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How Honest Should You be with Your Employees?

questionsClinton Korver wrote a great article for Harvard Business Publishing. He talks about his experience running a start-up and why it’s especially important during tough times to share information with your employees.

He says that he went against the advice of his venture capitalists. They feared losing employees, customers, and other investors if the bad news got out. Clinton found that being completely forthright strengthened his relationships with his employees.

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marylynn One of my radio managers did that when our company wasn’t doing so well. I appreciated the honesty and how it put all of us on the same page.

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Honesty is high on most of our lists of core values. However, do we really think that we should always be honest?

For example, picture yourself standing with your best friend adoring her newborn baby boy. You think he’s the least attractive baby you’ve ever seen. She’s going on and on about him, when she asks you the dreaded question …

Isn’t he the best looking baby you’ve ever seen?

Would you tell her what you really think? Or would you pick your words carefully to avoid hurting her feelings?

Of course, this is a different situation than the first one presented – being honest with your employees, even when things are not going well.

But it illustrates that there can be a second value at stake – the desire to not cause undue harm.

Is there a reason to tell your friend what you really think? What good will come from it?

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georgeI’ve come to believe strongly in open-book management. As a general rule, I think the more you share with your employees, the better. Having said that, I have found you also have to know your employees. Open-book requires a higher level of maturity from your employees. If that’s not present, sharing more just creates undue emotional distress.

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The reason an ethical dilemma is a dilemma is because two or more core values at odds with each other. These situations flow up to the leader. You have to find a good solution.

It’s a personal decision. There likely will be disagreement on the best way to handle it. That’s why it’s so important to have a framework in place for these kinds of decisions.
This framework will help you:

  • be more efficient in making decisions like this
  • make decisions that are consistent instead of all over the board
  • build goodwill with all affected parties
  • respect the face you see in the mirror at the end of the day

We have a great resource that helps you set up the framework so when an ethical dilemma comes your way you’re prepared. It outlines the three steps to solving an ethical situation:

  • Know your core values
  • Select an ethical model that helps you apply those core values
  • Use a problem-solving process to work through the situation at hand

So we’ve presented an ethical dilemma today … should you share all news with your employees, even the bad stuff? What do you think?

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3 Steps to Solve an Ethical Dilemma

By Bigg Success Staff
08-05-08

Leadership Skills

dilemma

One of the most important leadership skills you can possess is a high moral intelligence.
It may appear that bad behavior is rewarded in the corporate world, but it is usually a very short-term phenomenon. In the long-term, good behavior tends to pay off.

What makes ethical dilemmas particularly difficult is that they often involve conflicts between two or more deeply held beliefs. Consider this admittedly simple example …

A friend of yours just had a baby. He’s the most homely baby you’ve ever seen. While holding her new baby boy in her arms, your friend asks, “Isn’t he the best looking baby you’ve ever seen?”

Now you value honesty. But you also believe you shouldn’t needlessly hurt someone’s feelings. You have an ethical dilemma!

Ethical dilemmas flow upward
All of us are leaders, even if it’s just personal leadership. However, when you start managing others, it’s crucial to have a framework in place to deal with ethical dilemmas. Leaders must learn to apply their values, aligned with the values of their organization, to these situations. Ethical decisions are often trade-offs between:

  • Utility – the value delivered to the stakeholders in your organization
  • Rights – entitlement to something
  • Justice – equitable sharing of pain and pleasure

Because of these trade-offs, leaders must be prepared to deal with ethical dilemmas because these decisions tend to flow upward. So leaders must develop a framework to handle these inevitable challenges.

The benefits of an established framework

There are at least four benefits to putting a framework in place for making ethical decisions:

  • Efficiency – decisions can be made more quickly
  • Consistency – results in more systematic outputs
  • Payback – builds emotional goodwill with your constituents
  • Self-respect – you feel good about yourself when you look in the mirror

3 steps to solving ethical dilemmas

#1 – Know your values
There are certain values about which society agrees. For example, we tend to value honesty. Our discussion here isn’t designed to change your values – instead, it’s about applying them. Before you can apply them, you have to know what they are.

If you haven’t formally contemplated your values, or even if you haven’t thought about it for awhile, check out our article on core values.

Application: Create your list of core values.

#2 – Select a model
According to the book, Moral Issues in Business, ethical theories can be divided into two classifications: consequential theories (the formal term for these is teleological theories) and non-consequential theories (formal name is deontological theories).

The following is not a complete list of ethical theories, but it certainly covers the most significant ones for business people.

Consequential theories
With consequential theories, actions are judged by outcomes. If an action results in a positive result, it is morally right. If not, it is wrong.
Egoism – An act is moral if it promotes your best long-term interest.

Strengths Weaknesses
– Useful for decision-making – Ignores wrongs
– Flexible – Ignores interest of others
– Doesn’t build relationships
– Inconsistent (i.e. right for me, wrong for you)
– Can’t resolve conflicts of interest

Utilitarianism – An act is moral if it produces the great ratio of good to evil for everyone.

Strengths Weaknesses
– Useful for decision-making – May ignore wrongs
– Flexible – May conflict with justice
– Recognizes interests of all – Difficult to design rules
– Resolves conflict of interest

Situational – An act is moral if it creates the greatest amount of love.

Strengths Weaknesses
– Humanizes decisions – Lacks definite criteria for decision-making
– Rejects moral legalism

Non-consequential theories
According to non-consequential theories, a factor (single rule non-consequential theories) or factors (multiple rule non-consequential theories) other than the outcome should be considered when faced with an ethical dilemma.

Single rule

Golden Rule – An act is moral if you treat others the way you would wish to be treated.

Strengths Weaknesses
– Personalizes decisions – Needs modification to fit commerce
– Brings fairness into play – We can’t know how others feel and think
– Carries childhood teachings into business

Categorical Imperative (Kant) – An act is moral if you would wish that everyone behaved in the same manner.

Strengths Weaknesses
– Useful for decisions (i.e. do your duty) – Doesn’t resolve conflicts of duties
– Recognizes responsibilities – Subject to misinterpretation of duty
– Provides humanistic dimension – Results of acting on duty can be disastrous
– Respects rights of others

Multiple rules

Prima Facie Duties (Ross) – An act is moral if you fulfill your duties; if there is conflict, fulfill the duty to which you are most obligated. Prima facie duties include, but are not limited to: fidelity, gratitude, justice, beneficence, self-improvement, and non-injury.

Strengths Weaknesses
– List of duties is educational in itself – Difficult to determine weight of duties
– Sensitive to consequences – No basic agreement on moral principles

Maximin Principle of Justice (Rawls) – An act is moral if it provides an equal amount of liberty for you and others, except when social or economic inequalities exist. In that case, the worst-off in society should benefit more from the act.

Strengths Weaknesses
– Shows inherent respect for individuals – Concerned only with justice
– Encourages social responsibility by all – Assumes a high level of rationality
– Shows concern for less fortunate – Assumes acting without self-interest

Proportionality (Garrett) – An act is moral if, in engaging in it, you don’t will a major evil to you or anyone else and if you don’t will, risk or permit a minor evil to yourself or anyone else without a proportionate reason.

Strengths Weaknesses
– Synthesizes most useful theories – Definitions are vague
– Provides flexibility without immorality – Highly subjective

You probably noticed that all of these theories have weaknesses. So you may think that selecting an ethical theory is an exercise in futility. However, once you select the ethical theory that you feel is most closely aligned with your core values, you’ll find solving ethical dilemmas much easier. You can recognize the weakness of your method, while feeling confident in your process.

Application: Choose the ethical theory which most closely aligns with your values.

#3 – Use a problem-solving process

Now you know your values and you have a model with which to apply them. The remaining piece is to follow an orderly process to solve the problem, because not all ethical dilemmas are as simple as your friend and her baby that we discussed earlier.

We recommend that you SOLVE IT! That’s our acronym for the timeless problem-solving process. When you follow a process such as this to solve an ethical dilemma, or any problem for that matter, you feel good about your ultimate decision. You know you’ve considered all of the alternatives and chosen the best alternative under the circumstances.