Despite taking all the right steps for creating an ethical environment – providing ethics training, developing a code of conduct, implementing a reporting hotline, etc. – organizations are still not immune to inappropriate behavior. According to the most recent National Business Ethics Survey, approximately 41 percent of workers witnessed some form of unethical conduct within the previous 12 months.
While many believe that it’s only a few “bad apples” who commit ethical breaches, the reality is that many violations occur due to lapses in judgment by honest individuals who end up making some very poor decisions. As former federal prosecutor Serina Vash told the Harvard Business Review, “When I first began prosecuting corruption, I expected to walk into rooms and find the vilest people. I was shocked to find ordinarily good people I could well have had coffee with that morning. And they were still good people who’d made terrible choices.”
So why do seemingly honest, hard-working people who started out with the best of intentions commit unethical, or in some cases, illegal acts? What is it that leads them astray? The truth is that there is no one simple reason good employees turn bad – it is often the result of a combination of various cultural and personal factors.
Organizations can set themselves up for an ethical disaster by unwittingly creating an environment where employees ultimately feel compelled to make unethical choices. This can occur in several ways:
- Pressure to achieve unrealistic objectives – The pressure to meet exceedingly high expectations, especially in numbers-driven functions such as sales and finance, can cause employees to cut corners or make compromising choices. Employees who feel they have no chance of hitting a target may attempt to falsify documents or lie about their progress, often due to the fear of being fired.
- Perception of unfair treatment – Good employees who feel that their efforts are not being adequately recognized or rewarded by the organization may resort to unethical behavior to retaliate for the slight, or to attain what they believe is rightly theirs. For example, an employee who was passed over for a promotion may decide to cheat on expense reports or take home company property. The sense of unfairness can permeate the organization – several disgruntled employees may band together to collude against the company on a wide scale.
- Lack of focus on ethics and compliance – There are still many organizations that do not make ethics and compliance a part of the routine conversation – they only address it after a serious event or ethical crisis occurs. By not making ethics a primary component of the everyday work environment, organizations are, in effect, encouraging unethical behavior – even the most honest employees may receive a message that “anything goes.” In addition, a lack of attention to ethics may result in employees not being able to recognize the difference between acceptable and unacceptable behavior.
- Misguided loyalty – Sometimes, employees who are doing something wrong may believe they are doing the right thing for their company. They may think if they fail to act in an unethical manner, they are being disloyal to the boss or the organization. Misplaced loyalty can also occur when employees do not speak up when witnessing misconduct because they do not want to get a friend into trouble.
- Poor example from leadership – Leadership is responsible for setting the ethical tone in any organization. If top executives fail to “do the right thing” when making key decisions or handling ethical dilemmas, it sends the wrong signal to the entire organization and opens the door for inappropriate behavior.
Sometimes, it’s an individual’s personal situation that leads to misconduct. Research points to three behaviors that can make good people make unethical choices:
- Need – An employee may elect to take a bribe, cheat on an expense report or embezzle company funds to fulfill a major financial need like paying off debts or covering a medical bill. There can also be a psychological need such as a lust for the power that comes with money or a desire to own luxury items that would otherwise be unaffordable.
- Opportunity – Even good people are not always able to resist an opportunity to take advantage of a situation. We often hear about trusted employees in smaller organizations whose actions undergo little or no scrutiny – and eventually use this lack of oversight to steal funds or engage in other forms of unethical behavior to further their own interests.
- Rationalization – Many who commit unethical acts can justify their behavior in their own minds. For example, an employee who skims from the company’s accounts may convince himself that he is doing no harm because he tends to replace the missing funds at some point.
Organization Solutions for Preventing Unethical Behavior
Organizations can take several steps to limit the likelihood of good employees behaving inappropriately:
- Train employees to recognize the impact that misconduct has on their coworkers and the entire organization. Cite specific examples that link the behavior to the harm it causes.
- Ensure that all managers weigh the ethical consequences of their decisions – employees are quick to notice hypocrisy, and the failure to “walk the walk” will send a message that there is nothing wrong with unethical behavior.
- Develop and enforce a strong code of conduct that clearly defines what constitutes acceptable and inappropriate behavior.
- Focus on the positive aspects of ethical conduct – consider developing an incentive system that rewards employees who exhibit exemplary behavior.
Recognizing the Warning Signs of Unethical Behavior
Management can play a critical role in detecting and preventing the personal behaviors that can result in misconduct:
- Watching for need – Remain vigilant of employees receiving correspondence or calls from creditors at work or making extravagant lifestyle changes that don’t reflect their present salaries.
- Limiting opportunity – Minimize your employees’ opportunities to engage in unethical behavior by including more checks and balances in your operating processes and ramping up your monitoring efforts. The opportunity factor decreases dramatically when individuals know their actions are being watched.
- Providing “rationalization education” – Employees who rationalize unethical conduct typically are in denial regarding their actions. Provide training that teaches individuals to recognize rationalization and understand its significance.
Attempting to recognize and address the environmental and individual factors that influence employees to make poor choices can go a long way toward helping you establish and maintain an ethical culture in your organization.