Your high-performance culture could be creating cheaters

In 2024, Eric Adams became the first sitting mayor in modern New York City history to face criminal indictment. The charges were numerous: conspiracy, wire fraud, soliciting illegal foreign campaign contributions from foreign nationals, and bribery. But prosecutors traced his downfall to something far more prosaic — free flight upgrades he accepted as Brooklyn Borough president.

Recent high-profile cases follow a similar pattern. Former Republican congressman George Santos went from résumé lies to wire fraud and aggravated identity theft. Elizabeth Holmes exaggerated what her blood-testing company Theranos could do, then used unreliable tests that gave patients life-threatening misdiagnoses. And Sam Bankman-Fried bent the rules at his crypto exchange FTX, then stole $8 billion from his customers.

What pushes otherwise ambitious, smart people down this path? This question is one that Michael Christian and Timothy Kundro, organizational behavior professors at UNC Kenan-Flagler Business School, keep coming back to. Their combined research examines how people rationalize incremental ethical violations, as well as how organizational, social and physiological factors drive employees toward this behavior.

“Good people do bad things, and there’s a lot of complexity in trying to understand why,” Christian says.

There are, however, specific triggers. “Organizations need to be aware of the environments and conditions that make it more likely to occur,” Kundro says.

The implications of their research extend beyond headline-grabbing scandals. Workplace misconduct is an expensive problem, costing companies billions a year in legal fees, regulatory fines and reputational damage. And the same dynamics that brought down Adams, Santos, Holmes and Bankman-Fried continue to play out across corporate and political leadership.

Christian’s and Kundro’s research points to interventions that can interrupt the cycle, including some that run counter to how high-performance organizations typically operate.

A “slippery slope” of bad behavior

Christian’s interest in workplace ethics began in an unlikely place: the hipster restaurant in San Francisco where he worked before graduate school. He recalls watching colleagues he respected and considered to have high integrity justify stealing from their employer because they felt underpaid relative to the extravagant dot-com wealth all around them.

The experience stuck with him. Through a series of experiments, Christian showed that when people make small ethical compromises, they quickly find ways to excuse their behavior, a phenomenon he calls the “slippery-slope effect.”

It starts with self-deception. “You tell yourself a story that, ‘I deserve it as much as they do,’ ‘Nobody got hurt,’ or ‘It was just this one time,’ and it makes it easier to justify,” he says. “But that can normalize deviancy and lead you to continually adjust that new set point you’ve built.”

Psychologists refer to this process as moral disengagement. Bernie Madoff described it firsthand when he told Vanity Fair in 2009 how his billion-dollar Ponzi scheme began: “’It starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big.”

That doesn’t happen in isolation, however. In a separate study, Kundro and Christian found that high-performance organizations create intense pressure that makes crossing ethical lines feel necessary. In competitive, achievement-oriented cultures, employees who felt ashamed about taking time for themselves were more likely to bend rules in sometimes ethically questionable ways.

“People start to feel like the only way to stay afloat is to cut corners and cheat to hit performance metrics at all costs,” says Kundro.

They misrepresented their workload, inflated their performance and made themselves appear busier and more productive than they actually were. The threat of falling behind and damaging their reputations made employees feel they had to do whatever it took to catch up.

The physical toll and the social trap

Always-on work cultures create another problem: Employees don’t get enough sleep. Research shows that adequate sleep is essential for the prefrontal cortex, which helps people regulate behavior and make ethical decisions. And Christian’s work demonstrates that sleep deprivation makes people more likely to act unethically.

“Sleep plays a critical role in helping people act in socially normative ways,” he says. “But when you don’t get enough, you often just go with base instinct.”

The pressure to appear sleep-deprived can even become a badge of honor in some companies.

Christian recalls interviewing investment bankers for his dissertation who described how the industry endorsed sleep deprivation. “One told me he would go home and get his eight hours, but he’d show up to work in the same suit on purpose to make everybody think he was sleep-deprived just like everyone else, because it was so important to be seen that way.”

And while physical exhaustion and performance pressure create the conditions for ethical slides, social forces accelerate them. Kundro’s research reveals a particularly troubling pattern: how groups respond when colleagues cover up wrongdoing.

People show leniency toward those who conceal unethical behavior, including severe violations, when they view the cover-up as an act of loyalty. “If you’re close to the person who did the cover-up, you’re more likely to permit it because you see their behavior as loyal instead of problematic,” Kundro says.

This helps explain why scandals that shock the public often go unchallenged inside organizations for years, he says. “From outside you think, ‘How could people have allowed this to happen?’ But within the group, loyalty masks ethical concerns. Members rationalize the behavior and look the other way, which allows misconduct to grow unchecked.”

Preventing the slide

Close relationships at work aren’t the problem, any more than high expectations are. Plenty of organizations have rigorous performance standards without breeding misconduct. The difference, Christian and Kundro’s research shows, lies in how managers handle the environment.

Their research points to several interventions that could make ethical violations less likely.

For starters, managers need systematic protocols for addressing concerns at the first level, before small violations spiral into larger ones.

“Problematic behavior is going to happen,” Kundro says. “When managers receive reports of unethical behavior, their instincts aren’t always the best. They’re busy, overwhelmed and often inexperienced in how to handle these issues. Our data shows they often have a temptation to ignore or downplay issues.”

The worst response is reflexive punishment. Instead, organizations should create psychological safety where small violations are visible and safe to report. “When the automatic answer is to punish unethical behavior, you push it underground,” Christian says.

Managers also need to ensure employees can detach from work, and that requires modeling those boundaries themselves. When leaders praise work-life balance but send late-night emails or celebrate employees who skip vacations to meet deadlines, they signal that rest is optional and sacrifice gets rewarded.

“If managers fail to take breaks themselves, employees perceive messages about detachment as empty,” Kundro says.

The alternative carries real consequences.

The path Eric Adams, Elizabeth Holmes, George Santos and Sam Bankman-Fried took wasn’t inevitable. With organizational cultures that made small violations discussable, responded systematically to ethical concerns, and let people get a decent night’s sleep, they might never have taken that first step down that slope.