Religious Reminders

Intuitively, religious commitment should have a positive impact in fostering morally desirable behavior in business decision makers. Religions establish norms that prescribe the boundaries of acceptable behavior, often expressing rules of conduct in comprehensive writings such as the Koran and the Bible.¹³ But do people who possess strong religious commitments demonstrably behave more ethically than others in the workplace? The evidence is inconclusive.¹⁴

Although religiosity does not clearly reveal a person's propensity to cheat, studies do show that cheating diminishes if people subliminally are reminded of religious precepts shortly before performing an act. This notion, known as priming, suggests that people who are reminded of religious principles moments before performing an act are more likely to behave ethically than those who are not exposed to moral reminders.

Consider one experiment in which two identical groups were asked to complete a brief questionnaire prior to performing a core set of tasks. Before beginning the main test, one group of participants was given a pretest in which they were asked to identify as many of the Ten Commandments as they could recall. The other group was a control group. Its participants were asked innocuous questions that were devoid of any moral or religious content. According to the study's conclusions, the group that received the religion-oriented pretest had a much lower incidence of cheating on the main test than the control group had.

These results suggest that moral reminders may help reduce cheating in the workplace, especially if the reminders are timed to occur just before employees confront an ethically challenging situation. For example, the study's authors suggest that cheating might decrease if employees are asked to acknowledge a company's Code of Ethics in a signed writing shortly before submitting expense reimbursement requests.¹⁵

After catching a student cheating on an exam essay, one frustrated professor applied this concept of using moral reminders in a rather extreme manner. Imagine how surprised his students were when they were asked to sign an exam pledge that stated, as punishment for cheating, “I will be sorry for the rest of my life and go to Hell.” Would you have signed such a pledge? Many students did!¹⁶

Nonreligious Reminders

Nonreligious moral reminders also seem to work well. In Austria, newspapers often are distributed on street corners next to a cashbox. Customers are expected to put money into the cashbox, but many customers fail to pay the full amount due. Researchers posted two signs near the newspapers. The first sign, which recited that Failing to Pay Is Illegal Stealing, had no effect. However, when researchers appealed to customers' moral decency with a sign that essentially said Thank You for Being Honest, their appeal caused customer payments to rise significantly.¹⁷

One study even observed that, by displaying a large pair of watchful eyes on the wall, people in a group kitchen area became far more likely to contribute their fair share to replenish the kitchen snack and beverage fund.¹⁸

The Nature of Loss Aversion

Which you would prefer to buy in the store: A package of cheese that proclaims that it is 80% fat-free or one that is 20% fat? Similarly, are you more likely to agree to a major surgery that has a 90% chance of saving your life, or one that has a 10% death rate?

Although these paired sets are equivalent expressions, most people select the first statement in the set because of the psychology of how facts are presented, called framing. Positive affirmations are preferred over statements of negativity or loss.

Researchers have observed that people are so averse to losses that they will expend greater effort and expense to avoid a loss than they will to obtain a gain. This is known as the loss aversion effect. Consider the following situation: People were asked to choose between two results. Choice One was to definitely suffer a loss of $750. Choice 2 was an uncertain outcome that had a 75% chance of a $1,000 loss and a 25% chance of no loss. Although both choices result in an average expected loss of $750, nearly 9 out of 10 participants selected the second choice, hoping to avoid a loss.¹⁹

The baseball coach played by actor Brad Pitt in the movie Moneyball summarized this viewpoint as follows: “I hate to lose more than I love to win.”

The Importance of Loss Aversion in Ethical Decisions

The psychological impact of loss aversion manifests itself in numerous ethical decisions. For example, taxpayers who have had too much money withheld from their paychecks cheat on their tax returns at a fairly low rate because they already anticipate the pleasurable gain sensation of soon receiving a tax refund. In contrast, taxpayers who underpaid their taxes during the year are far more likely to cheat on their tax returns to avoid the loss sensation of unexpectedly having to pay additional taxes to the government.²⁰

This same behavior of cheating to avoid a loss has been observed in tax accountants as well as taxpayers. In one study, tax return preparers were presented with the opportunity to help a client claim exaggerated tax deductions in a questionable situation. When the accountants were told that the client relationship would end if they refused to overstate a deduction, a large fraction of the accountants willingly cheated to avoid the loss of a client. However, when accountants were told that their refusal to overstate a deduction likely would cause them to not gain a new client, far fewer accountants selected the unethical alternative.²¹

Not only does the loss aversion effect have a powerful influence on decisions, but the strength of its impact also intensifies when decisions have to be made under time pressure. Thus, to minimize the likelihood of unethical behavior, companies should avoid placing employees in loss-producing situations when decisions are subject to severe time constraints.

The Depleted Resistance Effect

If you have ever tried to diet, when were you most likely to crave eating a 40-slice pizza and an entire wedding cake with the bride or groom figurines still atop it? Was it when you were feeling rested and happy, or when you were exhausted and anxious?

Anyone who has ever been on a diet knows that willpower and discipline tend to wane when we feel overworked and underappreciated. Studies have confirmed that being tired and anxious makes us more likely to stray from our diet plans, as well as stray from our ethical values.²²

In a recent experiment on cheating, participants were sorted into two groups. The first group was comprised of night owls, whose energy levels peak late in the day, and the other group only included people whose natural body rhythms made them morning people. All the participants then were asked to play a game at various times of day and self-report their scores. Higher reported scores earned participants better prizes. Not surprisingly, night owls were much more likely to cheat in the early morning hours when their energy levels were low. On the other hand, morning people cheated more frequently once nighttime fatigue had set in.²³

Businesses should heed the results of this experiment by having employees make ethically sensitive decisions when they are well rested, not when their willpower is depleted.

Moral Compartmentalization

Historians have painstakingly documented the heinous acts that Nazi Germany inflicted on Jews. During the same time period that Nazis were torturing Jews, however, Germany incongruously was imposing the strictest protection laws for animals of all contemporary societies. In 1933, for instance, Hermann Goring, the Prime Minister of Prussia, announced that the government would strictly enforce animal rights laws regulating boiling lobsters and shoeing horses to “show sympathy for their pain.” A few months later, Germany enacted further laws that banned the use of animals in scientific experiments and protected animals used in filmmaking and parades. In a statement that is stunning in its inverted morality, Goring also declared that, “those who still think they can continue to treat animals as inanimate property will be sent to concentration camps.”²⁴ With this utterance, Goring warned Jews and non-Jews alike that a ruthless disregard for human dignity was just retribution for a lack of reverence toward animals.

The Nazis' use of children in horrific medical experiments, while concurrently forbidding animal experiments, is a stark example of what psychologists call moral compartmentalization. Moral compartmentalization occurs when people attempt to avoid inner conflict by isolating inconsistent moral situations into separate niches, or compartments. By placing incompatible moral decisions into mutually exclusive buckets, people are better able to cope with the emotional discomfort that results from maintaining inconsistent values or choices.

Moral compartmentalization occurs frequently in our daily lives. Some people, for instance, lie profusely in business negotiations all week long, but would never lie to at their place of worship on Sunday. Others do not hesitate to submit a phony damages claim to a large insurance company, but would never overclaim damages to their friendly local dry cleaner. This type of inconsistency was noted over 20 centuries ago when ancient Greek storyteller Aesop cynically said, “We hang the petty thieves, but appoint the great ones to public office.”

In the accounting realm, moral compartmentalization often occurs in tax reporting. As a former IRS Commissioner Lawrence Gibbs once noted, some people “compartmentalize morality…effectively separating tax cheating from other immoral actions and in the process, sparing himself or herself any guilt.”²⁵ That is, the same people who would never cheat their friends or neighbors often do not hesitate to cheat on their taxes.

The Copycat Effect

Is cheating a solitary act, or can it spread from one cheater to others, much like a contagious virus spreads?

If you have ever watched the veritable parade of fellow pedestrians who join in after an initial jaywalker has started crossing a street, you have witnessed firsthand how one cheater stimulates others to likewise participate.

In one European study, for instance, researchers observed a clear copycat effect. In this study, participants were divided into two groups, called the control group and the test group. Both groups were asked to solve a verbal test without using dictionaries or other reference materials that were prominently situated in the room. In the control group, most participants solved the assigned problems without using the reference materials. In the test group, however, an actor posing as a participant secretly had been instructed to openly cheat using the reference materials. Following this cheater's lead, this set of participants cheated at triple the rate of the control group.²⁶

In a somewhat similar university study, participating college students were divided into two groups, and an actor posing as a participant cheated openly in front of both groups. For one group, this actor dressed in apparel that made him appear to be a fellow classmate of the student participants. For the other group, though, this actor wore a sweatshirt emblazoned with the name and logo of a cross-town college to make participants think that he was a student at their despised archrival. According to the study results, the participants cheated far less in the second group, apparently because they considered the cheating of this intruder to be immoral and wanted to demonstrate their disapproval by refusing to emulate his conduct. Apparently, the authors concluded, the copycat contagion potentially created by peers cheating depends on whether others feel a social connection to the cheaters and their values.²⁷

Fortuitously, the real world often mimics contrived experiments. In a recent cheating episode commonly called the Great Harvard Cheating Scandal, 125 students in one Harvard University class violated exam rules by plagiarizing one another's answers on a take-home exam. In all likelihood, these students did not have a premeditated master plan to cheat on the exam. Rather, a few students began cheating, and like a virulent virus, cheating fever began to spread. At the conclusion of this scandal, the university disciplined about half of the accused students, forcing them to withdraw from school for at least one academic term.²⁸

Because of the copycat effect, business firms must ensure that unethical employees are removed from the workplace before they contaminate others with their inappropriate conduct.

The Cheater's High Effect

Many behavioral models assume that people feel remorse and shame when they commit ethical transgressions. Recent research, however, suggests that cheaters sometimes experience positive feelings of exhilaration, rather than negative feelings of guilt. Consider, for example, millionaire celebrities who shoplift, or successful executives who commit petty acts of cheating that jeopardize their careers. They do not engage in criminal behavior out of a desire for modest financial rewards. Rather, they are spurred on by the euphoric pleasure of getting away with it.

Have you ever walked briskly across a street when the pedestrian traffic signal unrelentingly flashed a warning for you not to cross? Was it really worth risking your life to get to your destination a minute or two sooner? In this situation, you too were likely experiencing momentary exhilaration from defying a minor societal rule.

The psychological impact of unethical conduct seems to depend on whether or not a cheater causes direct harm to an identifiable victim. If a person directly harms another, such as by stealing an elderly woman's purse, negative feelings of guilt and shame are likely to outweigh any pleasurable feelings. However, when the victim of ethical misconduct is a faceless bureaucracy or corporation, net positive feelings often result from beating the system. Neuroscientists suggest that cheating, like a large gambling win on a slot machine, creates a euphoric rush that excites certain regions of our brains. They call this phenomenon the cheater's high.²⁹