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From Great Ideas to Great Practices!
by Bruce Hamm

 
   
 
   

Many people are talking about how important ethics are in the workplace. They encourage companies to step up their business practices to meet ethical requirements. They exhort everyone to keep ethics on their mind and to always act ethically when conducting business. They tell inspiring stories to motivate people to reach for the ethical stars. Others exhort executives to be very conscious of complying with laws and documenting what your compliance looks like. Even though they are energetic speakers and very inspirational, how many of these people give you practical tools to accomplish the goals of enhancing your people's ability to act ethically in the work place and complying with legal requirements in the process? In other words, how do you go from developing great ideas about ethics and what they mean to an organization that actually lives those values? This article lays out general principles for how to do that.

The first thing to do when trying to establish ethics in the workplace is to assess where you are. Knowing where one is at is the key to figuring out how to get where one wants to go. This works for organizations also. This is the phase where you ask questions and look for the truth regardless of where it might lead. Figure out where you are and where you want to go. What ethical problems has your organization had? How did your company deal with those problems? What would you rather have seen as the outcome of those issues? What could you have done to prevent those issues in the first place? How did those issues not meet up to your expectations for ethical behavior?

What are your ethical expectations for all employees from the CEO to the entry-level customer service agent you just hired? What do you want your ethics to look like? How do you want people to perceive them? What does your staff see as a proper set of values? Are these two sets of values compatible? How would one describe these values to make them inspiring? What does the staff think the company should do to achieve them? What practical measures can the company take to move toward compliance with the selected set of values?

Once you have selected and written your values statements, look at how to practically implement them in all the ethical or legal risk areas. This will help you establish the requirements of writing a code of conduct. If you have done the assessment correctly, you already know where your greatest risk areas are; now figure out how to tell people what you would like them to do about them.

Identify a high level person responsible for managing the ethics program. For the program to establish and maintain its credibility, this person needs to be someone of unquestionable ethics who is senior enough to get things done. He or she needs access to resources and must have the authority to implement the plan. They also must be capable of being the final arbiter for interpreting how to implement the ethics. This person needs the respect of the entire staff so they can be seen as a resource or guide for ethical behavior. They also need to have the fortitude to make difficult decisions about discipline and program direction, if the situation calls for it.

The next step is to write a code of conduct. One way to accomplish writing this code is to identify potential risk areas and address how the company wants employees to tackle those risks. Adding questions that illustrate the expectations is a good way to make them understandable to all employees. This helps bring the code alive. People are much more likely to get useable information based on the stories. Keep the code as general as possible but not so vague it is useless for determining a course of action. If one were to spell out each potentially unprincipled act, the code would fill a library and would be too large to be practical. One also cannot leave it so general that everything is open to interpretation. If one were to write it that way, it would probably only be a paragraph or two in length and any behavior could be seen as either ethical or unethical. In other words, that kind of document offers no real guidance. One caveat though is to ensure you tell people that the stories are merely for illustration and if there is any question about interpretation of the requirements to contact the ethics office.

Companies often have their attorneys draft this document. I recommend staying away from legal representatives doing this because of their tendency to write in legalese. I recommend a small committee write the code and then pass it to the best wordsmiths in the organization to finalize the draft. Certainly, attorneys should look over the document and approve its final version but in order for this to be useful for the bulk of the employees, it needs to be written in common, clear, everyday language.

I also recommend letting the entire work force participate in writing the code. How would you do that? Electronically publish the code after reaching a near-final draft stage and ask the staff for feedback. Give them a deadline at which you'll cut off comments so you can finalize the code. However, consider leaving the door open for future revisions by allowing comments timed to coincide with significant review milestones.

Once you finish these measures, start drafting the training that will get the message to all the employees. Conduct formal training annually. One to two hours is sufficient for formal training though you may want to conduct informal training more frequently to reinforce the expectations. For example, you might want to schedule informal training in monthly staff meetings. A recently accepted business axiom is that "employees don't leave companies they leave managers". If that is true, immediate supervisors and managers carry a lot more influence with employees than overall company policies. Having the immediate supervisors conduct ethics training for their personnel demonstrates that the program is serious and that behaving ethically is the responsibility of everyone not just entry-level staff or senior management.

In order to make ethics training useful, it must contain tools people can use to make ethical decisions. For example, how does one make an ethical decision? It is very much like making any other decision with some specialized steps added to the process. Another article I've published gives an example of an ethical decision-making guide. That article is "Ethics Decision-making Quick Test".

Training should also emphasize what the company expects of the people, along with potential rewards and disciplines for various actions. Covering relevant laws governing company actions gives the employee valuable information. Letting staff know potential sentences for various illegal activities and how the sentences are applied can tell them that acting ethically and legally is serious. Demonstrating that regulatory agencies and senior management may hold them personally accountable for various illegal actions by subordinates, even if they had no direct participation in the action, illustrates their responsibility to foster ethical behavior. The emphasis, though, should focus on the positive aspects of ethics to maintain credibility for the program. What are the potential company actions when you substantiate a violation? Advising employees that the company may terminate their employment for serious violations again reinforces the serious nature of ethical concerns.

Another important element of a successful program is allowing employees to report suspected violations without fear of retaliation. Successful programs usually accomplish this in three ways. The first is implementing anonymous reporting channels. Some companies establish telephone, fax, email and standard mail addresses to receive reports. Others contract this function to external vendors. International companies may find it difficult to have the language skills necessary to take reports in a foreign worker's language, so contracting this to reliable vendors solves that potentiality. The second method of allowing reports without fear of retaliation is to strongly prohibit retaliation for any report. The third method is to discipline any employee who actually retaliates against a reporting employee where you can substantiate that charge, regardless of the outcome of the initial incident. It is important to encourage only good faith reports of misconduct. Allowing someone to use the ethics program as a method of revenge will only lessen the overall credibility of the program and senior management's commitment to it.

Thoroughly and professionally investigating incidents is another success factor for fostering an ethical environment. In order for people to trust the program, the company must be successful, as often as possible. One report states that half of all reports cannot be substantiated. Investigating incidents thoroughly and professionally is one area that requires care by company personnel. Badly handling a witness or sloppy investigations opens the door to charges of ineptitude and cover-ups. It also may tell employees that the only way to handle observations of unethical activity is to report it to an outside agency such as a regulatory body or the media, avoiding both of which is one of executive management's major concerns.

Properly handling reports of misconduct internally also demonstrates to the staff that executives are concerned with doing the right thing. Should an investigation get into the public forum, handling it well also demonstrates to regulators the legitimate concern the company has for proper behavior. You must forward reports to regulators when company staff breaks certain laws. Competent legal counsel will require that you report incidents meeting established criteria. For example, if a bulk chemical driver spills a few ounces of some paper making chemicals on the ground at a client's delivery site, companies are not required to report this to the EPA. However, if that same driver were to spill several gallons into the local waterway, you must report that as quickly as possible.

Once the investigation is complete and the reviewing authority makes a final judgment and determines the evidence substantiates an incident, there are four steps left to complete the case. The first step is to determine the discipline of the offender. Many actions may be appropriate from additional training to termination or even prosecution for the most egregious cases. The second step is to create ways to prevent that kind of incident in the future. The third step, the first if you cannot substantiate the incident, is to notify the reporting individual. Letting them know the company's actions tells them you addressed their concern to the best of your ability. This satisfies most people, even though there will be a few who disagree you did everything reasonable. The last step is to gather the documentation for the entire incident and archive it for possible future use. Whether to demonstrate the legitimate actions taken for a later lawsuit or regulatory investigation or simply to measure program success, having the documentation available for review by legitimate authorities displays the concern the company has for making ethics a priority.

Another great step to build credibility for the program is to reward individuals who demonstrate the values of the company. Figure out who is doing right and who is doing wrong. Publicly reward individuals you've caught doing the right thing. Privately discipline employees who are not incorporating the expectations into their behavior. It also might be appropriate for the CEO to address the program in the annual report to investors. Focusing on the values is important to show continued work toward achieving ethical goals. Take some caution, however. Seeking acclaim for how well a company is meeting the values sets the organization up for potentially bad publicity should you detect a serious violation by a rogue employee.

Reviewing the program and making needed adjustments continues progress toward meeting the corporation's values. Re-inspiring the workforce is an important element of continued credibility. Encouraging employee input makes the entire team feel as if they are participating in the outcome. Cultivating the right environment improves the probability of continued success from both an operational and an ethical standpoint.


     
   
     
   

The Author

Bruce Hamm

Bruce Hamm studied for the Catholic priesthood obtaining a BA in philosophy with an emphasis on ethics.  He has experience as a volunteer police officer.  He has over eight years in US Navy combat operations, coordinating a tactical data link between various battle group elements, controlling combat aircraft and instructing combat operations.  Then entering corporate management, Bruce conducted numerous workplace investigations, managed compliance for one employer and developed a Business Ethics program for another.  In 2001, he completed the “Managing Ethics in Organizations” Executive Development Course from the Center for Business Ethics at Bentley College and the Ethics Officer Association.  Combining his practical understanding of how organizations work with his desire to create healthy corporate cultures, he earned an MBA in Organizational Effectiveness at Marylhurst University.  Bruce is now also an adjunct instructor with DeVry University Online teaching Business Ethics and other general business topics.  Bruce is WatchIT’s Business Ethics and Compliance, Subject Matter Expert.  With two other professionals, Bruce was instrumental in the formation and continuing development of The Greater Omaha Alliance for Business Ethics.  Contact Bruce at info@compasssolutions.biz and visit www.compasssolutions.biz.

       
   
 
       
   
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Copyright 2004 by Bruce Hamm. All rights reserved.

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