1. Ethics and Employee Rights and Discipline14
Ethics and Employee Rights and Discipline
In this chapter we will explore issues, policies, and problems related to ethics, fair treatment, discipline, and the termination of employees. With the recent events at Enron, WorldCom, and other firms, ethics has become a major issue in today’s world. Let’s spend some time discussing what has changed to make this an issue. Is there more unethical behavior, have standards changed, or is it simply that today’s media and communications shed more light on perpetual problems?
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2. Learning Objectives Explain what is meant by ethical behavior at work.
Discuss important factors that shape ethical behavior at work.
Describe at least four specific ways in which HR management can influence ethical behavior at work.
Employ fair disciplinary practices.
List at least four important factors in managing dismissals effectively.
At the conclusion of this chapter, you will be able to:
Explain what is meant by ethical behavior at work.
Discuss important factors that shape ethical behavior at work.
Describe at least four specific ways in which HR management can influence ethical behavior at work.
Employ fair disciplinary practices.
List at least four important factors in managing dismissals effectively.
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3. Explain what is meant by ethical behavior at work.
Ethics and morality are basically the same but differ in their application. An ethic is a set of guiding principles (virtues) while morality is the degree of conformity to such a set of principles. Interestingly, the term "morality" relates to mores or customs. So, one can rightfully ask the probing question, "Whose customs or principles do we adopt?" Let’s discuss.
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4. Ethics and Fair Treatment at Work
What is ethics?
Ethics and the law
Ethics, justice, and fair treatment
Ethics, public policy, and employee rights
Unalienable rights
Public policy
Employment rights
Ethics refers to “the principles of conduct governing an individual or a group.” Ethical decisions also involve morals, which are society’s accepted standards of behavior.
The law is not the best guide about what is ethical because something may be legal but not right, and something may be right but not legal. Ethics means making decisions that represent what you stand for not just what is legal.
With respect to the workplace, experts generally define organizational justice in terms of distributive justice and procedural justice. Distributive justice refers to the fairness and justice of the decision’s result. Procedural justice refers to the fairness of the process itself. While law can provide guidelines for future behaviors and actions of an organization, ethical procedures depend on the standards we aspire to in our culture and society.
Societies don’t rely on employers’ ethics or sense of fairness or morality to ensure that they do what’s right. Societies also institute various laws and procedures for enforcing these laws. These laws lay out what employers can and cannot do.
Laws also carve out explicit rights for employees but not all rights derive from laws. For example, the first 10 amendments to the U.S. Constitution we call the Bill of Rights. Most laws therefore also reflect public policy. In other words, governments enact laws so as to further their public policy aims. Public policy “consists of political decisions for implementing programs to achieve societal goals”. Protecting employee rights is therefore part and parcel of all the employment laws we discuss.
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5. Review Ethics The law Justice, and fair treatment
Public policy, and employee rights
So far we have discussed the basic definition of ethics and its relationship to morality. We also determined that, while the law can provide some guidelines about ethical behavior, it is up to us to determine societal standards and abide by them. Justice, with respect to ethical behavior, depends on the extent to which the process and the results are deemed fair.
Finally, public policy exists to help societies protect the rights of individuals.
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6. Discuss important factors that shape ethical behavior
at work.
Whether a person acts ethically at work is usually not a consequence of any one thing. Let’s look at what the important factors are.
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7. What Shapes Ethical Behavior at Work?
No one smoking gun
The person (bad apples)
Situations (bad cases)
Outside forces (bad barrels)
Pressures
Ethics policies and codes
Organizational culture
Whether a person acts ethically at work is usually not a consequence of any one thing. Because people bring to their jobs their own ideas of what is morally right and wrong, the individual must shoulder much of the credit (or blame) for the ethical choices he or she makes.
Three factors combine to determine the ethical choices a person makes. No single “smoking gun” determines ethical behavior. The first factor may be called “bad apples” or individuals who make unethical choices. We may call the second factor “bad cases” or ethical situations ripe for unethical choices. The third may be called “bad barrels” or environments which foster unethical choices.
Individual characteristics: Who are the bad apples? Some people are just more inclined to make unethical choices. Which ethical situations make for bad (ethically dangerous) cases or situations?
Some ethical dilemmas are more likely to prompt unethical choices. Finally, what are the “bad barrels”? What outside factors mold ethical choices?
Some people are just more principled than others. One study suggests older workers generally have stricter interpretations of ethical standards and make more ethical decisions than younger ones.
We also know that outside pressures weaken one’s ethical compass. Common pressures include “meeting schedule pressures,” “meeting overly aggressive financial or business objectives,” and “helping the company survive.” It’s also hard to resist even subtle pressure, let alone coercion, from your boss.
An ethics policy and code is a good way to signal that the firm is serious about ethics. However, codifying the rules without enforcing them is futile. As one study noted, “…strong statements by managers may reduce the risk of legal and ethical violations by their work forces, but enforcement of standards has the greatest impact.”
Finally, employees take their signals about what’s acceptable not just from what managers say, but from what they do. Those signals then mold the company’s organizational culture, the “characteristic values, traditions, and behaviors a company’s employees share.”
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8. Review Smoking guns and apples
Some of the factors that shape ethical behavior at work include the individual, the situation, and forces outside of the individual such as environments or cultures that foster unethical behaviors. Policies and codes that are not enforced or pressures from bosses may help create some “bad barrels.”
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9. Describe at least four specific ways in which HR
management can influence ethical behavior at work.
Managers can use personnel activities to support the employer’s ethics goals. We’ll consider examples.
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10. Using HR Management Methods to Promote Ethics and Fair Treatment
Selection
Ethics training
Performance appraisal
Reward and disciplinary systems
Managing ethics compliance
Screening out undesirables actually can start before the applicant applies. This is more likely if the HR department creates recruiting materials containing explicit references to the company’s emphasis on integrity and ethics. Interviewing using questions about ethical behavior and managing other aspects of the selection process sends signals about the company’s ethical values and culture.
Ethics training typically plays a big role in helping employers nurture a culture of ethics and fair play. Such training usually includes showing employees how to recognize ethical dilemmas. It also includes how to use ethical frameworks to resolve problems, and how to use HR functions in ethical ways.
The firm’s performance appraisal processes provide another opportunity to emphasize a commitment to ethics and fairness. The appraisal can actually measure employees’ adherence to high ethical standards.
Managers and organizations need to reward ethical behavior and penalize unethical behavior. However, care must be taken in rewarding ethical behavior so as not to undermine the intrinsic value of behaving in an ethical manner.
Passage of the Sarbanes-Oxley Act of 2002 made ethics compliance mandatory. The act requires that CEOs and CFOs of publicly traded companies personally attest to the accuracy of their companies’ financial statements. Record-keeping in the post-Enron era has become intense so smaller companies face challenges in adhering to the Sarbanes-Oxley Act. As a result, some companies have been taken private to avoid the duties required of the company officers. Nonetheless, privately held or smaller companies should be willing to attest to the validity of the published statements and internal practices.
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11. Review Selection Training Performance Rewards Compliance Selection
We have discussed how specific HR practices can help establish and maintain a framework for ethical behavior within an organization. Emphasizing ethical practices during the selection process, training programs that reinforce ethical practices and establishing a rewards system that includes consideration of ethical choices as part of the employee’s actions will support the ethical culture of the firm. Various laws impact organizational ethics including the Sarbanes-Oxley Act requiring CEOs and CFOs remain personally responsible for adherence to proper standards.
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12. Employ fair disciplinary practices.
The purpose of discipline is to encourage employees to behave sensibly at work (where sensible means adhering to rules and regulations). Discipline is necessary when an employee violates a rule.
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13. Managing Employee Discipline and Privacy
Fairness in disciplining
Bullying and victimization
What causes unfair behavior?
The purpose of discipline is to encourage employees to behave sensibly at work. In an organization, rules and regulations serve purposes similar to what laws do in society. Discipline is called for when one of these rules or regulations is violated. A fair and just discipline process is based on three pillars: clear rules and regulations, a system of progressive penalties, and an appeals process.
Bullying and victimization is becoming a serious problem in the workplace. Such behavior usually involves an imbalance of power, an intent to cause harm, and repeating the same behavior with the same person or group.
One study suggests three supervisory actions influence perceived fairness. The first is to involve employees in the decisions that affect them. Second, ensure that everyone involved and affected understands why final decisions are made. Finally, make sure everyone knows up front by what standards you will judge him or her.
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14. Managing Employee Discipline And Privacy
Basics of a fair and just disciplinary process
Rules and regulations
Progressive penalties
Formal disciplinary appeals processes
The employer wants its discipline process to be both effective (in terms of discouraging unwanted behavior) and fair. Employers base such a process on three pillars: clear rules and regulations, a system of progressive penalties, and an appeals process.
First, rules and regulations address issues such as theft, destruction of company property, drinking on the job, and insubordination.
A system of progressive penalties is a second pillar of effective discipline. Penalties typically range from oral warnings to written warnings and, finally, to suspension from the job to discharge.
In addition to rules and progressive penalties, the disciplinary process requires an appeals procedure. Typically, if the decision is not acceptable to an employee, the employee may submit a appeal first to management, then a company officer and finally an executive review procedure.
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15. Discipline without Punishment
Oral reminder
Formal written reminder
Decision-making leave
Purge suspension from file
Discipline should be perceived and fair and its purpose understood to correct inappropriate behavior. The goal is not to fix the blame; the goal is to fix the problem. Typical steps include:
Issue an oral reminder.
Should another incident arise within 6 weeks, issue a formal written reminder, a copy of which is placed in the employee’s personnel file.
Give a paid, one-day “decision-making leave.”
If no further incidents occur in the next year or so, purge the one-day paid suspension from the person’s file.
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16. Managing Employee Discipline and Privacy
Employee privacy
Employee monitoring
Restrictions
The four main types of employee privacy violations upheld by courts are:
intrusion (locker room and bathroom surveillance);
publication of private matters;
disclosure of medical records; and
appropriation of an employee’s name or likeness for commercial purposes.
Employers monitor employees’ electronic activities mostly to improve productivity and to protect themselves from computer viruses, leaks of confidential information, and harassment suits.
There are two main restrictions on workplace monitoring: the Electronic Communications Privacy Act (ECPA) and common-law protections against invasion of privacy.
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17. Review Fairness Bullying Unfair behavior Rules and regulations
Penalties
Appeals
Discipline, not punishment
Employee privacy & monitoring
Much of what we have discussed has to do with common sense, respect for the individual and using a clearly understood system to ensure equity. Fairness, like beauty, is in the mind of the beholder but can be backed up by data. Bullying, unfortunately, continues to grow as a societal norm. It has to do with power issues, an intent to cause harm and repeating the same behaviors against the same individual or group. Involving employees, helping them understand why actions are being taken, and what the standards are will go a long way to ensure perceived fairness.
Rules and regulations are similar to societal laws in that they help guide behavior. Penalties should be administered in a fair and progressive manner, with respect for the individual in mind. If an employee is not satisfied with a decision, he or she should have the right to appeal. Discipline should be perceived as a learning opportunity, not strictly as a punishment for inappropriate behavior.
Finally, there are laws that guide what can and cannot be done with respect to employee privacy and monitoring. The key here is whether there is a genuine business purpose behind what an employee is doing while at work.
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18. List at least four important factors in managing
dismissals effectively.
Dismissal is the most drastic disciplinary step the manager can take. Because of this, special care is required to ensure that sufficient cause exists for it. Let’s spend some time discussing this important, yet sensitive, area in HR.
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19. Managing Dismissals Termination at will and wrongful discharge
Grounds for dismissal
Unsatisfactory performance
Misconduct
Lack of qualifications for the job
Changed requirements
Termination at will means that without a contract, either the employer or the employee could terminate the employment relationship at any time for any reason with no advance notice. Most states are employment at will states. Wrongful discharge is a dismissal that violates the law or that fails to comply with contractual arrangements, either stated or implied.
There are four bases for dismissal. In dismissing an employee, the employer should take care to ensure that all keys and company properties are returned, Internet passwords disabled, and employee accounts deactivated.
Unsatisfactory performance occurs when there is persistent failure to perform assigned duties or to meet prescribed job standards. Misconduct is a deliberate and willful violation of the employer’s rules. Lack of qualifications for the job results from an employee’s inability to do the work assigned even when he or she is diligent. Changed requirements (or elimination) of the job results from an employee’s inability to do the job after the employer changed the nature of the job.
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20. Managing Dismissals Other issues in dismissals Insubordination
Fairness
Security measures
Insubordination is a form of misconduct that refers to rebelliousness or disobedience. While things like stealing, chronic tardiness, and poor-quality work are easily understood grounds for dismissal, insubordination is sometimes harder to translate into words. However, some acts are usually clearly
insubordinate. These include, for instance:
Direct disobedience of, or refusal to obey, the boss’s orders, particularly in front of others
Deliberate defiance of clearly stated company policies, rules, regulations, and procedures
Public criticism of the boss
Contemptuous display of disrespect
Dismissals are never pleasant. However, there are three things to do to make them fair. First, provide full explanations of why and how termination decisions were made. Second, institute a formal multistep procedure (including warning) and a neutral appeal process. Third, who actually does the dismissing is important. People who are dismissed face-to-face by their managers tend to accept the circumstances more readily.
Finally, use a checklist to ensure that dismissed employees return all keys and company property, and (sometimes) accompanying them out of their offices and out of the building.
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21. Managing Dismissals Avoiding wrongful discharge suits
Personal supervisory liability
The termination interview
Outplacement counseling
Exit interview
Wrongful discharge occurs when an employee’s dismissal does not comply with the law or with the contractual arrangement.
Avoiding wrongful discharge suits requires a two-pronged approach. First, set up employment policies and dispute resolution procedures that make employees feel they are treated fairly. Second, do the preparatory work by paying particular attention to the employee handbook and other company policies and procedures.
Courts sometimes hold managers personally liable for their supervisory actions. Managers should be fully familiar with applicable federal, state, and local statutes and know how to uphold their requirements.
Guidelines for the termination interview include: 1) plan the interview carefully, 2) get to the point, 3) describe the situation and explain that the decision is final and irrevocable, 4) listen, 5) review all elements of the severance package, and 6) identify the next steps.
Outplacement counseling is a systematic process by which a terminated worker is trained and counseled in the techniques of conducting a self-appraisal and securing a new job appropriate to his or her needs and talents. This employee benefit is not required but is a good idea on a human and a public relations level.
Many employers conduct exit interviews with employees who are leaving the firm. They aim to elicit information about the job or related matters that might give the employer a better insight into what is right—or wrong—about the company. Unfortunately, many terminated employees prefer to not “rock the boat” for their future jobs by providing extensive insights into the firm they are leaving.
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22. Layoffs, Downsizing, and the Plant Closing Law
The layoff process
Objectives and constraints
Downsizing team
Address legal issues
Post-implementation actions
Security concerns
Remain informative
For the employer, reduced sales or profits may require layoffs or downsizing. Layoff generally refers to having selected employees take time off, with the expectation that they will come back to work. Downsizing refers to permanently dismissing a relatively large proportion of employees in an attempt to improve productivity and competitiveness. Congress passed the Worker Adjustment and Retraining Notification Act (popularly known as the WARN or plant closing law) in It requires employers of 100 or more employees to give 60 days’ notice before closing a facility or starting a layoff of 50 people or more.
The steps in the layoff process are listed in the slide. However, deciding on policies and practices to be implemented in advance is crucial. For example, if it is a multi-state layoff or downsizing, decisions must be made in advance as to how to handle the differing state laws on administering unemployment compensation. Also, you will need to decide if production can be stopped all on one day or if some things must continue for a short time after the formal announcement. Your downsizing team can help with these considerations.
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23. Managing Dismissals Preparing for layoffs Dismissal’s effects
Bumping/layoff procedures
Layoff and downsizing alternatives
Adjusting to downsizings and mergers
Merger guidelines
In preparing for layoffs, make sure appraisals are up-to-date. Identify top performers and get them working on the company’s future. Be sure to retain or hire committed new leaders.
It’s not surprising that layoffs often result in harmful psychological and physical health outcomes for employees who lose their jobs, as well as for the survivors who face uncertainty. Planning and communicating openly with employees will lessen the impact.
With layoffs, three conditions are usually present: (1) there is no work available for these employees, (2) management expects the no-work situation to be temporary and probably short term, and (3) management intends to recall the employees when work is again available. Layoffs and downsizings are painful for all involved. However, there are alternatives.
Find volunteers who may be willing to accept a layoff, perhaps with a “sweetened” return package.
Use the natural attrition of people who may leave or retire anyway. Consider redeployments to other firms in the area. Some employees may consider a voluntary reduction in pay to help the organization remain vital. Ask your employees to concentrate their vacations during slow periods when a smaller workforce would be appropriate. Ask employees to take voluntary time off (furloughs) without pay. And, don’t forget the possibility of early retirement.
Firms usually downsize to improve their financial positions. Yet many firms discover profits don’t improve after major personnel cuts. Low morale among those remaining is often part of the problem. In terms of dismissal, mergers and acquisitions are usually one-sided. In such situations, the acquired firm’s surviving employees may be hyper-sensitive to mistreatment of their soon-to-be former colleagues or feel “survivor’s guilt.” Some ways to improve on the situation include:
Avoid the appearance of power and domination.
Avoid win–lose behavior.
Remain businesslike and professional
Maintain as positive a feeling about the acquired company as possible.
Treating the acquired group with care and dignity will affect the confidence, productivity, and commitment of those who remain.
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24. Review (1) Termination at will and wrongful discharge
Grounds for dismissal
Insubordination
Fairness
Security measures
Avoiding wrongful discharge suits
For this learning objective, we have defined and discussed termination at will and wrongful discharge as well as grounds for dismissal. Such grounds include things such as unsatisfactory performance and misconduct. Insubordination, while not as clear cut as, say, stealing, is an important element in possible terminations. In all circumstances, however, remaining fair and objective while using a well-defined system will help. Obvious security measures include ensuring the terminated employee no longer has access to his or her computer or company property. And, using a common sense, documented and widely understood termination and layoff process will help avoid wrongful discharge suits. Such a process will also contribute to supervisors being less likely to become personally liable should a suit be filed.
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25. Review (2) The termination interview The plant closing law
The layoff process and preparation
Dismissal’s effects
Bumping/layoff procedures
Alternatives and adjusting
The termination interview should be business-like and conducted with thorough advance planning. The Worker Adjustment and Retraining (WARN) Act provides some protections for employees who are about to lose their jobs. In addition, implementation of the act requires employers to thoroughly plan all aspects of the process to the benefit of the organization and its soon-to-be former employees.
We also discussed the steps in the layoff process and the conditions under which a layoff is more appropriate than termination or permanent downsizing. While the process may be psychologically and physically taxing for some (perhaps many), the employer has the opportunity to make life better for all concerned.
Develop a strategy for the process, identify the precise goals to be accomplished by doing so and create and communicate a plan that takes into account the needs of the former employees and the needs of the company.
Finally, don’t hesitate to consider alternatives such as voluntary pay reductions or early retirement. If you are in a company that is being acquired by another, it is important to maintain a sense of equitable treatment for all concerned. Behaving in a dominating or condescending manner to the affected employees will have definite long-term impact on profits and productivity.
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