BUSINESS

ETHICS
PR OF. S TE VE N C. JOCS ON, CHR A, M BA

“Employee loyalty begins with employer loyalty. Your employees should

know that if they do the job they were hired to do with a reasonable
amount of competence and efficiency, you will support them.”

Harvey Mackay

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7 WHAT EMPLOYEES OWE EMPLOYERS

TOPIC OUTLINE

֎ Loyalty to the Company

֎ Loyalty to the Brand and to Customers
֎ Contributing to a Positive Work Atmosphere
֎ Financial Integrity
֎ Criticism of the Company and Whistleblowing

INTRODUCTION

Coworkers may express their opinions differently, for instance, agreeing or disagreeing,
perhaps in very animated ways. Although we and our peers at work may not see eye to eye
on every issue, we work best when we understand the need to get along and to show a degree
of loyalty to our employer and each other, as well as to ourselves, our values, and our own
best interests. Balancing these factors requires a concerted effort.

What would you do, for example, if one of your coworkers were being bullied or harassed by
another employee or a manager? Suppose a former colleague tried to recruit you to her new
firm. What is the ethical action for you to take? How would you react if you learned your
company’s managers were behaving unethically or breaking the law? Who could you tell, and
what could you expect as a result? What is the right response if a client or customer behaves
badly toward you as an employee representing your firm? How do you provide good customer
service and support the company brand in the face of difficult working conditions?

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 WHAT EMPLOYEES OWE EMPLOYERS

OBJECTIVES

A F T E R R E A D I N G T H I S P A R T O F T H E M O D U L E ,
T H E L E A R N E R S W I L L B E A B L E T O :

 define employees’ responsibilities to the company for which they work;

 explain how confidentiality applies to trade secrets, intellectual property, and
customer data;
 describe how employees help build and sustain a brand;
 discuss how employees’ customer service can help or hurt a business;
 explain employees’ responsibility to treat their peers with respect;
 describe employees’ duty to follow company policy and the code of conduct;
 discuss bribery and its legal and ethical consequences;
 identify situations in which an employee becomes a whistleblower.

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 WHAT EMPLOYEES OWE EMPLOYERS

LET’S THINK ABOUT THESE!

 Is loyalty something to demand from employees?

 When do you consider something as confidential?
 What are the company’s obligation to its customers?
 How can we contribute to achieve positive workplace
atmosphere?

Loyalty to the Company

A Duty of Loyalty

In general terms, the duty of loyalty means an employee is obligated to render “loyal
and faithful” service to the employer, to act with “good faith,” and not to compete
with but rather to advance the employer’s interests. The employee must not act in a
way that benefits him- or herself (or any other third party), especially when doing so
would create a conflict of interest with the employer. The common law of most states
holds as a general rule that, without asking for and receiving the employer’s consent,
an employee cannot hold a second job if it would compete or conflict with the first
job.

Differing Concepts of Loyalty

There is no generally agreed-upon definition of an employee’s duty of loyalty to his or

her employer. One indicator that our understanding of the term is changing is that
millennials are three times more likely than older generations to change jobs,
according to a Forbes Human Resources Council survey. About nine in ten millennials
(91 percent) say they do not expect to stay with their current job longer than three
years, compared with older workers who often anticipated spending ten years or even
an entire career with one employer, relying on an implicit social contract between
employer and employee that rewarded lifetime employment.

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 WHAT EMPLOYEES OWE EMPLOYERS

LET’S TRY THIS!

The Ties That Bind

If building employee loyalty is a challenge for managers and they see their workers leaving
for better opportunities, what can they do to change the situation? Some companies focus
on team-building activities, company picnics, rock-climbing walls, or zip lines, but do these
actually make workers decide to stay with their company for less salary? The answer is
usually no. The reality is that salary plays an important role in an employee’s decision to
move to a new job. Therefore, retention bonuses are a popular and perhaps more
successful technique for instilling loyalty. The company provides a payment to an employee
contingent on his or her committing to remain at the company for a specific period.

According to a Glassdoor study, when changing jobs, employees earn an average increase
of more than 5 percent in salary alone, not including benefits. Thus, the offer of a salary
increase and/or a retention or performance bonus can help turn many would-be former
employees into newly loyal ones. The same study found that a 10 percent increase in pay
upped the odds that an employee would stay at the company. According to Dr. Andrew
Chamberlain, chief economist of Glassdoor, “While it is important to provide upward career
paths for workers, a simple job title promotion may not be enough. Maintaining competitive
pay is an important part of reducing turnover.”

Of course, a retention bonus may not be enough to keep someone at a job he or she
hates, but it might help someone who likes the job to decide to stay. The Society for
Human Resource Management believes retention plans should be part of an overall pay
strategy, not merely giveaways for tenure. Imagine that your colleague is considering
leaving your firm for another company: Your manager has offered him a retention bonus
to stay and your colleague is seeking your advice about what to do. What would you
advise?

Critical Thinking:

1. What questions would you ask your colleague to better determine the advice you
should give him or her?

2. Consider your summer jobs, part-time employment, work-study hours on campus, and
internships. What meant more to you—the salary you made or the extent to which you
were treated as a real contributor and not just a line on a payroll ledger? Or a
combination of both?

3. What lessons do you now draw about reciprocal loyalty between companies and their
workers?

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 WHAT EMPLOYEES OWE EMPLOYERS

Loyal employees- “being committed to the success of the organization. They believe
that working for this organization is their best option . . . and loyal employees do not
actively search for alternative employment and are not responsive to offers.”
- Loyalty Research Center

Why are employees less likely to feel a duty of loyalty to their companies? One reason
is that loyalty is a two-way street, a feeling developed through the enactment of
mutual obligations and responsibilities. However, most employers do not want to be
obligated to their workers in a legal sense; they usually require that almost all workers
are employees “at will,” that is, without any long-term employment contract.

Confidentiality

In the competitive world of business, many employees encounter information in their

day-to-day work that their employers reasonably expect they will keep confidential.
Proprietary (private) information, the details of patents and copyrights, employee
records and salary histories, and customer-related data are valued company assets
that must remain in-house, not in the hands of competitors, trade publications, or the
news media. Employers are well within their rights to expect employees to honor their
duty of confidentiality and maintain the secrecy of such proprietary material.
Sometimes the duty of confidentiality originates specifically from an employment
contract, if there is one, and if not, the duty still exists in most situations under the
common law of agency.

Employers also want to protect their trade secrets, that is, information that has
economic value because it is not generally known to the public and is kept secret by
reasonable means. Trade secrets might include technical or design information,
advertising and marketing plans, and research and development data that would be
useful to competitors. Often nondisclosure agreements are used to protect against the
theft of all such information, most of which is normally protected only by the
company’s requirement of secrecy.

Loyalty to the Brand and to Customers

Respecting the Brand

Every company puts time, effort, and money into developing a brand, that is, a product
or service marketed by a particular company under a particular name. As Apple, Coca-
Cola, Amazon, BMW, McDonald’s, and creators of other coveted brands know,
branding—creating, differentiating, and maintaining a brand’s image or reputation—is
an important way to build company value, sell products and services, and expand
corporate goodwill. In the sense discussed here, the term “brand” encompasses an
image, reputation, logo, tagline, or specific color scheme that is trademarked, meaning
the company owns it and must give permission to others who would legally use it
(such as Tiffany’s unique shade of blue).

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 WHAT EMPLOYEES OWE EMPLOYERS

The process of getting employees to believe in the product, to commit to the idea that
the company is selling something worth buying, and even to think about buying it, is
called internal marketing.

Internal marketing is an important part of the solution to the problem of employees

who act as if they do not care about the company. It helps employees make a personal
connection to the products and services the business sells, without which they might
be more likely to undermine the company’s expectations.

Obligations to Customers

As the public’s first point of contact with a company, employees are obliged to assist
the firm in forming a positive relationship with customers. How well or poorly they do
so contributes a great deal to customers’ impression of the company. And customers’
perceptions affect not only the company but all the employees who depend on its
success for their livelihood. Thus, the ethical obligations of an employee also extend
to interactions with customers, whom they should treat with respect. Employers can
encourage positive behavior toward customers by empowering employees to use their
best judgment when working with them.

It may take only one bad customer interaction with a less-than-engaged or committed
employee to sour brand loyalty, no matter how hard a company has worked to build
it. In the same way, just one good experience can build up good will.

IMPROVE YOUR CRITICAL THINKING SKILLS

 What can employees do to help create a more harmonious workplace with a

positive atmosphere?

Contributing to a Positive Work Atmosphere

Getting Along with Coworkers

Here are the things you can do at work:

1. Keep an open mind

2. Remember to be kind
3. Avoid doing things that might offend others
4. Make an effort to get along with everyone, even difficult people
5. Do no use social media to gossip

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 WHAT EMPLOYEES OWE EMPLOYERS

Understanding Personalities

Understanding the various personalities at work can be a complex task, but it is a vital
one for developing a sense of collegiality. One technique that may be helpful is to
develop your own emotional intelligence, which is the capacity to recognize other
people’s emotions and also to know and manage your own. One aspect of using
emotional intelligence is showing empathy, the willingness to step into someone else’s
shoes.

Codes of Conduct

Criticisms of the Company and Whistleblowing

IMPROVE YOUR CRITICAL THINKING SKILLS

 When should employees decide to blow the whistle on their boss or company?

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 WHAT EMPLOYEES OWE EMPLOYERS

Whistleblowing: Risks and Rewards

The act of whistleblowing—going to an official government agency and disclosing

an employer’s violation of the law—is different from everyday criticism. In fact,
whistleblowing is largely viewed as a public service because it helps society reduce
bad workplace behavior. Being a whistleblower is not easy, however, and someone
inclined to act as one should expect many hurdles. If a whistleblower’s identity
becomes known, his or her revelations may amount to career suicide. Even if they
keep their job, whistleblowers often are not promoted, and they may face resentment
not only from management but also from rank-and-file workers who fear the loss of
their own jobs. Whistleblowers may also be blacklisted, making it difficult for them to
get a job at a different firm, and all as a result of doing what is ethical.

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CHALLENGE QUESTIONS

No. 1
Loyal employees is defined as “being _____ to the success of the organization…”
a. committed
b. dedicated
c. engage
d. true

No. 2
_____ means an employee is obligated to render “loyal and faithful” service to
the employer, to act with “good faith,” and not to compete with but rather to
advance the employer’s interests.
a. loyalty
b. call of duty
c. call of loyalty
d. duty of loyalty

No. 3
It is the process of getting employees to believe in the product, to commit to the
idea that the company is selling something worth buying, and even to think about
buying it.
a. Marketing
b. Internal Marketing
c. External Marketing
d. International Marketing

No. 4
In terms of confidentiality, _____ might include technical or design information,
advertising and marketing plans, and research and development data that would
be useful to competitors.
a. data privacy
b. trade secrets
c. company secrecy
d. intellectual property

No. 5
It is the act of going to an official government agency and disclosing an employer’s
violation of the law.
a. Striking
b. Greenwashing
c. Whistleblowing
d. Street Protesting

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FINALS_GROUP ACTIVITY #02

Instructions:

1. In relation to the “Whistleblower” movie you just watched last paired activity,
create a video skit/parody good for 2-3 minutes which shows a specific scenario
you want to change in the movie to make it ethical, yet a little lighter and fun.
2. Again, no further explanation at the end of the video is needed. Only the
actuations/dramatization shall explain the video skit.
3. Performance shall be graded using the rubric below:

Component Points
Lines were clear with appropriate volume and intonation. 10
Character was played in a funny and witty manner. 10
Script is clearly delivered. 10
Skit was light and fun to watch. 10
Actions captured and maintained audience interest. 10
TOTAL 50

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REFERENCES

Byars, S. & Stanberry, K. (2018). Business ethics. OpenStax

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