1 Employee Stakeholders and Workplace Issues Professor Craig Diamond BA 385 December 2, 2009 Chapter 17

2 Internal Stakeholders  Chapters address external stakeholders Government Customers Natural environment Community  Chapters address internal stakeholders Employees  This course covers chapters 17 and 19

3 Outline of Topics  The New Social Contract  Overview of Employee Rights  The Right Not to Be Fired Without Cause  The Right to Due Process and Fair Treatment  The Right to Freedom of Speech in the Workplace

4 The New Social Contract  Global competition and globalization are causing businesses and employees to be more competitive  Employees and employers view each other as much more disposable (“using each other” to get ahead)  The typical worker today has 9 jobs by the time he/she turns 30. Very different from past generations

5 The Changing Social Contract Old Social ContractNew Social Contract Job securityTenuous job security Life careers with one employerFew life careers; changes common Stable positions / job assignmentsTemporary project assignments Loyalty to employerLoyalty to self PaternalismRelationships far less familial Employee sense of entitlementPersonal responsibility for one’s job future Stable, rising incomePay for “value added” Job-related skill trainingEmployees in charge of own education Focus on individual accomplishmentsFocus on team building and projects Figure

6 Employee Rights  Public vs. private sector employees Public sector employees protected by constitutional control on employer power Private sector employees viewed through the principal of private property under the law This being challenged more and more  Employee rights provide workers with: Desired outcomes and Protection from unwanted outcomes

7 Sources of Employee Rights Employee Rights 1. Statutory rights – provided by laws/regulations 2. Collective bargaining rights – provided by union contracts 3. Enterprise rights – provided by employer promises

8 Models of Management Morality Moral Management Employees must be treated withdignity and respect. Employees must be treated withdignity and respect. Amoral Management Employees are treated only as the lawrequires. Immoral Management Employees are viewed as factors ofproduction to be used, exploited,and manipulated. Figure 17-2

9 Key Job-Related Rights  The right not to be fired without just cause  The right to due process and fair treatment in the workplace  The right to freedom of expression in the workplace  The rights to privacy, safety and health in the workplace (Chapter 18)

10 Right not to be fired without just cause  Good Cause Norm – belief/right that employees should be discharged only for good reason  Employment-at-Will Doctrine – asserted legal right of companies to terminate any employee for any reason at any time unless it is discriminatory or violates a union contract  These ideas are in direct conflict  Many employees incorrectly assume that good cause norm prevails Over time, good cause norm is gaining legal traction

11 Right Not to be Fired Without Just Cause Public Policy Exceptions Contractual Actions Contractual Actions Breach of Good Faith Principle Exceptions to Employment-at-Will Doctrine Protects employees from being fired for refusal to commit crimes (43 states) Protects employees who they believe have contracts or implied contracts (38 states) Employers are expected to hold to a standard of fairness and good faith ( 11 states )

12 Employment-at-Will 1. Employees deserve respectful treatment. 2. Employees do not have the option of being arbitrary or capricious with employers. Employers should bear the same responsibility. 3. Employees are expected to be trustworthy, loyal and respectful with employers. Employers should show employees the same consideration. Objections to Employment-at-Will

13 Terminating an Employee 1. Fire employees in a private space. 2. Be mindful of employees’ logistics. 3. Preserve the employee’s dignity. 4. Choreograph the notification in advance. 5. Use transparent criteria for layoffs. It is important to terminate employees fairly and respectfully, for both ethical and legal reasons. It also protects the morale of existing employees who see fairness in the process.

14 What Not to do When Terminating an Employee 1. Don’t fire on a Friday. 2. Don’t say that downsizing is finished. 3. Don’t terminate an employee via Stick to the topic and avoid platitudes. 5. Don’t rush through the meeting.

15 The Right to Due Process Due Process The right of employees to havedecisions that adversely affect themto be reviewed by objective, impartialthird parties. To achieve fairness, need to balance the interests of the employer with the interests of the employee.

16 The Requirements of a Due Process System It must be a procedure and must follow rules. It must be visible so that potential violators are aware of it. It must be predictably effective. It must be institutionalized. It must be perceived as equitable. It must be easy to use. It must apply to all employees.

17 Alternative Dispute Resolution Open-Door Policy Hearing Procedure The Ombudsman The Peer Review Panel One senior employee reviews the case Employee can be represented by an attorney or other person Formally and officially neutral person reviews case Selected and trained group of employees review case

18 Freedom of Speech in the Workplace Whistle- Blower An employee whodiscloses illegal, immoral, orillegitimate practices to personsor organizations that may be able toeffect action. Becoming a more frequent practice as loyalty and obedience become less prevalent

19 Changing View of Employees’ Responsibility in Whistle-Blowing Corporat e Employer Loyalty Obedience Confidentiality Employe e Traditional (Has certain rights) Public Employe e Corporat e Employer Whistle blowing Responsibility (Has certain rights) Emerging Figure 17-3

20 Whistle-Blowing A Few Well-Known Whistle-Blowers  Sherron Watkins, Enron  Jeffrey Wigand, Brown & Williamson tobacco co.

21 Consequences of Whistle-Blowing  Firing  More stringent criticism of work  Less desirable work assignments  Pressure to drop charges against the company  Heavier workloads  Loss of perquisites  Exclusion from meetings previously attended

22 Whistle-Blowing  Civil Service Reform Act (1978)  Michigan Whistle-Blowers Protection Act (1981)  False Claims Act (1986)  Whistle-Blower Protection Act (1989)  Sarbanes-Oxley (2002) Examples of Government Protection

23 Management’s Responsiveness to Whistle-Blowing  Employees should be encouraged to speak out and make suggestions, and those need to be acknowledged and rewarded.  The idea is to avoid the need for whistle-blowing in the first place.