Ethical behaviour is a critical factor in enhancing organizational performance, especially within public sector organisations. Public institutions, by their nature, are held to high ethical standards as they serve the public interest. This paper explores the relationship between ethical conduct and public sector performance, with a specific focus on productivity and service delivery. Drawing on ethical leadership theory and public service motivation theory, the paper examines how ethical behaviour fosters a culture of accountability, transparency, and integrity, which in turn reduces corruption, enhances decision-making, and improves employee morale. Empirical evidence from various studies indicates that ethical practices not only optimize service delivery but also build trust between the government and citizens. The findings highlight that ethical leadership plays a pivotal role in shaping organizational culture, leading to higher productivity and more efficient use of resources. Through institutionalizing ethics management frameworks, public sector organisations can significantly improve their service outcomes and overall performance.