Ethics and employee engagement go together

A study of workplace data collected by the Ethics Resource Centre indicates that employees tend to respond to an ethical culture with improved company loyalty and a willingness to “go the extra mile” for their employer.

The report, “Ethics and Employee Engagement,” released today by the ERC, suggests that “employee engagement is heavily influenced by factors that have nothing to do with money. . .
“If employees feel that they are significantly underpaid, their motivation is likely to suffer.  But when it comes to encouraging employees to pour discretionary effort into their work and deliver superior performance, the chance to contribute to something larger than themselves and be recognized for it is likely to provide a much stronger incentive,” the study concludes.

The report – a joint project of ERC and Hay Group, a global management consulting firm – is based on data gathered by ERC’s 2009 National Business Ethics Survey, a random telephone survey of 2,852 employees with a sampling error of 1.8 at the 95 percent confidence level. 

 Among the key findings and recommendations:

• Managers and supervisors need to demonstrate a commitment to ethics and foster open communication because employees’ perceptions of company ethics affect overall engagement
• When employees see misconduct in the workplace, they tend to be less engaged
• Engaged employees are less likely to feel pressure to commit misconduct
• Engaged employees are more likely to report misconduct, which reduces the organization’s ethics risk. 

“Besides being the right thing to do, this report indicates that there can be a direct return on investment in building an ethical culture,” said Alice Eldridge, vice president for ethics and business conduct at Lockheed Martin Corporation, the sponsor of the report. “All companies, but especially those with a very large workforce, can draw a valuable lesson here.”

“These findings confirm the benefit of active partnerships between a company’s HR and ethics and compliance functions,” notes Mark Royal, a Hay Group Senior Consultant.  “A strong ethical culture can help foster and maintain higher levels of engagement – and higher levels of engagement can help reduce a company’s ethics risk.”

“Doing longitudinal research since the mid-1990s, we at ERC have long since become convinced that ethical culture is vital to any successful, sustainable enterprise,” said Patricia J. Harned, Ph.D., president of ERC.  “An ethical culture doesn’t guarantee survival in tough times, but companies that lack it are operating with a high degree of risk and flirting with trouble.  There are tangible benefits to ethical behaviour.”