examples of ethical leadership.
Examples of Ethical Leadership
When HR gets it right, companies that truly put their people first shine, and they see higher levels of engagement, trust, employee health, and productivity. So much so that one study found happy employees were up to 20% more productive than unhappy employees. When HR gets it right, companies also value transparency and diversity. With that said, here are examples of ethical leadership at work.
Ethical Leaders Understand Employee Needs
Over the past several years, we have seen companies start talking about how great companies have free food, ping pong tables, or other kinds of game rooms in their offices. Meanwhile, the U.S. government found that 80% of Americans live paycheck to paycheck and 20% of Americans cannot afford healthcare. For many, there is no end in sight because the cost of living is rising higher/faster than wages.
Companies claim after a certain point, pay doesn’t matter and (what they are calling) “cultural fit” do. However, the truth is, it’s cheaper to buy a ping pong table than healthcare.
While ping pong is fun and all, it does not replace actual benefits like retirement, healthcare, parental leave, and vacation time.
Can we stop pretending “nice to have” perks can replace critical, life-saving benefits?
Leadership is Transparent About Pay
Despite many who question this, the gender pay gap is real. Research has shown this. This is widely accepted, even by the US government. Research found that men are, in fact, paid more than women for the same work. Pew Research reported the US Census Bureau “found that, in 2017, full-time, year-round working women earned 80% of what their male counterparts earned.” In 2018, the Pew Research Center analyzed the median hourly earnings of full time and part time U.S. workers and found that female employees earned 85% of what male employees earned. “Based on this estimate, it would take an extra 39 days of work for women to earn what men did in 2018,” Pew shared.
Over the years, companies have implemented pay secrecy policies, which encourage or prohibit employees from discussing pay with other employees. The truth is, these policies are designed to keep wages low and to keep employees from knowing about ongoing discrimination in pay. It only benefits the corporation, not the people. These policies have most certainly contributed to wage discrimination.
The solution? Columbia Business School, INSEAD, the University of Copenhagen, University of North Carolina Business School, and Cornell SC Johnson College of Business found that pay transparency reduces the gender wage gap by 7%. Coupled with anonymous pay transparency sites like Glassdoor and governmental regulations like the NLRA, talking about pay is starting to become more commonplace. And, some companies are even publishing salary ranges and benefits information directly in job postings. This is actually highly preferred by job candidates, as well!
When can we start embracing pay transparency and use it to improve our business and make our people happier?
Ethical Leadership Means Preventing and Managing Sexual Harassment Claims
According to NPR, a recent Stop Street Harassment study found that 81% of women and 43% of men have experienced sexual harassment. More specifically, the Association of Women in Action found 54% of the respondents reported having experienced some form of sexual harassment at work.
Needless to say, sexual harassment is happening. And, the costs to businesses can be significant. Aside from the fact that workers feel uncomfortable coming to work and experience related productivity loss and disengagement, legal fees can cost companies millions. Workology shares, “the EEOC secures about $404 million dollars from employers each year…. An average out of court settlement is about $40,000…. In addition, 10 percent of wrongful termination and discrimination cases result in a $1 million dollar settlement.” Additionally, as the number of sexual harassment claims increase, companies are also finding a new kind of retaliation – 60% of male managers claim to be uncomfortable participating in work events with female colleagues. Women are already paid and promoted less, and more likely to experience sexual harassment at work. Now, men in leadership positions are showing a complete lack of leadership by refusing to conduct business related activities with women in the workplace?
Ethical Leadership Means Diversifying Company Leaders
The cycle seems endless. But, it’s not. There is a solution. An uncomfortable one. One that disrupts the status quo.
CNBC Make It shares the solution is to promote more women and people of color into leadership positions. Catalyst.org shares that less than 5% of Fortune 500 and just 2% of S&P 500 CEOs are women. Yet, HBR shares that women are rated higher than men on key leadership capabilities including “takes initiative,” “resilience,” and “practices self-development.”
When can we start recognizing that we as a culture of workplaces need to start investing in women and people of colors as leaders to improve for all?
Overall, each of these uncomfortable truths uncover lies we have been told to keep the power in the hands of the few who don’t realize the potential in their people. And, it’s keeping employees stressed, sick, and unproductive. It’s also costing businesses big time. HBR’s Proof that Positive Work Cultures are More Productive shows high-stress organizations spend 50% more on healthcare, lose 550 million days of work every year, see lower employee engagement which leads to “18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time,” and “leads to an increase of almost 50% in voluntary turnover.” Basically, transparency and diversity is key. When can we stop pretending and instead actually focus on what really matters – our people?