A couple of years ago, I was part of project team that traveled to a client’s facility in South Korea. It was our company’s first experience in Korea, and so our accounting department didn’t have a historic per diem value for that particular city. It ended up using the per diem value we used for major U.S. and Canadian cities. Some of my coworkers were already unhappy with the Korean assignment, due to the long absence from home, and they felt we deserved more compensation. So they pushed the accounting department to increase the per diem, claiming that the cost of living in that particular city is higher than at home.
To verify the cost, the accounting department sent out emails to everyone on the project team. It asked us to list the cost of food, drinks, and groceries–basically everything we have been paying out of our own pocket since we arrived. Although it was never verbally agreed upon, there was an unspoken understanding that we would overstate the expenses, to obtain what some of us believed we were entitled to.
Because this was an unusual assignment, I understand why some felt the need for greater recognition. However, I didn’t agree that manipulating the per diem and having a few extra drinks on the company every day is the right way to do it. I struggled with the dilemma for a couple of days and then decided what I should do. What do you think?
Contributed by RL.
To comment on this dilemma, leave a response. For anonymity, omit your email address and website, and use a screen name.
Ethical Decisions 
I think lying to the accounting department is not ethical since it just can not pass the generalization test. If everyone just lie to the accounting department, the traveling expense will just keep increasing until accounting department find out (or they can just find that out by referring to other sources), then they will never ask the opinion of the employees again, making such behavior fail the generalization test.
LikeLike
The choice here was to deceptively ask for a higher per diem than was necessary. This choice fails the Generalization Test. To review, business travelers receive a per diem only for the purpose of covering daily costs of food in a particular city. The only reason per diems ever change between countries would be because there is an understanding that that country has a particularly high or low cost of food. Workers receive their salaries and bonuses in order to cover the value of the work they provide, and generally they will demand a higher salary or bonus in order to compensate for less than desirable work. Thus, demanding a higher per diem because the travelers resented the work assignment would undermine the whole per diem practice. If everyone did that, pretty soon, per diem would become interchangeable with salary demands, and the whole idea that a per diem is only supposed to cover food costs would fall apart. One can also look at the fact that there is a standard per diem across US and Canada to expressly avoid any subjectivity or manipulation that it may be used for anything other than food costs.
This choice also fails the Utilitarian Test. While it creates some utility, helping the business travelers feel better about the fact that they got stuck with an undesirable assignment, it bleeds extra money from the company without any long term positive changes in salary structure. A better action would be for the employees to demand a higher bonus or better future work assignments to compensate for the current work assignment. This way, the company acknowledges how undesirable the assignment is and compensates its employees in an appropriate manner. It also maximizes utility for future employees who may also be stuck in undesirable assignments, because the company will have recognized that they need some sort of additional salary compensation to make up for it. If compensation is hidden this one time as a per diem, the company will not make any positive changes.
Finally, this action fails the Virtue test. RH is a very honorable and honest person, and so the action is not consistent with who he is at his core. More generally, the actions of the travelers goes against the virtue ethics of honor and loyalty. The travelers are essentially screwing over their fellow coworkers across the company by deceptively asking for more money than they deserve for food, showing a lack of honor, and thus they are being disloyal to their company and to their colleagues.
If this action is considered under a Veil of Ignorance, it becomes obvious that being disgruntled about a job assignment is not a justifiable reason to lie and deceptively get money from one’s employer. The current per diem and compensation systems were set up to achieve separate purposes, and in order to help those systems be as effective as possible, those individuals making the choice must not deceive one system to make up for for a lack of compensation in another.
LikeLike
Dear RL,
If you apply the Rawlsian test and think of the hypothetical situation where you do not know whether you are the employer or employee you will see that the ethical path would be to communicate your expenses truthfully to the accounting department and allow them to decide the per-diem according to the company’s policies.
The amount of time that you and your colleagues worked, or the quality of your time and your perception of your treatment is irrelevant in deciding whether your decision is ethical or not. I notice that often people will try to justify their actions by declaring an ‘unjust world’ and that their unethical actions are OK because they offset other unfair actions. This is not generalizable because if everybody that believed they had encountered an unfair situation corrected it there would be a never-ending cycle of events (which is indeed what we see sometimes, especially in high-tension regions).
LikeLike
I believe the situation here is not only failed to the generalization test but also failed to the virtue ethics. The people from accounting department actually based on trust to ask everyone on the project team whether the cost of living in South Korea is higher per diem. However, everyone lie to the accounting department basing on the emotional unsatisfied to the travel arrangement. It breaks the mutual trust between the project team and the accounting department since the trust applies to rational human beings that have built a relationship with individuals. Thus, according to previous three replies, I agree with the situation failed to the generalization test. Also, I believe it did not pass the virtue ethic since the virtue ethics should be clarified by the generalization principle.
LikeLike
Dear RL,
I agree with the above posts that this is not ethical. It clearly does not pass the generalization or virtue tests as pointed out earlier, but I would agrue that it doesn’t pass the utilitarian test for the employees either. Obviously this does not pass the utilitarian test for the company because they want to know if they are spending money for accurate reasons and they also have a lot of motivators to want to understand if employees are irritated with the firm and their jobs. The employees on the other hand, would really ultimately like to see that the company understands that they should be compensated accordingly for being asked to commit to more time away from their families than normal. I think that if part of the employees’ irritation in this situation stems from the fact that their extra work and commitments were not being recognized and commended, then getting extra compensation without awknowledging that will not resolve the root of the problem. Yes, everyone wanted a few extra creature comforts for “free” but the larger issue is that they do not want to feel taken advantage of by his/her employer.
LikeLike
CH states a straightforward generalization argument against falsifying expenses. I think we all agree that it is unethical.
However, there is another element in this case that nobody mentions. There is an “understanding” that everyone will overstate expenses. If we call this an agreement, then maybe it is wrong to break it. Isn’t breaking agreements normally ungeneralizable?
Normally, yes, but here have an “agreement” to lie, and lying (in this case) is not even an action because it is ungeneralizable and therefore has no coherent rationale (see this video for an explanation). One can agree only on an action, and so there is no real agreement to honor. Of course, it’s unclear that an “unspoken” agreement is an agreement in the first place.
But things are perhaps not so easy. RL’s coworkers can argue that he is a free rider. He can sit on his moral high horse while reporting expenses, but he will receive the higher per diem like everyone else, due to their efforts. In theory, RL can perhaps avoid complicity by compensating the company in some way, but this is impractical, and in the end he won’t do it.
This is a very general and troubling dilemma. For example, we live in a society in which we accept the benefits of unethical behavior, such as exploitation of illegal immigrant labor at home and workers in unsafe garment factories abroad. How can we respond to this in an ethical way? The issue is not clearly presented in this case, but perhaps someone can post a case that poses it more squarely.
LikeLike