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Ethics Group Warns of ‘Steep Declines’ in Workforce Trust

The ‘ominous warning signs’ of an ethics decline, says the Ethics Resource Center in a new survey, include a sharp increase in retaliation against employee whistle-blowers.

March 20, 2012

A survey by a corporate research and watchdog group that predicts “a potentially significant ethics decline ahead” in American workplaces is a clear warning to employers to address employee disaffection, experts say.

The “ominous warning signs” of an ethics decline, the Arlington, Virginia-based Ethics Resource Center said in its 2011 National Business Ethics Survey, include a sharp increase in retaliation against employee whistle-blowers. More than 1 in 5 employees, or 22 percent, who reported misconduct say they experienced some form of retaliation in return. That is an all-time high and is almost double the number—12 percent—who experienced retaliation in 2007.

The most common forms of retaliation, according to the survey, are exclusion from decisions and work activity, getting the cold shoulder by co-workers and verbal abuse by a manager, according to the survey.

“This confirms other data [showing an increasing] level of distrust in the workforce, directed particularly at executive management,” says Earl “Chip” Jones III, a labor and employment law specialist at the law firm of Littler Mendelson in Dallas and a former senior executive for Dean Foods Co.

Workers who distrust management, Jones says, are more inclined to “perceive” they have been retaliated against even when, in reality, they have not. “There’s a breakdown in the relationship,” he says.

The Ethics Resource Center, which interviewed nearly 4,700 private-sector workers for the survey, which was released in January, reported that 2011 was “a year of extremes and substantive shifts.”

On the positive side, “[M]isconduct has reached an historic low and observers of wrongdoing are more willing to report than ever. But with this good news we also see some very ominous signs—ethics cultures are eroding and employees’ perceptions of their leaders’ ethics are slipping.”

Among the survey’s specific findings:

• The percentage of employees who perceived pressure to compromise standards in order to do their jobs climbed five points to 13 percent, just shy of the all-time high of 14 percent in 2000.

• Companies with weak ethics cultures also climbed to near-record levels at 42 percent, up from 35 percent two years ago.

As a group, the Ethics Resource Center said, active social networkers “are much more likely to experience pressure to compromise ethics standards and to experience retaliation for reporting misconduct than co-workers who are less involved with social networking.”

Jones sees a positive trend in the greater willingness of workers to report misconduct.

“Employees are more aware of their right to speak up,” he says. And juries appear ready to punish those employers that retaliate against whistle-blowers.

In what may be the largest verdict for a single employee in U.S. history, a California jury recently awarded close to $168 million against a Sacramento hospital for firing an employee who made complaints about patient safety and sexual harassment to the facility’s human resources department. In North Dakota, meanwhile, an oral surgeon won $900,000 against a health system in February in a similar whistle-blower case.

Both the Ethics Resource Center and Jones recommend that employers carefully review their anti-retaliation policies and invest heavily in ethics and compliance programs. As a first step, Jones advises clients to conduct a thorough employee engagement survey that asks questions such as, “Are you able to complain about your supervisor?”

“You have to find out what the cultural climate is in your business and then manage it,” he says.

Companies should also train managers, Jones says, “to understand they have a duty to let people complain” rather than take complaints personally. “If an employee complains about you ... you have to take personal sentiment out of the equation.”

And human resources practitioners should understand the company’s business, Jones says. If a factory worker, for example, complains that a manager put chemicals down the drain, there might be environmental law violations. “HR should be spotting all these issues,” Jones says.

As for active social networkers, the ethics center suggests that employers engage them in discussions about ethical issues and “enlist them in efforts to positively integrate social networks into your business culture.”

Matthew Heller is a freelance writer and editor based in Los Angeles. To comment, email editors@workforce.com.