While research has examined the factors that drive employees’ unethical behaviors, there is less understanding of how perceived relative deprivation – the feeling of being unjustly deprived of outcomes deserved in comparison to peers – can encourage creative unethicality. Drawing on the personal relative deprivation theory, it is proposed that when employees observe their peers benefiting from engaging in creative yet unethical acts, they are likely to perceive relative deprivation. As a result, they are more inclined to participate in creative unethicality themselves as a means to psychologically restore equity. This tendency is heightened in highly competitive team environments. Utilizing a multi-wave study design, data were gathered from 515 full-time employees and their 110 supervisors across a variety of industries in China. The findings corroborated the hypotheses. Theoretical contributions include the clarification of perceived relative deprivation, which is separate from moral disengagement, as an alternate pathway that leads to creative unethical conduct when employees compare themselves to misbehaving peers. On the practical side, implications involve the monitoring of team competitiveness climates that intensify relative deprivation spirals and the implementation of strategies to curb the proliferation of creative unethicality within organizations.
