CHAPTER 12
STUDENTS
Ethical Behavior Differs Among Generations
In June, the Ethics Resource Center (ERC) published a new study that provides further analysis of its 2011 National Business Ethics Survey (NBES). The Washington, D.C.-based ERC is a private, nonprofit organization devoted to independent research and the advancement of high ethical standards and practices in public and private organizations. The initial analysis of the 2011 NBES showed unexpected and disturbing findings that may portend a future downward shift in business ethics. This new report, titled Generational Differences in Workplace Ethics, examines the differences in attitudes toward ethical issues among the four generational groups.
Demographics
The four generational groups examined in the survey are Traditionalists, Baby Boomers, Generation X workers (Gen Xers), and Millennials or Generation Y workers (Gen Yers). Traditionalists, born 1925-1945, are hardworking, respectful of authority, and value loyalty. Baby Boomers, born 1946-1964, are hardworking, idealistic, and committed to harmony. Gen Xers, born 1965-1980, are entrepreneurial, flexible and self-reliant, and comfortable with technology. Millennials, born 1981-2000, are tech-savvy, appreciative of diversity, and skilled in multitasking.
Some of the negative traits and workplace attributes widely assigned to each cohort include:
- Traditionalists—Conformers who resist change, are disciplined and pragmatic, work and family lives never coincide, dress formally.
- Boomers—Self-centered with sense of entitlement, workaholics, self-motivated, don’t appreciate feedback.
- Gen Xers—Lazy, skeptical and cynical, question authority figures, desire for a work-life balance and flexible schedule, work dress is at low end of business casual.
- Millennials—Lack basic literacy fundamentals, very short attention spans, not loyal to organization, demand immediate feedback and recognition, integrate technology into the workplace, expect to have many employers and multiple careers, work dress is whatever feels comfortable.
Reporting and Its Consequences
According to Generational Differences in Workplace Ethics, these differences in attitudes and traits have resulted in a great deal of variability in many of the measures of workplace ethics. The study found that the youngest workers are significantly more likely than their older colleagues to feel pressure from others to break ethical rules because the pressure “eases as workers spend more time in the workforce and learn ways of coping with their work environment.” As a possible solution, companies should concentrate more on issues of ethical culture during the orientation of new employees, which should mitigate their feeling of not knowing much about how to act within the culture of their new workplace.
Another finding in the generational study was that more younger workers have observed ethical misconduct in the workplace during the previous 12 months than their older colleagues. This is in spite of the fact that Millennials observed significantly fewer examples of using company time to conduct personal business than did those in older generations. The study explains this latter phenomenon by noting that younger workers tend to integrate their work and personal lives to a greater extent.
While earlier studies have shown that younger workers were less likely to report unethical behavior, the latest report shows a sharp increase in Millennials’ reporting. “They are now on par with their older cohorts, except for Traditionalists,” who observed and reported fewer instances than in previous years. Millennials observed 49% of workplace misconduct, the highest of all generations. The types of misconduct observed include:
- Personal business on company time–26%,
- Lying to employees–22%,
- Abusive behavior–21%,
- Company resource abuse–21%, and
- Discrimination–18%.
Of those Millennials who observed unethical behavior, 67% of them reported the misconduct, which included:
- Stealing or theft–74%,
- Falsifying expense reports–71%,
- Goods/services fail to meet specifications–69%,
- Falsifying time sheets or hours worked–68%, and
- Offering improper payments/bribes to public officials–67%.
All age groups tend to inform their supervisors, whom they know well and can trust, about misconduct they observed. Only a small percentage of workers went outside their organizations with their initial complaints. Millennials are the group most likely to report by using the hotline option. The study found that younger workers were significantly more likely than those in older generations to feel some form of retribution or retaliation. This is possibly due to the increase in their reporting of misdeeds.
Millennials: The Future of Professionalism
Perhaps the most surprising and disturbing result in the generational analysis is the relatively high percentages of Millennials who consider certain behaviors in the workplace to be ethical:
- Use social networking to find out about the company’s competitors–37%,
- “Friend” a client or customer on a social network–36%,
- Upload personal photos on a company network–26%,
- Keep copies of confidential documents–22%,
- Work less to compensate for cuts in benefits or pay–18%,
- Buy personal items using a company credit card–15%,
- Blog or tweet negatively about a company–14%,
- Take a copy of work software home for personal use–13%.
The extensive use of social networking seems to pose challenges as significant numbers of Millennials post questionable information on their personal social networking sites:
- Feelings about their jobs–40%,
- Bad joke told by the boss–26%,
- Work on a project–26%,
- Picture of a coworker drinking–22%,
- Annoying habit of a coworker–20%,
- Information about the company’s competitors–19%,
- Opinion about a coworker’s politics–16%.
Most importantly, the report states that younger workers are significantly more willing to ignore the presence of misconduct if they think that behavior will help save jobs. “Willingness to ‘let the ends justify the means’ seems to have a strong inverse correlation with age,” according to the report.
Building a Strong Ethics and Compliance Program
The most encouraging news in the new ERC study is that a robust ethical culture means less pressure to compromise standards, fewer observations of misconduct, higher rates of reporting, and decreased levels of retaliation against those who report. A strong ethics and compliance program has a significant role in developing and maintaining an organization’s culture. In terms of the generations, Millennials are particularly driven by a strong program to be more proactive in their ethical conduct. Yet a weak ethics and compliance program has an adverse effect on older cohorts.
In terms of reporting frequency, which mirrors overall effectiveness of ethics and compliance programs, Millennials are more likely to report misconduct when they can (1) use company resources (such as a hotline), (2) feel prepared to handle an ethical dilemma (through effective training), (3) talk to an ethics advice resource in the company, and (4) rely on coworkers for support. In contrast, Boomers rely most heavily on “formal provision of standards and resources of an ethics and compliance program and [its] successful integration into their work arena as well as signs the company is doing the right thing,” according to the report. In other words, older workers are more likely to consult more formal company channels for guidance, whereas the first choice of younger workers is likely to be their families. Traditionalists and Boomers are least likely to talk to their coworkers about it.
These differences are illustrated in deciding whom to consider telling about workplace misconduct, which varies considerably among generations. Millennials’ choices are more extensive and significantly different from those of older cohorts. The youngest group prefers to tell friends–65%, family–65%, government resources–28%, religious leaders–22%, social networks–21%, legal counsel–20%, and traditional media–17%. Boomers’ choices, like those of Traditionalists, are much more conservative: government–14%, religious leaders–9%, social networks–4%, legal counsel–9%, and traditional media–3%. The percentage who make their initial report outside the organization is strikingly different among the generations: Traditionalists–14%, Boomers–13%, Gen Xers–7%, Millennials–5%. But the trend reverses if an additional or second report is deemed necessary: Millennials–19%, Gen Xers–18%, Boomers–15%, Traditionalists–13%. The IMA® Statement of Ethical Professional Practice states, “Each member has a responsibility to keep information confidential except when disclosure is authorized or legally required.”
The different resources each generation uses are a strong influence in the role the ethics and compliance program takes in an organization. Some of the objectives of the programs include raising employee awareness of:
- The ethical standards of the organization,
- Available resources for additional help,
- Confidential mechanisms to report misconduct, and
- Consequences for violating the code of conduct.
Observations contained in the ERC report include:
- The younger the worker, the more his or her perceptions about ethics will be influenced by social interaction;
- The older the employee, the more hierarchy, structure, and visible company commitment matter;
- Culture makes a difference for all generations, but, for younger workers, culture is the sum of their interactions with other individuals, much of which is with coworkers. Older workers get their cues about culture from the company’s stated values, messages from the top, and their beliefs about the organization as a whole.
The report provides considerable motivation for senior executives to develop and maintain an ethics and compliance program in their organizations that will consider the attitudes and expectations of workers from all generations. Effective training programs should be the hallmark of a strong ethical culture.
Social Networking at Work Is a Major Risk with Large Costs
The Ethics Resource Center (ERC) has been conducting nationally representative surveys of ethical attitudes, knowledge, and beliefs in the U.S. workforce since 1994. Its latest comprehensive report, 2011 National Business Ethics Survey® (NBES), included a series of questions about social networks and the people who use them. The intriguing findings on this subject led ERC to perform a follow-up survey in 2012 that focused on employees’ social networking activities. The resulting report, National Business Ethics Survey of Social Networkers (NBES-SN), found that the emergence of social networking has serious implications for the workplace. ERC believes “social networking is affecting the way work gets done, reshaping ideas about transparency and confidentiality, and even altering attitudes about the type of conduct that is acceptable in the workplace.”
The Securities & Exchange Commission (SEC) provided an indication of the importance of social networking to financial markets on April 2, 2013, when it announced that companies can use social media outlets such as Facebook and Twitter to report key market-moving information to the general public. These actions comply with Regulation Fair Disclosure (Regulation FD) as long as companies inform investors which social media outlets will be used.
According to the NBES-SN, “Social networking is now the norm, and a growing number of employees spend some of their workday connected to a social network.” In 2011, three-quarters of American workers at all levels reported that they belonged to one or more social networks. The 2012 report notes that the proportion is higher today. Contrary to popular belief, young workers aren’t the only ones using social networks. While the rate for 18-to 45-year-olds was 83%, participation by those in the 45-to 63-year-old group reached 67%. A November 2013 presentation by The Infographic Show reported that 67% of people use social networks when they are supposed to be working. Analysis of demographic factors in the NBES-SN, including gender, management level, intent to stay, education, union status, and compensation status (hourly or salaried), confirms that the population of social networkers closely mirrors the overall working population in the United States. The issue showing the greatest difference between a social networker and the U.S. workforce as a whole is tenure. Fewer social networkers have either short (less than one year) or long (11 years or more) tenure at their employer.
The top social networks that the largest percentages of employees use are Facebook (95%), Twitter (43%), Google+ (37%), LinkedIn (37%), Pinterest (23%), MySpace (21%), and a personal blog (14%).
Active Social Networkers (ASNs), which are employees who spend at least 30% of their workday connected to one or more social networks, represent 10% of the workforce. ASNs are younger: Workers younger than 30 make up only 26% of the total workforce but represent about 47% of ASNs. Workers older than 45 make up 43% of the total workforce but only 13% of ASNs.
ASNs include more members of middle management and first-line supervisors (71%) than the workforce as a whole. Again, employees who are more likely to be ASNs include males, workers in publicly traded companies, workers between the ages of 30 and 44, workers with some college or a technical degree, workers with three to five years’ tenure, employees who intend to stay one to two years, employees who intend to stay three to five years, middle managers, first-line supervisors, members of unions, and salaried employees.
According to the NBES-SN report, “Nearly three out of four social networkers (72%) say they spend at least some time on their social networks during every workday, and almost three in 10 (28%) say such activity adds up to an hour or more of each day they spend at work.” More than a quarter (27%) of ASNs check a social network about every hour. Well over half (61%) of all hourly employees—who should be paid only for time spent working—say that none of the time they spend on social networking is related to work.
In fact, survey participants report that very little of the workday spent online is work related. One-third (33%) of those who spend an hour or more of the workday on social networking say that none of the activity is related to work. Another 28% say just a small fraction (10%) of their time online has something to do with their job. Just 14% confine their social network use to their lunch period or other unpaid time, meaning that employers are paying considerable sums for ostensible work time spent on personal matters. While many employees report only passive use of social networks to “connect” or “consume,” more than half (55%) are “creators” who post commentary, write blog posts, or otherwise share their thoughts, including those about work-related issues.
This is particularly true of ASNs, who are unusually vulnerable to risks relating to ethical issues since far more of them consider many questionable disclosures to be more acceptable than do other social networkers: 60% of ASNs are likely to comment if their company is in the news, 53% mention work projects once per week or more, 42% believe it’s okay to post about their job if the company isn’t named, 36% mention clients once or more per week, 35% mention management once or more per week, and 34% mention coworkers once or more per week.
The propensity of ASNs to broadcast information otherwise considered confidential poses significant risks to all organizations. According to the NBES-SN, “Management must assume that anything that happens at work; any new policy, product, or problem; could become publicly known at almost any time.”
That isn’t to say that ASNs only represent a risk to an organization—they are also more likely to witness and report wrongdoing. In “Ethics and Social Media: Where Should You Draw The Line?” Patricia J. Harned, president of ERC, told Sharlyn Lauby that “You could also look at another set of our responses—particularly the high number of active social networkers who reported misconduct—and say that social networkers behaved appropriately.” And when they report misconduct, they experience retaliation more frequently than their colleagues. The survey states, “A majority (56%) of ASNs who reported the misdeeds they witnessed experienced retaliation as a result, compared to fewer than one in five (18%) of other employee groups.”
In addition to jeopardizing the reputation of the organization, improper use of social networking may provide temptations for sharing confidential information about new products or other projects that may enable others to profit illegally from trading inside information. This risk is especially relevant to accountants, who have access to a vast amount of financial and other data.
Social networking may also be altering the nature of reporting relationships at work. More than four out of 10 supervisors (42%) have some kind of an online connection, such as a friend or follower, who is someone they supervise. Among ASNs, the incidence of such linkages rises to 60%. Supervisors who connect to social networks during the day are especially sensitive to how their posts will be viewed. “Among supervisors who spend 10% or more of their workday engaging in social networking, 84% say they consider what their direct reports will think when seeing the post,” the survey notes.
To cope with the evolving importance of social networking in the workplace, the NBES-SN identifies several strategies for addressing these challenges. Organizations should:
- Develop broad-based strategies and social networking policies grounded in ethics and values, not merely compliance, so that employees are able to handle novel situations in an environment that continues to evolve. Only 32% of companies report having policies concerning social networking.
- Establish a social networking policy sooner rather than later, and reinforce it with training to reduce ethics risks for employees and management alike. It’s important for rules to reflect today’s realities of widespread use during the workday so that workers are more likely to abide by them.
- Take advantage of social networking to enhance internal and external communications, especially outreach to employees to reinforce the company’s ethics culture.
- Invite social networkers to help shape social networking policy and to help the ethics/compliance function engage employees through social networking.
With social networking now the normal behavior for most employees, employers need to deal with the risks and opportunities it provides. The Infographic Show presentation reports that almost a third of companies either have no social networking policy or don’t block access to certain sites. Employees should consider the consequences to themselves as well as their employer of every post they make. The continued growth of social media will only amplify these challenges in the future.