NBES of the U.S Workforce: Key Findings
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Pattern of Ongoing Misconduct
The survey shows that a significant amount of misconduct involves continuous, ongoing behavior rather than one-time incidents: Employees say that more than a quarter (26 percent) of observed misconduct represents an ongoing pattern of behavior. Another 41 percent said the behavior has been repeated at least a second time. Only one-third (33 percent) of rule breaking represents a one-time incident.
Most Misconduct Committed by Managers
Managers – those expected to act as role models or enforce discipline – are responsible for a large share of workplace misconduct (60 percent) and senior managers are more likely than lower-level managers to break rules. Surveyed employees said that members of management are responsible for six of every ten instances of misconduct and they pointed the finger at senior managers in 24 percent of observed rule breaking. Middle managers were identified as the culprit 19 percent of the time and first-line supervisors were identified as bad actors 17 percent of the time.
Reporting and Retaliation
More than one in five workers (21 percent) who reported misconduct said they suffered from retribution as a result, nearly identical to the 22 percent retaliation rate in NBES 2011. Retaliation has not always been so widespread: The rate was only 12 percent in 2007, the first time it was measured in NBES. Asked why they kept quiet about misconduct, more than one-third (34 percent) of those who declined to report said they feared payback from senior leadership. Thirty percent worried about retaliation from a supervisor, and 24 percent said their co-workers might react against them.
Furthermore, among those who did choose to report, those who experienced retaliation were less likely than those who did not experience retaliation to say they would report misconduct the next time they see it: 86 percent compared to 95 percent who say they would report.
Additional results of the 2013 NBES:
- The percentage of companies with “strong” or “strong-leaning” ethics cultures climbed to 66 percent in 2013, compared to 60 percent in the previous survey;
- The percentage of companies providing ethics training rose from 74 percent to 81 percent between 2011 and 2013;
- Two-thirds of companies (67 percent) included ethical conduct as a performance measure in employee evaluations, up from 60 percent in 2011;
- Almost three out of four companies (74 percent) communicated internally about disciplinary actions when wrongdoing occurs.
- Extremely serious forms of misconduct such as falsifying company financial data and public reports or bribing public officials were observed less frequently in 2013: Three percent of employees said they were aware of misleading information on financial reports and two percent stated that they observed somebody in their company who had offered bribes to public officials.
NBES 2013 reveals substantial good news about the state of ethics in American workplaces. Observed misconduct is down for the third report in a row and is now at a historic low; the decline in misconduct is widespread; and the percentage of workers who said they felt pressure to compromise standards also fell substantially.
- The percentage of workers who said they observed misconduct on the job fell to an all-time low of 41 percent in 2013, down from 45 percent two years ago and a record high of 55 percent six years ago.
- The improvement was pervasive. Over the last two years, observed misconduct fell in every one of the 26 specific categories we asked about in both NBES 2011 and NBES 2013.
- Pressure to compromise standards, often a leading indicator of future misconduct, also was down – falling from 13 percent in 2011 to nine percent in the latest survey.
The dip in misconduct may reflect workers’ tendency to take fewer risks when economic prospects seem weak or uncertain, given the relatively soft recovery since 2008. But it also is possible – and we believe probable – that businesses’ continuing and growing commitment to strong ethics and compliance programs is bearing fruit and that ethical performance is becoming a new norm in many workplaces. That belief will be tested once economic growth becomes more robust and widespread.
NBES 2013 also reveals some areas of concern. While misconduct is down overall, a relatively high percentage of misconduct is committed by managers – the very people who are supposed to set a good example of ethical conduct and make sure that employees honor company rules. Workers reported that 60 percent of misconduct involved someone with managerial authority from the supervisory level up to top management. Nearly a quarter (24 percent) of observed misdeeds involved senior managers. Perhaps equally troubling, workers said that 26 percent of misconduct is ongoing within their organization. About 12 percent of wrongdoing was reported to take place company-wide.
Also troublesome are the facts that the percentage of workers who reported the misconduct they see has stalled, and retaliation against workers who reported wrongdoing continues to be a widespread problem. High retaliation rates are especially worrisome because they discourage reporting and make it harder for organizations to identify and root out bad behavior.
- Among those who observed misconduct in 2013, 63 percent reported what they saw, compared to 65 percent in 2011 and 63 percent in 2009.
- For the second straight survey, more than one in five workers who reported misconduct said they experienced retaliation in return. In 2013, 21 percent of reporters said they faced some form of retribution, virtually unchanged from a record high of 22 percent in 2011.
In sum, NBES 2013 provides cause for optimism as well as a blueprint for the work yet to be done. The steady and sharp drop in misconduct since 2007 suggests that something both fundamental and good is taking place in the way Americans conduct themselves at work.
Companies’ investments in ethics and compliance are paying off, but there remains room for improvement. The data show just enough negative results to suggest that progress is not necessarily irreversible – especially if a revitalized economy arouses workers’ willingness to engage in riskier behavior. It is clear that manager behavior could be improved, and that reducing retaliation is essential. Building strong ethics cultures remains a constant work in progress.
NBES 2013 also includes in-depth investigation of several types of misconduct, including corruption; analysis of factors that increase employee reporting of observed misconduct; and the implications of retaliation against whistleblowers.
NBES 2013 is Sponsored by:
Altria Group, Inc., Walmart Lockheed Martin Corporation, Edison International, PricewaterhouseCoopers LLP, United Technologies Corporation Raytheon, KPMG LLP, Assurant, Inc., Archer Daniels Midland, SAIC, BAE Systems and Bechtel Group, Inc