Measuring Your Organization’s Climate for Ethics: The Survey … · 2013. 6. 6. · Measuring Your Organization’s Climate for Ethics: ...continued from page 11 pliance and ethics

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Society of Corporate Compliance and Ethics • +1 952 933 4977 or 888 277 4977 • www.corporatecompliance.org

Editor’s Note: Dr.Tiffany McDowell is a Manager in the Human Capital practice for Deloitte Consulting in Santa Ana, CA. She is a specialist in interview and survey meth-odology, program design and evaluation, research results presentation, change man-agement, talent management, and organiza-tion design solutions. She may be reached by e-mail at [email protected].

José Tabuena is with the Center for Corpo-rate Governance at Deloitte & Touche USA LLP in Irving, TX and formerly served as a compliance officer and in-house counsel. José has evaluated numerous compliance and ethics programs in highly regulated industries. He is a member of the Advi-sory Board for Compliance and Ethics Magazine and may be reached by e-mail at [email protected].

The U.S. Sentencing Commission explicitly recognized the significance of “culture” in its 2004 amendments

to the Federal Sentencing Guidelines, stating that businesses must “promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.”1 To assess whether such an environment exists, orga-nizations are increasingly making use of employ-ee perception surveys. And more and more board directors, given their oversight duties and personal exposure, are requesting such surveys be undertaken.2 These surveys are used to obtain quantifiable data on workforce perceptions that can be applied by companies to benchmark and

monitor progress against their own results (i.e., trending historical company survey data), as well as allowing for comparisons to industry peers, and national averages.

Perhaps you have decided that to better understand your existing corporate culture(s), and/or to determine if your programs are having the desired impact, you need to survey your organization, either by using an off-the-shelf measure, hiring experts, or by creating your own instrument. And likely, at some point during this process, you have asked yourself, “What is this thing called culture? And how can I be sure that I am assessing the right things in the right way?”

Culture or Climate?

The difference between “culture” and “climate” is commonly confused, and the terms are fre-quently and erroneously used interchangeably (even in the Sentencing Guidelines!). They are, however, derived from very different ontologi-cal traditions and represent distinguishable perspectives. And while the two constructs are complementary, for the purposes of quanti-tatively assessing organizational ethics, we are best to conceptualize an ethical climate.

Culture is commonly defined as the beliefs and values which guide the thinking and behavior of an organization’s members. Traditionally, culture was assessed by qualitative methods such as case studies, observation, story tell-ing, and unstructured interviews to examine symbolism, sense-making, and socialization

in an organization.3 Culture research is often concerned with the evolution of social systems over time, and has inconsistent results when predicting outcomes of interest.

In contrast, climate researchers place a greater emphasis on an individual’s perceptions of observable practices and procedures in an organization, and the categorization of these perceptions into analytical dimensions that can be measured.4 Climate, rather than culture, reflects employee’s perceptions of the organizational structures that help them to make sense of their world.5

Emerging evidence suggests that specific climates are predictive of specific outcomes. For example, a climate of safety has been shown to relate directly to safe behavior.6 Similarly, a climate for customer service has been shown to predict customer satisfaction.7 Thus, a climate for ethics would conceptually refer to employee perceptions of the practices and behaviors that get rewarded and supported with regard to ethics in the workplace, and could potentially predict ethical outcomes of interest.

Climate or Program?

The 2004 amendments to the Sentencing Guidelines also call for organizations to regu-larly evaluate the “effectiveness” of their com-

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Measuring Your Organization’s Climate for Ethics: The Survey

ApproachBy Tiffany McDowell, PhD and José Tabuena, JD, CFE, CHC

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Measuring Your Organization’s Climate for Ethics: ...continued from page 11

pliance and ethics program.8 Thus, not only must organizations demonstrate the presence of specific program elements, they must also provide evidence that these programs are actually working. Prosecutors and regula-tors still consider implementation of basic program elements (such as the amount, atten-dance, and type of compliance training, etc.) as well as how effectively these elements are put into action. In addition, companies are using surveys to measure ethical outcomes, or the “impact” of their program activities.9

However, assessing an ethical climate and assessing program effectiveness are not one in the same. Often, practitioners confuse these two distinct constructs and create tools that confound the measures. Questions pertaining to the possible effect of program activities should be distinguished from items that seek to mea-sure a climate for ethics. In reality, an organiza-tion may have the required program elements in place, but still lack a climate for ethics, which could result in problems down the road.

This is not to say that surveys can’t be used to measure the effectiveness of an ethics and com-pliance program. Questions that ask employees about the awareness and impact of training concepts, their use of various program resources, and perceptions regarding compliance and eth-ics communications, etc., are valuable measures of program impact. In addition, there may be value in analyzing the data for correlations be-tween program inputs and ethical climate items.

Measuring Ethical Climates

The concept of an ethical climate reflects orga-nizational practices with moral consequences. Such a climate arises when members believe that certain forms of ethical reasoning and/or behavior are expected norms for decision making. Thus, ethical climate is not character-ized by the individual’s ethical standards or level of moral development. Rather, like all

work climates, it represents components of the environment as perceived by the employees.10

Ethical climates serve many functions in organizations. They help employees identify ethical issues within the organization.11 In addition, ethical climates help workers ad-dress ethical issues by giving them answers to “What should I do?” when faced with an ethical dilemma. In other words, climate serves as a perceptual lens through which workers diagnose and assess situations.

There is no agreed upon approach to measur-ing a climate for ethics. Several attempts have been made by both researchers and practitioners to define this construct and its corresponding measurement, but, as yet, there is no academic or industry standard.12 A review of the scientific literature reveals that much of the discussion revolves around the moral philosophy that forms the basis by which to examine the ethical climate.13 Moral philoso-phy refers to the rules and principles that an individual considers during decision making to distinguish between right and wrong.

Ethical climate surveys often include an assess-ment of what is considered successful behavior, what is rewarded or punished, what is valued, and what is perceived as fair or just. Other surveys have examined the extent to which individuals, coworkers, supervisors, and leaders demonstrate commitment to ethics by setting a good example, keeping promises and com-mitments, and supporting others in adhering to ethical standards.14 As the field continues to evolve, there is a need to refine, validate, and standardize ethical climate measures.

Pros and Cons of Survey Research

Surveys can be extremely useful tools for assess-ing the current state of the ethical climate in your organization. Organizational surveys also communicate a strong message to employees.

Ideally, surveys can signal to employees, custom-ers, or other stakeholders that their opinions are valued, that the organization is committed to them as individuals, and that their input is be-ing used to make positive changes. Transmitting these messages can have a powerful influence on your desired outcome (e.g., increased compli-ance, reduced violations, heightened integrity).

When done incorrectly, surveys also can communicate the wrong messages. If, for example, employees see a survey on ethics as nothing more than a way for top manage-ment to protect themselves from blame, a survey will likely do more harm than good.

In addition, because surveys are specifically designed to be “standardized” so that every em-ployee receives the same questions and response choices, you may not uncover enough informa-tion to tell you why the employees answered the way they did. However, this information can be supplemented with information gathered from interviews with individuals or groups of employees, or with open-ended questions in the survey itself. Ideally, a data gathering project on the ethical climate uses a triangulation method in which managers and leaders are interviewed, a select number of focus groups are used to gener-ate and validate items, and finally, a survey is sent to a representative sample of employees. Further,


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interviews and focus groups can be considered subsequent to a survey, if certain issues require deeper probing and more nuanced evaluation.

The Survey Design Process

Before beginning the survey process, it is a good idea to form a survey committee. The group should be composed of representatives from different parts of the organization who have unique areas of expertise that relate specifically to corporate governance, risk, and compliance (and a survey expert if you have one!). This team is responsible for developing a strategy to manage all phases of the survey project. The process of designing, implementing, and reporting the data from an organizational survey is as important, if not more important, than the actual results. It is imperative you remember that the survey is a means to an end, not an end in itself. Given this, several things should be considered as you design your survey:

n Survey Objectives. You and the survey committee may believe the objectives are clear, but it is critical to ensure agreement on what you are trying to find out before you start to create a survey. Your research objectives ultimately drive everything else, including what questions to ask, whom to survey, and the optimal format to use. Before getting started, it is helpful to write a statement of purpose.15 In developing this statement, con-sider the following questions: n Why is this survey being conducted? n What is to be accomplished by this survey? n What will the organization do with the

survey results?

Once this is developed, the survey team should be able to articulate the survey objec-tives clearly.

n Target Audience. The population to target in any survey research is the group of individuals who possess knowledge

and views pertinent to the survey content. In ethical surveys, the target population will be all members of the organization. Obviously, you want a response rate (the percentage of people who complete the survey) high enough to feel confident the survey results are generalizable to the organization as a whole. There is no ideal percentage to aim for, as the response rate will depend on such things as the length of the survey, the effectiveness of the survey communication, and how effective any previous survey research has been in your organization. However, a 50% response rate is considered acceptable.16

n Mode of Survey Administration. Selecting the most appropriate survey admin-istration mode depends on factors such as the number of respondents desired, how fast the information must be collected and analyzed, and the degree of anonymity required. Today, most companies are opting for on-line surveys for ease; however, no evidence supports that the response rate is different from the traditional paper survey. Whatever the method of administration, it is critical that the target population is assured of their anonymity, as this will increase the likelihood of participa-tion.

n Invitation to participate. Any survey should include a description of the purpose of the project. This description should address the need for the project and attempt to overcome participant anxieties about the purpose of the survey. Employees will likely want to know why they were chosen to participate, what will be done with the findings, and how the survey will impact them personally.

Specific language answering these questions should be included in the invitation. The invitation to participate should also include assurances of anonymity, so participants understand that individual respondents

cannot be identified. Employees should be reminded that the survey is not a test—there are no wrong answers and honest answers are best. They also must be assured that only group-level data will be examined, not individual data. For example, the data is ana-lyzed in terms of how the entire accounting department responded, not in terms of any accountant’s individual responses.

Another set of fears employees may have is that the survey will be used to punish them or their co-workers in some way. These anxieties are likely to influence employees’ willingness to complete questionnaires and may affect the honesty of their responses, if they choose to participate. If possible, provide assurances that the project has no malevolent intent. Supervisors should also communicate the na-ture of the survey to their subordinates, and, if relevant, provide examples of how similar surveys have been used in the past.

n Instructions and Response Scale. You should include clear instructions for accessing and completing the survey. The in-structions can include tips like where to write responses and whether the questions refer to the employee or to employees in general.

The choice of a response scale is a function of a number of statistical and practical concerns. The most important point is to choose a response scale that matches the information requested in the question. In one of the commonly used ethi-cal climate surveys, the scale range is anchored from “Completely False” to “Completely True.”

In general, there are two rules for response scales. First, use an odd number of response options (3, 5, 7). This is particularly relevant where a middle value can be used to assess “no opinion or neither agree nor disagree.” Although offering a “don’t know” or “no opinion” option for perceptual questions


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is sometimes perceived as losing informa-tion, forcing people to express an opinion when they genuinely have no opinion, or are unsure, may lead to misinterpretations of the data. Second, use no more than seven points in the scale, because little or no increase in precision is gained beyond seven points. (See side bar on page 18 for examples).

n Wording of QuestionsA good guideline for organizational research is that “You only get what you measure” and, conversely, “If you don’t want to know, don’t ask.” Here are some guidelines17 to keep in mind when constructing questions:n Keep questions short, unless a detailed

explanation or clarification of an issue is ab-solutely necessary. (e.g., “Successful people in my company operate by the book”).

n Avoid ambiguity. Questions should be specific, avoiding generality. For example, “On a scale from 1 to 5, how popular is the company’s ethics program?” begs the question, “popular with whom?” Some respondents will answer an item like this in terms of how they, personally, would rate the program; others will answer in terms of popularity with their peers.

n Avoid unfamiliar terms and jargon. Employees may not understand what is being asked in “The CRO reports to the (1) CRO (2) CEO (3) BOD (4) Board Level Risk Committee.” Terms such as CRO may not be well known by typical employees. When a term that is not in common usage must be used, it is wise to precede the item with a brief explanation.

n Avoid requiring inaccessible infor-mation. Avoid asking employees for information that they would not know or do not have access to. For example, “My company has a superior ethics program as compared to what is offered by other com-panies” assumes that employees are familiar with both their employer’s ethics program

and those offered by other companies.n Avoid hypothetical questions. Ques-

tions that begin with “What would you do if…” (e.g., “What would you do if someone committed an unethical act?”) are difficult for employees to answer. They require greater mental effort on the part of the employee and take longer to answer.

n Write questions in the present tense. People’s ability to recall the past is limited. The more current and specific the question is, the better. If a recall question is neces-sary (e.g., “Over the past six months, I have witnessed an unethical act at work”), the time frame should be as recent as pos-sible, and not over six months unless the reference is to a major event, such as the compliance program roll-out or manda-tory ethics training.

n Avoid causing anxiety. Some questions may cause employees to feel anxious about their futures, (e.g., “I would feel nervous if my organization was firing employees for occasionally using their company laptop to check personal e-mail.”) Where pos-sible, avoid these questions.

n Do not use “double-barreled” ques-tions. Double-barreled questions tap more than one topic and can introduce ambigui-ties into the responses. For example, “The organization has created strong awareness about its ethics and compliance guidelines and principles and has trained employees how to use them.” If employees disagree with this statement, they may be answering about the awareness, the training, or both. Generally, the use of conjunctions like “and” or “or” should be carefully consid-ered. Double-barreled questions should be separated into two questions.

n Do not use leading questions. Leading questions are sometimes used deliberately to achieve personal goals. For example, the ethics training director might ask “Most people feel that ethics training is extremely

important for career advancement. Do you agree?” Be aware of this potential issue, and eliminate these questions.

n Watch for potential cultural bias. When conducting a cross-cultural survey, just translating it into a different language may not be sufficient. Keep in mind that U.S. benchmarks may not be appropriate. Consult a local expert when exporting your survey to a different culture.

n Use multiple measures of the same topic. If a survey is designed to assess attitudes or opinions about issues that are subject to some interpretation by employ-ees (as is the case with a climate survey), you should include multiple questions on each topic. This ensures that the responses are a function of the employee’s percep-tions of the issue and not a function of the idiosyncrasies of a single question. When multiple questions are asked, the average of the answers to these questions produces a “total score” for that topic. For example, if the topic of interest is supervisors setting an ethical tone, the questions might be “My supervisor talks about the importance of ethics and doing the right thing in the work we do”, “My supervisor sets a good example of ethical behavior”, and “My supervisor supports me in following our Code of Ethics and Conduct.”

n Keep the survey to a reasonable length. Generally, the survey should take no more than 20 to 30 minutes to complete. If it takes longer, the employee may become bored and begin responding in a careless fashion. Also, management may not fully endorse the survey, because of concerns about loss of productivity.

n Open-Ended QuestionsIt is advisable to include at least a few open-ended questions in any survey. At the minimum, a “comments” section will provide


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respondents the opportunity to voice their opinions on issues that they feel are important, but that were not addressed in the survey.

Specific open-ended questions such as, “What advice would you give your CEO to improve the ethical climate of the company?”

are more effective at eliciting specific and use-ful answers than vague or general questions. Open-ended questions are often used as a follow-up to important structured items. An open-ended question can point out unantici-pated interpretations of questions and varia-tions in the actual meanings in responses.

n Background (Demographic) Questions

In many cases, it is useful to include questions on employee characteristics. These questions concern personal characteristics (e.g., age, gen-der, marital status) or job/work characteristics such as geographical location, functional unit (e.g., sales, marketing, finance), supervisory unit, and hierarchical level.

These questions are useful to divide the respondents into sub-groups of interest. For instance, you might be interested in whether reactions differ by factors such as gender, shift, location, exempt vs. non exempt, full-time vs. part time, and job classification. These issues need to be identified in the planning stage be-cause, if they are not, the organization will be unable to identify the characteristics of a given response group during the data analysis.

However, the survey should measure employee characteristics only if they are important for a particular survey purpose. Background mea-sures are often seen as intrusive or unnecessary and may be viewed by employees as a way to identify them (particularly if many different characteristics are used). Generally speaking, it is best to avoid asking any question that deals with race, color, physical appearance, dis-ability, citizenship/national origin, or religion. Such questions can be interpreted as offensive and as an invasion of privacy.

Survey questions should be constructed on a need-to-know basis. That is, any question that is asked should have a specific, defensible

purpose. Survey questions that touch on any of the above topics should be examined by an attorney familiar with labor law at local, state, and federal levels.

n Next Steps Once the survey is designed, you will ideally conduct a pilot study to pre-test the survey. This procedure can help avoid numerous problems later in the process, and save many additional hours of work. After refining the survey, you will want to administer it to your selected population, being sure to com-municate effectively during the roll-out and data collection phase of the survey. Upon completion of the data collection phase, the challenging but rewarding task of analyz-ing the data begins. This should be followed by feedback sessions with leadership and management about the results and recom-mendations, and finally communication of the endorsed action plans to the organization as a whole. Part of this action plan usually involves a follow-up survey scheduled for some point in the future.

In summary, not only must you consider the effectiveness of your formal compliance


Recommended Resources

Edwards Jack E, Thomas Marie D, Rosenfeld Paul, and Booth-Kewley, Stephanie: How to Conduct Organi-zational Surveys: A step-by-step guide. Thousand Oaks, CA: Sage, 1997.

Kraut, Allen I. (ed): Organizational Sur-veys: Tools for Assessment and Change. San Francisco, CA: Jossey-Bass, 1996.

DeVillis, R F: Scale development: Theory and application. Newbury Park, CA: Sage,1991.

Sample Questions Reflecting Different Types of

Response ScalesEthical Climate

“My supervisor sets a good exam-ple of ethical behavior.”o Completely false, o Don’t know, o Completely true

“What advice would you give the CEO to improve the climate for ethics around here?”Drop-down menu (select all that apply): o Better communication o Hire more ethical people o Reward ethical behavior o Deliver ethics training o Set ethical tone at the top o Other (box for comments)

Program Impact

“The training I receive helps me comply with legal requirements.”o Strongly disagreeo Disagreeo Neither agree nor disagreeo Agreeo Strongly agree

“There is a means for employees to communicate, anonymously if so desired, other than through a direct supervisor.”o Yes, o No


30August 2007


programs, you must also address a little thing called culture. Survey design teams should know how to begin thinking about what cre-ates a climate for ethics and how to measure it appropriately. Because survey research has become increasingly popular as a method to assess organizational life, it is important to address some of the fundamental princi-pals of survey design. Knowing the design fundamentals is helpful, whether you choose to draft your own survey or employ an exist-ing measure. Remember—this is only the beginning. The data collection, analysis, and the feedback and sharing of results warrant separate articles all on their own. n

This publication contains general informa-tion only and Deloitte Consulting LLP is not, by means of this publication, render-ing business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte Consulting LLP, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.

REFERENCES1 Federal Sentencing Guidelines for Organizations, §8B2.1.(a)(2)2 Noted anecdotally by panelists at the New York Chapter Meeting of the

National Association of Corporate Directors (NACD), December 12, 2006. A number of compliance and ethics program surveys have attempted to benchmark whether organizations regularly conduct an employee perception survey. See, e.g., Corpedia and The Conference Board 2006 Compliance Program and Risk Assessment Benchmarking Survey.

3 Denison, D: “What is the difference between organizational culture and organizational climate? A native’s point of view on a decade of paradigm wars.” Academy of Management Review, 1966, vol 21(3), pp. 619-654

4 Ibid.5 James, L., & Jones, A: “Organizational climate: A review of theory and

research.” Psychological Bulletin, 1974, vol 81, pp. 1096-11126 Zohar, D: “Climate as a social-cognitive construction of supervisory safety

practices: Scripts as proxy of behavior patterns.” Journal of Applied Psychol-ogy, 2004, vol 89, pp. 22-333.

7 Schneider, B., & Reichers, A: “On the etiology of climates.” Personnel Psychology, 1983, vol 36, pp. 19-39

8 Federal Sentencing Guidelines for Organizations, §8B2.1.(b)(5)(B) 9 Martinek P: “Focus should be on ethics program outcomes, not process.”

Compliance Week, June 5, 200510 Victor & Cullen: “The organizational basis of ethical work climates.”

Administrative Science Quarterly, 1988, vol 33(1), pp. 101-12511 Ibid.12 Cullen, J. Victor, B. & Bronson, J: “The ethical climate questionnaire: An

assessment of fits development and validity.” Psychological reports,1993, vol 73(2), pp.667-674;

Cullen, J, Victor B, Stephens C: “An ethical weather report: Assessing the organization’s ethical climate.” Organizational Dynamics, 1989, vol 18(2), pp. 50-62;

Honeycutt E, Glassman M, Sugelder M, Karande K: “Determinant of ethical behavior.” Journal of Business Ethics, 2001, vol 32(1), pp. 69-79;

Reidenbach R, Robin D: “A conceptual model of corporate moral develop-ment.” Journal of Business Ethics,1991, vol 10(4), pp.273-284

Wimbush, J, Shepard J: “Toward an understanding of ethical climate: Its relationship to ethical behavior and supervisory influence.” Journal of Busi-ness Ethics, 1994, vol 13(8), pp. 637-647; and

Weaver G, Trevino L: “Compliance and values oriented ethics programs: Influences on employees’ attitudes and behavior.” Business Ethics Quarterly, 1999, vol 9(2), pp. 315-335

13 Ibid. 14 Seligson AS, Choi L: Critical Elements of an Organizational Ethical Culture.

Ethics Resource Center, 2006. Retrieved June 10, 2007 from www.ethics.org15 Edward J, Thomas M, Rosenfeld P, Booth-Kewley S: How to Conduct

Organizational Surveys: A step-by-step guide. Thousand Oaks, CA: Sage, 1997

16 Ibid.17 Kraut, Allen I. (ed): Organizational Surveys: Tools for Assessment and

Change. San Francisco, CA: Jossey-Bass, 1996.

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