This article highlights the importance of ethical environment in enhancing organizational performance. It is vital that organizations set ethical standards for their employees alongside providing an environment that fosters trust and commitment, provides leadership, and creates a high quality of workforce to improve organizational performance. To study the impact of ethical environment on organizational performance, we employ elements from André de Waal’s high-performance organization (HPO) framework. Data for this study come from a national survey conducted in four states in the United States, which are classified as at-will employment states: Oregon, Utah, Washington, and Florida. We find evidence that ethical environment plays an important role in determining organizational performance. This is particularly important in the context of at-will employment, where state governments are facing the challenge to maintain employee commitment while improving organizational performance.