Ethics – An Inherent Element of an Effective HR Program
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Over my 34 year HR career, I have witnessed a deterioration of ethics in the general public’s behavior and in business practices. WorldCom, Enron, Tyco, Adelphia, Global Crossing, Bernard L. Madoff Investment Securities, etc., are recent reminders of how far some executive management teams and their “friendly” Boards are willing to go to achieve personal and business objectives that are not in the long-term interest of the organization. Consequently, it should come as no surprise that many HR professionals have fallen victim to this trend.
An effective HR function serves as the steward of organizational culture. As HR professionals we should provide a touchstone for our organizations and nurture a high ethical and compliant culture. Ethics and an effective HR program are inseparable. Inherent in any effective HR Program is a foundation of trust, credibility, objectivity and impartiality. Without these elements, HR is often labeled as an extension of management and viewed by employees as a biased arbiter who causes employees to avoid raising issues within the company or to seek resolution outside of the company.
According to the National Business Ethics Survey [1] the longest study of ethics and compliance in the workplace, just 55% of employees who observed misconduct at work in 2005, reported it. This is a 10% decrease since 2003!
Other key findings of this national survey were:
* Formal ethics and compliance programs are on the rise, but positive outcomes expected of those programs are not
* Ethics and compliance programs do have an impact, but organizational culture is more influential in determining outcomes
Throughout my career, as HR professionals we have generally worked to gain credibility and respect as a leveraging business function and equal “player” to the other “C” Level positions in our organizations. We have seen our efforts rewarded as more and more of us earned a “seat at the table.” Unfortunately, for many of us, that seat became more akin to a massage chair that seduced us into complicity and slowly undermined our integrity and reputation, which hampered our ability to effectively act as our organizations’ culture and ethical stewards, and internal arbiters. Over the years, our function has evolved from a “necessary expense,” to a valuable internal business partner; to what I now see all too often as a co-conspirator or passive observer. Our greatest triumph of earning that seat at the table has, in many cases, beguiled us with the well paying jobs, corner offices, stock options and grants, and all of the other trappings and perquisites available to other valued colleagues. These perks are now often viewed by many HR professionals as rewards far too valuable to risk by “bucking the system.” So, at best, we “work around the edges” in a more passive attempt to remain true to our former selves; or at worst, we become complicit in supporting or initiating the unethical behavior often observed in our organizations.
Before one begins to believe that I am anti-capitalism, management or HR, let me set the record straight. I love this profession and have practiced it for over 30 years. I am more an optimist than a pessimist, and believe people are basically good and hard-working. I remember and see the fantastic possibilities that accrue when our business and HR functions operate in the long-term interest of the organization, instead of the short-term interest of individuals in the organization. It is because of my devotion to my craft that I am writing this article.
A 2008 national survey [2] conducted by Clemson University found that CEO’s viewed the top ethical concerns in the general business community as:
1. Improper accounting practices
2. Lying on reports/falsifying records and conflicts of interest
3. Exorbitant executive compensation
4. Dishonesty with customers
5. Misleading the public or the media
All of these behaviors can be influenced by an effective HR function.
It has been my experience that unless management is highly trained and employee communications are nearly transparent; HR professionals usually find when we look out for the long-term interest of the organization, that half the time, the resolution of ethical dilemmas or misconduct is managements’ cross to bear while the other half of the time the employee is at fault. This is as it should be and if we want to have an effective HR program, we have to call it, like we see it. We have to put the interest of the organization before our personal interest. To act contrary to this, will serve to undermine the organization’s culture and ethical standards, and the reputation and effectiveness of our HR function.
Key Causes of Unethical Behavior
As an HR professional, be on the lookout for organizational cultures that includes most of these behaviors;
* Sets unrealistic deadlines and pressures staff to achieve them
* Values or tolerates a high Machiavellian approach
* Sets unrealistic financial or business objectives
* Weak control over how financial or business objectives are achieved
* Money and perquisites are highly valued
* “Yes Man” culture, especially among “C” Level executives
* Teamwork isn’t valued
These behaviors and others create an environment that can cause good people to do bad things.
How to Promote Ethical Behavior
As the cultural and ethical stewards in our organization, we as HR professionals should;
· Have and behave with a strong moral compass
· Have the courage to call it like we see it
· Be a visible role model
· Provide ethical training
· Communicate ethical expectations
· Hold the organization accountable by visibly rewarding or punishing unethical acts
· Periodically assess employees’ and other stakeholders’ opinions regarding the organizations ethical performance
· Develop, utilize and evaluate ethical performance standards
As HR professionals let’s enjoy the hard fought status and recognition we have earned over the past decade, but without the fear of losing it all if we do the right thing; championing high ethical standards, fair and impartial adjudication of disputes, and holding the CEO accountable for the ethical and moral leadership of our organizations. By doing this, we will continue to enhance the reputation of our profession, serve the long-term interest of our organizations, and promote an ethical business community and general public.
[1] The National Business Ethics Survey, How Employees View Ethics in their Organization, 1994-2005, Ethics Resource Center
[2] The National Survey of CEOs on Business Ethics”
ABOUT THE WRITER
Pierre A. Towns is a Board Member, Vice President and Partner of Onyx Global HR LLC (http://onyxglobalhr.com), a full-service Human Resources consulting firm based in Long Beach, CA. He is also founder and Managing Partner of Human Resource Capital Consultants, Inc., (http://hrcconsultants.com) a full-service Human Resources consulting firm in Carlsbad, CA. He has taught various HR related subjects at the University of Southern California and California State University, San Marcos. Mr. Towns has also guest lectured for numerous organizations including; the University of California at Riverside’s Anderson School of Management and the International Employee Benefits Association’s Annual Conference.
Mr. Towns is the former Senior Vice President, Board Secretary, & Chief Administrative Officer of MedUnite Inc., an IT Services company that provides real-time connectivity between physicians, hospitals, insurance companies, pharmacies and laboratories nationwide.
Mr. Towns joined MedUnite from DreamWorks SKG, a privately held entertainment company in Glendale, California. There he was the Head of Human Resources and was responsible for directing DreamWorks’ human resources activities corporate-wide, including Live Action Feature film, Animated Feature film, Television Production, DreamWorks Records, and DreamWorks Interactive Divisions.
Prior to working with DreamWorks, Mr. Towns was with ARCO, a publicly held $39 billion integrated oil and gas company. During 19 years at ARCO, he worked domestically and internationally in positions of increasing responsibility. Mr. Towns’ ARCO responsibilities included: heading up Human Resources and Administration for ARCO Latin America, Caracas, Venezuela, which included Central and South America, and the Caribbean and world-wide HR Generalist head for ARCO International Oil & Gas Company.
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Comments
Bravo to you for highlighting this important issue and encouraging HR to hold itself to a higher standard. HR has a terrible reputation, IMHO one they deserve. It can be different, it can be much better, when those in the profession decide it is time for a change.
I do think that ethics is given secondary consideration – in firms where the focus is short-term, high revenue at all costs oriented. Sadly, many companies (especially publicly traded) are driven that direction as a result of the instant gratification culture that has been created.
Too many firms are focused on exceeding “analyst expectations” and “keeping the street happy” instead of genuinely focusing on building long term shareholder value.
That said, there are plenty of companies that value maintaining a proper perspective and appreciate an HR team that provides counsel to keep folks on the right path.
Thanks for highlighting encouraging HR to hold itself to a higher standard. HR can be different, but the person has to work for it.
nice article .
findings of national survey was surprising ,i would like to check out more about it : )and will post back soon .
thanks : )
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Do you think that there really has been a deterioration of ethics in business, or is it maybe just that the ethical violations are more visible in our always-on Internet spotlight?