1. © 2009 Pearson Education South Asia. All rights reserved. HUMAN RESOURCE MANAGEMENT Part 5: Employee Relations Chapter14: Ethics, Justice, and Fair Treatment in HR Management

2. © 2009 Pearson Education South Asia. All rights reserved. After studying this chapter, you should be able to: 1. Explain what is meant by ethical behavior at work 2. Discuss important factors that affect ethical behavior at work 3. Describe ethical issues (e.g. gift-giving, corruption, guanxi) 4. Discuss how HRM can influence ethical behavior at work

3. © 2009 Pearson Education South Asia. All rights reserved. Ethics and Fair Treatment at Work  The Meaning of Ethics –The principles of conduct governing an individual or a group; specifically, the standards you use to decide what your conduct should be.

4. © 2009 Pearson Education South Asia. All rights reserved. The Wall Street Journal Workplace-Ethics Quiz Source: Wall Street Journal, October 21, 1999, pp. B1– B4; Ethics Officer Association, Belmont, MA; Ethics Leadership Group, Wilmette, IL; surveys sampled a cross-section of workers at large companies and nationwide.

5. © 2009 Pearson Education South Asia. All rights reserved. Factors affecting ethical decisions  Normative judgments –Judging something as good or bad, right or wrong, better or worse.  Moral standards (Morality) –Society’s accepted standards for behaviors that have serious consequences to its well-being. Behaviors that cannot be established or changed by decisions of authoritative bodies. Behaviors that override self-interest.

6. © 2009 Pearson Education South Asia. All rights reserved. Ethics and Fair Treatment at Work  Gift-giving and Exchange of Favor –Gift-giving In most societies, it is a social custom among friends and relatives. –Corporate gifts for customers Viewed as favor exchange Issue: will it lead to corruption, especially with expensive gifts?

7. © 2009 Pearson Education South Asia. All rights reserved. Corruption and Guanxi  Guanxi: Reciprocal relationships extended from family, friends to business GuanxiCorruption Ingredient of social norm Deviation from social norm Legal Illegal Builds on exchange of favor Involves monetary exchange Involves implicit social reciprocity Pertains to explicit transactional reciprocity No legal risk if it fails High legal risk Long-term orientation Short-term transaction No time limit Requires timeliness Builds on trust Based on commodity Transferable Not transferable

8. © 2009 Pearson Education South Asia. All rights reserved. Corruption and Guanxi  Causes of corruption: 1.Low or inadequate salary 2.Exposed to opportunities of corruption 3.Viewed as low risk, high reward 4.…

9. © 2009 Pearson Education South Asia. All rights reserved. Ethics and the Law Law is not best guide about what is ethical –An behavior may be legal but unethical. –An behavior may be illegal but ethical. –An behavior may be both legal and ethical. –An behavior may be both illegal and unethical

10. © 2009 Pearson Education South Asia. All rights reserved. Employees and Ethical Dilemmas  Questions employees should ask when faced with ethical dilemmas: –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?

11. © 2009 Pearson Education South Asia. All rights reserved. What Shape Ethical Behavior at Work? –Clarify expectations for values to be followed. Publish a corporate ethics code –Use signs and symbols to signal the importance of values. –Provide physical (the firm’s rewards) support for values. Incentive plan, appraisal system, disciplinary procedures –Use stories to illustrate values. Stories can illustrate important company values –Organize rites and ceremonies reinforcing values Graduating from a management development course, etc.

12. © 2009 Pearson Education South Asia. All rights reserved. The Role of HR in Ethics and Fair Treatment  Why treat employees fairly? –“They’re not employees, they’re people” Management guru Peter Drucker –Avoidance of employee litigation –Enhanced employee commitment –Enhanced satisfaction with the organization, with jobs, and with leaders –Increased organizational citizenship behaviors

13. © 2009 Pearson Education South Asia. All rights reserved. Employee Privacy  Employee privacy violations upheld by courts –Publication of private matters –Disclosure of medical records –Appropriation of an employee’s name or likeness  Actions triggering privacy violations: –Background checks –Monitoring off-duty conduct and lifestyle –Drug testing –Workplace searches

14. © 2009 Pearson Education South Asia. All rights reserved. HR Ethics Activities Recruitment, Training Appraisal CompensationLabor Relations Health and Safety Fairness Human Resource Management (HRM)

15. © 2009 Pearson Education South Asia. All rights reserved. HR Ethics Activities  Recruitment –Materials to explicitly mention company’s emphasis on integrity and ethics to screen out undesirable persons even before they apply –Selection process based on job-related criteria and applied consistently shows company’s values on ethical and fair treatment –Applicants view job sample test as fair if job-related –Applicants view interviews as fair if it provides two- way communications

16. © 2009 Pearson Education South Asia. All rights reserved. HR Ethics Activities  Training –How to recognize ethical dilemmas. –How to use ethical frameworks (such as codes of conduct) to resolve problems. –How to use HR functions (such as interviews and disciplinary practices) in ethical ways.

17. © 2009 Pearson Education South Asia. All rights reserved. Role of Training in Ethics Figure 14.5

18. © 2009 Pearson Education South Asia. All rights reserved. Role of Training in Ethics (cont’d) Figure 14.5

19. © 2009 Pearson Education South Asia. All rights reserved. HR Ethics Activities  Performance appraisal –Appraisals that make it clear the company adheres to high ethical standards by measuring and rewarding employees who follow those standards.  Reward and disciplinary systems –Rewards ethical behavior and penalizes unethical behavior –The organization swiftly and harshly punishes unethical conduct.

20. © 2009 Pearson Education South Asia. All rights reserved. Dismissal  Dismissal –Involuntary termination of an employee’s employment with the firm.  Reasons for dismissal 1.Unsatisfactory performance 2.Misconduct 3.Lack of ability to do the job 4.Changed job requirement

21. © 2009 Pearson Education South Asia. All rights reserved. Building Two-Way Communications  Perceptions of fair treatment depend on: –Engagement: Involving individuals in the decisions that affect them by asking for their input and allowing them to refute the merits of others’ ideas and assumptions –Explanation: Ensuring that everyone involved and affected understands why final decisions are made and the thinking that underlies the decisions –Expectation clarity: Making sure everyone knows up front by what standards they will be judged and the penalties for failure.