Ethics in the Workplace

Having ethics in the workplace is one of the best professional traits to ensure a successful career. When you consistently display these golden rules, you'll be viewed as a valuable team member who is the epitome of professionalism.

Creating an Ethical Workplace

It's important to create a culture of ethics in the workplace because it's good for team morale and productivity. No one wants to work in a place where misconduct is the status quo. By encouraging strong ethics, you can reduce turnover while increasing your profitability.

In fact, studies show that businesses with a commitment to an ethical work environment make more money and have happier, more productive staff members. A company's ethics are truly tied to its own livelihood.

The best place to start building a strong ethical culture is through the human resources department. HR staff is involved in so many crucial parts of the organization, starting with hiring, and moving through training and even evaluating employees. There's a lot of room to wield influence and HR professionals can serve as role models and spokespersons for workplace ethics.

It should be their responsibility to feel the need to protect everyone from unethical behavior, whether it's employees or even the company's clients. They can also help push the right values throughout the company's operations to ensure the right ethics grow across departments.

Changing Expectations

Corporations have a lot of work to do in order to regain the trust of Americans. Since the recession resulting from the 2008 financial crisis, barely 15% of citizens say they have faith in corporate leaders to be truthful.  And across the world, only 28% of survey respondents indicated they thought most businesses were ethical.

While pre-2008 companies measured success solely in dollar amounts, today, they must attempt to regain trust from customers, particularly within the financial services industry. They can do this by creating an employee-friendly workplace, keeping a sound ethical policy, and making customer satisfaction as important as profitability.

Another game changer in the field of corporate ethics is the popularity of social media. This encourages companies to increase their transparency in order to decrease their risk exposure. Simply put, it's good business to have good ethics. This is even evident in the numbers, where a 15-year span of stock market returns were higher for companies on the Best Companies to Work List for Fortune 100. In fact, those companies averaged 11.8% compared to just 6% and 6.4% for the S&P 500 and the Russell 3000 Index, respectively.

There's growing recognition among companies who are finally placing real efforts on building ethical workplaces. Studies show that "strong" and "strong-leaning" ethics climbed 6% in a three-year period when surveying over 6,400 employees. These tendencies also help lower misconduct in the workplace.

In the "strong" ethics companies, just 20% of employees witnessed misconduct. In companies with the weakest ethical cultures, that number jumped to a whopping 88%.

What Is an Ethical Culture?

While it may seem difficult to measure a concept like culture, it really boils down to the day to day reality of a work environment. This ranges from anything like how employees get dressed each day to how they treat their customers and co-workers. Because it's a bit ambiguous, HR leaders may find it difficult to effectively communicate the importance of workplace ethics to the company's management team.

Essentially, a company should make it easy for employees to make the right decision, while making it hard for them to make a bad decision. Other traits of strong ethics in the workplace is prioritizing the rights of employees, creating fair policies, and implementing equal footing when it comes to promotions and pay.  The company should also reward individuals for exhibiting traits like loyalty, honesty, and even tolerance.

As the workplace nurtures and grows its ethical culture, employees will better reflect those values. From there, trust will grown among all levels within the company. And soon after that, ethics will become the status quo, rather than something that must be continually strived for.

Managers' Influence

One  of the key players to have on board for ethics in the workplace is the group of managers in a company. They can effectively lead by example and if they don't, they run the risk of losing trust from employees. The same holds true for the company's executive team -- they should all become models of the organization's values while being fair in the enforcement of rules.

There's actually research proving that individuals can more easily bypass their own ethical issues if they don't think their manager cares about them. Studies also show that 60% of misconduct in the workplace is performed by managers. And the rule breaking becomes more serious and widespread the higher up the manager is, with more senior managers exhibiting misconduct compared to junior managers.

This behavior can have a detrimental effect on employees and how they perceive the company's culture. It's especially true because retaliation for reporting misconduct has increased, and was up 8% just a few years ago. This causes a decrease in whistle blowing because employees fear the results if they report any wrongdoing they witness, despite it being easy for employees to spot any inconsistency in the workplace.

Can You Teach Ethics?

There are a number of ways an HR team can implement ethics in the workplace. The first step is to have written standards and communicate them to employees so they understand any expectations. Training is an ideal way to ensure everyone is on the same page, and it also gives managers a template for leading by example.

Ethics can also be included in the hiring process. During an interview, an HR professional can look for the right cultural fit by comparing how applicants have handled previous situations surrounding competing values or even unethical conduct from others. While a recent survey indicated that only 5% of HR workers thought they were able to hire an ethical person, sound guidelines can help the process.

A well thought out ethics program should include the following elements:

  • Training on expectations
  • Resources to utilize for advice
  • Reporting process for violations (ideally confidential)
  • Evaluation system for ethical behavior
  • Discipline system for violations

It's vital to continue to have ethics-related check-ins and trainings in order to maintain awareness. As long as ethics remain in the daily conversation at an organization, there's a chance to make lasting change there. While in-person trainings can be more engaging, online trainings can be quicker and easier to implement.

Beware of Ethical Danger Zones

Unfortunately, it doesn't just take a "bad" person to exhibit unethical conduct at work -- "good" people are also at risk of doing the wrong thing. For example, unrealistic performance goals may put undue pressure on an otherwise ethical employee to cut corners in order to get the job done. Work is compromised and trust is lost both ways between employees and managers.

To combat unethical behavior across the board, an organization needs a visible disciplinary program so that model behavior is encouraged. If unethical behavior isn't addressed, those actions can multiply because there are no repercussions. One bad decision often leads to another, and soon the entire company is suffering from an unethical work environment.  In addition to disciplining this behavior consistently, HR professionals can also use straightforward language, rather than rationalizing behavior with neutral phrases like "creative accounting."

Evaluation Time

Employee surveys are a helpful tool for the HR team to find out how successful their ethics efforts have been. Additionally, ethics and values can be incorporated into employees' annual evaluations, which places a much greater importance on the issue compared to other tactics. The HR team can also keep track of any ethics-related complaints, as well as the reasons for turnover. These can be clear signs as to whether or not the company culture supports ethics in the workplace.

Talk About It—A Lot

Ethics should be a continuing conversation in any workplace, which keeps it fresh on employee's minds -- especially when they need to make a tough decision. Managers can help by keeping ethics as a regular topic at team meetings. The executive team should also make a point of showing their support for strong ethics in the workplace. Leaders throughout the company shouldn't worrying about tracking every employee's decision, but instead should help them sift through their priorities. Employees are more likely to take advantage of their boss's open door if they know that person cares and wants them to come in to discuss an ethical dilemma.

A strong combination of resources and communications channels can help the entire organization run more smoothly and efficiently by creating a strong and ethical workplace.

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