Ethics in Performance Management

The ethical behaviour of an organization is a key essential for doing business in today’s competitive market. This type of behaviour plays an important role in the organization’s overall success and in this regard, an ethics professor Brenner (1992) observed, ‘A corporate ethics programme is made up of values, policies, and activities which impact the propriety of organization behaviour.’

The organizations are defining a comprehensive ethics and compliance program which includes six components:

  • Written standards of ethical workplace conduct
  • Means for an employee to anonymously report violations of ethics standards
  • Orientation or training on ethical workplace conduct
  • A specific office, telephone line, e-mail address or website where employees can get advice about ethics related issues
  • Evaluation of ethical conduct as part of regular performance appraisals
  • Disciplinary action against employees who commit ethics violations

Concept of Ethics

Ethics may be defined as a process whereby we choose between competing moral and/or economic values.Dave Kinnear 2002

For defining ethics, it is a system or code of moral standards of a particular person, group or profession. It may be defined as the actions an individual take on himself to ensure his continued survival across the dynamics.

Ethics deals with whether to perform certain kinds of action or not in line with what is acceptable to the society as a whole and therefore, ethics is the process of deciding as to what is good for human beings and also of rational thinking aimed at establishing ‘what values to hold and when to hold them’?


Principles of Ethics in Performance Management

The key principles of ethical performance management are as follows:

  • An ethical performance management system directs its employees to respect the core values of the organization. Because the ethics practiced by the organization is in conjunction with its environment. On the other side, the organization respects its employees and provide good working environment so that they will generate the result as per the potential.

  • This system is designed to make transparency in its operation and all the parties involved in performance management system respect each other’s needs, values, and preoccupations.

  • It emphasizes individual responsibility for personal decision making, behaviour, and action rather than collective responsibility.

  • This system put emphasis on employees respecting and actively considering the ethical concerns and issues of all stakeholders, rather than focusing merely on shareholders alone.

  • This seeks to build or change culture to a state in which the vision of the organization includes its employees, its customers, and the society at large.The values and norms of organization support employee’s decision making, behaviour, andactions consistent with an ‘ethical’ vision.

  • This system provide fair and free environment to itsemployees so that employees can get the opportunity to scrutinize the basis upon which the important decisions were made.

Developing Code of Ethics

The key guidelines to maintain an ethical performance management system in the organization are given below:

  • HR Responsibility: In organizations, the HR professionals are responsible for adding value to by developing HR functions. They are also responsible for maintaining the balance between performance improvement and ethical behaviour in the organization.

    The HR professionals shall act as ethics custodians and train and develop human resources for dealing effectively with relationship issues of morality, integrity, and honesty with other stakeholders particularly customer, suppliers, and society at large.


  • Developing Standards: Human resource professionals must strive to meet the highest standards of competence and ethics. The purpose is to keep abreast of organizational strategy, mission, and objectives on a continuous and consistent basis.

    They must drive ethics training of top managers and employees on a wide scale. They have to educate them on the significance of ethics in attaining high-performance standards. The HR professionals shall transmit ethics to employees, managers, and external stakeholders through performance management system.


  • Ethical Leadership: In making performance management a truly business-aligned, transparent, and credible management endeavor, human resource professionals must exhibit individual leadership. They should act as ethics communicator to improve the situation for their organizations.


  • Fairness and Justice: For employee’s work achievements and their contribution in improving organizational competence and performance, there should be fairness and justice in respect of rewards and recognitions.

    Human resource professionals are ethically responsible for promoting fairness and justice in the organization and they must enable a culture where ethical behaviour and action is a key performance criterion.


  • Conflict Management: They must safeguard the interest of all stakeholders to eliminate the conflict arising between manager-employees, employer-employee and employees-organization on certain issues related to rewards and recognition etc.


  • Transferring Information: The human resource professionals should ensure truthfulness of communication. It should be in respect of performance feedback and counselling and help top leadership in taking informed personnel decision.

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