How to manage employees when your company has an ethical scandal

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Workers at America’s largest employer are already familiar with the constant rumblings of controversy. But this time, the US government’s nearly 3million civilians on payroll – plus about 1.5million in the military – are directly affected by a federal ethical storm.

Several weeks ago, the New York Times revealed the federal government has been obligating many of its uniformed employees to wear sweatshop-made clothing, and has even profited from the sale of goods produced by abused workers and children.

The Office of Personnel Management would not respond to requests for comment. But you can still learn from this timely lesson so that if, God forbid, your company is mixed up in unsavory dealings, you’ll be prepared to face employees.

Set up an official listening channel
If you’re not listening, then you’ll lose staff before you ever get to hear their concerns, which may have been easily resolved. A simple way of doing this is setting up a hotline, which could be manned by somebody either inside the company or a third party. “Make it safe for people to express their concerns,” said Sandra Rothenberg, associate professor of management at Rochester Institute of Technology. “Having a company hotline where people can express their concerns without fear of reprisal is important.”

Implement a procedure to follow up concerns
Without follow-through, any attempt to hear employees’ concerns is impotent. The procedure could involve HR detailing principled reasoning behind the company’s stance to complainants, or it could be referring the employee to somebody who can better handle the complaint. Either way, a formal procedure will ensure every staff member feels heard, even when you may not have the authority to make any significant changes.

Focus on culture at a leadership level
Like many HR issues, having executive support is essential to the success of any ethics-related procedures. It’s leadership that will set the tone of a company’s ethical culture in its daily dealings. “How a company responds (to crises) is not only important for minimizing reputation damage, but it’s important because it signals to the employees what the company cares about,” Rothenberg said. “Those sort of make-or-break moments might do more for the employees than viewing an ethics training video when they're hired into the company.”

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