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Ethical Decision Making in HR Manager

Ethical Decision Making in HR Manager

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Published by: Farouk Shaffrizal Othman on Feb 01, 2009
Copyright:Attribution Non-commercial

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06/09/2013

 
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WORKING PAPER NO. 1, 2006ETHICAL DECISION MAKING OF HR MANAGERS:JUXTAPOSING ETHICAL EGOISM,THE INTERESTS OF THE FIRM AND EMPLOYEES.
BERNADINE VAN GRAMBERG &JANE MENZIES
School of Management, andCentre for International Corporate Governance Research,Victoria University, MelbourneEmail:bernadine.vangramberg@vu.edu.au Email
:
 jane.menzies@vu.edu.au 
 
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Bernadine Van Gramberg and Jane Menzies
Contacts
Associate Professor Bernadine Van GrambergSchool Of ManagementVictoria UniversityPo Box 14428 Melbourne MCMCVictoria Australia 8001Email: bernadine.vangramberg@vu.edu.auPhone: 03 9919 4489Fax: 03 9919 4272Dr Jane MenziesSchool Of ManagementVictoria UniversityPo Box 14428 Melbourne MCMCVictoria Australia 8001Email: jane.menzies@vu.edu.auPhone: 03 9919 5311Fax: 03 9919 4272
 
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 ABSTRACT
In this paper we examine ethical decision making of Human Resource (HR) managers. We review theinternational literature and examine ethical decision making from the perspectives of teleological,deontological and virtue ethics frameworks. We also use agency theory in our analysis to predict thedecision making of HR managers. We examine the types of ethical dilemmas that HR managers arelikely to face, and we argue that HR managers have conflicting demands on them which make ethicaldecision making difficult. We find that organisational culture, pressures from senior managers,individual interests and career maximisation and individual altruism have influences on a HR manager’sability to make ethical decisions. We argue that when faced with an ethical dilemma, HR managers willlikely make decisions that benefit themselves personally and their career, over the interests of anorganisation or employees. We conclude that a professional code of conduct is important in developinga moral compass to make decisions. Further, agency theory predicts that HR managers will adhere tothe goals of the organisation when there are incentives for them to do so. It seems likely then that acode of ethics with a reward structure attached to it embedded in their key performance indicators maybe one way of securing ethical management decision making.
INTRODUCTION
This paper outlines the research rationale for examining the ethical aspects of decision making of Human Resource (HR) managers. We argue that HR managers play an important role in developingethical organisations (SHRM/ERC 2003). Researchers have explored the many roles that HR managerscan adopt to develop the ethical climate of organisations. These include being a champion of ethicalissues, developing ethical agendas, audits, writing codes of conduct, and developing the moralconscience of an organisation. We question the ability of HR managers to take on these roles, andargue that when faced with an ethical dilemma, HR managers will likely make decisions that benefitthemselves personally, over the interests of an organisation. In coming to our conclusions we canvassviewpoints from the three main ethical frameworks (teleology, deontology and virtue ethics) andconsider the role of agency theory in predicting ethical behaviour. We acknowledge that HR managersface a difficult balancing act, between career, business and morally based demands, however wesuggest that it is important for HR managers to strive for higher positions, and maintain the higheststandards of ethics when making decisions within organisations.We argue that any code of ethics for HR Managers should take into account that the likely ethicalstance taken by HR managers is that of ethical egoism (the pursuit of self interest). Second, the fact thatmany instances of unethical behaviours go unreported by HR managers provides an understanding of the barriers to ensuring an ethical organisational climate and can also contribute to the development of a code. Third, agency theory and the rewards embedded in the employment contract predict a role for acode of ethics in the reward system.
DEFINING ETHICS AND DIFFERENT FRAMEWORKS ON ETHICS
Ethics has become an important issue for modern organisations as they face the inherent conflictsbetween the goals of profit maximisation and social responsibility (Vickers 2005). Ethics have beendescribed as a set of moral principles or values of people or society, which inform them of what is goodand bad, right and wrong, and which influence how people act and behave. Petrick and Quinn (1997)suggest that ethics is the study of individual and collective moral awareness, judgment, character and

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