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Doing the Right Thing
Employees nearly always perform better if they know up front how to make a decision
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Business New Haven
11/25/2002
By: Melissa Nicefaro
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From the very dawn of time, decision-making has been one tough apple to bite.
Adam and Eve may have set an epoch-defining precedent that day in the garden, but making decisions and having the confidence to do the right thing still does not come easy in today's business world. Most decisions have some ethical dimension, and making a wrong choice can cost a company respect - and in turn, cash.
Explains Michael Rion, president of West Hartford-based Resources for Ethics & Management consultancy: "It's important to know the rules, but no rule book can be thick enough.
"Ethics training goes to the next step and explains the 'why' behind the rule," Rion adds. "My job is to help people in the decision-making process in the grey areas to think it through."
Under the ethics-training umbrella falls "code of conduct compliance," or a company's specific policies and procedures. It is in the code of conduct where are found rules about conflict of interest, gifts, anti-trust and sexual harassment, to name a few.
Compliance also encompasses legal and regulatory issues. Ethics training takes compliance issues and adds a tier that answers why it is important to follow the rules. Playing by the rules doesn't always come naturally - especially when wealth and power are part and parcel of the equation.
Let's face it: Hospitals house a prodigious amount of very private information about every patient who passes through the doors. It's a responsibility many wouldn't wish to shoulder.
Joyce Mockalis is Yale-New Haven Hospital's (YNHH) compliance auditor. She says the hospital is in the process of expanding training for all employees to learn to "do the right thing."
YNHH does have controls over access to this information. Everyone with access has his or her own login and own password for the electronic medical record system. The hospital has audit trails and a process that monitors who is looking at which account.
Employees are held strictly accountable and if any infraction is discovered, they are disciplined. Mockalis oversees policies and corporate compliance and consults with various departments on an as-needed basis.
"Patient privacy has always been an issue that we've dealt with, but with HIPAA [the Health Insurance Portability & Accountability Act] from Congress, there are federal regulations that require agencies to have many more policies structuring what to do and not to do - from how to send a fax over to how to log in," Mockalis explains.
The regulations, which go into effect in 2003, will make the hospital more accountable to have all policies written up and explained to workers.
Mockalis says ethics training is practically inseparable from corporate compliance. "Because our customers are patients, it really does surround more personal issues in complying with ethical issues that get down to a real personal level," she explains.
YNHH's ethics policy covers all mandated regulatory issues, but also employee issues regarding talking in the hall and proper use of fax machines.
"Everything we do is so confidential and private and you do it every day, it's easy to forget when it becomes routine," Mockalis acknowledges. The hospital has posters up and reminders to "Do the Right Thing" in a never-ending effort to keep employees cognizant of their ethical responsibilities.
For cases still open to question, the hospital has an anonymous hotline that people can call and ask anything. Most questions have to do with conflicts of interest or accepting gifts and gratuities. The hospital has a limit of $10 on any gift.
While YNHH has it's own continuous, in-house ethics training program, many companies do not. Indeed, ethics training has become a thriving industry unto itself. There is a growing emphasis on Web-based training as opposed to classroom training, but most experts are not convinced a faceless ethics-training program is the way to go.
"I worry about it, actually," Rion says. "It can be really helpful for technical compliance training, where you need to learn a lot of the rules about certain procedures, but when you try to do totally Web-based training around ethical decision-making and values, it misses the mark somehow."
Jean Wihbey, associate dean of learning for corporate and continuing education at Gateway Community College, also teaches an ethics-training program to business owners, managers and employers.
Wihbey says the overall ethics concern has to do with social equity and efficiency at work, stakeholder partnerships at work, fairness, objectivity and decision-making.
"It's all is contingent on different things like technology, employment discrimination, breaches of the environment, biases, fraud and unsafe working conditions in the workplace. These are all corporate considerations."
In order for a company to forge and maintain a competitive advantage with attracting customers, investors and employees, ethical guidelines are a necessity, and it has to do with relationships, Wihbey says.
Employees are looking for ways to trust one another and their superiors. They are looking for a more effective work environment.
"Not that you want to become policy-laden, and try to avoid gaps in practices, but it makes it easier for people to not have to worry about whether their decisions will catch up with them or not," says Wihbey.
"I'm not a policy and procedure person, because that is evidence of a low-trust environment," she says. "But because these are judgment, value and accountability issues, it's in the best interest of the company, the employee and any investors to have clearly defined expectations and the considerations that a person should take a look at when deciding things that may be questionable."
A good example is Sears, a company that has for years had a very strong ethical code. It is part of Sears' daily operations and it takes the guesswork out of employee decision-making in terms of the best way to proceed. Their ethics-assist hotline gets upwards of 15,000 calls per year by employees looking for general guidance and clarification.
"It's more important to help people do it right than catch and punish people in violation," Wihbey notes. "[Sears] tries to make it so there's no risk. Trust is all about risk and harm. It's about vulnerability and if you remove peoples' level of vulnerability or risk in their decision-making, you really have a more efficient and productive work environment."
The same views can be applied at any business, large or small. If questionable issues have been clarified and the groundwork laid out before a proposition comes along, there ought to be no decision for an employee to make.
Stamford-based Xerox Corp. offers its code of ethics as a model to those interested in the different areas that they've examined and reviewed.
People's Bank, another example of a business that maintains a large amount of personal information about a large number of people, also has an ongoing ethics-training program. The initiative was launched late last spring and initially targeted incoming branch managers. Now the Internet program is available to all employees - more than 150 branch managers and employees have taken part so far - with a purpose of encapsulating People's self-proclaimed strong community values.
Whether at a bank, a retailer or a hospital, one thing gets in the way of everything in the world of work is self-interest, according to Wihbey. She believes it's part of human nature and it's part of life.
"One of the things that drives our American culture is wealth. Wealth is equitable to status, status is power and power leads to a high degree of freedom and prosperity," she says.
"People's judgments can become clouded in their efforts to acquire wealth," she says. "The clouding is not so much that people don't know how to make the right and wrong decisions; the clouding comes with the very basic level of a person at the end of a decision."
Wihbey says it's not necessarily such major events as the Enron scandal and similar violations of ethics that are the focus; it's more about the everyday life things that require clarification - like e-mail use or if somebody wants to take you out for lunch or whether they may send you a gift.
Because, unlike the cliché, rules are not necessarily made to be broken.
Feds Say, 'Just Do It'
Until the late 1980s and early '90s, incorporating ethics-training programs typically arose out of a strong values culture within organizations.
"[Companies] wanted to reinforce some value. They wanted to help people make decisions in the gray areas," business ethics trainer Michael Rion says.
New Federal Sentencing Guidelines changed the ethics-training landscape in the early 1990s. Growth in the ethics industry came not necessarily because ethics problems escalated, but rather in response to the sentencing guidelines.
The new mandates came from a sentencing commission with the federal government that oversaw guidelines for judges on mandated sentencing for specific crimes. In the early 1990s, the commission added a chapter on the these guidelines for corporate crime. Organizations - not individuals - became the responsible parties.
"It specified hefty fines if you were in trouble with the government for a variety of reasons, and then there's a culpability score that's calculated with a multiplier that makes the fine go up or down," Rion explains.
A company's having - or not having - an effective complaints program became a large determining factor of a sentence. The guidelines spell out seven specific steps, ranging from designating a senior person responsible for overseeing an ethics program to keeping on top of training and communications. A code of conduct is also expected under these guidelines.
"Many of these things are familiar now, but what that did was created a setting for companies to proactively make sure they had all those things in place to prevent problems," Rion says.
"But if they did have a problem, it would help mitigate a crime. That really has changed the whole approach here where before there were a few of us doing this kind of work."
Rion says most major companies by now have some iteration of an ethics-training program in place in part because of the guidelines.
It doesn't necessarily help businesses get to the root of the ethics issue if managers are saying, "Hey - we need to have all employees trained because our general counsel is worried," according to Rion.
"The programs that are least helpful are those that focus on the code of conduct, and say 'Here are the rules - follow them or you'll be in trouble,'" Rion says.
"A few companies do ethics training for more fulsome reasons - [such as] human-resource development and values - but unfortunately a lot of companies are doing it with a 'compliance' mentality. That undershoots the target since you do better at compliance if you focus on values."
Ethics in a Nutshell
Goals of an ethics training program:
- To improve performance through training that links corporate values to individual success.
- To enhance overall organizational effectiveness by encouraging mutual respect and trust.
- To increase responsiveness to competitive challenges by fostering candor and willingness to learn from mistakes.
- To strengthen organizational culture by encouraging, recognizing and rewarding values-based behaviors.
Successful organizations follow the goals through:
- Building awareness of ethics to reinforce corporate commitments.
- Enhancing leadership-development and planning skills.
- Teaching and demonstrating practical ethical decision-making skills to help managers to make tough judgment calls.
- Increasing the effectiveness of compliance messages by illustrating the ethical principles behind the rules.
Source: Resources for Ethics and Management
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