Ethical behavior is a very important fact for the
success of any organization because it influences its relations
with numerous stakeholders for making certain the success of a
business. This paper attempts to examine the impact of ethical
behavior on employees’ performance in Nepalese commercial
banks. Descriptive research design has used to identify
characteristics, frequencies, trends and categories of the impact
of ethical behavior on employee performance and causalcomparative research design has also used to ascertain and
understand the directions, magnitude and forms of the observed
relationship between ethical behavior and employees’
performance. Self-administered structured questionnaires were
distributed to a total of 810 respondents (30 respondents of each
27 commercial banks) but only 575 usable responses are
collected and has used to analyze the data. Employees’
performance is dependent variable and respect, teamwork,
reward and punishment, racial discrimination, leadership style,
discipline and corruption are independent variables. It is found
that respect, teamwork, reward and punishment, leadership style
and discipline have a positive impact on the performance of
employees, and however, racial discrimination and corruption
hurt employee’s performance in Nepalese commercial banks.
Keywords: Employees’ performance, Respect, Teamwork,
Reward and punishment, Racial discrimination, Leadership style,
Discipline, Corruption