Ethics in HRM

Recruitment – some issues

 Recruitment
 Employment issues
◦ Referrals, internal, external
◦ Faked credentials, but performance found
satisfactory
 Background checks
◦ Double employment!
 Psychological assessment
◦ Eg MMPI
◦ Stanton Survey
 Best practices discussion
Compensation & Benefits
 Industry benchmarking
 Fitment
 Incentives, and perquisites
 Referral fees (consultants)
 Promotions
 Rewards & benefits
 Tax structuring

 Best practices discussion

Performance measurement
 Annual appraisal cycle – definition and
timeliness, parameters & policy
 Promotions and incentive policies
 Performance + “how performed” as a

(ethical) measure
 Rewards / Improvements / Severance
 Developmental plans and actions

 Best Practices discussions

Discrimination
 race and disability
 empowerment of the weakest and uniquest
 sexual harassment

◦ Supreme Court Judgement Vishaka & Ors. v. State

of Rajasthan & Ors., (1997) 6 SCC 241 provided for
guidelines under under Article 141 of the
Constitution of India ("Guidelines") and enforceable
in law until suitable legislation is enacted by the
Indian Parliament
◦ Preventive Steps and Awareness mandatory
◦ Complaints Committee mandatory
◦ Employee's Initiative to complain must be
encouraged
Restructuring and Layoffs
• For efficiency, or wealth creation?
• Restructuring to reduce or rehabilitate
• Seen as instant solution to “cost
management”
• Alternatives to be explored – shorter hours,
flexi work, sabbaticals, wage cut, etc
• Considerations of
– Employee engagement
– Loss of intellectual capital
– Erosion of morale
– Brand impact
– Insecurity, inability to attract talent
• Best practices discussion
Other issues
 Employment issues and grievances
◦ How elicited, dealt with
◦ “shoot the messenger”
 privacy issues
◦ Observation, health, data, whistle-blower or
complainant privacy….
 Compensation to externals
◦ Eg claims, litigation under labour legislation
 wages empowerment
Rhetoric and reality in HRM
Rhetoric Reality

‘New working patterns’ Part-time instead of full-time jobs

‘Flexibility’ Management can do what it wants

‘Empowerment’ Making someone else take the risk and

responsibility
‘Training and development’ Manipulation

‘Recognizing the contribution of Undermining the trade union and

the individual’ collective bargaining
‘Teamworking’ Reducing the individual’s discretion
 Rights of employees as stakeholders of the
firm

Employee rights Issues involved

Right to freedom from Equal opportunities, Affirmative action, Reverse

discrimination discrimination, harassment
Right to privacy Health and drug testing, Work-life balance, monitoring
of presence, Electronic privacy and data protection
Right to due process Promotion, Firing, Disciplinary proceedings
Right to participation Organization of workers in works councils and trade
and association unions, Participation in the company’s decisions
Right to healthy and Working conditions, Occupational health and safety
safe working conditions
Right to fair wages Pay, Industrial action, New forms of work
Right to freedom of Whistleblowing
conscience and speech
Right to work Fair treatment in the interview, Non-discriminatory
rules for recruitment
 Duties of employees as stakeholders of the firm

Employee duties Example of Issues involved

Duty to comply with labour Acceptable level of performance

contract Work quality
Loyalty to the firm
Disclosure of conflict of interest

Duty to comply with the law Bribery

Duty to respect the employer’s Working time

property Unauthorized use of company resources
for private purposes
Fraud, theft, embezzlement
Discrimination
 Discrimination in the business context occurs
when employees receive preferential (or less
preferential) treatment on grounds that are not
directly related to their qualifications and
performance in the job
◦ Eg race, gender, disability, location, language, etc
 Managing diversity equally is a prominent
feature of contemporary business
 Extensive legislation
Equal opportunities and affirmative action

 How should organizations respond to

problems of discrimination?
 Equal opportunity programme
◦ Generally targeted at ensuring procedural justice
is promoted
◦ Affirmative action (AA) programmes: deliberately
attempt to target those who might be currently
under-represented in the workforce
 Recruitment policies
 Fair job criteria
 Training programmes for discriminated minorities
 Promotion to senior positions
Employee privacy
Four different types of privacy we may want
to protect (Simms 1994)
◦ Physical privacy
◦ Social privacy
◦ Informational privacy
◦ Psychological privacy
Health and drug testing
 Highly contested issue
 Des Jardins and Duska (1997) highlight three
main issues
◦ Potential to do harm
◦ Causes of employee’s performance
◦ Level of performance
 Despite these criticisms, such tests have
increasingly come common in the USA
Electronic privacy and data protection

 Computer as a work tool enables new forms

of surveillance
◦ Time and pace of work
◦ Usage of employee time for private reasons
 E-mail and internet
 Issue of privacy in situations where data is
saved and processed electronically
◦ Data protection
Due process and lay-offs
 Ethical
considerations in the process
of downsizing
◦ Right to know well ahead of the actual point of the
redundancy that their job is on the line
◦ Compensation packages employees receive when
laid off
Employee participation and association
 Recognition that employees might be more than
just human ‘resources’ but should also have a
certain degree of influence on their tasks, job
environments, and company goals – right to
participation
 Financial participation – allows employee share in
the ownership or income of the corporation
 Operational participation
◦ Delegation
◦ Information
◦ Consultation
◦ Codetermination
Working conditions
 Right to healthy and safe working conditions one of
the very first ethical concerns for employees
 Dense network of health, safety and environmental
(HSE) regulation
 Main issue is enforcement and implementation
 Newly emergent HSE issues relate to changing
patterns of work
 Ethical issues in the context of:
◦ Excessive working hours and presenteeism
◦ Flexible working patterns
Freedom of conscience and freedom of speech in
the workplace

 Normally guaranteed by governments

 Situations in business where freedom of speech
might face certain restrictions
 Speaking about ‘confidential’ matters related to
the firm’s R&D, marketing or accounting plans
◦ Usually unproblematic, since most rational
employees would find it in their own best interests
to comply with company policy
◦ Some cases where those restrictions could be
regarded as a restriction of employee’s rights
 Whistle-blowing
National culture and moral values

 Different cultures will view employee rights and

responsibilities differently
 This means that managers dealing with employees
overseas need to first understand the cultural basis
of morality in that country
 Raises the question of whether it is fair to treat
people differently on the basis of where they live
◦ Relativism vs. absolutism
 Absolutism: ethical principle must be applicable
everywhere
 Relativism: view of ethics must always be relative to
the historical, social and cultural context
The ‘race to the bottom’
 Many critics argue that MNCs play a role in
changing standards in countries
 Globalisation allows corporations to have
broad range of choice of location
 Developing countries compete to attract
foreign investment
 Large investors tend to choose country with
most ‘preferable’ conditions
◦ Lowest level of regulation and social provision for
employee
 Leads to ‘race to the bottom’ in
environmental and social standards