The (Honest) Truth About Dishonesty

Why might this be the case? I think that when both we and another person stand to benefit from our dishonesty, we operate out of a mix of selfish and altruistic motives. In contrast, when other people, and only other people, stand to benefit from our cheating, we find it far easier to rationalize our bad behavior in purely altruistic ways and subsequently we further relax our moral inhibitions. After all, if we are doing something for the pure benefit of others, aren’t we indeed a little bit like Robin Hood?^*

FINALLY, IT IS worthwhile to say something more explicit about performance in the many control conditions that we had in this set of experiments. For each of our cheating conditions (individual shredder, group with shredder, distant group with shredder, friendly group with shredder, altruistic payoff with shredder), we also had a control condition in which there was no opportunity to cheat (that is, no shredder). Looking across these many different control conditions allowed us to see if the nature of collaboration influenced the level of performance. What we found was that performance was the same across all of these control conditions. Our conclusion? It seems that performance doesn’t necessarily improve when people work in groups—at least not as much as we’ve all been led to believe.

OF COURSE, WE cannot survive without the help of others. Working together is a crucial element of our lives. But clearly, collaboration is a double-edged sword. On the one hand, it increases enjoyment, loyalty, and motivation. On the other hand, it carries with it the increased potential for cheating. In the end—and very sadly—it may be that the people who care the most about their coworkers end up cheating the most. Of course, I am not advocating that we stop working in groups, stop collaborating, or stop caring about one another. But we do need to recognize the potential costs of collaboration and increased affinity.

The Irony of Collaborative Work

If collaboration increases dishonesty, what can we do about it? One obvious answer is to increase monitoring. In fact, this seems to be the default response of the government’s regulators to every instance of corporate misconduct. For example, the Enron fiasco brought about a large set of reporting regulations known as the Sarbanes-Oxley Act, and the financial crisis of 2008 ushered in an even larger set of regulations (largely emerging from the Dodd-Frank Wall Street Reform and Consumer Protection Act), which were designed to regulate and increase the supervision of the financial industry.

To some degree, there is no question that monitoring can be helpful, but it is also clear from our results that increased monitoring alone is unlikely to completely overcome our ability to justify our own dishonesty—particularly when others stand to gain from our misbehavior (not to mention the high financial costs of compliance with such regulations).

In some cases, instead of adding layers and layers of rules and regulations, perhaps we could set our sights on changing the nature of group-based collaboration. An interesting solution to this problem was recently implemented in a large international bank by a former student of mine named Gino. To allow his team of loan officers to work together without risking increased dishonesty (for example, by recording the value of the loans as higher than they really were in an effort to show larger short-run profits), he set up a unique supervisory system. He told his loan officers that an outside group would review their processing and approval of loan applications. The outside group was socially disconnected from the loan-making team and had no loyalty or motivation to help out the loan officers. To make sure that the two groups were separated, Gino located them in different office buildings. And he ensured that they had no direct dealings with each other or even knew the individuals in the other group.

I tried to get the data from Gino in order to evaluate the success of his approach, but the lawyers of this large bank stopped us. So, I don’t know whether this approach worked or how his employees felt about the arrangement, but I suspect that this mechanism had at least some positive outcomes. It probably decreased the fun that the loan work group had during their meetings. It likely also increased the stress surrounding the groups’ decisions, and it was certainly not cheap to implement. Nevertheless, Gino told me that overall, adding the objective and anonymous monitoring element seemed to have a positive effect on ethics, morals, and the bottom line.