Integrity Pays Dividends

Investor's Business Daily

Does integrity really pay off on the bottom line?

Tony Simons says it does, and he has hard data to back it up.

Simons, a professor at Cornell University’s School of Hotel Administration, surveyed employees at 76 hotels. He found that hotels where workers say their bosses keep their word and do what they say they’ll do turned a higher profit than those where workers are leery about their bosses’ integrity.

How does that difference translate into money? Each hotel happier with management’s integrity drew $250,000 more in profit a year, he found. “It was the single biggest predictor of profitability among the things you can control,” said Simons, who wrote the new book “The Integrity Dividend.

Ways to reap that dividend:

Know integrity’s role. “It’s not all it takes to lead, but no leadership takes place without it,” Simons told IBD. People who trust their boss are more willing to go the extra mile, and they won’t waste time questioning a boss’ motives.

Make it a priority. “When I joined Applebee’s, I wanted to build a culture where people were standing in line to join the company because of the integrity culture,” said Lloyd Hill, former chief executive of Applebee’s.

Hire for it. Carl Camden, CEO of staffing firm Kelly Services (KELYA) , asks interviewees which tough decisions they had to make and when they’ve walked away from sales wins for a principle. “When your culture is known, it attracts other people who share those values,” he said.

Reward it. Managers should get incentives tied to their employees’ perceptions of their integrity, says Simons.

Get the word out. “It doesn’t do any good to live it if you don’t talk about it,” Camden said. That tells employees how important doing what’s right is to leaders, and it holds the leaders up to more scrutiny as integrity gets more publicized.

Be truthful in evaluations. People trust their bosses less when their reviews aren’t fully honest, which happens too often, Simons says.

Stay consistent. Give feedback often and celebrate your successes, Simons says.

Accept losses. When Camden took over as Kelly’s sales chief, he learned one big-money customer was unhappy. Kelly wasn’t filling the number of temporary jobs it promised to do for the customer. On top of that, the account was losing money, so Kelly’s staff wasn’t running extra ads to make sure those jobs got filled. Camden told his people they had to live up to the contract, even if they decided not to renew it later. Kelly met its promises. It later dropped the contract, but Camden says it strengthened Kelly’s reputation for keeping its word. “You have to be willing to take the hit,” he said. “If you’re seen as willing to preach one thing and then look the other way, you’ll never build the culture.”

Set an example. You can’t play favorites, Hill says. “I’ve had people who I loved and who met all their goals, but maybe they cheated on inventory or took advantage of an employee,” he said. “Then they have to go. That shows that leadership means business.”

(c) 2008 Investor’s Business Daily

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