Pay for Ethics?

As part of yesterday's post Ethics Trump Pay for Most Workers, we highlighted the question: should ethics be a factor in rewarding employees?

A client of mine recently addressed this very question when company managers formed a task force for the purpose of developing a new performance management program.  One of the tasks that they faced was identifying and defining a set of desired employee behaviors (they called them "performance factors") which would provide one part of the universal yardstick for measuring and appraising employee performance (and which would ultimately be a factor in compensation decisions).  Strong disagreement broke out in the group when they confronted the recommendation (by one member) that "integrity" be one of the performance factors.  The arguments, if I can paraphrase them here, went something like this:

Pro:  "How can we not include integrity as one of our performance factors?  It's a critical part of our mission statement!  To leave it out of the performance program would imply that we don't really think that it is important..."

Con: "Yes, of course integrity is important here.  But are you tellimg me that we are going to measure and reward different levels of integrity among our employees as part of their performance appraisals?  How do you see that working?"

Long story short, following some healthy debate, the task force concluded (although not unanimously, I have to tell you) that -- in fact -- integrity is a condition of employment at their organization, not a performance factor.  I was pleased at the group's conclusion, having had to bite my tongue for a good share of the discussion in hopes that they would arrive at this destination on their own, without a push from me.

Bottom line, I believe that ethics (or integrity) have no place in a reward system.  Putting them there implies that you will accept (and pay for) different levels of ethics or integrity, that addressing a lack of ethics or integrity merely requires offering the right carrot (or stick) to the offending employee.  This doesn't feel right to me, and I doubt that it does to many others (though I would welcome comments representing an opposing viewpoint).

Paul Hebert, author of Incentive Intelligence says it well in his recent post in response to this question, a part of which I share below as a parting point:

Rewards should be used to focus attention on those things that aren't "standard", help create new directions for a company or to get people to put in that little extra that makes a big difference.  Providing rewards for ethics is well... unethical.