Levonius - More carrot, less stick

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MORE CARROT, LESS STICK:How the Tone @ the Top Creates a Culture of Integrity
DON LEVONIUS, MA

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Levonius - More carrot, less stick

  1. 1. MORE CARROT, LESS STICK: How the Tone @ the Top Creates a Culture of IntegrityDON LEVONIUS, MAdon.levonius@comcast.net©2011 Victory Performance Consulting
  2. 2. AGENDA • Workplace deviance • The fraud triangle ∆ – It’s a BIG deal! – It takes 3 to tango • Ethics, morality & honesty • Deterring deviance – Oh, my! – Scare conditioning • Factors of employee • Creating a culture of deviance integrity – F3 = org x gen x econ – A 12 step program©2011 Victory Performance Consulting
  3. 3. WORKPLACE DEVIANCE … … IT’S A BIG DEAL!!!©2011 Victory Performance Consulting
  4. 4. ORGANIZATIONAL Production Deviance Property Deviance • Leaving early • Sabotaging equipment • Taking excessive breaks • Accepting kickbacks • Intentionally working slowly • Lying about hours worked • Wasting resources • Stealing from the company MINOR MAJOR Political Deviance Personal Aggression • Showing favoritism • Sexual harassment • Gossiping about coworkers • Verbal abuse • Blaming coworkers • Stealing from coworkers • Competing non-beneficially • Endangering coworkers INTERPERSONAL Robinson and Bennett, “A Typology of Deviant Workplace Behaviors”©2011 Victory Performance Consulting
  5. 5. WORKPLACE DEVIANCE • 27% of employees believe their organization’s leadership is unethical 1 • 48% of employees admit to committing unethical or illegal acts in the past year 2 • Workplace deviance costs businesses $1 trillion per year 3 • Employees who believe their workplace is ethical are 6 times more likely to stay 4 1) Society of Human Resource Management, 2) Jackson, 3)Association of Certified Fraud Examiners, 4) Smith©2011 Victory Performance Consulting
  6. 6. FRAUD & THEFT • Employee theft costs $50 Billion per year 1 • Incidents are increasing 3% annually 2 • Losses are increasing 10% annually 3 • 1 in 30 employees stole at work last year 4 • 30%-40% of all business failures are caused by employee theft 5 • Geopolitical and economic uncertainty is expected to drive unprecedented increases 1) US Department of Commerce; 2, 3, 4) Jack L. Hayes International, Inc.; 5) US Small Business Administration©2011 Victory Performance Consulting
  7. 7. ETHICS, MORALITY & HONESTY… …oh, my!©2011 Victory Performance Consulting
  8. 8. ETHICS Deontological Ethics Teleological Ethics • Evaluates decisions • Evaluates decisions based on what is right based on outcomes • A matter of principle • End justifies the means Moral Absolutism Moral Relativism©2011 Victory Performance Consulting
  9. 9. ETHICS Deontological Ethics Teleological Ethics Inner dialog: Inner dialog: Q: “Is this the right thing to do, Q: “Will this action produce a despite the consequences?” good or desirable outcome?”©2011 Victory Performance Consulting
  10. 10. MORALITY & HONESTY Moral Honesty Conditioned Honesty • Intrinsically motivated to • Extrinsically influenced to act ethically despite act ethically based on circumstances perceived consequences – Subconscious – Conscious decision – Self-evaluative process – Conditional process developed during continually influenced by childhood external conditions©2011 Victory Performance Consulting
  11. 11. UNDERSTANDING HONESTY©2011 Victory Performance Consulting
  12. 12. UNDERSTANDING HONESTY©2011 Victory Performance Consulting
  13. 13. UNDERSTANDING HONESTY For some people, the decision to “do the right thing”… …is greatly influenced by their perception of being caught©2011 Victory Performance Consulting
  14. 14. UNDERSTANDING DISHONESTY • There are people who WILL NOT steal, no matter what • There are people who WILL steal, no matter what • There are people who can go either way, depending on the circumstances Kessler, Longmore-Etheridge©2011 Victory Performance Consulting
  15. 15. FACTORS OF EMPLOYEE DEVIANCE F3 = org x gen x econ©2011 Victory Performance Consulting
  16. 16. ORGANIZATIONAL “When the organization as an entity, or in the person of the supervisor, has defaulted on the obligations of the organization to it’s members, reciprocal deviance can result.” Theodore Kemper©2011 Victory Performance Consulting
  17. 17. ORGANIZATIONAL • Reciprocal Deviance – Retribution toward management – Employee seeks to get even • Parallel Deviance – Imitation of management – Employee mirrors unethical behavior by management©2011 Victory Performance Consulting
  18. 18. GENERATIONAL • Work ethic • Job satisfaction • Rewards & recognition • Financial perspectives©2011 Victory Performance Consulting
  19. 19. ECONOMIC • Financial hardship • Economic uncertainty • Fear of impending layoffs • Feelings of exploitation • Preemptive deviance©2011 Victory Performance Consulting
  20. 20. THE FRAUD TRIANGLE It takes 3 to tango!©2011 Victory Performance Consulting
  21. 21. THE FRAUD TRIANGLE Opportunity©2011 Victory Performance Consulting
  22. 22. THE FRAUD TRIANGLE • Need or Desire – Experiences financial hardship – Senses external pressures • Rationalization – Believes employer deserves to incur loss – Believes organization can afford the loss • Opportunity – Perceives there is little chance of being caught Frank©2011 Victory Performance Consulting
  23. 23. THE FRAUD TRIANGLE • Need or Desire – HR has virtually NO influence • Rationalization or Motive – HR can influence employees’ moral reasoning • Perceived Opportunity – HR can increase employees’ perception of being caught Frank©2011 Victory Performance Consulting
  24. 24. DETERRING DEVIANCE Perception of Being Caught scare conditioning Conditioned Honesty©2011 Victory Performance Consulting
  25. 25. DETERRING DEVIANCE How Conditioned Honesty Perception of Being Caught Extrinsically influencing can we ethical behavior by influence increasing the perception of detection people to be honest? High Low Conditioned Honesty High©2011 Victory Performance Consulting
  26. 26. High DETERRING DEVIANCE What Perception of Being Caught deters people from breaking the law? High Low Conditioned Honesty High©2011 Victory Performance Consulting
  27. 27. High DETERRING DEVIANCE What Perception of Being Caught deters people from workplace deviance? High Low Conditioned Honesty High©2011 Victory Performance Consulting
  28. 28. CREATING A CULTURE OF INTEGRITY A 12-step program©2011 Victory Performance Consulting
  29. 29. THE BOTTOM LINE ON INTEGRITY • Companies that encourage open communication deliver 5% higher returns • Managers who demonstrate ethical values report 12% higher employee performance • Employees who believe their workplace is ethical are 6 times more likely to stay 4 • Employees in high-integrity organizational cultures are 67% less likely to experience major deviance at work Brotherton, Corporate Executive Board (CEB) Survey, 4) Smith©2011 Victory Performance Consulting
  30. 30. KEY DRIVERS OF INTEGRITY • Comfort in speaking up • Trust in colleagues • Relationship with direct manager • Tone at the top • Clarity of compliance expectations • Openness of communication • Organizational justice Brotherton, Corporate Executive Board (CEB) Survey©2011 Victory Performance Consulting
  31. 31. 12 STEPS TO A CULTURE OF INTEGRITY 1. Set an ethical tone at the top 2. Establish a code of ethics 3. Carefully screen job applicants 4. Assign proper authority & responsibility 5. Mandate fraud and ethics training 6. Implement effective disciplinary action Association of Certified Fraud Examiners©2011 Victory Performance Consulting
  32. 32. 12 STEPS TO A CULTURE OF INTEGRITY 7. Implement a confidential hotline 8. Establish a whistleblower policy 9. Follow through of reports of misconduct 10. Promote effective internal controls 11. Prevent reprisals 12. Create a culture of doing the right thing Association of Certified Fraud Examiners©2011 Victory Performance Consulting
  33. 33. SETTING THE RIGHT TONE • Communicate expectations to employees • Lead by example • Provide a safe mechanism for employees to report wrongdoing • Reward integrity Treadway Commission©2011 Victory Performance Consulting
  34. 34. SETTING THE RIGHT TONE • Organizational justice Establish the belief among employees that leadership will take action against wrongdoing is a leading driver of an creating a culture of integrity… Brotherton, Corporate Executive Board (CEB) Survey©2011 Victory Performance Consulting
  35. 35. SETTING THE RIGHT TONE • Open communication Create an environment in which employees are encouraged to voice concerns and rewarded when they do so©2011 Victory Performance Consulting
  36. 36. QUESTIONS? Don Levonius, MA Victory Performance Consulting linkedin.com/in/donlevonius don.levonius@comcast.net 352.978.9736©2011 Victory Performance Consulting
  37. 37. THANK YOU! Don Levonius, MA Victory Performance Consulting linkedin.com/in/donlevonius don.levonius@comcast.net 352.978.9736©2011 Victory Performance Consulting
  38. 38. ©2011 Victory Performance Consulting

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