Ethical lapses distract U.S. workers

New study from LRN finds U.S. workplaces at risk for reduced worker productivity and scandal

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LOS ANGELES, CA – May 8, 2007 – Three in four Americans working full time encounter ethical lapses in the workplace; more than one in three have been distracted by them; and one in 10 believe a current issue at their company could cause a scandal or business disruption if it becomes known, according to new research from LRN.

"Ethical lapses in the workplace, even seemingly minor ones, cause friction, dissonance and distraction that negatively impact company performance," said Dov Seidman, CEO and chairman of LRN. "How employees act and make decisions is a byproduct of their corporate culture. By engaging employees in shared values and educating them on the company's expectations for appropriate conduct, companies can inspire both principled and profitable performance from their workforce."

Ethical lapses cause distraction in the workplace

• Seventy-three percent of Americans employed full-time report encountering ethical lapses on the job, with one in three (36 percent) saying they have been distracted by such an incident.
• More than one in three respondents who encounter ethical lapses say these incidents happen at least once a week.
• Nearly four in 10 of those respondents who report being distracted spent a day or more distracted, including 11 percent who spent a month or more.
• One in 10 American workers believes a current issue at their company could create a scandal or business disruption if it was discovered. One in three of those who were distracted by a lapse in ethics or questionable behavior say they are aware of an issue that could create a scandal or disruption.

Paul Robert, associate general counsel & director, contracts & compliance for United Technologies Corporation, said, "Ethical lapses – even small ones in whatever form - harm the perception of a values-driven corporate culture. Questionable behavior by one employee can demotivate others, and an accumulation of small incidents detracts from productivity and job satisfaction. I draw the analogy to failing to repair broken windows - not paying attention to the small issues signals the company is willing to tolerate a level of questionable behavior. We address the 'minor' issues because they show our people that high standards and performance are what we care about, and that is what enables us to identify and navigate around our highest risks."

Division in how to handle ethical lapses

• Employees are at odds in how to handle the causes of their distraction, being almost evenly divided between handling it themselves (43 percent) or involving company management (48 percent).
• Employees get others involved in incidents of ethical lapses or questionable behavior at work; about half of Americans employed full-time, 46 percent, say they inform someone else. Those who report being distracted by an ethical lapse tell an average of eight other people, and an average of three of them also lost time because of the incident in addition to the original distracted employee.
• One in three Americans working full-time, 36 percent, say that they have reported an incident they believed to be unethical or questionable to management. Those observing an incident, yet do not report it to their employers, cite several reasons for not doing so, with the top three being lack of confidence in how management would handle it (14 percent), lack of comfort in reporting (13 percent) and lack of a formal reporting procedure (11 percent).

Survey methodology

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