The Ethical Context of HRM (Lecture 10)

It is widely accepted that corporations are encouraged to behave in an ethically responsible way but many discussions of ethics and ethical issues differ about definitions and there is still some uncertainty on how to define the concept.

“Ethics” comes from the Greek “ethos,” meaning character, or what a good person is or does to have a good character (Black and Roberts, 2011). According to Peter Singer (1985) who is Australian moral philosopher defined ethics as: “the field of study, or branch of inquiry that has morality as its subject matter.” Branch of philosophy that used to study ideal human behavior is called ethics and it is the ideal ways of being, (Rich, 2005).

Ethics in HRM

According to Sternberg, (2000) Ethics in HRM indicate the treatment of employee with ordinary decency and distributive justice. The ethical business contribute to the business goal as the employees will feel motivated and they will work with efficiency and effectiveness. Ethics in HRM basically deal with affirmative moral obligation of the employer toward employees to maintain equality and equity justices.

Another reference of Ethical dilemmas in HRM is multifaceted, there are three distinct involving personal, professional, and organizational considerations (Wooten, 2001).

Areas of HRM Ethics

According to Sternberg, (2000) explain following area of RHM ethics,

·         Basic human rights, civil and employment fight. (E.g Job security, Feedback from tests)           

·         Safety in the workplace

·         Privacy

·         Justifiable treatment to employee. (E.g. Equity and equal opportunity)

·         Respect fairness and honesty based process in the workplace. 

Unethical Practices of HRM

The perception on consumers about the company is based upon the ethics of the company. Eventually, based upon the perception about the company, the investor will affect its’ share price. Similarly, it has been suggested that poor standard of conduct emanating from the top management affect employee motivation and commitment to organizational goals (Sternberg, 2000).

Employers	Employer	Government
Creating split in union leader	False claim of personal details like age , qualification etc	Announcing the vacancies and not taking any action further
Biased attitude in selection, transfer, promotion etc..	Producing false certificates.	Functioning of government offices not transparent and reliable
Off-shoring and exploiting ‘cheap’ labor markets.	Taking decision as per their convenience.	Selection committees will be excessively caution of reservation quotas and possible court cases rather than gaining through the responsibilities.
Child labor
Regenning on company pension arrangement
Physical violence Coercion
Longer and inflexible working hours
Putting on more stress on employees for increasing productivity
The use of disputed and dubious practice in hiring and firing of personal

Table i: Unethical Practices of HRM

Ethical Decision-Making

Ethical decisions have always been part of psychologists’ personal and professional lives. (Miner and Petocz, 2003). Summary of seven-step guide to ethical decision-making (Davis, 1999) consider perspective ethical decision shown below.

1.       State the problem: For example, "there's something about this decision that makes me uncomfortable" or "do I have a conflict of interest?".

2.       Check the facts: Many problems disappear upon closer examination of the situation, while others change radically.

·         For example, persons involved, laws, professional codes, other practical constraints

3.       Identify relevant factors (internal and external).

4.       Develop a list of options.

·         Be imaginative, try to avoid "dilemma"; not "yes" or" no" but whom to go to, what to say.

5.       Test the options. Use some of the following tests:

·         Harm test: Does this option do less harm than the alternatives?

·         Publicity test: Would I want my choice of this option published in the newspaper?

·         Defensibility test: Could I defend my choice of this option before a congressional committee or committee of peers?

·         Reversibility test: Would I still think this option was a good choice if I were adversely affected by it?

·         Colleague test: What do my colleagues say when I describe my problem and suggest this option as my solution?

·         Professional test: What might my profession's governing body for ethics say about this option?

·         Organization test: What does my company's ethics officer or legal counsel say about this?

6.       Make a choice based on steps 1-5.

7.       Review steps 1-6: How can reduce the likelihood that, will need to make a similar decision again?

·         Are there any cautions you can take as an individual (and announce your policy on question, job change, etc.)?

·         Is there any way to have more support next time?

·         Is there any way to change the organization (for example, suggest policy change at next departmental meeting)?

WRHA, (2015) introduced decision-making process shown below.

Figure: Ethical Decision-Making Framework

Source: Ethical Decision-Making (AWRH, (2015).

Ethics Development Model

Figure i: Ethics Development Model: Albrecht, (2014)

Source: https://wheatley.byu.edu/ethics-development-model/

The foundation of ethics, Personal Ethical Understanding, represents the most basic ethical issues and boundaries of personal actions. It involves learning the difference between right and wrong, developing a sense of fair play, learning to care for and empathize with others, developing respect for others, and learning basic principles of integrity and reality, and having actions that are consistent with the values a person knows to be right Albrecht, (2014).

According to Carrol, (1991) Economics and Legal component of corporate social Responsibility explained as per the below.

Economics Component (Responsibilities)	Legal Component (Responsibilities)
It is important to perform in a manner consistent with maximizing earnings per share	It is important to perform in a manner consistent with expectations of government and law.
It is important to be committed to being as profitable as possible.	It is important to comply with various federal, state, and local regulations.
It is important to maintain a strong competitive position.	It is important to be a law-abiding corporate citizen.
It is important to maintain a high level of operating efficiency.	It is important that a successful firm be defined as one that fulfills its legal obligations.
It is important that a successful firm be defined as one that is consistently profitable.	It is important to provide goods and services that at least meet minimal legal requirements

Table ii: Economics and Legal CSR

Corporate Social Responsibility

“Social responsibility can only become reality if more managers become moral instead of amoral or immoral”  (Carroll, 1991).

Figure ii: Carroll pyramid of CSR: Carroll, (1991).

Source: The pyramid of corporate social responsibility (Book)

Ethical behavior and corporate social responsibility can bring significant benefits to a business and Schweppes, (2002) . some of them are, 

• Attract customers to the firm’s products, which means boosting sales and profits.

• Make employees want to stay with the business, reduce labor turnover and therefore increase productivity.

• Attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees.

• Attract investors and keep the company’s share price high, thereby protecting the business from takeover.

References

Authority, W. R. H., (2015). Ethical Decision-Making. In: Ethical Decision-Making. s.l.:s.n., p. 10.

Black, J. and Roberts, C., (2011). Doing ethics in media: Theories and practical applications. Routledge.

Cadbury Schweppes, (2002). Ethical business practices. [Online]
Available at: https://businesscasestudies.co.uk/cadbury-schweppes/ethical-business-practices/the-importance-of-ethics-in-business.html
[Accessed 1 10 2018].

Carroll, A.B., (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business horizons, 34(4), pp.39-48.

Davis, M. (1999) Ethics and the university, New York: Routledge, p. 166-167.

Miner, M. and Petocz, A., (2003). Moral theory in ethical decision making: Problems, clarifications and recommendations from a psychological perspective. Journal of Business Ethics, 42(1), pp.11-25.

Rich, K.L., (2005). Nursing ethics: Across the curriculum and into practice. Jones & Bartlett Learning.

Singer, Peter (1985) Encyclopedia Britannica, Chicago, pp. 627-648.

Sternberg, E., (2000). Just business: Business ethics in action.

Wooten, K.C., (2001). Ethical dilemmas in human resource management: An application of a multidimensional framework, a unifying taxonomy, and applicable codes. Human Resource Management Review, 11(1-2), pp.159-175.

W. Steve Albrecht, (2014). Ethics Development Model. [Online]
Available at: https://wheatley.byu.edu/ethics-development-model/
[Accessed 1 10 2018].