Quantifying business ethics

If managed properly business ethics help to create an ethical culture upon which a company can anchor its competitiveness.

A well designed ethics management programme is bound to positively influence the overall decisions and activities of the organisation as it guides the patterns of thought, choices, and actions of all staff.

Through an ethics programme, the organisation is able to develop a unique ethical culture that helps to build a brand that will attract customers, making the ethics programme a source of competitive advantage.

An ethics programme creates in staff a mindset that upholds integrity and honesty.   
Through the passage of time, it has become possible to quantify business ethics in order to measure its effectiveness and contribution to business operations. Employee surveys, interviews, whistle blowing, and audits are some of the tools corporations can use to quantify organisational ethics.

Measurement of ethical culture is not a one-size-fits-all affair. Organisations are different and because of that difference, they grow different ethical cultures with unique cultural factors and risks.
The use and importance of any ethics measurement tool is thus very much related to that organisational uniqueness.

Employee surveys are commonly used to measure HR issues, and in like manner, they have become one of the most powerful tools an organisation can use to measure its ethical prowess.

Employee surveys measure behaviour exhibited by staff such as whether employees observed misconduct, or whether they are willing to report observed misconduct. They also consider employees’ perceptions of the firm’s ethical culture such as whether they feel pressured to compromise ethical standards, or fear victimisation if they report misconduct.

To ensure the surveys are fully comprehensive, the questions asked should include HR variables such as job satisfaction/dissatisfaction, staff morale, absenteeism, and other work-related issues. Inclusion of HR issues in the survey will help to provide a complete and accurate reading of the company’s ethical culture.

The use of interviews to gauge employee perceptions on different workplace issues is a practice that is as old as the HR profession itself.

To interpret enterprise-wide ethics survey findings better, measurement should include individual interviews, group interviews and focus groups. It should also include review of relevant internal documents such as policies and procedures, rules and regulations, mission statement, and strategic plan.

Exit interviews can provide valuable insights into an organisation’s ethical culture. Incorporating ethics-related questions in exit interviews provides a channel for employee feedback, and normally elicits honest responses.

If questions are crafted properly, departing employees can reveal a lot about the firm’s ethical culture. The interview might ask, for example, whether management and supervisors provide guidance on ethics, and the opinion of the departing employee on the effectiveness of the existing ethics structures.

Independent audits that assess a company’s ethics risks and the effectiveness of its ethics programme are an important ethics measuring tool. Auditors should evaluate the ethics programme infrastructure, and must assess the programme’s effectiveness against best practices and international standards.

This evaluation can be made more comprehensive by including the firm’s enterprise-wide risk profile in the evaluation process.

Analysing reports that come through whistle blowing is another effective way of evaluating the impact of the ethics effort in the company.

Experiences show that the key to gleaning useful information from whistleblowing data is to look beyond the raw data and analyse the actual content of the reports made. Whistle- blowing report analysis is more meaningful when it’s tracked over time to determine patterns and trends.

Feedback captured from trainees after the delivery of ethics training is also an important way of evaluating the effectiveness of the ethics programme. The training period provides employees with an environment where they can freely express their concerns without fear of victimisation.

Sometimes organisations can measure the success of an ethics programme by simply listening to what employees say about the ethics programme in their informal groups, or in their everyday chit-chats.

The programme’s success can also be measured when employees are encouraged to provide feedback on the good and bad of the ethics endeavour using informal means.

Information gathered through surveys give managers a picture of the organisation’s ethical culture. Such information can then be used as baseline data for comparison with subsequent data to detect patterns and identify trends over time, or can be used for comparing findings with those of similarly situated firms.

Managers should understand that through a formal ethics programme, they are able to unlock the value in listed company values and shape employee behaviour. A formal ethics programme should include ethics training, practising, auditing and ethics evaluation.

Research shows that the most successful ethics programme is the one that is aligned to the company mission statement, and strategy.

Bradwell Mhonderwa is an ethics coach and trainer with the Business Ethics Centre. Send feedback to [email protected], or visit www.businessethicscentre.co.zw, or call 0772 913 875.