Institutionalization of ethics at workplace: A study of contributory role of HR and line functionaries

Abstract

Growing number of observed unethical practices in workplace and its dire consequences for the organization has forced the organization to think beyond compliance based initiatives hence, organizations have started responding to ethical issues through institutionalization of ethics in workplace. This study has been conducted to explore the ways of institutionalization of ethics used by organization with primary focus on contribution of HR and line functionaries in the institutionalization process. In addition, current study highlights the challenges faced by employees in displaying ethical conduct at workplace and explores the influence process of ethical leadership of line managers on subordinates’ ethical behavior and work-related outcomes. Study was conducted in two phases; phase one is qualitative study (33- HR & line managers interviewed) that helped in better understanding of the phenomenon under study (institutionalization of ethics), and phase two is the quantitative study (data collected using survey method from 55 line managers and 167 subordinates) conducted to examine the influence of ethical leadership of line managers on subordinates’ work engagement and in-role and extra-role behavior. The results of qualitative study show, HR plays very crucial role in the institutionalization of ethics at workplace, their contribution comes in both the forms that are implicit (background checks before recruitment, transparency in managing human resources, etc.) as well as explicit (grievances redressals, maintain reporting mechanism, involvement in rewarding good behavior and punishing unethical behavior, organizing ethics training, etc.). Further, the results of qualitative study informed employees face many challenges in displaying ethical conduct such as rent seeking behavior of government officials, focus on numbers over means, absence of support from top managers and unethical behavior of colleagues. Also, result shows besides promoting ethics, ethical line managers influence the work-related attitude and behavior of the subordinates. The results obtained from structural equation modeling (SEM) indicate positive influence of ethical leadership on work engagement and in-role and extra-role behavior of the subordinates. Also, it has been found that favorable exchange of leader-member and the organizational identification mediates these relationships. This study makes significant contribution to the existing literature by exploring contribution of both HR and line functionaries in institutionalization process and also findings suggest how organizations can institutionalize ethics at workplace.