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Unethical practices by a few have given HR firms a bad nam

Human resource management (HRM) has been gaining importance in organizations amid
growing competition in the domestic market. However, matching the right candidate with the
right workplace is still a challenge. There are more than 15 companies to help employing
organizations find the appropriate personnel. The Post talked with Shailendra Raj Giri, managing
director of Real Solutions, and Mohan Ojha, chairman of Growth Sellers Consultancy, regarding
the HRM culture in the country. Excerpts:

Please explain the scenario of HRM in the country.

Shailendra Raj Giri:

Despite HRM’s importance for the success of any organization, in Nepal, it has been overlooked
in the past. However, with the growth of competition in the market, organizations are gradually
considering HRM aspects with much importance. But professional service in this sector is still at
an infant stage.

Mohan Ojha:

The trend of regarding HRM with importance is growing in the country, though it had been
overlooked in the past. In recent days, both new and established organizations are giving equal
priority to professionalism in their services.

Being an HR consultancy firm, what can organizations and jobseekers expect from you?

Shailendra Raj Giri and Mohan Ojha:

We are an outsourcing firm which handles recruitment on behalf of our clients. If necessary and
we receive a request from our clients to train their recruits, we provide the necessary training too.
So far, we have set up proper HR systems and manuals in a few organizations. We have been
providing training and skill developing programmes to both our clients’ employees and
individuals. Besides that, we have a customized package for individuals to enhance their

Shailendra Raj Giri:

Besides that, we have been providing a platform for individuals to find jobs free of cost via our
website, which works as a databank from which individuals and firms can choose
the right job and the right candidates to meet their respective requirements.

Moreover, we are trying to remove the deep-rooted and unfair system of recruiting employees in
our country based on nepotism and place the right person in the right job at the right time.
Mohan Ojha:

As part of our initiative to increase awareness and to provide a common platform to discuss
HRM aspects in the country, we have been organizing an annual event titled HR Meet which is
being attended by executives from the business sector.

What kinds of challenges and hassles have you found during your work with the organizations?

Shailendra Raj Giri:

We have found that there is a communication gap between higher level executives and lower
level employees in most organizations. Through our customized packages, we have bridged the
gap in a few organizations. Besides that, lack of proper computer skills and IT related problems
prevail in the established organizations where most of the employees are of advanced age.

In your endeavour to promote HRM concepts in Nepal, how many individuals and firms have
benefited from your firm’s services?

Shailendra Raj Giri:

In our eight years of experience, we have found jobs for more than 40,000 individuals in more
than 2,500 firms ranging from banks and financial institutions, INGOs and NGOs to trading
companies and industries. However, a majority of our client firms are banks and financial

Mohan Ojha:

Since our inception in 2008, we have provided employment to more than 2,000 individuals in
more than 153 different firms.

What are the major problems for HR consultancy firms in Nepal?

Shailendra Raj Giri:

Though the sector is new and at an infant stage, a number of HR firms have been established in
Nepal. Meanwhile, unfair and unethical practices conducted by a few firms have given HR
consultancies a bad name. As a result, the trust and professionalism we have been providing are
on the verge of collapse. Due to lack of a controlling and monitoring mechanism in the country,
such firms are openly carrying out their business. Hence, something must be done from the
government’s side.

Mohan Ojha:

Due to the political uncertainty in the country, we are losing a large number of potential
manpower each day. As a result, some specific sectors in the country had to face a scarcity of
manpower. Until and unless the political situation improves, we cannot do anything in this

How is business for HR consultancy firms? What are their future prospects?

Shailendra Raj Giri and Mohan Ojha:

Although we had to struggle to introduce the concept of HRM in the market in the beginning, we
are satisfied with the present situation in terms of business. Being an emerging sector in the
country, we see lot of potential.

The unethical practice of HRM itself has also

hit public attention:

• Off-shoring and exploiting ‘cheap’ labour markets;

• Using child labour;
• Reneging on company pension agreements;
• Longer working hours;
• Increasing work stress;
• The use of disputed and dubious practices in hiring and firing personnel.

favouritism in hiring;
< training and promotion;
< sexual harassment;
< inconsistent disciplinary measures;
< not maintaining confidentiality;
< sex discrimination in promotion, and pay; and
< non performance factors used in appraisals.

employees receiving gifts or entertainment in violation of the organisation’s policies,

employees engaging in fraud,

accepting kickbacks or bribes,

lying to supervisors,

abusing drugs or alcohol,

lying on reports or falsifying work records,

conflicts of interest,

altering the results of product tests,

misusing insider information.

Dealing with unethical behavior on the job

Dealing with unethical behavior on the job
How do you measure ethics on the job? How far would you go to succeed and reach your
personal goals? What would you sacrifice without hesitation?

The following is a personal account of how one person's greed, negligence, and personal
ambitions can have the potential to affect many. Although the names in this story are false, the
story is real and


Michael, a young up-and-coming artist, was anxious to earn some extra cash before attending a
prestigious arts school. He decided to serve as a Deli Clerk in the bakery department for a well
known grocery store that is a part of a national chain. He worked in a team that consisted of
employees with rotating shifts, but the co-worker that would leave the biggest impression on him
was Ms. Mamie.

Ms. Mamie was a sweet old lady, of 81 years, who had been working in the bakery
department for two years. They would occasionally share shifts and engage in casual
conversation at work. She was very approachable, personable, and engaging with the customers
and knew intimate details of their lives. In less than a week, behind the scenes, the integrity of
her character would be brought into question in an alarming way.

One evening, a customer enters the bakery department eager to be severed a good sub sandwich.
Ms. Mamie was obviously perturbed by the customer's needs because she found it extremely
inconvenient to walk to the back storage room to retrieve the specific kind of bread the customer
requested. She proceeded to the nearest trashcan, picked out a piece of bread, and served the
sandwich as usual.
Luckily for the oblivious customer, he changed his mind about the sandwich.

Michael, however, was taken aback. He confronted her in a passive manner while she remained

Soon thereafter, a customer with whom Ms. Mamie was well acquainted with wanted to purchase
some meat. Ms. Mamie inventoried the meat selection and located what the customer requested
and tested the quality of the meat with her sense of smell. After concluding that the meat was
rotten, she proceeded to wrap the meat and serve it to the customer as usual.

At this point the tension began to build in Michael and Mamie's working relationship.

The department was subject to inspection from time to time and it received a sanitation rating of
71. Ms. Mamie insisted on taking matters into her own hands by replacing the new rating with
the old one; a 91.

One day, there were two meat cutters available and both were in use. While the team supervisor
was preparing

meat on one of the electric meat cutters, he cut off the tip of his finger. The injury was so
substantial that the bone was visible and the supervisor was rushed to the hospital. Instead of
being patient and waiting to use the next available meat cutter, Ms. Mamie made a vain attempt
to wipe off any residue and began cutting thick slabs of meat without properly cleansing and
sanitizing the equipment upon contamination. Michael was aware of the chaos of the incident
and witnessed her being reprimanded for her actions.

You may ask yourself in the case of Ms. Mamie - what was the motive? What could she have
gained from her actions? Michael stated that once in a while management would encourage sales
in the meat department by saying, "Productivity up, waste percentage down" with the promise of
bonuses to those who sell, sell, sell. Ms. Mamie was so driven by greed to the point where she
would rather sell soiled bread, rotten meat, and blood contaminants than face the possibility of
losing the prospect of a sale. Ms. Mamie never received a bonus, and business carried on as

Suggestions for dealing with unethical behavior on the job:

1) Avoid unethical management. The quality of the management tends to reflect the quality of
workers that are being hired. Also, management's refusal to act on unethical circumstances and
even encouraging certain behaviors also reflects corruption. Steer clear of businesses that are
focused on increasing profits without regard of the customer or client's wellbeing and the quality
of the goods and services being provided.

2) Address the issue assertively. Michael confronted Ms. Mamie about her unethical behavior.
He did not allow intimidation to prevent him from coming forward.
3) Inform a Supervisor. Speak with a supervisor and explain the situation. Also state that you
have spoken to this individual about their behavior and they are not yielding. Unethical behavior
can result in legal issues if it continues to go unaddressed and is discovered.

4) Change jobs. If the behavior continues and management does not act accordingly, it is best to
find another job. You do not want to be apart of an environment that does not reflect your
character and integrity. Also, if you stay and are aware of the corruption, you will be guilty by

My intent is not to make you ill or paranoid, but to simply expose the realities of the working
world. When it comes to greed, no one is exempt from the possibility. In this case, the elderly,
smiling, warm, personable, baker had no reservations about jeopardizing the quality of service
and the health of others for personal gain.

Feature - Ethics the missing piece in HR


HR claims to have done it all to remove the figurative “thorn in the flesh” at the workplace. The
missing link however is ethics in human resource practices.

Ethical problems arise almost continually in human resource management (Hosmer 1987: 313).
Bird & Waters, 1989; Hanson, 1985 cited in Schumann (2001:94) argue that the perceived lack
of ethics in business is a subject of considerable concern to the public. The management of
human resources can generate some of the most challenging ethical dilemmas in business. For
example, a survey of 747 human resource professionals by the Society for Human Resource
Management (1998) found that 54% of the human resource professionals had observed conduct
in the workplace that violated the law or the ethical standards of the professional’s organisation.
Ethics is a key branch of philosophy, concerned with analysing what is right or wrong in
people’s behaviour or conduct. Ethics and morality are terms that are often used interchangeably
in discussions of good and evil. The term ‘ethics’ is usually applied to persons (ethics comes
from the Greek ethos, meaning character) – and ‘morality’ to acts and behaviour (moral comes
from the Latin moralis, meaning customs or manners) (Rose, 2007:5)


Budd & Scoville (2005) maintain that in recent years, by following media coverage of many
scandals of accounting and accountability, the public has gained a greater understanding of what
can happen when business do not adhere to ethical practices. It is now time for the human
resources and industrial relations communities to explore the application of ethics to the
employment relationship and discover the importance of treating employees, not just numbers,


Schumann (2001:94), the survey respondents reported observing misconduct that included:
employees receiving gifts or entertainment in violation of the organisation’s policies, employees
engaging in fraud, accepting kickbacks or bribes, lying to supervisors, abusing drugs or alcohol,
lying on reports or falsifying work records, conflicts of interest, stealing, altering the results of
product tests, and misusing insider information.
In illustrating the range of issues that raise human resource management ethical issues,
Schumann (2001:94), raised the following examples:
< Should management hide from employees the dangerous nature of chemicals used in a
< Should a corporation shut down a plant, fire all the employees, and relocate to another
location offering lower pay and fewer governmental regulations? and
< At what point does an organisation’s attempt to fight theft by employees begin to infringe on
the privacy rights of the employees? What moral obligations do managers have to deal with
discrimination in employment, including sexual harassment?

Hosmer (1987: 314) further poses certain questions about unethical conduct. The shop foreman
in one of our divisions is disregarding quality standards in an effort to keep costs under control.
What should a young trainee do? The chief engineer in another division has falsified some test
results to make a product appear more reliable than it is; what should a recent graduate of an
engineering school do?
All HR practices have an ethical foundation. HR deals with the practical consequences of human
behaviour (Johnson 2003). Hosmer (1987: 314) concluded that all of the basic human resource
processes: selection, training, evaluation, and motivation – have some ethical content

What distinguishes ethical problems from other managerial issues? Ethical problems have a
negative impact upon people in ways that are outside their own control. Ethical problems cause
some hurt or harm to others that is undeserved. It is the undeserved nature, the lack of individual
control, that makes these adverse consequences of our managerial decisions and actions so
disturbing to most of us (Hosmer 1987: 314).


Thompson and Strickland (1995:299) argue that a strong corporate culture founded on ethical
principles and sound values is a vital driving force behind continued strategic success.
Lack of ethics caused organisations such as Enron Corp, WorldCom and to “be popular symbols
of wilful corporate fraud and corruption”. Moberg and Romar (2007) confirm that 2002 saw an
unprecedented number of corporate scandals: Enron, Tyco, Global Crossing in USA due to failed
corporate governance, accounting abuses, and outright grid. In South Africa we witnessed the
total collapse of SAMBOU, and Hyundai Motor Distributors. Also Satyam in India failed as a
result of ethical issues. Many South African companies have been fined huge sums of money
because of price fixing and involvement in uncompetitive acts. During the 2010 World Cup in
South Africa some public departments and state-owned-enterprises bought with millions of rands
World Cup tickets for their customers and employees and the government organ, SCOPA, found
it difficult to justify such spending. With such unpalatable examples of gross disregard for ethics
many people may be justified to believe we are suffering from an ethics crisis.
Ethical conduct in business practice and HR procedures is no longer a choice but a must in order
to ensure sustainability and a motivated workforce.

Rose (2007), argues that the unethical practice of HRM has hit public attention and the following
are examples:
< Using child labour;
< Reneging on company pension agreements;
< Longer working hours;
< Increasing work stress; and
< The use of disputed and dubious practices in hiring and firing of personnel.

Winstanley and Woodall (1996), highlight a number of ethical concerns about standards of HR
practice, arising from strategic focus. These include:
< Increased job insecurity – arising from ‘flexible work practices; short term and temporary
conditions of employment; fear of job loss due to outsourcing and off-shoring, increased stress;
and a wielding imbalance of power between management and workforce;
< Increase in surveillance and control – this ranges from the use of psychometric tests to
electronic surveillance of work patterns through the application of ICT; and
< Deregulation – freedom of the marketplace has been imposed by global regulators such as
the WTO, and has led to what Storey (1993) has termed: ‘impatience with rule’ and ‘can – do-
outlook’ amongst line managers, which in practice may be seen to push HR into compromising
‘good’ practice, for business needs.

A survey of over 1,000 US personnel managers (Danley et al., 1991) found that the most
common areas causing ethical concern were:
< favouritism in hiring;
< training and promotion;
< sexual harassment;
< inconsistent disciplinary measures;
< not maintaining confidentiality;
< sex discrimination in promotion, and pay; and
< non performance factors used in appraisals.

It is argued that by Winstanley and Woodall (2000) that HRM holds the moral ‘stewardship’ of


Schramm (2004) it has been shown that just consumers’ perception of the ethics of a company
can affect sales, so the views of its investors will affect its share price. Similarly, it has been
suggested that poor standards of conduct emanating from the top management affect employee
motivation and commitment to organisational goals. Covey in the Seven Habits of Highly
effective people, alludes to an incident in an organisation where employees were demoralised as
a result of a married manager who had an affair with a subordinate in the same organisation.
According to Koster (2007) there are two fundamental demands on HRM which are emphasised:
First, HRM academics as well as practitioners have to develop a professional “ethical
sensitivity”. Secondly, ethical reasoning must become an integral part of theoretical and practical
HRM (Winstanely and Woodall 2000 & 2001).

TPI – “Very unethical practices outside of HR”

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TPI IT Contracts Manager: (Past Employee - 2008)


Pay was decent for the market however the way mgmt. treated anyone that they weren't related to
was very unethical. Expectations of what work/life balance would be like were completely


Mgmt. treated anyone that they weren't related to was very unethical. Expectations of what
work/life balance would be like were completely exaggerated.

Advice to Senior Management

Sr. Mgmt. needs ethics training to determine what they can and cannot say to employees. There
are conversations that occur that if HR knew were happening would fire them on the spot.


Drugmakers Criticised For Unethical Marketing Practices

Thailand's public sector pharmaceutical spending is inflated by drugmakers' aggressive

marketing tactics. Last year, almost 40% of the THB158.6bn (US$4.78bn) state healthcare
budget was spent on medicines, according to research presented at a recent forum. BMI believes
improved regulations and better education would control state expenditure on pharmaceuticals.

Robust Growth AheadThailand's Pharmaceutical Marketf = forecast. Source: Association of the

European Self-Medication Industry (AESGP), IMS Health, BMI
Sales representatives from pharmaceutical companies use several tactics to persuade doctors to
prescribe their medicines, according to Dr Prasert Palittapongarnpim of Chiang Rai's
Prachanukroh Hospital. They range from giving branded stationery and hosting lunches to
offering overseas holidays and cash bribes. Some sales representatives even wear 'inappropriate
outfits' to boost interest.

The result is greater sales of patented medicines made by foreign multinationals, which have the
resources and expertise to engage in intensive marketing campaigns. An industry representative,
Manu Sawang-Jaeng of the Pharmaceutical Research and Manufacturing Association (PReMA),
is aware of the problem and revealed that uniforms for sales representatives had been suggested.
He also said that sales representatives from non-PReMA companies were to blame.

Thailand's pharmaceutical market is expected to grow by 7.7% in 2009. Although this is below
the 2004-08 compound annual growth rate (CAGR) of 12.4%, it is well above the global average
for this year. Annual per-capita spending is US$58.60 and the drug market accounts for 1.47% of
GDP. We are forecasting a 5.66% CAGR for pharmaceutical sales through to 2019. Due to the
strengthening baht, the market will post a 10-year CAGR of 7.80% in US dollar terms.

In 2008, public sector spending on pharmaceuticals reached US$1.91bn, or 54% of the total
market. However, these funds were not equally distributed among Thailand's 63.4mn population.
Almost 50% was spent by doctors treating the country's 5mn civil servants, while the remainder
was expended by the '30 baht' scheme introduced by former prime minister Thaksin Shinawatra.

Under the populist programme rolled out in 2001, people could pay a nominal fee of THB30
(US$0.90) to receive medical treatment. Despite its critics, the scheme survived the 2006 coup
and continues to provide healthcare to many millions of people that would otherwise be unable
to pay. According to the World Health Organization (WHO), the public sector accounted for
66.3% of healthcare spending in Thailand during 2007. The corresponding figure for 1995 was