How to Create an Ethical Workplace

When it was revealed that former Yahoo president Scott Thompson erroneously claimed to have a computer science degree on his resume, the revelation coincided with other allegations of misconduct in the C suites and boardrooms of high-profile entities, in industries ranging from Wall Street to Main Street to the oil and gas fields of the Great Plains.  

Negativity from these types of instances can have a direct effect on employees, especially in economically challenging times when the workforce is being asked to make sacrifices. The impact on morale and the impulse to take action when corporate wrongdoing is perceived are particularly strong in the current environment. In fact, good business ethics are at least as important for workforce morale and productivity as they are for keeping a company out of potential legal trouble. But how can an employer create an ethical workplace and ensure that managers and employees alike will behave accordingly?

Do As I Say, and As I Do

An ethical environment should be a component of the company’s values, which should consistently be reinforced by the actions of the owner and management team. There can be no “Do as I say, not as I do” mentality. Rather, the business leader should serve as an ethical role model. For example, an executive who refuses to do business with a disreputable business entity—even if the company stands to lose money as a result of this decision—is clearly demonstrating his priorities. Reputation and honor are more important to him than realizing an immediate profit. Employees who witness their employer’s ethical behavior will be more inclined to model it themselves.

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Set a Conduct Policy

Business owners should also provide standards of conduct, which outline the behavior expected of all employees. First and foremost, all employees should be treated with respect and dignity. They must also follow the letter and spirit of the law and respect any specific industry regulations.

Once standards of conduct are determined, they should be included on the company’s intranet, posted in visible areas throughout the office, and included in the employee handbook. However, employers should not simply rely on this written policy to enforce ethical behavior. A written policy is useless if the business’s management team does not behave ethically itself.

Offer Classes and Seminars

In addition to setting a policy, business owners should hold training classes or seminars to review the company’s ethics expectations. When moral principles are discussed, clarified and reinforced, they become part of the company ethos. Also, there are fewer instances of unethical behavior in companies where employees are engaged by their employers.   

Allow Employees to Report Misconduct

Even if these safeguards are in place, there are times when an employee may witness inappropriate ethical behavior by a manager or colleague. According to results from the Ethics Resource Center’s 2011 National Business Ethics Survey, 45 percent of U.S. employees surveyed reported witnessing misconduct, and roughly two-thirds of them reported it, most of the time to an authority within the company because their primary motivation is to help. It is imperative that employees know there are resources available if they wish to report misconduct.

It is also critical to create an environment in which the person reporting the inappropriate behavior is free of retaliation for coming forward. Management needs to constantly reinforce the concept that any breach of ethics adversely affects the overall business. Every employee, regardless of his or her position, is responsible for behaving appropriately and in the company’s best interest.

Declining business ethics, in short, have an impact far beyond the boardroom, potentially influencing the attitudes and actions of a company’s entire workforce. However, by taking proactive steps to create a positive, ethical culture, businesses can protect themselves and their employees and enjoy great business success.