If Good Ethics Is Good Business, What’s The Problem?

One employee’s actions can cause a major ethical breach whether they work for a Fortune 500 company or an indoor tanning salon. Salon owners and managers need to understand the importance of good business ethics.

A young man in his late 20s worked diligently for a financial services company for five years. He was well-versed in the legalities of the industry and received multiple awards for surpassing his sales goals. Then one of his top producers decided he should be compensated for doing business with the young man’s company—which is illegal and highly unethical—and went so far as to put his desire in writing.

The young man took the letter directly to his manager. His manager said, “Look, this stuff happens. You need to be a team player and not make such a big deal of his request. This stuff has been going on since before you got here and will continue to occur, so just pretend this never happened.”

The young man left the company not long after the occurrence because he did not want to be working there during the fallout that was sure to come. Not one year later, the company sold off the department because of lackluster sales.

So, if we know that being ethical will help business, what is the problem?

The problem is that it’s difficult to remain committed to high ethical standards— but it is not impossible. Great leaders are those who know adhering to ethics is good business practice and include the most important, yet most neglected, step in that practice by communicating the importance of ethics through their actions.

Do you remember that annoying kid from your childhood who would shout things like “I didn’t know” or “that’s not fair” when told he was out of the game? Well, you might face a similar situation in business if ethics and compliance issues are viewed as arbitrary or ambiguous. However, the stakes are much greater in business than they are on the playground.

A written code of ethics helps to negate the “I didn’t know” argument. Most businesses and employees view themselves as ethical, but a code of ethics helps to remove ambiguity and clarify exactly what is ethically acceptable. Introducing it early on in the employment process and continually reinforcing the importance of ethical behavior can save your salon time, money and embarrassment. It also communicates to the employees that the code is not just a statement framed on the wall. The entire salon abides by this code, believes in this code and puts the code in action on a regular basis.

A successful training program does not stop with one presentation. An ongoing approach to training employees on ethical decision-making and the salon’s ethical culture is paramount.

The state of Illinois recently came under scrutiny in regard to having a mandatory online ethics test for all its employees. It was slated to take about 30 minutes to complete; some employees were reprimanded for completing their test in 10 minutes. The employees were then asked to sign a noncompliant packet, when in fact, they believed they were compliant because they had taken the test.

The message here is that an online test is not an appropriate training tool. It’s a test that takes participants 10 to 30 minutes to complete; therefore, how effective can it be in training the employees about making ethical decisions, working with customers in an ethical manner and developing an ethically-sound environment?

An October 2005 study conducted by Reuters concluded that more than half of U.S. workers have seen at least one type of ethical misconduct in the workplace. However, 45 percent of these workers did not report violations because they feared retaliation or felt that nothing would be done to denounce the unethical behavior.

Salon owners and managers may not have to worry so much about catching the unethical behavior if they reward the ethical actions of their employees. The saying “an ounce of prevention is worth a pound of cure” applies to the health of a business as well as health of a person.

The following are examples on how to reward ethical behavior:

• Have a simple salon process to report ethical actions. A good medium could be a box, similar to a comments/suggestions box, where any employee can provide a documented example of witnessing someone taking the high road and following the salon’s code of ethics. 
• If you have a process where employees can report unethical conduct, do the same for the ethical conduct. Salon owners or managers can write a note of congratulations and thanks in a specific situation where ethical behavior was demonstrated. It is important to do this even if a sale was not completed.
• Publicly acknowledge the person for their ethical behavior. This shows that ethical behavior is seen and appreciated, which communicates a positive message to all employees. Soon, all employees will want to be recognized for the same reason. Can you imagine what this would do for your salon’s level of ethics?

Developing a healthy, robust and ethical organization is not easy. It takes courageous leaders who know what is right and are willing to put forth the time, effort and resources needed to ensure that the entire salon staff is well-prepared to conduct themselves ethically. This process is no simple feat, but one that ultimately will determine the success or failure of your salon. 

Frank Bucaro is an author, speaker and consultant specializing in the benefits of ethics for business growth and personal success. His clients range from Fortune 500 companies to associations to small businesses. His latest book, “Trust Me! Insights into Ethical Leadership,” highlights the unique role of ethics in leadership today. He can be reached at (800) 784-4476 or www.frankbucaro.com.