When we interview a college graduate for a job opening, what are the essential qualities that we look for? As this article outlines, none of the top 10 hiring qualities directly relates to honesty. Yet, losses due to employee theft, a direct consequence of dishonesty, are staggering. As per the report by The Association by Certified Fraud Examiners, a typical organization losses 5% revenues to fraud each year. JP Morgan had to suffer a loss of 7 billion including regulatory penalties and losses because of employee frauds. Historically, companies have even gone bankrupt because of employee fraud.
As the leading psychologist Dan Ariely, explains that even though dishonesty is very common at companies, big cheaters are still not common. In his research, interacting with many big cheaters, he found a clear pattern that most of them were cases of slippery slopes. In slippery slopes, we start with doing small acts of dishonesty, often out of desperation or under pressure. Slowly, we make such small acts part of our working model and this gradually leads us to big acts of cheating or stealing. Such small acts of dishonesty often get accepted within an organization and they set up the ground for future deterioration and decline. For example, employees who deliberately stay late to avail cab drop and night dinners often get praised for their hard work. Another example is employees not applying for leaves even though they are not coming to office as compensation for extra hours of work.
Even though companies suffer huge losses because of individual acts of dishonesty, environment plays an important role. As Wharton psychologist, Adam Grant explains that we genealogical inheritance accounts for 50% of our values and this leaves a wide scope for improvements by environment. Dan Ariel, also finds that environmental influences significantly effects acts of honesty or dishonesty. Entrepreneur & fellow at Stanford University, Vivek Wadhwa shares his own experiences of starting and sustaining multiple successful companies following the strong ethical values and importance of company culture in building an ethical and successful company.
In setting up the culture of honesty, allowing colleagues to speak up, even for their mistakes and praising them for owning mistakes has a big impact. Interestingly, as this article tells, even start-ups are opening up about their difficulties instead of posing a facade of a successful startup. Consistently communicating the importance of honesty and its virtues stimulates building an ethical environment.
In an ancient Chinese story a king chose his successor based on seed test. He gave burnt seeds and asked everyone to put in effort to grow a plant from these seeds, and come back after few months. Many retuned with beautiful plants but the only guy who returned with an empty pot, as plants can’t grow from burnt seeds, was rewarded and announced as the next king. In practice, we also need to recognize and reward honesty at the earliest stage of hiring. Asking simple questions about honesty can lead us to have honest employees who can build and maintain a strong foundation.
In HiSpark, we try to motivate the students to be open and forthcoming in communication, allow them to do mistakes and appreciate when they own their mistakes. We communicate incessantly about importance of honesty and advantages of working with honest and ethical colleagues. To know more, please visit www.hispark.in.