First, of course, there are the negative
consequences of unethical conduct to consider. Many corporate leaders
have been prosecuted and incarcerated for their unethical behavior.
Furthermore, federal laws have set strict guidelines for required
conduct in areas where unethical behavior is particularly risky—for
example, in financial reporting. The Sarbanes-Oxley Act
of 2002 (SOX) and the Federal Sentencing Guidelines have
placed strict legal requirements on covered employers.
But there are also positive rewards for engaging in ethical
conduct. Ethical conduct is good for business and is the basis for
long-term success in any organization. It promotes a strong public
image for the organization because people respect an organization
that makes ethical choices. Customers like doing business with an
organization they can trust.
Ethical conduct also makes the best use of resources.
Money, time, and effort are put into productive activities rather
than diverted for questionable purposes or personal gain. Ethical
conduct on the part of all employees also helps maintain quality and
productivity. When employees follow ethical standards, they do not
cut corners or shortchange the company or its customers.
Ethical behavior assists the organization to comply with
laws and regulations, because what is ethical is also legal. Last,
ethical conduct boosts morale and promotes teamwork. When employees
can trust one another and management, they can work together more
harmoniously and effectively.
Making ethical choices on the job, even for the ethically
minded, is not always easy. Many ethical problems fall in a “gray
area,” where what is right or wrong is not obvious. There may be many
reasons that drive people to cross the line and act unethically. Here
are a few examples:
• Conflicts of interest force employees to choose between
self-interest and the interests of coworkers, the department, or the
organization. Sometimes the choice is between the interests of a customer
and the interests of the organization, or between the community and
• Sometimes it is hard to draw a line between personal
and business relationships. Employees forge friendships with coworkers,
yet may have to make professional choices that do not seem very friendly.
For example, if a coworker does something wrong, an employee may have
to report the situation. If a customer with whom an employee has a
good relationship tries to use the relationship in some unethical
way, the employee is in a difficult situation.
• Massaging the truth, telling “little white lies,” and
failing to tell the whole story can all have an effect on the outcome
of a situation.
• Confidential information is exactly that—confidential
and privileged. Ethically, employees cannot use any confidential business
information for self-gain or pass along such information to benefit
friends or family, whether that information is about the organization
or its customers.
• Laws and regulations are another problem area. There
are many confusing laws. Even if an employee understands the law,
he or she may not agree with it. It can be tempting to cut corners
or forget about the details.
• Pressure to succeed, pressure to get ahead, pressure
to meet deadlines and expectations, and pressure from coworkers, bosses,
customers, or vendors to engage in unethical activities or at least
look the other way can drive people to do things they would not normally
• Some people make unethical choices because they are not
really sure what is the right thing to do. Ethical problems are often
complicated, and the proper choice may be far from obvious.
• Self interest, personal gain, ambition, and downright
greed are at the bottom of a lot of unethical activity in business.
Also, there are those who simply never learned or do not care about
ethical values. Because such individuals have no personal ethical
values, they do not have any basis for understanding or applying ethical
standards in business.
• Misguided loyalty can cause employees to lie because
they think that, in doing so, they are being loyal to the organization
or to their bosses.
Foundations of Ethical Conduct. Ethics policies and codes are built on basic ethical values that
apply to any job. These values include the following:
• Integrity. Being honest, keeping
• Loyalty. Supporting the organization’s
mission and policies, protecting privileged information, and cooperating
with others in the organization to promote common goals.
• Respect. Treating others professionally,
with courtesy and tolerance.
• Accountability. Taking responsibility
for one's actions and requiring the same of coworkers.
• Fairness. Acting consistently and
impartially at all times.
• Responsibility. Obeying laws and
regulations and acting appropriately toward the community where business
takes place and the public in general.
Effective ethics programs consist of many moving parts.
However, the basic elements of an effective ethics program are:
• An ethics policy, including written standards of conduct;
• An ethics training program;
• Reliable resources for ethics consultation and advice;
• A confidential and effective system for reporting ethics
• An established policy and practice of investigating and
disciplining or discharging employees found guilty of ethical violations.
Employees must be highly familiar with each element of
the ethics program and feel comfortable using the various resources
available to them. These elements are discussed in more detail in
the following sections.
Strong ethics policies cover five elements: responsibility,
respect, fairness, honesty, and compassion. A company’s code of ethics
should define these elements and set the appropriate behavioral standard.
Ethics policies often vary by company as different organizations have
different values and concerns.
In order to form a comprehensive and effective policy,
consider enlisting a policy committee and involve management. Any
list of prohibited behaviors should be clearly identified as not all-inclusive.
Don't be too specific. Other policies that govern ethical behavior
in the workplace are workplace romance, e-mail appropriateness, Internet
use, confidentiality, security, and harassment.
Issues to consider. Most employers don't have to look very far to discover potential
areas of unethical activity. It's a good idea to sit down with the
members of an organization's policy committee and ask them to compile
a list of what they regard as "unethical" in their particular areas.
The lists should be combined with similar examples grouped into broader
categories of forbidden activities. Remember:
• The goal of any policy on business ethics should be to
make supervisors (and through them, employees) aware of the responsibility
they must all share for promoting and protecting the company's best
interests. Many times employees engage in questionable activities
without even thinking that they might be endangering the company's
profits or reputation. But once an organization has established a
formal policy statement outlining exactly what is considered unethical
behavior and what steps will be taken, there is no excuse for violations.
• Consider conducting an annual review of the policy. A
policy may need to be revised to reflect changes in the company. An
organization also may want to periodically appoint a group of employees
to rewrite the policy. That process may serve as a reminder of the
Sample ethics policies are available on
HR.BLR.com under the Timesavers
tab. One such policy is available here
Controls. When working toward an ethical workplace,
HR can help set the example by establishing an honest, ethical HR
department. The following is a list of some of the controls that may
be implemented to ensure the accuracy of HR operations:
• Ensuring security of payroll systems, computer security
• Verification of payroll records, balances
• Proper processes for verifying paid employees, identities
• Ensuring proper timekeeping
• Proper, accurate systems for recording and reporting
pension balances, expenses
• Controls to oversee third-party outsourced services,
ensure proper, consistent oversight
• Systems to ensure that records of employee contributions
and stock options are accurate
• Processes to ensure control and accuracy of workers’
compensation claims and to decrease or limit losses
• Establishing adequate screening procedures to eliminate
• Proper, legal procedures for discipline and termination
of employees to comply with the law
• Establishing effective and well-publicized procedures
for receiving and addressing whistleblower claims (ethics and safety),
reports of harassment, and other complaints
• Establishing proper controls to protect privacy and ensure
the confidentiality of employee's individual information
(Source: Robert Yanak, Jefferson Wells International)