Almost every day, there is a story in the news about an employee acting unethically. Whether it’s an executive or frontline employee, it seems that it is within human nature to act unethically. And as the recent example from Wells Fargo scandal shows, management plays a key part in setting the example for ethical behavior.
In fact, the most recent National Business Ethics Survey states that 41 percent of employees reported seeing misconduct in the office. From this statistic, we can see that many of these incidents go undocumented. But why do these behaviors happen in the first place? Sure there is always the occasional bad apple but is there more at play here? Let’s review some of the reasons why your employees might make unethical decisions.
What Causes Employees to Make Unethical Decisions
1. Pressure to Succeed
Employees may choose to act unethically based on unrealistic expectations to succeed. For example, a salesperson may make false claims to secure a deal to meet their quota. With Wells Fargo, employees opened up fake accounts and credit cards in their client’s name to make quota. The quota, however, was unrealistic and almost impossible to make without cutting corners. In order to keep in good standing with their managers and keep their jobs, employees may make unethical decisions.
To help combat this notion, managers should discuss their job performance expectations with employees and any specific challenges employees face meeting these goals. They might discover that they need to change the quotas or provide the employee with additional resources-but they won’t know until they ask.
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2. Employees Are Afraid to Speak Up
Another reason employees don’t report unethical behavior is that they are fearful of the consequences. For one, employees may fear retaliation from their coworker who they are reporting. The employee might also fear getting a bad reputation among his or her coworkers. On top of this, many employees are don’t know how their supervisor will react. They fear they may get demoted or fired if their supervisor doesn’t believe their claim.
To relieve their fears, consistently reassure your employees that retaliation for speaking up is against company policies. Encourage managers to communicate with their employees about potential violations.
3. Lack of Training
Many organizations make the mistake of assuming their employees understand which behaviors are unethical. Employees may not know an activity they see on a daily basis is unethical or illegal. For example, a employee may not know that giving a potential client tickets to a sporting event could constitute a bribe.
Training employees on what behaviors are unethical can help lower your organization’s risk. Moreover, training can also help employees determine what actions to take if they witness unethical behavior.
4. There’s No Policy for Reporting
Employees also need to know how to report potential ethics violations. Having a policy in place helps keep the information from falling into the wrong hands. For instance, if your organization’s process is to go straight to HR, this prevents the employee from first going to his boss. Also, some employees may wish to stay anonymous. An anonymous drop off or hotline for employees to call and report violations or suspicions can ensure you discover most violations.
5. Managers Setting Bad Examples
Many instances of unethical behavior stem from the examples set by the employee’s manager. Managers should always be conscious of their actions and how employees view them. For example, a manager may lie to a customer about a contract. If the employee witnesses this, they may assume they are free to do the same. Employees may also become scared to defy their manager in fear of losing their job. They may also avoid reporting unethical behaviors in fear of repercussion.
Make sure your managers are aware of their responsibilities for preventing unethical behavior. It’s also important to ensure you hold them accountable for violations.
Conclusion
Unethical decision making is something many employees falls victim to. Whether it’s to make more money or keep their jobs, employees will sometimes break the rules. Having a clear policy, like a code of conduct, in place that explains your expectations, along with training is a great way to counter unethical behavior.
Also, don’t forget to hold managers accountable for their actions and communicate the process for employees to report potential violation. With these efforts combined, you’re well on your way to ensuring your employees act in an ethical fashion.
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FAQs
Employees are more likely to act unethically when they don't see their action clearly causing harm — for example, when the victim is far away or the damage is delayed. Unethical choices also occur when an employee feels that peers will not condemn their actions.
What are the reasons for unethical behavior? ›
Results show that exposure to in-group members who misbehave or to others who benefit from unethical actions, greed, egocentrism, self-justification, exposure to incremental dishonesty, loss aversion, challenging performance goals, or time pressure increase unethical behavior.
Why employees and managers engage in unethical practices? ›
The reasons include the pressure for performance at work, the effect of groupthink in the workplace, pressure from management, management control, demographic factors, and psychological traps, broken window theory.
How does unethical conduct occur and why? ›
Unethical conduct is when you become aware of another person not adhering to professional ethics and therefore, behaving in a way that puts clients at risk. Examples of unethical conduct could include situations such as: a fellow worker is overheard gossiping about a client at the local pub.
What is an unethical employee? ›
Unethical behavior in the workforce is not restricted to overt acts. It includes workers acting out and aggressively confronting supervisors, supervisees, and colleagues, and it includes more subtle behaviors that compromise people, productivity, and organizations.
How are employees affected by unethical behavior? ›
Unethical behaviour can lower employee productivity by interfering with their morale. Employees who witness unethical behaviour lose motivation to work and can result in absenteeism or worse, they may commit similar unethical behaviours perceiving this to be normal.
What happens when an employee commits unethical behavior in the workplace? ›
Companies should take heed that if unethical actions by employees go unaddressed, the corporate culture inside the company can become toxic and result in major disruptions, such as insider fraud, reputational risk, legal issues, and monetary penalties by regulatory agencies.
How can we prevent employees from being unethical? ›
However, business owners and their management teams can work with employees to prevent unethical behaviors.
- Create a Code of Conduct. ...
- Sexual Harassmen and Bullying. ...
- Lead By Example. ...
- Reinforce Consequences. ...
- Show Employees Appreciation. ...
- Welcome an Ethics Speaker. ...
- Create Checks and Balances. ...
- Hire for Values.
It's important to assess the situation and figure out the best course of action.
- Take Stock of your Behavior. ...
- Analyze the Situation. ...
- Document your Observation. ...
- Always Assume the Best. ...
- Seek Advice from a Mentor. ...
- Gently Intervene if Possible. ...
- Talk to your Coworker. ...
- Bow Out of the Situation.
An employee steals money from the petty cash drawer at work. You lie on your resume in order to get a job. Friends talk about another friend behind his back. A student takes credit for work they did not do.
Misuse of business time is one of the most common unethical actions in the workplace. Taking time is essentially the same as taking money because employees get compensated for work they did not complete and is, therefore, unethical behavior & fraud.
What are the three main reasons unethical business practices happen? ›
The three main reasons behind unethical business practices are:
- Poor leadership.
- Personal greed.
- Unclear company policies.
A lack of ethics has a negative effect on employee performance. In some cases, employees are so concerned with getting ahead and making money that they ignore procedures and protocol. This can lead to additional paperwork and careless errors that result in the task having to be completed again.
Who is affected when an employee acts unethically? ›
Ethics are usually company written for all employees as well as employers to abide to. Besides employees, who else is affected when an organization acts unethically? When an employer acts unethical, it effects the employee, the employer and the customer.
What are employees wrongdoings that commonly happen at a workplace? ›
Although all employees have the right to be treated fairly and to feel safe in the workplace, some employees face bullying, harassment, and/or discrimination.
Why can it be difficult to deal with unethical behavior in the workplace? ›
He shares that the survey found that people were hesitant to report unethical behavior for four main reasons: knowledge that doing so would make it harder to work with the perpetrator, fear of damaging their own career, fear of not being taken seriously, or lack of knowledge about how to address concerns.
How do you encourage employees to report unethical behavior? ›
6 Ways to Encourage Your Employees to Report Misconduct
- Publicize and Promote. One simple reason why employees don't report misconduct, is that they don't know where to go and/or how to file a report. ...
- Training and Examples. ...
- Multiple Methods of Reporting. ...
- 24/7/365 Access. ...
- No Retaliation. ...
- Culture of Integrity.
Unethical behavior is when a person, a professional, or an industry does anything that is considered unacceptable because they are against the social norms. Individuals, businesses, professions, and politicians may all engage in unethical behavior.
What are five behaviors that you would identify as unethical? ›
The ERC reported that employees most often observe the following five unethical behaviors in the workplace: 1) employees misusing company time, 2) supervisors abusing subordinates, 3) employees stealing from their employers, 4) employees lying to their employers, and 5) employees violating company internet policies.
What are the general causes of unethical and illegal behavior? ›
The main three categories of unethical and illegal behavior are...
- Ignorance: In order to avoid ignorance, all the rules, regulations, policies, and laws should be communicated properly to all the employees in an organization. ...
- Accident. ...
- Intent.
Factors influencing ethical behaviour? School/ Education Desire to preserve/ enhance status Loyalty to Family/ Friends/ Company Company Ethos Professional Ethics … Cultural/ societal values Media influences/ coverage Legal constraints (Government) Enforcement (Legal/ Professional/ Religious) … …
What is the most common cause of ethical failure? ›
The four major factors that can cause ethical problems in the workplace are lack of integrity, organizational relationship problems, conflicts of interest, and misleading advertising.
What are the root causes of misconduct? ›
1: Pursuit of profit (greed) The most fundamental cause of misconduct appears to be greed: “The Commission's work, so far, has shown conduct by financial services entities that has brought public attention and condemnation. …
What is unethical behavior in an organization affect its workplace? ›
Unethical behavior in the workplace also has the potential to lead to a lack of trust among employees, which is detrimental to a business that relies on collaboration and a sense of community.
How does unethical behavior in an organization affects its workforce? ›
Unethical behaviour can lower employee productivity by interfering with their morale. Employees who witness unethical behaviour lose motivation to work and can result in absenteeism or worse, they may commit similar unethical behaviours perceiving this to be normal.
What is an example of unethical behavior? ›
An employee steals money from the petty cash drawer at work. You lie on your resume in order to get a job. Friends talk about another friend behind his back. A student takes credit for work they did not do.
What is the number one cause of unethical business conduct? ›
Pressure from management to meet unrealistic business objectives and deadlines is the leading factor most likely to cause unethical corporate behavior, according to a new survey on business ethics.
What are three types of unethical behaviour in it? ›
Dozens of possible categories of unethical business conduct exist, but most fall within three broad areas.
- The Sarbanes-Oxley Act. ...
- Mistreating Employees and Other Workers. ...
- Financial Misconduct and Fraud. ...
- Misrepresentation and Falsification.
