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Decoding Ethics

By Kriti Jain

Oftentimes, good people end up doing bad things. This can be avoided if we spend a moment thinking about the consequences of our actions.

We run on auto-pilots. The pressures of a hyper-competitive fast-paced world don’t allow us time to pause and reflect. As such our intuitive, habitual, first-instincts behaviours take over. In matters of ethics, this can mean a self-centered ‘me-first’ attitude that is focused on the immediate benefits and discounting of the long-term consequences which can mean serious moral lapses. Institutional processes that emphasise competition and relative comparisons — such as relative performance evaluation within organisations or the rating on the curve in the classrooms — exacerbate such ethical breaches. In one of our research, we investigate these questions.

In one study, we asked 164 MBA participants to estimate the likelihood that an investment banker would use the bank’s error account to hide his losses. Participants were randomly divided into three groups that differed in the performance management system that applied to this investment banker: control (fixed salary), absolute (based on the profits generated individually), and relative (based on profits generated relative to peers). Our results showed that participants who were given the scenario of the investment banker under a relative performance system expected the investment banker to cheat significantly more than in the other two conditions.

In another study, we investigated people’s ethical behaviour in self-reporting their own performance scores on a quiz. This time participants were asked to take a time-bounded IQ test, self-verify their own answers, and report those scores to us. Again we had three groups. The difference was in how they were compensated. In the control, all participants were given a fixed fee irrespective of their performance. In the absolute condition, participants were to be paid based on the number of right answers reported and, in the relative condition, only the top scorers were to be rewarded with a bonuses. Our results were surprising. Majority of the participants over-reported. However, the incidence and the magnitude of over-reporting was significantly more in the relative performance condition. That is, the pressures of competition and comparison with others increased ethical breaches.

Such pressures of a hypercompetitive and fast-paced world are not fading away anytime soon. Then, what can be done to keep the moral fabric of our societies intact? Creating moral awareness — by signing codes of honour and creating ethics reminders — is common. Campuses and offices, for example, have “observe high ethical standards” included in their value statements that are hung around in the corridors. However, these can become futile. How many of us actually read these regularly? Moreover, being paternalistic in nature, these are at the risk of being taken wrongly. We, in our research, propose consequential reflection as an alternative. It is a simple prompt to ask individuals to prospectively reflect on both the positive and negative consequences of their decisions in ethically-charged situations. In our experiments, participants who took a moment to think and write down such possible consequences showed reduced willingness to act unethically.

The strength of this intervention lies in its unobtrusive nature which avoids direct manipulation and is unlikely to invoke negative reactions from the recipients. Individuals and companies can take the following steps to put this idea into practice:

  • Conduct pre-mortems. Ask the employees and team members to regularly stop and reflect before making crucial ethically-charged decisions. Make a conscious effort to do so pre-emptively. Instead of making post-event diagnosis, spend time to prospectively simulate the various possible decisions and their consequences.
  • Organise ethics hackathons. Once a month, let all team members get together and share their upcoming decisions. Let other people dissect it, play the devil’s advocate, and raise possible issues.
  • Train for reflection. Organisations can foster a more thoughtful environment by embracing a reflective and mindful approach to decision making. Conduct training sessions to incorporate mindfulness can be beneficial.
  • Write in culture codes. Include consequential reflection in values statements and culture guidelines of the companies. Reminders such as “Think first” and “Seek opinion” can be put up on the office walls. Oftentimes, good people end up doing bad things. One quick way to recognise and stop ourselves from falling into such traps is to spend a moment thinking about the consequences of our actions rather than running on auto-pilots.

An assistant professor at IE Business School, Kriti Jain’s research focuses on judgment and decision making. Learn more about Kriti Jain.

This was originally published on MyDigitalFC. Photocredit rawpixel on Unsplash.

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