Requiring Ethnics Training to Employees Is Simply a Dog and Pony Show Why or Why Term Paper

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Ethics Training for Employees

"Recently we have become aware of massive fraud and abuses that are tolerated and even encouraged by executives in large and formerly reputable organizations" (Lee, 2004). The Enron scandal sent ricochets through corporate America, causing literally thousands of people to lose their jobs and sending a major city into a deeper recession than that experienced by the rest of the country. Even seemingly minor corporate scandals have had a tremendous impact on both corporate America and on consumer confidence in corporations. One need only look at the recent media fury surrounding Martha Stewart's recent release from prison to realize that corporate misbehavior is the hot-button issue of the day. As evidenced by the abundance of "Free Martha" t-shirts, the negative impacts of corporate ethical issues are not always apparent on the surface. However, the fact is that abusive and illegal practices that have been permitted, and sometimes condoned, have cost people jobs and money, and have created a loss of credibility and trust in American corporations (Lee, 2004).

According to a 1999 study, approximately 30% of U.S. employees suspected that ethical violations had occurred in their organizations in the two years prior to the survey (Wells, 1999). However, almost half of the people who witness ethical violations fail to report them. The reasons for non-reporting are myriad, but seem to be dominated by fears of retaliation or not being taken seriously.

The problem is not that ethical violations are not taken seriously by the government. Actually, the penalties for ethics violations can be very severe. In fact, if a company has failed to institute programs designed at detecting or preventing in-house ethical violations, those in charge of the violating employee can face severe criminal penalties. The possibility of such penalties would seem to suggest that every company would have an ethical training and compliance program in place, or at least that every company should institute required ethics training. The reality is that "companies that do nothing at all may be smarter than those that take a weak stab at developing ethics programs" (Wells, 1999).

There is even some evidence that suggests that poorly implemented ethics compliance programs can actually promote unethical conduct. With that knowledge, it would be easy to dismiss required ethics training as simply a dog and pony show. However, there is substantial evidence that suggests that appropriate ethical training reduces incidents of unethical conduct. Furthermore, the institution of proper ethical training and compliance programs can provide additional benefits to corporations, beyond simply increasing the likelihood that employees will respond appropriately when confronted with dilemmas or after witnessing a coworker engaged in unethical behavior.

One external motivation for companies to implement ethical compliance programs is the Sarbanes-Oxley Act, which was passed in 2002. The Sarbanes-Oxley Act requires publicly traded companies to disclose whether they have adopted a code of ethics for senior officers (Tyler, 2005). The result has been that more publicly owned companies are providing ethics training and compliance programs than ever before. This intended result of such legislation is to increase confidence in corporate America, which will hopefully stimulate the American economy and revitalize American corporations. A side-effect of the legislation may be that the ethical training programs will actually reduce the incidents of unethical behavior inside corporations.

Despite the efforts of the government to legislate morality in the corporate structure, it has become increasingly clear that ethical scandals cannot be legislated out of existence. Laws have always existed to prohibit people from engaging in many of the same behaviors that are targeted by ethical training and compliance programs. The problem has been twofold: the wrongdoers have failed to comply with those laws, and their co-workers and employees have been reluctant to report misbehavior. Penalizing bad behavior is only part of the solution. As long as a corporation's atmosphere is conducive to unethical behavior, there will always be a subgroup of people willing to engage in such behavior. The real solution lies in finding something that will prevent or detect bad behavior before it can have the broadly catastrophic effects of the Enron scandal.

Research

Ethical training and compliance programs are becoming increasingly popular. In fact, more companies today provide some type of ethics compliance program than ever before, and for good reason; the institution of ethical programs can provide a company with a wide variety of benefits. Companies with ethical training and compliance programs are more able to recruit and retain top-quality employees, foster a more productive work environment, build and sustain a good reputation, maintain a high level of self-regulation, legitimize open discussion of ethical issues, provide ethical guidance and resources to employees, and align employee efforts with an employer's broader mission and vision (Joseph, Wan Veer, and McFadden, 2004).

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One of the most interesting things about the benefits of an ethics compliance program is, rather than making employees feel stifled by rules and regulations, it appears to give employees a feeling of safety and comfort, and enables employers to build a better-quality workforce.

Furthermore, employees who work in environments with ethics programs, where their supervisors model the ethical behavior taught and enforced by those programs, indicate that they believe the ethics programs have improved their work experiences. The most remarkable positive outcome associated with employer ethical training may be that employees report feeling less pressured to compromise their personal ethical standards (Joseph, Wan Veer, and McFadden, 2004). In addition, employees working under an ethical training and compliance program report that: they observe less misconduct at work; they are more willing to report misconduct; greater satisfaction with their employer's response to reported misconduct; greater overall satisfaction with their employers; and a greater likelihood of feeling valued by their employer (Joseph, Wan Veer, and McFadden, 2004). Furthermore, the evidence suggests that the benefits are greatest for employees in transitioning organizations, which indicates that employers and employees may benefit the most from ethical programs when times are toughest (Joseph, Wan Veer, and McFadden, 2004).

The effects of an ethical compliance and training program can have the most dramatic impact on those employees outside of management. There is evidence that suggests that senior and mid-level managers are more positive about workplace ethics than lower-level employees (Joseph, Wan Veer, and McFadden, 2004). This is important because less than half of employees who observe misconduct at work fail to report it (Joseph, Wan Veer, and McFadden, 2004). Employees fail to report misconduct because of fear of retaliation by their coworkers and because of worries that management will not take their concerns seriously. Therefore, if employees are reassured that their employers are committed to ethical standards and compliance, they are less likely to feel the threat of retaliation and more likely to feel that management will treat their concerns seriously.

Another reason that employees may be reluctant to report unethical conduct is that ethical dilemmas are not always clear-cut. Employers who take a "just say no" approach to ethical dilemmas do their employees a disservice by failing to address the complexities of ethical dilemmas. Employers have to go beyond teaching their employees to say no in the face of an ethical dilemma. Employers should enact various principles of communication in order to equip workers to deal with ethical dilemmas: develop a regular routine of open, honest communication; encourage employees to establish themselves as people of character and dignity; encourage employee to stand up for what is right; saying "no" is just the first step in solving an ethical dilemma; and employees should consider credibility when responding to an unethical situation (Putnam, 2003). While saying "no" is an important step in any ethical compliance program, leaving an employee with no recourse after saying "no" leaves that employee vulnerable to the two fears that prevent reporting of ethical misconduct: retaliation and lack of credibility.

Clearly, given the complexity of ethical dilemmas and employee relationships, merely having a compliance program is not enough to increase actual ethical compliance. Successful ethics programs have to motivate people, not just mandate compliance and penalize noncompliance. Employers can utilize motivational tools that have traditionally been used in other areas of employee relations to stimulate ethics compliance. Studies have shown that motivation begins with skillful leadership and includes the following employment practices: selecting the right employees; orienting employees to the organization's strategy and culture; developing business literacy that integrates the ethic perspective; organization communication; situational leadership; performance management; training and development; and instituting a system of rewards (Lee, 2004).

An additional benefit of an ethics training program is that ethical issues may be dealt with before they become ethical problems (Tyler, 2005). When employees feel comfortable approaching management with concerns or questions about ethical problems, the likelihood that employees will make unethical choices is reduced. Furthermore, employees whose companies have ethics programs feel empowered to make the correct ethical decisions (Tyler, 2005).

As beneficial as ethics training and compliance programs can be, the commitment by senior management to ethics compliance can be more important than the actual institution of such a program.….....

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