Ethics in the Workplace Supplemental Self-Study Presentation Ethics in the Workplace Overview Ethics in the Workplace Introduction The most common understanding of ethics is that it has to do with standards of right and wrong, and how people should behave. People most often think about: • Behaviors to engage in • Behaviors to refrain from • Specific values such as: – Honesty – Fairness – Integrity Ethics in the Workplace Module 1: What Is Business Ethics? Ethics in the Workplace The Development of Ethical Standards Ethical standards are developed using different approaches: • Utilitarian approach. The goal is to produce the greatest good and the least amount of harm. You can do this by focusing on the consequences of behaviors. • Fairness or justice approach. All people should be treated equally—or fairly based on a defensible standard. For example, paying people more based on harder work or greater contributions to the organization. Likewise, all people should be treated with dignity. Ethics in the Workplace The Development of Ethical Standards Part 2 • Common good approach. Decisions are made based on improving the welfare of everyone. Police and fire departments, public education, recreation, and health care are often created based on the common good approach (or trying to achieve the common good approach). • Virtue approach. This approach answers the question, “What kind of person will I become if I do this?” It looks at what behaviors bring out the highest potential in people. These would include virtues such as, truth, honesty, courage, compassion, generosity, tolerance, integrity, fairness, self-control, prudence, etc. Ethics in the Workplace Myths about Business Ethics • Myth: Ethics has to do with my feelings about what is right or wrong. Truth: Your feelings can misdirect you. • Myth: Ethics has to do with my religious beliefs. Truth: Being ethical can be related to religious beliefs and can motivate people to act ethically; however, every person can behave ethically, even if they don’t have any specific religious beliefs. • Myth: Being ethical is not breaking the law. Truth: Being ethical is not the same as following the law. In most cases, the law is derived from ethical standards. However, behaving ethically may require doing MORE than the law demands. And in rare cases, such as when slavery was legal, following the law was unethical. Ethics in the Workplace Myths about Business Ethics • Myth: Being ethical is behaving in a way that society/the organization believes is acceptable. Truth: Sometimes societal or organizational norms get out of whack, such as in Nazi Germany or Enron or the financial meltdown of late 2008. Often, there isn’t consensus on what society accepts, such as abortion or gay marriage. • Myth: Ethics is simply doing what’s right. Truth: What’s right is in the eye of the beholder. Two people can be faced with the same situation and make two different decisions about how to behave and both claim they are doing what’s right. • Myth: Ethics can’t be managed or trained— people are either ethical or they’re not. Truth: Ethics can be managed and trained; however, a business needs to specifically communicate its expectations and standards of behavior. Ethics in the Workplace Benefits of an Ethical Workplace Benefits of fostering an ethical workplace go beyond simply doing the right thing (although that is important). Here are more reasons: • Gives employees a foundation during times of change. In today’s business environment where change is constant and senior management can be a revolving door, attention to business ethics makes people consciously decide how they want to/should behave. • Cultivates teamwork and productivity. Ongoing discussions about business ethics builds trust, openness and, community—important ingredients of effective teams in the workplace. • Creates greater consistency in standards and quality of products and services offered by the organization. There will likely be more satisfied customers when they know they can have confidence in the quality of the product/service and how it is offered/delivered. And employee satisfaction will be higher, thus reducing turnover, lawsuits, etc. Ethics in the Workplace Benefits of an Ethical Workplace Part 2 • Helps ensure corporate policies are legal and proactively enforced. Attention to business ethics can close the gap between stated policies and actual behavior. In bottom line terms, this can save the company money by minimizing lawsuits related to hiring, firing, harassment, etc. • Supports employer and societal growth. Attention to business ethics has prompted changes over time, such as appropriate length of work days, hiring, and firing based on reasonable standards, etc. Ethics in the Workplace The Ideal Ethical Workplace • Equality is essential. • Fairness is fanatical. • Integrity is integral. • Vision is vital. • Individual accountability is authentic. • Collective responsibility is common. Ethics in the Workplace Test Your Knowledge Read the question, then click on the answer. The “Utilitarian” approach to developing ethical standards is based on which premise? A. Do the least harm. B. Treat all people equally. C. Increase the welfare of everyone. D. Develop individuals to their highest potential. Ethics in the Workplace Module 2: How to Create an Ethical Workplace Ethics in the Workplace Guidelines for Achieving an Ethical Workplace Creating an ethical workplace takes thought and planning; it doesn’t just happen automatically. Follow these tips for implementing a thorough and thoughtful plan. Communications • Develop a written code of ethics. • Distribute a copy of the code to every employee and include it with new employee orientations. • Make copies available to business partners and customers. • Emphasize the code’s importance by having senior management leading communications. • Explain how senior management/board of directors, etc. uses the code when formulating business practices and strategies. Ethics in the Workplace Guidelines for Achieving an Ethical Workplace Part 2 • Use various communication channels to reinforce the content of the code. For example, include a letter from the CEO along with a copy of the code, send an email regarding the code and ethics policy or post it on the organization’s intranet along with examples that illustrate acceptable and unacceptable behavior, blogs, video clips, etc. • Make sure employees and others know the consequences of violating the code. • Make sure employees know how to report violations of the code. Ethics in the Workplace Guidelines for Achieving an Ethical Workplace Part 3 Training • Include ethical issues in employee orientation and ongoing training. • Use real-world scenarios/case studies so that employees are clear about what constitutes acceptable business practices (and what doesn’t). • Ensure every employee knows how to react if he or she is faced with a potential violation of the code or a decision involving an ethical dilemma. • If employees can’t be certain of confidentiality when reporting a violation or potential violation, they will be less likely to bring attention to any violations the company culture will remain unchanged. Ethics in the Workplace Guidelines for Achieving an Ethical Workplace Part 4 Contracts and Performance Appraisals • Make compliance with the code mandatory. • Include references to code of ethics in employment contracts and contracts with vendors and suppliers. • Link violations to code with disciplinary procedures. • Include review of compliance to code as part of annual performance appraisals and bonus and salary evaluations. Linking compliance with the code to performance appraisals builds it into the culture of the organization. Ethical behavior becomes a norm and expectation. Ethics in the Workplace Guidelines for Achieving an Ethical Workplace Part 5 Monitoring and Reporting • Establish an independent committee to deal with oversight of the code. – Make them responsible for establishing, reinforcing, and monitoring the code, ethics policies, and identifying potential ethical risks and opportunities. – Use surveys, assessments, and other reporting tools to determine level of compliance from the organization as a whole. • The code of ethics and its accompanying policies and procedures should be reviewed at least every three years to ensure that new issues are covered and its relevance is maintained. • Analysis of ethics performance should be reported regularly to employees and other stakeholders. Ethics in the Workplace Guidelines for Achieving an Ethical Workplace Part 6 The Bottom Line The best way to handle an ethical dilemma is to avoid its development in the first place. Your ethics policy is working if your employees demonstrate ethical behaviors and refrain from unethical behaviors (as defined by your Code of Ethics). You should value attempts to behave ethically and recognize that a few mistakes are better than not trying at all. Sweeping infractions under the rug and pretending everything is OK only enables unethical behavior to persist. Ethics in the Workplace Decision-Making Tools Many employees will have their own ideas about what is ethical and what isn’t. In many cases, common sense serves as the basis for making decisions. However, it is also helpful to have some tools for employees to use when faced with an ethical dilemma. We start by offering a series of questions to cover to guide the employee in making an ethical decision. • What are the facts? • Who is involved? Who will be affected by the outcome? • What are the underlying causes of the situation? • What principles, values or standards should be upheld in this situation? • What is the best case scenario? The worst case scenario? • What are possible options/alternatives/solutions, and the pros and cons of each? (minimizes negative consequences and upholds values/standards) • What is your decision and how will you explain it? Ethics in the Workplace Decision-Making Analysis Once you have made your decision, it can be helpful to analyze it to make certain you are comfortable with your decision. • Have you defined the issue/situation/problem accurately? • Have you considered the other side of the issue/problem? • How did this situation occur in the first place, and how does this affect your potential decision/action? • What is your intention in making this decision? • Whom could your decision/action affect or injure? • Can you discuss the situation/problem with those affected before you make your decision? • Can you explain your decision/action to your boss, family, society with no misgivings/reservations? • Will you be as confident about your decision in a year as you are now? • How will your decision be perceived by others? Ethics in the Workplace Decision Confidence Assessment If you like a very structured approach, this chart may be more useful when analyzing a decision you have made. It can be used in conjunction with the questions on the previous slide, or in place of them. Click to the next slide to view the assessment. Ethics in the Workplace Decision Confidence Assessment Part 2 Scale: 1=not at all; 2=sort of; 3=about average; 4=better than most; 5=absolutely! Relevant information Affected people Did I obtain all relevant information about the situation to make an informed decision? Is everyone who is affected or has a right to be informed/involved in the decision in fact informed and/or involved? 1 2 3 4 5 1 2 3 4 5 Consequences Have I identified all potential negative consequences of my decision? 1 2 3 4 5 Fairness If I were any one of the people affected by this decision, would I think it was 1 2 3 4 5 fair? Universality How well could this decision be applicable to all similar situations? 1 2 3 4 5 Upholding values Does this decision uphold the values and standards that are important to me and my organization? 1 2 3 4 5 Enduring worth Will I feel as confident about this decision in a year as I do today? 1 2 3 4 5 Grandmother test Is there anything about this decision I would hesitate to tell my grandmother/mother/child, etc.? 1 2 3 4 5 Ethics in the Workplace Common Excuses and What to Do about Them If participants haven’t used these excuses for unethical behavior themselves, they have probably heard other people use them. • “My boss told me to.” • “I’ll lose my job if I don’t.” • “Everyone does it.” • “It’s expected.” • “I have to do it to get ahead.” • “The organization won’t notice.” • “My customers expect it.” Ethics in the Workplace Common Excuses and What to Do about Them What is the antidote to these excuses? Don’t be a victim! Ask yourself if you really want to work at a place that condones or even supports unethical behavior. If you’re not in a position to change jobs at the moment, think about the positive way you may be perceived if you stand up for yourself and what you know is responsible behavior. Think of the 4 C’s: • Character—who you are when no one is looking • Conscience—doing what you know is right in this situation • Courage—feel the fear and do it anyway • Confidence—acting “as if” Ethics in the Workplace Dealing with Unethical People Dealing with unethical people can be an extremely difficult situation, especially if that person is your boss. Before you report a violation: • Make sure you have your facts in order. • Include documentation if possible. • Have first-hand knowledge; don’t base your claims or accusations on hearsay. Even if the source is someone you trust wholeheartedly, see if you can substantiate that person’s claim. • Diplomatically see if others know what you know. • If the unethical person is your boss, see if others know what you know—a “safety in numbers” approach can help protect you if you decide to report on your boss. Ethics in the Workplace What You Can Do • Behave ethically yourself. • Lead by example. For instance, if you make a mistake, admit it and use it as a learning opportunity. • Get to know coworkers, customers, and vendors as individuals and don’t base your opinions of them on what others say. • Find common ground even with people who behave unethically. • If others’ unethical behavior is affecting you, and you see it is not going to change (through your intervention or anyone else’s), then find a way to deal with it without getting sucked in yourself. – Limit your interactions with the person. – Remind yourself that their behavior isn’t personally directed at you. – Don’t respond in kind. – As you develop rapport, you may be able to influence their decisions and choices to be more ethical. Ethics in the Workplace Test Your Knowledge Read the question, then click on the answer. Which of the following is true of creating effective guidelines for achieving an ethical workplace? A. Keep ethics separate from annual performance appraisals so employees think about it more than once a year. B. Don’t involve senior management because employees are cynical about what they say. C. Measure success based on the ability of employees to refrain from engaging in unethical behaviors. D. Use the standard chain of command to report potential ethical violations. Ethics in the Workplace Module 3: Tools to Support an Ethical Workplace Ethics in the Workplace An Ethics Policy An effective ethics policy: • Sets out an organization’s ethical values, standards, and commitments that form the foundation for the way that it does business. • Confirms senior management commitment to the above. • Describes how to report a potential violation. • Describes how this will be achieved and monitored. • Identifies the main ethical issues faced by the organization and employee. • Identifies other policies and documents that support and detail aspects of the ethics policy such as a code of ethics, a bullying and harassment policy, a gifts and hospitality policy, an environment policy etc. Ethics in the Workplace An Ethics Policy Part 2 • Supportive Activities Tie the code in with the organization’s core values. • • Give a copy to all staff. • Unsupportive Activities Write the code separately without incorporating core values (or not having core values). Pin the code on the HR bulletin board. • Provide the means to report a violation of the code in a confidential manner. Make the code available to customers and business partners. Make adherence to the code a part of the employment contract. Senior staff model the desired behaviors. • Failure to follow up on reported violations. • • Treat the code as confidential or a strictly internal document. Make exceptions to the employment contract. • Senior staff behave contrary to the code Set up an independent board to monitor the code’s effectiveness. • Depend on hearsay to judge whether or not the code is working. • • • • Ethics in the Workplace Issues Addressed in an Ethics Policy Ethics policies expressly state traits and behaviors that foster ethical behavior. They often deal with the following issues: • Professional dress and behavior • Business expenses • Personal use of business property • Gifts and entertainment • Conflicts of interest • Confidentiality • Harassment and discrimination • Work/home balance • Security and data protection • Drug and alcohol use • Whistle blowing Your goal when developing ethics guidelines is to focus on the top values needed to avoid the potential ethical dilemmas that are most likely to occur in your organization. If you are implementing an ethics policy for the first time, it may increase the number of issues and potential violations in your organization, as people become sensitive to the standards and expectations. Ethics in the Workplace Traits to Promote • Honesty, integrity, and trustworthiness • Responsibility and accountability • Respect, courtesy, tolerance, and acceptance • Justice and fairness • Compassion, caring, kindness • Citizenship—at work and in your community Ethics in the Workplace Code of Ethics Example This example is typical for a major corporation in the United States. Ethical Business Practices Company policy requires Directors, employees, and agents to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. Directors and employees must practice fair dealing, honesty, and integrity in every aspect of dealing with other Company employees, the public, the business community, shareholders, customers, suppliers, competitors, and government authorities. When acting on behalf of the Company, Directors and employees shall not take unfair advantage through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or other unfair-dealing practices. Company policy prohibits unlawful discrimination against employees, shareholders, Directors, officers, customers or suppliers on account of race, color, age, sex, religion or national origin. All persons shall be treated with dignity and respect and they shall not be unreasonably interfered with in the conduct of their duties and responsibilities. Ethics in the Workplace Code of Ethics Example Part 2 Ethical Business Practices (continued) No Director or employee should be misguided by any sense of loyalty to the Company or a desire for profitability that might cause him or her to disobey any applicable law or Company policy. Violation of Company policy will constitute grounds for disciplinary action, including, when appropriate, termination of employment. Sensitive Transactions Company policy prohibits its Directors, employees, and agents from entering into sensitive transactions. If such a transaction occurs, the Company and its officers, Directors, and employees directly involved may be subject to fines, imprisonment, and civil litigation. Commercial Bribery Company policy prohibits commercial bribes, kickbacks, and other similar payoffs and benefits paid to any suppliers or customers. Accounting Controls, Procedures & Records Applicable laws and Company policy require the Company to keep books and records that accurately and fairly reflect its transactions and the dispositions of its assets. Ethics in the Workplace Code of Ethics Example Part 3 Use & Disclosure of Inside Information Company policy prohibits disclosure of material inside information to anyone other than persons within the Company whose positions require them to know such information. Confidential or Proprietary Information Company policy prohibits employees from disclosing confidential or proprietary information outside the Company, either during or after employment, without Company authorization to do so. Conflicts of Interest Company policy prohibits conflicts between the interests of its employees and the Company. Fraud & Similar Irregularities Company policy prohibits fraud and establishes procedures to be followed concerning the recognition, reporting, and investigation of suspected fraud. Ethics in the Workplace Supplier Ethics Example This is an example of a corporation’s code of ethics regarding working with vendors. Corporation is confident that its suppliers desire to operate in an environment that is free from influence due to unethical business practices. Therefore, Corporation’s suppliers are requested to conduct business in a manner that would not, in any way, compromise the ethical principles required of Corporation’s personnel. Corporation personnel are to abide by the following guiding ethical principles: • Avoid the intent and appearance of unethical or compromising practice in relationships, actions, and communications. • Refrain from accepting money, gifts of other than nominal value, excessive hospitality, loans or other special treatment from present or potential suppliers that might influence, or appear to influence, purchasing decisions. • Refrain from reciprocal agreements that restrain competition. • Not to agree to restraints on resale or pricing on resale. Suppliers who attempt to compromise these ethical principles will be subject to cessation of business with Corporation. Ethics in the Workplace Test Your Knowledge Read the question, then click on the answer. Which of the following is the most useful activity to support the full adoption and integration of a code of ethics in your organization? A. Pin the code on the HR bulletin board. B. Treat the code as confidential or as a strictly internal document. C. Avoid following up on reported violations. D. Make the code available to customers and business partners. Ethics in the Workplace Review Ethics in the Workplace CASE STUDY—Apply What You’ve Learned Read the case study and answer the questions that follow in order to put your skills into practice. Organization: A large, metropolitan radio station. People: Nick, Justin, Shannon: coworkers. Amy: Nick’s mentor. Judith: a VP at the station. Situation: Nick just joined the company and completed his new employee training. He noticed a document labeled “Code of Conduct” posted on the bulletin board in the break room and remembered a brief mention of professional behavior and expectations during his orientation training. He asked his mentor, Amy, about it and she said, “I have never read it. I just do what my conscience tells me. Do the same and you’ll be fine.” Ethics in the Workplace CASE STUDY—Apply What You’ve Learned Part 2 A few days later Nick was meeting with his team including his coworkers Justin and Shannon. Justin: “Are you ready for the process improvement review? I hear the consultant will be here tomorrow.” Shannon: “Who’s that?” Justin: “His name is Jim Clark. Apparently, Judith highly recommended him.” Shannon: “I hope he doesn’t mess things up. I don’t know why we need a process improvement review. I feel like things are running just fine.” Justin: “I know we can always get better, but sometimes it’s just a cover for getting rid of “deadwood”—you know, eliminating positions just to get rid of certain employees more easily than going through an official performance improvement and dismissal process.” Ethics in the Workplace CASE STUDY—Apply What You’ve Learned Part 3 A few days later Nick was making copies and found a piece of paper left in the copy machine. It was a bill from a therapy session. The psychiatrist’s name: Jim Clark, and the patient’s name: Judith Overton. Nick isn’t sure what to do with this information. He goes to Amy for advice. Nick: “Am I acting unprofessionally to bring this up when it’s clearly private? She left it in the copy machine so it’s not like I intentionally invaded her privacy. Or is she acting unprofessionally for using her personal therapist for work that may result in people losing their jobs?” Amy: “Leave it alone. That’s what I say. What good could come of saying something? Who would you tell?” Nick: “Well, according to our code of ethics, we have an independent committee to look into things like this. Isn’t that where I would go?” Ethics in the Workplace CASE STUDY—Apply What You’ve Learned Part 4 Amy: “I would hardly call it independent. All of those people know Judith and while they’re not directly under her supervision, she has a lot of influence with their boss. I wouldn’t risk it.” Nick: “Risk it? You mean retaliation for reporting it?” Amy: “Now you’re catching on!” Nick goes back to his office to think about what Amy said. He remembers that Amy told him simply to follow his conscience and he would be fine. So what was his conscience telling him? That the situation sounded fishy. In his mind, the situation had the potential to do a lot of harm; some people might lose their jobs due to a senior manager’s bias and working around the official dismissal system. That didn’t seem fair. But what if this consultant was actually unbiased himself and very good at what he did? Nick wrestled with his choice about whether to report what he knew or not. In the end, Nick decided he didn’t have enough information to make an official report. Ethics in the Workplace CASE STUDY—Questions to Consider 1. What myths, if any, were evident? 2. What activities did the organization do that supported their code of ethics? That weakened their code of ethics? 3. What ethical issue(s) was/were present in the scenario and what excuses, if any, were used to explain them? 4. Which approach to ethical standards (Utilitarian, Fairness, Common Good, Virtue) does Nick appear to be using to asses the situation? 5. Why did Nick make the decision he did and what might have been the alternative? Ethics in the Workplace CASE STUDY—Suggested Answers 1. What myths, if any, were evident? Amy told Nick, “I just do what my conscience tells me.” That statement reflects a mistaken belief that business ethics is simply doing what’s right and that is has to do with your feelings about what is right or wrong, both of which are myths. 2. What activities did the organization do that supported their code of ethics? That weakened their code of ethics? The organization posted a copy of the code in the break room and briefly mentioned it during new employee orientation. Those two activities are not bad, but they are not enough to fully integrate the code into the organization’s culture. Employees were not given their own copy and appear to ignore the code or not take it seriously. In addition, it doesn’t appear to be modeled by senior staff or used in annual performance appraisals, all of which undermine its usefulness. Ethics in the Workplace CASE STUDY—Suggested Answers Part 2 3. What ethical issue(s) was/were present in the scenario and what excuses, if any, were used to explain them? There are two issues. The first is Judith’s choice to use her personal therapist as a consultant whose recommendations may result in employees losing their jobs. This is potentially a conflict of interest and/or questionable behavior. The second is Nick’s decision whether or not to report finding Judith’s bill in the copy machine. This reflects an issue of confidentiality. We don’t know Judith’s rationale or excuse for her choice. When Nick takes Amy’s advice to do nothing, he accepts the excuse that “Judith may retaliate and I may get fired if I report it,” and “Maybe it’s not really a problem.” 4. Which approach to ethical standards (Utilitarian, Fairness, Common Good, Virtue) does Nick appear to be using to asses the situation? Nick’s thinking was that the situation had the potential do a lot of harm; that is evidence of a Utilitarian approach. Then he thought to himself that the situation seemed unfair; that is evidence of a Fairness approach. Ethics in the Workplace CASE STUDY—Suggested Answers Part 3 5. Why did Nick make the decision he did and what might have been the alternative? Nick justified his decision by saying to himself that he didn’t have enough information. And that may be true. However, he seems to be influenced by Amy’s advice to leave it alone for fear of retaliation. The alternative would have been for Nick to report what he found. If the independent committee had walked Judith through the ethical decision making analysis questions, she might have changed her mind about using her personal therapist and avoided the appearance (or reality) of a conflict of interest. Ethics in the Workplace Congratulations! By now you should be able to: • Dispel common myths about business ethics. • Describe the ideal ethical workplace. • Implement ethics guidelines and policies in your organization. • Identify and resolve typical ethical dilemmas. • Recognize common excuses for unethical behavior, and what to do about them. • Deal with unethical coworkers, customers, and vendors. Ethics in the Workplace Appendix Ethics in the Workplace References The following resources are suggested for further information on the topics covered in this course. Ferrell, O.C. and John Fraedrich. Business Ethics: Ethical Decision Making and Cases. South-Western College Publishing, 2006. Fishman, Wendy, Becca Solomon, Deborah Greenspan, Howard Gardner. Making Good: How Young People Cope with Moral Dilemmas at Work. Harvard University Press, 2004. Shaw, William H. Business Ethics. Wadsworth Publishing, 2007. Trevino, Linda K. and Katherine A. Nelson. Managing Business Ethics: Straight Talk About How To Do It Right. Wiley, 2006. Ethics in the Workplace © 2012, 2015 HRDQ. All rights reserved. Published by HRDQ. HRDQ and the HRDQ logo are registered trademarks of Organization Design and Development, Inc. This publication is distributed under the terms and conditions of the Reproducible Content End User License Agreement (EULA). For specific details, visit www.hrdq.com/legal. For more information about this publication or to order additional copies, please contact the HRDQ Customer Service Team by phone at 610279-2002 or by email at custserv@hrdq.com. For more information about HRDQ products, visit www.hrdq.com. ISBN 978-1-58854-513-8 Title slide image: Brian A. 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