Dive Brief:
- Organizations focused solely on profits and revenues may invite unethical conduct in the workplace, according to a new academic study.
- In a survey of 400 employees and their clients, the research, co-authored by Rutgers School of Management and Labor Relations Professor Rebecca Greenbaum, found that in organizations with a bottom-line focus, some employees sharpen their focus on work and deliver superior customer service, while others break the rules.
- The findings show that sometimes the risk pays off, and sometimes it doesn't: "A leader’s exclusive focus on the bottom line may inspire employees to improve their performance, or propel them to lie to customers to close a sale," Greenbaum said in a press release. "The 'bottom-line' is advanced in both cases, but with very different implications for the organization’s long-term success. Unethical conduct typically is not sustainable."
Dive Insight:
When an employee witnesses misconduct at work, he or she becomes twice as likely to quit, according to recent research from Gartner. Aside from the financial costs associated with turnover, the loss of particularly conscientious workers can deflate productivity and harm culture and morale, the organization noted.
Luckily for HR, workplace cultures that encourage ethical behavior are within reach. In earlier research, Gartner discovered that employees at companies with strong ethical cultures were 90% less likely to witness misconduct and more likely to report any misconduct they saw. The study also determined that organizations with strong ethical cultures had 7% higher 10-year shareholder returns than companies with low ethical cultures. While a laser focus on the bottom line can sometimes create short-term success as Greenbaum noted, long-term success will generally require ethical behavior.
HR will, of course, need buy-in from leadership to create a culture that values ethical behavior. It will especially need an assurance that everyone — even executives and "rain makers" — can and will be held to the same standards.
