Ethics and Employees: Making the Connection Author(s): Gary R.

Weaver Source: The Academy of Management Executive (1993-2005), Vol. 18, No. 2 (May, 2004), pp. 121-125 Published by: Academy of Management Stable URL: http://www.jstor.org/stable/4166071 . Accessed: 27/09/2013 14:40
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tJ Academy of Management

Executive. 2004, Vol. 18, No. 2

. ..

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Ethics

and the

employees: Making connection

Gary R. Weaver

A technical employee in a manufacturing division of a respected company once gave me his opinion of his employer's efforts to foster an ethical workplace. Ethics initiatives, nondiscrimination policies, safety training ... the list went on ... in his view were nothing but ways for that scoundrel who managed the factory to blame low-level employees for anything that went wrong. This company had various ethics initiatives-ethics offices, telephone hotlines, etc.-but they did not connect with this employee. An executive in another company confided, during a research interview, that management's efforts to foster an ethical workplace had a varied reception among employees, often depending on things that had never occurred to him. For example, an employee complained that the company could not be serious about ethics because, after all, nothing had been done to remedy the heating and cooling problems at his work location. This executive did not view heating and cooling as a key issue of business ethics, but for the employee it was critical. There are many corporate practices regarding employee ethics for which there is fairly solid research support (and many for which there is not, but that's another story). In this article, I will stress two basic ideas that are illustrated by the foregoing examples, supported in scholarly studies, and indicative of the potential disconnect between what management might intend to do about ethics and what employees actually experience. This involves bringing an oft-ignored topic-fairness-to the foreground and recasting popular wisdom regarding corporate ethics initiatives. Ethics and Employees: Differing Perceptions Executives often have honorable intentions for their companies' policies and actions regarding ethics. For example, a vice president at a major bank put the raison d'etre of his company's ethics initiatives in terms of helping low-level employ121

ees: "If you have a real crud for a boss who's a nasty, arrogant S.O.B., the company will back you up, and this person won't make your life miserable .... We'll protect you."' But as the opening examples illustrate, and as more systematic research confirms, ethics practices in business are far from unequivocal. What an executive might think is a straightforward effort to foster ethics might, in the eyes of employees, be viewed as insincere or worse.2 Thus, creating an ethical environment with respect to employees is not as simple as it might seem. the sort encouraged Corporate ethics initiatives-of by government policies in the U.S.-might appear to foster ethical behavior by employees, but the success of efforts to develop ethical corporations also depends on other factors that influence employee perceptions of ethics within a company. Why Should We Care? Recent ethical failures and scandals, and heightened risks of legal penalties, highlight the relevance of ethics to companies and their executives. But there are more reasons to attend to ethics than simply staying on the right side of government requirements. An organization's internal ethical context can help or hurt key employee attitudes and behaviors, such as employee commitment, good-citizen behavior, and the amount of unethical behavior in an organization.3 On the positive side, for example, when employees are convinced that their company is committed to fixing its ethical problems, they are more likely to blow the whistle internally, in constructive ways, when they observe a problem.4 On the negative side, a company's lack of ethics can lead employees to be cautious and untrusting toward coworkers-not a good way to foster the cooperation and information sharing needed for organizational success.5 Ethical problems make management difficult: a company president lamented the poor ethical situation he inherited, telling me how the situation had led

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to employees becoming "directly plugged into the newspapers," so that a problem "would get to the papers before it would get to my office." Employee commitment and citizenship are important to a company's overall success, because these and other intangibles are resources that can be neither easily replicated nor purchased "off the shelf" by a competitor.6 But if management acts ethically just to obtain the benefits of ethical behavior, other people can not trust management to always act ethically.7 After all, what will management do should it discover a different, unethical way to achieve those benefits? By contrast, when employees see that their organization values fair treatment and their welfare, it's no surprise that conscientious, committed, and ethical behavior is more likely.8 So business ethics with respect to employees involves more than just legal compliance and reputation building. Although it is important to consider how organizational processes and policies influence ethical behavior by employees, it is just as important to consider how the fair and ethical treatment of employees influences their perceptions of and responses to company ethics goals. The Fairness Heuristic People often rely on rough-and-ready decision criteria, or heuristics. A fairness heuristic is influential in determining how much employees will commit energies to, and trust their welfare to, their employers.9 Obviously, fairness involves outcomes: Do I get what I deserve? But it also involves procedures: Does my employer play fairly, consistently, and even-handedly when applying procedures for making decisions that affect me? And it also involves informal aspects of social interaction: Am I treated respectfully? These are related; people will, for example, be less dissatisfied with what they think are undesirable outcomes if the procedures leading to those outcomes are fair and if they are treated respectfully in the process. Empirical research and social science theory indicate that employees' fairness perceptions play a major role in their reactions to corporate ethics initiatives. When fairness is missing, people are less trusting and act to remedy unfairness (e.g., stealing to make up for unfair outcomes).'0 The employee described in my opening example was untrusting of his company's ethics initiative because, given his plant manager's behavior, the company flunked the fairness heuristic. Also, a company that fails to consistently follow through in supporting its ethics standards conveys a stance of procedural and outcome unfairness: the rules

are not consistently applied, and violators do not get what they deserve. Consistent follow-through on ethics policies is linked to reduced unethical behavior and to employees' increased willingness to support a company ethics initiative by reporting problems instead of hiding them. Similar results hold for more general employee perceptions of fairness in their workplaces." So as we think about the kinds of practices that foster ethical employee behavior, it is important to keep track of the relevant fairness issues and to stay aware of just what employees think about the fairness of both their company overall and its specific efforts to foster ethical behavior. If ethics initiatives flunk the fairness heuristic, and if they are not supported by a general environment that employees see as fair, those efforts risk being wasted. Corporate Ethics Initiatives: Important, but Not in Isolation It is important to have standards and guidelines in a business. The issues that employees sometimes confront can be complicated or unanticipated, and platitudes about doing the right thing or taking care of stakeholders will not help. So ethics codes and programs can be helpful-if employees use and abide by them. Complex organizations generate various intentional and unintentional pressures for people to leave their ethics at the door when they arrive at work. When such pressures arise, ethics offices, telephone lines, training, and the like can be helpful-if employees use them. But the extent to which ethics initiatives have positive impacts depends on the kinds of reinforcement that those policies and programs receive from myriad other influences on employee behavior. (Never forget: Enron had a formal code of ethics.) Organizational programs and policies-such as ethics initiatives-can be disconnected from the rest of the organization.'2 The programs and policies exist, technically, but in practice have little impact on or role in everyday work. This could be intentional; ethics programs and policies might be intended merely as window dressing to make the company look good, without really changing anything. More likely, however, is that they are marginalized due to lack of management interest, resource shortages, or incompetent execution, similar ordinary failings. For example, brief online ethics training sessions once a year probably are no match for the crush of other pressures and demands that employees routinely face. Empirical studies of formal ethics initiatives find that, although they do affect employees, their impact on ethics is small compared to factors such as

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employee perceptions of fairness, leader behavior, and an organization's overall culture vis-a-vis ethics.13 Moreover, leader commitment to ethics plays a major role in whether ethics initiatives are seriously integrated into everyday organizational functions, instead of being mere window dressing.'4 Corporate executives and public policy makers deceive themselves if they assume that ethics policies, training, and offices alone will bring about meaningful change in a business. These initiatives need to be integrated into the everyday work of employees if a company is to be successful in fostering high standards of ethics. Fostering Fairness and Meaningful Ethics Integration Thus when it comes to fostering ethical employee behavior, two things are unequivocal: fairness is important, and ethics must be integrated across, and have the support of, routine organizational functions. The specifics of achieving these goals in any particular company are more contingent matters, depending on the company's specific situation. But we know enough, from multiple studies, to have a reasonable idea of what needs to happen. Here are some of the insights. Compliance and Values in Ethics Initiatives Some ethics initiatives focus on issues of legal compliance, relying on the promulgation of rules and on monitoring and disciplining noncompliance. Fairness requires that violations indeed be detected and responded to, and that expectations be reasonably clear (i.e., codified). But merely relying on compliance-oriented activities is less than ideal. It is, in fact, more important to hold forth and support broad ethical ideals as aspirations for every organization member.'5 This is partly a matter of fairness. Rather than implicate employees as potential miscreants, a values approach offers aid, advice, and support on the assumption that employees generally want to act ethically. Plus, stressing shared values suggests that the company's ethics initiative is for everyone, not just lowerlevel employees, and that it is central to the work of the company (i.e., integrated). Employee Involvement in Ethics Initiatives Fairness involves giving people a voice into processes that affect them.'6 So who has a voice in the company's ethics initiative? Is it just the prerogative of the legal department? Are human resources staff involved? Are people involved in the process

who can be sure to understand the issues from the affected employees' perspective, so that there will be a sense of respect and concern demonstrated in any ethics initiative? Training Little research has been done directly on ethics training in businesses, though it is a common phenomenon.'7 Procedural fairness suggests that everyone, not just some employees, should receive ethics training. Integration suggests that training should be tied to the everyday tasks of people in various jobs, rather than being a generic, one-sizefits-all activity. Rather than just having separately identified ethics training, companies might consider how they can make ethics a routine part of job-specific, operationally oriented training. Selection Employees get their initial sense of what an organization stands for through the selection process. The fairness of selection processes sends an important signal to new hires, one that might be hard to undo later. Selection is where new hires get their first impression of how seriously the company values ethical employee behavior. So are the ethical expectations of the company made clear to new hires? Is the selection process designed to seek out and encourage people who want to see high ethical aspirations at their place of work? Or do potential and new employees get a "We're in it for the money" message? Rewards and Discipline Are ethical goals integrated into performance appraisals? Is fairness supported by seeing that employees are rewarded and promoted according to the ethical standards they are asked to uphold? Or are bottom line numbers all that matter? Are managers accountable for the ethical climate they foster in their departments? Are they accountable not just for performance but for how they achieve that performance? When employees see that ethical behavior is part of how people succeed, they have a strong encouragement to act ethically themselves and to engage in behaviors that support the company's overall ethical standards.'8 Also, the fairness heuristic asks if people get what they deserve. So are people who violate ethical standards appropriately disciplined? If misbehavior is not disciplined, the implied message is that being ethical is not a central part of what we do in this company.

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Cultural Norms in an Organization Organizations have taken-for-granted norms for how things are to be done. These norms reflect a deep sense of "who we are" and "what we're about." In some companies, the culture reflects a focus on "what's in it for me" and a very competitive environment (sometimes because top management sees that as a way to motivate people). Cultural norms that stress advancement and selfinterest tend to reduce ethical behavior and other ethically desirable outcomes.'9 Regardless of any ethics initiative, the culture of the organization says "ignore ethics," and the fairness heuristic suggests "protect yourself." Language is an indicator of, and influence on, the status of ethics in a company culture. When ethical terminology-"right," "good," "ethical," "moral," "improper," etc.-is not used, employees have more trouble recognizing when they are faced with ethically significant situations (and thus more trouble doing something about them).20 Yet many businesses foster a "moral muteness,"2' making it easier to avoid difficult issues.22 But ethics can become a part of everyday language in a company, especially if leaders model it. For example, I interviewed an executive who occasionally brought a fifty-year-old copy of his company's ethics-laden mission statement to meetings. When his colleagues would get uncomfortable discussing the ethical aspects of a major decision, he would point to the old statement in order to show that ethics had always been an acceptable part of executive decision-making.

their behavior.25 For example, a low-level, parttime manager at a very large public agency told me that the agency president was so concerned about ethics that he would return even trivial, token gifts to vendors. This part-time employee in fact had no direct experience of the president's behavior regarding gifts; he gleaned this image of the president from the rumor mill-suggesting an agency head who explicitly modeled ethics to employees. It can take fortitude to assume a high-profile ethics role in a company, for doing so makes one accountable to high standards. The executive mentioned earlier, who brought the company's old ethics standards to meetings, also told me how carefully he had to think about the ethics of decisions. For example, he agonized over the fairness of firing a low-level employee for padding an expense account by several hundred dollars, given that executives routinely put similarly valued bottles of wine on the company tab at business dinners. Leaders that foster a fair organization in which people take ethics initiatives seriously also must avoid some common failures. Obviously, they must avoid pressuring employees to act unethically. But they also must avoid demanding unquestioning obedience and discouraging open discussion. When management demands obedience, people will be reluctant to report problems or seek advice for fear of being "shot down," and unethical behavior becomes more common.26 A Proviso and Open Question I have suggested how to address two important issues regarding the ethical environment for employees: fairness, and the integration of ethics initiatives into routine functions. But most of the research supporting these insights has been conducted in Western-usually American-business cultures. There is not as much systematic knowledge of how these employee issues fare in other cultures. For example, even in historically Western cultures that were temporarily isolated by Soviet communist domination, there are ways in which American conventions do not hold. One study of Hungarian managers, for example, finds them rather unwilling to talk and think in terms of their company's espoused values-a systemic legacy of communist practices.27 Similar legacies affect training, selection, compensation, and performance appraisal in the former Soviet bloc.28 So even though ethics is a central issue in global business today, managers need to be cautious about taking American-rooted ethics management practices abroad.29 Researchers, in turn, need to

Leadership: Ethically AWOL or Fully Engaged? A high-level auditing executive once surmised that the "typical response" of many business executives to ethical issues is "to duck." But studies have revealed a crucial link between leader behavior and the way fairness and integration factors are handled regarding ethics. Top-management commitment plays a more important role than external pressures in leading organizations to develop integrated, values and compliance-oriented ethics initiatives.23 But it's not just top managers who matter. Lower-level, supervisory leadership matters too.24 But leaders do not matter just in the decisions they make-as in making sure that an ethics initiative is integrated into the organization and that employees are treated fairly. Their behavior also is a model for others and influences organizational culture. But to have an ethical impact, leaders need to be explicitly ethical, so that their ethical concern is visible among the motives for

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direct attention to issues of fostering ethical behavior by and for employees when businesses cross national and cultural boundaries. Employee Ethics Is a Two-Way Street There is much that can be, and has been, said about business ethics with respect to employees. If anything is clear from existing scholarly research, however, it is that connecting with employees about ethics involves working from two directions. Organizations and their executives have an interest in encouraging ethical employee behavior. But doing that successfully requires looking at the issue from the employees' perspective too, and focusing on creating an environment of fair treatment for employees in which concern for ethics is taken seriously across the varied activities encountered in an ordinary day on the job. Endnotes
' Unless otherwise indicated, quotations such as these are taken from research interviews about business ethics and corporate ethics initiatives that I conducted during the 1990s with executives at various large American corporations. 2 Trevifio,L. K.,Weaver, G. R., & Brown, M. 2000.It's lovely at the top: Comparing senior managers' and employees' perceptions of organizational ethics. Academy of Management Best Papers Proceedings. 3Trevifio, L. K., Weaver, G. R., Gibson, D. G., & Toffler, B. L. 1999.Managing ethics and legal compliance: What hurts and what works. California Management Review, 41(2): 131-151; Weaver, G. R., &Trevifio,L.K.,2001.The role of human resources in ethics/compliance management: A fairness perspective. Human Resource Management Review, 11: 113-134. 4Miceli, M. P., & Near, J. P. 1992. Blowing the whistle: the organizational and legal implications for companies and employees. New York:Lexington Books. 5Badaracco, J. L., & Webb, A. 1995. Business ethics: A view from the trenches. California Management Review, 37(2):8-29. 6Pringle, C. D., & Kroll, M. J. 1997. Why Trafalgar was won before it was fought: Lessons from resource-based theory. The 73-90; Pfeffer, J. 1998. Academy of Management Executive, 11(4): The human equation: Building profits by putting people first. Boston: Harvard Business School Press. 7Quinn, D. P., & Jones, T. M. 1995.An agent morality view of business policy. Academy of Management Review, 20: 22-43. 8Eisenberger, R., Fasolo, P, and Davis-LaMastro,V. 1990.Perceived organizational support and employee diligence, commitment, and innovation. Journal of Applied Psychology, 75: 51-59; Trevifio,L. K., & Weaver, G. R., 2001.Organizational justice and ethics program follow-through:Influences on employees' harmful and helpful behavior. Business Ethics Quarterly, 11:651-671. 9van den Bos, K., Lind, E. A., & Wilke, H. A. M. 2001. The psychology of procedural and distributive justice viewed from the perspective of fairness heuristic theory. In R. Cropanzano (Ed.),Justice in the workplace: From theory to practice (vol. 2). Mahwah, NJ:Lawrence Erlbaum. 10Greenberg, J. 1996.The quest for justice on the job: Essays and experiments. Thousand Oaks, CA: Sage. 1 "Trevifno& Weaver, 2001, op. cit.; Trevifio, et al., op. cit.

2 Weaver, G. R., Trevifio, L. K., & Cochran, P. L. 1999. Integrated and decoupled corporate social performance: Management values, external pressures, and corporate ethics practices. Academy of Management Journal, 42: 539-552. 13 Trevifio, et al., op. cit. 14 Weaver, Trevifio, & Cochran, op. cit. 5 Trevifio, L. K., & Weaver, G. R. 2003. Managing ethics in business organizations: Social scientific perspectives. Stanford: Stanford University Press; Paine, L. S., 1994. Managing for organizational integrity. Harvard Business Review, 72(2):106-117. 6 Weaver & Trevifho, 2001, op. cit. 17 Trevifio & Weaver, 2003, op. cit.
18

Ibid.

19Trevifio, et al., op. cit. Trevifio & Weaver, 2003, op. cit. 20Butterfield,K.D., Trevifno, L. K.,& Weaver, G. R. 2000.Moral awareness in business: Influences of issue-related and socialcontext factors. Human Relations, 53: 981-1018. 21 Bird, F. B. 1996. The muted conscience: Moral silence and the practice of ethics in business. Westport, CT:Quorum Books. 22See, for example, Bill Sells' autobiographical tale of how managers at Johns Manville Corporation avoided coming to grips with issues of disease among asbestos workers by the use of euphemistic labels for asbestiosis cases. Sells, B. 1994.What asbestos taught me about managing risk. Harvard Business Review, 72(2):76-85. 23Weaver, Trevifno,& Cochran, 1999,op. cit.; Weaver, G. R., L. K.,& Cochran, P. L., 1999.Corporate ethics programs Trevifno, as control systems: Influences of executive commitment and environmental factors. Academy of Management Journal, 42: 41-57. 24 Trevifo, et al., op. cit. 25Trevifio, L. K., Hartman, L. P., & Brown, M. 2000. Moral person and moral manager: How executives develop a reputation for ethical leadership. California Management Review, 42(4):128-142. 26Trevifio, et al., op. cit. Trevifio, L. K., Butterfield, K. D., & McCabe, D. 1998. The ethical context in organizations: Influences on employee attitudes and behaviors. Business Ethics Quarterly, 8: 447-476. 27 Danis, W. M., & Parkhe, A. 2002. Hungarian-Western partnerships: A grounded theoretical model of integration processes and outcomes. Journalof International Business Studies, 33: 423-455. 28Kiriazov,D., Sullivan, S. E., & Tu, H. S. 2000. Business success in eastern Europe: Understanding and customizing HRM. Business Horizons, 43(1):39-44. 29Donaldson, T., & Dunfee, T. W. 1999. When ethics travel: The promise and peril of global business ethics. California Management Review, 41(4):45-55.

Gary R. Weaver is associate professor of management at the University of Delaware. He received a Ph.D. in management from the Pennsylvania State University and a Ph.D. in philosophy from the University of Iowa. His research on business ethics has appeared in leading scholarly journals, and he is coauthor of Managing Ethics in Business Organizations: Social Scientific Perspectives. Contact: weaverg@lerner.udel.edu.

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