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February 5, 2010

HR Fact Friday: Business Ethics Improved During Recession

Filed under: General HR Buzz — Tags: , , , 8:45 am

Finally some good workplace news to come out of the recession.

In the January issue of HR Magazine it was reported that a devastated U.S. economy did not translate into an increase in unethical behavior at U.S. companies, according to a study from the Ethics Resource Center (ERC). Although the ERC’s 2009 National Business Ethics Survey report found that retaliation against employees who reported misconduct has increased slightly since a similar survey two years earlier, most other measures of ethical behavior improved. According to the report:

Overall misconduct at U.S. workplaces is down. Fewer emloyees said they had witnessed misconduct on the job. This measure fell from 56% in 2007 to 49% in 2009.

  • Whistle-blowing has increased. Most workers (63%) who observed misconduct said that they reported it, up from 58% two years earlier.
  • Ethical culture appears to be stronger. The ERC’s measures of the strength of the ethical culture in the workplace increased from 53% in 2007 to 62% in 2009.
  • Pressure to cut corners has decreased declining slightly from 10% in 2007 to 8% in 2009.
  • Perceived retaliation as a result of a report of misconduct rose, from 12% to 15% over the past two years.

However the ERC researchers sound a warning saying that when more settled, prosperous times return, misconduct is likely to creep upward as the economic crisis dissipates.

During hard times, when a company’s well being or even existence may be on the line and regulators, board members and senior management are watching, management talks more about the importance of high standards to see the organization through. The result is staff are less inclined to commit misconduct when management is on high alert.

Source: HR Magazine, SHRM, Steve Bates, January, 2010

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