Workplace ethics

Module - 2
Professionalism at the workplace

The Centre for Professional ethics was established at Case
Western Reserve University, Canada.
• A profession is a vocation
founded upon specialized high
educational training, the
purpose of which is to supply
objective counsel and service to
others, for a direct and definite
compensation.
• Professional ethics encompass
the personal and corporate
standards of behaviour expected
of professionals.

WHAT IS A PROFESSION?
A profession as a vocation requiring advanced education
and training.
According to Roscoe Pound he defined profession as a
group pursuing a learned art as a common calling in the
spirit of public service.
Characteristics of a profession?
 Skill based on theoretical knowledge
 Professional association
 Extensive period of Testing of competence
 Institutional training
 Licensed practitioners
 Work autonomy
 Code of professional ethics and conduct

•Self regulation
•Public service
•Exclusion
•Control of remuneration and advertising
•High status and reward
•Granting of legitimacy

Core Values
• Integrity
• Honesty
• Professionalism
• Commitment
• Teamwork
• Leadership
• Competence
• Cooperation

• Efficiency
• Flexibility
• Initiative
• Mutual Accountability
• Community Involvement
• Openness
• Mutual Respect

Code of ethics
• A code of ethics is there for each profession
like doctors, lawyers, teachers, engineers and
other professions.
• People of a particular profession are expected
to follow it.
• Eg. Hippocrates oath for doctors.

• Integrity
• Live with dignity at all times in all places.
• Not accept favours or gifts from learners,
their parents or others in their behalf in
exchange for requested concessions.
• Not accept, directly or indirectly, any
remuneration from tutorials other than
what is authorized for such service.

• Honesty
• Not entitled to claim credit or work not of his
own.
• Not make false accusations or charges.
• Transact all official business through channels.
• Maintain good reputation with respect to
financial matters.
• Avoid conflict of interest.

Professionalism
• Organize records and other data before
leaving the post.
• Should not violate any confidential
information by leaking it out.
• Where mutual attraction and subsequent love
develop between teacher and learner, the
teacher shall exercise utmost professional
discretion to avoid scandal.

Commitment
• Possess and actualize a full commitment and
devotion to duty.
• Contractual obligations to live up to contract,
assuming full knowledge of employment
terms and conditions.

Teamwork
• Support one another when the best interest of
the learners, the school, or the profession is at
stake in any controversy.

Leadership
• A facilitator of learning and development of
the youth.
• Be an intellectual leader in the community.

Competence
• Physically, mentally and morally fit.
• Participate in Continuing Professional
Education program of the profession and
pursue other studies.

Cooperation
• Understand and support the legitimate
policies of the school and the
administration.

Efficiency
• Uphold the highest possible standards
of quality of education, make the best
preparations, and be at his best at all
times.
• Flexibility : Ensure that conditions contribute to
the maximum development of learners are
adequate.
• Extend needed assistance in preventing or solving
learner’s problems and difficulties.

Initiative
• Help the school keep the people in the
community informed about the school’s work and
accomplishments, its needs and problems.
• Mutual Accountability : Actively ensure that
teaching is the noblest profession.
• At all times be imbued with the spirit of
professional loyalty, mutual confidence, and faith
in one another, self-sacrifice for the common
good, and full cooperation with colleagues.

Community Involvement
• Provide leadership and initiative to actively
participate in community movements for moral,
social, educational, economic and civic
betterment.
• Openness : Not be prejudiced or discriminate
against a learner.
• Hear parent’s complaints with sympathy and
understanding and discourage unfair criticism.

Mutual Respect
• Maintain harmonious and pleasant personal and
official relations with other professionals, with
government officials, and with the people,
individually or collectively.
• Show professional courtesy, helpfulness, and
sympathy towards teachers and other personnel.

Ethical and
Unethical Behavior
• Ethical behavior is good, right, just,
honorable, and praiseworthy
• Unethical behavior is wrong, reprehensible,
(hated) or fails to meet an obligation
• Judgment of behavior is based on a specific
moral philosophy or ethical theory
Tanuja Nair Assot prof AMCEC 20

• Professional and ethical behavior can improve
the working environment and benefit an
employee’s career.
• In order to develop effective work habits, it is
better to understand examples of professional
and ethical behavior.
• Be conscious of how you treat co-workers and
your workplace attitude and you can become
more productive and effective.
• The employees are expected to follow such kind
of professional behavior.

• Ethics is the most debated topic of our times and
it is the difference from doing the right thing from
doing the wrong thing.
• Ethics is all about moral values and principles
which govern our conduct at the workplace.
• Business makes use of the society for its
resources and functions, so it is obligated to
society to take care of the welfare of the society.
The main objective of business is to make profits.
But in the process, it should not forget to give
back to society also by way of various welfare
measures.

• However, greed in the present business scenario
has led to many unethical practices, legal
complications and mistrust amongst the business
people.
• Most of the organizations have a code of ethics
today which lists the values and beliefs of the
organization. This is part of their company policy
and is implemented during induction and regular
training.
• Some of the ethical practices which companies
should follow to build a honest reputation and
ensure smooth running of the organization.

• To employees – provide good working
environment, opportunities for promotions and
training and timely payment of salaries.
• To investors – ensure safety of their money and
timely payment of interest.
• To customers – give complete information about
product and service to them. Don’t use personal
information of customers for personal gain.
• To competitors – do only fair competition with
them. Don’t use unlawful tactics to beat
competition.

• To government – follow the rules and regulations
of the government. Pay taxes, duties and follow
legal trade practices. Avoid unlawful practices like
bribery and corruption.
• To environment – preserve the environment by
following the anti-pollution laws of the
government regarding air, water, soil and noise
levels.
• Today, a free environment exists where
companies can break the rules openly and follow
unethical practices.

• Some of the unethical practices followed are –
Trickery, deception
Falsifying records, accounts
Greed to gain more profits.
Changing facts to confuse or mislead
Manipulating people to exploit them
Very few businesses are ethical today. There is a
severe lack of business ethics in the market
today. This has led to the crises in the world
economy today.

• Today, organizations recognize the benefit of
being ethical, humane and considerate in their
business. Because of being honest, companies
are able to survive and succeed in the
competition.
• Because of their honest ethical reputation
companies are able to attract better qualified
staff and are able to retain them also.
• By following ethical practices, companies are able
to do self monitoring, transparency and
accountability too. Anyways it is better to change
than risk getting punished.

Integrity is most wanted
• We all must create an environment of strictest
philosophy of clean honest business.
• Each one of us is accountable and responsible
to stop unethical business practices.

Unethical behavior
• Lacking moral principles;
• Unwilling to adhere to proper rules of
conduct.
• Unethical behavior means harassing
people at the environment,
inappropriate use of the Internet,
outside-of-work activities etc.

• Employees should be aware of workplace ethics.
They should be aware of key ethical issues and
should be taught how to make good decisions
based on ethical principles.
• Also, employees should report on any unethical
issue or any ethical violation happening at their
workplace.

Employer misconducts
• We’ve all heard horror stories about “monster”
bosses.
• An employer can commit the following illegal
acts-
Failure to follow Wage and Hour Laws
Employment Discrimination
Breach of Contract
Willful and Serious Misconduct
Sexual Harassment
Retaliation

Failure to follow Wage and Hour Laws
• Employers have to follow the law of the country
regarding wages and number of hours of work.
• They have to pay minimum wages as per the
minimum wages act of 1948 to skilled and
unskilled labor.
• A minimum wage is such a wage that it not only
guarantees bare subsistence and preserves
efficiency but also provides for education,
medical requirements and some level of comfort.
• Employers also have to pay overtime charges if
employees work more than 8 hours.

• Working Hours in India: As per the Factories Act
1948, every adult (a person who has completed
18 years of age) cannot work for more than 48
hours in a week and not more than 9 hours in a
day. According to Section 51 of the Act, the
spread over should not exceed 10-1/2 hours.
• Under Sec. 59 it is mentioned that where a
worker works in a factory for more than 9 hours
in any day or for more than 48 hours in any week,
he/she shall, in respect of overtime work, be
entitled to receive wages at the rate of twice
his/her ordinary rate of wages.

• An employer should give a minimum lunch break
of 30 mins.
• If an employer violates any of these regulations
an employee can consult an employment lawyer
to file a case against that employer.

Employment Discrimination
• Employees are protected from being threatened,
harassed, demoted, fired, or otherwise punished
for engaging in certain protected activities.
• These protected activities include filing a wage
claim, taking time off to serve on a jury, refusing
to perform hazardous work, reporting corporate
fraud, or reporting an unsafe working condition.
• Retaliation for these activities is another type of
employer misconduct.

• Under the law, it is illegal for an employer to
discriminate against his employee through hiring,
promotion, giving of benefits, compensation, and
termination on the basis of the employee’s disability,
age, nationality, religion, race, gender and even
genetic information.
• Some states like California even have anti-
discrimination laws against sexual orientation and
status.
• it’s also among the most common types of cases that
an employment lawyer might investigate.
Discrimination against employees because of their
age, national origin, religion, disability, gender, race,
or genetic information is prohibited under federal
law.

Breach of Contract
• Not all employees have contracts. However, if you
were asked to sign an employment agreement
and you believe your employer may have violated
one or more of its provisions, you have the right
to consult an employment lawyer. Both you and
your employer are legally bound by the terms of
the agreement.
• Employment contracts are legally binding on both
the employer and the employee so any violation
of its provisions can give rise to a lawsuit

Willful and Serious Misconduct
• An employer may be held liable for “serious and
willful misconduct” if he was aware of a dangerous
condition at work yet deliberately failed to take
corrective action, which resulted to an employee’s
injury.
• More than gross negligence, such actions/conduct is
quasi-criminal in nature. The employer may and be
held liable to pay an amount equal to half the value
of all benefits paid as a result of the injury which
would include temporary permanent disability,
medical and vocational rehabilitation benefits.

Sexual Harassment
• Sexual harassment is one of the most pervasive
employer misconduct to this day – the EEOC
(Equal Employment Opportunity
Commission)received as many 12,696 cases of
sexual harassment in 2009 alone.
• Under the law, it is unlawful for an employer to
sexually harass employees (whether male or
female) through actions/misconduct like making
unwanted sexual advances or requests, verbal
and physical of a sexual nature, or a hostile work
environment.

Retaliation
• An employer may be sued for retaliation if he fires,
demotes, threatens to terminate, harasses, or
punishes an employee who has engaged in a
“protected activity”. The following are examples of
protected activities under the law: reports corporate
fraud and/or illicit activity, files a wage claim, time off
to serve on a jury, reports to the authority about a
safety or health hazard or refuses to perform
hazardous work.
Retaliation for these activities is another type of
employer misconduct.

• Ethics is based on certain human rights –
 a person has the right not to be deliberately
deceived.
 a person has the right not to be forced to do
anything against his conscience.
 He has the right to expect others to behave
according to the law.
 Employers expect their employees to behave
according to the company policy.

Example of company that practices
unethical business practices.
Nike
Nike practices two aspects of unethical trade practices;
• refusal to fully compensate its workers with fair wages
- an Indonesian factory worker from PT Hasi Nike factory,
Jakarta revealed that he was paid less than the
amount that he should have get. He worked on an
average of 40 overtime hours a week to survive.
- This is one of the examples of unethical practices that
is practised by Nike. Nike cannot continue to support
this kind of labour - the idea of someone working
eighty plus hours a week, just to survive, should not
be acceptable in the twenty first century.

• They also used child labour
- Children as young as 4 and 5 years of age are
involved in the production line
- The disparity in wealth between nations is so
great that children in one country produce the
toys for another country’s children.
- Nike success story is not based on good name
and advertising alone but also attached to it is
the tears of tortured workers and child
labour.”

Employee misconducts at the office
• Working less hours and showing that one has
worked full time.
• Lying to supervisors, co-workers, customers,
vendors or the public.
• Misuse of employer’s assets
• Giving false reports or making false records.
• In such cases there is widespread need for ethics
in your workplace.
• A code of ethics is needed to provide guidelines
to employees and improve the working
atmosphere at the workplace.

Deliberate Deception
• Deliberate deception at the workplace means –
 one person takes credit for the work done by someone
else.
 calling in sick to go to the beach.
 sabotaging the work of another person. (deliberately
destroy/damage)
 In sales misrepresenting the product to achieve sales.
• So, deliberate deception can lead to conflict &
retaliation at the workplace. If it is in sales, deceived
customers can file a lawsuit against the company.

Violation of Conscience
• It means coercion (forced) of employees to do
something against their conscience. Example –
Your sales manager calls you and tells you to sell 50 large
toasters or he will fire you from your job. You know they
are inferior products, so you are selling the small toasters.
To keep your job, you violate your conscience and sell
large toasters to customers. Your boss is engaging in
unethical behavior by forcing you do this. He must have
been threatened by the top management to do so. By
such unethical behavior, your risk loosing valuable
customers and also invite lawsuits from this. Such
behavior causes more unethical behavior, may lead to
sexual harassment.

Failure to Honor Commitments
• Your boss promises you an extra day off, if you
finish the project by the deadline date. You work
late hours and finish the project before the
deadline. You ask your boss for the day off, he
responds by saying he cannot as much work
needs to done. Your boss has engaged in
unethical behavior and in future you will not trust
his promises and will not offer to do extra work.
You will tell this to your coworkers also. You will
not do extra work during emergencies and you
will mistrust your boss’s promises in future.

Unlawful Conduct
• Unlawful conduct means adding false expenses to
your expense accounts, taking home office
stationary, passing around unregistered software
are all unlawful conduct at the workplace. Such
persons who steal money or things from office
risk loosing their jobs. Such employees will
encourage other coworkers to do the same. If
software manufacturer finds company is using
counterfeit software, company may have to face
lawsuits and fines.

Disregard of Company Policy
• Disregarding company policy means to do illegal
activities in the company. Companies will try to avoid
lawsuits and angry customers because it would
negatively affect their profits. Most employers have
clear company polices against deception, coercion and
other illegal activities. Companies try to convey an
image of trustworthiness to their customers and
employees in order to increase profits and to retain
them.
• Disregarding company policy is unethical for employees
and harms both company’s reputation and its
employees.

Common Workplace Ethics Violations
• Employer Intimidation (threatening)
• Safety Violations
• Time Theft
• Stealing
• Misconduct
A common thing most employers do is having a
code of ethics. This is to avoid unethical
behavior which ranges from stealing office
supplies to cheating company of large sums of
money.

Employer Intimidation
• The 2005 National Business Ethics Study listed
employer intimation as the most common
unethical behavior at the workplace.

REASONS FOR ETHICAL PROBLEMS
• Personal gain
• Dubious character
• Individual values in conflict with organizational goals
• Managers’ attitudes and values
• Competitive pressures
• Cross-cultural contradictions
• Not much of Self-regulation and standard setting by
organizations
• Individual behavior is strongly influenced by incentive

Personal gain
• Sometimes business employs people who have
not so good personal values. This causes ethical
problems.
• Sometimes people become greedy, put their
welfare above all others ( fellow employees,
company or society).
• Ethical qualities are difficult to measure at the
time of recruitment. The people who steal
(embezzle), gives false expense accounts, chronic
sick leave taker or bribe taker may join the
company.

• Business should have a perfect screening system
to screen out such applicants. But at the same
time company has to take care of individual rights
too.
Dubious character
Some people do not have good character, who may
steal or lie a lot or avoid work etc.
Such people should be carefully screened out by
the company.
For eg. One marketing officer of a company, was of
dubious character. He used to make a lot of money
apart from getting a high salary. The top
management was aware of this. But tolerated it
because the manager was very good in his work. In
the long run companies image was affected.

Individual values in conflict with
organizational goals
• A company which achieves its goals in ways which
are not acceptable to employees leads to ethical
conflicts or ethical dilemma in the company.
• ‘whistle blowing’ will be the outcome when the
employee goes public about the company’s
wrong doings. After he has failed to convince the
company to correct its ways.
• Eg. Of an ethical dilemma – an officer, who had
worked abroad, had good qualifications and vast
experience was recalled suddenly and made to
work under a director in India. The methods,

procedures followed by the director, was not
acceptable to the officer. There used to be
arguments and the officers good suggestions was
not accepted by the director. He was made to work
in an isolated place and finally the officer was
forced to resign on his own.
The officer was not a trouble maker, he only
wanted to correct the internal company
procedures. He felt the company’s present
methods would harm everyone including
customers and the general public. The director, felt
he was right and the officer was wrong and
unethical. This is called ethical dilemma.

• The employees who do not like the company’s
practices would ‘blow whistle’ by revealing
the situation to the general public.

Managers’ attitudes and values
• Managers have more opportunities to take ethical
decisions and set the ethical systems within the
company. Usually, top level employees provide
ethical guidance to lower level employees. The
values top managers have is important in
promoting ethical activities.
• Managers usually ask three key questions before
making a decision: Will it work? (practical), Is it
right?(ethical), Is it pleasant? (affective).
• A 1982 survey on 1400 corporate executives rated
values as follows:-

 responsibility and honesty 88%
Capable 66%
Imaginative 55%
Logical 49%
 Ambitions 37%
• This shows managers feel more professional
responsibility towards their jobs. Making
organization effective is their central goal. Their
other goals are organization efficiency, reputation,
high morale, high productivity, growth, stability,
profits etc.
• For managers to take ethical decisions, the following
points should be fulfilled –
He should be of Moral Behavior

Proper Behavior of one’s equals
Industry’s ethical climate should be there
Society’s moral climate should be good
Formal company policy should be there
Personal financial need should be less
These above points show that values and attitudes
of managers are a critical element in a company’s
ethical performance.

Competitive pressures
• When companies compete for a similar product,
they may engage in unethical activities in order to
wipe out competitors from the market.
• Rivalry amongst employees for promotion, raises
or any other type of advancement can motivate
some kind of unethical behavior.
• When employees face pressure from top level
managers, they may be forced to do unethical
acts.

Cross-cultural contradictions
• Ethical problems occur when some corporations
do business outside their home countries where
ethical standards are different. At home, they
cannot sell unsafe products as their home
countries do not permit. But these products are
sold in other countries where demand is there
and less of ethical standards permit use of such
products.
• Acceptable safety standards differ from country
to country. Some companies have build factories
in countries where pollution control laws are less

These companies have been accused of ‘exporting
pollution’.
• What one nation thinks is ethically acceptable is
considered unethical by another nation. This
results in ethical dilemmas which firms and
managers find difficult to solve.
• Business should have a responsibility towards
four groups – society
employees
customers
investors

Not much of Self-regulation and
standard setting by organizations
• When organizations are not able to self
regulate themselves, do self check or self
audit than ethical problems arise.
• When organizations are not able to set any
standards for themselves be it quality
standards, production standards etc. Than
ethical problems arise.

Individual behavior is strongly
influenced by incentive
• Employees in organizations are influenced
mainly by the incentives they get.
• Their work performance depends on the
number or amount of incentives they get.
• Individual employees will also influence other
employees about the incentives offered.
• So, employees will work only if they receive an
adequate amount of incentives.

• Non-job failures:
– Cheating on your expense accounts
– Stealing supplies
– Sandbagging
• Job failures:
– Superficial performance appraisal
– Not confronting expense account
– Cheaters
– Falsely praising poor performers
– Denial of training opportunities
– Undermine management

• Job distortions:
– Bribery
– Manipulation of suppliers/buyers
– Differential pricing
– Falsifying information
• Job “creation”:
– Bending policies for certain customers
– Bending policies for salespeople
– Caught violating rules
– Arranging for promotions

Why people behave Unethically ?
• Pressure can drive people to do things they wouldn’t
normally do.
• Some people make unethical choices because they are not
sure about what really is the right thing to do.
• Self-interest, personal gain, ambition, and downright
greed are at the bottom of a lot of unethical activity in
business.
• Misguided loyalty.
• Then there are those who simply never learned or do
not care about ethical values.
• Ignorance
• Competition

Common unethical behaviors at
workplace
Harassment
Inappropriate internet use
Harassment – is a violation of your employer’s
ethics policy and may also violate the law.
Illegal harassment can be based on sex, race, color,
religion, national origin, disability or age.
Sexual harassment is more widespread in today’s
workplace. Such problems occur usually between
supervisor/manager and subordinate.Tanuja Nair Assot prof AMCEC 71

Inappropriate internet use
• It is a common unethical act done in offices today.
Which is misusing your employer’s internet usage
policy. An employee could commit the following
actions –
Surfing the web during your work day.
Addicted to news. gambling, shopping or social
networking sites.
Employees should follow the guidelines –
Blog or use social networking sites on your own
personal time and not on your employer’s time or
on your employer’s equipment.Tanuja Nair Assot prof AMCEC 72

Don’t disclose any of your employer’s confidential
information or any trade secrets when using
internet.

The Root Causes of Unethical
Behavior
• Psychological traps are the root causes of
unethical behavior.
• Primary Traps (External Stimuli)
»“Obedience to Authority”
• Personality Traps(Internal stimuli)
»“Need for Closure,”
• Defensive Traps(Two internal stimuli: guilt
and shame)
»“False Consensus Effect.”

PREVENTING UNETHICAL BEHAVIOUR
Tanuja Nair Assot prof AMCEC
75
Hiring the right employees
Regularly check and audit unethical behaviour
Implement the policies into their practices
Incentives and punishments
Open and transparent business practices

• Unethical behavior can infect a workplace, either if
an executive steals money from the company or an
associate falsifies documents. The unethical behavior
can damage the credibility of a company, making the
business lose customers and eventually spoil the
reputation of an organization.
• However, entrepreneurs and their management
teams can work with employees to prevent unethical
behavior. When employees work together for the
good of their workplace, both of them benefit
immensely. Following are the measures to control
unethical behavior in the workplace so that the
public image of the company would be adequately
protected from time to time.

Measures to control unethical
behaviors
• Create Policies and Practices
• Create Code of conduct
• Hire Right
• Develop People's Understanding
• Incent the Right Thing
• Put Controls in Place
• Build a Culture of Transparency, Openness, and
Communication
• Leadership Must Walk the Talk
• Lead by example

• Reinforce the consequences
• Show appreciation for employees
• Organize ethics lectures
• Create checks and balances

Policies and Practices
• Organizations must research, develop, and
document policies and processes around
defining, identifying, and reporting ethics
violations.
• These policies should be mentioned in the
employee handbook and protections should be
put into place for those who raise ethical issues.
• Just having a policy is not enough, employers
should practice what they preach. The policy
should not be just on paper and the management
is not implementing that policy in their
organization.

Create a written code of conduct
• Top management should develop a written code of
conduct.
• It provides employees and managers an overview of
the type of behavior and conduct that the company
expects.
• The written code of conduct describes what
behaviors are acceptable and what measures will be
taken if an employee violates the code of conduct.
• When the code of conduct is stated well than it
would be effective in punishing erring employees.
• This strengthens the rules in the code of conduct.

Use value-based scale when hiring
employees
• That is organizations should ‘Hire Right’.
• Companies should select ‘Quality’ people into
their organization. This helps to implement
and maintain ethics in the organization.
• Some organizations do background checks,
purchase screening soft wares or conduct
behavior-based interviews. Where they would
ask candidates to describe situations where
they have acted ethically, even though it was
against social or cultural norms.

• When employers hire employees, they want to
hire people with education and experience.
Which shows that they are qualified to handle the
work given to them.
• Employers who want to prevent unethical
behavior have to also consider the value based
scale of the candidate to see whether he will fit
into the organizational culture.
• Here most companies take the help of
recruitment consultant, who uses every tool to
make sure the candidate hired has the right
qualifications and also the right values.

• If companies follow these guidelines, the
public image of the company will be
maintained, its reputation will increase. The
trust and credibility ratings of the company
will always be high.
• This way companies can root out unethical
behavior.

Develop People's Understanding
• Most HR professionals will tell you that training
people to act "ethically" will not have much of an
impact.
• Instead, developing a process for reporting ethics
violations and building staff understanding about
ethics expectations is important.

Induce the Right Thing
• Schools and social communities should not
induce people to cheat or act unethically by
giving more importance to marks and not to
character development.
• Before introducing new measures in schools or in
any industry, leaders should make sure it
encourages the right behaviors amongst people.
If it may tempt people to behave unethically,
enough checks and balances should be put into
place to control such type of unethical behaviors.
For eg. Strict punishment if any one breaks the
rules.

Put Controls in Place
• Control mechanisms like auditing and disclosure
should be there to reduce opportunities of
employees doing anything unethical.
• Catch unethical issues which have happened by
accident.
• Counsel those employees who have behaved
unethically.

Build a Culture of Transparency,
Openness, and Communication
• Top management and business leaders should
create a culture of transparency, openness and
communication within their organizations.
• To make a true success of organizational ethics,
employees should see and hear what is going on
around them and they should also feel
comfortable to stand up and speak out if they see
anything unethical going on around them.

Leadership Must Walk the Talk
• Leaders must not only talk about the importance of
policies, processes, incentives, openness and
communication. They should also practice what they
preach.
• If a leader just talks ethics but behaves unethically,
his staff will also follow him. This will create suspicion
and destroy the trust amongst employees.
• Organization must make sure it has not only strong
policies to increase understanding of ethics amongst
employees but also make sure these policies are put
into practice in day to day matters by the employees
and leaders.

Reinforce the consequences
• Business owners must tell employees about the
code of conduct during counseling sessions.
• They should tell them about the consequences
(outcomes), if the employees do anything
unethical. The employees alone are responsible.
• If still the employees behave unethically,
management should fire them or punish them.
• Business leaders should not tolerate such
unethical acts and should always reinforce the
consequences of being unethical.

Show appreciation for employees
• Loyal employees are always working hard. They
know their company values the hard work they
put in.
• Loyal employees show less chance of doing
anything unethical.
• So, managers should show visible appreciation
towards such loyal employees.
• Showing appreciation to employees for a job well
done on a daily or monthly basis builds loyalty
amongst them.

Create checks and balances
• Instead of putting full responsibility in the hands
of your employees.
• It is better to create a system of checks and
balances to reduce the chances of unethical
behavior.
• Checks and balances help to measure
accountability of each section in your company.
• For eg. After a customer purchases, at the
counter he has to pay. The counter maintains
stock of products sold, checks and records the
payments received.

Organize ethics lectures
• Organize an ethics lecture and invite an ethics
trainer to come to your workplace and talk about
ethical behavior and why it is important in any
organization regardless of its size or the industry
it deals with.
• Ethics trainers use role plays, motivational talks,
videos and brochures to talk about the
importance of ethics in your workplace.
• Such lectures can help build ethnic value in your
workforce. It can also help to develop your
workforce.

Meetings
Communication
Time management
Employee safety
Ethical standards guide individuals and the company to
act in an honest and trustworthy manner in all their
workplace interactions.
These standards encourage employees to make the
right decisions for the company and not for the
individual. Give them the courage to come forward
when they notice any dishonest and unethical behavior.

• Company programs should be based on such
ethical standards. So that they provide clear
guidance on common ethical dilemmas, such as
using the work phone for personal long-distance
calls or using company software programs for
personal projects.
• Corporates core values should be based on
ethical standards in order to develop a working
culture of respect, trust and honest
communication. This helps to maintain ethical
business operations. If corporates insist on doing
the right thing, employees will also follow and
behave ethically. They should reward employees
for consistently being ethical.Tanuja Nair Assot prof AMCEC 96

• According to OECD principles of corporate
governance – incentive schemes should be
aligned to the ethical and professional
standards. So that those who follow ethical
and professional behavior reward them and
those who break the rules, punish them.

Rewarding ethical behaviors
• For years, discussion has been going on in
management circles about ‘rewarding’ ethical
behavior.
• People can be punished for doing the wrong
thing.
• But why and how people should be rewarded for
doing the right thing?
• Should people be rewarded for ethical behavior?

• The link between rewards and ethical behavior is
very clear and strong.
• Ignoring it will lead to serious problems.
• For eg. Sears Auto center case
• Profit margins has come down in the center
because of competition. In order to improve
performance, Sears introduced a cost-cutting and
productivity enhancing program that included
among other things giving a productivity
incentive to auto mechanics. Mechanics base pay
was reduced and a fixed amount of money would
be paid for completing a specific job in time. This
type of pay is also known as “piece rate”.

• Mechanics were given quotas, a certain number
of jobs. Service advisors, were put on base pay +
commission pay. They also had to meet certain
sales quotas.
• In 1992, the California Department of Consumer
affairs Bureau of Auto Repair gave the result of
18 month investigation into the practices of Sears
Auto Centers.
• It was found that these auto centers were
regularly overcharging customers for repairs,
unnecessary repairs were recommended and
customers were charged for repairs not done. It
was found that Sears commission and quota
compensation system was at fault.

• Sears Auto had to pay compensation to
customers and the CEO apologized to customers
in full page newspaper ads.
• It was the well-designed reward system that
encouraged unethical behavior and damaged the
reputation of the company.

• Many Smart companies have developed
motivational vision statements, clear corporate
policies, lengthy code of conduct, hotlines for
employees and have developed good training
and communication around ethics.
• They talk about their high ethical standards in
employee publications, in offices boards, on
their websites, in consumer advertising.
• But they have widespread unethical practices
within their company.

• Ethical behavior from employees depends on how
it is encouraged and rewarded by company.
• If the company is really serious about ethics, they
have to have proper infrastructure and real
commitment to ethics right from the leader’s
level to lower levels.
• Also, companies need to have a strategy on how
to reward behaviors.
• Most of the employees want to behave ethically,
but they do not know the ‘rules’. The employee
may be new to the job or new to the particular
industry.

• So, biggest challenge for companies is
communicating the ‘rules 'to employees.
• Ethical behavior can be driven depending on how
it is encouraged and rewarded in the
organization. If companies want to seriously
implement ethics in their organizations, they
should have an ethical infrastructure. They also
need to define ethical behavior in relation to their
industry and develop a real strategy to reward
desired behaviors.

Defining ethical behaviors
• Based on experience, most employees want to
behave ethically. But often, they don’t know
the rules. Even after knowing the rules,
employees need to have a clear description of
what ethical behaviors are applicable in their
industry, organization or job. They need to see
managers exhibiting such ‘ethical behaviors’.

• Suppose they know the rules but they still need
to know how ethical behavior looks like. They
need clear description of ethical behavior in
relation to their job, company and industry.
• They need to see managers modeling these
behaviors.
• Companies have invested money and time to
define competencies. These competencies are
used as criteria for selection, recruitment,
performance management and for rewards too.

• Same way companies can define criteria for
ethical behavior. This will help employees
understand what are the right ethical behaviors
in context with their job, organization and
industry.
• Companies should also understand which are the
common ethical dilemmas in their business. And
they should describe clearly what employees
should do to act ethically. Common ethical
behavioral terms can be:-

• Maintains confidentiality
• be truthful
• Confronts potentially unethical behaviour (does
not look the other way)
• Avoids conflicts of interest.
For example in healthcare, ethical behavior is
strictly required.
• Maintains confidentiality of patient and other
sensitive information.
• Is truthful in recordkeeping and reporting

• Confronts and counsels those who are doing
wrong things to a patient. (does not look the
other way)
• Treats all patients equally according to the level
of care needed for their condition, regardless of
who they are or who they know.

Developing a strategy for ethical
behavior
• Ethical behaviors are observable, people can be seen
doing them. Since it is observable, people showing
such behaviors can be rewarded and people not
showing such behaviors can be given corrective
feedback.
• In short, people can be held accountable and
rewarded for both their achievements and correct
behaviors.
• Companies can link ethical behavior with rewards by
building ethical standards into their incentive
programs.

• That means, if employees shows ethical behavior
he will be rewarded or if he does not show ethical
behavior he will be punished or given corrective
feedback.
• Other ways of linking ethical behavior to rewards
is – when doing performance evaluation see
whether ‘results’ have been achieved and also
see ‘how’ it has been achieved. Is it achieved by
using ethical values like ‘teamwork’ ‘open
communication’ etc.
• Also build ethics and other values into the non-
cash rewards programs. For example, a
courageous act of whistle blowing on suspicious

Accounting practice or suggesting a novel way to
safeguard confidential data are both worthy of
getting a non-cash award.
• Ensure managers always show ethical behavior,
encourage them and rewards those employees
who show ethical behavior.
• As performance and reward professionals, when
managing compensation we should maintain
ethical standards.
• When deciding pay, especially for executives
make sure it is reasonable and competitive. Build
a performance culture in the organization.

• The process for evaluating performance
should be through and transparent.
• Present complete and easy to understand
information to the Board.

Ethical and
Unethical Behavior (Cont.)
Find 1 cent Find $1
Find wallet with $1,000
and no identification.
Find wallet with $1,000
and identification.
Ethical dilemmas

Legal Versus Ethical Behavior:
The Issue of Lying
unEthical
behavior
Legal
behavior
Testifying under
oath in court.
Lying: deliberate misrepresentation of the truth.
Lying to a customer
about the safety of
a product.
“How does my
hair look?”

Module - 3
• Overview of Business Ethics –
• Business
• Business is a commercial activity to make profit
• It includes trade and all institution supporting
trade like banking insurance, transportation etc.
• Transacting of goods to earn profit.
• Selling product for money.
• Providing service to earn income. Example
Banking and educational institution.

• Two parties involved one is seller and another
one is buyer
• Transfer of goods against money
• Business may be a small, medium and large.
• Business may be various types like sole trader,
partnership and company form of business

WHAT IS BUSINESS ETHICS?
• Business ethics is the application of general
ethical rules to business behavior.
• Business ethics tell the business how to
conduct itself.
• In business, ethical decision making is to know
right from wrong and be committed to do
what is right.

Business Ethics
• Business Ethics is about:
–Decision-Making
–By People in Business
–According to Moral Principles or
Standards
The business leaders, managers should
exhibit high ethics in business decision
making.

• The business decision maker should be
morally sound, as higher the level of the
decision maker, the greater impact the
decision has on others in the industry.
• Business people should be motivated
internally to be ethical. External motivation
has only limited value, as punishment and fear
is effective only for the short term.
• Organizations should have a clear vision,
should support individual integrity. Such an
organization becomes a great place to work
and attracts good employees.

METHODS OF ETHICAL REASONING
• Utilitarian: Compares the costs and benefits of
a decision, policy, or an action.
• Rights: Respecting basic human rights.
• Justice: Justice or fairness exists when benefits
and burdens are distributed equitably and
according to some accepted rule.

METHODS OF ETHICAL REASONING
METHOD CRITICAL
DETERMINING
FACTOR
AN ACTION IS
ETHICAL
WHEN….
LIMITATIONS
UTILITARIAN Comparing benefits
and costs
Net benefits exceed
net costs
Difficult to measure
some human and social
costs.
Majority may disregard
rights of minority
RIGHTS Respecting rights Basic human rights
are respected
Difficult to balance
conflicting rights
JUSTICE Distributing fair
shares
Benefits and costs
are equally
distributed
Difficult to measure
benefits and costs.
Lack of agreement on
fair shares

AN ANALYTICAL APPROACH TO ETHICAL PROBLEMS
Ask
UTILITY
Do benefits exceed
costs?
RIGHTS
Are human rights
respected?
JUSTICE
Are benefits and costs
fairly distributed?
STEP 1

Compare results
If yes is the answer to all
three questions, it is
probably ethical.
If yes and no are mixed,
it could be either ethical
or unethical.
If no is the answer to all
three questions, it is
probably unethical.
STEP 2

ASSIGN PRIORITIES TO
UTILITY RIGHTS JUSTICE
STEP 3

Corporate Governance
• Corporate means a legal body that acts as an
individual.
• Governance – is control or direction.
• To make sure corporate takes only ethical
decisions, they need to governed.
• Through corporate governance, then different
groups in a corporate are brought together to
conduct business ethically.

Relationship between corporation and
business
• Corporation different groups business
for the purpose
Different group – managers, employees,
suppliers, customers and investors.

Ethical issues in HRM
• Ethical issues in job design
• Human resource planning
• Recruitment and selection

Ethical issues in job design
• Job designs options –
Work simplification – work is oversimplified, this
makes the job boring, tend to commit mistakes
and resigning. Unethical issue here is over
simplification of jobs.
Job rotation – unethical issue here is jobs do not
improve from innovative viewpoint and workers
feel they are having no connection with any
particular department.

Job enlargement – even though it is motivational.
It results in making the job boring.
Job enrichment – this option is more ethical than
other options, as it tends to increase motivation
and reduces absenteeism. It enables the
employees to meet their psychological needs and
brings out empowered teams.
Autonomous work teams – this option involves
employees in decision making, execution,
coordination and controlling fully. It enables
workers to use their human resources the
maximum and benefit the organization. So
designing jobs based on this option is ethical.

High performance work design – this option gives
complete freedom to workers and encourages
them to be innovative and creative.
Empowerment – this option helps the employee
to acquire skills and knowledge and enables him
to do the jobs in which he has aptitude.
De-jobbing – this option is more suitable for
competitive markets. It checks the companies
from overstaffing and also prepares committed
employees. Empowerment and de-jobbing are
more ethical to design jobs upon. Especially
under the liberalized and competitive global
environment.

So, job design options which benefit both the
organization and employees by utilizing the human
resources is considered ethical.

Ethics in Human Resource Planning
• Human resource planning means companies
should plan for future HR requirements, in such a
way there is always enough supply of developed
and motivated people to perform the work.
 recruitment and selection – the competitive
environment in industry is such that highly skilled
and talented candidates are always required. If
candidates are not available internally, company
will search for candidates outside. Such actions
are considered unethical as promotional
opportunities will be less for existing employees.

So, it is more ethical to recruit internal employees
after the required training and development. But it
is unethical, if company recruits unsuitable
candidates from inside the company.

Module -3
“Whistleblowing”

• A whistleblower is a person who tells the public
or someone in authority about alleged dishonest
or illegal activities occurring in a government
department or private company or organization.
• A whistleblower is a person who raises concern
about frauds, corruptions, wrongdoings and
mismanagement.

• A government employee who exposes corruption
practices within his department is a whistleblower. So is
an employee of a private organization, who raises his
voice against misconduct, within the company.
The misconduct can be classified in several ways, such as:
• Violation of Indian laws.
• Posing direct threat to public interest(Fraud,
corruption)
• Violation of health or safety norms.
• Deceptive practices.

DIMENSIONS OF ETHICS
( 3 “R’s” of Ethics)
– RULES
– RESPONSIBILITY
– RESPECT
138

Thank you
Whatever you do just do it with all your
heart…..

Workplace ethics

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