When Immorality Benefits the Organisation, What Are the Consequences?

FEHR, Ryan | WELSH, David | YAM, Kai Chi | BAER, Michael | WU, Wei | VAULONT, Manuel

Employees who act unethically are punished, ostracized, and even fired. But are these penalties applied when immoral behaviours contribute to the “greater good” of an organisation? In important new work, Manuel Vaulont of HKUST and colleagues delineate the conditions under which people separate morality from performance in organizations. This has meaningful implications for creating healthier supervisor–employee interactions and avoiding unethical behaviours in the workplace.

For unethical behaviours that are driven by self-interest, such as to attain personal benefits, “it is understandable that employees’ unethical behaviour would be negatively perceived,” say the researchers. And yet, there is another surprisingly common motivation for employees to engage in unethical actions—to benefit the organization.

Unethical pro-organizational behaviours include lying to cast the organisation in a better light, exaggerating the quality of products or services, and failing to divulge damaging information to the public. With these acts, ethical principles are sacrificed for the sake of the organization. “This raises the question of whether unethical pro-organisational behaviour might be positively perceived in some circumstances,” say the authors.

To address this possibility, the authors considered the phenomenon of “moral decoupling,” whereby a person’s performance and morality are separately judged. Take, for example, the golfer Tiger Woods, who continued to receive support from fans after his infidelity became public knowledge. “By engaging in moral decoupling, individuals are able to simultaneously condemn the behaviour of others while still recognising them as high performers,” the authors explain.

Assuming that employees “mirror behaviour that they believe will garner positive reactions from their supervisors,” the researchers first hypothesized that employees engage in more pro-organisational unethical behaviours when they believe that their supervisors endorse morally decoupling. The authors also queried whether supervisors’ awareness of their own unethical pro-organizational behaviour determines their reactions to employees. Whilst supervisors’ evaluations are generally negatively influenced by unethical behaviours, they are “also driven by the supervisors’ own attitudes, preferences, personalities, and biases,” say the authors.

In one field study and two experimental studies, the researchers assessed the interactions between the unethical pro-organisational behaviour and perceived performance of both supervisors and employees. The field study collected data from 176 supervisor–employee dyads across a range of industries. The experimental studies presented hypothetical ethical dilemmas to measure the relationship between perceived unethical pro-organizational behaviour and performance of 297 employees and 281 supervisors.

The results of all three studies suggested that employees exhibit more unethical pro-organisational behaviour when their supervisors do the same. “This effect is strongest when employees believe that their supervisors morally decouple,” report the authors. Worryingly, supervisors also viewed employees’ unethical pro-organizational behaviour as a positive indicator of performance when they self-rated as high in moral decoupling. 

Unethical pro-organizational behaviour might have short-term benefits, but it poses serious risks to the reputation and long-term performance of organizations and employees alike by endangering the relationships with stakeholders and inviting lawsuits. The authors therefore suggest that performance management systems should “reward more than just short-term task performance.” Other solutions include screening for moral decoupling when hiring and encouraging supervisors to consider ethics when evaluating employee performance. “Organisations should be mindful of the dangers of focusing on performance to the detriment of ethics,” conclude the researchers, “and should explicitly emphasise that they do not advocate unethical pro-organisational behaviour.”


Assistant Professor