Memphis Business Journal. Strengthening The Ethical Culture Of Your Organization Should Be A Priority.Link.12.7.12


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Memphis Business Journal. Strengthening The Ethical Culture Of Your Organization Should Be A Priority.Link.12.7.12

  1. 1. Friday, December 7, 2012Strengthening the ethical culture of yourorganization should be a priorityMemphis Business Journal by Barbara RichmanAccording to the 2011 National Business Ethics Survey, a report published by the EthicsResource Center (, the ethical culture of the American workplace is intransition. The survey, the seventh since 1994, was conducted for the purpose of understandinghow employees at all levels view ethics and compliance at work.Its overall results send mixed signals to employers. While positive indicators are included in thefindings, they are clouded by “ominous warning signs of a potentially significant ethics declineahead.”On the positive side, the data revealed historically low levels of misconduct in the Americanworkplace and near record high levels of employees reporting misconduct that they observed. Onthe negative side, however, there was a sharp rise in retaliation against employee whistleblowers,an increase in the percentage of employees who perceived pressure to compromise standards inorder to do their jobs, and near record levels of companies with weak ethical cultures.The economy was identified as one of the factors influencing the shift in trends.In its projection of anticipated economic growth, the report predicted the following: “Historyteaches a bittersweet lesson that goes with the good omens: when economic recovery takes place,some companies lose their focus on ethics, some employees will return to risky behavior, andmisconduct is likely to rise.Indeed, the rise in retaliation, increased pressure to break rules, and the decline in ethics culturessuggests that — at least at the corporate level — some slippage has occurred already.The stage is set for a larger jump in misconduct once a strong economy reduces companies’ethics focus and eases employees’ worry about job security.”The Ethics Resource Center published a supplemental report, “Retaliation: WhenWhistleblowers Become Victims,” as a follow up to related trends identified in the 2011 survey.
  2. 2. Among its findings, the report noted that “not only is retaliation on the rise nationally, it israpidly becoming an issue even at companies with a demonstrated commitment to ethics andintegrity.” Both reports and related information can be found at following are a number of employment-related considerations to assist employers instrengthening the ethical cultures of their organizations:1. Ensure that all levels of management understand the organization’s commitment to ethics,beginning with the senior leadership team. Leaders who consistently act with integrity and leadby example reinforce organizational values and serve as role models for employees.2. Incorporate policies in the employee handbook that establish expectations for ethical conduct.Include a policy on business ethics that covers conflicts of interest, work-related gifts andgratuities, and other related topics. Develop policies that affirm the organization’s compliancewith applicable laws, including equal employment and harassment. Add language to existingpolicies that addresses other aspects of ethical conduct, such as requirements for employees tomaintain accurate records and reports.3. Take steps to prevent retaliation against individuals who exercise legally protected rights, suchas participating in employment investigations or lawsuits. Ensure that supervisors and managersunderstand their responsibilities, including the levels of approval required prior to takingdisciplinary action. Incorporate language prohibiting retaliatory behaviors in appropriatepolicies. Consider drafting a separate anti-retaliation policy to underscore the organization’scommitment to an environment in which conduct of this nature is not tolerated.4. Develop and communicate procedures for reporting misconduct. Anticipate the types ofethical issues which may arise and tailor procedures accordingly. Consider the need to provide away for employees to bypass their immediate supervisors and report violations to other membersof management, such as in situations involving harassment.5. Adopt consistent enforcement policies and practices. Conduct prompt and objectiveinvestigations of potential ethical misconduct. Maintain the integrity of the organization’spolicies by holding all employees accountable for their actions, even if violations involveexecutives and top performers.6. Provide training and communicate information to assist supervision and employees in makingethical decisions. Cover policies and other expectations the organization has in place forcompliance purposes. Challenge individuals to reflect on the results of their decisions, such ashow potential actions will impact others. Create an awareness of the need to guard againstjustifying unethical decisions with excuses or rationalizations, including “everybody is doing it”or “it’s ethical if it’s not illegal.”7. Examine financial incentives and other rewards that target individual and organizationalperformance prior to implementation in order to minimize the potential for unintendedconsequences. Consider whether rewards will motivate individuals to cut corners or take
  3. 3. inappropriate risks. Decide if it is necessary to institute checks and balances or other measures tohold individuals accountable for their behavior.8. Make ethics a part of workplace discussions on a regular basis. For example, seek inputregarding whether certain actions under consideration are the right things to do. Remindemployees to pause, reflect and ask questions to obtain information if they are uncertain aboutthe appropriateness of decisions they are making.BARBARA RICHMAN is a senior consultant with HR Mpact, a Memphis human resourceconsulting firm, She can be reached at (901) 685-9084, (901) 496-0462