Almost all businesses are forced to place ethical decisions in the hands of their employees. Whether employees decide to do right or wrong in these situations is less clear-cut than employers think, suggests the results of an experiment done by researchers from Northwestern University’s Kellogg School of Management. Often, it takes very little to sway workers in either direction.

In the experiment, participants could either lie or tell the truth to a counterpart. Lying was likely to result in participants receiving a $10 payout, while telling the truth was likely to result in a payout of $5.

Participants were broken into three conditions where they were asked to make their decision immediately, contemplate their decision for 3 minutes before acting or exchange an e-mail with an anonymous stranger before acting. The people who made their decision immediately and the people who had a conversation with someone who encouraged lying told the truth about half the time. The people who were given an instruction to contemplate their decisions for 3 minutes and the people who had a conversation with someone who encouraged honesty told the truth about 85% of the time.

SmartBrief recently asked the co-authors of the research, Brian C. Gunia, Long Wang, Li Huang, Jiunwen Wang and J. Keith Murnighan, some questions about what employers should should take away from their experiment. An edited version of their responses follows.

Does your research suggest that people’s initial instinct when faced with a decision is to act out of self-interest?

Several theories suggest exactly this — that people start their lives as self-interested and only through learning, or maybe evolution, acquire a willingness and a desire to think of others’ interests. Our research suggests that right-wrong decisions naturally put people on the fence, and that a small amount of contemplation or conversation can push them onto more stable, ethical ground.

Does contemplation before making a decision and having a conversation before making a decision trigger the same psychological process, or do they simply produce similar results?

Our data cannot definitively resolve this question, since we could not “get inside” people’s heads. However, we do believe that contemplation and conversation trigger a similar psychological process. Contemplation and conversation both lead people to weigh various considerations before acting. In a way, conversation is a public form of contemplation. Another reason that we believe the two are the same is that people’s explanations of their actions almost uniformly supported their decisions, justifying them as natural and appropriate. This suggests that contemplation and conversation had similar long-term effects, in addition to their short-term impact on the decision itself.

Do you think that participants in your experiment were more likely to give honest answers when they were given time to think because contemplation leads to a desire act morally? Or are there other factors that come into play, such as an increasing awareness of the potential for embarrassment if caught?

Again, it is hard to say without additional evidence. We do think embarrassment in front of others is an unlikely explanation for our results. Participants in all conditions of our study were assured that they would never see, meet or even know who their decision counterpart was — and they knew that their counterpart knew the same. They also knew that the experimenter would not learn whether they had lied. That said, it is possible that some people may have told the truth to avoid being embarrassed of themselves. This is consistent with other research that shows that people act more ethically when made aware of themselves by looking into a mirror.

Your experiment suggested that people were surprisingly influenced by a short message from an anonymous source. Why do you think people were so easily swayed?

We believe that these decisions truly put people on the fence, and it is quite easy to fall off, one way or the other. More seriously, right-wrong decisions force people to choose one of two, automatically-compelling courses of action. Decision-makers typically have several persuasive reasons to tell the truth, and several to lie. This forces them into a delicate balancing act, in which any number of small, situational factors can push them one way or the other.

What are some things that companies can do to encourage employees to make a habit of contemplating moral decisions before taking action?
Most obviously, companies should integrate contemplation into their formal training programs. Second, organizations should provide employees with clear, deliberate decision-making frameworks. Third, organizations might give employees who are likely to face many moral decisions more time to think. In other words, they could actually slow the pace of organizational life for these individuals; any loss in productivity would be balanced against freedom from moral scandal. Finally, organizations could integrate contemplation into their technology. For example, their computer systems might automatically require a “cooling-off” period for decisions above a certain dollar threshold. During this period, the screen might prompt individuals to think about and reinforce the organization’s values.

Image credit: iStockphoto

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5 Responses to “Why employees lie (and how to get them to stop)”

  1. J.David Knepper says:

    I once admitted a client service error to my immediate supervisor and told her my plans for correcting the problem. It was the honest thing to do.

    The potential for encouraging such candor in other employees was squandered when the supervisor wrote up the error for my permanent file, the only such record I ever earned. She told her manager about the error she had 'discovered' and clucked about how clever she was. Since that day, employees in that large media company have been reluctant to share their shortcomings with supervisors.

    My question is: Are those silent employees dishonestly withholding information from their employer, or are they simply doing what they must to survive?

    • JJ Murphy says:

      What this person failed to recognize is what employee behavior she would drive by her handling of your addmission. She chose a path that in many cases will drive employees to say nothing.

      To have an open environment where people feel comfortable in bringing issues foward, there has to be a degree of trust with the management. If trust is missing, most anything can happen. This person's actions created an environment of distrust. So to your question are the employees being dishonest? My answer would be no becasue of the risk they would suffer negative consequences like you did if they come forward with an issue. A bad situation for everyone.

  2. VLKrayna says:

    Part of the ethically-challenged debacle is the fact that far too many managers have morals that would quite frankly embarrass Satan. Demon-bosses have a penchant for hiring their minions. Emotional Vampires, Narcissist, Machiavellian Werewolves, and Sundry Neanderthals thrive in such and environment. Those characterized by integrity, emotional intelligence, judiciousness, etc. … don't fair so well.

  3. Al Watts says:

    I just saw this – thanks for bring i to our attention. My first reaction was that it would be good for organizations to post a REFLECT sign up here and there like IBM's THINK! signs. The research confirms why "discernment" and "dialog" made by list of six critical capacities for leading with integrity in my book Navigating Integrity – Transforming Business As Usual into Business At Its Best (http://www.integro-inc.com/About/NavigatingIntegrityBook.aspx) The other four were Discipline, Consistency, Courage and Competency.

  4. StealthGenie says:

    Employees always want their own profit from the organization. They don't think that if the company will touch the peak of success than employees will also get the edge of success. Employees always want some shortcuts. I personally recommend StealthGenie for the mobile monitoring of cheating employees. StealthGenie helps the organization about what cheating employees are actually doing.