Ethics in performance management

Ethics related issues are discussed here.

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Ethics in Performance Management
Table of Contents


Serial No. Particulars Page No.
1 Meaning of Ethics in Performance Management 1
2 Importance of Ethics in Performance Management 2
3 Objectives of Ethics in Performance Management 3
4 Principles of Ethics in Performance Management 4
5 Guidelines of Ethics in Performance Management 4-6
6 Causes of Poor Ethics in Performance Management 6-7
7 Danger of Poor Ethics in Performance Management 8
8 Impact of Poor Ethics in Performance Management 9
9 Impact of Poor Ethics in Organization 10
10 Impact of Poor Ethics in Behavior 11
11 Role of Management in Developing Ethics 12
12 Role of Government in Developing Ethics 13
13 Role of Employer in Developing Ethics 14
14 Role of Training Institutes in Developing Ethics 15
15 Parties Responsible for Poor Ethics 16
16 Proposed Model for Developing Ethics 17-18
18 Questions 18
19 Multiple Choice Questions 19-20
20 References 21

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1. Meaning of Ethics in Performance Management
Ethics is a process of rational thinking aimed at establishing ‘what values to hold and when to hold them’.
In other words, a moral principle or set of moral values held by an individual or group is called ethics.
Ethical means based on a system of moral beliefs about right and wrong, in accordance with principles of
professional conduct. Standards of conduct and moral judgment mangers use in their business are
managerial ethics.
Experts Definition
1. According to Dave Kinnear (2002),” Ethics may be defined as a process whereby we
choose between competing moral and /or economic values”
2. According to Shelby Hunt & Scott Vitell (1986), “ Ethics may be defined as an inquiry
into the nature and grounds of morality where the term morality is taken to mean moral
judgements, standards, and rules of conduct”.

Source of Ethics can be Organizational (such as Employer, Managers, Peer group), personal(Individual
employee, Family, Friends, Profession) or environmental(Society, Regions of country, Religious beliefs,
Law)
Ethical Behavior
Higher employee loyalty
Encouragement of personal sacrifices
Honoring of organizational policies
Reduction in turnover
Satisfied Customers

Unethical Behavior
Manufacturing - use of inferior quality of material
Marketing – misleading customers about product features or service differentiations
Distribution – changing priority of booked orders without informing customers
Customer care – not keeping commitment on guarantees

There are, however, fundamental ethics that all people subscribe to. These "common ethical values that are
applicable and knowable to all, regardless of gender, race, age, wealth, class, politics, or religion are
trustworthiness, respect, responsibility, fairness, caring, and citizenship" (Josephson Institute).
Ethical Performance Management:
It is defined as the process of planning, managing, appraising, and monitoring employees. Performance is
based on the principles of fairness, objectivity, transparency and good corporate governance to achieve the

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organizational objectives. It promotes effective self-regulatory practices and management systems that
foster a relationship of confidence and mutual trust between managers, employees and the organization
2. Importance of Ethics in Performance Management
The relationship between ethics and performance management is a critical issue in today’s business
environment. Ethics plays a vital role in effective performance management system. It should be
the cornerstone of performance management. The overall objective of high ethical performance
management should be to provide an honest assessment of the performance and mutually develop
a plan to improve the ratee’s effectiveness. Ethics and Performance management goes side by side.
It is very important for an organization to make a balance between ethics and performance
management for successful implementation of the management system.

In addition, ethics is important because of the following:
1. Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human
needs. Every employee desires to be such himself and to work for an organization that is
fair and ethical in its practices.
2. Creating Credibility: An organization that is believed to be driven by moral values is
respected in the society even by those who may have no information about the working
and the businesses or an organization. Infosys, for example is perceived as an organization
for good corporate governance and social responsibility initiatives. This perception is held
far and wide even by those who do not even know what business the organization is into.
3. Uniting People and Leadership: An organization driven by values is revered by its
employees also. They are the common thread that brings the employees and the decision
makers on a common platform. This goes a long way in aligning behaviors within the
organization towards achievement of one common goal or mission.
4. Improving Decision Making: A man’s destiny is the sum total of all the decisions that
he/she takes in course of his life. The same holds true for organizations. Decisions are
driven by values. For example, an organization that does not value competition will be
fierce in its operations aiming to wipe out its competitors and establish a monopoly in the
market.
5. Long Term Gains: Organizations guided by ethics and values are profitable in the long
run, though in the short run they may seem to lose money. Tata group, one of the largest
business conglomerates in India was seen on the verge of decline at the beginning of
1990’s, which soon turned out to be otherwise. The same company’s Tata NANO car was
predicted as a failure, and failed to do well but the same is picking up fast now.
6. Securing the Society: Often ethics succeeds law in safeguarding the society. The law
machinery is often found acting as a mute spectator, unable to save the society and the
environment. Technology, for example is growing at such a fast pace that the by the time
law comes up with a regulation we have a newer technology with new threats replacing the
older one.

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In conclusion we can say that managing ethical values in the performance management system
strengthens the organization’s culture, improves trust in relationship between individuals and
groups, supports greater consistency in qualities of products and increases the credibility of the
performance management system
3. Objectives of ethics in Performance Management

Ethics is the backbone of an organization and all its activities. Since performance
management is a key HR system to control, modify and change behaviors of employees
acceptable to the organization in consonance with its core values, ethics in performance
management is a crucial organization need.

The objectives and significance of ethics in performance management are enlisted here:
1. Building a better society: To build a better society, ethics is necessary in performance
management.
2. Cultivates High-Performance Teams: To Cultivates High-Performance Teams, Ethics is
also necessary.
3. Attracts and Retains Talents: To attract and retain talents in an organization ethics is
necessary in performance management.
4. Maintains Legal Sanctity: To Maintains Legal Sanctity, Ethics is necessary.
5. Improves Reporting: To improves Reporting, Ethics is a mandatory component.
6. Promotes a strong Corporate Image: To Promotes a strong Corporate Image, Ethics is
also necessary.
7. Use Uniform Evaluation Criteria: Eliminate some of the potential for ethical missteps in
performance evaluations by using the same standard evaluation criteria for all employees.
8. Remove Personal Prejudice: Everyone has personal prejudices, although some are more
pronounced than others. The first step in eliminating personal feelings from what should
be an unbiased process is to acknowledge them. Otherwise, you may unintentionally tap
into these feelings when conducting performance evaluations.
9. Eliminate the Friendship Factor: It can be difficult to be objective about employees you
consider personal friends, but letting friendships overshadow professional responsibilities
is unethical.
10. Defer Evaluations: If you don't feel you can be objective in a performance evaluation, the
ethical thing to do is defer the task to another manager or superior.
11. Improved motivation among employees: Feel good factor - many employees will be
more committed if they can see an ethical approach adopted by the company
12. Reduced labor turnover: Improved motivation is also likely to result in improvements in
the recruitment and retention of staff, who will be more loyal to an ethical company

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Thus, managing ethical values in the performance management system strengthens the coherence
and balance of the organization’s culture, improves trust in relationship between individuals and
groups, supports greater consistency in standards and qualities of products and increases the
credibility of the performance management system.
4. Principles of Ethical Performance Management

With ethics at the epicenter of performance management, the following principles are noteworthy:

1. Respect for the individual: people should be seen as “ends in themselves” and never as
“means to other ends”.
2. Mutual respect: both sides in the performance management process should totally respect
each other’s needs and preoccupations.
3. Fair procedures: all systems must be managed and operated with total fairness.
4. Transparency: people affected by decisions coming from the performance management
process should be given the opportunity to examine and scrutinize the basis upon which
any decisions were made.
5. Employees are driven by the core values of the organization
6. Promotes fairness and justice in order to avoid ethical dilemmas
7. Recognizes individuals for assuming responsibility for actions
8. Operationalizes ethical culture
9. Robust Process



5. Guideline of Ethics in Performance Management
While you may, at times, feel as though you are guided by your own morals and beliefs it is very
important for you to remember to put your personal beliefs aside so that you can look at each
situation objectively and make the most ethical decisions possible.
In order to do this there are some guidelines of ethical management you need to keep in mind at
all times. They are as follows:
 Respect for each employee:
While it’s difficult at times, it is important to make sure about the treating each employee
or team members respectfully. Everyone work with the organization will have different
religious and cultural beliefs and should be treated fairly.
 Mutual respect:
Your role as a manager involves making sure that your employees all treat each other
respectfully as well. While they don’t all have to agree with each other, they should show

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proper respect for each other ideas and opinions. A team that doesn’t get along on a
personal level will not work will together and will be less productive.

 Procedural fairness:
You may not have control of the procedures your company expects you to follow but you
do have control over the procedures you can implement within your team. It is important
to make sure the procedures you implement are fair to all of your employees – neither
favoring nor neglecting one employee or another.
 Decision making transparency:
It’s incredibly important for you to make sure your employees understand why you make
the decisions you do. If they realize you aren’t making arbitrary choices based on personal
beliefs, they’ll be more likely to accept your decisions and work together as a team.
 Recognize that managing ethics is a process:
Ethics is a matter of values and associated behaviors. Values are discerned through the
process of ongoing reflection. Therefore, ethics programs may seem more process-oriented
than most management practices. Managers tend to be skeptical of process-oriented
activities, and instead prefer processes focused on deliverables with measurements.
However, experienced managers realize that the deliverables of standard management
practices (planning, organizing, motivating, controlling) are only tangible representations
of very process-oriented practices.
 The best way to handle ethical dilemmas is to avoid their occurrence in the first place:

That's why practices such as developing codes of ethics and codes of conduct are so
important. Their development sensitizes employees to ethical considerations and minimize
the chances of unethical behavior occurring in the first place.


 Make ethics decisions in groups, and make decisions public, as appropriate:
This usually produces better quality decisions by including diverse interests and
perspectives, and increases the credibility of the decision process and outcome by reducing
suspicion of unfair bias.
 Integrate ethics management with performance management practices:
When developing the values statement during strategic planning, include ethical values
preferred in the workplace. When developing personnel policies, reflect on what ethical
values would like to be most prominent in the organization's culture and then design
policies to produce these behaviors.

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 Use cross-functional teams when developing and implementing the ethics
management program:
It’s vital that the organization’s employees feel a sense of participation and ownership in
the program if they are to adhere to its ethical values. Therefore, include employees in
developing and operating the program.
 Value forgiveness:
This may sound rather religious or preachy to some, but it’s probably the most important
component of any management practice. An ethics management program may at first
actually increase the number of ethical issues to be dealt with because people are more
sensitive to their occurrence. Consequently, there may be more occasions to address
people’s unethical behavior. The most important ingredient for remaining ethical is trying
to be ethical. Therefore, help people recognize and address their mistakes and then support
them to continue to try operate ethically.
 Note that trying to operate ethically and making a few mistakes is better than not
trying at all:
Some organizations have become widely known as operating in a highly ethical manner,
e.g., Ben and Jerrys, Johnson and Johnson, Aveda, Hewlett Packard, etc. Unfortunately, it
seems that when an organization achieves this strong public image, it's placed on a pedestal
by some business ethics writers. All organizations are comprised of people and people are
not perfect. However, when a mistake is made by any of these organizations, the
organization has a long way to fall. In our increasingly critical society, these organizations
are accused of being hypocritical and they are soon pilloried by social critics.
Consequently, some leaders may fear sticking their necks out publicly to announce an
ethics management program. This is extremely unfortunate. It's the trying that counts and
brings peace of mind -- not achieving a heroic status in society.

6. Causes of Poor Ethics in Performance Management
Most of us would agree that it is ethics in practice that makes sense; just having it carefully drafted
and redrafted in books may not serve the purpose. Of course all of us want that the management
of the performance will be fair. But although we all want ethical behavior the poor ethical situation
may occur. There have discussed some causes of poor ethics:
 Unclear Policies:
In some cases, managers and employees exhibit poor ethical behavior because the company
doesn’t offer a clear model of ethics in performance management. A company policy
manual and ethical code of conduct normally establish ethical standards and consequences
for poor decisions. Some businesses have no formal ethical policy documents and offer no
guidance at all. Others have policies that are unclear, vague, inconsistent or not consistently
enforced.

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 Managerial malpractice:
When the top level of employees or managers are involved in illegal behavior or practices
then it became the culture of the organization. By seeing the top levels personnel behavior,
the junior levels of employee motivated to do the unethical behavior.

 Not engaging employee in decision making:
In time of making the performance decision managers should involve the employee for
whom the specific decision is made. Because when the employee involves in decision
making process then he or she become clear about his or her personal goal of achievement
and the process and he/she can act ethically. But when employees are not engage in
decision making then they may choose unethical path for goal achievement.

 Workplace politics:
When the managers and employees are get involve in the politics of the workplace then the
unethical behavior arise.

 Corporate goal achievement:
Sometimes managers of an organization give complex target for employees. When the
target level become hard for employees to attain then they get involved in unethical
behavior.

 Managerial favoritism:
In some organization in some cases the managers favor unethical or illegal behavior for
their personal interest which in term increase the unethical behavior.

 Unethical Culture:
A company’s culture comprises the shared norms and values among workers. Influenced
by top managers and HR initiatives and trickling down through frontline management
ranks, a company’s ethical nature is built into the fabric of its culture. In some businesses,
peers demand high ethical standards and behaviors among colleagues. In companies that
routinely exhibit bad ethics, employees either condone or go along with poor ethical
decisions or passively condone them through inaction.

 Having less mutual respect:
One’s role as a manager involves making sure that his/her employees all treat each other
respectfully as well. While they don’t all have to agree with each other, they should show
proper respect for each other ideas and opinions. When there have less respect for each
other than the ethical dilemma arises.

 Less accountability:

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Having less accountability in performance management increase the unethical behavior.
Because when there have less accountability employee become free to do what he/she
want. And that case some of them involve unethical behavior.
7. Danger of Poor Ethics in Performance management
Some danger of poor ethics is discussed below:
1. Employee Performance: A lack of ethics has a negative effect on employee performance.
In some cases, employees are so concerned with getting ahead and making money that they
ignore procedures and protocol. This can lead to additional paperwork and careless errors
that result in the task having to be completed again. Additionally, employees who feel
acting ethically and following the rules will not get them ahead in the business sometimes
feel a lack of motivation, which often leads to a decrease in performance.

2. Employee Relations: When a manager or head of a business exhibits a lack of ethical
behavior, he faces losing the respect of his employees. It is difficult to have a successful
business without well-respected leaders. A lack of ethical behavior can also cause tension
among employees, with some employees resenting those who do not play by the rules and
still manage to get ahead. Unethical behavior in the workplace also has the potential to lead
to a lack of trust among employees, which is detrimental to a business that relies on
collaboration and a sense of community.

3. Company Credibility:
If a lack of ethics in a business becomes public knowledge, that business loses credibility.
While some businesses survive public knowledge of a lack of ethics through reimaging and
advertising campaigns, many lose a key customer base. Even if a business recovers from
news about its lack of ethics, it takes a lot of time and money to restore its image and
consumer confidence.

 Increased employee turnover and more challenging employee recruitment. Because
employees in the organization become neglected products.
 Decreased success of retention and recruitment of employees.
 Increased dysfunctional behaviors such as not paying attention to details, scapegoating,
withholding information, under delivering and overpromising, not giving credit to others,
lowering goals, misrepresenting results, etc.
 Increase conflict internally
 Decrease productivity of individuals
 Decrease the profitability of the organization

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8. Impact of Poor Ethics in Performance management
Poor ethics always contain for bad impact on the organization. Some of those are discussed below:
 Worsening Decision Making:
Poor ethical situation worsens the decision making of the organization because in the
unethical practicing organization there have no proper participation of the employee.

 There arises less accountability:
When there have poor ethics in the performance management the accountability of the
individual become weak.

 Lower the performance responsibility:
People with unethical ethical behavior always process less responsibility. Because they
always work for their own personal interest. They are not aware for the organization they
work for.

 Increase organizational politics:
When unethical behavior arises in the performance of the employees and the managers they
become involved in the organizational nasty politics day by day.

 Decrease the level of respect for each other:
Poor ethical behavior decreases the respect level of respect for each other in the
organization. Everyone become concern about their personal interest and sacrificing ability
become poor.

 Threat for the Organization:
Unethical behavior contain threat for the organization. The productivity of the organization
decrease. Which lead lesser profitability and in the long run effect the organizational
sustainability.

 Establish a total unhealthy culture:
In the last point it can say that the poor ethics in performance management create a total
unhealthy culture for managing performance properly.

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9. Impact of poor ethics in organization
Poor ethics has generated bad impact in organization. Poor ethics decreases the moral values of
the employees of the organization. Poor ethics can deteriorate the goodwill of the organization.
Impacts of poor ethics in organization are discussed below:
1. Decreasing goodwill: Poor ethics decreases the goodwill of the organization. The
organization which is poor in ethics can cheat with the customers or with its clients. Such
behavior of organization can reduce the goodwill of the organization.
2. Poor employee performance: Poor ethics makes the employee do poor performance. The
employee who is poor in ethics decreases his efforts to perform a job.
3. Poor employee attitudes: Poor ethics negatively affects the employee attitudes. It creates
bad attitudes in employee.
4. Bad quality of employee relations: Poor ethics deteriorates the relation among
employees. It has increased bad relations among employees.
5. Decreasing productivity: Poor ethics makes the employees poor in performance. Hence
productivity of the organization decreases.
6. Decreasing profitability: Poor ethics decreases the productivity of the organization.
Hence profitability of the organization decreases. Low productivity generates low
profitability.
7. Increasing conflict: Poor ethics increases conflict among employees. Poor ethics
decreases moral values of the employees. Low moral values in employees create conflict
among employees.
8. Deteriorating labor-management relationship: Poor ethics decreases the moral values
of the management of the organization. The management who is poor in ethics can treat
unfairly to employees. Hence labor management relationship decreases.
9. Decreasing growth of the business: Poor ethics decreases the performance of the
employees and poor performance decreases the productivity of the organization and poor
productivity decreases the profitability of the organization.


In conclusion, we can state that there is adverse impact of poor ethics in organization.
It creates hostility in relationship between individuals and groups, can’t keep
consistency in standards and qualities of products and decreases the credibility of
the performance management system.

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10.Impact of Poor Ethics in Behavior

Poor ethics affects the behavior of staff of an organization. Poor ethics has negative impacts on
human behavior. Impacts of poor ethics in behavior are as follows:
1. Misusing company time:
The employee who is poor in ethics can misuse company time. Poor ethics in employee
instigates him to perform nothing in idle time. He lowers his performance and decreases
efforts to do job.
2. Abusive behavior:
Poor ethics makes the employees behavior abusive. The employee poor in ethics abuse his
behavior.
3. Employee theft:
The employee who has poor ethics steals small items like pen, clip etc.
4. Lying to employees:
The managers who have poor ethics make lying to employees. Poor ethics makes the
managers do bad behavior to employees.
5. Violating company policies:
Poor ethics makes the employees violate the company’s policies. Employees have no
regret for violating company policies because they have no ethics in their mind.
6. Lying about skills and experience:
The employee who has no ethics can make lying about skills and experience. It decreases
the performance of the organization.
7. Badmouthing colleagues:
The employee who has no ethics in his behavior makes badmouthing to his colleagues. He
has right or wrong sense. That’s why he behaves in such a way.
8. Lying to hide mistakes:
The employee, poor in ethics, makes lying to hide mistakes. He has no shame to do such
type of behavior.
9. Taking credit for other colleagues:
Some employees have no shame to take credit for other colleagues. Such type employees
have no ethics in their behavior.

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So, we can say that poor ethics leads the employees towards the path of destruction. They become
accustomed of malpractice which hinders their future potentiality.


11.Role of Management in Developing Ethics
Management plays a significant role in developing ethics in an organization. Management takes
various actions to develop ethics in the organization. Management should play following roles:

1. Be a role model and visible: Your employees look to the behavior of top management as
a model of what’s acceptable behavior in the workplace. When senior management is
observed (by subordinates) to take the ethical high road, it sends a positive message for all
employees.
2. Communicate ethical expectations: Ethical ambiguities can be reduced by creating and
disseminating an organizational code of ethics. It should state the organization’s primary
values and the ethical rules that employees are expected to follow. Remember, however,
that a code of ethics is worthless if top management fails to model ethical behaviors.
3. Offer ethics training: Set up seminars, workshops, and similar ethical training programs.
Use these training sessions to reinforce the organization’s standards of conduct, to clarify
what practices are and are not permissible, and to address possible ethical dilemmas.
4. Visibly reward ethical acts: Performance appraisals of managers should include a point-
by-point evaluation of how his or her decisions measure up against the organization’s code
of ethics. People who act ethically should be visibly rewarded for their behavior.
5. Visibly punish unethical acts: People who act unethically should be visibly punished for
their behavior. It helps to decrease unethical action by people.
6. Provide proactive mechanisms: The organization needs to provide formal mechanisms
so that employees can discuss ethical dilemmas and report unethical behavior without fear
of reprimand. This might include creation of ethical counselors, ombudsmen, or ethical
officers.



Management can play a dynamic role in developing performance of the employees by the above
mentioned ways. If the management can play its role in the proper manner, it can exploit its
employees effectively and efficiently.

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12.Role of Government in Developing Ethics

Government plays a significant role in developing ethics in business. Government takes numerous
actions to develop ethics in business. To develop ethics government should play following roles:

1. Develop rules and regulations: Government should introduce rules and regulations to
develop ethics in business. Business must follow rules regulations developed by
government to ensure ethics in working place.
2. Develop law: Government should develop laws about ethics to force the organization to
follow ethics in business.
3. Provide training in ethics: Government can provide training in ethics for business
organization. Ethical organization may not fraud with the government regarding tax.
4. Provide facilities for ethical organization: Government should provide new facilities to
ethical organization. The organization which gets government facilities acts in ethical way
to contribute to government development project.
5. Provide tax rebate to ethical organization: Government provides tax rebate to ethical
organization.
6. Introduce ethics in business: Government should take initiatives to introduce ethics in
new business organization.
7. Provide financial service to ethical organization: Government can provide financial
assistance to ethical organization. Government needs to provide financial assistance to
ethical organization because ethical organization contributes large amount of tax to tax
revenue of government.
8. Reward the ethical organization: Ethical organization should be rewarded by
government visibly to motivate other business organization to follow ethics in the
organization.
9. Punish the unethical organization: Unethical organization should be punished visibly to
make other organization aware of ethics. It motivates other organization to follow ethics in
business.

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In fine, we see that government has an inevitable role to play for developing ethics in the
employees by taking different policies and procedures.





13.Role of Employer in Developing Ethics
Role of Employer is to ensure that all employees understand the organization’s values and comply
with the policies and codes of conduct that create organization’s ethical climate. Employer cannot
assume that employees will know how to behave when entering an organization and that’s why he
is to play some roles. These roles are enumerated in below:

1. Making understand the need for ethics: The employer needs to make the
employees understand about the need for ethics because employees are not legal
experts and need guidance.
2. Communication: The employer must start with a foundation, a code of ethics, a
procedure for airing ethical concerns.
3. Education and Training on Ethics: The employer can educate the employees
about the need of ethics in their performance and playing responsibilities.
4. Creation of awareness: The employer can make employees aware of resources,
support systems and personnel who can assist them with ethical advice.
5. Empowerment of Employees: If the employees are empowered, they get
autonomy in their work. Then they can show creativity as they don’t think of losing
jobs anymore.
6. Setting Corporate Codes of Ethics: The employer is to develop a code of ethics
that are reasonably capable of detecting and preventing misconduct. Codes of ethics
are consisting of general statements that serve as principles and the basis for the
rules of conduct. Codes of ethics contain six core values: trustworthiness, respect,
responsibility, fairness, caring, citizenship.

7. Monitor and Enforcement Ethical Standards: An effective ethics program
employs many resources to monitor ethical conduct and measure the program’s
effectiveness.
8. Consistent enforcement of standards, codes and punishment: The employers
need to be very consistent in enforcement of standards, codes and punishment. They
should not compromise in enforcement of standards, codes and punishment.

9. Resolving Value Conflict: The employers have to resolve the value conflict of the
employees.

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10. Increasing Employee Engagement: The last but not the least role of the employer
is to increase employee engagement.

From the above discussion it seems to be clear to us that the employers of the organizations can
take time to time actions like training programs on the needs of ethical practice in the business
activities that results in enriched ethics in employees.
14.Role of Training Institutes in Developing Ethics

Ethics training seeks to help understand the ethical aspects of decision making and to incorporate
high ethical standards into employees’ daily behavior. To develop employees’ ethics, different
training institutes are working. Their played roles are described in below:
1. Surveying employees’ ethical level: Training Institutes survey managers and lower-level
employees to find out what kind of ethical dilemmas they commonly encounter. When they
know this, they know what ethics topics need to be addressed.
2. Creating a list of ethics topics: Create a list of ethics topics that need to be addressed in
your awareness training, drawing from what employees said, codes of ethics for your field
and language in your company's employee handbook.
3. Use of Case Studies: They use case studies to illustrate specific scenarios dealing with
each topic identified in the previous step. They make these up or use actual case studies
from past news stories. Training institutes can use the scenarios to role-play during training
sessions. Alternately, use them to generate discussions.
4. Create Power Point Slides: Then they create PowerPoint slides to state key points that
they want employees to remember. People learn better when information is presented not
just in an auditory manner, but visually as well.
5. Allowing time for Questions: They allow time at the end of their presentation for
questions. They encourage participants to ask questions by beginning the Q&A section by
explaining that anything discussed stays in the room.
6. Giving employees opportunity to evaluate: Then they give trainees the opportunity to fill
out evaluations, explaining what they found useful and what was not so valuable. Allow

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space for suggestions. Then, use the evaluations to improve employees’ ethics awareness
program.

The role of training institutes is to make employees aware of the necessity of ethical behavior and
gives him the adequate and appropriate guidelines from where he can get consultancy.


15.Parties Responsible for Poor Ethics

Poor ethics can also inflict damages on the business' reputation and trustworthiness of its
stakeholders, such as customers and business partners. The absence of trust ensures that the
business finds it difficult to conduct business with others. Parties responsible for poor ethics are
mentioned below:

Top Management:
In some cases, managers and employees exhibit poor ethical behavior because the company
doesn’t offer a clear model of ethics. A company policy manual and ethical code of conduct
normally establish ethical standards and consequences for poor decisions. Some businesses have
no formal ethical policy documents and offer no guidance at all. Others have policies that are
unclear, vague, inconsistent or not consistently enforced.
Employees:
Employees have a legal and moral obligation to conduct themselves ethically in regard to their
employer. Employees are likely instructed by human resources on company policies regarding
ethical behavior, such as upholding the law, avoiding conflicts of interest, and being loyal.
Managers:
Sometimes, it's not the employee who exhibits unethical behavior, but the managers of the
company. Putting rules in place for employees but not following them yourself is an example of
an ethical issue in the workplace. To keep your employees motivated and satisfied with their
workplace, a leader should practice what he preaches and keep his own behavior ethical.
Family:

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Parents are a child's first teachers and role models” They are responsible for shaping up the child's
behavior and implementing positive values in them. Children listen, observe and imitate their
parents. So it is important that they should be good role models the kids would want to follow.
Environment:
Environments that encourage individualistic behavior as opposed to a climate that emphasizes
doing what is best for other employees, customers, and the community are responsible for poor
ethics.
The above parties are responsible for poor ethics in the Performance of the employees.
16.Proposed Model for Developing Ethics
W. Steve Albrecht developed a model of ethics development. The model consists of four levels.
Which are given below:
1. Personal ethical understanding
2. Application of ethics to business [and work] situations
3. Ethical courage
4. Ethical leadership

Source: Ethics Development Model by W. Steve Albrecht
Level 1: The foundation of ethics, Personal Ethical Understanding, represents the most basic
ethical issues and boundaries of personal actions. It involves learning the difference between right

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and wrong, developing a sense of fair play, learning to care for and empathize with others,
developing respect for others, and learning basic principles of integrity and reality, and having
actions that are consistent with the values a person knows to be right.
Regardless of when learned, a personal ethical understanding or basic code of ethics is applied to
all aspects of life. It is applied to how we treat others, how we conduct transactions, how we learn,
how we earn money, and in everything we do.
Level 2: While a person’s ethical understanding is developed early in life, the second level of the
EDM is usually learned later, both through their educational endeavors and in the workplace. It is
the responsibility of teachers and professors, as well as business managers to help students and
those we mentor learn to translate their personal ethical values to the business world. Whether a
student or new employee is studying business, attending medical school, engineering school or
some other professional area, or whether they are a new employee where judgments and ethics are
a part of every decision, they must learn how to translate their basic ethical understanding to their
profession.
Level 3: The third level of the EDM is ethical courage. Ethical courage is the strength and
conviction to act appropriately in questionable situations. A person can have a personal ethical
understanding and be able to translate that understanding to business or other work-related settings
but may not have the courage to take a stand when necessary. For example, in one of the major
financial statement frauds where I was retained as an expert witness, more than twenty people
helped falsify financial statements. All testified they were aware their actions were unethical, but
none had the courage to stand for his or her beliefs. Ethical courage is difficult to teach because its
roots are formed through years of learning to be courageous in small things. Having ethical courage
is sometimes very difficult because there are often perceived “costs” of taking an ethical (and
sometimes lonely) stand.
Level 4: Level 4 or ethical leadership, is instilling in others a desire to develop ethical awareness
and courage. This higher form of ethical behavior requires a person to inspire others through
labeling, modeling, persuasion, and good management. Anyone who accepts a partner or executive
status in a firm should possess ethical leadership.
Questions
1. a) Define” Ethics” and “Ethics in Management Performance Management”.
b) Why ethics in performance management is required?
c) What are the objectives of ethics in Performance Management?

2. a) Enlist the principles of ethics in Performance Management?
b) Point out the guidelines of Ethics in Performance Management.
c)Explain the Causes of Poor Ethics in Performance Management.

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3. a) Mention the Dangers of Poor Ethics in Performance Management.
b) What the impacts of Poor Ethics in Performance Management?
c) Critically discuss the Impacts of Poor Ethics in Organization

4. a) “Poor ethics have some impacts on employees’ behavior”-How?
b) “Management has some roles in developing ethics”-what are those roles?
c) “Government can play roles in developing ethics of the employees”-Explain.
5. a) What are the role of employers in developing employees’ ethics?
b) What are the parties responsible for poor ethics?
c) Propose a Model for Developing Ethics.
Multiple Choice Questions
1. Ethics is the study of…………
a) human conduct in respect of its propriety. b) human development
c) religion d) languages
e) human origin
2. A process of deciding as to what is good for human beings is called…………….
a) Morality b) Values
c) Ethics d) Humanitarianism
e) Loyalty
3. Which parties are responsible for Poor Ethics?
a) Top Management b) Family
c) Environment d) Line Manager
e) All of the above

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Correct Answers: 1-A;2-C; 3-E;4-E;5-E

4. Who have the roles in developing ethics?
a) Government b) Management
c) Employer d) Training Institutes
e) All of the above
5. Which is not an objective of ethics in Performance Management?
a) Building a better Society b) Cultivate high Performance Teams
c) Attracts and retains talents d) Maintains legal sanctity
e) Encouraging distrust.
6. According to the US practices of Performance Management, Performance is
………….valued than loyalty
a) more b) least
c) less d) most
e) none of the above
7. Which factor is not responsible for workplace politics according to Kaushik?
a)Career Aspiration b) Inherent Jealousy
c) Lack of openness of subordinates d) Feeling of Insecurity
e) None of the above

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 Correct answer: 6-a;7-e;8-a;9-d;10-d
References:

1. Diana Winstanley, Kate Stuart‐Smith, (1996) "Policing performance: the ethics of
performance management", Personnel Review, Vol. 25 Issue: 6, pp.66-84,
https://doi.org/10.1108/00483489610148545
2. Krishnasree Gogoi, Dr. Papori Baruah, (2016) “An Ethical Evaluation of Performance
Appraisal System”, “The NEF Journal of Commerce and Management", Vol.6 No.1.
(ISSN-2231-492X).
3. https://www.slideshare.net/sheetalgwagh/ethics-in-performance-mangement
4. https://www.managementstudyguide.com/importance-of-ethics.htm
5. D. Dante (2016). “Simple Ethics Role forBetter Risk Management”. Leadership Article.
6. Kohli.A.S., Deb. T. Performance Management. Delhi.
7. http://www.bizfluent.com
8. http://www.lvb.com
9. http://www.torbenrick.eu
8. Employees are driven by the …………..of the organization.
a) core values b) culture
c) discipline d) tradition
e) training
9. What is enhanced by ethics in Performance Management?
a) Trust of employees on the organization b) Commitment to work
c) Absenteeism towards the work d) Both a and b
e) Both a and c
10. Ethics can be defined as an inquiry into the nature of morality where the term
morality is taken to mean what?
a) moral judgements b) standards
c)rules d) all of the above
e) Both a and b.

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10. https://wheatley.byu.edu/ethics-development
model/?fbclid=IwAR05woVVl1Ce5jTAwdSquGsNaDZ23prrIvNw-
0W2VaFEBjg3LyEbsSdFI94
11. http://users.metropolia.fi/~minnak/ipw/Andrea%20Rijkeboer/the%20role%20of%20HR
%20in%20ethics%20Trevino.pdf
12. https://smallbusiness.chron.com/start-business-ethics-awareness-training-program-17710.html