People & Organizations

Master of Business Administration

Executive Summary

Organization culture can be identified as collective behavior of people within an organization

and meanings behind their actions. According to Bruce Perron (2014), it defined as jointly
shared description of an organization from within. Every organization prefers an ethical
culture. Culture of the organization develops overtime and it created by the people who work
for the organization.

An organization is nothing without its people. People comprises human element of the
organization. It is the major resource, which drives activities of the organization.
Effectiveness of achieving the purposes of the organization and sustainability of the
organization within this competitive environment depend entirely on the people in the
organization. Therefor people management becomes crucial task in the modern organizations.

Many organizations in current business environment face challenges due to unethical

conducts of its employees. Unethical behaviors can be described as, behaviors breaking the
rules of the organization which are designed to maintain the fairness within the organization.
There may be many reasons for behave in an unapproved manner by the employees, some of
those reasons are to gain financial benefits from outsiders, ignorance within work place,
discrimination, damage the trust about employer and various other reasons. Due to those
reasons employees executes misbehaviors such as badmouthing about company, providing
important information to competitors, stealing and lying and use illegal methods for getting
promotions and recognition. Therefor to gain the ethical behavior of employees better
management of people within the organization are crucial.

Management of people within the organization focuses on building high performance culture.
Trusting the employees and giving responsibilities for them lead toward creating an ethical
culture organization expects. Motivation of employees helps any organization to drive toward
its success. Motivated employees have feeling that they are valued by the organization and
due to that they only engage in activities which creates value toward the organization.

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Table of Contents

Executive Summary ................................................................................................................... 1

List of Tables & Figures ............................................................................................................ 3

01. Introduction .......................................................................................................................... 4

02. Challenges and Issues Organization Faces .......................................................................... 5

03. Challenges in Building of an Ethical Workforce ................................................................. 9

04. Changes and Approaches required to Ensure Ethical Behavior of Employees ................. 12

05. Conclusion ......................................................................................................................... 16

References .................................................................................................................................. 4

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List of Tables & Figures

Figure 1 : Gender of Workforce................................................................................................. 7

Figure 2 : Age analysis of workforce ......................................................................................... 8

Figure 3 : Employee turnover 2014- By Age........................................................................... 10

Figure 4 : Information leakage process ........................................................................................

Figure 5 : Values drive behavior Approach ............................................................................. 12

Figure 6 : Means for gain high performance of employees ..................................................... 13

Table 1 : Value driven Behaviors ............................................................................................ 15

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01. Introduction

ABC Bank is reputed bank in Sri Lanka, it is recognized as Best Retail Bank in Sri Lanka by
the Asian Banker magazine for seven times from 2007 to 2015. It is the first bank in Sri
Lanka which obtained international credit ratings and it gained AA-(lka) rating by Fitch
Rating. Its vision is to be the acknowledge leader and chosen partner, in providing financial
solutions through inspired people (ABC Annual Report, 2014). ABC targeted at fulfilling the
needs of the generations of Sri Lanka they serve. They are continuously expanding their
activities by size, speed, strength with new innovative technologies to satisfy their
stakeholders.

It was established in 1888 and it conducting business more than 127 years, because of the
trust they have gained from their customers through the excellent service they provide. In
2014, it had group assets around Rs. 600 Bn and the profit after tax of the group is Rs. 10 Bn
during the year. It has large network of branches around 249 all around the country. ABC
provides service under two main categories, retail banking services and micro finance
services. Retail banking services includes activities like deposit mobilization, pawning,
leasing, housing loans, credit cards and personal loans. Main products under retail banking
are ABC Pathum Vimana Rewards, SHANTHI housing loans, ABC Leasing, ABC Singithi
Lama, ABC capital savings, ABC Privilege current account etc. Micro finance service of the
bank targeted at provides lending for agricultural activities, through products like ABC
Youwanabhimana and ABC Adishtana. (ABC-Annual Report, 2014)

ABC highly value its employees, because they are the foundation of its success. There are
around 4,450 employees are working at ABC. It people management activities focus at
gaining higher engagement score of employees, increasing staff productivity and retention
rate and strengthen the ABC employer Brand. ABC use strategies like two way relationship
to form team spirit, training and development programs, share information about targets to
accomplish, to strengthen the employees with knowledge and achieve expected results.

This report analyzes about the challenges ABC has to face due to misbehavior of its
employees and recommendations to prevent those types of misbehaviors in future.

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02. Challenges and Issues Organization Faces

ABC Bank (ABC) has identified unethical behavior of employees of the organization, due to
the incident of leaking the Director’s E-mail conversations about ‘Financial Deal about take
control of Ceylinco Insurance’. This discussion is about enter into Memorandum of
Understanding (MoU) between ABC and Ceylinco Insurance Company shareholder, about
financing shareholder to purchase 23% stake of Ceylinco Insurance which value Rs.7.3
billion and then ABC purchase on its own 20% of Ceylinco shares which values around Rs.
6.4 billion. This information has leaked to former ABC unionist, before ABC and
shareholder take decision on signing MoU. Due to exposing of that information, ABC doubt
about loyalty of employees because one or more employee involved in this action to create a
confusion situation in ABC. (ABC-Annual Report, 2014)

ABC has to conduct investigation on employees of the organization, who behave unethical
manner to expose the important information to outside world, before publicize it by the
company. Suspected parties about exposing of the information are, IT department of the
bank, who can access to the main server of the bank and they have freedom of sharing email
conversation of the email server to other servers. Other than that Internet and email service
provider of company, they can also be suspect in this situation for leaking the information.
These employees of the ABC act in unethical manner by breaking the policy of the
organization, about security of information and expose them to third parties.

Email can be considered as powerful tool of communication because of its cost effectiveness
and fast delivery of massages. ABC also uses this communication method, to make decisions
regarding the company’s activities quickly. Not only by the lower level employees, but also
by senior managers of the ABC use this communication tool for fastest communication
purpose. Massages delivered through email can also be important business discussion and,
unethical employees of the organization hack that information to create distraction situation
in the organization. ABC also faces that type of situation due to misbehavior of individual or
group of employees by leaking this email conversation.

Due to this misbehavior of employees, ABC have to face several issues coming from
different parties as follows:

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1. Damage to the trust of the customers and fear about risk of revealing their
important information provided to the bank.

Banks are dealing with financial assets of the people, there for protecting customer’s identity
is important when conducting operations. If financial information of consumers are theft by
third parties, it arise unsecure situation for their lives and also to their assets. Due to this
leakage of ABC email conversations, it arise doubt within consumers mind about protection
of the information they provided to the bank, such as name, assets details, account balance,
credit card information and other security details. There for it leads to reducing the trust of
consumers about the bank. Therefor attracting new customers become much difficult due to
damage of the image.

2. Competitors can obtain strictly confident information of the bank and it

adversely affect toward competitiveness of the bank.

Some employees are revealing the confidential information of the company, to its
competitive organizations to gain financial benefits. Because of this type of unethical
employees, it arise risk of competitors gain information regarding products going to introduce
to the market, new strategies going to use, new technologies going to develop. Because of the
leakage of that information, competitors will act quickly against the company by using
company information. There for it results in losing market share and occur bankruptcy
situation. Banking industry in Sri Lanka developing rapidly and every bank planning on
inventing something new for the market, if those information are known by the employees
and give them to competitors, it gives opportunity for another banks to invent that product
before the company. Therefor misbehavior of revealing bank information, will lead to reduce
the profitability of the bank.

3. Damage to company reputation and good will

Misbehavior of employees results in damaging company image and reputation; it will lead to
discourage the new investors. It results in reducing market share of the organization.
Unsecure nature for the information within ABC, negatively impact on the image of the bank.
There for bank should investigate on the employees who behave unethically and give them
necessary punishments for prevent these wrong behaviors in Future.

Leakage of email conversation details to the third party is the major issue ABC faced, due to
unethical behavior of employees, apart from that there are some other issues which are not

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appropriate for manage people within the organization effectively. Those can be describing as
follows.

Unbalance Gender Distribution within the organization

Gender of Workforce

Females
38%
Males
62%

Figure 1 : Gender of Workforce

According to the Chart, large portion of the employment opportunities are filled with males.
ABC assumes females will not be adaptable to their digital culture, because ABC highly
deals with IT related environmental practices. Even though ABC does not reflect higher
gender discrimination according to this chart, but it is not in a balance condition. Therefor
bank should increase their attention of recruiting female employees for bank even more. Bank
operations are suitable also for females and at present there are highly energetic and
knowledgeable females in Sri Lanka than past. They are much talented to deal with
technological environment. Due to those reasons ABC should give equal chance for the
females as well, for use their talents in this highly dynamic banking industry.

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Balancing the needs and aspirations of a multigenerational workforce

Age Analysis
18-25
1%
7% 13% 25-35
9% 35-40
40-45
20% 31% 45-50
50-55
19% >55

Figure 2 : Age analysis of workforce

According to above chart it shows ABC consist with employee’s age range from 18 to more
than 55 years. Due to differences of their attitudes managing them become very difficult task.
Fulfilling the expectations of this diversified workforce, is the crucial task lies with the
management of the organization, to gain best performances of them. Young generation likes
to deal with more innovative and technology related environment and they are motivating by
doing new things and provide recognition for them. And also they like to work in a company
which provides incentives based on their performances and promotion opportunities. On the
other hand employees who are more than 45 year of age, expects the safety of their jobs. If
ABC unable to fulfill these aspirations of the employees, it encourage employees to behave in
an unethical manner to fulfill their needs and wants.

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03. Challenges in Building of an Ethical Workforce

Above chapter examined about issues ABC has faced due to misbehaviors of its workforce.
In this chapter going to examine about what causes employees behave unethical manner and
challenges of building ethical workforce at ABC. Employees of the ABC shows dishonesty
by providing the information about email conversations ABC had with Ceylinco shareholder.
Following are main causes for this kind of dishonest behaviors.

1. Job Roles are not match with the skills of employees.

Due to diversity of the working environment of the bank in terms of technology, processes,
division of work, it required specialized knowledge and skills to perform the job. Therefor
with the time, employees have to develop their skills to fulfill the requirements of the job.
According to Douglas J.D.(1971) explained that technology shapes the life style of the people
at present, through formal education about the technology within the organization, it leads to
create a competitive edge to an organization over their competitors in the market. ABC
highly consideration about technological advancements and it leads to changes of the size of
groups employee include, membership of the group and interpersonal interactions. With these
changes employees may unclear about, what ABC expects from them and how should they
serve to fulfill that expectation. These changes arises changes of job roles of the employees
and due to that their available skills may not enough. It makes employees in a confusion
situation about, clarifying job roles and gaining skills. Due to that they use unethical and easy
ways to fulfill their targets.

2. Lack of Support given by top level management.

Employees, who work in the banks, are works in a stressful working condition. They have
less free time in the working place and have to do more than one tasks at same time. And also
targets should be covered to be survive and to get promotions in the banking sector. Due to
these stress of jobs in banks, employees are looking for support from their supervisors and
senior managers. When considering about ABC, it shows that, even though it has physical
tools for conducting operations quickly, it consider less about giving emotional support for
their employees. Therefor the employees try to bad mouthing about bank and complaining.
Due to that they are act with having negative attitude toward bank, which leads to create

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unethical practices. If ABC employees are given appreciation and guidance by their
managers, it would help on reducing misbehaviors.

3. Not having methodology for value the work of employees.

Another challenge for building ethical work force is, not having proper appreciation process.
To improve the productivity of the employees of ABC, one best method can be use is given
appreciation they seek. But ABC does not give priority for give intrinsic and extrinsic
rewards for the employees of the bank. It has result in reducing the motivation level of the
employees in the bank. Employee of this bank have attitude, that the bank does not give
recognition for their hard work, and due to that misbehaviors like lack of trust and loyalty,
low engagement in activities and miscommunication can occur.

4. Lack of Inspiration.

Employees of the bank demotivated due to, their attitude that managers of the bank uses their
energy to make money for the benefit of shareholders. And also believed that their job has no
real purpose and only act as the managers lead them. Because of this, they are seeking the
jobs which give attention for them even more. Because in that way, they feel that they are
part of the bank. As a result of this negative attitude, employees are attracted to the employers
who care for them more. It leads to increase in employee turnover within the bank and
information regarding bank can be expose to the competitors, through these demotivated
employees.

Employee Turnover 2014- by Age

5% 14% < 25
25-35
33%
35-45
26%
45-55
22% >55

Figure 3 : Employee turnover 2014- By Age

Above chart shows turnover percentages of ABC employee’s age vise. 26% employees who
left the bank, includes the age between 25 to35. The main reason for this high percentage of

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young generation turnover is that not giving proper knowledge by bank, about their jobs and
less means are used for motivating them for doing the job.

5. Weaknesses in security conditions of communication system.

The leakage of email conversation details of ABC to outside party occurs, due to unethical
behavior of employees of the organization. These employees have done this, due to their
negative attitude about current practices of the bank and damage the trust about management
of ABC. This misconduct has done by employees, to destroy the image of the bank and
reduce its competitiveness. If ABC had strict regulations when entering to the communication
systems this incident may not happen. Mainly not having strong security tools regarding the
communication of the bank, provided easy access to those conversation by employees, and
they use that advantage to damage the name of the bank by exposing those information.
Following diagram shows procedure of unethically copying the email conversations of the
company.

Figure 4 : Information leakage process

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04. Changes and Approaches required to Ensure Ethical Behavior of

Employees

It is essential for ABC to use strategies to establish ethical working culture and thereby create
ethical workforce for the bank, due to the issues ABC has faced, because of misbehavior of
employees.

ABC can use ‘Values drive Behavior’ which was introduced by Charles D. Kerns (2003), to
create ethical work force for the bank.

The Ethical
Attitude
Values Behavior

Figure 5 : Values drive behavior Approach

Changing the behavior of the employees to behave in an ethical manner is the base to develop
ethical workforce. Through this approach, ABC able to create as well as sustain the ethical
workplace culture for the long period of time. Values are the foundation of behaviors,
according to type of values within the employees mind, their attitudes are changed and finally
it derives ethical or unethical behavior. As the case described in ABC, employees assumed
ABC less caring for employees, it occur negative attitude regarding the bank in employees
mind and finally it resulted a behavior of exposing the email conversation details of the bank
to the outside world. To prevent this type of misbehavior of employees in future, Values
drive behavior approach is the best method ABC can adapt. In Value drive behavior
approach, values are the important input of formation of attitudes. Therefor first ABC should
establish proper value system within the bank including following values.

Wisdom and Knowledge- Knowledge is employees are aware about the facts which are
essential to conduct operations of job. Wisdom refers to the ability of making decisions by
effectively using the knowledge they have. To create ethical workforce, it is essential for

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employees to be knowledgeable and wise. With that kind of employees, bank able to gain
ethical workforce because they can differentiate right from wrong and have ability to make
right decision in crisis situations, for the success of the bank.

Self-Control - This is essential value for create ethical work force, at present many ethical
issues arise within the organization, because employees do not have self-control, they misuse
the information and properties of the organization to have financial benefits from outside
parties. With the employees with self-control, they always behave targeting the growth of the
organization, other than their individual gains.

Fair Treatment – This value develops trust within employees mind. Bank should provide
equality for the people in the bank, without considering their gender. ABC has issue about
equality of workforce according to gender. Therefor bank should establish proper policies for
establish gender equality and also provide fair return to employees for their commitment and
energy used for the operations. Also bank should not give special privileges to specific
groups because it will lead to destroy other employees trust. Other than that guidance and
support for the employees continuously will lead to inspire employees and to execute good
behaviors which are contributes to the success of the organization.

Recognition- This value creates motivated workforce. This result building the attitude within
the employees that they are essential part of the organization success. Due to the recognition
given within the organization, employee will not think about cheating on the organization and
develop respect toward organization. Recognition provides necessary power for employees
required for their job, and due to that stress can be reduce because they have better
understanding about their job role. Following chart shows that the main driver of the high
performance is giving responsibilities for employees and trusted them. Giving responsibilities
is a method of providing recognition for employees. Employees believed that company have
given that responsibility for them because company trust about their abilities, and it leads to
increase the commitment and engagement of employees towards success of that task.

Figure 6 : Means for gain high performance of employees

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Courage and Integrity- This value drives employee to choose the right actions from wrong,
and act accordingly even though it is much difficult. Unethical workers seeks easiest way of
doing things, which are not relevant for organization. By developing these two values among
work force, results in diminishing unsuitable behavior of employees. And also employees are
encouraged to execute right behaviors for the success of operations.

By spreading these values among its work force, ABC able to develop positive attitudes
within the employees mind about bank, operations, policies, structures etc. and it will lead to
execute ethical behaviors. Following table shows how these values finally ensure the ethical
behaviors of the workforce.

Value Attitude Ethical Behavior

Wisdom and Use of right information for Engage in right activities and
Knowledge decision making with the long using knowledge gained for
time experience solving the problems face by
when conducting operations.

Self- Control Reduction of self-benefitted Doing the activities relevant for

emotions the success of the company
other than concerning about
personal benefits.

Fair Long term success of ethical Reduce gender discrimination of

Treatment behavior depends on fair and work force, establish transparent
justice actions payment policy and it develops
trusted workforce.

Recognition Belief about every one Engage in activities which help

contributes toward success of the to achieve the vision of the
organization organization and do not engage
in the activities which destroy
the image of the organization.

Courage and Able to do the right thing Continuously do the right thing
Integrity constantly for the success of the to achieve expected end result
organization by putting personal feelings

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aside

Table 1 : Value driven Behaviors

By using the Values drive Behavior approach, it helps the bank to develop workforce who
executes ethical behaviors. ABC can successfully apply this approach to the bank culture, by
eradicating the issues which act as restrictions for ensuring ethical behavior of employees.
Those restrictions can be eradicated by using following strategies.

1. Destroy the knowledge gap and provide freedom for employees to do what is right.

2. Attract the talented applicants who have believed on same values as the bank.
3. New recruits should train in appropriate manner to comply with the values of the
bank, which leads to ethical behaviors.

4. Establish systems and procedures for remind the values and commitment of
employees and ensure accountability of employees for converting values into ethical
behaviors.

5. Fair allocation of resources to positively affect the ethical behavior of employees.

Change Management process can used by ABC to adopt this values change behavior
approach. Change Management can be describe as structured approach for ensuring that
structures are thoroughly and smoothly implemented for achieving the benefits of change.
ABC can uses ADKAR model developed by Prosci., a renowned leader in change
management field. Following are the steps can used by ABC to establish the values drives
behavior approach through this model.

Awareness of the need for change- In this step ABC can aware all levels of employees at
ABC about the need for change their behaviors in an ethical way.

Desire to participate and support change- By providing facts about why they need to
change the behaviors, employees can be motivated toward the change effort and create
willingness to participate for this change process.

Knowledge on how to change- This is crucial step. Here ABC can aware employees about
values drive behavior approach, which ABC going to derive ethical behaviors.

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Ability to implement required skills and behaviors- Then ABC can establish the desired
values within the bank which motivate employees toward ethical behavior by using the skills
they have.

Reinforcement and sustain the change- Time to time the personal department of bank can
monitor that values established within the organization drive the behaviors of employees in
an ethical manner as expected, it they have identify some errors, can make necessary
amendments to sustain the values drive behavior approach in a positive manner.

05. Conclusion

Misbehaviors of employees can occur due to variances in values and attitudes of people, who
work within the organization toward achieving one goal. Even though majority of employees
behave in a positive manner to achieve organization goals, few employees may conduct
unethical behaviors, which negatively affect towards organization success. These unethical
practices of few employees, will damage the image and reputation of the organization, and
incur costs and also negatively effects on survival of the organization.

In that sense people management have to play crucial role in any type of organization.
According to Flippo (1980), people management described as the planning, organizing,
compensation, integration and maintenance of people for the purpose of contributing to
organizational, individual and societal goals.

When considering about ABC, leakage of email conversations, gender discrimination and
discrimination based on age can be identifies as misbehaviors in the bank. Because of these
misbehaviors some consequences can occur are damages to the bank reputation and trust,
damages to the trust about the bank within customers mind and competitors able to gain
strictly confident information about bank and it uses against the bank with the aim of
decreasing its competitive position.

Main causes of these misbehaviors occurred in ABC are conflict about job roles within
employees mind, lack of inspiration and support for the employees to enhance their
performances, less priority given for appreciate employees to increase their productivity and
not having proper security system for information delivering through different
communication medias. Organization should not ignorance these kinds of misbehaviors, and
should take actions to solve, correct and prevent problems arising due to misbehaviors.

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As a solution for the misbehaviors in ABC, can recommend using Values drive behavior
approach. This approach illustrates that, by establishing proper values within the
organization, it helps to creates positive attitudes within employees mind and it drive towards
ethical behaviors. ABC can use ADKAR model to change the behaviors of employees in an
ethical way by using values drive behavior approach.

Misbehaviors of employees are inevitable in the organizations in world of work today.

Therefor organization should concentrate on developing suitable people management policies
to prevent misbehaviors can occur within the organization.

References
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Hall of India, New Delhi.

Edwin B. Flippo. (2004). Personnel Management. Grow-Hill, New York.

ABC-Annual Report -2014. (Online) Available at: http://colombostockwatch.com/wp-

content/uploads/2015/05/HATTON-NATIONAL-BANK-PLC-ABC.N0000-2014.pdf

Armstrong, M. (2007), A Handbook of Human Resource Management Practice. London:

Kogan Page limited: pp346-47.

Armstrong, M. (2008). Armstrong's Essential Human Resource Management Practice: A

Guide to People. London: Kogan Page ltd.

Beck, R, C. (2003). Motivation: Theories and Principles, 4/e. Pearson Education India

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http://markets.ft.com/research/Markets/Tearsheets/Business-profile?s=LHL.N0000:CSE

Ferreira,E.J , Erasmus,A. W., Groenewald D. (2009). Administrative Management. Juta

Company: Cape Town.

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Catano, V., Fitzgerald,C., Hackett, Wiesner,W.& Methot, L. (2010). Recruitment and

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Frederick F. Reichheld, Thomas Teal. (1996). The Loyalty Effect: The Hidden Force Behind

Growth, Profits, and Lasting Value. harverd Business School Press.

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