Accountability Through Communicating Company Ethics
As critical as are the code of ethics (COE) and the decision-making ladder (DML) tools to hold the company accountable for ethical decisions, ultimately it is the communication of company ethics that is the chief accountability tool to assure compliance with organizational values. In my organizational research of companies in diverse industries, with global and local operations, both for- and not-for-profit, communication of ethics was one of the top components that emerged for the corporate ethical management system (CEMS) (Dunn 2013).1 Thomas, Zolin, and Hartman (2009) believed that the quality and quantity of organizational communication had significant impact on organizational trust, transparency, and commitment (see graphic below).2 For communication to attain quality status it had to be accurate, timely, and useful; the metric for the amount or quantity of information was deemed as adequate (Thomas et al. 2009).3 In addition, the quality of information had the most impact for trust between coworkers and supervisors and the quantity or adequate information allowed for more trust of top leaders by employees (Thomas et al. 2009) (see Figure 6.1).4
Figure 6.1 Communication Research
Though the research of Thomas et al. applies to any type of company communication, it is especially salient for ethical communication application in the organization.
Think about how ethics and company values are communicated in your organization. What is the consistency and frequency of such communiqués? What form do the communiqués take? Is the communication of company ethics done in creative modes and in interesting ways to remind employees of company values? How would you evaluate the accuracy, timeliness, and usefulness of the information your company gives about ethics? Do you consider the information about ethics adequate? Keep in mind that the receiver, and not the sender, usually measures the adequacy of the information. There are times that privacy issues prevent full disclosure of ethical issues, but here we are speaking of the communication of the stated company values.
To achieve the goal of quality (accurate, timely, useful) and quantity (adequate) of information, the communication of company ethics must be consistent and completed through several venues for maximum effectiveness. Not one communication piece or type of communication is necessarily more important than another, as all work in concert to create a process of effective communication surrounding company ethics.
Hiring Processes
The message of company ethics begins in the beginning or in the employee attraction or hiring processes of the company (Dunn 2013).5 All companies hire for the job-, skill-, or knowledge-fit of prospective employees with the company. Many companies add a personality-fit to assure that a new hire complements and adds diversity to the current staff. Fewer companies add a value-fit dimension to the hiring process.
During interviews, a clear message is delivered to the candidates for hire if part of the interview process involves time spent discussing company values. A specific interview protocol should be created that asks behavioral and situational types of questions that help the interview panel determine the value-fit of the candidate. The value-fit interview protocol is in addition to any other interview questions deemed appropriate to hire for specific positions or personalities. The value-fit interview protocol should center on the company COE with questions that seek to know how the candidate has or will demonstrate the company values that form the COE.
In Figure 4.1, a pocket card illustrates the COE for Alvamar, Inc. that employees are expected to keep. The values of pride, listening, attentive customer service, and you (as the first customer impression), PLAY, should form the value-fit questions for an interview protocol at Alvamar. I developed the following value-fit protocol for Alvamar, Inc. Use it as an example to create your own company value-fit interview protocol.
Pride
1. Appearance: Interviewer can tell by dress/outward appearance during interview. How do you decide what is appropriate dress for any event? What does dressed and pressed mean to you?
2. Character of honesty: How do you define honesty? Describe a time when you were less than honest and wish you could change that now? How would you be honest in helping a teammate at work improve in doing their job?
3. Work ethic: Tell me about a time when you were assigned a task which you finished well; tell me about a time when you were assigned a task that you did not finish as well as the supervisor liked. If I would walk into a previous office or work area of yours, describe what I would see.
4. Work area: In dining room, pro shop, golf course, what should a customer see, hear, and smell when he/she enters Alvamar? What does it mean to you that Alvamar is “your” club? What images do the phrase: “neatly swept, kept, and scrubbed” bring to mind?
Listen
1. If a customer started complaining about the golf course, food, and so on what would you do?
2. If a customer is wrong about the complaint, in your opinion, how long do you wait before correcting him/her?
3. What do you think are key techniques to being a good listener? (Note eye contact)
4. Describe a time when you listened to a criticism. How did you respond?
5. Describe a time when you listened to a compliment. How did you respond?
6. Tell me about some advice you received from your parents/supervisor. How did you respond? Tell me about a time that you did not listen to authority and what were the consequences?
7. Tell me about a time when you received improvement advice from a teammate and how did you respond?
Attentive/Anticipatory
1. At home or work, what are some of your parents’, siblings’, or coworkers’ needs?
2. Describe a time when you realized and met the needs of another person.
3. How would you train someone in good customer service?
4. What do you think is necessary for an employee to provide anticipatory service to our customers?
You
1. Describe a time you left an impression, either positive or negative, on another person.
2. What is the most important impression an employee can leave with a customer?
3. At Alvamar, we believe an employee is the frontline person to make the first good impression and to leave a lasting impression on customers. How would you do both?
The Director of Operations at Alvamar immediately adopted the “PLAY” value-fit interview protocol and required all management staff to utilize it in addition to existing protocols used in the hiring processes of the separate departments at Alvamar. Organizations can adapt this model protocol to fit their specific values. Potential hires could walk through several sets of interviews: (1) job-, skill-, or knowledge-fit with the departmental manager, (2) personality-fit with the HR manager and with a group of peer workers, and (3) value-fit interviews with a senior leader. The extra time and human power needed for these diverse interview steps may be prohibitive to some companies. But, the investment of this time in the hiring process assures (at least as much as is possible in interviewing) an employee who is already somewhat indoctrinated to and is a value-fit with company ethics.
Training Processes
Organizations have specific types of training in order to develop employees in job skills, customer relationships and service, leadership and management processes, global or expatriate leadership in diverse cultures, diversity sensitivity, IT skills, project management, Six Sigma or other quality improvement programs, conflict resolution, and much more.
Several years ago, as I was working on my PhD and transitioning to higher education, I sought employment at a prominent fast-food restaurant chain in my community. I applied for a management position by taking on online test that required over 1 hour of answering situational and behavioral types of questions. Twenty minutes after submitting my application, I received a phone call from the manager of one of the restaurants near my home. The manager requested that I come for an interview, which I did. During the interview, the manager told me that this fast-food chain rarely had anyone outside of the organization score as highly as I did on the management test. The manager stated that he was not sure what to do with me, but assured me that the chain would not just immediately give me the keys to one of their restaurants. I told him that I would not want those keys immediately, but that I wanted training on the chain’s processes. The manager explained that I would probably be sent to another restaurant in my community for fast-track training, and that I would have my own store within 4 months. The main need for me was not training in how to work with people, as I scored highly on that test; I needed solid training on how this chain restaurant brought good food through the supply chain to the customer.
There is probably not a single company that would hire personnel without some type of training no matter how proficient and experienced those personnel might be in a particular skill set. The main need is to demonstrate to employees the culture and the processes of the company. Included in this needed training is the ethics or the values of the company. Most companies would give a quick overview to the COE and the values of the organization during on-boarding or new employee orientation. Some organizations require employees to sign off on the company values at hire; some even require employees to annually sign off on the company values. But, little training beyond this tangential relationship to the COE is offered.
A former ethics student recently e-mailed me. As part of the ethics class this student attended, I had each learner create a COE as described in this book. He created a salient COE in a succinct and memorable mnemonic device a few months prior to his e-mail to me. A major restaurant chain that now employed him required him to sign his commitment to the company COE. In his e-mail, this student told me that the company COE was not memorable or succinct and that it was not posted or visible to employees in the restaurant. He also knew that after signing his commitment to the COE, he would not see it again. For this major company, there would be no specific or ongoing training of its primary ethical device. I was extremely proud that this student caught the vision for a proper COE and its use; I was extremely disappointed that a major company gave such little ongoing concern to its primary document.
Collins (2010) insisted that ethics training added to the organization’s culture of trust and integrity.6 Valentine and Fleischman (2004) found that employees who participated in formalized ethics training were much more positive about company ethics, which also affected employee job satisfaction.7 Pelletier and Bligh (2008) understood that top leaders and employees should attend ethics training together to improve employees’ ethical perceptions of company leaders and to avoid any idea that ethics are only for employees.8 Ethical leader (EL) role modeling also happens when top leaders and employees work together in ethics training programs. An intentional and formal type of training system not only offers these benefits, but also is necessary to inform, to remind, and to help employees keep company values. For Sims (1991), a critical component for the teaching of organizational standards to employees and to helping employees understand the ramifications of their actions was ethical training, although for only employees involved with ethical issues.9 It would seem that this type of systematic training is necessary for all employees since all routinely make ethical decisions at some level.
Company values, standards of conduct, and the organizational COE are worth only the price of the paper on which they are written unless systematic and intentional training systems are in place. Systematic, ethical training systems could fall into two categories: orientation training and the consistent, ongoing training of company ethics.
Orientation Ethics Training
The first and most obvious ethics training must happen at orientation or during the on-boarding of new employees. Organizations consistently offer some type of new-hire orientation in which an employee learns the “ropes” or the culture of the company. Policies, insurance, benefits, payroll, specific job characteristics, and the location of company resources all form a part of this initial training.
The intentional time taken to cover company values and ethical policies assures the effectiveness of the employee in his or her compliance to company standards. In providing ethics training, the company demonstrates how important ethical behavior is to its mission and what is expected of employees in compliance to ethical codes. Imbedding the ethical values of the company during training allows new hires to acclimate and align their behaviors to those company expectations and to the ethical culture already in place. As priority is given to ethical training, the company gives new hires a solid foundation for employees who are satisfied and committed and have more comfort and fun at work (Dunn 2013).10 As seen earlier in this book, satisfied and committed employees are more productive, which leads to improved organizational performance, better financial results, and to competitive advantage (Dunn 2013).11
Each organization must intentionally decide what ethics training is offered during on-boarding and the orientation of new hires. There are certain ethics points that should be covered during this critical phase of an employee’s organizational life. At the minimum, new hires should understand the following:
1. The company COE with its memorable values and demonstrated behaviors. During orientation, time should be given to allow new employees to memorize the COE. Ethical trainers should give specific organizational examples of the behaviors expected for each value in the COE. Situational and behavioral role-playing could provide a fun, yet meaningful approach to teaching the company COE. Employees could also be tested on the COE through a written exercise or through a verbal debrief following the training sessions.
2. The EL attributes selected by the company. If the company has selected EL attributes that are in addition to the values of the COE, these attributes should be a part of the orientation training. New hires could participate in the speed interviewing exercise suggested in Chapter 3 to gain their input on EL attributes. This exercise allows for a collaborative effort in the ongoing analysis of company ethical policies and for new hires to immediately sense ownership of the company ethics.
3. The company DML. If the company has created an ethical DML, it should be explained at orientation. Trainers should teach new hires how to walk a proposed decision through the ethical theories by giving a case study example or by demonstrating how the company using the DML made an actual workplace decision.
4. The company role modeling system. At orientation, training should include the expectation of role modeling from top-tier (TT) leaders and peer-to-peer (P2P) workers. This would be the appropriate time to set up the mentoring process for new hires, pairing each employee with a TT leader and a P2P worker.
5. The context for a CEMS. The reasons for the company’s CEMS should also be covered in orientation. This is the appropriate time to list the research reasons covered in Chapter 2 as to the reasons why the company chooses to be ethical.
6. The company accountability system. New hires need to understand how the company will hold them accountable for company standards, including rewards and discipline (discussed later in this chapter). New hires should also understand the expectation of their participation in ongoing ethics training throughout each calendar year (discussed later in this chapter). At orientation, new hires should see that the company has a whistleblower and a reporting policy through which all employees are expected to report unethical behavior at any level or the organization. New hires should know how to access a reporting “hotline,” and that the company is a safe place to do so without repercussions to the reporting person.
In addition to the minimum training provided at orientation, the company might choose to add a significant amount of time dedicated to listening to the ethical experiences and ideas of new hires. New hires come from diverse belief systems, cultural backgrounds, and workplace experiences. As company leaders listen to the input from new hires, new employees sense ownership of company ethics and that their opinions count (Buckingham and Coffman 1999).12 Trainers also learn the value systems of new employees as a way to understand their former behavior and how to work with them in the future. Trainers can also identify potential problem areas in some employees and learn potential changes to company ethics from the good ideas presented by new hires.
During the ethics training at orientation, trainers should only lecture or explain company values in short time segments of 15 to 20 minutes. People today have short attention spans without learner involvement or participation in the teaching exercise. Attention spans are extended by learner involvement in the training. It is important to thoroughly explain company ethics in a short time period and then allow interactivity between the trainer and the learners by application exercises. Trainers should be creative in developing application exercises that demonstrate how the COE, the DML, EL attributes, and role modeling sections are implemented in organizational life. Case studies, real-workplace situations, and role-playing help with learner involvement in the training process. New hires extend the learning curve when placed into groups to work through different ethical scenarios that apply the company ethical tools. The group work allows for better individual discussion and involvement, plus also allows new hires to see how different groups attack the same ethical scenario. These varying teaching techniques add interest to the training, but also give the learners a chance to see constant movement in the teaching, much like watching TV or playing a video game in which scenes change rapidly. Remember: what we hear, see, and do or apply add to the retention rate of the information presented.
It is also important for top company leaders to be present at some or all of the ethics orientation, especially during the mentoring pairing and the listening times. Top leaders should be the ethical trainers at some point in the orientation. The presence of top leaders demonstrates to new hires the importance of company ethics and that company ethics apply to all personnel.
The time invested in orientation is huge and costly for the company in terms of person power expended; however, the investment in ethics training at orientation forms a solid foundation for the future success of new hires and for the employee and company benefits already discussed.
Ongoing Ethics Training
What we do not use, we lose. For that reason alone, ethics training must be more than a one-shot item completed at orientation. Employees at all hierarchical levels need refresher training about company ethics to be reminded of company ethical values and principles. Ongoing ethics training demonstrates that the ethical culture of the company is central and an integral part of doing business. Training that consistently happens throughout the course of a calendar year provides an opportunity to sharpen ethical decision-making skills and to assure that the company has not experienced ethical drift. Organizations should adopt an attitude that the training of company ethics is simply an ongoing endeavor. Employees should see ongoing ethics training as the norm or part of company culture.
For employees to appreciate and even look forward to the ongoing training, the training must be meaningful and not seen as a waste of employee time and company resources. Again, creativity in the training is needed. Employees could be placed in small, stratified groups that have a mixture of personnel representative of the company demographics. Group formation should consider demographics such as race, ethnicity, hierarchical level, tenure, age, and gender. This type of demographic mixture in groups creates a synergy of learning from and appreciation for all workers in the company. These demographic focus groups could receive a set of discussion questions to answer and case studies to solve that require the use of company ethical tools such as the COE. Collins (2010) suggested that ethics training should focus on real-life experiences in which employees participated in interactive workshops.13 Ongoing ethics training is more meaningful when employees are given real problems to solve in interaction with each other. Departmental employees could also form focus groups; however, this tends to compartmentalize ethics and people and to continue the “silo” effect about which many employees complain. Competitions with rewards could be offered for the groups who are most creative in solving the case studies presented.
How often during a calendar year should ethics training be scheduled? Company decision makers can only answer that question based on the value and meaningfulness of the training. An interviewee in my research said that company vision should be repeated enough so as not to be irrelevant (Dunn 2013).14 Kotter (2007) believed that the vision for change should be communicated and repeated many times and in the most creative ways possible in order for improved employee engagement.15 So, the company decision makers must balance repetitive training between employee understanding and engagement without making the training irrelevant or unnecessary in the perception of employees. Thomas et al. (2009) would say that communication should be accurate, timely, and useful with an adequate amount of information.16 While these communication principles are not firm or exact metrics, they do represent parameters with which to design ongoing ethics training.
It would seem that a good rule of thumb is to offer ongoing ethics training at least semiannually, utilizing different focus groups, demographic and departmental, for the two training times. This allows a good balance of company-wide and departmental interaction. The instructional material in each training session should be varied in presentation without compromising the value content needed for training. It is possible to use a set of discussion questions in one training session and to use case studies in another training session. If different focus groups are utilized in the separate training times, then the questionnaire and the case study format could be used both times with a debrief by top leaders comparing how the different focus groups responded to the ethical questions and the case study. A company-wide discussion could offer an interesting format as to what was learned from both focus groups in terms of applying company ethics.
Another possibility for ongoing ethics training is to add company ethics to each employee’s performance appraisal. One organization in my research utilized the annual appraisal for salaried employees to analyze if the employee was conducting business the right way (Dunn 2013).17 Whatever the frequency of performance appraisals in your organization, the company ethics would be a point of discussion between the employee and the supervisor conducting the appraisal for ongoing ethics training and the communication of employee accountability for company values. The supervisor could also ask for employee feedback on company ethics, which again gives ownership of company values to the employee or the opportunity for the employee to safely report any noncompliance issues observed.
The training of company ethics, both at orientation and in an ongoing system of training, is a major component of an effective CEMS. Training is a component that communicates company ethics to all employees and it is the means by which to remind personnel of their personal accountability for company values.
Visual Marketing
In a sense, each company has the responsibility to market its company values. That marketing is a part of the communication of company ethics and is part of the accountability effort. Since people remember more what they see than what they hear, visual marketing of company values is unique and critical. Most organizations fill their walls and halls with graphic images of some type; however, few organizations are intentional about the promotion of company ethics on those walls and in those halls.
My dissertation research utilized visual observance as one method of data collection to determine how organizations communicated ethics in and around their facilities of operation (Dunn 2013).18 All three organizations had some form of graphics or images on the walls and most of those images informed employees and customers what those companies valued. The for-profit local company demonstrated several organizational priorities but no graphic included the specific company values found in the company handbook. The not-for-profit global company had a plethora of artifacts in glass cases and script writing on the walls that shared the values of the company. However, no succinct graphic form of company ethics existed in visual or even written form. The for-profit global company filled its walls and halls with information specifically focused on the company values; but, the information became so expansive and it so saturated the wall spaces that eventually the information became easily diluted and ignored.
I found several unique tools used by the research organizations for visually communicating or marketing company ethics (Dunn 2013).19 Such tools included a daily e-newsletter, signage located on the walk way entering the facility, signage in many parts of the facilities, note cards printed with company values, and work computer screen savers that scrolled company values.
Visual signage should include the graphic form of the company COE as placed in a mnemonic device. The COE should be placed in prominent spots within the facility of operation so as to be easily seen by employees and customers, but not so much as to be easily ignored. Break rooms, bathrooms, and wall space should contain the company COE. Each employee should have a pocket card or lanyard name/key card with the COE attached in the mnemonic device with the specific values and a shortened form of expected behaviors. Depending on the type of organization, the company COE could be placed on counters beside cash registers or near machinery used in daily operations. As a creative type of visual marketing, the various values of the company COE could be separately placed in prominent spots within and throughout the facility.
The company COE should be placed on all communiqués to employees and customers, including the company letterhead, newsletters, and website. For placement on printed materials, the COE must be succinct and salient, but also in a recognizable or branded format. Stakeholders should easily equate the graphic created as the expression of company ethics.
Top leaders and employees might discuss and decide the visual placement of the COE within the facility in order to give ownership and to avoid employee perceptions that visual marketing is only the responsibility of TT leaders.
The communication of and accountability for company ethics needs a visual marketing component for an effective CEMS. People learn from visual branding and recognition. Company logos are important for stakeholder recognition; the company COE should have the same prominence and place in marketing.
Rewards
Everyone loves and usually expects rewards for good behavior, for strong performance, for allegiance to the rules, for winning a competition, for receiving good grades in school, and for meeting standards set by authorities. We teach our children how to behave by rewarding good behavior and punishing improper behavior. In the same way, it is important to communicate company values by rewarding employee compliance to those company values.
Organizational rewards for ethical behavior are an effective component in a CEMS for establishing and holding employees accountable for company values or the company COE (Dunn 2013; Treviño et al. 2000).20 In my research, rewards for ethical compliance had good support from the for-profit local company and the not-for-profit global company; the for-profit global company analysis demonstrated only moderate support for the use of rewards as part of a CEMS (Dunn 2013).21 An interviewee from the for-profit global company stated that rewards were unnecessary for expected behavior, but a few moments later in the interview shared that he gave gift cards when he caught employees doing good.22 Not only do rewards communicate accountability, but rewards also enhance social learning theory when rewards are given to employees who act out or role model the ethical behavior of leaders (Brown et al. 2005).23
Not all ethical researchers agree on the use of rewards to support ethical behavior in organizations. Baucus and Beck-Dudley (2005) disagree about the use of rewards for increasing ethical behavior, as these rewards teach employees to reason at Kohlberg’s lowest levels.24 Kohlberg and Hersh (1977) taught that the gain of reward and the avoidance of punishment were the lowest levels of moral reasoning.25 It is good to keep in mind that we begin behavioral training with children at Kohlberg’s lower levels, but hopefully graduate children to his higher levels of moral reasoning. The same mindset should guide organizational leaders in the use of rewards as a beginning stage to help employees learn company values (see a full discussion of the use of Kohlberg in Chapter 7).
There are many ways to reward employees for compliance to the company COE or company values. Monetary benefits are always fitting in the form of pay raises if company ethics is a part of the performance appraisal, as suggested earlier. All employees would enjoy an envelope with cash ($50 or less) and gift cards for gasoline, groceries, restaurants, sporting or concert events, or online shopping. Departmental lunches and staff dinners are monetary ways to reward group ethical behavior.
Recognition is also a significant form of reward and a tremendous motivational tool (Herzberg 1974).26 Recognition of ethical employees can take the form of tangible artifacts, verbal praise, and written acknowledgment. Organizations have become creative in the use of artifacts that show appreciation to employees for behavior in compliance to or above and beyond the company values. Engraved plaques or clocks, forest trees, golden golf balls, miniature traffic cones, trophies, and any symbol of the company are all tangible artifacts that employees love to receive as a form of recognition. Even those artifacts that seem silly often carry the weight of recognition from top leaders and peers for a job well done. Verbal praise and the written acknowledgment from top leaders that employees have exemplified the company COE are critical ways to show recognition for compliance to company values. Leaders should thank an exemplary employee in front of peers or in solitary fashion or by leaving a handwritten and signed note in that employee’s work area. A colorful, sticky note is also a meaningful way for a leader to personally acknowledge the ethical work of an employee. At annual banquets, some organizations give framed certificates with the verbal acknowledgment of exemplary service to the company. Leaders and managers should practice critical incident discussions in which employees are immediately praised for ethical behavior versus waiting for the annual appraisal to offer thanks. Awarding ethical behavior provides recognition, employee motivation, and communication of what is important to the organization.
A larger form of recognition for outstanding and exemplary, ethical behavior is advancement or promotion within the company. Herzberg (1974) included advancement as one of his work satisfiers.27 Though promotion is not a regular occurring event for being an ethical employee, promotions should always have ethical compliance as a criterion for advancement in the organizational hierarchy. Employees should understand early on in their company tenure, that the ethical component forms a critical piece in any promotion effort, carrying as much weight as do quantitative performance metrics. A more simple form of promotion is to give exemplary employees more responsibility without advancement in title or organizational hierarchy.
Another tremendous work motivator for employees is to know that their opinions matter to top leadership (Buckingham and Coffman 1999).28 How would an employee feel if his or her supervisor said: “I have noticed that you are a great example of our COE, specifically in the area of ________________; for that reason, I would like to ask your opinion on ______________?” To ask an employee for his or her opinion is just one more way to reward exemplary ethical behavior. Based on social exchange theory, this type of interaction would create a beneficial dyadic relationship with the employee and the leader that will further increase reciprocation of ethical behavior from the employee.
A fun way to communicate accountability for company ethics in the form of rewards is to have an office party with snacks with the express purpose of thanking staff for strong ethical behavior. A cake with the words: “Congratulations for Ethical Work!” would be unique and appreciated by staff. The area leader or manager could issue a celebration proclamation in honor of the office workers.
Vroom believed that employees were more motivated toward what they value or toward an outcome’s valence (Kreitner and Kinicki 2008).29 In other words, employees work harder when the result of their work is an outcome they desire or value. To apply Vroom’s theory to rewards, find out what your employees value. If giving gift cards, do they value sporting event and concert tickets or the ability to shop online? What restaurants do your employees enjoy? Do some employees devalue public recognition while others relish acknowledgment in front of their peers? It is important as the person who has reward power to know what rewards individual employees value. When you find that reward value for each employee, tie it to compliance with the company COE, and you will have employees motivated to keep company values.
Rewards for ethical behavior do teach employees to operate from an ethical egoist or self-interest motivation, and at a lower level of moral reasoning. However, rewards are essential as a foundation to communicate accountability for company values.
Discipline
No one likes rebuke, correction, or discipline. We like to think that we always behave properly, and that we do not need the discipline provided by others to correct inappropriate or even unethical behavior. As with rewards, we begin teaching our children appropriate social behavior through the discipline of unwanted behavior. Parents should be clear about behavioral boundaries and the attached consequences when those boundaries are crossed. If parents are not clear about boundaries, then it is improper to discipline children for crossing boundaries they did not know existed. If boundaries are drawn, but the consequences are not enforced when the boundaries are broken, then parents may be seen as pushovers. At the same time, children may learn that the boundaries are not serious, and that the parents’ word is not to be trusted. If parents are consistent in setting boundaries and in the enforcement of the consequences, discipline then becomes an effective source of feedback in the development of all individuals.
It is difficult to conceive of a home or a society without discipline or punishment for those who break its rules and laws. It should also be difficult to conceive of an organization that does not effectively utilize discipline for unethical behavior; however, organizations may not have an effective disciplinary process already in place.
Research confirms that ELs must offer accountability for company ethics through some type of discipline system (Parboteeah et al. 2010; Treviño et al., 2000).30 My research confirmed that discipline was one of the main components used to communicate to employees the needed accountability for company ethics (Dunn 2013).31 Dhanoa and Kleiner (2000) thought that disciplinary action should include the following due processes: (1) make company expectations and accompanying consequences clearly known to employees; (2) employers must be consistent in response to noncompliance; (3) discipline should be based on facts, not emotions; (4) employees should have the opportunity to question the charges, including a defense or rebuttal of charges, and to appeal any consequences; (5) discipline for noncompliance of company expectations should be progressive; and (6) any disciplinary action should consider a holistic approach, including the employee’s past infractions, contribution to the organization, and frame of mind.32 Treviño et al. (2000) believed that ELs must give attention to discipline instead of trusting the issue will disappear over time, and that any discipline should be visible and fair.33
An organizational system or process of employee discipline could include the following:
1. Clear expectations of employee behavior with accompanying consequences. The company COE could serve as the document that expresses clear boundaries and expected behaviors. At hiring, the employee should sign his or her acceptance of the company COE with a full understanding of the disciplinary process for noncompliance.
2. A stepped disciplinary process. The organizations in my research utilized several steps in correcting employee behavior before termination; however, executives reported that steps could be skipped if the noncompliance was of a serious nature (Dunn 2013).34 Steps allow for discussion in an attempt to immediately avoid termination and to gain compliance from the employee. In each step, the employee would sign a document agreeing to the needed corrective action or appropriate behavior. After a period of time in which two to three steps of corrective action and signed documents have had no effect to change the employee’s behavior, termination is achieved in reality by the action of the employee who has disregarded his or her own signed agreement.
3. Fair, consistent, and immediate employer action. Some organizations attempt to correct improper behavior through the annual performance appraisal. Most employees dislike the annual appraisal for this very reason—they are being corrected for actions that happened months ago. That is parallel to disciplining the dog today for spoiling the carpet yesterday; he has no recollection of yesterday’s event. When noncompliance to the company COE happens, employers should talk to the employee immediately. Critical incident discussions should be used for discipline as well as rewards, as mentioned earlier. The leader or managers should be constantly cognizant of how discipline is perceived by employees in its fair and consistent administration. Employers can maintain a sense of justice in the organization if discipline rules are followed consistently and if all factors are considered, including the employee’s contribution to the organization and his/her side of the story.
4. Check local, state, company, and union laws and policies. The disciplinary suggestions here are generic and should be checked against all applicable laws and workers’ rights, and your company’s legal department or attorney. Documentation for the discipline process should also be checked for legality and the protection of all concerned.
Though discipline may teach employees to live at the lowest level of Kohlberg’s moral reasoning theory (avoidance of punishment),35 it is an effective way to help employees initially grasp what is ethically expected of them while at work. As an analogy, organizational leaders are like parents who help employees (children) understand expectations. Organizations, like parents, must be clear about the COE boundaries and consequences. To fail to do so eliminates the ability to discipline employees since improper behaviors were not clearly articulated at hire. If boundaries and consequences are clear, but not enforced, organizational leaders run the high risk of being perceived as untrustworthy or undependable in keeping their word; employees also soon learn that the boundaries and the COE are not serious. But, if the COE is presented at hire, consistently trained, and if leaders are clear about boundaries and consequences, then discipline is an important component to effectively manage the workplace ethical environment.
Treviño et al. (2000) understood that the use of rewards and discipline for compliance and noncompliance to company ethics was the most powerful tool to communicate accountability for company values and behaviors.36 Rewards and discipline become important and critical components of the CEMS as employers find and reward employee ethical behavior and catch and discipline employee unethical behavior (Dunn 2013).37
Recently, I walked out of a chief executive’s office with one of the company’s senior leaders. As the senior leader and I walked down the hall, another senior leader commented: “you both came from the same room; it must not be good news.” Why would that senior leader make a comment like that? Though not the case in this company, some companies may use discipline more prominently than rewards (Dunn 2013).38 When discipline is effectively utilized throughout the company without the balance of effective rewards, employees soon believe that anyone coming from the CEO’s office must be there for a reprimand. Rewards are more often thought of as tangential to effective ethical leadership, while discipline is believed to be a priority. The proper view is to see rewards and discipline as effective components of a strong CEMS as each is utilized in balance.
Ethical Auditing
Today’s companies are well acquainted with the idea of audit. Financial records and inventories are monitored and audited to comply with the Sarbanes–Oxley Act and to protect organizational stakeholders. Companies are not as familiar with an ethical audit and do not consistently think about that form of compliance. New legislation and the Federal Sentencing Guidelines for Organizations have encouraged companies toward the use of an ethics audit in a systematic approach to evaluate company performance in relation to stated standards and values (Ferrell, Fraedrich, and Ferrell 2015).39
The ethical audit is a strong component for an effective CEMS. The for-profit companies in my research utilized some form of an ethical audit; all companies felt that this was an area of organizational ethics that could be improved by using a formal ethical audit (Dunn 2013).40 In one company in my research, the annual ethics training allowed employees to give input as to needed improvement in the company CEMS (Dunn 2013).41 One person interviewed for my research believed that annual ethical audits done by individual employees would bolster company values and would encourage company stakeholders (Dunn 2013).42 Ferrell et al. (2015) suggested that an ethics audit provided the following benefits: (1) improved ethical performance, (2) documentation of a company’s ethics program for legal proceedings, (3) identification of any ethical issues, and (4) greater transparency for and better relationships with company stakeholders.43 TT executives consistently manage company reputation, customer relations, and stakeholder trust; the ethical audit can enhance that part of executive management (Ferrell et al. 2015).44
Cohen (1993) suggested that an ethical audit should assess employees’ understanding of company ethics by using many qualitative research methods, such as individual employee interviews, distributed surveys, and focus groups.45 Ferrell et al. (2015) noted that companies used specific measurement tools such as Six Sigma, the Balanced Scorecard, and the Triple Bottom Line for an ethics audit.46 My research organizations had anonymous hotlines, formal meetings with leaders and the chairman, employee evaluations, secret observation of employee behavior, and the suggestion of suggestion boxes as means to evaluate the ethical climate (Dunn 2013).47 I believe that an ethical audit should include the following to fit with the Moldable Model©:
1. Evaluation of role modeling. It is possible to create an employee survey to ask how well TT leaders are doing in demonstrating the values and behaviors of the COE and/or the selected EL attributes. Each survey question could represent a value of the COE or an EL attribute and allow employees to rate each TT leader on a Likert-type scale. A survey, in the same way, could ask employees to rate the company’s mentoring program, both TT and P2P, in its effectiveness to teach ethical behavior.
2. Evaluation of the COE. Employees should be asked on an annual basis to consider the values and behaviors of the COE with such questions as: (1) Where and when did you see the company COE in action? (2) Are there values that need updating in the COE? (3) Does the company need to change any of the stated behaviors in the COE? (4) How well do TT leaders and P2P employees keep the values and behaviors of the COE (use a Likert-type scale)?
3. Evaluation of ethical context. The ethical audit could also include an employee perceptional survey to check on the contextual reasons (Chapter 2) for being ethical such as employee satisfaction and commitment, employee comfort and fun, and increased company productivity, financial performance, and competitive advantage.
4. Evaluation of communication and accountability processes. Company focus groups could be tasked with the analysis of hiring and training processes, visual marketing, and rewards and discipline systems as to each component’s effectiveness toward a strong ethical environment (Dunn 2013).48
Ethical audits should be performed consistently, at least on an annual basis, to gain employee feedback on how the company is succeeding or failing in its ethical culture, and results of the company-wide ethical audit should be publicized to stakeholders with prioritized action plans for improvements (Dunn 2013).49 Without action or changes from the results of an ethics audit, the audit is “mere lip service” to bolster company reputation without changing the ethical climate (Ferrell et al. 2015, 245).50 Employees soon will be demotivated to participate in an ethical survey or audit if needed changes are not published and implemented.
As an added part of the ethics audit system, each organization should make the workplace a safe place for employees to report unethical behavior. Pelletier and Bligh (2008) insisted that employees should challenge the unethical actions of others that are contradictory to their personal ethical values.51 Anonymous hotlines, the approachableness of executives, and the continuing effort of the organization to be transparent about ethical issues should encourage unethical reporting from concerned employees. The term whistleblower should be changed to concerned workplace citizen (CWC) so that employees see unethical reporting as a positive move to help the organization. With an ethical auditing system and CWCs, employees can work with top leaders to assure a quality ethical environment.
To design ethical workplaces, a regular ethics audit system needs to be created utilizing the tools and suggestions discussed here or other ingenious tools specific to your organization. TT leaders and P2P employees should collaborate on the creation of an effective audit system and how to consistently implement its parts to assure an ethical environment. Ownership of the audit system happens when organizational members collaborate on its creation and implementation.
The ethical audit system should then be promoted, explained, and implemented with a focus on needed improvements to the system after implementation. Organizational change is difficult and scary to employees, especially in the area of ethics. As Kotter (2007) advised, create a sense of urgency, develop a guiding coalition, and communicate the vision for any needed organizational change.52 Before the roll-out of the new ethical audit system, these three criteria of effective change leadership must be met and utilized within the organization and to all company stakeholders, including customers.
Ethical auditing is one more component to the design of ethical workplaces and to an effective CEMS. It is the component that assures the other components are working together effectively to create a workplace environment that is ethical, safe, comfortable, fun, and productive.
Parboteeah et al. (2010) found that communication played a significant and integral role in the development of a company’s ethical environment.53 ELs and managers must communicate accountability for company ethics through hiring and training processes, visual marketing, rewards and discipline, and through ethical audits. These components are effective tools for a CEMS in an effort to constantly enforce and enhance a company’s ethical environment.
Chapter 6: Workplace Application Exercises
1. Make a list of how your company communicates company ethics. Based on the procedures in Chapter 6, what needs improving?
2. How does your company assure value-fit of employee candidates to company values?
3. Create an interview protocol that determines the value-fit of potential hires. Be sure the interview protocol aligns the company COE.
4. Review company training processes, paying specific attention to how company ethics is communicated to new hires. What should be improved or added based on the discussion in this chapter?
5. Do an observational tour of your facility to see what your company is marketing through wall graphics. Is the company COE displayed in a memorable graphic and in prominent places?
6. What is your mindset regarding the use of rewards for ethical compliance? If you believe rewards are useful, what rewards might you offer in your organization?
7. Spend some time this week in talking and listening to individual employees to understand what each values or enjoys. Use this information to tailor rewards to individual employees for compliance to the company COE. Send any great reward ideas to Dr. Don Dunn, [email protected], for possible inclusion in another edition of this book.
8. Review your company’s disciplinary system and compare and contrast it to what you have read in this chapter. What are good elements and what needs improvement?
9. If your company does not have a disciplinary system in place for unethical behavior or noncompliance to the COE, what would you recommend? Send your disciplinary system to Dr. Don Dunn, [email protected], for possible inclusion in future editions of this book.
10. What are some informal methods your organization uses as a type of ethical audit? Based on the discussion in this chapter on a systematic ethical audit, what are new ideas you would want to implement in your workplace?
11. After collaboration with a guiding coalition of top leaders and employees, describe the ethical auditing system your company created and implemented. Send your ethical auditing system to Dr. Don Dunn, [email protected], for possible inclusion in future editions of this book.
Notes
1. Ibid.
2. Thomas, “The Central Role in Communication,” 287.
3. Ibid.
4. Ibid.
5. Dunn, “The Moldable Model,” 215.
6. Collins, “Designing Ethical Organizations,” 104.
7. Valentine, “Ethics Training,” 386.
8. Pelletier, “The Aftermath of Organizational Corruption,” 839.
9. Sims, “The Institutionalization of Organizational Ethics,” 504.
10. Dunn, “The Moldable Model,” 1.
11. Ibid.
12. Buckingham, “First, Break All the Rules,” 265.
13. Collins, “Designing Ethical Organizations,” 104.
14. Dunn, “The Moldable Model,” 1.
15. Kotter, “Leading Change,” 100.
16. Thomas, “The Central Role in Communication,” 287.
17. Dunn, “The Moldable Model,” 1.
18. Ibid.
19. Ibid.
20. Ibid.
Treviño, “Moral Person and Moral Manager,” 128.
21. Dunn, “The Moldable Model,” 174.
22. Dunn, “The Moldable Model,” 1.
23. Brown, “Ethical Leadership: A Social Learning Perspective,” 117.
24. Baucus, “Designing Ethical Organizations,” 355.
25. Kohlberg, “Moral Development,” 53.
26. Herzberg, “Motivation-Hygiene Profiles,” 18.
27. Ibid.
28. Buckingham, “First, Break All the Rules,” 265.
29. Kreitner, “Organizational Behavior,” 225.
30. Parboteeah, “Establishing Organizational Ethical Climates,” 607.
Treviño, “Moral Person and Moral Manager,” 128.
31. Dunn, “The Moldable Model,” 1.
32. Dhanoa, “How to Conduct Due Process Discipline,” 559.
33. Treviño, “Moral Person and Moral Manager,” 135.
34. Dunn, “The Moldable Model,” 1.
35. Kohlberg, “Moral Development,” 53.
36. Treviño, “Moral Person and Moral Manager,” 135.
37. Dunn, “The Moldable Model,” 208.
38. Dunn, “The Moldable Model,” 1.
39. Ferrell, “Business Ethics,” 243.
40. Dunn, “The Moldable Model,” 168.
41. Dunn, “The Moldable Model,” 198.
42. Dunn, “The Moldable Model,” 150.
43. Ferrell, “Business Ethics,” 244.
44. Ferrell, “Business Ethics, 245.
45. Cohen, “Creating and Maintaining,” 352.
46. Ferrell, “Business Ethics,” 248.
47. Dunn, “The Moldable Model,” 150.
48. Dunn, “The Moldable Model,” 192.
49. Dunn, “The Moldable Model,” 204.
50. Ferrell, “Business Ethics,” 245.
51. Pelletier, “The Aftermath of Organizational Corruption,” 840.
52. Kotter, “Leading Change,” 96.
53. Parboteeah, “Establishing Organizational Ethical Climates,” 607.