WORKPLACE: The Death of Business Ethics?

Webster’s New World Dictionary defines ethics as “the system or code of morals of a particular philosopher, religion, group, profession, etc.” Does your company have such a “system” or “code of morals?” The answer is “yes,” even without a formal written policy or code of conduct. The system is defined by how your company puts its values into practice and this (no surprise) has to do with the leaders in the organization — in other words, you.

In my June column I wrote about trust. Trust and ethics go hand in hand. Often, employers ask me to conduct an employee opinion survey inside their organization. “We want to measure trust,” or “We want to know if employees have organizational trust,” they tell me. Measure the degree to which employees trust the organization? “Impossible,” I tell them. Why? Because the concept of institutional trust is an oxymoron. We don’t trust institutions; we don’t trust policies or processes; we trust people. If you want to measure trust in an organization, ask about the behavior of its leaders.

Business ethics, like trust, is first and foremost about people. Unfortunately, many people, prior to entering the work-force, lack a strong foundation of values, morals and ethical behavior. Don’t believe me? Just ask a young person how common cheating in school is and what the school is doing about it. Better yet, debate the notion of right and wrong with a colleague. Regardless of the topic, the difference, for many, is not clear. If this is true, then it’s largely up to employers to define right and wrong behavior in the workplace and to enforce the standards.

A recent Wall Street Journal article highlighted the latest outcome of the ethical dilemma facing corporate America: job seekers and recruits probing into the ethical standards and practices of potential employers. I can’t say I blame these people. When Barron’s defines CEO as “Chief Embezzlement Officer” and CFO as “Corporate Fraud Officer,” candidates (and current employees) have reason to question the ethical practices of would-be employers. After all, most people, ethical or not, want a stable position, a guaranteed paycheck and to work for a company they can be proud of. Are you prepared to demonstrate your commitment to ethical behavior?

ETHICS TO THE TEST. Find out how your company measures up by analyzing responses to these questions:
• Do you have a comprehensive “Code of Conduct” or “Code of Ethics” published in your employee handbook? On your Web site?
• Do you screen potential new hires based on your business values, ethics and integrity?
• Is integrity emphasized in orientation and training classes?
• Do you have an employee hotline for employees to anonymously report potential ethical, immoral, illegal or fraudulent behavior? (Don’t confuse ethics with legal issues. What is legal is often unethical.)
• Do people with integrity and positive moral values advance in your company?
• Do you measure performance based on how people perform against your values?
• Are employees rewarded for ethical behavior?
• Is your bonus or compensation plan based in part on ethical conduct?
• Do your systems and processes (billing, financial and others) inadvertently encourage unethical behavior or do they conflict with your values? (For example, do you preach about customer service, but then demand that employees “make the numbers,” forcing them to spend as little time with customers as possible?)

REVAMP YOUR POLICY. If you haven’t reviewed or updated your company policy on ethics, now is the time. Some handbooks spell out their pledge to ethical business practices in a Code of Conduct. Regardless of what you call it, at a minimum, make sure your policy contains these components:
• A statement about the company’s values and commitment to integrity, with a strong warning that the company will not tolerate lying, cheating or stealing.
• The company’s position on maintaining or engaging in outside business or financial activities that conflict with the interests of the organization.
• A requirement that employees and members of the employee’s immediate family (be sure to define this!) not give or accept gifts, favors, entertainment, special accommodations or gratuities worth more than a token value ($50) to or from anyone with whom the employee conducts company business.
• A statement that the company will not tolerate disparaging remarks about the organization, its employees, products, services or customers.
• A requirement that employees conduct their personal and non-company affairs in such a fashion that their duties and responsibilities to the company are not jeopardized and ethical and/or legal questions do not arise with respect to their association or work with the company.
• A prohibition from giving or receiving anything that could be construed as a bribe, kickback, or other illegal or unethical payment.
• A requirement for employees to report any possible violations of ethical business practices to a manager or the owner of the company.

Other activities that relate to ethical conduct such as moonlighting, soliciting while at work and non-compete requirements should be spelled out in separate policies or documents.

BE PREPARED. One thing is certain — if a potential new hire questions your business values, philosophy or practices and you’re uncomfortable with the questions, don’t be surprised if the candidate moves on. An unwillingness to openly share information about your company’s ethical practices and policies signals shortcomings. These days, it’s a two-way street; you demand integrity from your employees and they demand the same from you. If only we could define “integrity”...

The author is president of Seawright & Associates Inc., Winter Park, Fla. She can be contacted at jseawright@pctonline.com or 407/645-2433.