Does Employee Conduct Matter?
Is how employees perform their work more important than what they produce?
According to a new study, nearly half (46 percent) of the U.S. senior leaders surveyed — 150 respondents with the title of director and above, including CEOs and general counsels — say the conduct displayed by employees while doing their work matters more. Yet only one in four of these same leaders say the companies they work for value the conduct more.
Potentially more troubling is that 20 percent of these leaders say their companies place less importance on how employees conduct themselves when getting their work done than on the actual work that is produced.
In the second part of the “LRN Values of Corporate Values” study — the first part of this study was also conducted by LRN and detailed here in September — researchers examined the significance U.S. business leaders and their companies place on how employees conduct themselves in getting their work done.
“A good leader recognizes the significance of good employee conduct and understands that employees exhibiting ethical behavior are more valuable to the organization,” said Mark Detelich, VP of Leadership Solutions at LRN.
Leaders appear to be translating this belief into action, the study found, with a majority ensuring that employee conduct is assessed in performance appraisals. Yet many of their companies haven’t adopted employee conduct as part of the corporation’s appraisal process.
Eighty eight percent of leaders say they stress how employees conduct themselves in performance appraisals, but only 59 percent of these leaders say their companies underscore conduct and 25 percent say their companies do not stress worker conduct at all.
The higher numbers from company leaders could be a reflection of them saying that there isn’t a formal ethics review program embedded in their organizations, said Patricia Harned, president of the Ethics Resource Center (ERC). ”The leaders may be including ethics as more of an informal thing in meetings with employees. It’s the difference between what they do informally and what the company does formally.”
Two recent ERC and Society for Human Resource Management (SHRM) surveys support this idea. In the National Business Ethics Survey, ERC found that 67 percent of employees at all levels said that they are reviewed on ethics as a part of their evaluation. But in The Ethics Landscape in American Business survey, SHRM/ERC found that only 43 percent of human resources professionals said their companies include ethical conduct as part of employees’ appraisals. The difference? The HR professionals surveyed in “The Ethics Landscape” were commenting on ethics being part of the formal review process, while the National Business Ethics survey included many employees across the workforce, and their responses were based on ethics being part of the informal review, said Harned.
“Historically, we see low numbers in people who indicate that their companies do formal performance appraisals that include ethical behavior and conduct,” she said.
That could be because it’s not always black and white as to what ethical behavior can be defined as, said Mary Miller, director of human resources for home video distributor Acorn Media Group and a member of SHRM’s ethics special expertise panel. “In every corporate culture, there will be nuances on what this behavior is. And sometimes, companies aren’t looking long-term as to how they can objectively measure it. People who are running companies are being measured on very short-term results - and ethical behavior is not a short-term result.”
Jeremy Price, program delivery executive of LRN, agrees with this assessment. “Many employees chase what they’re measured on. It’s a short-term horizon: Their incentive systems are based not on how they sell their service, but on the selling. If companies have a long-term focus, workers will focus on how they sell to get return consumers.”
Principles in Practice
So what can leaders and their companies do to be more successful at making ethics a seamless component of performance appraisals?
It has to start with your business process, said Miller. “You have to have a defined process within some specific parameters of what we’ll do to make a sale and what we won’t do to make a sale. Then in the appraisal piece, you can identify whether employees have done this without stepping over the line. If the people leading the company have high expectations and live the values visibly and transparently, others will follow the example,” she said.
“If executives all the way down to team leaders aren’t evaluated on the way they do things in performance appraisals, they will not necessarily behave in a manner that aligns with the values and mission of the company,” said Price. “They’ll align to how they’re rewarded: better salary, perks, incentives, assignments, projects and conferences. So they need to base performance appraisals on values. We need people to chase the right metrics.”
*About this story:
The study this story is based on was performed by LRN, the company founded by HOW Online founder, Dov Seidman. LRN provides financial assistance to HOW Online but does not directly influence its content.
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