Assessing ethical behavior: the impact of outcomes on judgment bias

Purpose – The objective of this empirical study is to apply the methodology commonly used to performance appraisal and examine if outcomes achieved by ratees bias rater's judgment of ratee ethical behavior. Design/methodology/approach – Two studies were conducted: in study 1 the participants were undergraduate business students and in study 2, the participants were MBA students but who were also full time employees. In both these studies, participants read the vignettes and rated the ratee performance using behavior observation scale. Findings – Both the studies found support for the main hypothesis that outcomes achieved by the ratees influenced judgment of ethical behavior. The hypothesis that ethical beliefs of raters will moderate the biasing influence of outcomes on ethical judgment bias was not supported. Research limitations/implications – If outcomes achieved by employees influence judgment of ethical behavior, future research has to examine how the biasing influence of outcomes on ethical judgments can be mitigated or eliminated. Practical implications – If managers are influence by outcomes achieved by their employees in judging the ethical behavior, it can lead to “success breeds acceptance” culture. If organizations place undue emphasis on outcomes at the cost of ethical standards, unethical behavior of individuals could be condoned or justified which would lead to worsening of ethical climate in these organizations. Originality/value – This study demonstrated that outcomes achieved by employees biases judgment of their ethical behavior and this finding has important implications for designing effective appraisal systems for assessing ethical behavior of employees.