1. PowerPoint Presentation by Charlie Cook The University of West Alabama Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. M ANAGING H UMAN R ESOURCES Ensuring Fair Treatment and Legal Compliance Chapter 3

2. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–23–2 The Strategic Importance of Fairness and Legal Compliance Managers seek to maximize profits on behalf of shareholders…. But businesses operate in complex environments.

3. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–33–3 Business and the Environment Effective businesses address the concerns of many stakeholders….  Society  Labor Force  Legal Institutions

4. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–43–4 Society and Fairness Society’s definition of “fair treatment” is in constant flux. Its definition varies in different cultures Laws, government agencies and courts offer guidelines. Complying with laws is not enough.

5. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–53–5 Concerns of the Labor Force “Fairness creates the feeling of trust that’s needed to hold a good workplace together.” Employees express their concerns:  When they choose an employer  When they decide to stay or leave  Through surveys and grievance systems  Through labor union participation

6. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–63–6 The HR Triad: Fairness and Legal Compliance Line Managers Be informed Set policy in collaboration with HR Follow due process Respond to employee concerns Intervene if observe illegal behavior Keep accurate records Line Managers Be informed Set policy in collaboration with HR Follow due process Respond to employee concerns Intervene if observe illegal behavior Keep accurate records HR Professionals Stay current on legal issues Set policy with managers Encourage managers to adopt societal views Balance employer/employee rights Administer dispute resolution HR Professionals Stay current on legal issues Set policy with managers Encourage managers to adopt societal views Balance employer/employee rights Administer dispute resolution Employees Be informed Work with HR to establish procedures Report illegal behaviors Accept responsibility to behave fairly Educate employees from other cultures Employees Be informed Work with HR to establish procedures Report illegal behaviors Accept responsibility to behave fairly Educate employees from other cultures

7. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–73–7 What Fairness Means to Employees Distributive Justice  Comparison of personal outcomes with the outcomes of others Procedural Justice  Perceptions about fairness in the process Interactional Justice  Whether managers are sensitive, polite, respectful, and employees are given sufficient information

8. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–83–8 Reactions to Unjust Treatment A.Quit B.Stay and accept the situation C.Seek revenge D.Talk to others in the organization E.Complain to external authorities

9. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–93–9 Legal Means to Ensure Fair Treatment U.S.Constitution Title VII of the Civil Rights Act State Laws Administrative Regulations Executive Orders Common Law Rules

10. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–10 Major Federal Employment Laws and Regulations EX 3.2 National Labor Relations Act (Wagner Act, 1935) Fair Labor Standards Act (FLSA; 1938) Equal Pay Act (1963) Title VII of the Civil Rights Act (1964; 1991) Executive Order 11246 (1965) Age Discrimination in Employment Act (ADEA; 1967) Occupational Safety and Health Act (OSHA; 1970) Rehabilitation Act (1973) Employee Retirement Income Security Act (ERISA; 1974) Pregnancy Discrimination Act (1978) Worker Adjustment and Retraining Notification Act (WARN; 1988) Americans with Disabilities Act (ADA; 1990) Family and Medical Leave Act (1993) Sarbanes-Oxley Act (2002)

11. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–11 Civil Rights Act–Title VII Prohibits discrimination by employers, employment agencies, and unions. On the basis of  Race  Color  Religion  Sex  National Origin  Pregnancy Applies to businesses with 15 or more employees.

12. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–12 State Laws Must be consistent with Federal law. May apply to smaller businesses than Federal laws. May offer greater protection to employees (e.g. sexual orientation). State laws may precede (but not conflict with) Federal laws.

13. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–13 Administrative Regulations Rules, guidelines, and standards that government agencies produce to enforce the law. Equal Employment Opportunity Commission (EEOC) Occupational Safety and Health Administration (OSHA) National Labor Relations Board (NLRB)

14. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–14 Proactive Approaches to Ensuring Fair Treatment Diversity Initiatives  Policies and practices adopted voluntarily to ensure all members of a diverse workforce feel they’re treated fairly.  Coverage: may address concerns of groups that have no legal protections.  Culture of Inclusion: a company culture in which everyone feels integrated into the larger system. Characterized by respect, equal access, and merit-based decisions.

15. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–15 What is Harassment? Harassment is conduct that creates a hostile, intimidating, or offensive work environment. or Unreasonably interferes with an individual’s work. or Adversely affects an individual’s employment opportunities.

16. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–16 Current Legal Standard for Evaluating Harassment Would a “reasonable person” in the same or similar circumstances find the conduct intimidating, hostile or abusive?  Ellison v. Brady (1991)— a “reasonable woman” EEOC regulations require an environment free of harassment based on sex, race, color, religion, national origin, age or disability.  Oncale v. Sundown Offshore Service Inc. (1998) Same-sex harassment covered.

17. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–17 Challenges for the 21st Century Employment-at-Will Employee Privacy Fairness in the Global Context

18. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–18 Employment-at-Will  A company’s right to terminate employees for any reason. Either party (employer or employee) can sever the relationship at will. Regulations that curtail employment-at-will:  Civil Rights Act  Age Discrimination in Employment Act  Americans with Disabilities Act  National Labor Relations Act

19. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–19 Employment-at-Will (cont’d) Procedural Justice  Emphasized in most court decisions.  Termination should be the last step in series of documented steps.  Steps should ensure employee understood problems and had chance to improve.  Worker Adjustment and Retraining Notification Act (WARN) of 1988 Requires a 60-day notice of plant/office closure and worker training.

20. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–20 Acceptable Reasons to Terminate Employees Incompetence in performance that does not respond to training or to accommodation Gross or repeated insubordination Civil rights violations such as engaging in harassment Too many unexcused absences Illegal behavior such as theft Repeated lateness Drug activity on the job Verbal abuse Physical violence Falsification of records Drunkenness on the job EX 3.8

21. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–21 Unacceptable Reasons to Terminate Employees Blowing the whistle about illegal conduct by employers Cooperating in the investigation of a charge against the company Reporting Occupational Safety and Health Administration violations Filing discrimination charges with the EEOC or a state or municipal fair employment agency Filing unfair labor practice charges with the National Labor Relations Board (NLRB) or a state agency Filing a workers’ compensation claim Engaging in concerted activity to protest wages, working conditions, or safety hazards Engaging in union activities, provided there is no violence or unlawful behavior Complaining or testifying about violations of equal pay or wage and hour laws Complaining or testifying about safety hazards or refusing an assignment because of the belief that it’s dangerous EX 3.8 cont’d

22. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–22 Employment-at-Will (cont’d) Implied Contracts  Based on employee-held beliefs regarding conditions of employment.  Beliefs may be based on verbal assurances given by managers. Explicit Contracts  Written down and clearly state company policy.  Some employers require signed waivers when severance packages given to prevent wrongful discharge suits.

23. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–23 Access to Medical and Lifestyle Information Americans with Disabilities Act (ADA)  Medical examination may only be given after a conditional job offer.  All medical records must be kept separate and confidential. Employers can penalize, refuse to hire or terminate because of conditions associated with high health care costs.  Lower insurance premiums for “healthy” lifestyles  90% of employers now conduct drug testing.

24. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–24 Access to Genetic Information Challenges to Personal Privacy  Federal legislation prohibiting use of genetic information for staffing decisions has been proposed.  Some employers may want to use genetics to predict employee health.

25. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–25 Monitoring Communications Technology makes monitoring easy and unobtrusive  Companies can monitor telephone, e-mail, voice- mail, use video and other surveillance devices.  Informing employees and claims of “business necessity” make monitoring more defensible.

26. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–26 Fairness in the Global Context Work Conditions and Pay  Other countries may provide more or less legal protection than the U.S. Economic and social differences create inequities and ethical challenges. Terminations and Layoffs  Other countries have costly employer obligations. Before layoffs or shutdowns, firms may be required to have a government-approved “social plan.” Privacy  EU’s Data Protection Directive Restricts collection and storage of personal information.

27. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3–27 Conclusion: Fair Treatment and Legal Compliance Legal compliance is the first step Effective managers who are sensitive to employee perceptions and to the broader social fabric:  Anticipate employee reactions  Personally respect employees  Elicit positive attitudes from employees