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WASHINGTON, January 12, 2004 – While financial scandals dominate the news headlines, U.S. workers are far more likely to cite hypocrisy and favoritism as the biggest ethical problems in the workplace, according to a new survey by Watson Wyatt Worldwide. By contrast, few workers point to more concrete legal or financial misdeeds when asked about issues that undermine honesty and integrity at work.

“The survey holds mixed news for employers,” said Ilene Gochman, national practice leader of organization measurement at Watson Wyatt. “While most employees do not believe there are concrete ethical breaches in the workplace, some clearly feel compromised by day-to-day hypocrisy and broken promises. This might explain why job commitment is also down – a problem for companies as the economy picks up and job prospects brighten.”

The survey of 1,200 U.S. workers found that a vast majority of employees –72 percent – believe that their immediate bosses behave with honesty and integrity, although they are somewhat less certain about top management – and even their co-workers.

Percentage of Workers Who Feel Others in Organization Behave with Honesty/Integrity in their Business Activities

When asked to elaborate on why others’ behavior lacks honesty and integrity, workers were far more likely to cite hypocrisy and favoritism (62 percent of those who question top management’s integrity cite this factor) than dishonest financial dealings (8 percent) and investor-related violations (2 percent).

A small minority of employees in the survey (9 percent) says that the demands of work “almost always” or “often” put pressure on them to do things that conflict with what they think is right. Another 22 percent say that this is “sometimes” the case. But 70 percent say this happens “infrequently” or “never.”

“Some workers may see the relentless pressures on the job as causing them to compromise their personal standards for behavior and performance. Couple these findings with our ongoing research on employee commitment levels and the data suggest that we could, in fact, be seeing the aftereffects of organization restructuring and downsizing,” said Gochman.

Indeed, overall employee commitment levels have dropped since 2002. Specifically, employee responses have declined at least five percentage points with regard to pride in company, preference to remain with company, overall rating of company and satisfaction with company. Three out of ten workers surveyed also indicated they would leave their company if they could.

“These results should give employers cause for concern,” said Gochman. “One positive lever companies have at their disposal is the role of immediate bosses in the employment equation. Employees still have very positive feelings about their immediate bosses, and this is perhaps the best defense against job hopping as the economy picks up steam.”

In other findings, most employees – 77 percent – say that their company has a clear ethics policy/code of conduct that is clearly communicated to employees. And nearly two thirds (64 percent) say they are encouraged to pass important information – good or bad – up the line. But nearly two out of ten worry that someone reporting unethical behavior would be considered a “troublemaker.”

About Watson Wyatt Worldwide

Watson Wyatt & Company, the primary subsidiary of Watson Wyatt & Company Holdings (NYSE: WW), is an international human capital consulting firm that provides services in the areas of employee benefits, human capital strategies and related technology solutions. The firm is headquartered in Washington, D.C., and has 4,000 associates in 60 offices in the Americas and Asia-Pacific. Together with Watson Wyatt LLP, a leading Europe-based consulting partnership, the firm operates globally as Watson Wyatt Worldwide. Watson Wyatt Worldwide has more than 6,200 associates in 88 offices in 30 countries.

Contact

Ed Emerman, 609-452-5967, eemerman@eaglepr.com