Today, ethical violations can cost companies billions of dollars in fines and sanctions. However, what may be more damaging are the costs associated with the loss of the company’s reputation. And decreased stock prices, reduced employee engagement, and increased turnover are just some of these costs. The costs associated with these effects are also likely to far outweigh the costs from any fines or sanctions. The bottom line? For companies, having ethical employees matters.
As a result of numerous ethical violations and lapses by both organizations and public figures, individuals are more outspoken in their desire for integrity at all levels of society. And now, their voices are broadcast even more clearly on the loudspeaker of social media. Likewise, companies are feeling increased pressure to be accountable for their employees' actions. All of this together is leading companies to take a closer look at their hiring processes, especially when it comes to selecting ethical employees.
In previous blog posts and my interview on the Leadership 480 Podcast, I covered more broadly how companies can increase their employees' ethical behavior. Like many organizational initiatives, though, a multi-pronged, systems approach is needed to maximize the ethical behavior of employees at all levels.
One of the key pieces of a people strategy is how you select your employees. But just how can companies maximize the effectiveness of their hiring practices to make sure they are getting the ethical employees they need?
When combing through the organizational sciences, you may come across something known as the Attraction-Selection-Attrition model (ASA for short). This model proposes that potential employees who do not fit an organization’s culture will be removed or excluded at one of three points during the selection process.
Either candidates will fail to be attracted to the company, will drop out of the process during the interview, or they will leave the company (attrition).
This blog is written with the ASA model structure in mind, and I hope you can also evaluate your hiring practices in accordance with these phases.
How to attract ethical employees
Before people decide to apply to a company, they typically try to learn what they can about it. And even if a potential candidate does not thoroughly research the company, they may have heard about it through a variety of other means. The effects of a scandal or a seemingly unethical workplace can scare away those seeking an organizational culture in line with their own values.
Thus, the first step to hiring ethical employees is to ensure your culture is ethical. If it's not, you risk scaring away more moral candidates before their resumes ever hit your desk. Organizational impression management can go a long way toward ensuring you are attracting more ethical and responsible candidates.
By promoting a more socially responsible culture to internal employees and the external community, companies can reap a variety of benefits. One such benefit is the attraction of more ethical and socially responsible candidates. Another benefit is that current employees will be happier. Also, through their participation in company-sponsored outreach programs or non-profit work associated with the company's social responsibility initiatives, they can even develop new skills.
The big takeaway here is that in today’s competitive job market, people can choose where they work. And because of this, people with ethical pursuits simply will not be interested in working for a company they view to be corrupt.
How to screen employees for integrity
Assuming a potential candidate sees your organizational culture as a value fit, there are many different scientific theories for how to screen for ethical employees.
Some academics and researchers argue for overt integrity tests that ask individuals how they have or would behave in a variety of ethical situations. Some examples include, asking candidates if they have ever stolen money/time from an employer or asking them to describe a situation where they knew a co-worker was violating company policy and what they did about it.
These tests are designed to be more transparent than other methods of integrity testing. Questions such as these can be asked in a variety of ways, using survey questions or during an in-person interview.
However, there is still a great deal of debate as to if these more overt assessments may negatively affect a candidate’s view of the company. In addition, these types of questions may be easier to fake given the transparency of the questions and the number of resources available online showing individuals how to pass these forms of questions.
On the other side of the argument, there are academics and researchers that advocate for more covert tests. These tests investigate personality constructs or variables that have been found to be related to ethics or integrity. They are believed to be less prone to faking than more direct ways of measurement. These covert integrity tests have also been found to be more predictive. They have the potential to predict as much as 44 percent of an individual’s behavior in an ethical situation.
To provide a bit more guidance around this point, some of the personality traits positively related to ethical behavior include authenticity, honesty-humility, conscientiousness, and agreeableness. Targeting personality traits that are positively related to ethical decision making can be referred to as a means of "screening in" candidates.
There are also options for screening out those who are more vulnerable to unethical behavior…although this may be substantially riskier from a legal perspective. "Screening out" implies removing a candidate from the process due to elevated levels of a negative trait or aspect. Some traits that are negatively related to ethical decision making include Machiavellianism, narcissism, psychopathy, emotionality, and impulsivity.
Depending on the nature of the role and the types of situations faced on the job, one or more of these traits, both positive and negative, may be more relevant than others. A thorough job analysis should always be conducted prior to implementing any assessment for selection. In order to stand up to legal scrutiny, before you assess for them you should always be certain that ethics are required for the job or to work in that company culture.
How to keep your ethical employees
Let’s assume you’ve managed to attract and select the most ethical employees possible. Now, how do you keep them? A lot of this harkens back to the ethical culture I mentioned previously.
However, additional emphasis should be placed on the maintenance of an ethical organizational culture. Too often, culture initiatives can slip through the cracks as a "one and done" implementation. This can lead to a false sense of security for leaders. It can also cause a regression away from the desired culture over time.
It is important to highlight and reward instances of ethical behavior in addition to calling out any instances of unethical behavior. It is also recommended that additional follow-up and care be taken to ensure the psychological safety of your most ethical employees.
Individuals that are highly ethical may be viewed as targets by unethical employees and, ultimately, driven out of the company. Because this type of behavior can happen behind the scenes, it is critical that HR partners stay connected at all levels and keep a pulse on the mood of the company.
Advice for ethical companies
Often, what makes a previously ethical company lapse into violations is a sense of complacency and turning a blind eye to the real situation at hand. No company culture is perfect, but we need to be aware and attentive to the accuracies and subtleties of our own internal contexts if we are to ensure an ethical environment for our employees and, potentially, the community at large.
Learn how to anticipate and avoid interview mistakes in our eBook, 14 Common Behavioral Interviewing Mistakes and How to Overcome Them.
Elizabeth Ritterbush, Ph.D., is a leadership consultant at DDI based in Atlanta. She partners with clients globally and across industries to design, implement, and manage leadership development and selection strategies. In her spare time, she can often be found traveling or working on organizational research. Her research interests include a wide variety of topics such as ethical decision making, cross-cultural leadership, organizational culture, and performance management.