Ethical Practice: HR Must Champion a Principled Culture

As employers struggle to compete in a global economy, many are experiencing new pressures that make it harder to consistently do the right thing. An August New York Times exposé described a crushing work environment at Amazon, spurring controversy about how far a company could—and should—push its employees to meet its goals. And while some recent headlines have touted companies’ “unlimited vacation” policies, others have depicted an epidemic of overworked employees rarely in a position to take any time off at all, let alone unlimited time.

Meanwhile, straight-up corporate malfeasance is also alive and well, as demonstrated by the recent Volkswagen emissions scandal. Global CEO Martin Winterkorn resigned after the company’s employees were found to have deliberately installed software to give falsely low emissions readings on diesel cars.

Were these employees entirely devoid of any sense of right and wrong? How much can we blame individuals vs. a cutthroat business environment?

While there are no easy answers, it’s clear that HR can play a crucial role in creating and maintaining a culture that encourages people to do the right thing.

As HR professionals know, a culture is a shared set of beliefs, practices and traditions that gives employees a sense of “how things are done around here.” But what sets an ethical culture apart? There are four key characteristics:

• An ethical culture embodies a clear set of values that are embedded in the way business gets done and that are repeated, explicitly, as often as possible.
• Ethical issues are always open for discussion.
• Through training and open communication, an ethical culture prepares employees for making good decisions.
• It empowers employees to have the courage to act ethically.

HR teams often are already in charge of ethics training and writing key policies, including the organization’s code of ethics and conflict-of-interest policy. Even HR decisions and practices that don’t bear the label of “ethics” can set a tone for principled behavior.

Every HR decision is an opportunity for the company to do the right thing as well as to be seen doing the right thing. This starts, of course, with equity in hiring. When a senior manager’s son gets the job instead of the best-qualified candidate, it sends a powerful signal. Ethics in HR also extends to the details of benefits programs, to the openness of employee communications, and ultimately to fairness in discipline and firing. It’s up to HR professionals to ensure that all employees are treated in a humane manner, whether that means protecting them from bullying supervisors or ensuring that they aren’t working around the clock. HR must balance organizational success with employee advocacy.

HR’s greatest impact may be in determining the ethical character of the individuals who are hired and retained. Putting the right individuals on the team—that is, hiring those with the values we want—is crucial. So is getting rid of the bad apples, even if they happen to be star performers.

As scandal after scandal suggests—and don’t expect there to be fewer such episodes in 2016—ethical breaches can often evolve into legal troubles, resulting in lawsuits, loss of stock value and even jail time. Yet as executives engage in their short-term pursuit of quarterly profits, they often lose sight of the role culture can play in keeping the company out of hot water. It is up to HR professionals to remind them.

Chris MacDonald is an associate professor and director of the Jim Pattison Ethical Leadership Program at Ryerson University’s Ted Rogers School of Management in Toronto. He teaches courses on ethics and critical thinking.​