What do employees, in the aggregate, think about the ethics of business leaders? As a former executive, I always felt, when I was in the corporate world, that this question was an intriguing one. A reasonably perceptive observer couldn't help but notice that while many leaders were exemplary role models that employees naturally wanted to follow, others took advantage of their positional power and seemed to be chronically above the rules they asked others to play by.
So I was pleased to recently come across a 2014 report examining just this issue: How do employees view leadership ethics? This is the focus of a survey, Ethical Leadership: Every leader sets a tone, from the Ethics Resource Center. The national survey involved responses from approximately 6,400 private sector workers. Following are some of its key findings.
Employee perceptions of leaders are shaped by three main factors - According to the report, these are: 1) The overall character of leaders as experienced through personal interactions. 2) How senior managers handle crises. 3) The policies adopted by leadership to manage the company.
"Employees want to know, for example," the report stated, "whether leaders treat lower level employees with dignity and respect, share credit when good things happen, and uphold standards even if it reduces revenue and profits. They watch to see whether leaders are steady in a crisis, hold themselves accountable or, alternatively, shift blame to others. Workers also look at day-to-day management decisions to gauge whether ethical behavior is recognized and rewarded, or whether praise and promotions go to workers who bend the rules." In short, when it comes to ethics, small things - like personal interactions - make a big difference. Not surprisingly, employees respect leaders who walk the talk, not talk the walk. The report commented:
"Leaders who demonstrate they are ethical people with strong character have a much greater impact on worker behavior than deliberate and visible efforts to promote ethics."
A second key conclusion - on the surface surprising, but probably less so for those who spend considerable time studying or thinking about the day-to-day fabric of management - is that:
Supervisors can impact ethics as much as CEOs - "We also found," the report stated, "that tone at the top doesn't just come from the C-suite. When it comes to modeling good behavior, keeping promises, or upholding company standards, direct supervisors may matter just as much or more than CEOs and other senior executives. In fact, two in five workers we surveyed pointed to their immediate supervisor when asked who they consider senior leadership."
I found this last point fascinating, an insight I'd never heard articulated this way, grassroots testimony to the influence of individual managers, no matter where they reside on the management food chain. (Old business saying: People leave managers, not companies.)
"However 'senior leadership' is defined," the report noted, "workplaces in which leaders display ethical leadership tend to have lower rates of misconduct, less pressure to break rules, and greater employee engagement." All solid, desirable business outcomes.
Overall, the survey was a thoughtful balanced examination of an important subject that tends not to receive much examination. It was less focused on finding, say, that a certain percentage of employees believe leaders to be unethical... than on determining the types of leadership behaviors that will elicit the most productive results.
The report concluded that ethics isn't something to trot out for an occasional employee campaign, but a 24/7 job: "In matters of ethics, leaders are always setting a tone." Nicely, concisely said.
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Victor is author of The Type B Manager: Leading Successfully in a Type A World (Prentice Hall Press).
