Abstract

This study proposes a moderated mediation model based on deontic justice theory to investigate the impact of unethical peer behavior on employee performance. Data were collected in China through two survey studies, with two measurement points in each study. The data in study 1 were obtained from 271 employees of 17 firms, and the data in study 2 were collected from 225 employees of 9 firms. Confirmatory factor analysis was conducted to confirm the factorial validity of the measures employed in the studies. The hypothesized moderated mediation model was tested using hierarchical multiple regression analysis. The results show that employee deontic justice mediates the negative relationship between unethical peer behavior and employee performance, and a stronger ethical climate tends to strengthen this indirect relationship. This study extends previous research by introducing deontic justice theory to explore the unconscious process that relates unethical peer behavior to employee performance. The theoretical and practical implications of this paper are discussed.