Ethics are a set of principles that forms the rules of conduct for a group of people, such as a business. Ethics focus on day-to-day behavior and decision making. They apply to people at all levels of the organization and help to determine the success of the organization. According to a 2011 "Ethisphere" article, ethical businesses are more successful than their industry competitors. In addition, companies with strong ethics programs, such as Patagonia, Ford Motor Company and Microsoft, typically have stock prices that exceed the average S&P 500 Index.
Unethical employee behaviors often include taking home office supplies, overreporting hours worked or miles driven for business and taking excessive breaks or sick days. Using company technology for personal reasons, such as cyber loafing – surfing the Internet, shopping online and social networking – is another form of unethical behavior. Promoting and supporting ethical employee behavior reduces these behaviors.
Ethical Behavior Categories
According to the Worldwide Center for Organizational Development, there are four categories of ethical behavior. Ethical leadership applies to the decisions each person makes in his daily work. For example, an employee deliberately withholding important information from management is committing an unethical act. Ethical commerce involves the decisions made by workers in relation to internal and external transaction standards, such as overpromising services to win a customer and dealing fairly with suppliers. Ethical relations involve open, honest communication and respectful conflict resolution. Refraining from gossip and not taking credit for the work of others are examples of ethical relations. Ethical controls involve compliance with organizational policies, procedures and safety standards. For example, falsifying reports and padding a budget in anticipation of cuts are forms of unethical controls.
Employees observe and copy the behavior of their team leaders, managers and organizational leadership. If a person in a leadership position demonstrates unethical behavior, such as treating others with disrespect, employees will follow that example. Those who supervise others must consistently demonstrate all four categories of ethical behavior. In addition, they are responsible for ensuring that their employees understand the code of ethics and that performance standards include ethical behavior.
Support Ethical Behavior
Organizations must encourage and support ethical behavior. Start the process by establishing a code of conduct and providing employees with training on it, including new employee orientation and periodic compliance training for current employees and managers. Conduct an ongoing ethical awareness program to remind employees of behavior standards along with benefits and consequences. Provide a way for employees to privately and safely ask questions about ethics and report ethics violations. Include evaluation of employees' compliance with the organization’s code of ethics in annual performance appraisals.
Code of Conduct
A formal code of ethics, often called a code of conduct, details acceptable and unacceptable behaviors and serves as the foundation for an organization’s ethics support activities. Typically, a code of ethics requires honest, respectful behavior, avoidance of conflicts of interests, compliance with laws and regulations, and reporting of ethics violations without fear of retaliation.
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