When Latif Jamani's family bought Calgary Lighting Products in 2000, they ran the commercial lighting distribution company with values drawn largely from their Ismaili Muslim faith: hard work, a family atmosphere and honest dealings with vendors, staff and customers.
As the company evolved, they drew up a business plan to develop a "long-term lighting distribution network of excellence." Earlier this year, looking to recruit more staff and pass responsibilities on to his general manager, Mr. Jamani, the company president, brought in a human resources consultant to help write a code of business conduct and an employee handbook.
The documents set out ethics policies and conflict-of-interest guidelines, and describe the cultural foundations of the business, letting staff know management's values and expectations.
"Nobody wants to be babysat all the time," says Mr. Jamani, 29, whose company, which sells lighting for office buildings, condominiums and stores, has doubled in size to 10 employees in the past dozen years. "We're putting everyone on the same wavelength."
It's a wise approach for small businesses, says Janet Salopek, president and senior consultant at Salopek and Associates, the Calgary HR company that the Jamanis hired to draft their code and handbook. Such guidelines are best developed even before there is any hiring, she says, because recruiting should be based not only on people's skills, abilities and knowledge but also on their values and behaviours. However, companies at best bring in ethics policies only as they grow.
"In business, you tend to get busy 'doing,' and you forget about the strategic pieces," she explains, adding that companies often introduce policies when the boss finally realizes that "it's hard to be everywhere for everybody."
She drew up a code of ethics when she first started her consultancy in 2006, basing it on the codes of ethics drafted by the two HR associations to which she belongs. Many professional organizations have such guidelines, which can be the foundation of company codes, but they should be tailored to fit, and must comply with provincial legislation.
Smaller companies can "keep it simple," starting with a template from an HR expert or even taken from the Internet, she says. Specifics can include policies on office romances, confidential information, employing relatives and workplace etiquette.
Make sure that employees read the document and sign it, Ms. Salopek says.
"When you ask someone to sign something, it takes on a different level of importance," she explains, adding that such formalities are important if employees get into trouble from a legal standpoint. "You'll be asked, 'Did you ever explain this to people?'" And you can say, 'Yes, it's in our code of conduct, and they signed off on it.'"
Employers should set up mechanisms to regularly review their codes, says Nicole Byres, an employment lawyer at Miller Thomson LLP in Vancouver.
In the three most critical areas – conflict of interest, respect in the workplace and confidentiality – Ms. Byres says she has seen employees who are in "clear breaches" of policies who are "stunned" when told that what they are doing is unethical, harmful to their companies or even illegal.
For example, some workers end up leaving companies with copies of client lists and proprietary material, she says. "We're living in an electronic world, and maybe people don't realize that information and ideas belong to their employer."
Other significant issues include employees bullying colleagues in the workplace by keeping them out of the loop of information, as well as invading co-workers' privacy, through actions as seemingly innocent as snapping their photos at the company holiday party and posting the images on Facebook.
Avoiding or preventing ethical problems through well-defined codes is much less troublesome and costly than suing staff for damages or cleaning up harm to the company's reputation after the fact, she notes. It's important to assign someone to consider ethical complaints, she says, suggesting that in case a matter involves the boss, that person should be a third party, such as an in-house lawyer or a designated "compliance officer" outside the company.
Jeffrey Gandz, a professor of strategic leadership at the University of Western Ontario's Richard Ivey School of Business, says that as small businesses grow, the owners usually relate better to those employees who were with them at the start. But they must have confidence in their entire staff and be able to devolve responsibility. It can help to establish ethical principles at a high level, although these are often broad prescriptions and should instead tell workers what to do in specific circumstances.
Many such policies also tend to be reactive, he adds, coming into play once a problem has occurred.
Many small businesses prefer to deal with ethical matters ad hoc because it can be intimidating to delve into them, says Mr. Jamani. "There's a lot of questions you have to answer that you may not want to have to deal with. There's a fear factor."
His 14-page employee handbook began with a "people strategy" and a template from Ms. Salopek's firm, which was then customized to read like a narrative rather than a rule book. "There's no musts; we talk about who we are and why we do what we do," Mr. Jamani explains. "It's a little more friendly, a little more warm."
He hopes his staff will consult the handbook before asking him questions, which will be a time-saver, and it will guide him in his dealings with employees, such as at performance-review time.
The document will also be updated annually, as new ethical concerns and strategies arise, Mr. Jamani adds. "It's living and breathing."
What they cover
The new staff handbook developed by Calgary Lighting Products offers a range of information about the ethical underpinnings of the business and what's expected of those who work there, including:
- Company vision, values, goals
- How we treat one another
- Rules of conduct
- Social responsibility mandate