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12 Steps to Building a Best-practices Ethics Program

September 1, 1997
Related Topics: Ethics, Featured Article
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In Part I of this report (see August 1997) it stated that, more than in the past, employees feel pressured to meet organizational goals. And when employees presume those goals are unreasonable, they may resort to unethical means of reaching them. When managers see employees' apparent success in achieving results, they assume it's appropriate to raise the goals, eventually ensuring no one can achieve them by legitimate means. The bottom-line result is an organization infested with distrust, rationalizations and unethical behavior.

  • As outlined in the previous article, examples of unethical behavior include:
  • Disconnecting sales and service calls to reduce the average time per call
  • Adding unordered items to customer requests to increase the average dollars per sale
  • Deleting customers from the market research sample when they have been the subject of the preceding behaviors.

Fortunately, many of today's most successful organizations have combated the forces that cause employees to believe they have to lie, cheat and steal to survive. These companies have confronted the pressure-to-perform dilemma and have established some forward-thinking best practices for doing more and better work with fewer people.

The formula derived from these best practices is fairly straightforward. But be forewarned. Best practices are easier to describe than to implement. These practices require a desire on the part of all involved to build a working environment based on respect and concern for doing the right things in the right ways.

The 12 elements of a best-practices ethics program include the following. Each element is described in reference to the pressure-to-perform scenario.

  1. Vision statement. A vision statement defines the long-term, most desirable future state for the organization. The vision gives employees and managers a first screening test for decisions. They should ask themselves: "Will this decision or action move the organization closer to its vision?"
    Example: When setting performance goals HR should question whether the goals further the vision. But this alone is an insufficient test of the appropriateness of a set of goals. For example, "stretch" goals can further the vision in ways that are inconsistent with company values. A better measurement of the appropriateness of a goal would be: If meeting the goal will require unethical actions, the goal should be rejected.
  2. Values statement. A values statement defines general principles of required behavior. It's the standard against which decisions and actions are evaluated to determine if they meet the company's and employees' requirements.
    Example: An organization that adopts the simple values of fairness, honesty and integrity would set only those goals that employees can achieve through honest means, and would require that employees refrain from "gaming the system" and that communication among all parties be truthful.
  3. Organizational code of ethics. A code of ethics gives organization-specific definitions of what's expected and required. The code of ethics should clarify the organization's expectations. The code also defines the consequences for failure to meet the standard.
    Example: In detailing the values of honesty or integrity, the code of ethics would specify that reporting of sales and work times be accurate and truthful, and that failure to meet this standard can be cause for dismissal.
  4. Ethics officer. An ethics officer ensures that the ethics systems are in place and functioning. This person monitors the organization to determine if it's making a good faith effort to abide by its stated values, that the code of conduct supports those values and that violations of those values are prevented or detected and addressed. The ethics officer usually oversees the ethics communication strategy and mechanisms for employees to obtain guidance and report suspected wrongdoing.
    Example: In the pressure-to-perform case, the ethics officer should encourage and receive communication from employees about the performance standards and determine whether or not those standards constitute an impetus to violate the organization's values and code of ethics.
  5. Ethics committee. The ethics committee oversees the organization's ethics initiative and supervises the ethics officer. It's the final interpreter of the ethics code and the final authority on the need for new or revised ethics policies. Early in the ethics initiative, it also may act as an ethics task force, creating the infrastructure it will eventually oversee.
    Example: The ethics committee receives information regarding any patterns or trends in employee comments about goal-setting, measurements and rewards, as well as instances of reported misconduct. It's responsible for initiating the organization's response to those patterns and trends, which likely includes a review of the goal-setting guidelines and a test of the reasonableness of current goals. The committee also initiates steps to reverse the pressure to violate the code of ethics to meet artificially high performance standards.
  6. Ethics communication strategy. If employees are to know what's expected of them and what resources are available to them, the ethics officer must create a cohesive ethics communication strategy. This strategy ensures that employees have the information they need in a timely and usable fashion and that the organization is encouraging employee communication regarding the values, standards and the conduct of the organization and its members.
    Example: Employees require information about what's expected and how to safely raise their concern if the goals, as set, are unattainable by any means that the organization would condone.
  7. Ethics training. Ethics training teaches employees what the organization requires, gives them the opportunity to practice applying the values to hypothetical situations and challenges, and prepares them to apply those same standards in the real world.
    Example: Ethics training enables employees to recognize the ethical dilemma of unreasonable goals and ensures they know what resources are available for safely raising the issue. It also makes it evident to the managers setting those standards that doing so creates an unacceptable condition in the workplace.
  8. Ethics help line. Help lines aren't just for reporting unethical conduct. They also make it easier for the organization to provide guidance and interpretation of its expectations when the intent of an ethics policy is unclear.
    Example: In the pressure-to-perform scenario, a call to a help line alerts the organization to the problem and ultimately leads to restoring reasonableness to the sales and performance objectives.
  9. Measurements and rewards. In most organizations, employees know what's important by virtue of what the organization measures and rewards. If ethical conduct is assessed and rewarded, and if unethical conduct is identified and dissuaded, employees will believe that the organization's principals mean it when they say the values and code of ethics are important.
    Example: Appropriate rewards and measures prevent the unreasonable goals that are the motivation for the lying, cheating and stealing.
  10. Monitoring and tracking systems. It isn't enough to track and monitor employee behavior. It's also critical to assess the extent to which employees accept and internalize the organization's values and ethics code. Do they agree with their importance and appropriateness? Do they believe they apply to all employees at all levels?
    Example: If employees suspect that managers know employees are cheating to reach goals and are looking the other way, this may suggest that looking good on the sales reports is more important to managers than doing the right things in the right ways.
  11. Periodic evaluation. It's important to assess periodically the effectiveness of any initiative, especially an ethics program. Is the commitment still there? What has been the impact of recent changes? Are ethics-related goals and objectives being met? What new challenges are emerging?
    Example: With periodic ethical climate evaluations the pressure to improve sales and service performance can be anticipated, preventing an ethical mess to follow.
  12. Ethical leadership. The bottom line is that ethics is a leadership issue. Leaders set the tone, shape the climate and define the standards. If managers are trustworthy and trusted, if their motivations are honorable and their expectations crystal clear, and if they're paying attention to ethics as an integral element of every business decision, then ethical problems will be rare. Problems arise when the leaders are distracted by other elements of running the organization and fail to ensure that the ethical systems are in place and are effective.
    Example: The pressure-to-perform scenario can develop because managers are sidetracked by competition and inadvertently communicate that nothing is more important than sales. The message they should be communicating is that sales, honestly made and honestly reported, are crucial, but that dishonest sales dishonestly reported serve no one.

These 12 best practices can prevent the vast majority of ethics violations, large and small, if they're systematically and systemically applied. Nothing has proven effective in preventing the rogue employee from perverting any system. But these practices can ensure that an organization is doing nothing to encourage good people to do bad things.

Workforce, September 1997, Vol. 76, No. 9, pp.117-122.

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