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Pieter Nel, Liza Nel and Andries du Plessis 2011 International Em ployment Relations Review Vol 17 No 2 Page 55 IMPLICATIONS FOR HUMA N RESOURCES AND EMPLOYMENT RELATIONS PRACTIC E WITH REGARD TO THE INTEGRATION OF CORPORATE ETHICS PRO GRAMMES INTO THE CUL TURE OF ORGANISATIONS Pieter Nel Unitec NZ Liza Nel New Zealand Green Building Council Andries du Plessis Unitec NZ ABSTRACT This paper examines how useful components of corporate ethics programmes (code of ethics, ethics training, rewarding, disciplining employees and example of senior executives) are in i ntegrating ethics into organisations’ culture. Implications for human resources and employment relations practise are also considered. An e -survey comprising 11 questions with sub -questions was executed late in 2007 and early in 2008 amongst 483 eligibl e member organisations of the Rosebank and Avondale Business Associations in Auckland, New Zealand, resulting in a 12.63% useable response. After applying the Kruskal Wallis test to the findings of the empirical investigation, some significant results wer e revealed. These included that a code of ethics, ethical training, rewarding and disciplining employees are useful in integrating ethics into an organisation’s culture. A major recommendation is that senior executives should continue setting the example regarding ethical behaviour. Significant findings also relate to some large, medium and small organisations and the service sector in particular. INTRODUCTION Corporate scandals like WorldCom, Enron, J.P. Morgan, City Group and ICN Pharmaceuticals, for e xample, have given rise to a growing worldwide interest in business ethics (Garsten & :ernes, 2009; O’Toole & Mayer, 2010). The interest in business ethics was highlighted again when one of the largest ever scandals occurred in the news media industry’s h istory. This involved News Corporation, the second largest news media group in the world, when it experienced the worst crisis in its existence after Rupert Murdoch unexpectedly closed The News of the World newspaper in July 2011, due to Implications for HR and ER Practice with Regard to the Integration of Corporate Ethics Programs into the Culture of Organisations 2011 International Employment Relations Review Vol 17 No 2 Page 56 the phone hacking scandals which had been uncovered. The closure of the longest running newspaper in the UK after 168 years of circulation resulted in job losses of 250 staff members and led to the arrest of, amongst others, Rebekah Brooks, the former editor of the News o f the World. Further fallout from the scandal occurred with the resignation of Sir Paul Richardson, the Commission of Police ( News of the World, 2011). The spin -off effect of serious corporate ethics mishaps and the implications for employment relations and human resources (HR) for businesses is therefore easy to grasp. In recent years organisations have consequently focused more intensely on ethical considerations and ethical culture in particular, than ever before. Exhibiting an ethical culture is seen to be important for organisations, as researchers have found a direct relationship between ethical behaviour and corporate culture (Jose & Thibodeaux, 1999; Mellahi, Morrell & Wood, 2010). Processes to integrate ethic s into an organisation’s culture have also been researched and established over time. Trevino and Nelson (2007) explain that ethical standards need to be effectively communicated to employees in order to integrate ethics into an organisation’s culture. T hey also outlined that ethics messages should be communicated in ways that employees will find meaningful and useful (McCormick, 2010). Various components of corporate ethics programmes could, therefore, be used to integrate ethics into an organisation’s culture to avoid unethical behaviour and negative publicity. The most common ones are a code of ethics, ethics training, rewarding and disciplining employees and the example set by senior executives. Thus, the purpose of this article is to examine how use ful corporate ethics programmes can be in integrating ethics into an organisation’s culture. There are also human resources and employment relations aspects that would impact on organisations’ efforts to enhance ethical behaviour. In this article a lite rature review is undertaken first. The research method is then discussed and the e -survey executed in Auckland, New Zealand to determine the usefulness of corporate ethics programmes is outlined. An analysis of the results is then undertaken, which includ es whether size and/or type of industry are significant in this regard as well as implications for employment relations and HR management. Lastly, some conclusions and recommendations are presented. The research question is: How useful are the components (code of ethics, employee ethics training and enforcement mechanisms) of corporate ethics Pieter Nel, Liza Nel and Andries du Plessis 2011 International Employment Relations Review Vol 17 No 2 Page 57 programmes in integrating ethics into an organisation’s culture? The main sub -question is: In the New Zealand context does the size and types of industry make a difference with regard to the aforementioned listed components? It is of interest to note that New Zealand as a country features very high in terms of transparency on the International Corruption Percep tions Index (www.transparency.org ). In 2006, for example, New Zealand was ranked first together with Finland and Iceland and obtained a score of 9.6 out of 10, which indicated that it was a “highly clean” country (Dowling, Festing & Engle, 2008, p.297). However, only a very small local sample is analysed in the current research in New Zealand companies, so without specific evidence, making predictive conclusions and recommendations is presumptuous. Therefore, thi s topic is not pursued in any detail when reporting the results in this article, but it could form the basis of a separate future study with a much larger sample for global comparative purposes. In this regard the study of, amongst others, Svennsson, Wood , Singh, Caraso and Callaghan (2009) would be of interest, as they executed a longitudinal cross cultural multi -country study. LITERATURE REVIEW The concept of ethics is derived from the Greek terms ‘ethos’ and ‘ethikos’, which refer to ‘usage’ or ‘charac ter’ or ‘custom’. The concept of moral comes from the Latin term ‘moris’ or ‘mos’, which refers to ‘way of life’ or ‘conduct’ (Boatright, 2007; Johnson, 2007; Wiley, 1995). Matheson, (2010) on the other hand, says that the public no longer trust or have confidence in senior management. It confirms what McDonald (2004, p.2) states, namely that ‘ethics examines whether something is good or bad’. Conversely, morality relates to the customs that a society accept as being wrong or right. Different cultures have different values which define what actions are morally acceptable. From another angle, ethical governance requires management and leaders to recognise that there is more to good business practice than the next financial bottom line; therefore, leader s should be careful in their practise of ethics. Ethics thus is not a concrete science and solutions to moral dilemmas are not always clear, as they are subject to interpretation and context within which they are practiced or experienced (Nelson & Quick, 2011). The demonstration of high ethical standards is therefore increasingly important to the long term interests of any organisation. Understanding Business Ethics Barkhuysen and Rossouw (2000, p.230) state that ‘business ethics studies the ethical di mensions of economic activity as it is being manifested on three different levels’. The three levels of inquiry (micro, meso and macro) into business ethics relate to the multi -faceted and multi -disciplinary nature of business ethics. Readers should note that this article, from which the research Implications for HR and ER Practice with Regard to the Integration of Corporate Ethics Programs into the Culture of Organisations 2011 International Employment Relations Review Vol 17 No 2 Page 58 originated, focused on the micro -level (work and ethics) of business ethics since the empirical investigation researched the ethics of individual employees in organisations as well as the descriptive ethics. The results on the usefulness of corporate ethics programmes should consequently assist managers to successfully integrate ethics into their organisations’ culture. The definition used in this article for business ethics is ‘the study of business situations, activities, and decisions where issues of right and wrong are addressed’ (Crane & Matten, 2007, p.5). Corporate Ethics Programmes Several categories of employees are involved in formulating and managing programmes relating to ethics. Mellahi et al (20 10) argue that the (HR) department have a responsibility to play a role in the formulation, monitoring, communication and enforcement of an organisation’s ethics programme. Erasmus and Wordsworth (2004) also agree that HR departments ought to be tasked wi th drawing up a blueprint for ethical codes and standards of behaviour for employees. Furthermore, the effect of poor ethical awareness or programmes in organisations is potentially a source of major negative consequences for organisations, a case in poin t being the Enron disaster (Garsten & Hernes, 2009). Trevino and Nelson (2007) state that an organisation’s culture is reinforced through a code of ethics, employee ethics training and organisational enforcement mechanisms. Ethical leadership is also imp ortant with regard to the effectiveness of ethics programmes (O’ Toole & Mayer, 2010). Martens and Day (1999, p.165) point out that the CEOs in particular must take a highly visible leadership role in promoting the corporate ethics programmes. Without a visible commitment by the CEO, the programme may lack credibility among employees, particularly among the senior management team itself. Martin (2009) states that it is important to take cognisance of the fact that ethical behaviour in organisations shou ld be endorsed and supported not only via ethical programmes, but also through effective HR management processes. They should be supported by ethical codes of conduct, selection and HR strategy (Mellahi et al, 2010). Intertwined with the aforementioned a spects is an awareness of the impact of the application of these codes on the organisation. Enforcement mechanisms should thus be applied via effective employment relation practices which include disciplinary action. Organisational Culture Culture is the rites and rituals, including the informal behaviour within an organisation. It is often also referred to as how things are done in a corporation: ‘A pattern of basic assumptions that are considered valid and Pieter Nel, Liza Nel and Andries du Plessis 2011 International Employment Relations Review Vol 17 No 2 Page 59 that are taught to new members as the way to pe rceive, think, and feel in the organization’ (Nelson & Quick, 2011, p.556). =t may also be something which is embedded in and expressed by habits of communication. Organisational culture therefore forms the glue that holds the organisation together and stimulates employees to commit to the organisation and to perform (Van den Berg & Wilderom, 2004). Nel (2008) suggests that a definite direct relationship exists between ethical behaviour and corporate culture in organisations also. This is because ethica l components compel executives to integrate ethics into their organisation’s strategic decision -making and corporate culture. Code of Ethics Webley and Werner (2008) say that when attempting to create an ethical culture, developing a code of ethics is imp ortant. However, it should reflect a values context instead of merely a compliance approach to ethics. This approach can be linked to the stance of Trevino, Weaver, Gibson and Toffler (1999) with regard to values and compliance. Maheshwari and Ganesh (20 06, p. 81), however, state that ‘codes of ethics contribute significantly towards institutionalising ethics in organisations’. An organisation’s code of ethics is therefore a distinct and written expression of its values and ethical norms (Rodriguez -Domin guez, Gallego -Alvarez & Garcia -Sanchez, 2009; Valentine & Barnett, 2003). The perceived usefulness of the code of ethics is also positively related to the degree of its familiarity, since familiarising employees with the ethical codes helps to create awar eness of ethical issues. Dessler (2011) also points out that a code of ethics is a means to create an ethical culture in an organisation and it should take place within the context of the culture of a country as well. Employee Ethics Training Ethics training is necessary to integrate ethical decision making into the organisational culture (Trevino & Nelson, 2011). Mellahi et al. (2010) also explain that the major topics covered by ethics training are in the areas of personal conduct, use of of ficial information, public comment, conflict of interest and responsibility to people in authority. Erasmus, Loedolff, Mda and Nel (2010) state that when an organisation provides ethics training to employees, they communicate indirectly that ethical behav iour is valued and should be considered in decision making. Training programmes should also address the effects of unethical behaviour so that discipline issues and the consequences from an HR perspective on the individual as well as their career within a n organisation can be discussed (Plant & Ran, 2009). The first training session should be led by the CEO to enhance the programme’s credibility among employees, because it may be unsuccessful without the involvement of senior leadership (Zhou, Zhang & San chez , 2011). Implications for HR and ER Practice with Regard to the Integration of Corporate Ethics Programs into the Culture of Organisations 2011 International Employment Relations Review Vol 17 No 2 Page 60 On the other hand, Brandl and Maguire (2002) believe that the best training is actually educational, that is the example set by the organisation’s leaders. This aspect of a leader’s integrity is also highlighted by Garsten and :ernes (2009). Organisational Enforcement Mechanisms Wood and Callaghan (2003 ) state that ethical behaviour should be encouraged and supported (rewarded) and unethical behaviour discouraged (disciplined). Organisations base rewards like promotion and pay on performanc e appraisal information. Performance criteria therefore, should be used in the appraisal processes to support ethical ideals and goals. Punishment facilitates important social learning as third parties become aware of the consequences of not following et hical norms. This should be synchronised with the employment relations and HR policies in an organisation (Segon, 2010). Ethics programmes are designed with two different approaches in mind namely, a values -based or a compliance -based approach. A values -based approach encourages employees to commit to ethical behaviour and to define organisational values. A compliance -based approach focuses on detecting, preventing and punishing breaches of the rules. The values -based approach is more effective than th e compliance -based approach as it motivates employees to act in accordance with the values which are shared (Trevino & Nelson, 2011). Rewarding employees for ethical conduct is important because rewards are one of the most important influences on people’s behaviour. This also highlights the interdependency between the human resources and organisation behaviour elements and the pervasiveness of ethical elements in an organisation (Mellahi et al., 2010, p.181). Armstrong (2009) states that behavioural comp etencies such as ethical behaviour, can also be described as behavioural expectations. The assessment of employees’ competence will distinguish between poor ethical behaviour and good ethical behaviour Gupta (2010) . In managing ethics, strong and organisation -wide communication of strategic plans, codes of conduct (ethics) and decisions, and advising and updating employees should be done on a regular basis. Non -compliance and breaches of ethical guidelines and principals should be regarded as non -performance, and disciplinary action should be taken following the organisation’s disciplinary procedures, which should be in line with all the relevant employment legislation. Managers should not tolerate any unethical behaviour by any employee; they should confirm a culture of values that results in high ethical standards and sustainable ethical practices (Dessler, 2011). Pieter Nel, Liza Nel and Andries du Plessis 2011 International Employment Relations Review Vol 17 No 2 Page 61 METHODOLOGY Quantitative and qualitativ e research Various approaches were considered for the research to execute the information gathering process. The quantitative paradigm considers the world to be objective and external to the researcher. Leedy and Ormrod (2005) refer to quantitative resea rch as impersonal and experimental. Researchers remain distant when the research is conducted to ensure an objective view. Conversely, the qualitative paradigm is context -bound. When taking notes, the qualitative researcher automatically summarises the information and this can lead to errors, omissions, distortion and bias, as the researcher’s own perceptions act as a filter. Methods used to collect quantitative data include models, surveys, theories and samples, all of which can be tested and generalis ed (Eldabi, Iran, Paul & Love, 2002). Methods used to collect qualitative data may include in -depth interviews. The data gathered with this approach is valuable, but is it subject to interviewer bias since it may emerge from a small sample (Collis & Hus sey, 2003). It does not allow for replication ‘as controlling the research setting destroys the interaction of variables and therefore affects the underlying philosophy of its research method’ (Eldabi et al., 2002, p. 67). Another criticism of this appro ach is that reliability is low since it is difficult to make similar interpretations on different occasions (Collis & Hussey, 2003). However, the quantitative approach has been criticised because it is context - free and it is not possible to obtain a deepe r understanding of a particular issue or topic. On the other hand, a qualitative approach can be used to put categories and variables in context. Qualitative researchers may not assign meaning to a phenomenon if the context is not described and understoo d from the point of view of the people who are affected by the phenomenon (Gummesson, 2006). Collis and Hussey (2003, p.162) state that ‘one of the main advantages of a quantitative approach to data collection is the relative ease and speed with which the research can be conducted’. =n contrast, interviews can be very time consuming as it takes a lot of time to write down the questions and answers. Consequently this method could be more demanding than a quantitative study (Eldabi et al., 2002). Considering the advantages and disadvantages of the two methods, a quantitative approach was chosen for this research project despite a Implications for HR and ER Practice with Regard to the Integration of Corporate Ethics Programs into the Culture of Organisations 2011 International Employment Relations Review Vol 17 No 2 Page 62 preference for mixed methods for investigating ethics and corporate culture phenomena. This is because the objective wa s to get an overall view from the respondents, bearing in mind the link to employment and HR implications (Mellahi et al., 2010; Mey, 2004). The rationale for using an e -survey is as follows: Firstly, this approach enabled the researcher to obtain a la rge amount of anonymous data speedily. Secondly, when using a survey it is possible to summarize responses with frequency counts and percentages and use statistical indexes that enable the researcher to avoid interviewer (Leedy & Ormrod, 2005). Thirdly, with an e - survey respondents have sufficient time to think about questions. Fourthly, it is respondent friendly as it is less time consuming than other methods and it is also anonymous. Fifthly, open -ended questions are limited in surveys and this makes it easier to collect data, as respondents do not have to provide extensive written information. However, e -surveys, like all surveys, have limitations. Limitations summarised by Gillam (2000) are that surveys are impersonal and consequently respondents may not see answering honestly as a priority. Few people can express themselves comprehensively in writing when discussing complex or judgemental issues. However, after evaluating these considerations, the researchers concluded that an e -survey is approp riate to gather information to address the stated research question. E-Survey Design The researchers found that Erasmus and Wordsworth’s (2004) and Mey’s (2004) survey questions were relevant to this study, so the majority of the e - survey questions used in this study were based on their validated survey questionnaires and were used with permission. The literature that was reviewed for this study also helped the researchers to design additional questions for the survey and to answer the research question s. A questionnaire containing 11 closed questions with sub sections was developed. Closed questions are regarded as more suitable for large -scale surveys as they are less complex, quicker for respondents to answer and are easier to analyse, since the cho ice of potential answers is limited (Eldabi et al., 2002; Lewin, 2005). The researcher deliberately avoided open -ended questions, as these may be problematic because they place high demands on respondents’ time and can easily be misunderstood . Some of t he questions in the survey were dichotomous questions (Yes/No) and others were multiple choice. The majority of the questions made use of a five - point Likert Scale anchored by ‘strongly agree’ and ‘strongly disagree’. The Pieter Nel, Liza Nel and Andries du Plessis 2011 International Employment Relations Review Vol 17 No 2 Page 63 Likert Scale is acknowledged to be very suitable for this study because it turns questions into statements and captures respondents’ opinions about concepts such as codes of ethics and ethics training. It enables the researcher to determine how much respondents agreed or disagreed with certain statements (Collis & Hussey, 2003). The researchers also made use of filter questions to ensure that respondents only answered relevant questions. This is important as respondents might drop out of the survey when they have to answer irrelevant questions. Placing demographic data at the beginning of the survey could be seen by a respondent as a personal intrusion which may deter them from continuing with the completion of the survey. For this reason the demographic questions were included in t he last section of the survey. E-Survey Participants The target population included all the organisations which were registered members of the Rosebank and Avondale Business Associations (RBA and ABA) in Auckland, New Zealand for the 2007 calendar year . These districts are regarded as high growth areas in the Auckland region (Batts, 2007). A total of 427 organisations of the RBA and 61 organisations of the ABA were eligible members. The eligible participants thus totalled 483 organisations. The elig ible list comprised organisations which were traceable, not duplicated and had e -mail and fax details that could be identified by the researchers. Employees in management positions in every organisation who were eligible to complete the survey were targeted as potential respondents. They included: Chief Executive Officer, Director, Assistant Director, General Manager, Senior Manager, Manager and Su pervisor. Pilot E -Survey Designing a questionnaire is very important as the wording can have a huge impact on the outcome of a study ( Co hen , Manion & Morrison, 2000 ). For instance, the way in which a question is framed can produce radically different levels of disa greement and agreement. Piloting a questionnaire is, therefore, essential as it can highlight ambiguities and potential pitfalls (Lewin, 2005). During August 2007, the researchers used a two -phased pilot study to test the questionnaire. Firstly, in orde r to maximise reliability, ten post -graduate students took part in the pilot study survey to check whether the wording of the questions was confusing or offensive. Examples of questions that were asked are as follows: Implications for HR and ER Practice with Regard to the Integration of Corporate Ethics Programs into the Culture of Organisations 2011 International Employment Relations Review Vol 17 No 2 Page 64  How long did it take you to complete the survey?  Do you think that the layout should be changed?  Did the progress bar encourage you to complete the survey?  Do you have any suggestions on how the instructions could be improved? As a result of the feedback, some of the survey question s were modified. In the second phase of the pilot study five member organisations of RBA and ABA respectively were approached to complete the survey in order to further refine the questions in the questionnaire. Examples of questions that were asked ar e as follows:  Do you feel that the questions follow logically?  How comfortable did you feel about answering the questions? An example of a change in a question, in terms of clarity and preciseness, is as follows. The stem of question 1 of the ethics sur vey read: ‘To successfully integrate ethics into your organisation’s culture it is important to…’ This question was found to be unclear and as a result it was changed to read as follows: ‘The following are components which are useful to integrate ethics into your organisation’s culture or way of thinking …’ Data collection: E -Survey The survey itself was executed during the period November 2007 to January 2008. The data collection was executed in the following manner. An information letter (sanctioned by the two senior managers of the respective business associations) with a dedicated web link was e -mailed to 483 organisations. Various reminder emails were sent to potential respondents as well as a faxed letter to remind and motivate them to complete the e -survey. A total of 61 usable responses were received (12.63 % response rate). The analysis and writing up of results took place during 2008 whilst the publishing of results was ongoing through to 2011. Data Analysis – E-Survey The Chi -square together with the ANOVA -Kruskal Wallis test was primarily used to analyse the data. These tests were applied after the results were obtained and means and percentages, in terms of the Likert Scale ratings, were calculated. The ANOVA -Kruskal Wallis test w as applied since Leedy and Ormrod (2005: 274) explain that it ‘compares three or more group means when the data are ordinal (e.g. ranked)’. This test, therefore, facilitates examining possible differences between respondents in the analysis of the data ob tained as it applies to the data in the way it was collected. Pieter Nel, Liza Nel and Andries du Plessis 2011 International Employment Relations Review Vol 17 No 2 Page 65 RESULTS Demographics of the Participants Organisation/grouping of categories The RBA and ABA eligible member organisations were grouped as follows for analysis of the data: the goods -producing s ector, which includes manufacturing and construction representing a 27.9% response; the service producing sector, which includes transport, storage and communications, finance and business services and community, social and personal services, representing a 39.3% response; and the sales orientated sector which includes retail businesses, the motor trade, repair services, wholesale trade, commercial agents and allied services, representing a 29.5% response. (Readers should note that two cases are missing (representing 3.3% to make up 100% of the responses). They did not answer the question so they could not be classified in terms of business categories. Number of employees working in organisations The groupings compiled for analysis purposes comply with the general New Zealand and Survey organisations employment profile (New Zealand statistics, 2005; Walsh & Raffills, 2007). Small includes organisations with fewer than 10 employees and represents a 41% response. Medium includes organisations with 11 to 50 employees and represents a 23% response. Large includes organisations with 51 and more employees and represents a 34.4% response. (Readers should note that one case is missing (representing 1.6% to make up 100% of the responses.) It could not be cla ssified in terms of the number of employers. Position held in organisations Managers completing the survey are as follows: Chief Executive Officers and Directors were 39.3%. A total of 19.7% were in general manager and senior manager positions and 23% w ere in manager and supervisor positions. Only 3.3% completed the other category, the majority of which designated their position as owner. ANALYSIS OF FINDINGS Overall Results of Corporate Ethics Programmes The ‘strongly agree’ and ‘agree’ percentages of respondents were added together for each question to obtain an overview of the positive results. This is referred to as ‘agreed’ when discussing the findings. Similarly ‘strongly disagree’ and ‘disagree’ percentages were added together and are referred to as ‘disagreed’ to indicate negative results. Implications for HR and ER Practice with Regard to the Integration of Corporate Ethics Programs into the Culture of Organisations 2011 International Employment Relations Review Vol 17 No 2 Page 66 The overall result of the usefulness of corporate ethics programmes for integrating ethics into an organisation’s culture is presented in Figure 1, ranked by percentages. Figure 1: Useful components for integrating ethics into an organisation’s culture Most of the respondents indicated that these components are useful. A total of 90.2% agreed (52.5% strongly agree and 37.7% agree) that a code of ethics is useful and only 9.8% gave a neutral response. Nobody disagreed with this component. A total of 67.2% agreed (21.3% strongly agree and 45.9% agree) that ethics training programmes are useful and 21.3% gave a neutral response. This component received the most disagreed (11.5% disagree) responses for this question in Figure 1. A total of 80.3% agreed (29.5% strongly agree and 50.8% agree) that disciplining employees (compliance -based approach) is useful, 14.8% gave a neutral response and 4.9% disagreed (4.9% disagree). A total of 60.6% agreed (21.3% s trongly agree and 39.3% agree) that rewarding employees is useful. This component received the most neutral (29.5%) responses. Only 9.8% disagreed (9.8% disagree) with this component. A total of 98.4% agreed (68.9% strongly agree and 29.5% agree) with t he statement that the example set by senior executives is the most useful component. Only a small percentage of respondents gave a neutral response (1.6%). Nobody disagreed with this component. The example set by senior executives was thus seen as the m ost useful component of all. It can be deduced that all these components appear to be useful for integrating ethics into an organisation’s culture as most responses fell into the “agree” category. The 52.5 21.3 29.5 21.3 68.9 37.7 45.9 50.8 39.3 29.5 9.8 21.3 14.8 29.5 1.6 11.5 4.9 9.8 0 10 20 30 4050 60 70 80 90 100 Code of ethics Ethical training Dis cipline employees Reward employees Examples s et by s enior executives Percentage of respondents Strongly agree Agree Neutral Dis agree Strongly dis agree Pieter Nel, Liza Nel and Andries du Plessis 2011 International Employment Relations Review Vol 17 No 2 Page 67 results also concur with the view expressed by (Van d en Berg and Wilderom, 2004). The mean and standard deviation for these components is presented in Table 1.

Table 1: Useful components for integrating ethics into an organisation’s culture Mean (M) Std. Deviation (SD) Code of ethics 1.57 0.66 Ethics training 2.23 0.91 Discipline employees 1.95 0.79 Reward employees 2.28 0.90 Examples set by senior executives 1.33 0.50 Note: The scale used a range from 1=Strongly agree to 5=Strongly disagree. When reviewing the mean, it appears that these components are useful in integrating ethics into an organisations culture. The results should also be read in conjunction with the standard deviation to contextualise the spread of the response per component. It suggests that the example set by senior executives is the most useful component (M=1.33, SD=0.50). The second highest is a code of ethics (M=1.57, SD=0.664). The third is disciplining employees (M=1.95, SD=0.79), and the fourth is ethical training ( M=2.23, SD=0.91). The least important is rewarding employees (M=2.28, SD=0.90). These results were analysed in more detail by applying the Kruskal Wallis test to analyse differences between size and type of industry sector. The use of the Kruskal Wallis e-test is very relevant since it compares three or more group means when the data are ordinal (e.g. ranked)’. Significant Differences in terms of Industry Sector and Size After the Kruskall Wallis test was applied to all the results, significant differe nces were found concerning ethics training and rewarding employees and these data were analysed in more depth. No differences were found for other components of corporate ethics programmes. Ethics training Ethics training is considered useful since 67.2 % of the respondents agreed. When the results presented in Table 1 are reviewed, it is seen to be the fourth most useful. It is clear that employees cannot be expected to act in accordance with ethical policies if the organisation does not support critic al areas such as education, as was pointed out by Erasmus et al. (2010) as well as Wood, Svensson, Singh, Carasco and Callaghan (2004). A deduction based on Implications for HR and ER Practice with Regard to the Integration of Corporate Ethics Programs into the Culture of Organisations 2011 International Employment Relations Review Vol 17 No 2 Page 68 this result is that both RBA and ABA regard ethics training as being useful in integrating ethics into an organisation’s culture, but they regard it as less useful than a code of ethics. However, after applying the ANOVA -Kruskal Wallis test, a significant difference was found between organisations of different sizes and the usefulness of ethics traini ng when integrating ethics into an organisation’s culture. This result is shown in Table 2. Table 2: Training to integrate ethics into an organisation’s culture based on size Ranks Ethics training Size of organisations N Mean Rank Small 25 36.20 Medium 14 29.86 Large 21 24.14 Total 60 Missing cases: 1 Test Statistics a,b Ethics training Chi -Square 6.159 df 2 Asymp. Sig .046 a. ANOVA -Kruskal Wallis test b. Grouping Variable: Size of organisations The results reveal that respondents from large organisations in particular perceive ethics training to be more useful than medium and small size organisations when integrating ethics into an organisation’s culture. =t can be deduced that ethics training has more value when there is a large number of employees who need to be instructed to perform ethically, which is supported by Nel (2008) as well as Erasmus et al (2010). A deduction based on this finding may be that training is perceived as expensive so it appeals less to medium and small s ize organisations that have a smaller budget and are more concerned about expenses. It appears that although ethics training is listed as the fourth most useful component, large organisations in RBA and ABA in particular are aware of the role of ethics tr aining in the ethics integration process. However, medium and Pieter Nel, Liza Nel and Andries du Plessis 2011 International Employment Relations Review Vol 17 No 2 Page 69 small organisations are perhaps less aware of the importance of this component than larger organisations. Rewarding employees Rewarding employees for ethical practices is perceived to be usefu l as 60.6% of RBA and ABA respondents agreed with this component. As indicated in Table 1, rewarding employees is, however, perceived as least useful. Weaver and Trevino (2001, p. 125) however suggest that when employees receive rewards for expected ethi cal conduct it ‘… may conflict with some employees beliefs that ethical behaviour should be its own intrinsic reward, and that ethical behaviour is diminished in stature if it is rewarded’. Since more than half of the respondents still agreed with rewardi ng employees, it is deduced that, overall, it is perceived as useful. This is confirmed by researchers indicating that ethical behaviour should be encouraged and supported (Segon, 2010). After applying the ANOVA -Kruskal Wallis test, a significant differe nce was found between the different industries. The results are presented in Table 3. Table 3: Rewarding employees in order to integrate ethics into an organisation’s culture Ranks Reward employees Industry N Mean Rank Manufacturing and construction 17 36.47 Retail and wholesale trade 18 32.89 Transport, finance and community 24 23.25 Total 59 Missing cases: 2 Test Statistics a,b Reward employees Chi -Square 7.369 df 2 Asymp. Sig .025 a. ANOVA -Kruskal Wallis test b. Grouping Variable: Industry Implications for HR and ER Practice with Regard to the Integration of Corporate Ethics Programs into the Culture of Organisations 2011 International Employment Relations Review Vol 17 No 2 Page 70 Respondents from the transport, finance and community industry (service sector) perceive rewarding employees as more useful than the other respondent industries do for integrating ethics into an organisation’s culture. The reason for this may be that employees in the service sector have well identified goals to meet and it is consequently easier to measure employees’ performance; the employer can probably determine how many people an employee has serviced. It is possible to reward employees i n accordance with their performance and to encourage them to engage in ethical practices. (Mellahi et al, 2010) suggest that employees need to be rewarded for ethical behaviour to ensure that ethics expectations are not regarded as an additional uncompens ated burden. It thus appears that RBA and ABA members in the transport, finance and community industry in particular differ from the other industry respondents over rewarding employees, but they consider that it is generally useful as a component for int egrating ethics into an organisation’s culture. CONCLUSIONS AND RECOMMENDATIONS The RBA and ABA members perceive all the components of corporate ethics programmes (code of ethics, employee ethics training, rewarding and disciplining employees and the exam ple set by senior executives) to be useful in integrating ethics into an organisation’s culture. Some components are more useful (codes of ethics and discipline employees) than others (ethics training and rewarding employees). Large organisations percei ve ethics training to be more useful than medium and small size organisations do when integrating ethics into an organisation’s culture. The transport, finance and community industry (service sector) perceive rewarding employees (monetary and non -monetary rewards) as more useful than retail and wholesale trade (sales related businesses) and manufacturing and construction (the goods -producing sector). The following are the recommendations that can be deduced from the data from the RBA and ABA managers in Auckland. First, codes of ethics need to be continuously communicated to employees to influence behaviour on an ongoing basis. Second, large organisations should continue to provide ethics training to employees to raise ethical consciousness and prevent possible occurrences of unethical incidents that could damage an organisation’s reputation. Third, it is not only organisations in the service sector that need to encourage and support ethical practices by means of rewarding employees; stronger support sh ould be provided by other sectors as well. Fourth, disciplining employees to dissuade them from engaging in unethical practices Pieter Nel, Liza Nel and Andries du Plessis 2011 International Employment Relations Review Vol 17 No 2 Page 71 in future should have positive results and fifth, senior executives should continue to set an example regarding ethical behavio ur to ensure that corporate ethics programmes are effective in organisations. Sixth, employment relations and HR implications are far reaching. Limitations The study primarily employed a quantitative approach and focused on a small section of the New Zeal and business community. Furthermore, implications of ethics in the context of morals and corruption did not form part of the study, but would be valuable for future research. Despite these limitations, the study produced some valuable insights regarding the approach to and practice of ethics in the context of an organisation’s practice. 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