Ethics in the Workplace

Results of a recent national study provide solid data that leaders who want to establish a
practice of positive workplace ethics within their organizations should develop written
ethics standards, provide ethics training, and ensure resources are
available for employees in need of ethics advice.

By Joshua Joseph, Lee Wan Veer, and Ann McFadden

Ethics Association executives typically want the answers to two key questions about
ethics in their association offices: “How do workplace ethics apply to the practical goals
of my organization and the work of my employees?” and “Can you show me
reliable data that support your assertions?” In this article, we address those questions as
we present findings from the Ethics Resource Center’s 2000 National Business Ethics
Survey (2000 NBES) - a rigorous telephone survey of 1,500 U.S. employees - and
discuss what these findings mean for association executives.

One caveat first - we focus on issues relevant to an association’s internal staff and to
ethics programs designed for them, not for association members whose relationships with
their organization are often very different from those of staff. In the 2000 NBES, we
gathered information on three key elements of an ethics program: written ethics
standards, ethics training,and means for employees to get ethics advice (e.g., a telephone
help line or ethics office).

Ethics Trends
Studies show that formal ethics programs are becoming increasingly common in U.S.
organizations across the nonprofit, for-profit, and government sectors. Compared to the
1994 survey, the 2000 NBES finds dramatic increases in the percentage of employees
who report that their organizations have ethics programs. In the nonprofit sector
specifically, the 2000 NBES finds that nearly 90 percent of employees say their
organizations have written standards of ethical conduct. In addition, 65 percent say their
organizations provide some form of training about these standards, and more than 40
percent say a dedicated telephone line or office is available for ethics advice. Not
surprisingly, the percentages are consistently higher among larger nonprofits - those with
more than 500 employees - as compared to smaller ones.

These percentages suggest that many nonprofit executives are seeing value in actively
promoting ethics within their organizations. The list of potential benefits linked to an
effective ethics program includes the following:

 Recruiting and retaining top-quality people;

 Fostering a more satisfying and productive working environment;
 Building and sustaining your association’s reputation within the communities in
which you operate;
 Maintaining the trust of members to ensure continued self-regulation;

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  Legitimizing open discussion of ethical issues;
 Providing ethical guidance and resources for employees prior to making difficult
decisions; and
 Aligning the work efforts of staff with the association’s broader mission and
vision.

Like most leaders, association executives would likely agree that high ethical standards
are important in their organizations. But what does this mean in practice? What are the
basic functions of an ethics program, and how can these programs lead to the kinds of
benefits described above?

The Function of an Ethics Program

Essentially, ethics programs are meant to affect how people think about and address
ethical issues that arise on the job. Gretchen Winter, vice president of business practices
at Baxter International, puts it this way: By providing employees with ethics standards,
training, and resources to get advice, organizations seek to create a work environment
where (1) it’s okay for employees to acknowledge that they have an ethical dilemma, and
(2) resources are readily available to guide employees in working through such dilemmas
before making decisions.

“It’s fine to have a structure that tells people they need to report it when someone does
something wrong,” says Winter. “But that’s not the main reason to have an ethics
program.” Winter believes that ethical guidelines, in the form of policies and practices,
“give employees the basic tools they need to take informed risks on behalf of their
organizations.” Her language is intentional. At a time when many organizations are
embracing “risk-taking,” she points out that all executives should view ethics as more
than a way to simply reduce risks. Rather, ethical guidelines benefit organizations by
steering employees away from ethical risk-taking and into more productive and
appropriate kinds of risk-taking.

Winter notes that busy association executives have a choice: “They can either have
employees come to them with every ethical decision, or they can give employees a
framework to make many of these decisions themselves.” Executives who can trust their
employees to do the latter will have more time and energy for other work.

“Ethics programs cannot prevent all misconduct from occurring,” says Ken Johnson, an
ethics consultant and colleague at the Ethics Resource Center. “Even in the best-run and
most ethical organizations, there are always a few employees who willfully break the
rules.”

In such cases, there is no substitute for clear procedures and sanctions. But the real
function of an ethics program “is to allow basically good people to do the right thing and
succeed.” According to Johnson, this is the essence of a healthy work environment.
People need to be sensitive to ethical issues on the job, but they also must trust their
organizations enough to raise them.

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Encouraging Findings

The 2000 NBES finds much that is encouraging for organizations that are putting their
efforts into workplace ethics. For example, employees have high expectations for ethics
within their organizations. More than nine in 10 respondents say that they “expect their
organizations to do what is right, not just what is profitable.” This finding suggests that
most employees are not so cynical about ethics at work. This should be encouraging news
for all executives pursuing ethics initiatives. Most recognize that the long-term success of
any program requires the active support of employees.

Findings from the NBES also show that both formal ethics programs and informal ethics
practices are related to key outcomes. Employees who work in organizations with ethics
programs, who see their leaders and supervisors modeling ethical behavior, and who see
values such as honesty, respect, and trust applied “frequently” at work generally report
more positive experiences regarding a range of ethics outcomes that include the
following:

 Less pressure on employees to compromise ethics standards;

 Less observed misconduct at work;
 Greater willingness to report misconduct;
 Greater satisfaction with their organization’s response to misconduct they report;
 Greater overall satisfaction with their organizations; and
 Greater likelihood of “feeling valued” by their organizations.

These findings tell executives that a more positive ethical environment is strongly linked
to a focus on ethics programs, to ethical modeling by leaders and supervisors, and to the
“frequent” practice of key values such as honesty, respect, and trust.

Importantly for association executives, the relationships described above are even
stronger among employees in transitioning organizations - those that have undergone a
merger, acquisition, or restructuring within the last two years. The findings suggest that
organizations and employees may draw the greatest benefits of ethics programs when
times are toughest. However, this also means that the foundations for an ethics program
need to be laid in good economic times when, ironically, some of the most valuable
benefits of these programs may be least apparent.

Earlier, we highlighted a list of potential benefits of ethics programs. Now we focus on

two particular areas of interest to association executives: attracting and keeping good
people, and building and sustaining your association’s reputation. It may come as a
surprise that some organizations are able to use their ethics programs as a recruiting tool,
but it shouldn’t. In many cases, the top-quality people you want to hire are those who are
looking for more than a job - they want to feel good about their work and about the
integrity of the organization they work for. In a recent conversation, Winter relayed a
story about a strong candidate that her company successfully recruited and hired. At the
start of a day of interviews, the candidate’s would-be manager took the time to talk in
detail about the company’s business practices. When Winter met with the employee

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several weeks after the hiring, he told her, “I didn’t need to meet another person at Baxter
that day. I was hooked in the first 20 minutes.” In a tight, competitive job market,
association executives shouldn’t underestimate the potential impact of a good ethics
program on attracting high-quality candidates.

The good reputation that an association maintains within its key communities is an
immeasurable asset that executives naturally want to protect. Winter notes that a strong
reputation is, in many ways, a natural outcome of a strong commitment to ethics at all
organizational levels. Executives generally recognize that employees can either enhance
or diminish that reputation through their daily decisions and interactions. They may not
fully appreciate how an ethics program can give employees the tools to enhance that
reputation.

Findings of Concern

Association leaders should pay particular attention to findings in the 2000 NBES that
raise serious concerns. One consistent finding is that senior and middle managers in all
types of organizations are more positive about workplace ethics than are lower-level
employees. This suggests that executives may underestimate the importance of specific
ethics issues and concerns facing employees. As a result, they also may fail to address
these issues adequately within their organizations’ ethics programs. Thus, it is important
for executives to include input from employees at lower levels in the development of
ethics programs and to continue to solicit their input and feedback on a regular basis.

Another finding from the 2000 NBES strongly links pressures to compromise an
organization’s ethics standards with employee observations of misconduct. Among
employees who did not feel pressured, about one in four observed misconduct at work
within the last year. In contrast, among employees who did feel pressure to compromise
an organization’s ethics standards, nearly three in four observed misconduct during the
same period. This link suggests that ethical pressure on employees can be an important
warning sign of potential or ongoing misconduct in your organization. As part of broader
discussions or surveys relating to workplace ethics, executives may want to ask
employees about perceived pressures to compromise ethics standards.

Finally, the 2000 NBES finds that more than two in five employees who observe
misconduct at work say they did not report it. There are many reasons why employees
may decide not to raise ethical concerns or report misconduct they observe at work.
During the last decade, studies have consistently shown that one of the main reasons is
employees’ fear of retaliation for speaking up. Employees often know what is right but
believe they will be penalized for reporting it. This is not news to many managers - they
already see the value of reducing such fears in the workplace. But to take proper action,
managers should be aware that employees are as likely to fear retaliation from coworkers
as they are from management.

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The 2000 NBES finds that one in three employees believe that coworkers will see them
as “snitches” if they report misconduct. This is roughly the same proportion of employees
who believe that management will see them as “troublemakers” for reporting ethical
concerns. A key takeaway for executives is that they need to address and eliminate
retaliation systemically, at the management and peer group levels throughout their
organizations.

Returning to our initial two questions, there are a variety of practical reasons for
association executives to focus on workplace ethics and reliable data that support their
efforts. The survey findings consistently link ethics programs and practices to more
positive organizational outcomes (e.g., less pressure to compromise organizational
standards and less frequently observed misconduct) and greater employee satisfaction.
These data have direct implications for sustaining a productive work environment,
attracting and keeping good employees, and maintaining your association’s reputation
among key stakeholders.

In addition, findings from the 2000 NBES identify ethics areas where organizations
commonly encounter problems and suggest preventative actions. It would be naive to
suggest that an emphasis on ethics will improve your work environment and solve your
association’s problems overnight. But in many cases, a thoughtful and organized effort to
target key ethics issues sends an important message. It tells employees that your
association is heading in a positive direction, one that is positive for them as individuals.

Defining “Ethics”

Organizational ethics: Sets of formal and informal standards of conduct that people use to
guide their behavior at work These standards are partly based on core values such as
honesty, respect, and trust, but they also can be learned directly from the actions of
others. For example, what people see their organizational leaders, managers, and
coworkers do on the job can influence their own views of what is acceptable or
unacceptable behavior.

Ethics program: The formal policies, practices, and processes that organizations develop
to deal with their own ethical issues.

Tips on Establishing an Ethics Program

Establishing an ethics program is not an exact science. As with the development of other
organizational programs, it involves the input, interaction, cooperation, decision-making,
and ongoing commitment of many people. Proper planning isimportant, but the
effectiveness of any association’s approach also depends on characteristics that are
unique to its culture, the leadership style of the executive director and executive team, the
association’s relationship with its board of directors, and so on. In addition, discussion of
workplace ethics can raise sensitive issues. Some people in your organization mayhave
difficulty or be uncomfortable discussing these issues. Given these caveats, a valuable

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exercise for association executives is to first ask, consider, and answer seven key
questions:

1. Why might good people in this organization do unethical things?

2. What are our organization’s values?
3. Have we adequately articulated these values internally and externally?
4. Does our organization have written ethics policies, procedures, or structures?
5. To whom is our organization accountable?
6. What do we mean by “success”?
7. Does the leadership of our organization support the idea of an ethical workplace?