Employees, as countless mission statements proclaim, are our greatest assets. However, those workers that exhibit such rule-bending behaviors as coming in late or calling off at the last moment can prove to be a real pain in the asset at times. The reason some workers follow rules more closely than others is simple: everyone is at a different place in their ethical maturity journey.

In The Art of Ethics, author Elizabeth McGrath outlined the various stages people go through on their way to ethical maturity. Our earliest memories of personal ethics involve obedience, she says. When we obeyed adults, we were good boys and girls. When we disobeyed, we were bad. Therefore, we learned to view the world in we're-right-and-they're-wrong terms. As we mature ethically, we recognize that we are entitled to our own opinions about right and wrong. We learn to reject authority in favor of personal free will--whatever the cost--and to accept right and wrong as conditional. Finally, once we experience the consequences of our independent decisions, we begin accepting responsibility for our behavior. We do this by thinking before we act, thus giving some much-needed forethought to our impulsive, or irresponsible, actions.

Unfortunately, many of our employees are stuck in the rebellious stage between strict obedience and ethical maturity. They enjoy the liberty of making their own decisions, while failing to recognize the consequences of their free-will actions. So, it seems to us, they are always testing the limits of their decision-making freedom. Our typical response is to punish the rule breaking. We issue verbal or written warnings to a chronically tardy or absent employee, for instance, only to watch in frustration as the unwanted behavior continues.

Here's the problem with the punishment approach: Once people reach the free-will point of ethical maturity, they're unwilling to return to the obedience stage. No personal consequence outweighs their freedom to choose, for example, to call in sick on a sunny summer day.

So stop trying to push rule benders back to obedience. Instead, pull them forward toward ethical maturity by explaining how their bad choices affect others. Describe the side effects of their tardiness. If the company's technical support telephone lines open at 8:00 a.m., for instance, and an employee arrives ten minutes late, some customers are left waiting on hold. Or, if a worker is late when the production line starts, other employees have to cover multiple positions--sacrificing both quality and safety. It's realizing what the consequences of their actions mean to others that eventually moves people out of the rebellious stage and into ethical maturity. Bookmark this post on del.icio.us

Values matter to today's workers. If you want confirmation, compare the benefits offered by the organizations on Fortune's latest list of the best companies to work for to those from five years ago. Onsite fitness centers are out; in are flexible schedules that allow workers time to fit in a child's dance recital or ballgame. Extended vacations are out; in is paid time off to do volunteer work. Why the evolution? Organizations are finally realizing that the key to employee retention is aligning the company's values to those of its workers.

That was my keynote message to the Ohio Provider Resource Association this week. You can download the slides here. You will need PowerPoint to view these slides. Bookmark this post on del.icio.us

It's been twelve years since Built to Last hit the best seller lists, and I think the book's authors owe readers some revisions. The eighteen companies that Jim Collins and Jerry Porras examined in 1994 may once have been, in their words, "premier institutions--the crown jewels--in their industries, widely admired by their peers." But a dozen years later, we recognize some of those companies more for their disgraced leaders than for their endurance. Consider the following examples of recent scandals involving a third of the companies profiled in Built to Last:

Citigroup CEO Sandy Weil convinced the company's telecommunications analyst Jack Grubman to manipulate AT&T's stock price in 2000 by making excessively optimistic forecasts; afterward, Weil intervened to secure a hard-to-obtain place for Grubman's twin daughters in an exclusive New York City preschool.

In 2004, Boeing's board fired its CEO after the company illegally bid on Pentagon contracts--twice. Hoping to repair its tarnished image, the board lured former Boeing president Harry Stonecipher out of retirement and gave him the CEO position. Fifteen months later, the board tossed Stonecipher for having an extramarital affair with a company office manager.

In more than twenty thousand current lawsuits filed against Merck, plaintiffs accuse company officials of withholding knowledge that the arthritis drug Vioxx posed potentially fatal cardiovascular risks in patients who took it for extended periods.

After announcing a staggering third-quarter 2006 loss of $5.8 billion, Ford disclosed that it would have to restate financial results for the past five years to correct the way it accounted for certain transactions.

In a twenty-seven-page memo leaked to the media, Wal-Mart benefits director Susan Chambers suggested some "bold steps" to control the company's rising employee-benefit costs. Her recommendations included incorporating some physical exertion into every job description, to "dissuade unhealthy people from coming to work at Wal-Mart."

California's attorney general indicted Hewlett-Packard's former board chair Patricia Dunn on charges of authorizing an illegal investigation into which HP board member was leaking information to the media; private investigators hired to find the mole impersonated board members, employees, and reporters in order to obtain their phone records.

Through their questionable behavior, the present-day leaders at many of the Collins and Porras built-to-last companies are proving just how easy it is to dismantle their organizations. It seems the authors overlooked a critical criterion when choosing their subjects: good old-fashioned business ethics. Perhaps a sequel is in order. Bookmark this post on del.icio.us

The national unemployment rate in September was down to 4.6 percent, which is good news if you're in the market for a job. However, if you're an employer, you need to pay attention to another statistic: on August 31, 2006, the job openings rate was up to 3 percent, its highest level since April 2001. In other words, U.S. companies have more jobs than people to fill them. Therefore, if your organization bases its employee retention strategy on the age-old, "everyone is replaceable" theory, it's time you find a new model.

That was my message to a group of graduate students at the University of Findlay this evening. You can download the slides here. You will need PowerPoint to view these slides. Bookmark this post on del.icio.us

Are you a good listener? That's a trick question, because the ultimate judge of your listening behavior is the person talking to you. I've found that most business leaders want to be good listeners, but they nurture four illusions that frustrate their efforts. Before you can master listening, you must first rid yourself of the following illusions.

1. Leaders believe that, in every instance, they understand their listening role. When employees initiate conversations, they expect you to fill one of two listening roles: advisor or sounding board. Those soliciting advice want an expert to diagnose their problems and suggest solutions. On the other hand, some workers simply crave a confidant with whom they can share their success, or their unhappiness, or their apprehension. To listen effectively, you must understand your appointed role.

2. Leaders believe speaking and listening are separate activities. In other words, leaders often fail to pay attention to how their listeners are reacting to what they are saying. We speak and assume our employees agree. But do they? Our employees' body language provides built-in indicators and warning signs that clearly display their real response to our message. You must pay attention for the nonverbal signs of what's going on inside your listeners' heads.

3. Leaders believe they have uncommon gifts for completing several other tasks while they listen. In their book Fish! Tales, Stephen Lundin, John Christensen, and Harry Paul wrote, "You can multi-task with 'stuff,' but you need to 'be there' for people." Leaders who are there for their employees are engaged listeners, present in the conversation, giving their full attention to what their workers have to say. Show your speaker you value what he or she is saying now; you can multi-task later.

4. Leaders believe they can expedite the listening process. The average person speaks at a rate of 125 words per minute. However, most people listen and process information at speeds four or five times faster than that. So they try to drag the speaker along, pushing them to make their point quickly by saying "yeah, yeah" or "sure, sure." Without conversations with our employees, leadership would give way to bureaucracy. Therefore, nothing takes priority over talking with and listening to your employees.

Values-based leadership is about caring, and one of the best ways to show you care is to listen when others speak. If you are going to help workers see the link between their values and those of the organization, you will first need to hear their expressed interests, needs, and concerns. Bookmark this post on del.icio.us

Anti-virus software maker McAfee has detected a worm in its system. The company announced today that it would restate a decade's worth of earnings to account for giving executives backdated stock options. The restatements could wipe out as much as $150 million of the company's profits. McAfee also revealed that it fired president Kevin Weiss and that CEO George Samenuk retired.

"I regret that some of the stock-option problems identified by the special committee occurred on my watch," said Samenuk, referring to an internal investigation. That's nice, but his statement implies that he unwittingly overlooked the back-dating activities. That seems unlikely for a leader who took over McAfee following a previous financial scandal that led to criminal indictments for company executives. Call me cynical, but I'm guessing that every one of the 120 ongoing investigations into stock-option manipulation involves a fully-aware CEO.

John C. Maxwell wrote, "Ethics is never a business issue or a social issue or a political issue. It is always a personal issue." The only reason to backdate stock options is for personal gain. It's time for CEOs to stop apologizing as if they didn't know it was happening, or didn't realize that it was wrong. Bookmark this post on del.icio.us

Mike Thompson has a thoughtful post about personal integrity on his Ethics in Business blog. With so many notorious CEOs in the news, it's easy for us to focus on the ethics of those at the top of an organization. But as Dr. Thompson points out, we need to pay attention to our own choices, too. Bookmark this post on del.icio.us