Organizational Wellness

Handling Unethical Behavior in the Workplace

Dec 11, 2023
Last Updated Jan 11, 2024

Whether you're aware of it or not, ethics play a crucial role in the success of your business. Ethics are like a set of guidelines that help people in a community decide what's right and wrong. They're rooted in moral values. Neglecting ethics at work can lead to behaviors that aren't above board, and that can negatively impact your company's culture, as well as the happiness of your employees and the satisfaction of your customers.

In today's business world, ethics are all about embracingmoral principles like honesty, fairness, leadership, integrity, compassion, respect, responsibility, loyalty, compliance with the law, transparency, and being environmentally aware. Unethical behavior at work can be seen as any action that goes against these values, whether it happens on purpose or by accident. 

Unethical behaviors can sometimes go hand in hand with illegal actions, but not always. This is because the law doesn't always perfectly align with what people see as right or wrong, and vice versa.

When unethical behavior is illegal, it has resulted in billions of dollars’ worth of fines and compensation. But even when unethical actions aren't strictly illegal, they still come at a cost. Any harmful behavior that goes against the shared values of the company can harm a positive work environment and create problems with employee well-being and retention. These consequences often go beyond just the team members and can affect your company's reputation with clients, vendors, and potential future employees.  

Despite the potential costs of these behaviors, it remains a pervasive problem. According to a recent national survey conducted by the Harvard Business Review, 29% of employees have experienced or witnessed what they describe as “rule violations” in the workplace. What's even more concerning is that nearly one in four employees feel pressured to take part in unethical actions at their job and are hesitant to speak out against it.

Let's dive into how to identify unethical behavior in the workplace, and how to cultivate a company culture that shuns it.


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Identifying Unethical Behavior in the Workplace

You can safely assume that any behavior that violates moral principles is unethical, but it may be necessary to narrow things down further, especially if your organization is struggling with specific kinds of unethical behavior. Some common examples of these behaviors include:

  • Misleading Communication: The dissemination of misleading or inaccurate information about a product or service in promotional materials, which can include false claims, deceptive imagery, or incorrect representations intended to lure consumers into making a purchase based on false premises. Examples include false advertising or deceptive marketing practices.
  • Fraudulent Behavior: Any deceptive or dishonest activity designed to gain an unfair or unlawful advantage, often involving misrepresentation, concealment, or false information with the intent to deceive or defraud others. Examples include tax evasion, bribery, and deceptive selling of inferior goods.
  • Anti-competitive Activity: Activities that aim to restrict competition in a market, often resulting in higher prices, reduced choices, and hindered innovation for consumers. Examples include price fixing, bid rigging, and market sharing.
  • Production Deviance: Behaviors by employees that disrupt or harm the normal production and workflow processes within a workplace, often resulting in lower productivity, decreased quality, or inefficiency. Examples include deliberately performing substandard work, and claiming more hours than actually worked.
  • Withdrawal: Refers to behaviors in which employees disengage from their work or workplace, often leading to reduced productivity, increased absenteeism, or a general lack of commitment. Examples include taking too much personal time on the job and not performing necessary tasks while at work.
  • Knowledge Hiding: This is the intentional act of employees concealing or withholding information or expertise from their colleagues or organization, rather than sharing it for the benefit of the team or the company. Examples include misrepresenting one’s level of knowledge on job-related matters and sharing incorrect information.
  • Property Deviance and Sabotage: The deliberate actions by individuals that involve damaging or vandalizing company property, assets, or resources, often with the intent to disrupt operations or cause financial harm to the organization.
  • Political Deviance: Behaviors such as manipulation, rumor-spreading, or strategic actions intended to gain power or favor within an organization, often at the expense of others. This includes showing favoritism or exploiting relationships with coworkers for personal gain.
  • Ostracism: The act of excluding, ignoring, or socially isolating an individual in a group or community, often with the intention of punishing or shunning them.
  • Interpersonal Deviance: Inappropriate or harmful behaviors between individuals in a workplace, including acts of bullying, harassment, incivility, or aggression, which disrupt healthy social interactions and can negatively impact the work environment.
  • Aggression: Hostile or harmful behavior, such as verbal abuse, threats, or physical violence, directed toward colleagues, superiors, or subordinates, leading to a hostile or unsafe work environment.
  • Abusive Leadership: A style of management characterized by supervisors or leaders who engage in harmful, demeaning, or exploitative behavior toward their subordinates, creating a toxic and damaging work environment.
  • Alcohol and Drug Abuse: The misuse or addiction to alcohol or illicit substances by employees, which can lead to impaired job performance, safety risks, and negative consequences for the individual and the organization.
  • Unsafe Behavior: Actions or practices by employees that disregard safety protocols, potentially leading to accidents, injuries, or hazardous situations for themselves and their colleagues.

Unethical behavior can happen anywhere in a company, whether you're a top manager or just starting out. It can be a solo act or something that a whole group, team, or committee gets involved in.

In fact, some of the most famous examples of unethical behavior in the workplace involved many people at many different levels of an organization. For example, Work Institute reveals that a prominent U.S. bank once made it common practice to charge customers for auto insurance they did not need, affecting up to 570,000 consumers. This bank also created up to 3.5 million accounts without the permission of their customers. 

Determining the Severity of Unethical Behavior

Fostering a culture that condemns unethical behavior, irrespective of its seriousness, helps companies avert both the repercussions of such behavior and the need for subsequent corrective actions. But when action is needed, you must first determine the severity of the unethical behavior:

  1. Impact: Assess the harm caused by the behavior, both to individuals and the organization. Consider financial, reputational, and emotional consequences.
  2. Intent: Determine whether the behavior was intentional or accidental, as intentional unethical actions are often considered more severe.
  3. Repeated Patterns: Evaluate if the unethical behavior is a one-time incident or part of a pattern, as repeated actions can be more severe.
  4. Violation of Laws or Regulations: Check if the behavior breaches any legal or regulatory requirements, which can escalate its severity.
  5. Organizational Policies: Consider whether the behavior violates company policies or codes of conduct, as this can indicate severity within the context of the organization.
  6. Impact on Trust: Assess how the behavior affects trust and relationships within the workplace, as severe unethical behavior can significantly erode trust.
  7. Consequences: Evaluate the consequences and repercussions for both the individual and the organization, as more severe unethical behavior often leads to more severe consequences.

By taking these factors into account, you can better gauge the severity of unethical behavior in a specific situation.

Combating Unethical Behavior in the Workplace

Addressing unethical behavior in the workplace is essential for nurturing a positive and effective work environment. Here are some strategies to tackle and prevent unethical conduct:

  • Clear Ethics Codes: Craft and communicate a precise and comprehensive code of ethics for your organization, ensuring all team members are well-informed about these standards and comprehend the anticipated conduct.
  • Leading By Example: Company leaders should exemplify ethical behavior, setting the right example for the entire organization. When employees witness ethical conduct at the top, they are more likely to emulate it.
  • Continuous Education and Training: Provide ongoing ethics education and training to employees. This can encompass workshops, seminars, or online courses aimed at raising awareness and equipping employees to make ethical decisions.
  • Shielding Whistleblowers: Establish a secure and confidential platform for employees to report unethical behavior, safeguarding whistleblowers from retaliation and ensuring that their concerns are thoroughly investigated.
  • Routine Monitoring: Put in place systems and procedures for monitoring and identifying unethical conduct, such as internal audits and mechanisms for anonymous reporting.
  • Communicate Penalties: Precisely outline the consequences for unethical actions, including potential disciplinary measures, and consistently enforce these penalties.
  • Promoting Transparent Communication: Foster a culture of open and honest communication within the organization, which can address issues before they escalate into unethical behavior.
  • Ethical Oversight: Reflect on the creation of an ethics committee or the appointment of an ethics officer to supervise ethical matters within the company.
  • Recognition for Ethical Conduct: Acknowledge and reward employees who consistently demonstrate ethical behavior, contributing to a constructive workplace culture.
  • Effective Conflict Resolution: Develop efficient processes for resolving conflicts and disputes to prevent them from becoming unethical.
  • Nurturing a Positive Workplace Environment: Cultivate a workplace culture that places a high value on integrity, transparency, and respect, actively discouraging unethical behavior and encouraging ethical decision-making.
  • Leveraging External Expertise: Seek guidance from external sources, such as ethics consultants or industry associations, to assist in the development and maintenance of an ethical workplace.
  • Continuous Evaluation and Enhancement: Regularly assess and enhance your ethics policies and procedures based on feedback and evolving circumstances.

Strengthening Company Culture With Wellbeing Programs

Creating a company culture based on integrity and transparency can go a long way toward preventing unethical behavior and misconduct before it even begins. Recent research shows that employees who work within a corporate culture that actively maintains ethical standards are more than four times more likely to question decisions that conflict with their organization’s values and more than three times more likely to do the right thing in a given situation, even when such action is not in their personal interest.

If you want to create a strong company culture that upholds strong ethics, start with how you treat your employees. You can demonstrate top-down ethical responsibility when you prioritize your employees’ welfare with wellness initiatives and programs that will help them thrive in their personal and professional lives. To get started, speak with a wellbeing specialist at Wellhub today.

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Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


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