5 Ways You’re Turning Your Employees Into Crooks

Aug 26, 2014

When it comes to your employees, the adage holds true that one bad apple can spoil the barrel.

Even one dishonest employee can do enormous amounts of damage, and, if that employee is in a management position, he or she can inflict millions of dollars in damage.

Here’s the thing: It’s your fault.

5 ways you may be turning employees bad

I’m not saying it’s your fault that some of your employees have the tendency to behave dishonestly. Blame their brains, their mothers, or Grand Theft Auto.

But although there is a large body of research that shows certain people’s personalities make them more prone to acting unethically, there is another body of research that suggests the situations in which people live or work can determine whether they act on those tendencies.

Here are five (5) things you’re doing to turn your employees into deviants, and what you can do to stop.

1. Sticking them with shady co-workers

In a survey of 700 people, 80 percent of respondents reported they had been lied to, stolen from, cheated, or treated dishonestly by a colleague or supervisor. That’s bad news for your organization – research shows many of our moral failings originate in our interactions with others.

Put simply, employees are subject to peer pressure. However, that peer pressure can also be a force for good.

Just like a group of immoral coworkers can persuade even the squarest of squares to bend the rules, putting a less-than-scrupulous employee in a group of rule-abiders can help keep the former in line.

2. Surrounding them with temptation

In a groundbreaking 1996 experiment, psychologist Roy Baumeister put 67 participants in a room that smelled like fresh-baked cookies, then showed them a smorgasbord of chocolate confections. They gave some the participants access to the treats, then, in an unimaginably cruel twist, asked the remaining participants to eat radishes instead.

Baumeister found that in a subsequent persistence-testing exercise, participants who had been asked to eat radishes gave up easier than their peers who had feasted on chocolates. Self-control is a finite resource that can be diminished.

If you want your employees to be happy eating radishes, don’t put them in a room full of cookies.

Provide oversight and demand accountability for your employees, and don’t be afraid to make an example of unethical employees. It’s much less costly to hire a new sales manager than it is to find out they’ve been cooking their numbers.

3. Providing the wrong incentives

In a post on the Wharton School finance blog, professors Adam Grant and Jitendra Singh cited a study by Sara Rynes and her colleagues at the University of Iowa that showed individual financial incentives can increase employee performance and productivity by 42-49 percent.

The problem, say Grant and Singh, is financial incentives also tend to breed unethical behavior, especially when employees fall just short of their goals. They offer a case as anecdotal evidence:

Several years ago, Green Giant, a unit of General Mills, had a problem at one of its plants: Frozen peas were being packaged with insect parts. Hoping to improve product quality and cleanliness, managers designed an incentive scheme in which employees received a bonus for finding insect parts. Employees responded by bringing insect parts from home, planting them in frozen pea packages and then ‘finding’ them to earn the bonus.”

Although planting insect parts is a fairly inconsequential example, the subprime mortgage crisis provides an idea of the devastating effects tying compensation to performance can have.

Instead of relying solely on financial incentives, Grant and Singh suggest keeping them small and supplementing them with initiatives to support intrinsic motivation – fostering a sense of autonomy, mastery, and purpose.

4. Promoting a destructive culture

Enron provides a perfectly illustrative, if dated, case study of how a toxic corporate culture can encourage immoral behavior. When he took control at Enron, former president Jeffrey Skilling had a reputation as smart, extremely competitive, and prone to taking excessive risk so long as success promised equal reward.

Skilling created around him a culture that emphasized ends over means, implemented a bonus structure that rewarded transaction size and volume over quality, and ostracized or removed subordinates who deviated from that culture. What resulted was a company full of employees willing to circumvent or outright break legal and ethical boundaries in order to bolster short-term performance.

Culture starts at the top, and research shows that leaders’ level of morality determines the degree to which employees perceive the organization as ethical or unethical. So, if you want honest employees, you should act honestly yourself.

5. You’re making them miserable

Research shows that job satisfaction mitigates employees’ likelihood of engaging in counterproductive work behavior, and nothing kills job satisfaction like an unethical boss.

Honesty is the absolute most important characteristic for leadership. Employees want to know that they can trust the people they work for, that the people in charge won’t lie, cheat, or play favorites. And, studies show when subordinates trust their supervisors they are happier and more productive at work.

The Bottom Line

There are those in the world who simply are dishonest people. They lie, they cheat, they steal, and if they’re in your organization, they can have disastrous effect.

Aside from the occasional bad egg, however, regular instances of employee dishonesty should be viewed as a symptom of a larger organizational problem.

Without addressing the problems that are causing your employees to stray from the straight and narrow path, your organization will continue to struggle with unethical behavior.

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