Article (January-2017)


Shaping an ethics driven organization

Chandan Chattaraj

Designation : -   President - Human Resources

Organization : -  (India & Global), Uflex Ltd., Noida


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The ethical behavior of the employees is the foundation for success of any organization. For the organizations which place ethics above everything else, the structures and relationships work together around core value that transcends self-interest. Ethics is about behavior, in the face of dilemma, it is about doing the right thing. Ethical leaders and their people take the 'right' path when they come to the ethical choice points even when the right thing is hard to do. 

Fortunately, my grooming in Corporate HR life has been with those companies which consider ethics as their core and uncompromising value- be it Tata's well established ethical image or the Oberoi Dharma or Xerox XVLF (Xerox's code of ethics)- the belief in ethics in all the companies was unflinching. The same streak continued in my stints in Jubilant and now in Uflex. At Uflex in the last few years we have institutionalized the processes and systems and have implemented strict, well-documented code of ethics. There has been an increasing concern about the prevalence of unethical behavior within business organizations. In the last few years, numerous cases have been exposed indicating different forms of ethical issues that widely exist in the organizations. Here, role of leadership team is critical. If leaders are ethical, they can ensure that ethical practices are carried out throughout the organization. Leaders in any organization are in influential positions and thus, it is their one of the primary responsibilities to leverage this power in the decisions they make, actions they engage in and ways in which they influence others. 

Another pillar in building and sustaining an ethical organization is the HR. HR is believed to be the conscience keeper of an organization. Factors such as the growth of organizations' size and their influences, global competition, changing values etc. have made the relationship between HR and ethics popular. The role of HR in promoting ethics is undeniable. Understanding the existence of ethical climate in the organization can form the basis for developing HR practices in a manner that fosters an ethical culture. 

HR provides a vital link between the organization and the individuals by being a custodian of many processes that can significantly contribute to creating and sustaining an ethical organization:

Code of Ethics:
It establishes the standards that govern the way in which we deal with our internal and external stakeholders. HR plays a vital role in developing this content and also helps with internal dissemination, communication and awareness of the code along with monitoring the implementation part of it. There have been numerous evidences that suggest that managers, employees and different groups within an organization often have different perceptions of ethical management. Therefore, every organization must design appropriate ethical policies and implement them into all the practices. HR often provides the means by which ethical practices are implemented to build an organization with an ethical culture.

Today, job applicants are increasingly concerned with the reputation of the company they are applying for. The first interaction an applicant or a potential employee experiences is with the HR. Perceptions of justice in the selection process have important implications. Selection process should leave the applicants with the perception that they have been treated fairly. Maximizing ethical work behavior starts begins with the hiring process. The prospective employees' knowledge, skills and abilities need to be complemented with the moral values. A thorough ethics screen includes job announcement notification, examination of behavioral information from resumes, reference checks, background checks, personality assessments and posing ethical dilemmas as part of the job interview process.

Induction is one of the apt opportunities for the HR to provide new employees with an objective view of the company, its culture, work ethics, values and the right behavior they are expected to demonstrate.

Performance Management:
Ethics can permeate through the performance management process. Many organizations take accounts of ethical actions and behavior in their performance appraisal system. Performance evaluation process must reflect the balance between the means and the end. This means taking into account how people in the organization achieve the goals and objectives.

Create a learning environment:
To sustain positive ethical climate, learning and development can prove to be an effective tool. Training on ethics is one of the areas under training and development that enhances the effective integration of ethical behavior and actions among the employees. This process of training and re-training on ethics is important to validate the understanding of ethics on the part of our employees.

Employee Relations:
Employer-employee holds a mutually dependent relationship which has a great impact on the people involved. With stakeholders everywhere, the relationship is burdened with moral responsibilities. It is not a question only of fair pay and good working conditions, there should be a real and enduring concern for employees. Being loyal to all the stakeholders including employees is indispensable for the organizations. Lay offs, shut down and other disciplinary matters should be handled with care and sensitivity and as acts of great moral significance.

Ethics have become an organizational priority. In the  VUCA times we are operating in, ethics has become an integral part of any business. The complexity and ambiguity is abounding. Times of adversity often call for inspirational and ethical leadership. The leaders must develop a sense of excellent decision making in moments of high ethical complexity. In more than 28 years of my career, some of the most important choices I have ever made were rationalization of man power who weren't conducting themselves with integrity. While at times we feel ethics is a given, it is a hygiene factor but the fact remains that it is not. Even in many large top notch companies, in spite of their stringent code of conduct, there have been instances of unethical behavior which have been highlighted by the media also.

Many organizations are aware of the critical need for ethics in their cultural fabric. However, there is still a great deal of room for improvement. Today's organizations need to advance beyond a view of ethics as necessary for safeguarding their reputation and thereby avoiding bad media coverage or compliance issues. In fact, they need to treat ethics as a foundation stone of their organizational behavior. Great opportunity awaits organizations alert to the potential of ethical values in shaping the future.