The Price Tag for Ethical Behavior




Eighty-eight percent (88.3 percent) of graduating MBA students say they’d take a pay cut to work for firms that have ethical business practices, according to research from David B. Montgomery of Stanford University and Catherine A. Ramus of the University of California, Santa Barbara. The average amount that the students would forgo is $8,087. The researchers suggest that this finding should be viewed as a hopeful sign for the management profession. 

I haven’t dug any further into this research, but I must admit that the last thing I felt was “hopeful.” My interpretation was ethics has a price tag…and it’s $8K. Sad. Sad. Perhaps what bothers me most about the statistic isn’t what was reported…but what wasn’t.

For example: Students will take a $8K pay cut to work for an ethical company. But will they take a $9K pay cut? And if students will take a $8K pay cut, is the reverse true – will they stay at an unethical company for $10K?

We throw around the cliché “everyone has a price”. Is the price really $8,087? I struggle to believe that students would throw their credibility out the window for $8K. That’s less than the price of a car or a Rolex. Personally, my credibility is worth more than that. Much more. In fact, it’s absolutely priceless.

The statistic also raises some interesting questions in terms of defining ethical behavior, which is one of the SHRM behavioral competencies. Wikipedia explains ethics addresses the concepts of right and wrong, good and evil, etc. This implies that ethics is subjective behavior. Granted some behaviors are deemed wrong by society (i.e. cannibalism) or some are declared illegal by government (as in murder). But if an employee is taking reams of copy paper home because the company cut their pay and their child needs it for a school project…is that unethical? I can see where some people might say “yes” and others will say “no”.

Maybe the key to defining ethics is consistency. Here’s another example - if a person calls out an organization for not following the bylaws and making stupid financial decisions, shouldn’t they also call out any organization that is doing the exact same thing? Otherwise, their actions look inconsistent. One organization gets away with it, and another one doesn’t. It could be perceived as the person has some sort of hidden agenda or that their actions look hypocritical.

Another key to defining ethical behavior could be personal impact. Is it possible that individuals can tolerate hearing about unethical behavior because they can say, “Oh – I didn’t know about that.” Or they can watch unethical behavior because it doesn’t personally impact them. You know, the whole “I’m just doing my job” argument. It’s only when the behavior impacts them, they have to make a decision.

And according to the statistic above, it has to impact them more than $8K. Personally, I’m not sure I’ve bought into ethical behavior as a cost-benefit analysis formula. As much as I love the numbers, there are some things that math – or money - can’t buy.


Originally posted on HR Bartender blog.


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