It’s Friday, April 3^rd, and I am enjoying breakfast  with my sweet adorable children and my lovely bride of 23 years. As the four of us talked about current events over a well-balanced breakfast of oatmeal, toast, fruit, and milk, my 22-year-old son reads a headline from a previous day’s Financial Times, “Layoffs strain ethics in the workplace.” Knowing that I help companies understand how employees’ perceptions of their business ethics impacts their engagement and retention, I could tell Josh was looking for some input from the expert at the table.

OK, since this is an article about ethics, it’s time for me to ‘fess up. To this day, my kids couldn’t really tell you what I do for a living except when I am on the road speaking and doing workshops. The last time the four of us sat down to a well-balanced breakfast was when we went to Calgary a few years back. In fact, for me, a “well balanced meal” means I don’t drop the Pop-Tart and coffee mug while tripping over the dog and running out the door with my briefcase and laptop. My older son’s interest in the business section of the newspaper concerns good deals on laptops and cell-phones. And, trust me, current events to a forty-six year old are nothing like current events to a nearly seventeen year old, my younger son. The only part of the story, so far, that is true is the headline and article that recently appeared in FT. Oh, and the fact that my bride is lovely. My kids know they aren’t sweet and adorable. Whew, I feel better. Now, back to my story…

The article makes the point that “good ethics is good business,” whether in good times or bad. The article included insightful comments from Kurt Ewen, an Orlando, Fla., business consultant, community college instructor, and former priest who has studied ethical issues for years.

“Good ethics are as integral to profit as are inventory controls and product pricing,” Ewen said. “Good ethics keep employees and customers on board.”

In a speech given by Frank Vogl, a member of the board of directors at the Ethics Resource Center in Washington, he said “…the most compelling reason for a new era of transparency and accountability is that good ethics makes for stronger business competitiveness. It builds consumer trust, it strengthens the ability of corporations to secure investor support, and it is vital in recruiting and retaining the best employees.” And has there been a more opportune time to talk about transparency than during the financial crises and worldwide meltdown we are dealing with today?

In a study conducted by the Ethics Resource Center lone in eight employees feel pressure at work to make ethical compromises. One-third of employees observe some form of misconduct at work, and one-third fear retaliation by co-workers, if they make their concern known. Ninety percent of workers in the study say they expect their organizations to do “what is right, not just what is profitable.” In fact, the survey findings indicate that in transitioning organizations, the link between ethics programs and how employees view workplace ethics is strongest. In essence, these findings suggest that when times are toughest and ethical risks are greatest, ethics programs may matter most to organizations and their employees.

The data from the 2008-09 Employee Hold’em National Benchmark on Workforce Engagement on employee loyalty and business ethics raises a similar and alarming points:

• Only six in 10 employees believed that their organization is highly ethical, while only half of all employees believed that their senior leaders are people of high personal integrity.

And the link between employee engagement, retention, and ethics is strong. Employees who believe that their organization is highly ethical and their senior leaders have high personal integrity are significantly more likely to be committed and engaged to their organization than employees who feel otherwise. In fact, the third biennial benchmark indicated that when employees believed they work for an ethical company, 89 percent were Fully Engaged with their organization. When employees did not believe they worked for an ethical company, only 2 percent were willing to “stay longer, work harder and recommend the organization as a great place to work.

As you have heard me say before, employees that are committed to your organization are more likely to exhibit behaviors that make your company successful (i.e., increased tenure, recommending the organization as a good place to work, improved work performance). In an era where business practices are being scrutinized like never before, ethical perceptions of the work environment have a significant impact on employee commitment and retention. Companies will do well by remembering that being an ethical company is the right thing to do, and, just as importantly, it works.