December 10, 2010

Setting an Ethical Gift Policy

Just in time for the holidays, comes a new piece from Inc. Magazine on the essentials of setting an ethical employee gift policy to minimize potential conflicts of interest. Lots of good advice for entrepreneurs, some of which even comes from me:
"....companies can find themselves struggling to identify what is appropriate for employees to be unwrapping in the offices around the holidays. Creating and maintaining a clear gift policy is an easy way to be confront the situation.

"If you don’t have one, then you open yourself up to a credibility, liability problem," says Julian Friedland, a business ethics professor and writer who edited the 2009 book Doing Well And Good: The Human Face of the New Capitalism.

"Whatever product you happen to be selling, whether it’s a service or actual object of any kind, can be compromised by the appearance of some conflict of interest."....
 "One of the main problems with corporate gift policies isn't caused by stale fruitcakes; it occurs when gifting policies are poorly understood or incorrectly interpreted.
UHY's study showed that while most companies had some form of a policy, only 53 percent of employees said it was well-defined. Beyond that, 60 percent of employees said they were not sure whether their company's leaders follow their own policies.

That's why experts say it's important to clearly communicate your gifting rules to employees to make sure they're not caught off guard.  The policy needs to be monitored and enforced company wide — without giving top executives a free pass. Making arbitrary rulings on gifts opens you up to more criticism, Friedland says.

"If you don't, you're likely to undermine the loyalty of your employees," he says. "They might get angry or frustrated at what they see is an overly paternalistic policy"."

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