How to Tell if Your Company Has Ethical Practices

Friday, January 14, 2022

If you want to have ethical employees, your company needs to set an example. Unfortunately, many businesses fail to become role models for employees, and either do not have ethical practices or don’t promote them in the workplace.

Article 5 Minutes
How to Tell if Your Company Has Ethical Practices

Businesses of all types need to have ethical practices and let their employees know what these look like so they know what to do and how to act. Here’s how to tell if your company has ethical practices.

Incentives match policies

Many companies claim to have good ethics and tell the world about their goals. However, plenty of these companies don’t practice ethically, and this is shown through how they treat their employees. While company culture is necessary for any business, employees must be correctly incentivized.

For example, when your company decides to promote someone or give them a raise, you need to be able to provide them and other employees with an ethical reason. You can’t give someone a raise just because you like them, and you can’t stop an employee from rising the ranks within the company because you don’t like them.

Employee compensation needs to be tied to specific goals, such as performance. If employees are given special attention and they’re underperforming, then something within your company isn’t ethical.

Employees are free to be themselves

Many people act differently at work. Social performance, especially at work, is normal. However, your employees should feel happy to be themselves, especially if they’re not going against company policy. If your employees act differently at work than at home, then there is a disconnect between the values of the company and the values of the employees.

By forcing employees to act differently at work and not be able to showcase their personalities, you can foster a mentality of immense pressure and overall employee unhappiness.

Promotions make sense

Top performers deserve to get promoted, and underperformers don’t. Those who cut corners and don’t show up to work on time shouldn’t be promoted over other employees who stay late at the office and perform better.

Remember, your business must lead by example. Promoting people who ignore the ethics of the company tells your employees that it doesn’t matter how hard they try; promotions go to those who are more favored by upper management. Your business’ actions speak louder than words. While your ethics policy might highlight hard work, your company doesn’t have ethical practices if you promote those who have different ethics than the company.

If you continuously promote people who don’t deserve it, your employees will catch on and stop trying to help your business succeed. Many of them may even seek out other opportunities.

Upper management is supportive

Ethical management can help your employees be ethical, which helps your business as a whole remain ethical. It’s important to pay close attention to upper management. If upper management breeds a toxic environment, then your company is not ethical. If they talk more about employees as numbers and less about employees as people, then it’s time to rethink the way your C-suite thinks about the business.

You bill accurately

If your business bills clients or partners, then it’s important to make sure the billing is accurate. While it’s tempting to charge clients for more hours than were worked, you should never send an invoice you can’t back up with evidence. At any point, your clients and partners can ask for more details on your invoices, in which you’ll have to explain why you worked more hours than what was originally estimated. Your business can use a professional tax software to does the work for you.

You don’t cover for employees

Your employees are an extension of your company, so if they do something wrong, it could reflect poorly on your business. Many companies make the mistake of covering for their employees so they can cover for themselves. Unfortunately, this can get you into more hot water. For example, if an employee posts something on social media that’s offensive, it may harm your business’ reputation. Instead of asking for the employee to delete the post and hope for the best, you’ll need to take action.

In this case, your company would need to fire the employee (if the offense was bad enough) and send out a memo to the rest of your employees about how to behave online. If you think it’s necessary, you may need to have a meeting with your employees to discuss ethical practices.

Toxic behavior is not tolerated

All it takes is for one person to spoil the entire work environment. If you have one toxic employee, you can expect them to negatively impact all of your employees. Bullies typically attract other bullies, and when employees feel targeted at work, it makes coming to work more difficult. If you have a toxic workplace, many of your employees will be unhappy and less productive.

Unfortunately, you can’t just fire the low performers if you want to have an ethical workplace. Instead, you’ll need to find out who the toxic employees are so you can meet with them and discuss how their actions are affecting everyone else. This will ensure your other employees that toxic behavior is not tolerated and they should feel protected.


For a company to be truly ethical, you need to have some level of accountability. You expect your employees to admit when they’ve done something wrong, so your company needs to be able to do the same.

If managers and C-suite executives always blame lower-level employees, then you can’t expect your employees to work hard and help your business succeed. Whenever your business does something wrong, you should apologize when necessary and make a plan to solve the issue so it doesn’t come up in the future. For example, if an employee is being harassed at work, it’s up to your company to find out who is harassing them and take action.

Assessing the ethical practices in your company

If you want to ensure your company has ethical practices, you should create an ethical policy. Make sure your policy is passed out to all of your employees so you can hold a meeting and go over the policy. All of your employees, including upper management, should know what actions are tolerated and which are not.

Matt Casadona


Matt has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. Matt is passionate about marketing and business strategy and enjoys San Diego life, traveling, and music. 


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