Quest for Honesty and Ethics

For Tina Byles Williams, hiring ethical employees is doing the smart thing as much as doing the right thing. The pension funds and other institutions that pay her 10-year-old firm, FIS Group Inc., for investment advice and management naturally expect that none of her 16 employees will make off with their funds. They also expect no conflicts of interest or other improprieties -- a matter brought into high relief three years ago when a former employee's activities made Williams consider measures to prevent unethical employee behavior.

Since the incident, the $6 million company has re-examined its process for hiring, evaluating and retaining ethical employees. Williams, 45, now regards hiring ethical employees to be a core mission: "If part of what we're selling is trust, it's critical to hire people of integrity and high ethics."

Those people may be hard to find, according to the 2005 "National Business Ethics Survey." The report by the Ethics Resource Center found that 52% of employees had observed at least one type of misconduct in the workplace during the past year -- but only 55% of them reported it. Also, according to the nonprofit Washington, DC, research and education organization, the number of employees reporting misconduct fell by 10% from the prior survey in 2003.

Those findings should be of interest to entrepreneurs, according to Tom Hooyman, a Denver consultant on organizational ethics. When employees appropriate company property for personal use, for example, it comes straight out of profits, Hooyman notes. So replacing theft-minded employees with ethical ones saves you money. "Other benefits include improved productivity and increased retention," says Hooyman....