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Ethical behavior in workplace is desirable, necessary [By Michael Kinsman] Compensation expert Anne Ruddy likes to tell the story about the employee who missed a deadline to file for her company’s stock options.

The woman, an assistant to the company’s

“It’s usually not a crime that would stop us

Burchill says that puts added pressure

chief executive, visited the human resources

from hiring them,” he says. “But the fact they

on HR employees to be candid and fair

office the morning after the deadline,

lied on their application raises a lot of red

when handling personnel issues. Notable

apologized for being so busy that she

flags. We are then in a position of deciding

corporate ethical lapses over the past few

overlooked the deadline, and then asked to

whether we would hire this qualified person

years have created an atmosphere in which

file for the stock options.

knowing that they might wind up lying to us

companies talk about ethics more and the

down the road. It’s a powerful ethics issue

behavior they expect from their employees,

that we face.”

he says.

to accommodate this woman, although no

Ruddy says that too often we treat ethics as

Ruddy says there are some powerful

one would probably ever know it? Or should

a theoretical concept but that ethical issues

incentives for companies to promote ethical

she risk offending someone in the company

surface in our jobs regularly.

workplaces. She says that public companies

“What was the person in HR supposed to do?” Ruddy says. “Should she violate the law

who suffer ethics problems can see their

who might be in a position of power?” The HR person chose to deny the request - and the employee went straight to the CEO to appeal. “Fortunately, the CEO stood behind the HR decision,” Ruddy says. “If he’d made an exception and allowed her the stock options, it could have caused real problems.” Ruddy, president of the nonprofit World at Work benefits and compensation association in Scottsdale, Ariz., says this story illustrates how the seemingly insignificant decisions we make every day test our ethics. HR employees, especially, must be

While chief executives need to assume

stock prices decline for up to six months

responsibility for creating a culture of ethical

after the public learns of unethical behavior.

behavior, that task cannot be left to them alone, says Ruddy. “Ethical issues pop up all over the company, to everyone,” she says. In a survey of 418 World at Work members who work in human resources, 65 percent said they face ethical dilemmas in their jobs at least once a month, with 19 percent reporting ethical issues surfacing at least once a day. “These can be very subtle and seemingly insignificant, but they are all important in how you handle them,” Ruddy says.

constantly aware of the ethical decisions that are part of their jobs, says Roy Burchill,

Increasingly, she says, ethics questions

senior manager for compensation and

surface in human resources departments

benefits for Accredited Home Lenders in San

because they deal with real-life problems.

Diego. “A lot of people look to HR as the ethics

And a study from the Walker Loyalty Institute of Indianapolis finds that 42 percent of workers take ethics into account before accepting a job with a particular company. Yet, Ruddy fears, companies just don’t pay proper attention to cultivating an ethical atmosphere inside their companies. “It’s not enough just to have a policy, you have to make sure everyone knows what it is and how to apply it,” she says. “Companies have policies buried in documents and think that’s enough. You must educate and remind workers when you see behaviors that are not what you want. You can’t expect people to be ethical unless you tell them what is acceptable and what isn’t and live up to that every day in your own actions.”

For example, Burchill says criminal

police,” says Burchill. “They want to trust

Burchill says his companies and others have

background checks sometimes reveal minor

HR and want to have the people there handle

set up third-party reporting options, allowing

crimes that individuals didn’t report on their

ethics issues.”

people to anonymously report ethical lapses

job applications.


or inappropriate conduct.


“A lot of issues that get reported are not ethics-related, but it’s good to have a forum where people can vent their complaints,” he says. But it’s also important that workers know the difference between acceptable and unacceptable behavior on the job and can report violations when they see them.


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Ethical behavior in workplace is desirable, necessary  

Ethical behavior in workplace is desirable, necessary.

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