Will Your New Hires Do the Right Thing?

Raymond Chiu, Doctoral Candidate, DeGroote School of Business | Hamilton, Ontario | April 7, 2014

ethical workersAll or nothing. This is a major conclusion of our research on how companies deal with the challenge of choosing job candidates who will behave in an ethical, moral manner on top of getting the job done. In detailed interviews with a panel of six high-ranking executives, researchers from the DeGroote School of Business found that when it comes to ethical requirements such as honesty and integrity, some firms leave no stone unturned, while others take an informal approach and simply look to someone who fits the existing culture–whether good or bad.

Our team, consisting of myself and Rick Hackett, professor and Canada Research Chair, was spurred by the realization that individual hiring is important when it comes to advancing workplace ethics. Bad behaviour on the part of only a few employees can lead to firm-wide implosion, with devastating effects for direct victims and for the bottom line. Such was the case at WorldCom, headed by Edmonton-born Bernie Ebbers, and is again reflected in the unfolding courtroom dramas currently being played out by former SNC-Lavalin and Livent executives. According to a recent PricewaterhouseCoopers report, more than a third of Canadian companies have been hit by white-collar crime, with one in ten of these firms reporting losses of more than $5-million.1 Moreover, as competitive pressures continue to mount, compliance efforts touted by firms in crisis seem out of step with the growing temptation faced by new managers to cut corners. The executives we interviewed were quick to point out that it is much easier for a business to enhance the technical skills of a good employee than to correct the values and habits of one who is susceptible to failure. In view of this reality, management rarely stops to consider a basic question: How can we prevent wrong-doers from getting hired in the first place?

When it comes to ethical requirements such as honesty and integrity, some firms leave no stone unturned, while others take an informal approach.

Our investigation revealed that the most progressive firms take extreme measures to catch even the slightest whiff of misdemeanour among job candidates. Interviews are not simply off-the-cuff one-on-one interactions. They consist of four or more sit-downs involving multiple stakeholders posing probing questions concerning situations of moral compromise. This is followed by an unapologetic interrogation of the candidate’s career or financial history. Reference checks are detailed conversations conducted by skilled callers who are sensitive to the significance of off-hand comments passed along the grapevine. Background checks can involve five or more data points ranging from one’s online profile to insider trading records. These approaches, often combined with results from psychological testing, are scrutinized to not just assess “whether” the applicant will mess up on the job, but “where” their professional ordeals have taken them, and “why” their path has landed them at the employer’s doorstep.

The more progressive firms were quick to acknowledge that much more is needed to improve their selection systems. From a strategic perspective, they recognized that to access better candidates and build a high-quality workforce, decision makers need to be able to trust people who come from networks, companies, and even cultures that they’re not familiar with. Ensuring the moral goodness of incoming employees goes a long way to instilling confidence among both internal staff and external stakeholders who may be expecting high standards.

Decision makers need to be able to trust people who come from networks, companies, and even cultures that they’re not familiar with.

At the other end of the spectrum, we found firms where the approach to employee selection was less sophisticated and the notion of assessing the ethics and morality of job candidates was not systematically addressed. Some executives drew a line in the sand between inquiries that are permissible in the hiring context and those that are seen as offensive or illegal. These leaders viewed ethical matters to be the candidate’s own business, or were concerned that delving into such issues would result in a barrage of employee or union objections concerning employment rights or discrimination. In contexts where conditions work against ethical considerations—relatively little scrutiny from outsiders, institutional inertia, or perhaps a sense of irreproachable professionalism—some firms seemed perplexed or put off by the challenge of integrating ethical concerns into the hiring process. Government-funded organizations in particular seemed handcuffed by these factors.

Perhaps not surprisingly, a common concern from these hard-pressed executives was how to figure out the precise meaning of morality and ethics in relation to hiring. This was reflected in the lack of unity among our panel regarding what good moral sense ought to look like in a prospective employee. Many possibilities were mentioned, such as fairness, avoidance of failure, a good reputation, mutual respect, role modelling, sound stewardship, trustworthiness, a clean criminal background check, and so on. Only a few of the firms have tapped into well-established moral frameworks that can help leaders foster a common organization-wide view with regard to ethics and morality. But such consensus typically does not develop without the conscious effort from top management.

Some executives drew a line in the sand between inquiries that are permissible in the hiring context and those that are seen as offensive or illegal.

Our ongoing research strives to uncover more about sector differences, best practices, and leadership attitudes and will be discussed at upcoming annual meetings of the Administrative Sciences Association of Canada and the Canadian Business Ethics Research Network. Over the coming year we are seeking a larger sample of businesses that are interested examining their staffing systems for their effectiveness, including the extent to which an ethical mandate is supported across the organization. Through this effort we hope to highlight the ideas and opportunities that can help leaders take ethical hiring considerations to the next level.

1. Barrie McKenna. “White-collar crime hits more than a third of Canadian organizations.” The Globe and Mail, February 24, 2014.

chui-thumbRaymond B. Chiu is a doctoral candidate in human resources and management. His research interests include ethics, personnel selection, and spirituality in organizations. The background work for this study is funded in part by the Canadian Centre for Ethics and Corporate Policy.

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DeGroote School of Business
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