Ethical behavior in workplace is desirable, necessary

Compensation expert Anne Ruddy likes to tell the story about the employee who missed a deadline to file for her company's stock options.
 

The woman, an assistant to the company's chief executive, visited the human resources office the morning after the deadline, apologized for being so busy that she overlooked the deadline, and then asked to file for the stock options.

"What was the person in HR supposed to do?" Ruddy says. "Should she violate the law to accommodate this woman, although no one would probably ever know it? Or should she risk offending someone in the company who might be in a position of power?"

The HR person chose to deny the request - and the employee went straight to the CEO to appeal.

"Fortunately, the CEO stood behind the HR decision," Ruddy says. "If he'd made an exception and allowed her the stock options, it could have caused real problems."

Ruddy, president of the nonprofit World at Work benefits and compensation association in Scottsdale, Ariz., says this story illustrates how the seemingly insignificant decisions we make every day test our ethics.

HR employees, especially, must be constantly aware of the ethical decisions that are part of their jobs, says Roy Burchill, senior manager for compensation and benefits for Accredited Home Lenders in San Diego.

For example, Burchill says criminal background checks sometimes reveal minor crimes that individuals didn't report on their job applications.

"It's usually not a crime that would stop us from hiring them," he says. "But the fact they lied on their application raises a lot of red flags. We are then in a position of deciding whether we would hire this qualified person knowing that they might wind up lying to us down the road. It's a powerful ethics issue that we face."

Ruddy says that too often we treat ethics as a theoretical concept but that ethical issues surface in our jobs regularly.

While chief executives need to assume responsibility for creating a culture of ethical behavior, that task cannot be left to them alone, says Ruddy. "Ethical issues pop up all over the company, to everyone," she says.

In a survey of 418 World at Work members who work in human resources, 65 percent said they face ethical dilemmas in their jobs at least once a month, with 19 percent reporting ethical issues surfacing at least once a day.

"These can be very subtle and seemingly insignificant, but they are all important in how you handle them," Ruddy says.

Increasingly, she says, ethics questions surface in human resources departments because they deal with real-life problems.

"A lot of people look to HR as the ethics police," says Burchill. "They want to trust HR and want to have the people there handle ethics issues."

Burchill says that puts added pressure on HR employees to be candid and fair when handling personnel issues. Notable corporate ethical lapses over the past few years have created an atmosphere in which companies talk about ethics more and the behavior they expect from their employees, he says.

Ruddy says there are some powerful incentives for companies to promote ethical workplaces. She says that public companies who suffer ethics problems can see their stock prices decline for up to six months after the public learns of unethical behavior.

And a study from the Walker Loyalty Institute of Indianapolis finds that 42 percent of workers take ethics into account before accepting a job with a particular company.

Yet, Ruddy fears, companies just don't pay proper attention to cultivating an ethical atmosphere inside their companies.

"It's not enough just to have a policy, you have to make sure everyone knows what it is and how to apply it," she says. "Companies have policies buried in documents and think that's enough. You must educate and remind workers when you see behaviors that are not what you want. You can't expect people to be ethical unless you tell them what is acceptable and what isn't and live up to that every day in your own actions."

Burchill says his companies and others have set up third-party reporting options, allowing people to anonymously report ethical lapses or inappropriate conduct.

"A lot of issues that get reported are not ethics-related, but it's good to have a forum where people can vent their complaints," he says.

But it's also important that workers know the difference between acceptable and unacceptable behavior on the job and can report violations when they see them.


© Copley News Service