How Unethical Customers Cost Organizations Twice
Unethical customers can cost organizations lots of money. For example, customers can steal, cheat, scam, defraud, hoodwink, or make up an overly dramatic story about how the soup of the day was far too salty so that they get a small discount. New research (Greenbaum, Quade, Mawritz, Kim, & Crosby, 2014) shows that there may be hidden costs to organizations that allow customers to consistently get away with these offenses. Specifically, it’s the employees who suffer.
ETHICS VIOLATIONS LEAD TO EMOTIONAL EXHAUSTION
The authors conducted two separate studies and found that customer ethical violations led to employees becoming emotionally exhausted. This is based on the idea that people have a certain amount of internal resources to spend, and when these resources run out, people begin to suffer from emotional exhaustion.
What about unethical customers makes internal resources run low? Specifically, the authors note that we feel an inherent need to live in a law-abiding and just society. When these ideals are threatened, it bothers us, and we become stressed-out. This explains why employees who consistently observe unethical behavior become emotionally exhausted.
In the study, this finding held up even though the authors were only considering unethical behavior targeting the organization, like the stealing that we’ve mentioned. They were not considering unethical behavior targeted against employees, as research has already established that employees can suffer from direct mistreatment. The current study shows that even crimes which occur against others may be disturbing to employees.
HARMFUL OUTCOMES OF UNETHICAL CUSTOMERS
Eventually, when unethical customers lead employees to emotional exhaustion, three specific negative outcomes occur. First, affected employees have higher levels of work-family conflict, which means that it becomes more difficult for them to balance the competing demands between their work life and family life. Second, employees have more negative relationships with their coworkers, and third, employees begin to neglect job responsibilities. All of these three things are known to be harmful to employees and can eventually affect the bottom line of the organizations that they work for. Due to this, unethical customers who steal or cheat end up costing companies twice: The value of the theft, as well as the value of the compromised employee who has to witness the theft.
HOW ORGANIZATIONS CAN STOP THE PROBLEM
So how can organizations, which typically have little control over customer behavior, cut down on the harmful effects of unethical customers? The authors make two recommendations. First, organizations may need to revisit the mantra of “the customer is always right.” While customer service is undeniably important, organizations may not want to allow their customers to get away with anything. Similarly, employees may be given more leeway when it comes to dealing with and punishing ethical violations that they observe. The authors note that observing unethical behavior is really only stressful when you are unable to do anything about it.
The second recommendation made by the authors is that even when employees witness unethical customer behavior, social support (such as increased encouragement) can help mitigate the consequences. Because the unethical behavior first led to emotional exhaustion and loss of personal resources, social support from the organization or from coworkers can help replenish these resources. Employees in jobs in which we’d expect lots of unethical customer behavior to occur may benefit the most from enhanced social support.
Sleep Deprived Employees Engage in More Unethical Workplace Behavior
When employees engage in unethical behavior, organizations suffer. For example, employee theft or dishonesty can hurt organizations both internally and in terms of public reputation. New research (Welsh, Ellis, Christian, & Mai, 2014) has identified several key links in understanding the dynamics that lead to employee deception, which is a type of unethical behavior.
SLEEP DEPRIVATION LEADS TO EMPLOYEE DECEPTION
The authors based their research on past findings that show that sleep deprived employees are more likely to engage in unethical behavior (Christian & Ellis, 2011). When faced with an unethical opportunity, people need to use a certain amount of self-control to prevent themselves from doing the unethical thing. Researchers call this self-regulation, and people have a certain “reserve” of resources that they can use to self-regulate themselves. When people are sleep-deprived, the brain undergoes physiological changes that deplete the resources available to self-regulate. When this happens, a person may no longer have the ability to stand up to temptation, and it becomes more likely that they will actually behave unethically.
THE ROLE OF CAFFEINE AND SOCIAL INFLUENCE
In the current study, the researchers found that tired employees who also consumed caffeine were less likely to have depleted self-regulation resources. In other words, the lack of sleep did not affect them as much, and they were more likely to maintain the ability to control themselves and stand up to the temptation to behave unethically. As we all know too well, caffeine has the ability to temper some of the effects of sleep deprivation.
A second major finding was that when people’s fatigue lowered their ability to self-regulate, it didn’t always lead to unethical behavior. The authors found a condition that made it more likely that unethical behavior would result. The condition is called social influence, which refers to the influence that people receive from other people, kind of like peer-pressure. One of the pitfalls of having a decreased ability to self-regulate, is that you can be more susceptible to the suggestions of other people who are themselves acting unethically.
IMPLICATIONS FOR ORGANIZATIONS
The major takeaway from this article is that sleep deprivation among employees is bad for organizations. Besides for some of the more obvious problems that we might expect (i.e. lower productivity, more mistakes or accidents) sleep deprivation can actually cause employees to act unethically. As the authors mention, employees are now being asked to work an increasingly greater number of hours during the week, making sleep deprivation a greater challenge in the workplace.
The easiest solution is to encourage employees to get enough sleep, and to structure work schedules and workloads to support that goal. But that’s not always an easy thing to do. What else can organizations do?
Specifically, this article provides two ways that organizations can lower the amount of deceptive behavior that their employees engage in, even if they are sleep deprived. First, caffeine was shown to help. There may be something to supplying your office with a fresh pot of morning coffee. However, as the authors point out, this doesn’t mean that caffeine is the perfect solution. Technically considered a drug, caffeine does have harmful side effects such as increased anxiety and heart-rate. So don’t go overboard.
Second, organizations should realize the role of social influence. Even when sleep deprived employees lose the ability to stop themselves from unethical behavior, it doesn’t mean that unethical behavior will result. In this circumstance, peer-pressure to behave unethically is the real enemy. If organizations work to create an environment where employees behave ethically, and strive to hire more ethically inclined individuals, then even the occasional sleep-deprived employee won’t be too much of a problem.
Workplace Bullying: Corrupt and Harmful to Organizations
In recent years, there has been a noticeable rise in bullying, and the workplace is no exception. In fact, it has become such a pervasive issue, with such profound effects, that it is considered an extreme threat to the health and wellness of all businesses. Many argue that bullying is not only the newest form of discrimination in the workplace, but that it should also be recognized as a form of corruption.
The mishandling of bullying complaints and the inability of organizations to effectively provide support for employees, have led to the widespread growth of workplace bullying. From physical aggression to unfavorable treatment, bullying has become an increasingly problematic issue that companies must now face. This is especially true considering the health and safety risks to employees and the immense organizational costs through loss of resources and poor performance. Often incredibly distressing to victims, bullying also poses threats to individual health, personal and professional relationships, and can even interfere with career development.
In the past, institutional corruption has typically been defined as blatant illegal acts, including fraud, embezzlement, and extortion. However, this narrow definition fails to encompass all of the complexities that truly define corruption. Researchers now define corruption not only in terms of illegal acts, but also misuse of authority to violate personal rights and workplace norms, misuse of resources for gain, and other oftentimes legal activities that impede an individual’s ability to succeed.
WORKPLACE BULLYING AS CORRUPTION
The author provided several examples of workplace bullying that may also be considered corruption:
- Abusing power through information withholding, manipulation, and misdirection. This makes it difficult for employees to complete work and for organizations to distribute resources.
- Misuse of power in influencing employment processes like hiring or salary (for example, nepotism), or enacting policies that harm employees’ professional status, job satisfaction, or physical and emotional well-being.
- Participating in or encouraging unscrupulous behaviors or practices that thwart others’ efforts.
- Attempting to control employees through purposeful isolation, drastic reduction of workload, or through harassment and intimidation. This may include misusing private information to humiliate, undermine, or isolate employees.
WHY SHOULD ORGANIZATIONS CARE?
Why should organizations care about workplace bullying? There is burgeoning awareness of the severe consequences bullying behaviors have, not only on victims’ physical, emotional, and mental health, but also on the role of bullying in undermining organizational success. Ultimately, more research in this area will provide greater understanding on how bullying may affect employee retention, development of healthy workplaces, as well as employee motivation and wellness. In the meantime, practitioners should recognize the potentially harmful effects of bullying, and strive to reduce its prevalence in the workplace.
How Corporate Social Performance Attracts Job Seekers
In recent years the topic of Corporate Social Performance (CSP) has become increasingly of interest to major corporations.
It’s becoming more important for organizations to have a social presence, display their dedication to the community and adopt positive practices that go beyond the company’s bottom line. Some may wonder just how important corporate social performance actually is to a company’s stakeholders.
A recent study by Jones, Willness & Madey examined several questions in relation to recruiting new talent: Are job seekers more interested in working for organizations that have a greater CSP presence and, if so, which aspects of CSP are they more drawn to?
THE INFLUENCE OF CORPORATE SOCIAL PERFORMANCE
The areas of CSP that Jones, Willness & Madey were interested in investigating included how an organization’s community involvement and pro-environmental efforts influenced job seekers. Community involvement was defined as philanthropic efforts and supporting employees’ efforts for volunteerism, while pro-environmentalism was focused on policies and procedures being put in place to enable a company to become more eco-friendly and sustainable.
To get more specific, the researchers wanted to see how these two factors influenced the applicants’ prospective pride in working with a CSP-conscious company, their perception that the company’s values matched their own due to CSP practices, and their expected treatment as an employee due to the company’s social/communal efforts.
They set out to answer these questions through two separate studies, presenting CSP information to research participants in exactly the same formats most of us would use to gather information when hunting for jobs. This practical approach means that their research can easily translate into real world applications.
The first study’s participants consisted of 180 senior undergraduate students with an average of nearly two years of work experience, each of whom attended two sessions scheduled a week apart.
In Session 1, participants were given a survey with questions focused on political beliefs and values. Embedded within that survey were questions directly related to Corporate Social Performance. In Session 2, participants were asked to look at content from three fictitious companies. The content for two of the companies remained the same for all 180 participants, but the third company’s content had three different versions– one focusing on community involvement, one highlighting pro-environmental practices, and one with no CSP-related content– divided evenly among the participants. They were then asked to rank the companies and give their feedback on each one.
The results showed that participants who received versions focused on community involvement or pro-environmental practices felt that these issues carried significantly more weight in their top company choices. Participants who received a CSP-focused version of the company’s materials were more attracted to that company than participants with the non-CSP version. The results also showed that exposing jobs seekers to CSP-related information increased their anticipated pride in working with the company, as well as the feeling that the company’s values fit their own.
In the second study, researchers sought out job seekers at two different job fairs, ultimately finding 171 participants to answer a survey. They also looked at booth setups for the majority of recruiters in order to catalog the amount of Corporate Social Performance content in their materials.
The participants were asked to identify the top companies they were interested in working with, and the survey also contained questions regarding community involvement and pro-environmental practices.
The results of this study found that job seekers had more favorable perceptions of companies that had CSP information. Community involvement had a much stronger influence than the environment when it came to factors like anticipated pride, perceived value fit and employee treatment.
BIG PICTURE TAKEAWAYS
In order for companies to attract a larger pool of talented job seekers, it may become necessary to include more Corporate Social Performance information on their websites.
The researchers found that many Fortune 500 companies did not have CPS information on their recruitment and job pages. Not having this sort of content could prove to be a missed opportunity for these organizations.
The study found that it’s beneficial for companies to have pro-environmental practices, but even more important to increase community involvement initiatives, which may be perceived by job seekers as reflective of a more “selfless” organization.
The Connection Between Sleep Deprivation, Caffeine and Self-Control
Many of us can’t imagine going a day without our caffeine of choice—coffee, energy drinks, tea, soda, or any number of others. A recent study cited in this article claims that 90% of Americans ingest some form of caffeine daily in order to overcome the effects of sleep loss. But did you know that caffeine could also help you maintain better self-control?
THE IMPACT SLEEP DEPRIVATION
When our mental resources are depleted, we have a harder time regulating our behavior. This is often what happens with sleep deprivation, which can decrease our ability to control impulses and overcome temptation.
As our resources for self-control are depleted from lack of sleep, we become more susceptible to negative social influence— such as being less able to resist someone who tries to persuade us to do unethical things, such as deceiving others.
CAFFEINE & SELF-CONTROL
The authors claim that caffeine can actually boost our natural resources in these situations, helping us to better control our actions and refrain from unethical behavior, even when someone is attempting to influence us.
The study found that, when participants were tired, they were more likely to succumb to unethical suggestions from others. But, after consuming caffeine, the participants had more resources to resist social influence (that is, the researcher telling them to deceive the other participants) because the caffeine alleviated some of the effects of sleep deprivation.
SLEEP VS. CAFFEINE
These findings are particularly applicable in work settings, where sleep deprivation in employees could make them less able to resist unethical temptations from others at work.
But, while helpful in some regards, caffeinated beverages also have some disadvantages. Caffeine is a diuretic, can increase anxiety and heart rate, and can cause withdrawal symptoms like headaches and fatigue when you stop consuming it.
It’s not a cure-all solution for resisting unethical suggestions, either: The study found that well-rested individuals had much greater self-control than those who were tired, even when the sleep-deprived individuals ingested caffeine. Well-rested individuals didn’t experience the same benefits as sleep-deprived individuals who ingested caffeine, because it affected them less. So they were ultimately able to resist unethical behavior equally well, whether there was social pressure or not.
But if rest is lacking, caffeine may give people the extra boost they need in order to get back some of the self-control they’ve lost from being exhausted.
Leave a Penny, Take a Penny: Effective Giving
You don’t have to be an I/O psychologist or HR professional to have observed that there are people in the world who are “givers” and others who are “takers.” Givers provide support and assistance to their colleagues, friends, and family expecting nothing in return. They’re classic ‘do-gooders.’ Then you’ve got the takers; the people who take what they can and rarely reciprocate.
Organizations increasingly value a ‘culture of giving.’ Research shows a strong relationship between employee giving behaviors and important business outcomes such as profitability, productivity, efficiency, and customer satisfaction. However, excessive generosity can threaten these very same outcomes, if employees are so distracted by helping others that they neglect their responsibilities.
According to the researcher, Adam Grant, effective givers know that the secret to giving is not to give unconditionally, but to give wisely. Truly effective givers are able to differentiate generosity from being taken advantage of or being ‘used and abused.’
How does one learn to distinguish the two? As a starting point, it’s important to understand that giving is not synonymous with weakness or timidity. Unfortunately it can sometimes be difficult for givers to stick up for themselves and what they want, Grant offers practical advice. First, shift your frame of reference and consider how your actions or negotiations will affect those around you. Advocating for someone else is often substantially easier than advocating on your own behalf. Next, set limits on your availability. You can’t possibly do everything; seek support and delegate tasks to competent others when possible. Set aside time for yourself, and know that it’s okay to say no from time to time. Finally, when making decisions consider others’ perspectives in addition to their feelings so that you don’t let your emotions hold you back from making smart choices.
Can you think of any other effective giving strategies?
Everyone On Board: Encouraging Employee Whistle-Blowing (IO Psychology)
With the prevalence of corporate scandals seemingly increasing in recent years, organizations are concerned with preventing unethical behavior like never before. One way some organizations may combat unethical behavior is through employee whistle-blowing programs, in which they encourage employees who witness unethical behavior to report it internally. In this way, organizations hope to find out about problematic behavior quickly, before the issue grows and becomes more damaging and difficult to deal with. However, whistle-blowing programs have an inherent drawback: they rely on employees to take the initiative to report unethical behavior, which many employees may be reluctant to do, especially if the unethical behavior involves their manager or another powerful figure.
A recent study by David Mayer and his colleagues investigated some of the conditions that might facilitate (or suppress) employee whistle-blowing behavior. Across two field studies and a lab experiment, the authors found that both supervisors and coworkers played key roles in determining if an employee would report unethical behavior. Specifically, ethical leadership on the part of an employee’s supervisor seemed to make it more likely that the employee would engage in whistle-blowing when necessary; however, supervisors’ ethical leadership had a much smaller impact on employee whistle-blowing when an employee’s coworkers behaved unethically. Put another way, it appears that simply having an ethical boss isn’t enough to ensure whistle-blowing; the behavior of an employee’s coworkers also seems to play an important role in this process.
While research will undoubtedly continue to uncover new insights on whistle-blowing behavior, this study has important implications for practice. Specifically, consultants might advise organizations that it is important to encourage ethical behavior at all levels of the organization. If an employee’s supervisor, or coworkers, behave unethically, it reduces the likelihood that an employee will engage in whistle-blowing. Employees need to feel that unethical behavior is discouraged at all levels of the organization, thus minimizing the risk that they take by reporting such behavior.
Explaining Unethical Decision Making: The Problem with Tunnel-Vision
Topic: Ethics, Judgment
Publication: Judgment and Decision Making
Article: Is that the answer you had in mind? The effect of perspective on unethical
Authors: Schurr, A., Ritov, I., Kareev, Y., and Avrahami, J.
Reviewer: Neil Morelli
When someone makes a “bad” or unethical decision inside or outside the workplace, we oftentimes ask the question: why? Perhaps answering this question is important because it helps us make sense of the behavior, as well as helping us prevent it from happening again in the future.
Schurr and colleagues recently sought an answer to the question, “Why?”, when explaining unethical behavior. They proposed that people make unethical decisions because of how those decisions are framed. In other words, an individual’s perspective of a decision can be either narrow or broad; narrow being that a decision or sequence of decisions are considered in isolation, broad being that a decision or set of decisions is framed in a broader context in that the aggregate consequences of the decision(s) are considered.
To test this idea, the authors had students face an ethical dilemma by giving them an
opportunity to be rewarded for cheating at a trivia game. This was measured by asking the students to participate in a practice round, then allowing them to self-score their answers in a monetarily incentivized “real” round. The researchers found that those in the “narrow” condition (students asked to move straight from the practice round to real round) were more likely to cheat than those in the broad condition (students asked to plan which questions they would see
in advance). In a follow-up experiment where no monetary incentive was involved, the level of cheating dropped off significantly.
These results demonstrate that when there is incentive to do so, and a person is applying tunnel-vision to their decision making, the chances for unethical decisions increase. Said a different way, when choices are made sequentially, in isolation, versus when they are planned ahead and considered to be an aggregate choice, the chances for unethical behavior increases.
The authors warn that this study shows that the guardrails for “acceptable” behavior can move depending on a person’s perspective. But, when a person considers his/her decision or set of decisions more broadly (i.e., the greater consequences of the decision and how it affects a larger context), those guardrails stand out more saliently and are harder to “reset”. Thus, by helping people think more broadly about how their decisions connect to the larger world, organizations, leaders, and trainers can feel better that the decisions being made are more ethical.
human resource management, organizational industrial psychology, organizational management
Need Ethics? Here, Take Mine (IO Psychology)
Publication: Journal of Management (2012)
Article: The psychic cost of doing wrong: Ethical conflict, divestiture socialization, and emotional exhaustion
Authors: Kammeyer-Mueller, J. D., Simon, L. S., & Rich, B. L.
Reviewed By: Katie Bachman
It’s sweet, albeit naïve, to think that the ethical training we learned in pursuit of a degree or on the job during seemingly endless training sessions will do the trick. We will always be upstanding corporate citizens, ready to fight evil. But that’s not really what happens. It’s all well and good to make your employees take ethics training, but what about when their supervisor or even the organizational culture pushes them to break their ethical rules? Sure, we have a moral dilemma, but it goes deeper than that. Ethical lapses have an effect on the employees who make or see them.
In a study of new lawyers (you can insert your own lawyer joke here), researchers examined the impact of ethical conflict on emotional exhaustion and feelings of fulfillment. In terms of establishing ethical conflict, they looked at a particular kind of organizational socialization—divestment. This is the type of socialization that encourages new employees to drop their own ideals and intuitions and adapt to what the organization believes. It’s the drop-that-hold-this approach to socializing. So, employees who come into an organization with wide eyes and high standards of ethics are now bombarded with the real world, or at least the real world as the organization sees it. If the employee’s belief system doesn’t jive with the organization’s, the new employee has to change to fit. If the change in beliefs has to do with professional ethics, that’s were we see this ethical conflict. Take it another step further and we find that the ethical conflict can be particularly draining for new employees. They have to deal with situations that they know are unethical and that takes a toll. They’re also less fulfilled as employees, because, hey, they’re in the business of doing wrong. Would you be happy about that?
Unless your organization is on a quest to bring down James Bond or uses words like “nefarious” in its mission statement, you’re probably interested in decreasing instances of unethical behavior. After all, ethical lapses on the part of organization lead to less fulfilled, more exhausted employees. The key here is to change the culture before it changes the people. Those individuals suffering that ethical conflict—those are the good ones. Keep them in their angelic condition by instituting policies that encourage ethics (training, whistle-blower protection, etc.). Ethical lapses happen, but not in your company.
Kammeyer-Mueller, J. D., Simon, L. S., & Rich, B. L. (2012). The Psychic cost of doing wrong: Ethical conflict, divestiture socialization, and emotional exhaustion. Journal of Management, 38, 784-808.
human resource management, organizational industrial psychology, organizational management
Predicting someone’s propensity to morally disengage (IO Psychology)
Topic: Assessment, Personality, Ethics, Counter-Productive Work Behavior, Workplace Deviance
Publication: Personnel Psychology (SPRING 2012)
Article: Why employees do bad things: Moral disengagement and unethical organizational behavior
Authors: Celia Moore, James R. Detert, Linda Klebe Treviño, Vicki L. Baker, & David M. Mayer
Reviewed by: Alexandra Rechlin
Organizations obviously want their employees to be ethical. While there are existing measures that are used to predict who will act immorally, the authors of this paper proposed a new construct that they called an individual’s propensity to morally disengage – an individual difference in how people think about ethical decisions and behavior that allows them to act unethically without feeling bad about it.
Celia Moore and her colleagues developed a measure of an individual’s propensity to morally disengage. In a series of studies, they then validated the measure for working adults by showing that the propensity to morally disengage was positively related to unethical behavior after accounting for a number of other related traits, orientations, and emotions. Predicted outcomes included self-, supervisor-, and coworker-reported unethical behavior, decisions to commit fraud, and self-serving decisions in the workplace.
You may be wondering how this paper is relevant to practitioners. This new measure of the propensity to morally disengage predicts unethical behavior, and it is short – it only includes eight items. While it has yet to be validated for employee selection, this measure certainly shows promise for its ability to predict unethical behavior. The authors also found that this measure had a low correlation with social desirability, so it seems to be fairly resistant to test-takers faking their responses to receive a good score. If your organization is using a lengthy integrity test in the selection process for the sole purpose of predicting those who would conduct unethical behavior, then this new measure may be something your organization might want to consider using instead.
Moore, C., Detert, J. R., Treviño, L. K., Baker, V. L., & Mayer, D. M. (2012). Why employees do bad things: Moral disengagement and unethical organizational behavior. Personnel Psychology, 65, 1-48. doi: 10.1111/j.1744-6570.2011.01237.x
human resource management, organizational industrial psychology, organizational management