An ethical scandal shakes every aspect of an organization, from customer loyalty to employee retention. And, in a marketplace that offers choices for both customers and employees, all it takes is one scandal to bring down even a powerful organization.
Consumer activists hold a lot of power in the U.S. A survey conducted by YouGov in July 2020 found that 50% of respondents have participated in a boycott, and 63% believe that boycotts are an effective means of signaling their displeasure with a company’s actions.
So what can you do to support ethical behaviors at your organization? Every company conducts compliance training and exercises, but focusing on compliance alone rarely produces ownership of organizational ethics. Your greatest tool is organizational culture, which allows you to reinforce good behaviors — and hold people accountable for unethical ones. “Leadership creates culture, and it’s our responsibility as well as our obligation to do that,” says Cyndi Ramirez Ryan, SPHR, CEO of Más Talent HR. Strong leadership from HR is essential to creating a culture of ethics.
Culture is the living, breathing embodiment of your organization’s shared values. It’s the collection of choices and actions that make up day-to-day life among your employees. Building an ethical workplace requires HR leaders to tap into workplace culture at every level of your organization.
Ethical motivations and behaviors have to be modeled by leaders, and employees should recognize ethics at work in their decision-making process.
When leaders put ethics ahead of profit or personal gain, it sends a strong signal down the ranks. The tone at the top of the organization should emphasize the importance of acting ethically, says Steven Mintz, an ethics expert and professor emeritus at California State Polytechnic University at San Luis Obispo. “It's up to top management to serve as ethical role models so that employees see it's taken seriously,” he says.
A well-written code of ethics is a good starting point. Your code should draw from your mission, vision and values to provide a blueprint for ethical behaviors. “It starts with stating your organizational values: Who are you, what do you stand for?” says Jason Herring, SPHR, Director, Human Resources Business Partner of Global Technology at VF Corp. “Then you can start modeling the way and training and reinforcing those values.”
Your organization may have a designated ethics officer or committee, but every individual must take ownership of ethics to create an ethical organization. HR is already embedded at every organization level through processes like performance management and therefore has the infrastructure in place to promote universal ownership of ethics. Partner with leaders across the organization to outline potential ethical pitfalls inherent in each job grouping. Help leaders develop and implement a plan for modeling those behaviors.
“We need to be setting the bar for treating people fairly, applying HR policies consistently and fairly (and ensuring that leadership does that, as well), and helping to enforce a culture that has zero tolerance for any type of ethical violations,” says senior HR leader Suzanne Speak, SPHR. HR can craft interview questions to help direct managers probe values and ethics in candidates, for example, or outline expectations for ethical behaviors in specific roles.
Coach direct managers through potential worst-case scenarios and conflicts of interest so they can be prepared when a situation arises. Identify areas with the highest risk of ethical breach. If you’ve already conducted a risk assessment, reevaluate the progress you’ve made and adjust your goals accordingly.
HR shouldn’t be perceived just as an enforcer, Ryan says, but also as a shepherd and coach. Team members from HR should be approachable and capable of offering guidance to employees who are facing difficult decisions. But when there is an ethics violation, it must be reported and addressed. Start with a written warning to the employee, Speak says, and have a conversation with them to ensure they understood how they violated ethical proscriptions. “Although we can't share the details around what happened, it does send a message about what we will stand for and what we won’t,” Ryan says.
Violations in high places must be publicly addressed, too. It takes a lot of strength to call out an ethics violation in senior leadership, but it’s essential for building a strong ethical culture. “It takes courage to maintain virtues and stay the course,” Herring says. “But once you take one shortcut or deviate from your guidepost, it becomes easier to do it over and over again.”
Your middle managers and direct supervisors are among the most instrumental ethical gatekeepers. Direct managers are essential when cultivating a culture of ethics in a remote work environment. Direct managers are a remote worker’s most frequent line of communication with the company, so they must be trained to address potential ethical challenges.
Build ethics reviews into performance management conversations, too. Ask employees to identify an ethical situation they were involved in. Have them share:
“This enables HR to make sure ethics systems are working as intended,” Mintz says. If employees know their managers will ask this question, they will stay more aware of their surroundings and actions.
Emphasize that you want employees to report issues as they arise. “I think some companies don’t talk about or enforce the non-retaliation policy enough,” Herring says. “Let employees know about their ability to file an ethics complaint, even anonymously.” Companies must stand behind their commitment to non-retaliation and frequently share channels for reporting complaints.
Understanding ethical concepts is different from putting those concepts into action. Employees in every role need to understand how ethics applies to them.
Aligning ethical principles with actual behaviors requires regular training. When employees face ethical dilemmas, they tend to fall back on their training to guide their choices. “Broad-based policies have to filter down to the individual employee,” Mintz says. “It works best to have separate training programs or modules for each role — otherwise, employees never really know how it relates to their job responsibilities.” The intersection of each position’s daily operations and ethical behavior should be clear and unambiguous.
The perception of training as a compliance exercise, or just something to be checked off periodically, doesn’t reinforce ethics as a daily responsibility for employees. “We ask them to do so much training,” Speak says. “It doesn't matter what industry you're in; there’s so much compliance training.” Continuous learning is essential to create a sense of ongoing responsibility. Ethics should be perceived as an ongoing conversation, Speak suggests, with every individual working continuously towards the same goal.
Microlearning, when done right, can be much more engaging and effective. Take allyship as an example. Cultivating a sense of psychological safety for all employees is an ethical imperative but requires ongoing learning. One day of unconscious-bias training isn’t enough to permanently change behaviors. “You can’t be an ally unless you understand what white privilege looks like,” Speak says. Keep ethics top of mind by promoting dialogue through microlearning modules at your organization.
Following your code of ethics and cascading the code down to policies and behaviors helps you make ethical decisions when faced with new situations. When a company’s values and code of ethics are ingrained in the cultural DNA, decision-makers at all levels can act quickly while upholding high standards. We must model preparedness, too, and stay abreast of changes that increase the risk of ethics violations. “In times of change and turmoil, employees and organizations look to HR to help provide guidance,” Ryan says. HR leaders must address ethics concerns spurred by current changes and events, such as civil rights issues and advances in data technology.
In light of the recent resurgence of the Civil Rights movement, more organizations acknowledge their ethical imperative to create equitable workplaces, foster equal opportunities for hiring and promotions, and cultivate a sense of psychological safety and belonging across the workforce. Last year, thousands of companies took the first step by putting out statements supporting the Black Lives Matter movement. But if they don’t follow through by creating a culture of inclusion and belonging, these statements undermine their credibility as ethical companies. “It's easy to say that we want to do something or make a commitment to do it,” Ryan says. “It's so much harder to put actions behind it, and I think that’s going to be critical.” In some organizations, diversity, equity and inclusion initiatives fall under the HR umbrella, and in other organizations, DEI is separate. In either case, though, it’s incumbent on ethical HR leaders to ensure that DEI initiatives are enacted across the workforce.
Technological advances can also be concerning for some employees. Unapproved data collection is perceived as a privacy violation, for example. Partner with IT and legal to monitor technology changes and how they affect employee privacy. You must be transparent with employees about what data you’re collecting and how it’s being used. “The moment you start tracking information and employees don't know, you've lost the trust of that employee,” Herring says.
Being an ethical gatekeeper is a challenging role, especially in moments when it puts you at odds with senior leadership. But it’s essential for the life and integrity of your company. When consumers lose faith in your brand, you risk a hit to your bottom line. HR leaders must design and enforce an ethical culture for the good of the company.
But knowing that you’re doing the right thing doesn’t make it any easier to do. “This past year, a lot of people truly understood the value that HR brings to the table,” Herring says. “It's a really hard job, and we have to have the courage to do what's right.” One allowance or shortcut undermines all of the work you’ve put into developing an ethical culture.
Maintaining an ethical culture is an ongoing process. Work with department heads and direct managers to monitor for warning signs. When violations occur, address them, educate the workforce on why they were a problem, and move forward with integrity.
Learn more about HRCI’s commitment to ethics, including the new ethics requirement for recertification.
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