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Does a company’s commitment to ethics affect employee morale?

07 July 2015 by Henry Ker

Dr Patrick Bitature says in his interview this month, ‘We [businesses] cannot exist alone, you need to give back to the communities where you work’. Running with the theme of companies’ place in society, beyond making profit and into the importance of their ethical contribution, we asked the Governance and Compliance/Core community about companies’ ethical commitment and how this affects employee morale.

This question had a resoundingly positive response, with 89% of people answering ‘yes’ to the question, just 7% answered ‘no’ and 4% that they ‘don’t know’. Many of the respondents who answered ‘yes’ spoke about how good ethics are motivating for staff, that ‘a commitment to ethics is fundamental. If everyone believes in the ultimate aim, they will be more motivated to work towards it,’ with another stating ‘it is motivating to work for a company that has a culture where it has a high commitment to ethics. [It is] usually also a good place to work and employees are generally valued.’

The idea that good ethics are an indication that a company offers other qualities was a common theme in responses, with one respondent stating ‘a reputation for honesty, openness [and] a sound approach to business and operations… will make a business attractive to all stakeholders; from investors to employees, job seekers to future clients’ and another saying simply ‘they know they will be dealt with how they would like to be dealt with’.

Many comments focused on how good ethics fosters a positive working environment as ‘it gives an employee the option to be proud of who they work for because they do business the right way’. Several backed up this idea, with one stating that from personal experience, ‘I know employees take pride in knowing that they are working for a company that has a minimum ethical standard they adhere to.’ Several others further developed this idea, arguing it will help in staff retention: ‘Working for a company where you believe people are in it for the right reasons can be the difference between wanting to stay and choosing to leave,’ and another: ‘staff working in an organisation which they know is honest and open feel more involved as they are more likely to be consulted. I dread to think what staff morale at FIFA is like at the moment!’

One other went further to suggest that a company’s ethical stance will increase in significance as ‘this is of particular importance for the millennials, who are the emerging workforce. They want to know that a company is transparent and accountable.’

However, some people did not agree, or at least qualified it with the condition that ‘only if the commitment is supported by actions. It needs deeds as well as words.’

Among the ‘no’ respondents, there was a mix of reasons, although most suggested other factors are considered more important: ‘I don’t believe the status of a corporate code of ethics has an impact on morale, its well down most employees main worries, unless there are specific problem areas – for example, the company uses child labour’. Another simply answered ‘most employees are motivated by money’.

Conducted in association with The Core Partnership

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