How the Ethical Work Climate of Your Organization Can Impact Employee Performance

When we think about elements of workplace culture that attract, retain, and engage employees, integrity, and values are often a common theme—especially for employees whose passion is to work for a company where they feel a sense of purpose. When an employee feels that they are doing good work and their organization values them, the employee is more likely to be engaged with their work and motivated to produce higher quality results.

Conversely, when employees feel like they are not valued by their company or do not enjoy the day-to-day tasks of what they do for a living, it can have a negative impact on how much time and energy they put into their job. In fact, research shows that American companies lose up to $550 billion annually due to unsatisfied employees.

In this post, Lindsey Wilcox, digital marketing specialist at Clear Law, helps you understand how the ethical work climate of your organization can boost or hinder employee performance.

What Is an Ethical Work Climate?

An ethical work climate is one in which employees are valued, treated equally and with respect, and their best interests are sought by management and leadership.

In an ethical work climate, employees feel safe to do what they think is right even if it means speaking up about wrongdoing within the company.

Transparency and giving employees mechanisms to speak up are key. An ethical work culture also solicits and invites employee feedback on a regular basis. Employee surveys, polls, meetings, town halls or even things as simple as a (virtual) suggestion box are great ways to let employees voice what they need or want so they feel their concerns are heard and being acted upon.

The Effect on Performance

If you have ever worked in a place with low morale, then you know it is also a significant factor in employee productivity and performance. When employees are consumed by feelings of fear, anger, hostility, insecurity, and alienation, they become easily distracted by noise and negativity, ultimately influencing both individual performance levels and overall organizational performance.

Employees who believe their company is committed to doing the right thing become more engaged and emotionally invested in their organization’s success and are more likely to feel empowered to do a good job, make a positive contribution, and generally feel satisfied with their work.

Embedding Ethics into Your Culture

Employees may face scenarios at work where their personal value system is being challenged. When employees don’t know how to respond when faced with these situations, it can affect your corporate culture and create risks for legal consequences.

That’s why, it is important to train employees—and managers—on how to identify and handle difficult situations in an ethical manner. For example, sexual harassment training thoroughly explains what is permissible in the workplace and what is not, so everyone is on the same page. The topic may be sensitive and complex in nature, but it is essential to address it so it can be prevented, and so it can be identified and stopped if it happens before it becomes worse.

Try to enable an ethical work climate by clearly communicating the importance of adhering to established company policies regarding confidentiality, privacy, or legal compliance.

Here are some tips that may help you make your work culture more ethical:

• Provide training on how to handle classified materials according to compliance laws.
• Maintain an open door policy so employees can come forward with potential ethical issues at work.
• Provide whistleblowing systems that create an anonymous channel so employees can report violations of company policies or laws while being protected against retaliation.
• Stress the importance of ethical behavior in company meetings, and back up what you say by leading by example.

An unethical company image becomes even more apparent when poor practices are made public.

A poll by Deloitte with regard to millennials uncovered how a company’s ethical behavior influences customers’ decision-making. According to the findings, 42% of millennials have started or expanded a business relationship because they believed a firm’s goods or services had an effective influence on society and the environment.

Furthermore, because of a company’s unethical or ethical behavior, 37% stated that they had stopped or decreased a business connection while 36% began/deepened an association.

Your company image directly affects employee productivity because unethical activities can lead to loss of funding, falling sales, and public rejection.

But more than that, having an ethical culture is simply the right thing to do.