Strength of character is a wonderful thing. Most people strive to live with integrity and authenticity. They try to be honest, to treat others fairly, and to be compassionate. It’s no surprise that businesses want to hire people who exhibit “strength of character,” and there’s reason to believe it’s worth it. The Harvard Business Review, for example, has made a solid case that businesses whose leaders have a strong moral character make more money.
Yet, even the best of us can fail when our self-interest conflicts with doing the right thing. And in many cases, good people falter because they were incentivized to do so.
Wells Fargo’s fake accounts scandal is probably the most recent and high-profile example of incentive programs gone wrong. Management at Wells Fargo put tremendous pressure on their sales teams to meet unrealistic goals for opening new accounts. Former employees report that they opened fake accounts to avoid being publicly shamed by their managers and because they needed to keep their jobs. The perverse incentives have so far resulted in a $575 million in settlement, a lagging stock price, and 5,300 people who lost their jobs.
The workers who opened the fake accounts likely didn’t think they were going to walk down an unethical path when they started working at the bank. But pressure to perform and legitimate self-interest conspired against them. Strength of character may be the price of entry for a good career, but it isn’t enough. It never has been. Cultivating an ethical workplace needs more effort than simply hiring “people of good character” and sending them to compliance trainings once a year. Businesses should seek out ethics expertise to help them build incentive programs that balance the self-interest of the employees with the interests of the clients and the business.
Hi Tricia. Long time, no hear. Hope you are well. Nicely said.
Thanks, Heather! As you can see, I’m doing something a little different with the site. I’m still figuring out what to do with the travel posts, but for now I’m transitioning to this consulting practice. Hope you’re doing well too!