Does promoting ethics improve employee performance?

by L&D18 Aug 2016
Promoting core values is a way to engage employees, increase their commitment and loyalty, and encourage ethical decision making, according to Marlene Neill, assistant professor of journalism, PR and new media in Baylor's College of Arts & Sciences.

Neill’s study found that building a business reputation “from the inside out” -- with employees acknowledging their company  as an ethical place to work -- is increasingly being praised as a way to get an edge on competitors (alongside customer service and quality products).

In particular, the Baylor University research found that incorporating company values (such as honesty and respect) into employee awards and job evaluations is being conducted by PR, marketing and HR departments in some top-performing companies.

The research involved Neill conducting interviews with 32 executives in PR, HR and marketing from 26 companies. A handful of the companies were ranked in Fortune 500, the Global 500 and Fortune's "100 Best Companies to Work For."

One HR manager whose company surveys employees about corporate values said: "Our values are supposed to be integrity, courage, curiosity . . . If we're struggling in an area, it makes me wonder, 'Are we not communicating well? Are we not being honest? Or are we not being perceived as being honest?"

Neill added that if workers believe that an employer does not "walk the walk" they may see it as violating a "psychological contract".

The consequences of that are increased turnover, job dissatisfaction, distrust and reduced performance - despite good salaries, benefits and chances to advance.

Additionally, some companies suggest that it’s a good idea to link ethics to reward systems.

"When someone receives an award or gets a nomination, it has to be related to one of the values. And then we have values painted all over the office on the wall, so those are the two big reinforcements," one HR manager told Neill.

"You're also rated on the values in your annual performance review."

The study recommended that employers should:
  • Communicate ethics in a relevant way, such as employee testimonials and historical anecdotes.
  • Review their core values to be sure they mesh with policies and reward systems. If not, they should make revisions.
  • Review recruitment and orientation materials to include core values.
  • Evaluate their ethics programs and see if they should add more resources, such as ethics audits or decision-making trees.
  • Do routine surveys to see how employees rate the company's performance in regards to core values.
  • Model ethical behaviour should be rewarded through positive job evaluations and awards programs.
The study is titled "The Influence of Employer Branding in Internal Communication" and is published in the Research Journal of The Institute for Public Relations.