How Human Resources Can Help Build An Ethical Organization

How Human Resources Can Help Build an Ethical Organization
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Linda Gravett, Ph.D, SPHR
How many times have you heard statements like these from your employees? A Human Resource practitioner, or anyone who serves in a leadership capacity within an organization, is often faced with multiple choices about how to handle ethical dilemmas. Laws such as Title VII of the Civil Rights Act and The Americans With Disabilities Act provide legal guidelines for handling employee relations issues; however, its possible to comply with the law and still not be on solid ethical ground. With the assistance of legal counsel we can determine the law. We can partner with Finance and Accounting professionals to calculate the financial impact of decisions. However, determining the right choice when people are involved can be challenging. A complicating issue is the fact that the concept of ethics means different things to different people. The field of Human Resource Management has evolved into a strategic, technical, and measurement-oriented area in the past decade. The field will continue to grow in sophistication and complexity as a reflection of the world in the 21st century, presenting difficult ethical dilemmas. This article describes what an ethical organization looks like; indicators of a weak ethics system; and the Human Resource professionals potential to contribute to the development of an ethical organization.
What An Ethical Organization Looks Like.

Individuals within an organization can hold and practice core values; however, that doesnt mean that the organization as a whole is ethical. To build an ethical organization, its leadership must establish, publish, and model the companys core values. While each organization should establish its own ethical framework, I suggest that two cornerstones must be in place in order to build an ethical organization: mutual trust and respect. In personal interviews conducted with 100 Human Resource practitioners across the United States in 1999 and 2000, these two characteristics surfaced time and again as critical components of
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ethical organizations. Figure 1 depicts a high trust mutual respect organization. In an organization in which respect is a demonstrated value, employees and managers treat each other with dignity and make it known that they care about the work they perform. The organizations leadership fosters initiative and creativity. Individual differences and perspectives are appreciated and promoted. All employees, regardless of their position, are recognized and rewarded for their contributions. In an organization where trust is prevalent, information is accurate, timely, and complete. Coworkers share their ideas and concerns. People at all levels accept suggestions for ways to improve the work. Alternatives are discussed freely, and clear and concrete goals are developed and shared across the organization. There are clues within the organizational culture if trust and respect are not part of the cultural fabric. Here are some indicators of a weak ethics system:
Scapegoating.
If scapegoating is a common phenomenon in your culture, this is a red flag that failure may not be tolerated and its necessary to hide mistakes or errors in judgment. When customer complaints occur, perhaps employees blame everyone else, or every other department. When goals arent achieved, there may always seem to be someones elses doorstep on which the lay the fault.
Abdicating Responsibility.
When the time comes to make a decision and stand by that decision or action, how do people in the organization respond? If common excuses are, Im not aware of any problems I asked Joe to handle that or, I assigned that to a member of my staff I dont know whats happening, this is an indicator of abdication behavior. Members of an ethical organization accept responsibility for themselves and their direct reports, if they have them. Period.
Overpromising.
This company is the best place to work in the county! The promotion path here is extremely fast. Well be going public within the year! Are managers using these kinds of statements frequently without knowing whether theyre really true? If the norm is making brash, optimistic (possibly untrue) statements to achieve a short-term result, this is an indicator of a weak ethics system.
Turf Guarding.
In todays rapidly changing marketplace, companies must be highly flexible to meet customer demands. The result is that employees must be prepared to shift gears and learn new skills or serve on various work teams to complete projects. If an organization has employees that hoard information and
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jealously guard their turf for any reason, productivity may suffer and resentment can build. This kind of behavior indicates that people dont trust their knowledge or expertise in someone elses hands.
Underachieving.
Are employees allowed to barely get by and still be rewarded with a paycheck and even promotions? Is mediocrity accepted because its too difficult to fire people who arent really competent? If an organization takes the easy way out and tolerates employees who are negative and only partially productive, long-term success is jeopardized.
Three Ethics Tests for Individuals.

Human Resource professionals are in a unique position to observe the organizations ethics and serve as a catalyst for change if the ethics system is weak. Human Resource professionals can, and should, serve as role models for the organizations core values. How can one determine if an action he or she is planning to take is ethical? After reading Lawrence Kohlbergs research about stages of moral development, Ive concluded that there are three tests individuals can use for making a decision.
Test #1: The Butterfly Test.

Prior to making a decision or engaging in a behavior, some people get butterflies in their stomach. This is a physical, involuntary reaction to stressful situations that causes people to take notice of what theyre about to say or do. This uncertainty may be precipitated by doubts that a proposed action is the best for all stakeholders. Perhaps theres a concern about the impact of an action on employees or coworkers. This instinct is important and should be trusted, for its a sign that its necessary to pause and reflect on ones own and the organizations values.
Test #2: The Authority Test.

When someone uses the authority test, he or she thinks about a person whose opinion is highly valued and asks, what would that person do in a similar situation? or, what would that person think about how I reacted to this challenge? The authority can be a mentor, a trusted peer, a teacher, or anyone viewed as competent in the area in question.
Test #3: The Public Scrutiny Test.

People about to make a decision or engage in a behavior thats questionable should ask themselves, can I accept public review of this decision or behavior? What if an article about my actions would be published in the local newspaper or headlined in the evening news? Decisions or actions must be defensible in a public forum. This isnt to say that every single person would agree with the decision made or actions taken, but the underlying values that precipitated an action are clear. Human Resource professionals are likely to be challenged daily with issues
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that present ethical dilemmas. The choices that HR professionals make, or guide others to make, may affect the productivity, profitability, and the public image of their organization.
The Human Resource Professionals Responsibilities.

I believe that HR practitioners can be a driver for building a strong ethical foundation, although one person or one department cannot singlehandedly change a culture that has some of the indicators of a weak ethics system mentioned earlier in this article. An organizations core values are manifested by its culture; that is, in the basic ways that business is handled, such as how decisions are made and how rewards are distributed. Employees learn these ways of doing business through observing coworkers and leaders. If no expectations are established and effectively communicated, employees will make it up as they go along when faced with ethical dilemmas. Does your organization have a Code of Ethics or Statement of Core Values? Supervisors and managers in organizations are often afforded a level of respect from employees because of their leadership position. I believe that HR professionals are in leadership roles by virtue of their visibility and influence, if not always in terms of title. Employees look to the leadership as role models to guide their own behavior. This is especially true when organizations are weathering difficult times, such as mergers or acquisitions. A written Code of Ethics cannot be institutionalized unless organization leaders show their respect for individuals and the organization by engaging in legal and moral behaviors. Employees will learn to trust and respect each other and managers only if they observe characteristics that merit that trust and respect. Putting a Code of Ethics in place and encouraging leaders to model desired behaviors are important steps toward creating an ethical organization. Each employee must understand his or her role in carrying out the organizations values, as well. Expectations around standards of behavior in everyday situations must be established and enforced. By the way, the 2000 National Business Ethics Survey finds that employees have high expectations for their organizations. Ninety percent say they expect their organizations to do what is right, not just what is profitable. After expectations are initially established, ongoing and open communication systems must be in place to ensure a forum for discussion exists regarding ethical issues. Informal meetings and accessibility are two ways that supervisors and HR practitioners can keep the channels of communication flowing. Human Resources can influence organizational culture. The stories you tell and the events that you comment about illustrate what matters to you and what you consider acceptable behavior.
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