meyer proposed the Continuous commitment as dimension of organizational
commitment. This was consistent with the employees desire to stay in company because they
want to get rewards or wages after doing a job.
3. EMPLOYEE PERFORMANCE
Simanjuntak (2005) said that performance was the outcome of one's work in an organization,
both in quality and quantity. Performance was the level of achievement outcome on various
tasks and obligations done. Dharma (2009) said that a standard was needed to measure the
level of employee achievement to evaluate the employees objectively and appropriately. The

criteria or measures be used were quantitative (how much), qualitative (how good), and
timeliness of execution of tasks
4. RELIGIOSITY
Religiosity was the obedience level of a person to do all orders and away from prohibition of
Allah Almighty. The first level of religiosity or piety was islam, it means peace or safety. It
can be concluded that Islam was a religion that brings salvation to life in world and in
hereafter (rahmatan lil alamin). In terms of language, which was associated with origin of
word (etymological), Islam has several meanings below.
1. Islam comes from word 'salm' (‫)ملسلا‬ which means peace.
The 'salm' word above means peace. This was one characteristic of Islam religion to teach
its people to love peace or always fight for peace.
2. Islam comes from word 'aslama' (‫)ملسأ‬ which means surrender or surrender.
This shows that a Muslim was someone who sincerely surrenders his body and soul to do
God commands and away from all His prohibitions.
The second level of religiosity or piety was Faith. Faith means belief in heart of what was
brought by Prophet Muhammad SAW and accompanied by practicing the Sharia. Faith in
God was a very basic need for someone. Allah commands that mankind should believe in
Him, as the word of God means: "O you who believe! Believe in Allah and His messenger,
and the Book He sent down to His messenger, and the Book He sent down before. Whoever
rejects Allah, His angels, His Books, His messengers, and the Last Day, has strayed far in
error". (Q.S. An Nisa: 136).
The third level of religiosity was Ihsan. Ihsan means "you worship God as if you see Him,
but if you do not see Him then He will see you". Ihsan literally means "perfection" or "best."
Islam religion was built on three main bases, namely Faith, Islam, and Ihsan. Therefore, a
Muslim should not view ihsan as merely the main character, but must be seen as part of creed
and biggest part of his Islam religion.
Implementing ihsan for social beings like humans was one way was to do well. This ihsan
understanding made us feel that we were always supervised by Allah the All-Seeing. We will
not want to do bad deeds, even if we get it then we will not want to do it because the Ihsan.
People who have strong feelings will be diligent in doing well because he tries to make God
happy to always see him. Instead he was ashamed to do evil because he was always sure God
sees his actions.
5. THREE PRINCIPAL ASPECTS IN IHSAN
Ihsan covers three fundamental aspects. These three things were worship, muamalah, and
morals. These three things were the subject matter in ihsan.
1. Worship. We were obliged to worship, namely by fulfilling all kinds of worship,
such as prayer, fasting, hajj, and so on in right way, namely perfecting the terms,
harmony, sunnah, and their manners.
2. Muamalah. We must worship Allah and do good to our fellow human beings; we
will practice the knowledge by cooperating with others.
3. Morals. Moral was an output of worship and muamalah. A person will reach the
level of ihsan in his morality if he has performed worship as the Prophet's hope in
hadith that was stated at beginning of this paper. It will bear create good modal

behavior. People who arrive at ihsan stage in their worship will be clearly seen in
behavior and character.
McDonnel and Burnett (1990) define Religiosity as trust in God which was indicated by a
commitment to carry out all of His commands. Allport and Ross (1967) said that religiosity
concept has two types: extrinsic religious orientation and intrinsic religious orientation.
Extrinsically religious orientation was a person's religious form that shows cooperation or
affiliation with others. Intrinsic religious orientation was a religious form of someone who
seeks perfection for self-practice. Extrinsic orientation shows affiliation with others, so that
later will be known how the effect of leadership on employee commitment (Mansoor, 2014)
6. RESEARCH CONCEPTUAL FRAMEWORK
The conceptual framework of this research is shown in figure 1 below.
Figure 1 Conceptual Framework for Research
7. RESEARCH HYPOTHESIS
 H1: Higher ethical leadership will increase the organizational commitment.
 H2:Higher organizational commitment will increase the employee's performance
 H3: The higher the ethical leadership will increase the employee's performance
was mediated by organizational commitment
 H4: Higher ethical leadership will increase organizational commitment moderated
by religiosity
 H5: Higher commitment will increase employee's performance moderated by
religiosity
8. RESEARCH METHODS
8.1. Sample Determination
All employees at Sharia Bank have the same opportunity to become research samples.
Because the population was only 109 respondents, saturated samples were used, i.e. all
respondents will be sampled.
8.2. Data Collection
This research data was collected from primary and secondary sources. Primary data was
obtained by distributing questionnaires and interviews to all employees who were not

categories of company leaders in accordance with predetermined population. The list of
questions in questionnaire was compiled based on indicators of research variables. Secondary
data was obtained from in depth interviews to explain questions and get answers as desired
and supported by various relevant publications. Hypotheses testing were done by looking at
probability value and t-statistics. For probability values, p-value with alpha 5% was less than
0.05. The t-table value for alpha 5% was 1.96. So the hypothesis acceptance criteria was
when t-statistics> t-table.
9. RESEARCH RESULTS AND DISCUSSION
9.1. Respondents Characteristics
The respondents characteristics were shown in table 1 below.
Table 1 Respondents Characteristics
Demography Frequency Percentage
Gender
Male 65 59.6%
Female 44 40.4%
Total 109 100%
Age
20 - 25 years 28 25.7%
26 - 30 years 54 49.5%
31 - 40 years 25 22.9%
41 - 50 years 2 1.8%
> 50 years 0 0.0%
Total 109 100%
Tenure
1 - 3 years 53 48.6%
4 - 6 years 38 34.9%
> 6 years 18 16.5%
Total 109 100%
Latest Education
Senior High School 36 33.0%
S1 73 67.0%
S2 0 0.0%
S3 0 0.0%
Total 109 100%
Company
Bank BNI Syariah 12 11%
Bank BRI Syariah 16 14.7%
Bank BTN Syariah 12 11%
Bank Muamalat Indonesia 19 17,4%
Bank Syariah Mandiri 36 33.0%
BTPN Syariah 14 12.8%
Total 109 100%

Title
Supervisor Le e 8 7.3%
Staff 79 72.5%
Others 21 19.3%
No Answer 1 0.9%
Total 109 100%
Source: Primary data processed, 2017
Table 1 shows that 109 respondents at Islamic Banks in Pasuruan and Probolinggo Cities
have 59.6% male, and 40.4% female employees, 49.5% ages 26-30 years, 25.7% ages 20-25
years, 22.9% ages 31-40 years and the smallest 1.8% ages 31-50 years, and none more than
50 years old. The tenure condition shows 48.6% participants had worked for 1-3 years, 34.9%
had worked for 4-6 years and 16.5% had worked for more than 6 years.
9.2. The Partial Least Square Analysis (PLS)
9.2.1. Validity Test
Partial Least Square Analysis (PLS) is started by validity test. Table 2 shows validity test
results.
Table 2 Validity Testing
Variables Dimension Loading Factor
Ethical Leadership
Moral Person 0.892
Moral Manager 0.913
Organization Commitment
Hearth Istiqomah 0.848
Oral Istiqomah 0.966
Deeds Istiqomah 0.880
Religiosity
Intrinsic Religiosity Orientations 0.867
Extrinsic Religiosity Orientations 0.914
Table 2 shows the analysis of 2nd order measurement model. It can be seen that all
dimensions measurement of the company's ethical value, ethical leadership, organizational
commitment, and religiosity variables have loading factors greater than 0.5. Therefore, these
dimensions are valid or able to measure the variables of ethical leadership, organizational
commitment, and religiosity.
9.2.2. Reliability Testing
The construct reliability test using cronbach alpha and composite reliability are shown in
table 3. The reliability criteria is the reliability composite greater than 0.7 (Hair, et al., 2014)
and cronbach alpha was greater than 0.6 (Hair, et al., 2014).

Table 3 Reliability Test
Variables Dimensi
Composite
Reliability
Cronbachs
Alpha
Ethical Leadership
Moral Person 0.931 0.889
Moral Manager 0.893 0.840
Organization
Commitment
Hearth Istiqomah 0.919 0.824
Oral Istiqomah 0.927 0.882
Deeds Istiqomah Perbuatan 0.933 0.856
Religiosity
Intrinsic Religiosity Orientations 0.930 0.886
Extrinsic Religiosity Orientations 0.905 0.861
Performance 0.896 0.820
Table 3 shows that composite reliability value for dimensions of formal system, informal
system, moral person, moral manager, heart Istiqomah, oral Istiqomah, deeds Istiqomah,
intrinsic religiosity orientations, extrinsic religiosity orientations, and performance variables
greater than 0.7. Therefore, all variables are reliable.
9.3. Goodness of Fit Model
The goodness of fit model is shown in table 4.
Table 4 Goodness fit of model
Variables R2
Ethical Leadership 0.628
Organizational Commitment 0.337
Performance 0.549
Q2
= 1 – ( 1 – R1
2
) ( 1 – R2
2
) ( 1 – R3
2
) 
Q2
= 1 – ( 1 – 0.628) ( 1 – 0.337) ( 1 – 0.549) = 0.889
Table 4 shows that R-square of ethical leadership variable is 0.628 or 62.8%. It indicates
that variance of ethical leadership variables was explained by company's ethical value
variable of 62.8%. In other words the contribution of company's ethical value variables to
ethical leadership variables was 62.8%, while the remaining 37.2% was the contribution of
other variables outside this study.
Furthermore, R-square of organizational commitment variable is 0.337 or 33.7%. This
can indicate that variance of organizational commitment variables was explained by variables
of ethical leadership and religiosity by 33.7%. In other words the contribution of ethical
leadership and religiosity variables to organizational commitment variables is 33.7%, while
the remaining 66.3% was the contribution of other variables outside this study.
R-square of performance variable was worth 0.549 or 54.9%. This can indicate that
variance of performance variable can be explained by ethical leadership, organizational
commitment, and religiosity variables by 54.9%. In other words, the contribution of ethical
leadership, organizational commitment, and religiosity to the performance variable is 54.9%,
while the remaining 45.1% is the contribution of other variables outside this study.
Q-Square predictive relevance (Q2) is 0.889 or 88.9%. This can indicate that the model
can explains the variance of performance 88.9%. In other words, the contribution of ethical
leadership, organizational commitment, and religiosity to performance variable is 88.9%,
while the remaining 11.1% is the contribution of other variables outside this study.

9.4. Hypothesis Testing Results
The hypotheses testing for this study is shown in table 5 below.
Table 5 Hypothesis Testing Results
Variables Relationship
Origin
al
Sample
(O)
Standar
d Error
(STERR
)
t Statistics
(|O/STERR
|)
Description
Ethical leadership  Organizational commitment 0.587 0.124 4.738 Significant
Organizational commitment  Performance 0.345 0.116 2.964 Significant
Religiosity  Organizational commitment 0.784 0.078 10.076 Significant
Ethical leadership  Performance 0.511 0.138 3.687 Significant
Ethical leadership * Religiosity  Organizational
commitment
0.816 0.124 6.563
Strengthenin
g
Organizational commitment * Religiosity  Performance 0.213 0.108 1.967
Strengthenin
g
Hypothesis test results show that the effect of ethical leadership on organizational
commitment has a path coefficient of 0.587 with a t statistics of 4.738. It shows that t
statistics values > 1.96. This means that ethical leadership has significant effect on
organizational commitment. Hypothesis test results the effect of organizational commitment
on performance has a path coefficient of 0.345 with a value of t statistics of 2.964. The test
results show that values of t statistics> 1.96. This means a significant effect on organizational
commitment to performance. Hypothesis test results for the effect of ethical leadership and
religiosity on organizational commitment have a path coefficient of 0.816 with t statistics of
6.563. The test results show that t statistics values > 1.96. This means that there was an
interaction between ethical leadership and religiosity on organizational commitment. In other
words, religiosity can moderate the effect of ethical leadership on organizational commitment
The interaction between organizational commitment and religiosity on performance has a
path coefficient of 0.213 with t statistics of 1.967. It shows that t statistics values > 1.96. This
means organizational commitment and religiosity has significant effect on performance. In
other words, religiosity can moderate the effect of organizational commitment on
performance
10. RESEARCH IMPLICATIONS
This study finding confirms that religiosity has a positive effect on individual; compliance
and obedience of employees play a role in company's environment. The positive effect of
ethical leadership on organizational commitment was higher than religiosity level of
employees, and organizational commitment to employee performance was increasing with
Religiosity factor.
10.1. Practical Contributions
1. The activities and actions of all company members, especially the leadership activities
to do business and behavior ethical are the main capital to improve organizational
commitment.
2. Organizational commitment with heart, verbal and deed Istiqomah dimensions should
lead to good performance because the employee's performance will provide an
identity pattern for companies whose the goals are not always business oriented, but

there were social and religious missions that can elevate the standard life of
pandalungan society
3. Higher performance was expected to have a positive effect on company to compete
with other conventional banks, create partnership relationships with community,
business people, or fair competition with other companies.
10.2. Research Limitations
This study explores performance from a non-financial perspective. Therefore, these results
were limited only from employees or individuals perspective.
11. CONCLUSIONS AND RECOMMENDATIONS
11.1. Conclusion
1. The stronger ethical leadership can improve the employee's commitment and
performance. This finding also shows the strength of leadership factor, company's
operations were expected to increase performance for general public. Islamic banks as
a representation of a bank characterized by Islam must be firmly attached to
individual leaders, guiding employees with ethics that can be replicated and
implemented to raise commitment to improve the employees and companies
performance.
2. The employees commitment affect on performance. Higher religious commitments
will provide an individual identity as characteristic of company. Heart commitment
will give confidence that will deliver good performance, deeds lead the employee to
carry out daily activities with full trust.
3. Religiosity is a personal factor. This is indicated by intrinsic factor that religiosity is
obedience to God Almighty, but religiosity can also occur within workplace,
religiosity to maintain adherence to ethical leadership and religiosity towards
individual performance.
11.2. Suggestion
Management should pay attention to the Religiosity factor of company members. Every
stakeholder has a different Religiosity. Therefore, the approach to each stakeholder was
different.
11.3. Suggestions for Further Research
Further researches should explore the employee performance from perspective of other
stakeholders, for example from company's financial performance to find common ground and
differences views between employees and companies.
Further research should explore ethical leadership from management perspective of non-
banking private companies such as manufacturing industries and other companies with
different locations.

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THE EFFECT OF ETHICAL LEADERSHIP ON RELIGIOUS COMMITMENT AND EMPLOYEE PERFORMANCE (STUDY ON SHARIA BANKS IN PASURUAN AND PROBOLINGGO CITIES)

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