Honesty Is Contagious at Work

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Bosses take their ethics cues from their workplace peers, new research suggests.

While people with a greater tendency to conform to social norms are, on average, more honest, researchers found that managers tend to adjust their ethical behavior based on how their peers act, according to a study from Penn State University. Specifically, if managers discover that their peers are acting more honestly, those managers adjust to be more honest, however of managers find that their peers are acting more dishonestly, they adjust to be less honest.

For the study, researchers divided participants into two groups of managers. Each participant was asked to review a project's budget costs and send "headquarters" the actual costs. The participants were told that they got to keep the difference between the amount they reported and the actual cost.

In the first stage, each manager reported his or her costs independently, and in the second stage, one manager had the opportunity to report his or her costs after learning what the other manager reported. The study's authors were able to review the results to determine how participants' honesty level changed when they had no other social information compared with when they did have that information.

The authors found that the participants' budget reports were more honest when the managers saw their peers' reports as being honest, and the reports were less honest when participants saw their peers reporting dishonest budgets.

The study's authors said their research shows the importance of social information in shaping actions.

"The observation of others can lead to behavior changes in different ways because the behavior of others can establish benchmarks for social comparisons in multiple dimensions," the study's authors wrote.

Pennsylvania State University Smeal College of Business faculty members Steven Huddart and Hong Qu authored the study.