Compensation That Corrupts: How Rewards Affect Ethical Behaviour

Without ensuring that an organization’s compensation and reward systems support and reinforce the corporate values, organizations may unknowingly spawn a breeding ground for unethical behaviour.

Document Highlights

Almost half of the 1,324 participants of a recent U.S. study admitted that they engaged in unethical or illegal actions in the workplace. These included such acts as:

• lying to customers (9 per cent);
• withholding important information (5 per cent);
• overlooking, paying or accepting bribes (3 per cent); or
• accepting inappropriate gifts or services (1 per cent).

This briefing:

• looks at contributing factors;
• examines the relationship between rewards and ethics; and
• explores consistency, control and customer focus.

The Ethical Rewards Assessment tool, provided in this paper, will help managers to proactively assess whether the organization’s reward plan has the potential to create an unethical workplace environment.