In order to enforce ethical behavior at work, management first has to define ethical business practices. Your company probably has a written code of ethics and associated policies describing ethical conduct in specific work areas -- such as in sales, for dealing with customers and pricing issues; in purchasing, for dealing with vendors; and in information technologies, for defining proper and improper use of company equipment, data and communication systems. These documents set the workplace rules for ethical behavior.
Setting the Rules
Workplace rules should be clearly and concisely written. If these documents are too long, employees either won’t read them thoroughly, or won’t remember everything they’ve read. There also should be no room for misinterpretation. Employees need to be able to identify acceptable behaviors with actual experiences. Simply requiring employees to be honest might not translate as precisely as leaders intend. For instance, after reading a vague policy document, a member of a global sales team could still believe under-the-table agreements or bribes are a necessary part of doing business in some parts of the world.
Ethics policies must include enforcement provisions to show employees that failure to follow the rules does carry consequences. More severe penalties, such as termination or loss of pay, will cause employees to take notice and make a greater effort to understand unacceptable behaviors and actions. Leaders should also consider the likelihood of detecting ethical lapses when defining the rules. Even with severe penalties, some employees might think they can get away with anything, as long as the boss isn’t looking. Audit programs and compliance hotlines increase the likelihood of detection.
Training and Communication
Establishing rules and penalties is just the starting point. Management needs to periodically remind employees that these policies exist. Training programs should also be held periodically, providing employees with examples showing how easily their behaviors can be influenced by others. Training can also help employees to realize the negative impact a single ethical lapse can have on a company. Negative press can result in a loss of public trust, customers and market share. When federal laws are broken, heavy fines can cause serious financial burdens – and some employees could even end up in prison.
Leading by Example
Probably the most important factor in enforcement is leading by example. Managers have an opportunity to reinforce the company’s ethical values by promoting them as a normal practice. The company’s leadership must also be quick to detect ethical lapses and take action as prescribed in the enforcement provisions of the company’s code of ethics. When employees see that the penalties defined in the rules are not empty threats, their likelihood of following the rules increases.
Ethics policy documentation and the company’s overall compliance should be regularly reviewed by a governance team. Audit results, compliance hotline calls, internal and external investigations into reports of inappropriate behavior, and recorded incidents will all feed into these reviews. The team will identify what actions might be needed to improve the effectiveness of the program. Some possible actions can include requiring that employees take additional training, increasing the scope or frequency of audits, revising policy documents, and making adjustments to training plans.
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