3 Reasons Employees Act Unethically - Network for Business Sustainability (NBS) (2024)

Employees’ ethics at work are driven by individual, issue-specific, and environmental factors. Building an ethical company requires addressing them all.

What causes employees to steal, lie, or behave aggressively? Unethical behaviours like these can be driven by individual, issue-specific, and environmental factors.

Researchers Jennifer Kish-Gephart, David Harrison, and Linda Treviño analyzed 136 academic studies of ethical and unethical choices. They examined what leads to unethical intentions and behavior and how employers can reduce it.

3 Reasons for Unethical Behaviour

The researchers describe the different factors as “bad apples” (individual factors), “bad cases” (issue-specific factors) and “bad barrels” (environmental factors). Here’s how they play out.

1. Bad apples (individual factors): Unethical choices are more likely from people with specific personal characteristics — specific views and values. Overwhelmingly, these employees are driven by self-interest. For example, they manipulate others for their own personal gain, fail to see the connection between their actions and outcomes, and believe that ethical choices are driven by circ*mstance. They obey authority figures’ unethical directives and act merely to avoid punishment.

Margaret Jones is a supervisor at a production plant during a disease outbreak. Employees are complaining about inadequate protection. Margaret must decide whether to act on the concerns – including taking them to her management. She thinks: “I’ll only get in trouble with the boss. This outbreak is a situation beyond our control. I need to keep focused on what’s best for me; that’s the approach that’s worked for me so far.”

2. Bad cases (issue-specific factors): An employee might make an unethical choice in one situation, but not in others. Some issues are more likely to lead to unethical choices. Employees are more likely to act unethically when they don’t see their action clearly causing harm — for example, when the victim is far away or the damage is delayed. Unethical choices also occur when an employee feels that peers will not condemn their actions.

Melanie D’Souza sources material for a sign-printing company. She’s heard about a new material that degrades more easily in landfills. She’d need to do extra research to investigate the material, but she thinks the effort is worth it. “I live in this community,” she explains to a colleague. “I know our landfills are filling up, and I know it’s an issue local people care about.”

3. Bad barrels (environmental factors): Unethical choices are more likely when the organization encourages individualistic behaviour rather than doing what is best for other employees, customers, and the community. For example, the performance management system might reward individual bottom-line achievement, no matter how it is achieved.

“When I started here, I knew getting the bonus was mattered,” said Jan Svenson, a salesperson at a financial products firm. “That’s how everyone in the company knows who’s a winner and who’s a loser. You can cut some corners to make your targets, but don’t come up short.”

Two things that don’t influence ethical choices: Research doesn’t support two common ideas about what drives ethical behaviour. Demographic qualities —employee age, gender, and educational level — have little effect on unethical action.

And, the existence of a code of conduct does not curb unethical actions, although enforcement of such a code does. The researchers suggest that stated codes of conduct have become so common that they have lost their power.

How to Keep Employees Ethical

Strategies exist for addressing bad apples, cases and barrels. The researchers recommend these actions for companies.

• Bad apples: Use selection tests to hire employees less inclined to unethical behaviour. For example, measure applicants’ locus of control (to see if people believe ethical choices are driven by circ*mstance) and their conscientiousness (within the Five-Factor Personality Model). New research shows that someone’s honesty and humility, their tendency to be fair and genuine in dealing with others, also reduces unethical behaviour. A Six-Factor Personality Model called HEXACO measures Honesty-Humility.

• Bad cases: Link unethical behaviour to the harm it causes. Show employees the serious impact of unethical behaviour on a specific victim, especially one similar to the employee. For example, employees could meet with victims of similar actions.

• Bad barrels: Enforce a code of conduct that defines and reinforces behavioural expectations for ethical conduct Enforcement could happen, for example, by visibly disciplining rule violators, no matter their level or status. HR systems should insure that living the organization’s values is a prerequisite for promotion to leadership positions. Leader role modeling and informal norms can also communicate that unethical conduct is acceptable.

Make Ethical Choices Automatic

Often ethical choices are impulsive, rather than calculated, the researchers report. People first do things, and later rationalize them, or first feel things, and later think about them. This tendency means that ethical choices need to become almost automatic. David Harrison told NBS: “Repeated, regular engagement with ethical matters and routine processing in moral ways is going to reap the most dividends. Ethical habits, organizational cultures, and consistent norms, along with the personality features and individual differences, shape outcomes.”

After all, we all tend to follow our self-interested impulses. “The key to solutions for all of the causes is to find some way to check that impulse,” said Harrison. Making good decisions automatic is the best way to do that, and businesses can do a lot to create a context that supports that effort.

This article was originally published in 2010 and updated in 2020 and 2022 through exchange with the researchers. Linda Treviño, David Harrison, and Jennifer Kish-Gephart reviewed the article and contributed new insights.

Read the research

Kish-Gephart, J., David A. Harrison, and Linda Klebe Treviño. 2010. Bad apples, bad cases, and bad barrels: Meta-analytic evidence about sources of unethical decisions at work. Journal of Applied Psychology, 95(1): 1-31.