Employees are more likely to enjoy going to work each day when they know they will be treated fairly, that they will not be harassed and that other workers will play by the rules.  A strong ethical climate helps ensure that employees, who have a personal stake in the company, are respected.  Stakeholders include employees, owners, customers, suppliers, distributors, and the community.  Employees for example, expect to be paid well and to be treated fairly.  Companies that do not pay their employees a fair wage or treat them fairly can expect to have a high turnover rate, which adversely affects the business.  Owners, including shareholders, have an interest in the company showing a profit.  Investors expect the company to be open and honest about its financial condition.  Customers who buy the company’s products and services provide the financial resources for it to make a profit.  Pleasing its customers, with an excellent product or service, is top priority for successful business.  You can see that maintaining an ethical climate is always in the best interests of a business or organisation.

Several characteristics distinguish ethical organisations.  They include being environmentally responsible, promoting diversity within the organisation, providing a safe environment for workers, offering fair and equitable pay, being socially responsible and respecting the law.

Environmentally Responsible

Ethical organisations work to preserve the environment for future generations by reducing the impact of their operations on the environment.  For example, many companies recycle paper, plastics, electronics, and other items.  Some companies have adopted alternative energy sources, such as solar, wind or methane.  Some use hybrid or electric vehicles in their fleets.

Diverse Workforce

A diverse workforce benefits companies in several ways.  It helps them meet the needs of their global customers and an increasing diverse population.  Studies have shown that groups and teams with diverse members are more creative and make better decisions.  Diversity also helps a company attract and retain talented employees.

All organisations must comply with laws that promote equal treatment and prohibit discrimination.  Ethical organisations, however, go further than the law requires.  They make hiring decisions based on merit and are committed to providing equal employment opportunities.  They create environments that are attractive to all employees.  They are intolerant of discrimination, provide diversity training for their employees and hold managers accountable for consistently supporting and ensuring diversity.

Diversity at work encompasses several differences.  They include race and ethnicity, physical ability, age, sexual orientation, and gender.

Workers’ Rights

Workers are entitled to a safe and healthy working environment.  The Occupational Safety and Health Administration (OSHA) set and enforce standards for safe and healthy working conditions.  An ethical organisation takes these requirements very seriously.  For example, it may provide extensive training and state of the art equipment.  It may also use ergonomics in designing work areas and purchasing equipment so that employees can work not only safely, but comfortably and in a pleasant environment.

There are laws that set standards for minimum wages and require equal pay for equal work.  If employees are unionised, an organisation is legally required to bargain in good faith for wages, benefits and working conditions.

An ethical organisation offers its employees fair and equitable pay.  This attitude coincides with the best interest of the company.  Most employers compete for the best workforce.  To retain highly qualified individuals, they must pay the market or above the market price.  An ethical organisation wants its employees to be pleased with their pay and benefits as well as their working conditions.  A good compensation plan attracts capable employees, motivates employees to perform effectively and helps retain capable employees.

There are laws that protect workers from being discriminated against because of their age, a disability, gender, race or ethnicity, religion, or pregnancy.  These rights are guaranteed for hiring, promotion, firing and pay.  In addition to complying with the laws, ethical organisations, as noted above, do not tolerate any type of discrimination.  They uphold clearly stated policies and procedures committed to equal employment.  They publish grievance policies that are also clearly stated and are distributed to all employees.

Socially Responsible

Social responsibility refers to the obligation of a business to contribute to the greater good of the community.  Communities rely on the support of local companies for financial stability and growth.  Businesses have a legal and ethical obligation not to harm the citizens of the community.  This includes properly disposing of harmful wastes and using pollution controls for factories.  An ethical company is a good neighbour.

Businesses make choices about pollution, employee health and safety, the sponsorship of charitable endeavours and employee volunteer programs and other issues and needs.  They may, for example, choose to give employees time off for volunteering or a convenient way to financially support worthy causes.

Respect for The Law

An ethical company has respect for the law.  It abides by all state and local laws.  If it is an international company, it also abides by the laws of the country or countries in which it does business.  Numerous laws affect businesses, including hiring, firing, trade, taxes, fair competition, and EPA requirements.  In addition to abiding by the law itself, an ethical company makes sure its employees know, understand, and follow the laws that affect its business.