1. Ethics and Fair Treatment in Human Resource Management
Ch 14

2. When you finish studying this chapter, you should be able to:
Explain what is meant by ethical behavior. 
Discuss important factors that shape ethical behavior at work. 
Discuss at least four specific ways in which HR management can influence ethical behavior at work. 
Exercise fair disciplinary practices.
Discuss at least four important factors in managing dismissals effectively.

3. The Meaning of Ethics Ethics
the principles of conduct governing an individual or a group
standards you use to decide what your conduct should be
Involves normative judgments

5. The Meaning of Ethics (cont.)
Normative judgment implies that something is good or bad, right or wrong, better or worse

6. The Meaning of Ethics (cont.)
Involve morality, society’s accepted standards of behavior
Moral standards address matters of serious consequence to society’s well-being
Involve morality, society’s accepted standards of behavior.
Moral standards address matters of serious consequence to society’s well-being,
Cannot be established or changed by decisions of authoritative bodies
Should override self-interest

7. Ethics and the Law
The law is not the best of guides for what is ethical
Something may be legal, but not right
Companies where fairness and justice prevail tend to be ethical companies

8. Ethics, Fair Treatment, and Justice
Workplace unfairness can be blatant
Employees of abusive supervisors are more likely to quit their jobs, and to report lower job and life satisfaction and higher stress if they remain in those jobs

9. Perceptions of Fair Interpersonal Treatment Scale

10. Why Treat Employees Fairly?
Perceptions of fairness relate to enhanced employee commitment, and enhanced satisfaction with the organization
Perceptions of fairness relate to enhanced employee commitment, enhanced satisfaction with the organization, jobs, and leaders, and enhanced organizational citizenship behaviors

11. Why Treat Employees Fairly? (cont.)
Procedural justice - fair processes
Distributive justice - fair outcomes

12. Why Treat Employees Fairly? (cont.)
College instructors completed surveys regarding the extent to which they saw their colleges as treating them with procedural and distributive justice.
Instructors who perceived high distributive and procedural justice reported higher organizational commitment.
Their students reported higher levels of instructor effort, prosocial behaviors, and fairness, as well as more positive reactions to their instructors.
A study provides a vivid illustration. College instructors completed surveys regarding the extent to which they saw their colleges as treating them with procedural and distributive justice. (Researchers generally distinguish between procedural justice and distributive justice. The former refers to fair processes, while the latter refers to fair outcomes.) The procedural justice questions included, for example, “In general, the department/college’s procedures allow for requests for clarification for additional information about a decision.” The distributive justice questions included, “I am fairly rewarded considering the responsibilities I have.” These instructors also completed organizational commitment questionnaires. These included questions such as “I am proud to tell others that I am part of this department/college.” Their students then completed surveys. These contained items such as “the instructor put a lot of effort into planning the content of this course,” “the instructor was sympathetic to my needs,” and “the instructor treated me fairly.”The results were telling. Instructors who perceived high distributive and procedural justice reported higher organizational commitment. Furthermore, their students reported higher levels of instructor effort, prosocial behaviors, and fairness, as well as more positive reactions to their instructors. “Overall,” as the researcher says, “the results imply that fair treatment of employees has important organizational consequences.”[i] [i] Suzanne Masterson, “A Trickle-Down Model of Organizational Justice: Relating Employees’ and Customers’ Perceptions of and Reactions to Fairness,” Journal of Applied Psychology 86, no. 4 (2001): 594–601.

13. Individual Factors Age
Older workers in general had stricter interpretations of ethical standards and made more ethical decisions than younger employees

14. Organizational Factors
Being under the gun to meet scheduling pressures
Meeting overly aggressive business objectives
Helping the company survive

15. Organizational Factors (cont.)
Judge sentenced WorldCom’s former CFO to 5 years in jail, allegedly for helping the firm’s former chairman, Bernard Ebbers, mask WorldCom’s deteriorating financial situation
The government accused him of instructing underlings to fraudulently book accounting entries, and of filing false statements with the SEC
Examples Several years ago, a judge sentenced WorldCom’s former CFO to 5 years in jail, allegedly for helping the firm’s former chairman, Bernard Ebbers, mask WorldCom’s deteriorating financial situation. Among other things, the government accused him of instructing underlings to fraudulently book accounting entries, and of filing false statements with the SEC. Why, as a star CFO and someone trained to protect the interest of his shareholders, would the CFO do such a thing? “I took these actions, knowing they were wrong, in a misguided attempt to preserve the company to allow it to withstand what I believed were temporary financial difficulties.”[i]
[i] “Former CEO Joins WorldCom’s Indicted,” Miami Herald (March 3, 2004): 4C.

16. The Boss’s Influence
Level of misconduct at work dropped dramatically when employees said their supervisors exhibited ethical behavior
Leader’s actions may be the single most important factor in fostering corporate behavior of a high ethical standard

17. The Boss’s Influence (cont.)
How supervisors lead subordinates astray:
Tell staffers to do whatever is necessary to achieve results
Overload top performers to ensure work gets done
Look the other way when wrongdoing occurs
Take credit for others’ work or shift blame

18. Quick Ethics Test Is the action legal? Is it right?
Who will be affected?
Does it fit the company's values?
How will it “feel” afterwards?
How will it look in the newspaper?
Will it reflect poorly on the company?

19. Organizational Culture
characteristic values, traditions, and behaviors a company’s employees share
Value
basic belief about what is right or wrong, or about what you should or shouldn’t do

20. Culture and the Manager
Clarify expectations
Use signs and symbols
Provide physical support
Use stories
Organize rites and ceremonies

21. Ethics, Fair Treatment, and the Role of HR Management
Staffing and Selection
Simplest way to tune up an organization is to hire more ethical people
Honesty tests
Comprehensive background checks
If prospective employees perceive that the hiring process does not treat people fairly, they may assume that ethical behavior is not important in the company

22. Training Showing employees how to recognize ethical dilemmas
How to use ethical frameworks (such as codes of conduct) to resolve problems
Using HR functions in ethical ways

24. Complying with Sarbanes-Oxley
Requires that the CEO and CFO of publicly traded companies attest to the accuracy of companies’ financial statements

25. Performance Appraisal
Employees’ standards should be clear
Should understand the basis upon which they're going to be appraised
Appraisals themselves should be performed objectively and fairly

26. Reward and Disciplinary Systems
Employees expect the organization to dole out relatively harsh punishment for unethical conduct
Important for the company to send the right signals by disciplining executives who misbehave

27. Workplace Aggression and Violence
Employees who see themselves as unfairly underpaid may take negative actions ranging from employee theft to destruction of company property

28. Building Two-Way Communication
Engagement
involving individuals in the decisions that affect them by asking for their input and allowing them to refute the merits of one another’s ideas and assumptions

29. Building Two-Way Communication (cont.)
Explanation
ensuring that everyone involved and affected understands why final decisions are made as they are and the thinking that underlies the decisions

30. Building Two-Way Communication (cont.)
Expectation clarity
making sure everyone knows up front by what standards they will be judged and the penalties for failure

31. Employee Discipline and Privacy
Purpose of discipline is to encourage employees to behave sensibly at work
Sensible is defined as adhering to rules and regulations

32. Three Pillars of the Discipline Process
Set of clear rules and regulations
System of progressive penalties
Appeals process

33. FedEx Appeals Process
Management review - the complainant submits a written complaint to a member of management
Officer complaint - the complainant submits a written appeal to the vice president
Executive appeals review - the complainant may submit a written complaint to the employee relations department

34. Traditional Discipline
Leaves a residue of ill will
Forcing your rules on employees may gain their short-term compliance, but not their cooperation

35. Discipline Without Punishment
Issue an oral reminder
Should another incident arise within six weeks, issue the employee a formal written reminder
Give a paid one-day “decision-making leave”
If no further incidents occur in the next year or so, the one-day paid suspension is purged from the person’s file

36. Electronic Employee Privacy Violations
Intrusion
Publication of private matters
Disclosure of medical records
Appropriation of an employee’s name for commercial purposes

37. Legal Issues
More employers today are issuing and online services usage policies to forewarn employees that those systems are intended to be used for business purposes only
Employers may be held liable for illegal acts committed by their employees via

38. Managing Dismissals Dismissal should be fair, warranted, and just
Manager should ensure that immediate dismissals are humane

39. Termination at Will Exceptions
Statutory exceptions
federal and state equal employment and workplace laws prohibit specific types of dismissals
Common law exceptions
a court may decide that an employee handbook promising termination only “for just cause" may create an exception to the at-will rule

40. Termination at Will Exceptions (cont.)
Public policy exception
courts have held a discharge to be wrongful when it was against an explicit, well-established public policy

41. Grounds for Dismissal Unsatisfactory performance Misconduct
persistent failure to perform assigned duties or meet prescribed standards on the job
Misconduct
deliberate and willful violation of the employer’s rules

42. Grounds for Dismissal (cont.)
Lack of qualifications
an employee’s inability to do the assigned work
Changed requirements of the job
an employee’s incapability of doing the work assigned, after the nature of the job has been changed

43. Grounds for Dismissal (cont.)
Insubordination
direct disregard of the boss’s authority, and disobedience of, or refusal to obey the boss’s orders

44. Avoiding Wrongful Discharge Suits
Wrongful discharge occurs when an employee’s dismissal does not comply with the law

45. Avoiding Wrongful Discharge Suits (cont.)
Lay the groundwork that will help avoid such suits before they get started
Use practices that help ensure the fairness of the decision

46. Severance Pay

47. Personal Supervisory Liability
Follow company policies and procedures
Do not add to the emotional hardship on the employee
Let employee present their side of the story
Do not act in anger
Utilize the HR department

48. Termination Interview
Plan the interview carefully
Get to the point
Describe the situation
Listen
Review all elements of the severance package
Identify the next step

49. Outplacement Counseling
employer provides terminated employees with career planning and job search skills

50. Exit Interviews
Want to elicit information that might give the employer a better insight into what is right—or wrong—about the company   

51. Layoff Layoff Employer expects to be short term
employer sends workers home for a time for lack of work
Employer expects to be short term

52. The Layoff Process
Senior management meets to make strategic decisions about the size and timing of the layoffs.
Frontline supervisors assess their subordinates, rating employees either A, B, or C
Subordinates are informed about their A, B, or C rating
Employees with C grades are designated “surplus” and most likely to be laid off
The layoff process A study illustrates one firm’s layoff process. In this company, senior management first met to make strategic decisions about the size and timing of the layoffs. These managers also debated the relative importance of the skill sets they thought the firm needed going forward. Front-line supervisors assessed their subordinates, rating their nonunion employees either A, B., or C, (union employees were covered by a union agreement making layoffs dependant on seniority). The front-line supervisors than informed each of their subordinates about his or her A, B., or C rating, and told each that those employees with C grades were designated "surplus" and most likely to be laid off. [i]
[i] Leon Grunberg, Sarah Moore, and Edward Greenberg, "managers’ reactions to implementing layoffs: relationship to health problems and withdrawal behaviors", human resource management, summer 2006, volume 45, number two, pages

53. Adjusting to Downsizings and Mergers
Reducing the number of people employed by the firm
Requires careful planning and consideration