What can we learn from behavioral science about workplace honesty?
Updated: Oct 7, 2019
There is a nice story recounted by Dan Ariely in his book The (Honest) Truth About Dishonesty. Someone once lost the key to his house and had to call a locksmith to help him get in. The locksmith took less than a minute to pick the lock. Dismayed, the person asked what good the lock is if someone can pick it in less than a minute. The locksmith reminded him that the purpose of the lock is not to keep the burglars out. When a burglar wants to get in, the burglar will figure out a way, including picking the lock, to get in. The purpose of the lock is to keep honest people honest. In other words, even honest people need some reminder to remain so
A subcontractor with about 200 employees recently claimed that his business loses about a quarter-million dollars a year just due fudging of time cards by his hourly employees. If true, the loss can not possibly be due to wholesale cheating by only a few bad actors. It has to be because of small fudging by a large number of employees; employees who I am sure are sincere people.
A quick back-of-the-envelope calculation shows that all it takes is an average of 5 minutes of fudging by each employee each day for the subcontractor to lose quarter-million-dollar a year. The subcontractor could have spent half of the money on employee perks, benefitting the same set of employees while achieving better workforce outcomes.
Individually, each such small dishonesty has a minimal impact on a business. However, collectively, their impact on the finance and the culture of the business can be significant. Assuming that the subcontractor’s experience is typical throughout the construction industry, it likely loses $4B each year just due to what seems like a petty fudging of time cards. So the billion-dollar question for those in the industry is, how can we reduce such petty dishonesty by a larger number of a generally honest bunch of people?
Of course, a simple solution is to make it impossible or very difficult for people to cheat. It makes sense because, much like the locks on our doors, it gives people fewer opportunities to be dishonest. However, a vast majority of cases, it is too costly or impossible to put those “locks” in place, leaving us with no choice but to trust people to be honest.
For the situations when we have to rely on people’s honesty, we often rely on better monitoring or stiffer penalties as deterrents. On the surface, this may make sense. No one shoplifts when they know someone is watching them. However, most people don’t shoplift even when no one is watching them. For those people, the risk and the price of getting caught are not the only things that seem to deter cheating. As Dan Ariely, a behavioral psychologist, stated in the book cited above “our sense of own morality is connected to the amount of cheating we feel comfortable with. Essentially, we cheat up to the level that allows us to retain our self-image as reasonably honest individuals.” In other words, each one of us draws our own line of honesty we are not going to cross.
Some businesses trust employees to be honest because they believe, rightfully, in trust as the foundation of all good relationships. Others trust their employees because they have no choice but to do so. Regardless of the reason, businesses rely on their employees to draw the. What causes each employee to draw the line where he or she does? Moreover, how can we get him or her to move the line?
Over the past few decades, much has been learned in behavioral scientists about the psychology of honesty. The bad news from those learnings is, we are all cheaters at some level or others, and the line we draw for ourselves is not fixed. The good news is, we all constantly redraw our line of honesty based on external factors that are within our control. This gives organizations tremendous opportunities to implement policies and procedures that nudge employees towards honestly and to rely more on trust as the foundation of their relationship with their people.