Chapter 8
Ethical Problems of Managers
Contents: (Please note: the Instructor Guide for every chapter will follow this structure.)
1. Chapter Outline
2. Teaching Notes
3. In-Class Exercises
4. Homework Assignments
5. Additional Resources
Chapter Outline
I. Introduction
A. Managers and Employee Engagement
II. Managing the “Basics”
A.
B.
C.
D.
E.
F.
Hiring and Work Assignments
Performance Evaluation
Discipline
Terminations
Why Are These Ethical Problems?
Costs
III. Managing a Diverse Workforce
A.
B.
C.
D.
E.
Diversity
Harassment
Family and Personal Issues
Why Are These Ethical Issues?
Costs
IV. The Manager as Lens
A. The Buck Stops with Managers
B. Managers Are Role Models
V. Managing Up and Across
A. Honesty is Rule One
B. Standards Go Both Ways
VI. Conclusion
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VII.
Discussion Questions
VIII.
Short Cases
Teaching Notes - Discussion Questions
1. Why is employee engagement important?
Employee engagement is critical to organizations, because it is the primary indicator of
productivity. Employee productivity is all about customer service, quality products and services,
and being prudent with organizational and human resources. Managers are the most critical
element in encouraging employee engagement.
Probes to Stimulate Discussion
 Is it important to companies that people are inspired to do their best work? Why?
 What impediments are there to people being engaged and productive? What conditions
in a work place could cause employees to become disengaged or disenchanted with their
work? Or with the company?
2. How does employee engagement relate to organizational culture? How do managers
contribute to the ethical culture?
Strong, healthy organizational cultures build engagement levels. Managers are the prime
communicators of the culture to employees. They help set goals for employees, determine
expectations, evaluate performance and determine rewards. They are the ones who communicate
what is important and what is not, and what is rewarded and what is punished.
Probes to Stimulate Discussion:
 What role does a manager play in communicating corporate culture to employees?
 What specific activities do managers engage in that communicate culture to employees?
 Is it possible to have a manager misaligned with the general corporate culture? If it is,
what effect would that have on employees who report to that manager? What would be
more influential with employees: the organizational culture or the manager?
3. In addition to identifying and training good managers, what else could an organization
do to increase levels of employee engagement?
Smart organizations understand that employee engagement is the result of a comprehensive
effort to build a healthy work place. Certainly it involves hiring and training talented managers.
But it also requires a myriad of other factors including: family-friendly corporate policy; flexible
work schedules; equitable rewards; goal setting that incorporates values and ethics; ethical
leadership, etc.
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Probes to Stimulate Discussion
 Is it possible for someone to have an awful manager and still be engaged?
 If you were to design an engaged organization from scratch, what would you include and
why?
 What could an organization do that would absolutely kill engagement?
4. What specific action could a manager take to try to move employees up the employee
engagement continuum – for example, from not engaged to actively engaged?
Once an employee is disengaged, it is very difficult to move him or her up the continuum to
engaged. Like building a reputation, building engagement takes a lot of sustained, consistent
effort over a long period of time. And sometimes, it cannot be done at all. However, since
engagement is rooted in trust, activities that engender trust will also promote engagement: telling
the truth, kindness, openness, inspiration, fairness, building a relationship, etc.
Probes to Stimulate Discussion
 Are some people just naturally engaged or disengaged – regardless of what a company or
a manager does?
 What would you do, if an actively disengaged employee was transferred into a
department that you manage? Is there anything you need to look out for?
 What risks might disengaged employees pose to an organization?
5. Why should performance be measured as an on-going process, and not just as a once-ayear event?
Performance evaluation is probably a manager’s most important job. One key reason why it
should be an ongoing process is that feedback must be timely, in order to have any impact on a
subordinate’s behavior. Most managers know this, but they are uncomfortable giving negative
feedback, so they put it off. By the time they find themselves doing an annual performance
review, neither the manager nor the subordinate can remember the details. It is not fair to say, “I
haven’t been satisfied with your performance this year.” You have not provided ongoing
feedback that would give the subordinate specifics and a chance to change.
Probes to Stimulate Discussion




“What are the barriers to continuous performance appraisal?"
"Should peers evaluate one another's performance? What are the advantages and
disadvantages?" (Many companies are using 360-degree performance appraisals.)
"Should workers evaluate the performance of their managers? What are the advantages
and disadvantages?"
"Should such evaluations be confidential (the identity of the reviewer unknown to the
person being evaluated)?"
6. Should high performers be allowed to work by rules that are different from those that apply
to other workers? Why or why not?
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Probes to Stimulate Discussion




"If star employees are exempt from the rules that govern other employees, how can you
explain it to other employees?"
"Are there certain employees who deserve to have different rules?"
"What happens when workers violate the rules?"
"What happens when "stars" violate the rules? If there is a difference, is it fair?"
7. Imagine that you are the manager of a facility where 200 layoffs are scheduled. Design an
action plan for how the layoffs would occur. How would you handle those who are being laid
off and the survivors?
Probes to Stimulate Discussion








"Should any employees get early notification?"
"Who can help you plan the layoff?"
"Will everyone hear at the same time?"
"When will the press be notified?"
"Who will give effected employees the news? How? Where? When?"
"How will you motivate workers who are remaining with the company?"
"If you need to lay off workers six months from now, how can you notify them now and
yet encourage them to stay for a six-month period?"
“Put yourself in employees’ shoes. What will make the layoff seem fair?”
8. Are there ways in which managers can avoid harassment issues among employees who
report to them? What would your strategy be?
Probes to Stimulate Discussion




"If you work in a male-dominated industry, do you need to be especially vigilant about
this issue?"
"How can you get senior management support regarding this issue?"
"Should you talk to employees individually about this topic or in a group?"
"If you believe an employee is harassing a coworker, how would you discipline the
employee?"
9. Imagine that someone who reports to you is on a prescription medication that makes his
breath smell like alcohol. How would you handle this situation?
Probes to Stimulate Discussion



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"How can you protect his or her rights (especially to privacy) and yet prevent your
customers from thinking a worker is an alcoholic?"
"How would you counsel this employee? What would you say?"
"Could you ask someone else to counsel this employee?"

"Could you insist that this employee have no customer contact?"
10. Imagine that one of your employees complained that a coworker was harassing him or her.
Also, imagine that you suspect the motives of the person who is complaining to you. How
would you handle the situation? Is there a way you could discern motivation, or does it
matter? When would you involve your company’s human resources department?
Probes to Stimulate Discussion
 “Is it up to you to analyze motivation in this case?”
 “What questions might you ask the person who has brought the issue to you?”
11. As a manager, how would you respond when a worker’s performance has declined and
you suspect a problem at home is the cause?
Probes to Stimulate Discussion
 “Is an employee’s home life your business? Should privacy be a concern?
 “What questions might you ask the person?”
 “Would you involve human resources? When?”
12. List ways you can communicate your standards to your employees and to your peers.
Probes to Stimulate Discussion
 "Are there any situations you can think of where it is natural to communicate standards?"
 "Can you help employees establish their own standards?"
 "Can peers get together and agree to standards? What are the advantages and
disadvantages?"
In-Class Exercises
General Note to Instructors:
For many of the ethical issues in this chapter, it may be difficult to do what one thinks is right,
because of the sensitive communications that must take place. It is difficult for most people,
especially inexperienced students, to give negative feedback for example, or talk with an
employee about a personal problem that seems to be interfering with work. We suggest that this
chapter and its cases are perfect for role playing exercises. Involve students in role playing, so
that they can practice their communication skills and get feedback from you and their classmates.
After you get some consensus on what is the right thing to do, ask students if they would have
difficulty actually doing it. If so, ask people to role play the characters in the case.
Case # 1 -- Hiring and Work Assignments:
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You are planning to hire a new sales manager and one of the leading candidates
is really homely. You are concerned about how your customers – and even his
colleagues -- would react to him. The specific job he is applying for requires
extensive customer contact and his appearance is frankly disconcerting. On the
other hand, his credentials are excellent and he is certainly qualified for the job.
Notes:
In the classes where this scenario has been used, students invariably laugh over the "homely"
aspect. However, when asked how things would change, if the candidate were deaf, or
overweight, or longhaired, or scarred, students begin taking the issue more seriously.
Case #2 -- Performance Evaluation
You were recently promoted to manager of a department with five professionals
and two clerical staff. One of the professionals, Joe, is a nice guy, but he simply
has not been able to match the performance of the others in the department. When
he tells you he has been interviewing for another job in a different part of your
company, you pull his personnel file and see that your predecessor had rated
Joe's performance as "good to excellent." You frankly disagree. Joe has asked you
for a recommendation. Based on the written appraisals, you could give him a
good one -- but your personal observation is at odds with the written evaluations.
Joe's prospective manager -- your peer in another department -- asks for your
opinion. What do you say?
Notes:
Many managers do not see this as an ethical issue, which, of course, it is. They say that getting
Joe out of their department does not hurt anyone, and in fact may help Joe in the long run. After
giving the issue some thought, however, most managers agree that Joe needs to be properly
evaluated before a transfer can take place, even if it is more difficult for the manager. Honesty
with Joe about the kind of evaluation you can give him is the most ethical route and best for all
concerned in the long run. Joe will have an opportunity to improve and another department will
not be stuck with a mediocre employee, when they thought they were getting a good one.
Case #3 – Discipline
Steven is a salesman who reports to you -- the regional director of sales for an
office supply company. He has a great track record and has consistently
surpassed his sales targets, but he has one terrible flaw: he is not on time for
anything. He is late both for meetings with you and for lunches with clients, and
the problem extends to his paperwork. His expense reports, sales reports -everything is handed in a week late. As his manager, you have counseled him
about his tardiness and he has improved. Now instead of being 15 minutes late for
a meeting, he is only five minutes late. And instead of submitting his expenses a
week late, they are only two days late. His lateness seems minor in view of his
achievements, but it is driving you and his co-workers crazy.
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Notes:
While this issue is common just about everywhere, it is a real issue in industries like investment
banking. "Star" employees can bring in or make millions of dollars for their companies, and they
are generally very well compensated for their efforts. They can also think they are more valuable
than other employees (and they may be) and that they do not have to follow the same rules as
everyone else. It takes a very strong leader to keep these characters in tow. Without senior
management discipline, these "stars" can become real "monsters."
Case #4 – Terminations
You are a manager in a large commercial bank. You discover that Patricia, a
loan officer who reports to you, has forged an approval signature on a customer
loan, which requires signatures from two loan officers. When you confront Pat
with the forgery, she apologizes profusely and says that her husband has been
very ill. The day she forged the signature, he was going into surgery and she just
did not have time to find another loan officer to sign the authorization for the
loan. Pat has been with your bank for 15 years and has a spotless record.
Notes:
This real case resulted in termination and caused a lot of angst for the manager who had to do the
firing. But, this kind of behavior simply cannot be tolerated in a financial institution. Forgery is
one of the biggest "sins" an employee can commit in a company, especially a financial firm.
Appeals would get an employee nowhere in a situation like this one. Patricia could have avoided
the debacle by asking for help. If she had admitted to her manager that she could not get the
other signature, he or she could have helped her. It is a sad case, but there is really no excuse for
her behavior.
Case #6 – Diversity
One of your best customers is a very conservative organization -- a real "whiteshirt" company. Reporting to you is David, a very talented African-American,
who could benefit greatly from working with this customer account -- and the
customer account would benefit greatly from David's expertise and creativity. The
issue is that David dresses in vibrant colors and wears a kufi, an African
skullcap. Your company long ago recognized David's brilliance, and his dress
within the company is not an issue. But you know your customer would react to
David's attire with raised eyebrows.
Notes:
Most students and employees are savvy enough to understand this particular issue and see the
need to support this employee in his choice of dress. Change the situation slightly and substitute
a different sort of variation from the norm and you may get a very different reaction. Suppose all
of the following employees are extremely competent and well groomed. Which might you
hesitate to bring into a client meeting? A 65-year old female; a deaf male who reads lips; a man
or woman who weighs 300 pounds; a dwarf or someone extremely tall; a man with a beard; a
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woman with a discernible mustache; someone in a wheelchair? Is there any justification for
judging a coworker by appearance or disability and not bringing them to a client meeting, if they
are otherwise qualified? In the case of David, one can simply alert the client to his brilliance
and his dress in advance, so there are no surprises.
Case # 7 – Harassment
Your profession has been traditionally a male-dominated one and Marcia is the
only woman in your department. Whenever Sam -- your senior engineer-- holds
staff meetings, he and the other males in the department compliment Marcia
profusely. They say things like, "It's hard for us to concentrate with a gorgeous
woman like you in the room," or "You've got to stop batting your eyelashes at us,
or the temperature in this room will trigger the air conditioning." They
compliment her apparel, her figure, her legs and her manner of speaking.
Although flattering, their remarks make her feel uncomfortable. She has
mentioned her discomfort to you on several occasions, and you have told Sam and
the others to cut it out. They just laughed and told you that Marcia was too
sensitive. You think that while Marcia was being sensitive, she did have
justification for being upset about her co-workers' remarks.
Notes:
This is probably the most common form of sexual harassment, although many people are simply
complimented and do not feel harassed. Since it is difficult (if not impossible) to know how
people are going to react to this sort of banter, managers should nip this kind of thing in the bud.
Case # 8 – Harassment
One of your direct subordinates, Robert, belongs to an activist church. Although
you have no problems with anyone's religious beliefs, Robert is so vocal about his
religion that it is becoming a problem with other employees in your department.
He not only preaches to his fellow employees, but he also has criticized the attire
of some of his female co-workers, and continually quotes religious verse in staff
meetings. You have received complaints about his behavior from several
employees. A few weeks ago, you suggested to Robert that he tone down his
preaching, and he reacted as if you were a heathen about to persecute him for his
beliefs. His behavior has since escalated.
Notes:
This is no doubt a sensitive issue. However, it does not matter if the issue is peddling religion or
Girl Scout cookies, employees should not have to endure feeling pressured by other employees.
Robert is selling religion, as surely as someone else may be selling candy bars for their civic
organization. That kind of behavior is fine, if people do not mind it. As soon as people start to
complain and feel uncomfortable, the behavior must cease. Robert has gone way too far and
should be disciplined.
Case #9 -- Family and Personal Issues
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One of your direct subordinates is Ellen, who just returned from maternity leave.
She now has two children -- her infant is four-months-old and her older child is
three-years-old. Ellen is not only a talented worker, but she is also a wonderful
person. Before the birth of her second child, she had no problem handling the
workload and the demands on her time - she had a live-in nanny, who could care
for her child regardless of when she returned home. Recently, however, her livein left and Ellen is now sending her children to a day care facility with strict
opening and closing times. Although Ellen is very productive when she is in the
office, her schedule no longer has any flexibility -- she must leave the office no
later than 5:00 p.m. This has caused a hardship for all of her peers, who must
complete team assignments whether or not she is present. Although you do not
want to cause problems for her, the situation does not seem fair to her coworkers.
Notes:
Frequently, this situation is more common in reverse. In some companies, managers bend over
backwards to help employees in Ellen's situation -- sometimes to the detriment of other
employees. There are offices, where single people always have to work the weekend or overtime
shifts. There are other organizations, where Jewish employees are forced to work over the
Christmas holidays. Fair is, after all, fair. If you try too hard to accommodate employees with
special needs, you may be unfair to employees without special needs. The situation should be
discussed honestly with Ellen. Can she still meet the expectations of her job?
Case #10 -- Honesty Is Rule One
Michael is a lawyer who reports to Paula -- the corporate counsel for a chemical
company. During one particularly busy period, Paula asks Michael to prepare a
summary of all pending lawsuits and other legal activity for the company's senior
management. Since Michael has several court appearances and depositions
cluttering his schedule, he assigns the report to one of his paralegals, who
completes the report in several days. Since he is so busy, Michael simply submits
the report to Paula, without reviewing it. When Paula asks him what he thinks of
the report, he assures her that he is fine with it. The next day, Paula asks Michael
into her office and says that she has found a major omission in the report.
Michael has no choice but to admit that he did not have time to review it.
Notes:
This is a perfect illustration of how important it is to be forthright with your manager. If we fake
it, we invariably get caught. And the effects of our behavior can last for the duration of our
relationship with our manager. Trust is very difficult to reclaim.
Case #11 -- Standards Go Both Ways
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It began when Bruce asked Andy to lie to his wife about his whereabouts. "If
Marcia calls, tell her I'm in Phoenix on a business trip," he told Andy. Of course,
he had also confided to Andy that in case of an office emergency, he could be
reached at a local golf tournament or at a nearby hotel, where he was staying
with another woman. Since Bruce was senior to Andy and was a powerful
contributor in the department, Andy went along with his request. When Marcia
called, Andy told the lie about Bruce being in Phoenix. Bruce asked several more
"favors" of Andy, and Andy complied. Then Bruce asked for a big favor: he
instructed Andy to inflate monthly sales figures for a report going to senior
management. When Andy objected, Bruce said, "Oh, come on Andy, we all know
how high your standards are."
Notes:
In the real case, "Andy" was subpoenaed by Bruce's wife to be a witness in their divorce. It was a
real mess! It is foolhardy to ever lie for a co-worker or manager.
Case #12 -- Employment Basics
You have recently been promoted to a supervisory position and are now
responsible for coordinating the work of four other employees. Two of these
workers are more than 20 years older than you are, and both have been with the
company much longer than you . Although you have tried to be supportive of them
and have gone out of your way to praise their work, whenever there is some kind
of disagreement, they go to your boss with the problem. You have asked them
repeatedly to come to you with whatever issues they have; they just ignore you
and complain to other workers about reporting to someone your age. Design a
strategy for dealing with these workers and your manager.
Notes:
This problem is as much with your boss, as with the two workers who report to you. You should
ask your manager to stop undermining you with these two workers. If he or she refuses to listen
to their complaints, they will be forced to deal with you.
Case #13 – Diversity
After two years of sales calls and persuasion, a large, multinational petroleum
company -- Big Oil Ltd. -- decides to sign with your employer, Secure Bank. Since
Big Oil is headquartered in Saudi Arabia and most of the meetings with the client
have been in the Middle East, Secure Bank's senior executive in charge of oil and
oil product companies -- Julie -- has not attended. Although the Secure Bank
employees who have met with the company have told the Big Oil executives that
the lead on their account will be a woman, the news must not have registered,
perhaps because of language difficulties. Today the Big Oil reps are in Chicago
to sign on the dotted line and meet with Secure Bank's senior managers, and of
course, they have met with Julie. A member of the original Secure Bank sales
team calls you, to say that Big Oil's senior team member has told him, he does not
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want Julie to work on their account, period. Because of cultural issues, Big Oil
execs are uncomfortable dealing with women from any country. As Julie's
manager, what do you do?
Notes:
This case has been discussed in various business and educational settings and almost everyone
who has seen it thinks that the “right” thing is to defend Julie, but that most companies would
comply with customer wishes and replace her. However, that sends quite a message to customers
and to every other employee in the company. Julie needs to be included in this deal or the result
is unfair, period. An interesting question raised by one student is: Why do American companies
always try to accept other cultures? Why can’t other cultures accept our standards?
Case #14 --Managing Up and Across
As an operations professional, you need to be able to interact effectively with
many internal customers – from corporate managers to field representatives. One
of your peers is Jessica, who is a talented operations professional, but who is
downright rude to her internal customers. Her attitude is so bad that people
around your company ask specifically to deal with you instead of Jessica. You
have heard many tales about her sarcasm and her unwillingness to deliver
anything other than the absolute minimum to other employees. You have thought
about talking to Bruce, the manager to whom both you and Jessica report, but you
and everyone else knows that they are dating. In the meantime, your workload is
increasing, because of Jessica’s reputation. How do you handle Jessica and
Bruce?
Notes:
Most professionals agree that it is unfair to everyone to let a situation like this one continue.
You could, of course, approach Bruce with this. A better choice might be to go to your human
resources representative or to Bruce’s manager.
Homework Assignment
Please note that any of the in-class discussion cases would make excellent homework
assignments.
Additional Resources:
1. Institute for Global Ethics
This is a wonderful website and the founder of the IGE, Rushworth Kidder, is a well-known
expert on organizational ethics. Look for the section called “Dilemmas” for additional cases that
can be used as homework assignments or as in-class cases for discussion.
http://www.globalethics.org/
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2. CasePlace
Another good resource for cases and teaching materials is CasePlace: http://www.caseplace.org/
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