HR Leads Business

Mar 13, 2020 | HRCI Team

How HR Leaders can Cultivate an Ethical Workplace

An ethical scandal shakes every aspect of an organization, from customer loyalty to employee retention. And, in a market that offers a wealth of choices for both customers and employees, all it takes is one scandal to destroy a powerful organization. In fact, 56% of consumers are willing to cut ties with an organization they believe is unethical, and 35% of consumers will stop buying a product from an unethical company, even if there’s no substitute for the product on the market. 

So what can you do to support ethical behaviors at your organization? Your greatest tool is organizational culture. “Culture is more than a set of core values on the wall,” says Attracta Lagan, co-principal at Managing Values. “It's a set of consistent behaviors.” 

Culture is the living, breathing embodiment of your organization’s shared values. It’s the collection of choices and actions that make up day-to-day life among your employees. Building an ethical workplace requires tapping into culture at every level of your organization. Here’s how.

Start With Ethical Leadership

Ethical motivations and behaviors have to be modeled by leaders, and employees should recognize ethics at work in their decision-making process. “It's time for leaders to move beyond strict 'economic' rationales to include the ethical framework that influenced their decisions,” Lagan says. “This helps leaders build a culture of correct attitudes and disciplines.”

When leaders put ethics ahead of profit or personal gain, it sends a strong signal down the ranks. The tone at the top of the organization should emphasize the importance of acting ethically, says Steven Mintz, Ethics Sage and professor emeritus at California State Polytechnic University at San Luis Obispo. “It's up to top management to serve as ethical role models so that employees see it's taken seriously,” he says.

Integrate Ethical Training Across the Organization

Understanding ethical concepts is different from putting those concepts into action. Employees in every role need to understand how ethics applies to them. Aligning ethical principles with actual behaviors requires regular training. When employees are faced with ethical dilemmas, Lagan notes, they tend to fall back on their training to guide their choices.

“Broad-based policies have to filter down to the individual employee,” Mintz says. “It works best to have separate training programs or modules for each role — otherwise employees never really know how it relates to their job responsibilities.” The intersection of each position’s daily operations and ethical behavior should be clear and unambiguous.

Embed Ethics in Performance Management

While it’s important that company leaders embrace ethics, the actions of employees at the entry level drive an ethical workplace. Your middle managers and direct supervisors are the most instrumental ethical gatekeepers. “A loud tone at the top can get people to listen — but an effective tone from the middle is needed to get people to act,” Lagan says. 

To ensure that employees prioritize ethical behavior, ethics should be built into performance management. As part of performance management conversations, ask employees to identify an ethical situation they were involved in, Mintz suggests. Have them share how they handled it, who they spoke to, and whether it was resolved satisfactorily. “This enables HR to make sure ethics systems are working as intended,” Mintz points out. And, if employees know their managers are going to ask this question, it helps them stay more aware of their surroundings — and their actions.