Values-based work
9
Oct 2015
APS Human Capital Matters: Values-based work
October, 2015, Issue 9
Editor’s Note to Readers
Welcome to the ninth edition of Human Capital Matters (HCM) for 2015—the digest for leaders and
practitioners with an interest in human capital and organisational capability. Human Capital Matters
seeks to provide APS leaders and practitioners with easy access to the issues of contemporary
importance in public and private sector human capital and organisational capability. It has been
designed to provide interested readers with a monthly guide to the national and international ideas
that are shaping human capital thinking and practice. The inclusion of articles is aimed at stimulating
creative and innovative thinking and does not in any way imply that the Australian Public Service
Commission endorses service providers or policies.
Thank you to those who took the time to provide feedback on earlier editions of Human Capital
Matters. Comments, suggestions or questions regarding this publication are always welcome and
should be addressed to: humancapitalmatters@apsc.gov.au. Readers can also subscribe to the
mailing list through this email address.
This edition focuses on values-based work. Values have been defined as ‘an enduring belief that
a specific mode of conduct or end-state of existence is personally or socially preferable to an
opposite or converse mode of conduct or end-state ...’ (Rokeach, 1973, p.5). That is, our values—
internalised and long-held beliefs—are the fundamental drivers for our behaviour. In the workplace a
values driven culture might be considered as the way things are done at work based on employees’
commitment to a set of values.
Values-based work can be conceived as one approach to creating ethical ‘norms’ for organisational
behaviour and outcomes. It is usually posed in contrast to a standards-based work climate which is
dictated more by the need for compliance to external rules, regulations and laws. Values-based
approaches are guided by internalised values which aim to encourage responsible, internally-driven
and self-managed conduct. It is likely that all organisations exist with a mix of values-based or
ethical considerations and economic and standards-based considerations, albeit in various
combinations.
This edition of Human Capital Matters will attempt to trace the rationale for values-based or
integrity-based approaches to work through to how it might be implemented in organisational
settings; specifically how the APSC has approached the issue of a values-based culture in the APS.
The list of articles is:
The first article is a persuasive argument for the adoption of values-based approaches to work.
While the author places a large part of the responsibility for ethical conduct at the feet of the
organisation and particularly leadership, individual responsibility for ethical behaviour is also made
clear. The author notes that compliance-driven regulations are also part of an organisation’s suite of
values.
The second article explores the idea that organisational efforts to influence employee values might
have ethical implications of its own. This is an interesting slant on the issue of values-based
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approaches to work. The paper provides insight in the authors’ discussion of the person-organisation
‘fit’ and how this is largely values driven.
The third article is a guide to building an ethical culture within organisations. The author cites the list
of examples previously described in articles 1 and 2 and reinforces the need, as a matter of good
business sense, to develop a values-based culture. The Institute of Management Accountants (IMA)
see this as necessary to help employees deal with situations ‘in the white spaces in between’, those
not covered by laws, rules and regulations.
The fourth article is a brief synopsis of a book written by an eminent writer and practitioner in the
field of values-based organisations, Harry Kraemer Jr. The book is not available in its entirety online and has been included more as a bibliographic reference for an interested reader.
The fifth article is a description of the APS Values framework and the expectation that individual
agencies will embed these values into their strategic plans and ways of doing business.
The final article is included as a readable and accessible discussion of the worth of considering
different values perspectives when dealing with the broader community and those outside one’s own
profession or usual network, specifically— in this book— in a medical setting.
Other sites an interested reader may wish to peruse include:
The World Values Survey: This is a longitudinal survey, analysis of which has demonstrated that
people’s beliefs play a key role in economic development, the emergence and flourishing of
democratic institutions, the rise of gender equality and the extent to which societies have effective
government. This particular link will take you to some of the key findings of WVS6, 2015
The Sarbanes-Oxley (SOX) Act of 2002 in the USA. SOX was enacted as a reaction to major
corporate and accounting scandals, perceived to be in part the result of organisational failures to
embed ethically-based cultures, and included criminal penalties for misconduct.
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Lynn S. Paine, Managing for Organisational Integrity Harvard Business Review, March-April,
1994
Paine starts with the premise that many organisations implement compliance-based ethics programs
designed to prevent, detect and punish legal violations and argues that they need to go beyond postviolation punitive measures. ‘Integrity strategies’ which define a company’s guiding values would
help prevent ethical lapses which cause reputational damage and loss of public confidence. At the
same time, Paine argues, such ethical strategies tap into ‘powerful human impulses for moral thought
and action’.
Citing case-studies of two US companies, Sears Auto Centers and Beech-Nut Nutrition Corporation
(Nestlé), Paine describes the role of company imposed sales quotas and incentive payments in
causing failures of judgement on the part of some employees. Some employees reported ‘pressure,
pressure, pressure’ to sell unnecessary products and services, which:
(w)ithout active management support for ethical practice and mechanisms to detect and
check questionable sales methods and poor work, it (was) not surprising that some
employees ... reacted to contextual forces by resorting to exaggeration, carelessness, or
even misrepresentation
The result was an overwhelming number of customer complaints. The ultimate cost to Sears in 1992,
in settling customers’ complaints, was estimated at $60 million (USD).
A similar lapse of judgement cost Beech-Nut an estimated $25 million (USD) in 1987.
Paine’s argument is that neither company might be considered inherently bad. Rather, both
companies were seen to lack ingrained principles that would guide ethically sound decisions.
Identifying contextual, organisational factors does not excuse individuals’ responsibilities, however:
Many people resist acknowledging the influence of organizational factors on individual
behavior—especially on misconduct—for fear of diluting people’s sense of personal
moral responsibility. But this fear is based on a false dichotomy between holding
individual transgressors accountable and holding “the system” accountable.
Acknowledging the importance of organizational context need not imply exculpating
individual wrongdoers. To understand all is not to forgive all
Paine also argues for ‘a sound, well-articulated strategy for legal compliance’ in any organisation
and notes that many ‘integrity initiatives have structural features common to compliance-based
initiatives’, for example a code of conduct and training. It is also asserted however that emphasis on
sanctions, especially if designed without employee consultation or if too vague, can be
counterproductive and lead to employees’ perception that management is covering its own back.
Compliance, Paine suggests, can be inadequate in addressing the range of ethical issues confronting
most organisations today. As well, the value of compliance alone in inspiring exceptional
performance is seen as questionable (italics by this author).
Paine explores, through case studies again, the benefits of management-led commitment to ethical
values. The primary benefit is identified as discouraging damaging misconduct.
Lynn S. Paine is a John G. McLean Professor of Business Administration and the senior associate
dean for faculty development at Harvard Business School
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Return to list of articles
Maierhofer, N. I. & Colley, S. Ethical considerations for using values to manage in the
workplace. Paper presented to Social Change in the 21st Century Conference, Queensland
University of Technology, 29 Oct 2004
What are the ethical implications of influencing people’s work values? This question is posed by the
authors in the context of employers’ responsibilities to employees and the wider community. This
interesting slant on the issue of values-based approaches to work takes more form as the authors
discuss the self-selection options available to employees as part of the ‘attraction, selection and
attrition’ (ASA) model of employment.
In explicating the business costs to organisations of unethical conduct the authors identify three
levels of costs:



Level 1: Government fines for breaches (considered the least serious of consequences)
Level 2: ‘Clean up costs’ such as legal and auditing fees; costs of an investigation and
remedial action (these are considered survivable and as having minimal impact)
Level 3: The most severe and damaging and involve social implications such as loss of
reputation, customer abandonment, decreases in employee morale and increased employee
turnover (Thomas, Schermerhorn and Dienhart, 2004 as reported by Meierhofer, p.4)
They also discuss ‘value congruence’ between the employee and the organisation. The level of
congruence between employee and organisational values —termed the person-organisation fit—has
been associated with positive outcomes for both the employee (increased levels of satisfaction and
reductions in intentions to quit) and the organisation. This congruence is achieved in organisations
by one of three mechanisms: selection, socialisation and/or development. Organisations may choose
staff on the basis of the alignment of their values with those of the business. They will also socialise
employees, once selected, as part of the usual induction process. Organisations can also actively
intervene to change or reshape employee values through the mechanism of development
programmes.
In terms of the ASA employment model, selection and development are described as active attempts
on the part of the organisation to enhance values congruence:
The process of attraction ... selection and attrition will produce a restriction of range
over time on a whole host of unspecified individual difference variables. Consequently,
the people who remain in the organization will come to find themselves working with
colleagues much like themselves because the ‘fit’ is better (Denton, 1999, p.1 as reported
by Meierhof, p.5)
During the socialisation process, the passive organisational mechanism to enhance value alignment,
employees may ‘self-select’ either in or out of the organisation based on their perceptions—
described by Meierhof as ‘translation’—of the value congruence. Socialisation of new employees
occurs through exposure to management/leadership, as well as policies, procedures and practices
employed by the agency. Such exposure signals the organisation’s expectations, not necessarily
ethical ones, of employee behaviours and conduct.
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As part of the socialisation process also employees will also learn to regulate their behaviours in
accordance with the clues provided by significant others such as a manager. This is the mechanism
of social learning theory (SLT; Bandura, 1977). SLT highlights the important role of managers and
leaders in ensuring values are transplanted to enhance a collective ‘mindfulness’ on the part of all
employees.
While the role of managers and leaders in transplanting ‘right’ values is undeniable, Meierhof and
Colley also report three ways in which organisations encourage unethical behaviours: co-optation;
incrementalism and compromise.
The socialisation process involves a degree of passivity and the removal of the need for conscious
decision-making for the employee. Socialisation processes work to induce an employee to ‘go-along’
with organisational norms. Of course if the ethical fit is not good there is still the ‘active’ option of
quitting though for many employees this may not be a realistic option. This underscores the ethical
question posed originally by the authors.
Meierhof and Colley conclude:
Most work that has considered managing by values assumes a morally responsible
approach ... The espoused values of an organisation will typically be morally responsible
with some balance of moral and economic focus. Strategies that aim to increase the
malleability of people’s values through ... management mechanisms may make people
more susceptible to potential negative influences of values. Furthermore, values
statements about the values of the organisation may foster the distance that people use to
justify the gap between their behaviour at work and home. Perhaps values statements
shouldn’t be about the organisation but individuals and should extend to general
behaviours not just work behaviours. More importantly values statements should be
values practices—a point not new but perhaps more pertinent than ever (p.12)
Naomi Meierhof and Sarah Colley were both representing the School of Management at QUT at the
time this paper was presented
Return to list of articles
Institute of Management Accountants, Statements on Management Accounting, Leadership,
Strategies & Ethics, Values and Ethics: From Inception to Practice, USA 2008
The IMA’s SMA starts with the notion that approaches to values and ethics management should be
based on principles rather than a set of rules. The paper, like those by Paine and Meierhof, reinforces
the need for organisations to align organisational and employee values. It cites recent case-studies
where failure to align values has resulted in significant negative impact for corporations though
extends this to suggest that failure to align values results in unmotivated employees. Such
employees, so the paper asserts, can have a disastrous effect on a business by ‘poisoning the
atmosphere’, undermining stakeholder relationships and reducing the collaboration required for
knowledge transfer and innovation. None of these potential outcomes can be quantified, yet all are
typical human responses when employees feel distant from the values of the organisation.
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The SMA proposes a schematic framework for the creation of a system of ethical conduct
incorporating three phases (see page 8): design and development; deployment; and, measurement.
Each phase is supported by specific suggestions for assessment and review (e.g., focus groups,
surveys, gap analysis between employees’ perceptions of what currently exists and management
ideas about what ‘should’ exist). The measurement phase incorporates disciplinary approaches and
procedures based on monitoring and feedback. Ethics by (leadership) example is prioritised in the
framework. A detailed ‘how-to’ guide is provided for implementation.
A final word of warning is offered by the authors:
Readers should recognize that effective implementation of an ethical culture requires a
consistent management philosophy and that it is not a short-term program to ‘fix the
ethics issue’
The IMA acknowledged the work of Nick A. Shepherd, FCMC, FCCA, CGA of EduVision Inc. on
whose work this SMA was based.
Return to list of articles
Kraemer, H.M. Jr (2011) From Values to Action: The four principles of values-based leadership.
Jossey-Bass, San Francsico
This book has been included for its topical content though not all the book is available on-line
without purchase. It may be of interest for some readers. Kraemer identifies four principles of
values-based leadership: self-reflection; balance and perspective; true self-confidence; and, genuine
humility. Each is discussed in chapter-length detail within the context of work-life balance.
Harry Kraemer is a Clinical Professor of Strategy at Northwestern University’s Kellogg School of
Management and former chair and CEO at Baxter International, a health-care company.
Return to list of articles
Australian Public Service Commission, Strengthening a values based culture: A plan for
integrating the APS Values into the way we work, Commonwealth of Australia, Canberra, 2015
This paper was produced by the APSC to assist agencies in integrating the revised APS Values of
2013 into their organisational culture and the day-to-day work of all employees. The underpinning
premise is that values form the foundation of public service and guide judgement in serving public
interest. Values are also seen to provide a unifying force for as disparate an organisation as the APS
and to reinforce the professionalism of the Service.
APS agencies that have their own value statements are expected to reflect the overarching 2013 APS
Values:

Impartial: the APS is apolitical and provides the Government with frank, honest and timely,
evidence-based advice

Committed to Service: professional, objective, innovative, efficient and collaborative
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
Accountable: open and accountable to the public

Respectful: respects all people, their rights and their heritage

Ethical: demonstrates leadership and trustworthiness and acts with integrity
The Values are underpinned by Commitment, Leadership, Assurance and Management Systems.
Against each of these ‘building blocks’ is a checklist of possible actions that each agency might use
to ensure that the values are embedded.
In 2013 a comprehensive review of the APS in regard to integrity and ethics was published in the
State of the Service Report. This review was essentially an update about the changes in the ethics
infrastructure governing the APS. In subsequent years APS employees have been surveyed about
their views on the APS Values and Code of Conduct. Agencies have been requested also to report on
the number of investigations into suspected breaches of the Code of Conduct. The data about their
employees’ perspectives are available to each agency that participates in the State of the Service
Employee Census.
Return to list of articles
Fulford, K.W.M., Peile, E., & Carroll, H., (2012) Essential Values-Based Practice: Clinical
Stories linking Science with People, Cambridge University Press, New York
In a series of medically-oriented case-studies the authors describe the role of values in patient
treatment. It is accessible and informative reading. The premise for the book is that most failures to
achieve desired results in medical practices are not a failure of evidence-based practice. Rather, ‘the
most likely reason things go wrong is a failure of values-based practices’. That is clinicians fail to
ascertain the relevant values perspectives and act on them in a coherent and purposeful manner,
informed by values as well as evidence. The attached appendixes include a summary and definitions
and a possible teaching framework.
Fulford, Peile and Carroll are respectively: Emeritus Professor of Philosophy and Mental Health,
University of Warwick Medical School, UK; Emeritus Professor of Medical Education, University of
Warwick Medical School, UK and General Practitioner, Aberdeenshire, UK
Return to list of articles
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