Forget the idea that human beings are perfectly rational. People do not always make consistent decisions based on strict logic or narrow self-interest. Human behavior is complex and emotions and intuition have a significant role to play in individual decision-making.
So, what can be done to ensure that employee behavior is in line with ethical values?
Ethics programs — the development of a code of ethics, training, and communication campaigns — can go some way, but even the best-intentioned ethics programs will fail if they don’t take into account behavioral ethics — the biases that can blind us to unethical behavior, whether ours or that of others.
Nudging ethics can be more effective than enforcing compliance. Nudge Theory suggests that positive reinforcement and indirect suggestions can be more effective in encouraging desired behaviour than direct instructions, legislation and enforcement.
People are likely to put aside their personal moral standards at work if they think this is what is expected from their role. “I was only following orders” is a classic indicator of this kind of ethical blindness. Roles come with expectations and these expectations can translate into pressure to compromise one’s ethical standards.
Milgram’s electric shock experiment showed that people are likely to follow orders given by authority figures even if it means inflicting harm on another human being.
To prevent this kind of blind obedience, it is important that companies encourage employees to apply critical thinking and learn how to take initiative, rather than just following orders. Promoting an open culture where employees feel empowered to challenge decisions, even when they are instruction from a superior, is paramount.
Ethics needs to become part of the reward, recognition and promotion system. “Availability bias” means people tend to overestimate the likelihood of something happening because a similar event has either happened recently or because they feel emotional about a previous similar event.
So if commercial results are rewarded, even if they are obtained by unethical means, this will influence future employee behavior. On the other hand, publicly recognizing and rewarding those who for live up to the organization’s ethical values or communicating positive stories sends the message that ethics is important in the organization.
Internal communications and the language used within an organization can have a significant impact on the ethical culture. The “framing effect” is a cognitive bias where individuals respond differently to the same problem depending on how it is presented.
Communications manipulate perception and how a situation is interpreted or framed, making it easier for employees to rationalise poor behaviour. For example, the use of aggressive language — e.g. at war with competitors — promotes rigid framing which can, in turn, drive ethical blindness.
On the other hand, using positive language can be a driver of change — reframing a whistleblowing line to a Speak Up line can have significant effect on the number of calls.
People determine the appropriate behavior by looking around. The phrase “everybody’s doing it” is a red flag which signifies that there may be an ethical problem. Social pressure from a majority group can cause a person to conform to a certain behavior.
To avoid this ethical risk, training staff on ethical matters is important to create a shared systems of beliefs and to keep these issues prominent in people’s minds when they face a difficult decision. Leadership engagement and the right tone at the top are also crucial. We naturally follow our leaders and employees will be more likely to behave unethically if they perceive that their senior leaders and managers fail to walk the talk.
Doing the right thing needs to become our instinctive reaction. Corporate culture — the way things are done around here — is a powerful influence upon our corporate subconscious.
Sometimes a company’s culture can actually be working against its ethical values. Looking at what behaviors are rewarded, considering how messages are framed, setting an example at the top, are all examples of how ethics can achieve saliency in an organization.
Embedding ethical values into everything the organization does can help ethics become an automatic part of an employee’s “System 1” — the intuitive part of our decision-making before the brain engages rationally.
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In the Autumn, we’re looking forward to Richard Bistrong visiting us at the IBE to talk about how good people can end up doing bad things.
But perhaps the question should be: why do they do good things? And how can we support and empower employees to do the right thing?
Guendalina Dondé, pictured above, is a Senior Researcher at the Institute of Business Ethics in London.
One concern with using nudges in corporate compliance settings is that the mechanisms of ethical decision making may not always be compatible with the mechanisms of economic decision making, which is where the concept of nudges originated. Also, certain nudges that take advantage of employees' automatic thinking system might be deemed unethical themselves by employees, which could undermine larger compliance efforts. I explore this as well as provide theory and practice related to behavioral ethics nudging in my article, Nudging Corporate Compliance, published last year in the American Business Law Journal. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3004074
Excellent tips for cultivating an ethical culture at work!
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