Positioning Ethics in the Workplace: Pull versus Push

Submitted by Elaine Cohen

By Elaine Cohen

How do you get employees to behave ethically at all times? With so many aspects, approaches and so many different people to align against a common behavioral standard, it's not an easy nut to crack.

The workplace is a complex dynamic, with pressures and stresses, often pulling people in different directions between personal interest and corporate interest, and several other interests in between.

Code of Ethics Not Enough To Prevent Misconduct?

The fact that a company has published a Code of Ethics that forbids, finds unacceptable, prohibits or expressly rejects certain types of behaviors is apparently not enough to prevent unethical behavior in the workplace. You only need to take a fleeting look at the 2011 National Business Ethics Survey, to see that about 45 percent of U.S. workers (that's over 60 million employees) observed ethical misconduct in the workplace and 65 percent of them reported it.

Of those who reported misconduct, 22 percent experienced retaliation for doing so.

Misconduct includes behaviors such as “lying to employees,” “stealing,” “sexual harassment,” “discrimination,” “conflicts of interest,” “insider trading,” “falsifying expense reports,” “software piracy” and more – all the negative examples of behavior that Codes of Ethics so eloquently outlaw.

Misconduct Increasing, Employees Say

This correlates with the fact that the “percentage of employees who say their business has a weak ethics culture increased to 42 percent in 2011, a seven percentage point surge and the highest level since 2000.”  Similarly, employees' perception of their supervisors and company executives has declined in recent years, with 34 percent of employees simply not able to trust their superiors.

At the same time, companies are spending more money, time and effort in developing and embedding Codes of Ethics, Codes of Conduct and Codes of Business Principles. A cursory glance at any Sustainability Report will show you the importance attributed to embedding ethics, and the range of tools, processes, training, dialogue, communications and management resources that companies have in place to ensure awareness, adherence and active protection and advancement of an ethical culture. 

Running potentially to more than a million dollars per year for large corporations (very few large companies do not have a full time Ethics and Compliance Officer these days, and some companies have entire teams), not counting the value of management and employee time spent in training and workshops, ethics is big bucks. And it never stops. You have to keep on embedding and keeping it alive.

Employees come and go, but ethics training stays on the agenda.

But, it's not working. Almost half of the U.S. workforce says unethical behavior is still prevalent and many of them are penalized for admitting it.

New Study Points To Positioning

Against this backdrop, LRN appears to know what's going wrong: it’s about the way you position ethics programs in companies. Employees are not responding well to being told to adhere to rules, or compliance.

LRN Corporation specializes in supporting companies in developing and embedding ethics programs for “principled performance,” and also conducts annual research into what makes ethics programs effective.

The latest piece of research conducted by the company is its sixth annual Ethics & Compliance Leadership Survey Report 2013. Based on an analysis of 180 companies internationally of all sizes and types, of which almost half have more than 15,000 employees, most of the respondents are Chief Ethics and Compliance Officers, general counsel, or senior members of their staffs.

The research analyzes responses to a range of questions about ethical practices and embedding effectiveness, and develops a correlation between the two.

The LRN report indicates a shift from prior years:

“...Size and per-capita cost of compliance programs bear little weight on overall program effectiveness. The study finds that per-capita spending on ethics and compliance programs is far less correlated to overall program effectiveness than generally thought.”

Ethical Behavior: Motivating Employees Through Values

This suggests that ethical behavior is more the outcome of motivating employees through values and the positive power of inspiration and transformation to help them understand and engage, rather than throwing the rule book at them.

It's about pull, not push.

In the LRN survey, 68 percent of respondents indicated that their ethics program is based on ensuring alignment with core values, while 32 percent indicated that the main objective is ensuring compliance with rules and regulations. However, even where there is a pull toward values, rather than a push toward compliance, an ethics program must be implemented in a structured way.

Five Keys To Effectiveness In Ethics Compliance

According to LRN, the key to effectiveness includes:

1. the existence of clarity in the orientation and purpose of the program and of the Code of Conduct;
2. a process for formally evaluating behavior;
3. use of blended learning and focused campaigns, and
4. measuring organizational impact.

Apparently, (5) “more spending on education and less on consultants” also helps.

Interestingly, "having ethical bosses" is not noted as a key effectiveness driver in the research, though the third major obstacle to ethics program effectiveness is cited as lack of support by middle management.

Inspire, Rather Than Require

The solution? LRN's report suggests today's focus should be on “being deliberate and intentional about culture and behaviors and using purpose and values to inspire and extend rather than using rules to coerce and constrain.”

Intuitively, it makes sense to pull rather than push. Inspire rather than require. This is immensely challenging and demands an ever-present momentum and a commitment that starts with the most senior leadership and cascades through the ranks at all levels, including disengaged middle management.

In a year in which the 2013 Edelman Trust Barometer points to a “crisis in leadership” however, with CEOs remaining the least trusted representatives of business, maybe it's not quite the time to throw away the rule-book.