BUSINESS ETHICS

Chapter 4
Ethics and Human Resource
Management
LECTURER: DUONG THI HOAI
NHUNG (MBA)
FACULTY OF BUSINESS
ADMINISTRATION
EMAIL: nhungdth@ftu.edu.vn
MOBILE: 0985867488
1
 CHAPTER 4:
ETHICS AND HUMAN RESOURCE MANAGEMENT
From the perspective of the management, the employee
is the second most important stakeholder. The success
(or failure) of a company hinges on the quality of its
employees and employer-employee relations.
Questions:
What is your opinions about ethical issues in HRM
in the below cases?

2
 CHAPTER 5:
ETHICS AND HUMAN RESOURCE
MANAGEMENT
Readings:
Laura P.Hartman, et.al, 2014, Business Ethics-
Decision making for integrity and social
responsibility, Mc. Graw Hills.
- Chapter 6: Ethical Decision Making: Employer
Responsibilities and Employee Rights

3
 CHAPTER 4:
ETHICS AND HUMAN RESOURCE
MANAGEMENT
Purpose and learning outcomes
The purpose of this chapter is to apply theories of
applied ethics to some areas of the management of
people, with a continuing development of case analysis
as a tool for the exploration of dilemmas.
You will be able to
Understand the importance of the concepts of business
ethics in the context of some problems of the practical
management of people;
Apply a structured approach to case study analysis.

4
 CHAPTER 4:
ETHICS AND HUMAN RESOURCE MANAGEMENT

Ethical Issues in
HR

5
 CHAPTER 4:
ETHICS AND HUMAN RESOURCE
MANAGEMENT
Main contents:
The first section is on ethical considerations when
making HR decisions
The second is on Performance Management.
 The third leads into a discussion of HRD in an
organisational context, a key part of HRM strategies

6
 1. Ethical considerations when making HR
decisions
A company can treat its staff in three ways.
Immoral
 Treats the employee a tool for production;
 Uses, exploits and manipulates the employee to increase
the profit for individual management staff or for the
company;
 Ignores the employee’ s needs, rights and expectations;
 High-pressure, domineering and indifferent management.

7
 1. Ethical considerations when making HR
decisions (cont.)

Unethical, but in accordance with laws

 Treats the employees according to law;
 Sees increase of production as a target rather than
satisfying the different needs of the employee
 Treats the employee as a tool for production while
adopting a system of gratuity;
 The company would offer a minimal level of respect to
the employees to protect its own interests
 The structure, salary and system of rewards all aim to
promote production in short-to-mid term.
8
 1. Ethical considerations when making HR
decisions (cont.)
 Ethical
 Treats the employees as an important part of the company,
respects and protects their dignity;
 Adopts a leadership that encourages discussion or participation,
hoping to build up a mutually-trusting relationship;
 Reiterates the main concept of “commitment”;
 In all decisions the company tries to ensure that the employees
enjoy the rights of seeking legal redress, personal privacy,
freedom of speech and personal safety;
 The management seeks fair ways to deal with labour issues.

 In the above cases (a-f), the companies are apparently unethical

9 in their management of employees.
 2. Ethics and Performance
management

Performance management: the process through which

managers ensure that employees’ activities and outputs
contribute to the organization’s goals.
This process requires:
Knowing what activities and outputs are desired
Observing whether they occur
Providing feedback to help employees meet expectations

10
2. Ethics and Performance management
(cont.)
Purposes of Performance Management
 Strategic Purpose – means effective performance
management helps the organization achieve its business
objectives.
 Administrative Purpose – refers to the ways in which
organizations use the system to provide information for day-
to-day decisions about salary, benefits, and recognition
programs.
 Developmental Purpose – means that it serves as a basis for
developing employees’ knowledge and skills.

11
 2. Ethics and Performance management
(cont.)
From a HRM point of view the intention is partly to
ensure fairness, that is a level playing field in
relationships between managers and subordinates, but
also to introduce formal processes of human resource
planning which can be synchronised to business
planning systems including financial and product output
forecasts.
If individual and corporate needs can be simultaneously
satisfied, and this is often the case, then we have no
problem. If this is not the case then we have the potential
for a damaging ethical dilemma and a range of practical
12
issues.
 2. Ethics and Performance management (cont.)

CASE 3-HRM3
Questions
1. Is there an ethical issue here? If so, what is the issue and how
should it be addressed?
2. How should Marty handle Robert in his future scheduling
activities?
Guideline:
1. Carefully read your assigned case(s).
2. Identify ethical issues
2. Identify the stakeholders involved in the case.
3. Assess the issues in terms of the ethical theories and principles
discussed in the class
134. Present your recommended solutions
 2. Ethics and Performance management (cont.)

Ethical criteria in employee appraisals

- Treating others fairly and with respect

- Operating effectively in a multicultural environment
- Accepting personal accountability
- Continually developing themselves and others
- Operating openly and honestly with all

14
 3. Ethics and Human resource development
Training is seen as the mechanistic acquisition
of skills, as typified by shop-floor
manufacturing skills, basic administrative
routines and the abilities to use computer
systems effectively.
Education is usually characterised through the
improvement of analytical and critical faculties
as well as the achievement of knowledge and
understanding in a substantial subject area.
The word ‘development’ may also be used in
the sense of Organisational Development
(OD), a professional activity concerned with
bringing about changes in an organisation
15
 3. Ethics and HRD (cont.)
Case 6-HRM6-Outward bound training
(Text book, p.260-p.262)
Discussion and points for consideration
1.To what extent can a company expect, or demand,
employees to participate in activities to which they openly
object?
2. How far should a company go in encouraging
participation when there is an obvious unwillingness to
take part? Note that both ethical and practical
considerations may be relevant here and these may
complement each other or may be in opposition.
163. As training manager, what lessons might you learn from
 3. Ethics and HRD (cont.)
It may be nonsense to divorce skill development from
knowledge acquisition and we might also note that the
practice of very high levels of skill (e.g. in an art and
crafts context) is demanding on the knowledge,
feelings and judgment of the individual.
We also should not split the exercising of a skill from
the moral evaluation of the consequences of its use.

17
 3. Ethics and HRD (cont.)
the use of a management development approach which
is very popular in the context of teambuilding and
leadership training, as well as selection and
appraisal of new staff, is the residential outdoor
activity programme, of which outward bound is
typical.
 Participants may be subjected to physically rigorous
training regimes, including activities which increase
stress in order to encourage group support. There are
some basic issues of safety and psychological well-
being in this context.
18Eg., office workers should be physically fit
 3. Ethics and HRD (cont.)
In the context of considerable publicity about excess
weight and general physical unfitness in children and
adults, an organisation may argue that it has the right to
expect reasonable standards of fitness in its employees,
even when such fitness is not directly linked to
characteristics of their jobs.
 a policy should exist which protects the general
rights of employees. At a practical level, attempts to
coerce participation are likely to lead to ingenious and
widespread subversion and political counter-
manoeuvres, a traditional way in which an ethical
19
balance is restored in the workplace.
 3. Ethics and HRD (cont.)
Ethics and Code of Conduct Training
Employees must be fair, honest and in compliance with
the law in all business relationships
Discrimination against any employee or individual
involved in our daily business dealings is prohibited
Harassment of any kind or nature, including sexual
harassment, is prohibited

20
 Conclusion
If companies were to succeed; the most important
measure is to reduce production costs. But as we enter
an information age, it is important that one increases
the profit. For a company to succeed one must treat its
employees in just and fair ways, so that they are
willing to stay. It is a proven fact that while treating
employees well increases costs, the productivity of the
employees also raises substantial with greater
combined profit.

21
 Conclusion
Whether from the perspective of teleology or
deontology , it is appropriate to treat employees well.
The company should provide comprehensive measures
that include providing safe, healthy work environment
and conditions, reasonable rewards, respect and trust
for employees, while providing health social environ
ment for employees, reasonable work hours to balance
the family and work, chances for career development,
and opportunities for community service.
 On one hand this is ethically proper, on another hand
this may attract talents that are creative and motivate d
22
to work. Companies may then work continuously while
fulfilling their social responsibility to their staff.
 Summary
1. Ethical considerations when making HR
decisions
2. Ethics and Performance management
3. Ethics and Human resource development

23