Employee Disengagement Linked to Unethical Behavior

November 29, 2016 by - Leave a comment

Employee Disengagement Linked to Unethical BehaviorI am certain many of you saw the Wells Fargo scandal in newspapers and on the news earlier this year. In short, the bank’s management and culture allowed and even rewarded Wells Fargo employees for opening millions of bogus accounts that customers never requested in order to generate fee income for the bank. Think about that. When you choose where you want to bank, you no doubt are looking for a financial steward you can trust. Upwards of 5,300 Wells Fargo employees knew about the scam. Moreover, the bank is now being investigated for unfairly firing those employees who did the right thing and reported the unethical violations of the bank’s customers.

What kind of culture would allow for this unethical, and yes, criminal behavior? You got it: a culture of employee disengagement, and now a company culture with a fervent distrust of Senior Management.

According to a study conducted by management consulting firm cg42, Wells Fargo’s fake account scandal could prompt at least 44% of the bank’s retail customers to walk out the door, and a loss of $99 billion in deposits and a four billion dollar loss in revenue. As devastating as those projections are, to me, they seem low. Wouldn’t you take your business elsewhere?

The story is made even more ironic and sad due to what was posted on the company’s website at the time:
Wells Fargo’s reputation as one of the world’s great companies for integrity and principled performance depends on our doing the right thing, in the right way, and complying with the laws, rules, and regulations that govern our business. We earn trust by behaving ethically and holding all team members and directors accountable for the decisions we make and the actions we take.

Furthermore, one can only imagine how many of the 264,000 Wells Fargo employees are now actively looking for a new place of employment.

Is there scientific proof that higher levels of employee disengagement lead to more unethical behavior? You bet. A July 2010 Hay Group/Ethics Resource Center study definitively proved that the two topics are highly correlated at a .73 coefficient.1

In life and in business, you always have choices. When you choose to nurture a culture of employee engagement, it will result in making decisions that put your employees, brand, and customers first. As a result, you will automatically act with honor, integrity, and ethics.

 

Source 1: HR Zone, 2016

 

 

Kevin Sheridan is an Internationally-recognized Key-Note Speaker, a New York Times Best Selling Author, and one of the most sought-after voices in the world on the topic of employee engagement. He spent thirty years as a high-level Human Capital Management consultant, helping some of the world’s largest corporations rebuild a culture that fosters productive engagement, earning him several distinctive awards and honors. Kevin’s premier creation, PEER®, has been consistently recognized as a long- overdue, industry-changing innovation in the field of Employee Engagement. His book, “Building a Magnetic Culture,” made six of the best seller lists including The New York Times, Wall Street Journal, and USA Today. He is also the author of “The Virtual Manager,” which explores how to most effectively manage remote workers.

Kevin received a Master of Business Administration from the Harvard Business School in 1988, concentrating his degree in Strategy, Human Resources Management, and Organizational Behavior. He is also a serial entrepreneur, having founded and sold three different companies.

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Email: kevin@kevinsheridanllc.com

  • Jasmine Gartner

    This seems a bit chicken & egg to me – how do you know that disengagement led to unethical behaviour and not the other way around? Correlation doesn’t equal causation, after all 🙂

    • kevinsheridan5

      Great point Jasmine. I can clearly see that perspective as well.

      • RAWLCM

        In either case there is a clear link. And a well documented history of bad things happening in toxic workplaces. In my personal experience, the culture of a group evolves to emulate the behavior of those at the top, or in common terms, stuff runs downhill.

        • kevinsheridan5

          Very good point. Thanks for sharing!

  • jimjr11

    I happen to have had the opportunity to view the previous CEO’s & Chairman, Dick Kovacevich in several board meetings and I can say without hesitation that this eppisode would never have occurred on his watch. Employee engagement had nothing to do with what happened. Believing the leader wanted them to do what they did is the only explanation. Dick’s executives would have known there was no chance he would approve of anything as ethically challenged as what happened under the new CEO. The chicken (leadership) definitely arrived before the egg (employees)