How the ethical work climate can impact employee performance

Having an ethical work climate can align employees with your core principles

With all the political and cultural changes happening today, it is more important than ever for your business to establish an ethical work climate. A proper ethical climate will help keep your business running smoothly and positively impact your team and their productivity.

Let’s look at how an ethical work climate can improve the day-to-day work experience for everyone in your organisation — and improve your bottom line.

Why is an ethical climate important to your organisation?

Your organisation’s ethics involve the procedures, culture, and policies that affect every aspect of your business. They represent shared formal and informal perceptions of procedures and policies. Creating an ethical work climate can:

  • Enrich organisational commitment.
  • Improve employee morale.
  • Provide clear boundaries.
  • Show employees how to make the right decisions.

In a workplace with an unethical climate, employees are more likely to experience increased stress and workplace accidents or errors. This causes them to be less engaged and have lower overall job satisfaction, leading to lower productivity, higher levels of absenteeism, burnout, and turnover. 

Not only does this make it harder to find and keep talented team members, but it can cost your business a pretty penny. Unhappy employees cost U.S. companies an estimated $550 billion annually. In September 2021, a record-breaking 4.4 million employees quit the workforce. 

How do you craft an effective organisational climate?

An organisational climate measures your team’s views and attitudes about your company’s practices and policies. An effective organisational climate helps provide a framework for your team to know what is expected of their behaviour. Here are some steps that will help you create an effective organisational climate:

1. Provide regular training

Training on issues that could put your employees in danger or lead to legal consequences should be provided regularly. These include sexual harassment, discrimination, bullying, and other behaviours that could contribute to an unethical work climate.

This will give your team the proper guidelines to make decisions that are in line with your company’s values and contribute to a more positive workplace atmosphere.

2. Specify your company’s mission and values

When your team understands your company’s mission and values, they will be more motivated and invested in their work. Articulate your organisation’s position and goals, and explain to your team how their roles contribute to your company’s success.

Everyone likes to feel like they are making a difference and working toward something good.

3. Gather feedback

Collect feedback from your team to identify the current organisational climate of your business and bring to light issues you may not notice on your own. One-on-one meetings, group meetings, or even pulse surveys are a great way for your team to provide feedback.

4. Give everyone a voice

Provide everyone with a forum to bring up concerns and complaints and give them a secure channel for anonymous reports. There may be times when your team is not comfortable speaking up publicly about actions or conduct they witnessed that is not in line with your company’s ethics.

5. Listen and respond with action

Listen to your team and make changes based on the feedback you receive. Be prepared for both positive and negative feedback. How you respond to your team will impact their willingness to provide their insight in the future. 

6. Use team building activities

Team building activities can build trust, increase collaboration and communication, and create stronger personal connections among your team members. When your team gets to know each other on a personal level, they are more likely to respect each other and work together cohesively.

This will help keep everyone engaged and immersed in the company’s culture.

An effective organisational climate should make your team feel safe, secure, confident, appreciated, and enthusiastic.

What should the ethical climate of an organisation be?

The ethical climate of your organisation is built on your behaviour and actions as a leader. It is a reflection of your core values. If your team sees you acting inappropriate or unprofessional, they will believe that it is acceptable for them to do the same.

So you must consistently model the same ethics that you would like to see throughout your business. 

Good leaders are easy to approach, honest, trustworthy, empathetic, and good listeners. They value their team and treat them as equals. They communicate with them in a respectful manner, especially when it is time to coach them or when a member of their team needs to discuss serious topics like their mental health.

You should also regularly show your thanks and appreciation for your team’s hard work and achievements. They are a key part of keeping your business going. Turnover is costly, and over 91% of HR professionals believe that giving recognition and rewarding employees makes them more likely to stay with your business.


Having an ethical work climate in your organisation can compel your team to make decisions, take action, and behave in ways that are in line with your company’s core principles.

This improves the workplace atmosphere, increases engagement and employee satisfaction, and creates a better environment for your team to develop and grow your business.

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