Creating a workplace where integrity flourishes isn't easy, particularly if ethical corner-cutting has become the prevailing mentality. However, companies can take powerful steps to raise the bar – such as instituting a code of conduct, and tying pay raises to its implementation. Whatever a company does, it's important to let employees know that they'll be treated equally. Otherwise, the message comes across as, "Do as we say, do not as we do."

Rethink Employee Incentives

Most companies rely on incentives, such as cash bonuses, to encourage loyalty and hard work. However, critics like Harvard Business School professor Justin D. Margolis contend that this approach encourages employees to cut ethical corners in pursuit of incentives. Instead, companies should link performance goals with ethical standards, Business Management Daily advises. Workers are more likely to meet or exceed those standards if they're included in annual reviews, and made a condition of any future raises.

Set Consistent Standards

Creating a code of ethics is a good way of outlining the kinds of behaviors that an employer will accept. In crafting such policies, however, companies often focus more on prohibited conduct, instead of ethical behaviors that should be promoted, Margolis says. Employees pick up quickly on ethical policies that lack consistency. There's little point in telling workers not to cross certain ethical lines, for example, when they're also urged to "make those numbers."

Model Appropriate Behavior

Ethical behavior starts at the top. Employees who see corporate leaders model appropriate ethical behavior are more likely to emulate it themselves, and ensure that co-workers do likewise, states Business Management Daily. Managers should discuss ethical standards at employee meetings, and also incorporate them into the hiring process, too. Hiring managers should identify applicants who share the company's ethical values, and will maintain them on the job. These steps reinforce the message that integrity, not profit, will drive daily operations.

Encourage Complaint Reporting

Employees can play a critical role in reporting unethical behavior, but companies must offer a venue to hear their complaints. Otherwise, employees will hesitate to complain, either because they fear retaliation, or don't want to appear ungrateful, as "Inc." magazine notes. However, an ethical culture becomes difficult to maintain if employees don't think that their voices will be heard. Managers should be trained to investigate ethics complaints, and follow up on them, once they've determined the facts.

Other Considerations

Without follow-up from management, employees won't take any of a company's proposed measures to level the ethical playing field seriously. There's no point in asking employees to identify problems when managers won't do anything about them, notes "TLNT" magazine. Faced with this situation, employees may grow cynical, disaffected and more likely to behave unethically, too. Taking the time to address complaints lets employees know they're not hired hands, but partners in strengthening the company's operations.