7 Organizations and Employees Individuals respond to incentives and firms that

7 organizations and employees individuals respond to

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7. Organizations and Employees Individuals respond to incentives, and firms that wish to encourage their employees to act ethically can act purposefully to move them in that direction. 1. Firms can develop an ethical corporate culture. This typically involves using best practices to develop and promulgate a corporate code of conduct. Top officers must live up to the code themselves. They must not only punish employees who violate the code but reward employees who follow it. To learn more about becoming an ethical leader, view the videos Ethical Leadership: Best Practices (Links to an external site.) and Ethical Leadership: Perilous at the Top (Links to an external site.) from the UT Ethics Unwrapped website if you have not already done so.
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2. Firms can hire ethical people. There is no easier way to have ethical employees than to hire ethical people. 3. Firms should treat employees well. Treating employees poorly virtually invites them to act unethically. Ethics training can help. 4. Firms should structure incentives wisely. Part of what this means is that firms should avoid giving large bonuses contingent on factors that can be easily manipulated. Understanding how to ethically use incentives is not easy and conflicts of interest can easily arise. Watch the videos titled Incentive Gaming (Links to an external site.) and Conflict of Interest (Links to an external site.) from the UT Ethics Unwrapped website to learn how leaders can ethically motivate their employees.
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  • Spring '08
  • Law, Common Law, Supreme Court of the United States

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