Do You Have an Ethical Corporate Culture?

Doing whatever you want to do as long as it’s legal means you have a culture that is legally safe, but not necessarily moral or ethical.

Your company may pride itself on having a fun, flexible culture, but is it also an ethical culture?

A recent LRN survey highlighted by Emily Miner in Fast Company shows that companies with an ethical culture outperform other companies by 40 percent “across all measures of business performance: from levels of customer satisfaction to employee loyalty, innovation, adaptability—even growth.”

Among other factors, Miner writes that “ethical” means employees feel like they have a fair boss and they are heard when offering input. Effective Diversity, Equity, and Inclusion (DEI) policies also are valued by those looking for an ethical workplace.

Wondering if you have an ethical culture? To answer that question, Miner recommends assessing your culture by asking everyone—from the most senior members of the company to those at the entry level—how they experience your corporate culture. “Doing so helps identify gaps that need immediate attention in access to people, tools, resources, and training. Gathering and analyzing data illustrates objective insights and can let you know where and how to intervene,” she writes.

Being “transparent and honest” about where your company stands is also important, Miner writes. In my own career, I have given credit to company leaders and managers who were honest when the company or department did not reached its financial goals. However, a phenomenon I have noticed is a tendency to not be fully honest when the numbers were extremely good. There could be a fear that if you tell employees the department or company did extremely well, they will wonder why they are not being paid more. Is part of being ethical admitting to yourselves, and then employees, that they should be paid more, given their output and their department’s impressive performance?

This brings me to a significant ethical question that has been answered already by standard practice, but which I’ll pose anyway: If you know you are under-paying an employee, is it ethical and OK as long as the employee doesn’t ask for more money? Standard operating practice, from what I have observed, is that the burden is wholly on employees to speak up and push for more money. If a department head can see the employee is being paid less than peers, is it OK so long as that employee did not ask for as much money as their peers? Is it ethical to pay one employee less than others at the same level because they didn’t push as hard for more money?

Another salary-related ethics question: If you promote an employee, does that employee ethically deserve a salary renegotiation? From my experience, when employees get promoted, they wait to hear what the new salary will be, similar to how they would wait for a surprise gift. In one case in my career, I proactively requested a revised salary, printing out pages from research on sites such as Glassdoor and to show what others in my new position typically earn. That request and that research were disregarded, so my only recourse would have been to threaten to walk out the door if I was not paid more. Managers usually have a sense of which employees, if any, will walk away in protest of an unfair salary. If they use that sense to empower themselves to pay an employee less than what they deserve, is that ethical? It’s legal, but is it fair and ethical?

Another ethics question is whether a manager of salaried employees has an obligation to ensure the employees are not working much more than nine hours per business day, that they are not forced repeatedly to work until late at night or on weekends, and that they are able to completely log off from business communications during vacations. I sometimes have found myself over the course of my career working well past business hours and occasionally on the weekend, but I have always been strict about enforcing a total disconnection from business communications during vacation. I have had at least one colleague, however, who never disconnects entirely from work e-mail, even when on vacation. If you are paying salaried employees on a five-day-a-week, nine-hours-per-day, basis, is it ethical if you know they are working well past that basis, and sometimes even cutting into their vacations?

Broaching a conversation with managers and company leaders about what constitutes a fair workload can be frustrating and fruitless for employees. “Everyone’s working hard,” is the standard, pat response employees are likely to receive from the manager or company executive. Is that ethical? If everyone at the company is working equally hard—working nights, weekends, and during vacations—does that make the practice ethical? First, I would note that it’s almost never true that “everyone” at a company is working equally hard. One person’s definition of “working hard” might be attending meetings back-to-back from 9 a.m. to 5 p.m., then signing off and enjoying the night, weekends, and vacation time. Another employee’s definition of working hard might be having meetings in addition to a huge list of deliverables that keep them at the computer until the work is done, regardless of what day or time it is. Second, it’s worth questioning the “Well, everyone’s doing it” rationale. That isn’t a legitimate ethical argument or position. That’s just seeing what you can get away with, and then doing it until you can no longer get away with it—the very definition of unethical behavior.

In an ethics course I took in college, the professor said ethics and the law were “kissing cousins,” but not necessarily one and the same. Doing whatever you want to do as long as it’s legal means you have a culture that is legally safe, but not necessarily moral or ethical.

How does your organization define “ethical,” and what is your process for evaluating company and departmental practices to ensure your definition of “ethical” guides executive and manager behavior?