How To (and How Not To) Assess the Integrity of Managers (19 pages)

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that there may be a problem that warrants an investigation into the leader, the attitudes of the direct
reports, and the performance of the unit.

Finally, if the results are to be fed back to managers, this process would require feedback

facilitators to tell managers that their subordinates expect that they will behave unethically, and this
is an awkward position in which to be. There is some truth to the view that a good reputation is like
virginity: once it is lost, it is hard to get back. Nonetheless, these perceptions exist whether or not
they are communicated and it seems important for managers to know if their subordinates mistrust
them. The key is to help these managers accept that the perceptions exist and to accept responsibility
for addressing them. Developmental work can focus on behaviors that promote trust and commu-
nicate that the manager is motivated by factors other than pure self-interest (e.g., showing concern
for others and the larger organization, prosocial acts of self-sacrifice).

Closing Thoughts

We would like to emphasize three points in closing. First, managerial incompetence is not the same
thing as managerial malfeasance; incompetence comes from a lack of capability, malfeasance comes
from a lack of character. Moreover, although the base rate for managerial incompetence has been
estimated in at least 12 professional sources to average about 50% (J. Hogan et al., 2010), published
estimates of the base rate for flawed managerial integrity are hard to find. It seems that researchers
and thoughtful practitioners have treated this topic as taboo. Nonetheless, it is critical to establish
guidelines for work in this area to progress. Implicit in our dismal evaluation of competency ratings
of integrity is the assumption that a significant proportion of managers are at risk for behaving badly.
But opinions seem to vary; for instance, one reviewer of this paper firmly maintained that events like
Enron and Tyco are anomalies. On the other hand, ethnographic researchers and corporate ethics
experts have suggested that these high-profile cases are just the tip of the iceberg (Jennings, 2006;
Sayles & Smith, 2006). Based on our experience with individual assessments of thousands of senior
managers, consulting with dozens of major corporations, and on the data reported in Table 6, we
estimate the base rate for low integrity managers to be in the 10% to 20% range. This implies that
every organization contains a sizable number of managers capable of breeding mistrust and
disengagement among employees and harming their organizations. Checks and balances, proper
oversight, and periodic assessments are needed to prevent these individuals from acting on their
selfish agendas (Kaiser & Hogan, 2007; Padilla et al., 2007).

Second, we believe that the competency rating method seriously underestimates the number of

managers with integrity issues. This is because the typical competency survey defines integrity
strictly in terms of desirable ethical behaviors that have been observed. The norm is for virtually all
managers to receive acceptable ratings on these measures of integrity. Also feeding the problem is
that managers are more often evaluated by their bosses than by their subordinates; bosses rarely see
the dark side of managers, subordinates routinely see the dark side. Bosses need better methods for
learning about how subordinates view their direct supervisor’s integrity. Alternative methods for
detecting low integrity—such as simulations, assessment centers, enhanced background checks, and
perhaps even specially designed interviews—may also be needed, especially for selection purposes.

Our third point is that it is rare for managers to get caught misbehaving. However, managers

who are likely to behave unethically let cues slip through their leaky channels, and subordinates use
these cues to frame the reputations of their managers. Reputations reflect the likelihood of people
behaving in certain ways, and subordinates’ estimates of the likelihood that their manager will
behave unethically probably come closer to predicting managerial misconduct than any other source
of data. This is ultimately an empirical matter and we encourage research, rather than rhetoric and
opinion, to evaluate our claim.

References

Allport, G. W. (1937). Personality: A psychological interpretation. New York: Henry Holt & Company.
Association of Certified Fraud Examiners. (2010). 2010 Global fraud study: Report to the nations on occupa-

tional fraud and abuse. Austin, TX: Association of Certified Fraud Examiners.

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SPECIAL ISSUE: HOW TO ASSESS INTEGRITY

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