Ethical conduct is a topic getting a lot of attention, especially concerning public companies. Some situations involve employees misrepresenting their educational backgrounds and accomplishments or management teams communicating inaccurate financial statements.

During an online poll in May 2003, The Business Research Lab asked employees to rate the ethics of their employers. The results might surprise you; approximately 30% of the respondents indicate that their employers have some level of unethical behavior. Unethical conduct is boundless. It can manifest itself in your employees, vendors, and customers. How well do you think your organization would fare in this poll? What are some of the steps you should consider to establish an ethical atmosphere and to assess how well you are doing?

The challenge in developing value and principle statements is to provide adequate examples. That way, management and employees are applying the intent of the behavior or principle fairly and equitably.

Are My Ethics Your Ethics?

A common misconception is that all employees understand how to define ethical behavior. Cultural and environmental differences can affect how people view their own or others behaviors or actions. “Everyone knows that taking home company supplies is unethical,” says Sally, a manager in a local company. Let’s test her statement. Sally’s administrative assistant, Jan, listens to her boss talk for at least a half an hour on the phone each day conducting personal business. Once in awhile, Jan takes home company supplies since she works from home occasionally. Is either of these two individuals exhibiting unethical behavior?

On the surface, peers may see Jan as “stealing” company property. In Jan’s mind, she is safeguarding against using her personal resources for company business. To the average employee working a regular workday, Sally is receiving pay for time not worked. If you dig deeper into Sally’s circumstances, she logs excessive overtime on a daily basis. In her opinion, there are 24 hours in a day; as long as she is producing results, she can interchange her work and personal time. So who’s right?

Companies Need To Define Ethical Behavior

There are a number of ways in which a company can set the standard for ethics. Some companies utilize an employee handbook or develop standard operating procedures (SOPs). Both of these approaches clearly state acceptable behaviors or actions in specific situations. Companies can soften the approach or content by providing “guidelines” which allow managers greater latitude in administering the policy or procedure.

Other companies invest significant time in developing a set of values or principles. These values or principles represent the yardstick for determining if an employee’s behaviors or actions are in alignment with the organization. Value and principle statements are not situation specific, so they apply to a broader range of possibilities. The challenge in developing these statements is to provide adequate examples so that management and employees are applying the intent of the behavior or principle fairly and equitably.

Put Your Organization to the Test

We research our products; we ask our customers for feedback, yet we don’t always provide an internal or external vehicle for our employees to blow the whistle on unethical behavior. Here are some ways to consider tapping into your employees’ thoughts:

Create an Ethics Hotline

Establish a phone hotline where employees can leave their comments anonymously with a trusted member of management, human resources or an outside firm. It is important to conduct a timely investigation of all calls to determine if immediate action is necessary. Establish measurements for the ethics hotline usage and report statistics on the number of calls and actions resulting from this process back to your organization.

Respect confidentiality of the caller by holding back specific information about each call.

Conduct an Organizational Climate Survey

Traditional employee surveys often focus on compensation and benefit satisfaction. Organizational climate surveys take it a step further and incorporate questions on ethics, leadership style, and work environment. Is there value on gaining insight and feedback from your employees that either reinforces your efforts or provides an early warning signal for trouble?

Consider a Measured Approach

While companies may forge ahead with enthusiasm and attempt to open lines of communication with their employees, often the level of trust is suboptimal. If employees are seeing unethical behavior go unreported or unnoticed, chances are they will be reluctant to have candid conversations. Consider receiving expert advice on the design, collection, and implementation of potentially sensitive information in the event you receive some unexpected results.

Published with Business Strategies Magazine, March 2004.