Almost every day, there is a story in the news about an employee acting unethically. Whether it’s an executive or frontline employee, it seems that it is within human nature to act unethically. And as the recent example from Wells Fargo scandal shows, management plays a key part in setting the example for ethical behavior.

In fact, the most recent National Business Ethics Survey states that 41 percent of employees reported seeing misconduct in the office. From this statistic, we can see that many of these incidents go undocumented. But why do these behaviors happen in the first place? Sure there is always the occasional bad apple but is there more at play here? Let’s review some of the reasons why your employees might make unethical decisions.

What Causes Employees to Make Unethical Decisions

1. Pressure to Succeed

Employees may choose to act unethically based on unrealistic expectations to succeed. For example, a salesperson may make false claims to secure a deal to meet their quota. With Wells Fargo, employees opened up fake accounts and credit cards in their client’s name to make quota. The quota, however, was unrealistic and almost impossible to make without cutting corners. In order to keep in good standing with their managers and keep their jobs, employees may make unethical decisions.

To help combat this notion, managers should discuss their job performance expectations with employees and any specific challenges employees face meeting these goals. They might discover that they need to change the quotas or provide the employee with additional resources-but they won’t know until they ask.

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2. Employees Are Afraid to Speak Up

Another reason employees don’t report unethical behavior is that they are fearful of the consequences. For one, employees may fear retaliation from their coworker who they are reporting. The employee might also fear getting a bad reputation among his or her coworkers. On top of this, many employees are don’t know how their supervisor will react. They fear they may get demoted or fired if their supervisor doesn’t believe their claim.

To relieve their fears, consistently reassure your employees that retaliation for speaking up is against company policies. Encourage managers to communicate with their employees about potential violations.

3. Lack of Training

Many organizations make the mistake of assuming their employees understand which behaviors are unethical. Employees may not know an activity they see on a daily basis is unethical or illegal. For example, a employee may not know that giving a potential client tickets to a sporting event could constitute a bribe.

Training employees on what behaviors are unethical can help lower your organization’s risk. Moreover, training can also help employees determine what actions to take if they witness unethical behavior.

4. There’s No Policy for Reporting

Employees also need to know how to report potential ethics violations. Having a policy in place helps keep the information from falling into the wrong hands. For instance, if your organization’s process is to go straight to HR, this prevents the employee from first going to his boss. Also, some employees may wish to stay anonymous. An anonymous drop off or hotline for employees to call and report violations or suspicions can ensure you discover most violations.

5. Managers Setting Bad Examples

Many instances of unethical behavior stem from the examples set by the employee’s manager. Managers should always be conscious of their actions and how employees view them. For example, a manager may lie to a customer about a contract. If the employee witnesses this, they may assume they are free to do the same. Employees may also become scared to defy their manager in fear of losing their job. They may also avoid reporting unethical behaviors in fear of repercussion.

Make sure your managers are aware of their responsibilities for preventing unethical behavior. It’s also important to ensure you hold them accountable for violations.


Unethical decision making is something many employees falls victim to. Whether it’s to make more money or keep their jobs, employees will sometimes break the rules. Having a clear policy, like a code of conduct, in place that explains your expectations, along with training is a great way to counter unethical behavior.

Also, don’t forget to hold managers accountable for their actions and communicate the process for employees to report potential violation. With these efforts combined, you’re well on your way to ensuring your employees act in an ethical fashion.

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