How a Firm’s Ethical Failure Can Increase Employee Satisfaction

February 10, 2014 If a company responds vigorously to a breach in ethics, workers who witnessed the breach end up more satisfied with the firm than if no failure had occurred at all (4.55 versus 4.22 on a seven-point satisfaction scale), according to a study of more than 24,000 employees in 16 U.S. companies by Marshall Schminke of the University of Central Florida and colleagues. But the researchers caution that anything less than an outstanding response on the company’s part leaves witnesses to ethical failures feeling less satisfied than nonwitnesses. Thus ethical failures represent an opportunity—often missed—for companies to enhance their relationships with their employees. SOURCE: Better than ever? Employee reactions to ethical failures in organizations, and the ethical recovery paradox