6 Ethical Issues in the Workplace and How to Avoid Them

By Indeed Editorial Team

Updated 26 November 2022

Published 27 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

It is important to be aware of the various ethical issues that can arise in a place of work. Many times, it is possible to avoid these issues by creating and enforcing clear policies and procedures. Learning more about these common issues can help you avoid them, and it may make the workplace safer and more positive for you and your team members. In this article, we discuss what these concerns are, provide you with six examples of ethical issues in the workplace and outline how to avoid them, particularly as a human resources professional or policymaker.

What are ethical issues in the workplace?

Ethical issues in the workplace occur when a situation arises requiring the persons involved to make a decision about what is right or wrong. Regardless of how major or minor these issues may seem, they can quickly escalate if left unchecked.

If a company has a high standard of ethics, it means it supports an environment built on trust and honesty. It also means that it follows the necessary laws and regulations. To provide you with some context, here are a few examples of ethical dilemmas that can happen in a company:

  • an employee considers whether to keep office supplies for personal use

  • an employee takes the credit and praise for another colleague's work

  • the manager asks an employee to lie about the number of hours they work

  • the boss openly favours one specific employee because they are related

  • an employee uses abusive language towards their coworkers and supervisor

Related: What Is a Code of Ethics in Business? (With Examples)

6 examples of ethical issues

There are many different ethical issues that can arise in the workplace. Understanding what they may look like can help you identify and report them to human resources (HR). If you work in HR, understanding these common issues can help you create policies and practices to avoid them in the workplace. Here are six examples of common ethical concerns:

1. Honesty and integrity

A fundamental aspect of ethics in business is honesty and integrity. This means behaving truthfully and fairly in all dealings with others, both inside and outside the company. Doing so can help you build your own credibility along with that of the company. An example is if an employee is asked by their boss to lie about a project but instead tells the truth because they know their supervisor's request is wrong. By refusing to lie, they show that they possess these two essential qualities. Other examples of situations that can threaten the honesty and integrity of a workplace include:

  • a sales manager lies about how many clients they gained that month

  • an employee lies to their employer, saying they are sick when they have a job interview with another company

Related: 20 Positive Traits To Demonstrate in the Workplace

2. Conflict of interest

A conflict of interest occurs when someone has competing professional or personal obligations that may interfere with their ability to perform their job duties objectively. For example, an employee might face ethical issues if they work for two companies in different industries without disclosing this information, such as on tax forms.

What qualifies as a conflict of interest can differ depending on the company and industry. This is why it is important that the entire staff, from the lower levels to upper management, know exactly what constitutes a conflict. Other examples of situations in the workplace that might qualify as a conflict include:

  • an employee uses company resources, such as its technology or supplies, for their own personal profit

  • an employee starts their own competing business while still working for their employer

  • a supervisor gives an employee special treatment because they share a romantic relationship

Related: How to Resolve Conflict in 8 Steps (Plus Types of Conflict)

3. Harassment

Harassment is a type of discrimination that involves inappropriate physical or verbal behaviour. It is important that employers have clear and enforced policies on what constitutes harassment. This can help keep all team members safe. It is also vital that they ensure all members of staff are aware of the company's rules. Additionally, it is essential that the company has strong procedures in place to make it easier for victims to report an incident as soon as it occurs.

Related: A Guide to Handling a Workplace Bully: Definition, Types and Examples

4. Discrimination

Discrimination in the workplace occurs when someone faces unfair treatment on the basis of their race, beliefs, religion or age. A person can also face discrimination for other reasons, such as their gender identity. Direct discrimination is more obvious, for example when an employer outright refuses to recruit an individual. It can also be indirect, for example when a company uses a screening method that disproportionately excludes certain groups. Other examples of discrimination might include:

  • two employees receive different salaries despite having the same qualifications, skills and experience

  • a group of coworkers exclude and isolate a specific employee

Related: Learning About Diversity and Inclusion: 10 Free Virtual Courses

5. Theft and fraud

These two terms are closely related, but they differ in key ways. Theft involves stealing money from an employer by taking something without permission. Meanwhile, fraud involves making false statements to obtain benefits illegally, such as an employee claiming sick days when they are not ill. A common ethical issue you might face at work involves lying about the hours you worked when you want to avoid getting caught doing something else during that time. Here are some other examples you may encounter:

  • an employee diverts some of the firm's funds into their own personal bank account

  • the employer uses their corporate credit card to make purchases without authorisation

  • an employee overcharges a customer and keeps the difference

Related: What Is Code of Conduct? (Definition, Examples and Tips)

6. Privacy

The line between work and personal life is becoming increasingly indistinct, due in large part to technological advancements. For example, employers may punish any social media postings, particularly if they express concerns about workplace conditions or the organisation as a whole. Employers may also fire employees who make controversial remarks that are at variance with the firm's principles.

The ethical dilemma is, where exactly does it cross over from ethical to unethical behaviour? Because this is a relatively new issue within the field of ethics, every company is likely to have different policies and views concerning privacy. Other examples of breaches in privacy that might be unethical include:

  • the employer accesses another employee's medical records without permission

  • the employer secretly reads another employee's personal text messages or emails

Related: Code of Conduct in the Workplace: Importance and Examples

How to avoid ethical issues in the workplace

When faced with an ethical issue, you might consider the possible consequences of each option before making a decision. It can also prove constructive to consult with other colleagues or experts. It is important to avoid ethical issues because if a company allows them to flourish, it can create a toxic work environment. On a more personal level, you risk losing your job if you break any of the company's ethical policies.

There are several ways you can avoid ethical issues, particularly as a human resources professional or policymaker. Here are a few of the important ones:

  1. Uphold the rules: Familiarise yourself with the organisation's ethical policies and ensure that all employees are aware of what they are.

  2. Train the staff: If you work in HR, make plans to educate the staff on common ethical issues and teach them how to avoid these situations.

  3. Make reporting easy: If you work in HR or policy-making, develop procedures to ensure that any unethical behaviour can be easily reported both internally and externally.

  4. Invite feedback: Invite constructive criticism and different perspectives on how to improve the company's work environment and current ethical policies.

  5. Encourage accountability: Hold employees accountable when they violate the company's policies concerning ethical behaviour and proper conduct. This is especially important if the violator is a leader in the office, such as the manager or supervisor.

Related: 5 Interview Questions about Work Ethic (With Answers)

What happens when ethical issues occur in the workplace?

If an employee behaves unethically, it is usually the management who decides how they want to handle the violation. If you work in HR or policy-making, it is important to consider how the company plans to react to any ethical issues in advance. You may include these details in the employee handbook. Ensure that all the policies follow the Ministry of Manpower's regulations on lawful termination. There are several common options they might choose from, including:

  • Immediate termination: They can fire the employee immediately if the misconduct is serious enough that there is no chance for redemption.

  • Warning: They might let the employee off with just a warning and information on exactly what happened so the violator can avoid committing the same mistake again. This might also include obligatory training on proper behaviour at work or counselling sessions with HR.

  • Professional help: Management can also decide to give the employee a second chance by allowing them time off to seek professional help.

Related: Responsibility at Work Example and Why It’s Important

Please note that none of the companies, institutions or organisations mentioned in this article are affiliated with Indeed.

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