For many companies, the issue of ethics is pushed to the back burner while executives focus on more tangible business concerns.
However, there are many reasons that employers should take ethics seriously, from exposure to costly lawsuits to allowing a workplace culture in which no one knows what is and isn’t allowed.
“Ethics and employment practices are interrelated and attention to both should be paid by employers of all sizes,” says Amanda Shults, chief marketing officer for Clark-Theders Insurance Agency. “Employers must understand their exposures and options to manage the risk.”
Smart Business spoke with Shults about how to approach ethics in the workplace and why ethical behavior matters.
How important is the issue of ethics in the workplace?
There is a difference between acts that are unethical and those that are illegal. Employers must determine how those types of acts will be tolerated within the organization.
Many factors must be considered when running an organization: preparing budgets, hiring, creating procedures, etc. Striving for high professional and ethical standards in all business activities and in its stakeholders needs to be at the top of that list.
It is very important for business owners to keep in mind that an emphasis on high ethical standards and the ability to exhibit best practices go hand in hand.
How can employers ensure that employees take ethics seriously?
Employers should take steps to create a workplace environment that promotes a culture of support and respect for all. That includes having written ethics standards or codes of conduct that are read and signed by each employee annually.
Acceptable ethical practices may vary from one person to the next, so employers should give clear instruction of what is expected when an employee discovers unethical behavior, including whom they should contact and how it will be managed. Some employees may feel uncertainty, or even fear, about what to do in the event that they discover unethical behavior within the company. Employers should provide multiple avenues, some anonymous, to report unethical happenings in order to prevent that uncertainty and fear.
Another way to promote the importance of ethical behavior is by providing meaningful and relevant training on the importance of ethics and how to handle ethical dilemmas. It is sad but true that most employees will experience some type of unethical act. Because of this, it is important to offer resources for employees who need advice on how to handle situations that may arise.
What are some strategies to protect a business from unethical behavior?
In an ethical workplace, employers must consider the impact of their employment practices, as lawsuits in this area should be a major concern for employers of all sizes. You can’t manage the risk if you don’t understand your exposures and options.
The three most common employment-related lawsuits today are wrongful termination, discrimination and sexual harassment. Unethical behaviors such as intimidation, harassment, bullying, bribes, theft and Internet usage can lead to these types of lawsuits.
Two solid strategies that go hand in hand to protect your business are comprehensive employment practices that include ethical standards and employment practices liability (EPL) insurance, a policy that defends your company against a suit or that pays the claim should you lose.
Emphasizing ethical behavior through communication and education will allow employers to rely on the skills and abilities of their people to make the right decisions. Although workshops, training, or insurance policies targeting employment issues may seem like another expense, they can ultimately reduce your overall cost of doing business by preventing an allegation, suit or claim.
What can employers do to change the culture if ethical behavior has not been a priority?
Communication is vital in promoting ethical behavior in the workplace. An employer could begin with a simple position statement about the significance of ethical behavior. Once everyone hears that message, the company can begin to look at its current practices and identify areas that need attention or that may already promote ethical behavior.
Next, determine resources that you may have to assist in helping you develop best practices that promote ethical behaviors, both internally and externally. The more people who are engaged in the process, the more likely it is that there will be enthusiasm and appreciation surrounding the efforts to create an ethical environment. In addition, rewarding ethical behavior and punishing unethical acts consistently is recommended for effective ethical practices.
If an employer is comfortable doing so, encourage employees to share ethical dilemmas they encounter, the options and consequences they considered, and the solution they chose. Ask if they are satisfied with their decisions, or whether their choice keeps them up at night.
Finally, lead by example. Actions are stronger than words, and your employees will take note of your behavior.
What results can employers expect from implementing these strategies?
As with the old saying, ‘Birds of a feather, flock together,’ organizations that promote high standards of ethical behavior may experience better recruitment and retention of the best people. Additionally, these changes may strengthen the reputation and brand of the organization, promote open and frequent conversations on ethical issues, support and empower employees, align daily work activities with the overall purpose of the company and ultimately cultivate a more satisfying work environment for all.
Amanda Shults is chief marketing officer at Clark-Theders Insurance Agency Inc. Reach her at (513) 644-1278 or email@example.com.
Do the right thing. This may seem like a simple task, but there are many circumstances in the workplace that challenge employees’ ability to act within their organization’s core mission and values. With a strong ethics program, employees can better grasp expectations and understand their individual role in making the culture of compliance thrive within the organization as a whole.
“The law is the minimum standard,” says Debbie Wheeler, regional compliance director, Tenet Florida. “To help employees make the right decisions that properly reflect the organization, employers need to take a step further by developing, communicating and enforcing clear standards of conduct.”
Wheeler discusses with Smart Business why ethics in the workplace is critical, and offers suggestions for building a strong employer-driven compliance program.
What are the benefits of managing ethics in the workplace?
A strong ethics program aligns the organization and its employees. It provides a solid foundation from which an organization can build a consistent culture of ethical decision-making, transparency and accountability. I always say that the law is the minimum standard; what goes beyond that in our daily decision-making of ‘right’ versus ‘wrong’ is guided by integrity and ethics. Employers can play an important role in helping employees make more ethical decisions in the workplace by routinely communicating and enforcing a standard of conduct. This serves as a guide for employees to understand their organization’s specific expectations for communication, decision-making and actions in their work. When employees feel that their own standards and values align with their employers, they are generally more positive about their work and even more productive.
What is a code of conduct and why is it important?
A code of conduct can be viewed as a guide or reference for employees, as it provides a resource to influence ethical decision-making and behavior. The code of conduct also reaffirms the values of the organization, which often include integrity, transparency, honesty and respect. For example, the code may communicate that employees are expected to: make decisions that support the organization’s values; be responsible for their decisions and doing the right thing; raise issues that are inconsistent with their workplace values; seek appropriate help when the right decision is not clear; and have the tools to effectively solve problems.
It’s important to have a code or standard of conduct, but it’s even more important to enforce it and offer consistent support and resources for employees who may need help with the ethical decision-making process. At Tenet, our Standards of Conduct provide employees with an Ethical Decisions Guide. The guide is a step-by-step algorithm that can assist individuals with making decisions when the right one is not obvious or clear. In addition, Tenet has created the culture of open communication and trust, where employees understand how to go through the proper channels to discuss and report their concerns. One of these channels is the Ethics Action Line (EAL), which is available 24 hours a day. Employees know that they can call this line and anonymously talk to a qualified professional who can help address their problems and offer a suggested process to reach a resolution. Employees are also encouraged to go to their supervisors and express ethical issues without fear of retaliation. We have taken every effort to open communication within all organizational levels while ensuring that employees feel protected. I recommend that organizations promote their code of conduct and ethics program by fostering a high level of trust between employees, management and administration.
What does a highly ethical organization look like?
A highly ethical organization sends out a clear and consistent message of its expectations; employees are aware of their standard or code of conduct and put it into practice each and every day in their work. It’s an organization where everyone understands the culture of transparency and full disclosure. Because of this, employees feel comfortable about speaking up when they perceive a potential ethical dilemma personally, or see a potential problem within the organization. When the entire work force is acting based on shared values and standards, the organization has a more influential force to reach its goals.
What are some ways to train people about an ethics program and ethics in the workplace?
It’s important for every employee to be trained on the organization’s standard or code of conduct at the start of and routinely throughout their employment. I recommend requiring specific ethics training for every new employee upon hire and at least annually thereafter for review. In my experience, it is beneficial for employees to hear real-life examples of ethical dilemmas as well as their resolutions. These examples give employees an opportunity to apply the standards of conduct to real situations and it creates an applied learning experience that will be remembered.
Organizations should also consider designating a qualified point person who is responsible for managing and emphasizing ethics in the workplace, such as a compliance officer. This person must display sound ethical judgment and character as the role model for the organization. He or she should also engage employees and earn their trust in order to influence the entire organization’s culture of compliance. This person is the advocate and resource for all employees as they strive each day to ‘do the right thing.’
Debbie Wheeler is the regional compliance director of Tenet Healthcare Corporation, Florida region.
You probably have read much about the basics of ethics, leadership, stewardship, morality and social responsibility. Accordingly, you have most likely formed a good understanding of them based on your experiences and thoughts.
However, most people do not really take the time to understand the true meaning of values, ethics and morality.
Values are core beliefs or desires that guide or motivate our attitude and actions. What one values drives his or her behavior. Some people value honesty or truthfulness in all situations; others value loyalty to a higher degree in certain situations.
Ethics is the branch of philosophy that theoretically, logically and rationally determines right from wrong, good from bad, moral from immoral and just from unjust actions, conducts and behavior. Some people define ethics simply as doing what you say you will do or walking the talk.
Overall, ethics establishes the rules and standards that govern the moral behavior of individuals and groups. It also distinguishes between right and wrong conducts. It involves honest consideration to underlying motive, to possible potential harm and to congruency with established values and rules.
Applied ethics refers to moral conclusions based on rules, standards, code of ethics and models that help guide decisions. There are many subdivisions in the field of ethics; some of the common ones are descriptive, normative and comparative ethics. Business ethics, more specifically, deals with the creation and application of moral standards in the business environment.
Morals are judgments, standards and rules of good conduct in the society. They guide people toward permissible behavior with regard to basic values.
Consider the following dilemma and how the terms values, ethics and morals apply.
A thief named Zar guarantees that you will receive the agreed upon confidential information from your competitor in five days. Zar is professing a value -- he will deal with you honestly because you, as the customer, are very important to his business. When Zar has delivered the proper documents within the agreed upon time (five days), one can say that Zar has behaved ethically because he was consistent with his professed values.
The following year, you ask Dar, who is a competitor to Zar, to do the same thing. He makes the same promise as Zar by professing the same values. Five days later, Dar only delivers part of the information, which is not totally accurate, and at the same time, blackmails you for more money. Dar says that if does not get more money, he will go to the authorities and the competitor to report this business dealing.
One can say that Dar has behaved unethically because his actions were not consistent with his professed values. And, you can conclude that all three parties involved in stealing insider information have acted immorally as judged by majority of the population.
Overall, values are professed statements of one's beliefs, ethics is delivering on one's professed values and morals are actions of good conduct as judged by the society that enhance the welfare of human beings.
With an understanding of values, ethics and morals while using ethical principles, a business owner or leader can form a framework for effective decision-making with formalized strategies. The willingness to add ethical principles to the decision-making structure indicates a desire to promote fairness, as well as prevent potential ethical problems from occurring.
Corporate ethics programs are part of organizational life, and organizations can use such sessions to further discuss the meaning of values, ethics and morals in the context of their businesses. Organizational codes of ethics should protect individuals and address the moral values of the firm in the decision-making processes.
Corporate codes of ethics are not merely manuals for how to solve problems; they are tools that can empower everyone in the organization to say, "I am sorry, that is against our policy or that would violate our company's code of ethics."
Doing so will increase the personal commitment of employees to their companies because people take pride in the integrity of their corporate culture.
Bahaudin Mujtaba, D.B.A., is an assistant professor and the director of institutional relations, planning and accreditation, for Nova Southeastern University at the School of Business. He is a former senior training specialist and manager of Publix Super Markets. Bahaudin recently co-authored a business ethics textbook published by Pearson Custom Publications. Reach him at (954) 262-5045 or Mujtaba@nova.edu.