Religiosity and managers' attitudes to offering a financial incentive: moderating and mediating roles of ethical climate

The aim of this study is to investigate the factors that influence managers' attitudes to offering a financial incentive, namely religiosity and perceived ethical climate. A survey of 573 MBA students in Indonesia was undertaken and 368 valid responses were analysed. A statistical analysis was performed using SEM-PLS to simultaneously analyse three variables (religiosity, ethical climate, and managers' attitude to offering a financial incentive). This study finds that religiosity has a negative association with managers' attitudes to offering a financial incentive described here as a bribe. People who scored high on religiosity scale are less likely to think that it is alright to offer a financial incentive. Further, this study investigates the moderating and mediating roles of ethical climate in this association. Mediation analysis shows that religiosity has a positive association with ethical climate and ethical climate has a significant negative association with managers' attitudes to offering a financial incentive. Further analysis finds that there is a partial mediation effect of ethical climate in the association between religiosity and managers' attitudes to offering a financial incentive. Nevertheless, it is found that ethical climate does not have a moderation effect in this association.