How HR Can Support Ethical Leadership

The past year has not only brought unprecedented events, but has also tested the ethics of leadership and executives within companies.

From the misuse of PPP loan funds to the exploitation of employees that put them at increased risk of COVID - it's critical to talk about ethical leadership, and now more so than ever.

And ethics isn't confined to leadership - it's important as a whole from an HR perspective. When leaders are ethical, they communicate trustworthiness and reliability - and when employees feel like they work for people they can trust, they're more engaged, satisfied, and productive in a way that benefits the whole organization from an employee retention and employee satisfaction perspective alone.

A year from the start of lockdown in COVID and a lot of political unrest, protests, and more - we want to cover what HR can do to encourage more ethical leadership and behavior for the future.

Organizations Set the Tone - Lead By Example

Too often, people think of ethics and integrity (or a lack of) as a one-off perpetrator who simply went rogue. But more often than not, these perpetrators were acting within a larger culture of unethical behavior and the pressure to meet goals at any cost.

From the public teachers who cheated on the statewide standardized exams, to the sales associates who pressured customers into repairs that they didn't need, without fail, the people who took part in these scandals often cite the stress they were under from their leadership to meet certain standards or reach unrealistic milestones - and therefore subtly encouraging them to cut corners.

Ultimately, organizations set the tone, and leaders - all of them - must lead by example. If employees see that management can get away with unethical behavior, or that the behavior will be overlooked if it's perpetrated by a star employee or manager's favorite - they will begin to operate within a culture that lacks integrity.

Develop Codes and Policies - and Make them Personal

Too often, ethics and integrity are outsourced off to the legal and compliance departments and treated like a task to check off of a list, rather than a fundamental part of the mission and culture, making it easy to ignore, or leaving room for a lot of ambiguity.

While legal and compliance statements can provide clear guidelines on how to avoid breaking the law, in practice, ethical dilemmas arise as a part of our regular work and it's not always so clear-cut.

For example:

How can you draw the line between accepting a gift and bribery? Particularly when gift-giving in business can be cultural?

What constitutes a reasonable business expense on a trip?

How should interviewers draw the line between asking personal questions that build camaraderie and overstepping into a territory of potential bias?

Businesses that are serious about creating ethical organizations shouldn't just stop at policies - they should personalize them, and illustrate what types of scenarios could arise in your organization, and how to handle them with integrity.

With GoCo’s Magic Docs, it’s extremely easy to view all of your company policies at a glance, AND note if your code of ethics/other codes need to be updated or improved.

Be Clear About How to Report Violations

If an employee has an ethics violation to report, do they understand how? What are the steps? How long do they take? What should they expect throughout the process? How long will it be until there is a clear outcome?

These questions can be barriers to reporting - if employees don't know what to do, or if they find the process confusing, overwhelming or convoluted, they'll be less likely to report it at all. Rather than including it as a short blurb in a handbook, ensure that the steps and process for reporting violations is highly visible, easily accessible and widely-known.

With HR workflow software like GoCo, leadership can focus on prevention and administer proper ethics training for all employees. HR managers can bring any existing checklist to life, including sexual harassment training and anti-discrimination training workflows. By automating these workflows, HR can ensure that every team member is up-to-date on best practices, what’s acceptable in the workplace, and stay consistent. They can also track progress on workflows, assign tasks, and report on data collected for future analysis.

Digital HR also helps with accessibility, and ensures that all employees are in the loop on any updates. It’s important from an employee retention perspective - they should always have the power to access all of their information online, and are notified if policies, training, or new documents are added by HR.

Protect People Who Report Violations from Retaliation

Too often, when in the midst of an investigation about an ethics report, the person who reported is subject to malicious retaliation or even subtle forms of retaliation that can be difficult to recognize. They may find themselves excluded, unfairly ousted, or treated with hostility until they're pushed out. Naturally, this can be a major deterrent to reporting. HR must ensure that people who report are protected by the organization - and that the policies and consequences for any type of retaliation are clear.

Discuss It Openly and Often

Ethics and integrity trainings aren't a one-and-done event. These situations must be discussed openly and routinely. Some organizations have gotten creative about how they do this. Airbnb, for example, created short entertaining videos of hypothetical scenarios. Chegg implemented a game-show-style quiz session with tough questions about the code of ethics. And other companies like L'Oreal created Ethics Ambassador programs that train people to provide advice to other employees. All of these strategies have the effect of recognizing that 1) these scenarios might come up more often that we realize and 2) we should be open about how to handle them.

Follow Through with Consequences

Regardless of how accessible or streamlined the reporting process is, if employees see that there are ultimately no consequences for offenders, they will not only see it as a waste of time - they'll become disillusioned with the organization as a whole. After all, if people can act reckless and without restraint, how can employees expect to feel safe and protected? When employees or leaders misbehave, a lack of consequences from management is one of the fastest ways to build resentment and reduce retention.

The HR support center has a variety of templates, best practices, and legal assistance on how HR and business owners can become and remain ethical leaders - and allow those values to trickle-down through the organization.