1. Building an Ethical Culture The role of HRM
Professor Pauline Stanton
School of Management

2. Do we have a problem?

3. How do we respond?
Blame, name and shame…….and jail?
……..regulate, regulate regulate
……………………..more codes of conduct and compliance
………………………... more policies and procedures
………we undermine trust and create risk averse organisational cultures

4. Developing Codes of Conduct, disciplinary procedures
Role of HRM
Designing and implementing best practice recruitment and selection, promotion, performance and reward
Developing Codes of Conduct, disciplinary procedures
Role of Leadership
‘The tone from the top’ ‘Walking their talk’ Graycar and Kelly 2014

5. Signalling theory: the strength of the HRM system
Distinctiveness: the features of the HRM system that capture the attention of staff and arouse interest in the goals: visibility, understandability, legitimacy of authority, relevance
Consistency: how the HRM message is encoded and interpreted: instrumentality, validity, consistent HRM messages
Consensus: agreement amongst employees on the perception of cause and effect relationship: agreement amongst principle decision makers, fairness (distributive, procedural and interactional)
Bowen D and Ostroff C (2004) Understanding HRM-firm performance linkages: The role of the ‘strength’ of the HRM system” Academy of Management Review 29(2):

6. Distinctiveness
People know what is expected, why it is important and that the policies and processes are relevant and meaningful – otherwise they ignore them
If there are no policies and line managers hire and fire – Wild West as managers do their own thing – led to inconsistency ‘its not fair’
If there are too many policies and processes – policy overload – managers do their own thing – work arounds

8. Consistency The policies are integrated and pull in the same direction
People are rewarded for the right behaviours not the wrong ones
People see the value of HRM systems and processes to help them do what they need to do

9. Consensus Agreement – engagement with staff Shared decision making
Organisational Justice
Procedural
Distributive
Interpersonal

10. Leadership at all Levels: ethical challenges facing line managers
We might have to deal with large scale theft or fraud
But often it is more about
Difficult behaviours – bullying, unprofessional s, moonlighting and misuse of company time or resources, the old mates/family network
Such difficult behaviours if left unchallenged lead to a toxic culture – staff don’t like it – mistrust, undermines team spirit

11. What don’t line managers challenge difficult unethical behaviours?
It’s too hard
I won’t get support from above
I have no real evidence only hearsay
The union will get involved
It will take too much of my time
I don’t know what to do and how to do it
It will go away

12. What can HRM practitioners do?
Not just focus on training……
Instead work with the line managers to identify and advise – build relationships with line managers – be at their side – brainstorm possible outcomes and pitfalls
Make sure that they have sensible, practical support
Don’t always be the expert – find help from the right people
Work with the leadership team to provide the tone from the top

13. An ethical culture is about openness and transparency It is also about trust Leadership at all levels as managers walk their talk

14. Questions and Comments?