Ethics may be a moving target for some
Of course you're an ethical person. You'd never become a rogue trader or run a Ponzi scheme or engage in questionable business practices.
But a new study has found that many people who think of themselves as ethically upright may feel no remorse about fudging results if they don't think they're hurting others.
In fact, getting away with things such as overstating billable hours or taking a little off the top for themselves can result in an emotional rush the researchers called the "cheater's high."
The findings have important implications for managers at a time when budgets are squeezed and pressure to meet goals may be increased, said Nicole Ruedy, co-author of the study.
"One of the big implications is that employers should highlight that unethical behaviour not only cheats the company but can do potential harm to others," said Dr. Ruedy, a postdoctoral research associate at the Center for Leadership and Strategic Thinking at the University of Washington.
The research, which she conducted at the University of Pennsylvania, as a doctoral student, involved a series of experiments. In two of them, groups of students were given scenarios in which other people had cheated on tests or had a choice of lying or telling the truth about the number of hours they worked. In a questionnaire given after the experiment, the participants predicted the cheaters would feel remorse about what they had done.
In other tests, groups of students were given tasks in which they could make more money by overstating their results. They were allowed to score themselves after the test by comparing their results to an answer sheet.
Forty-one per cent of the participants cheated by writing in additional answers after seeing the score sheet. When given written tests of their emotions after the experiment, the cheaters showed statistically significant boosts in positive feelings compared with the non-cheaters.
But the fact that they showed no higher levels of "negative emotions," such as guilt or shame, than those who were honest suggests that people don't feel remorse if they feel no one else is being harmed, the researchers concluded.
This suggests that leaders need to be more direct in making people aware that their unethical behaviour has real costs and effects on others, Dr. Ruedy said.
"A code of ethics is not enough. People have to be made aware of the real cost of their unethical behaviour," she said. If unethical behaviour is becoming an issue, an effective approach might be to have a town hall meeting that highlights not only the increased costs the company faces but the potential effects on others.
For instance a leader might say: "We're in this as a team. Unethical behaviour could hurt the other team members through damage to the team's reputation or lost sales. That could result in potential job losses," Dr. Ruedy suggested.
Putting in an elaborate monitoring process or a surveillance system could actually have a negative effect by making cheating feel like a game employees can win if they're clever enough, she added.
One startling finding of the experiments is that people can actually get a kick out of being under suspicion of cheating.
One group was given a test that included trick questions that hardly anyone could get right. If people who self-scored their tests claimed to get them right, the researchers told them they were suspicious about their high scores. But in the follow-up emotional tests, those who were caught out didn't actually register any higher on feelings of guilt or remorse.
In fact, "after we alerted them to the fact that we were aware they could be cheating there was a slight increase in self-satisfaction. We found that very disturbing. We're still trying to absorb that and asking why they could feel better," Dr. Ruedy said.
The study was conducted along with Celia Moore, an assistant professor of the London Business School, Francesca Gino an associate professor at Harvard Business School, and Prof. Maurice Schweitzer of the Wharton School of the University of Pennsylvania. It will be presented in August at the annual meeting of the Academy of Management in Boston .
An implication of the findings is that "people under pressure as they are today might more easily find justifications for unethical acts than they would when we had greener pastures," Dr.. Ruedy said. "It might also give them a boost emotionally when they are feeling down about other things in their lives and they are feeling pressure to meet ambitious goals."
That means leaders should also examine whether they are setting the bar so high that it is becoming an incentive to cheat to achieve the goals, she suggested.
Leaders should make the case that people are ultimately responsible for monitoring their own behaviour, she said.
"Reflection can have a good dampening effect on unethical behaviour. When it becomes clear that they may cause harm to someone else, they won't be as likely to give in to temptation."