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Human Resources Management MNGT 103

The Origin and Development of Human Resource Management
• • • • • 17th Century before the start of Industrial revolution Steam engine & assembly line Adam Smith- father of capitalism 1800-trade unionism started 20th century- Frederick Taylor- father of scientific management conducted studies. • Hawthorn studies by Elton Mayo 1927-1932bsignificant role of social relationship • Today’s focused is seen in enriched jobs, increased empowerment and participations in decision making

• Concepts of Human Resources
People are our greatest asset People demand a fair return of their investments

• Definition of Human Resources
Effective use of the human resources to improve its performance Strategic & coherent approach to the management of the organization’s most valued asset the people. The productive use of people in achieving the organization’s strategic business objectives and the satisfaction of the individual

 Strategic activity- has moved from traditionally administered function to strategic one that recognizes the link between talented and engaged people and the organization’s success.  Human resources capital-people in the organization with different values, aspirations, culture, education, attitude, etc. It takes a lot of skills, adroitness, people sensitivity to manage the HR.  A Company may have the best strategies and business plans, values and work processes but these processes are useless if the company does not have the right people to implement them.

Outsourcing Flatter Organization Fall of the Command-and-Control Manager .The Challenge of Managing Human Resources • Rapidly Changing Technology o Advent of computer Emphasis on Increased Productivity o Global competitiveness o Increased competitiveness New Modality of Employment.

consolidation. • Global Competitiveness  economic recession Redundancy.. reengineering • Changes in the business • Changing employee expectations o Silent Generations (before 1946) o Baby Boomer ( 1946-1959) o Generation X (1960-1979) o Generation Y (1980-2010) . retrenchment Reduce operating people Merger. streamlining.

. organized or unorganized. recognizing the right of labor to its just share of fruits of production and the right of enterprises to reasonable returns to investments. local and overseas. and to expansion and growth.The Constitutional & Legal Framework of HRM • Introduction 1. The state shall afford full protection to labor. The state shall promote the principal of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes. The Constitutional Basis – In the Declaration of Principles and State Policies: a) b) c) d) e) The state affirms labor as a primary socio-economic force. (Art. It shall protect the right of workers and promote their welfare. association or societies for purposes not contrary to law. II Sec. 18) Protects the rights of the employees to form unions. The state shall regulate the relationship between workers and employers.

Labor Relations.Health.. Book 6. It is divided into 6 major parts: Book 1. Safety & Social Welfare Benefits. Book 2. Book 4.Post Employment .Pre-employment. Book 5. The Labor Code  Enacted during the martial law by virtue of PD 442.Human resources Development Book 3.2. International Basis of Right To SelfOrganization  Geneva Convention • • ILO Convention 87 (Freedom of Association) ILO Convention 98 (Right to Collective Bargaining) 3.Conditions of Emp.

 Employee. or discipline employees Supervisory-effectively recommends managerial functions. Rank & File.vested with power or prerogative to lay down and execute management policies and/or hire.includes any person acting in the interest of the employer directly or indirectly.Salient Provisions of The Labor Code  Kinds of Employees-Definitions  Employer. recall. discharge. suspend. transfer. .includes any person in the employ of an employer Managerial. lay-off. assign.not falling under any of the preceding definitions of managerial or supervisory.

Regular.shall not exceed 6 months from the date the employee started working.employment has been fixed for a specific project or undertaking. 2. 4. 3.Types of Employees In Terms of Tenure 1.engaged to perform activities which are usually necessary in the usual business or trade. Project. .Not covered by the preceding paragraph. Casual. Probationary.

. dentist & nurse It shall be the duty of the employer to provide all necessary assistance to ensure the adequate and immediate medical and dental attendance and treatment to an injured or sick employee in case of emergency.Health & Safety & Social Welfare Provisions • First-aid medicine & trained first-aider • Full time registered nurse (50-200 employees) • Full time registered nurse & part time physician (200-300) • 300 or more.physician.

Employee Compensation and State Insurance Fund • A State Insurance Fund is created out of monthly contributions by the employer to the employee 1) 2) 3) 4) Employee Compensation Commission Social Security System Philhealth Pag-IBIG Fund .

and the political decisions and laws that affect it.just and equitable pay and treatment and fair return on investment. • It refers to the relationship between employers and employees in industry. labor and capital in the attainment of their mutual goal. .Labor Relations • Labor relations can be defined as the aspect or quality that holds together the social partners.

Labor Rights Management Prerogative Labor Rights Power to manage Power to hire Power to fire Power to transfer employee Power to promote/demote Right to participate in decision-making Union security rights which may include closed shop Security of tenure Right to refuse if it is obvious to thwart unionization or any other ULP act Right to question if basis is unfair/discriminatory or is in violation of CBA Right to question basis and manner of layoff/right to strike Right to participate in decision making/to CBA Right to due process Right to grievance Right to share in the fruits of production Power to lay-off/lockout Power to lay down policies Power to discipline Power to set working hours Fair return in investment and expansion .Management Prerogative vs.

All Managers of people must have a solid knowledge and understanding of all laws that impact on their power to manage. . Organizations and heir authorized representatives are accountable for illegal acts committed in the workplace even if these individuals are ignorant of the law. It must ensure that all departments are properly educated about these pertinent law. • The HRD is at the forefront of this education campaign.SUMMARY • It is not enough for human resource department to appreciate the legal environment under which businesses operate.

Assignment • Search reading materials on “The Role of Human Resources Professional” and be able to discuss and submit your reactions and comments .

• It is HR job to show that we can be an equal partner with your peers. operational and administrative expert and both employees and employers’ advocate.The New Role of Human Resources Management • HR must balance the demands of several different roles: business partner. • HR balance the needs of the organization and the needs of the managers and the employees. The challenge is to maintain strong partnerships with both internal and external customers. . internal consultant.

. Serving both management and employees.The Balancing Act of Human Resources Professionals 1. The role of HR is have a seat at the executive table. 4. “Owning” the people issues. 2. As employee advocates and social worker. 3. This means that you are a strategic partner of he executive committee. A rubber stamp of other managers rather than partner.

Align your department objectives to the over-all goals • Run your department like a business Know your people very well Contribute to the attainment of overall business goals Look into the training activities Review past services .How to Get a Seat at the Executive Table • Understand your organization’s business Talk the language of your peers • Share responsibility for business goals and plans.

9.The Functions of HR 1. 3. 7.Career development . 6. incentive programs Confidential advice to internal “customers” in relation to problems at work 10. 4. 2. retirement. selection and placement Training and development Performance evaluation and management Promotions Redundancy Industrial and employee relations Record keeping of all personal data Compensation. 5. 8. Recruitment.

These three are the very foundation of Federal Express. People-Service-Profit.Developing a Public Statement of HR Philosophy • Federal Express (FEDEX) one of he most admired companies. explained the company’s philosophy in its Management’s Guide: ‘Take care of our people.” .they in turn will deliver the impeccable Service demanded by our customers who will reward us with the Profitability necessary to secure our future.

and involved employees justify high pay for their exemplary contributions • Protect jobs • Promote from within • Share the wealth • Invest in employees • Empower employees  Allowing employees to participate in problem-solving and decision making . • Reward well  Skilled.• Build and Implement the HR Philosophy • Hire the Right People: Know What you Want • Keep employees  Keep good and potential employee. motivated. promote from within and give people a piece of advice. .

The New Role of the Human Resource • • • • A strategic partner Employee advocate Change champion Harness the benefits of technology Continue to upgrade your professional skills and competencies .

Assignment • Read Chapter 4: Skills For Effective Human Resource Management Human Resource Management by Ranulfo Payos .

here is the list of critical skills and attributes that are credited for their success: 1. Human relations or interpersonal Multitasking Organization Ability to dual focus Trust and confidence Dedication to continuous improvements Negotiation and problem solving Team oriented Honesty and integrity . 7. 9. 4. 5. 2. 6.Skills For Effective Human Resource Management • Based on the observation of successful HR practitioners. 3. 8.

must be proactive.consider the needs of both employees and management . no HR professional can succeed if one is poor in interactive skills. must be able to do what is being asked..has to deal with all departments of the company thus. as one deals with the • Human relations skillsday to day problems of behavior and motivation. • Ability to dual focus. • Organization-orderly and well organize. • Multitasking.

• Trust and confidence. • Honesty and integrity-conscience of company and keep of moral image.. . values.many confidential records and information are in the hands of HR. • Negotiation and problem solving-achieving conflict resolution requires negotiating prowess and problem solving skills • Team-oriented. Must walk the talk and practice what he preaches.the goal is continuous improvements and innovation as well as remediation. and feelings of others to win their cooperation and collaboration in order to attain the over-all goals of the organization.must be gregarious. • Dedication to continuous improvement. an extrovert and sensitive to he needs.

employee classifications.Pointers to Review • Review Chapter 1-3 of Human Resource Management by Ranulfo Payos. functions and roles. employee tenure. due process. . • Take special note on challenges.

Human Resources Planning • Human resource planning is the critical step in getting the right people in the right place at the right time. • HR planning . • Without accurate human resource planning. how many does it need in the future considering its business plans. is a process of honest self assessment that clearly identifies what are the strengths and weaknesses of the firm’s workforce. the organization may not be in a position to compete in the marketplace. . what are the skills and competencies needed and how much does it cost to get there. in reality.

Definition of Human Resources Planning HR planning is the process by which management ensures that it has the right personnel who are capable of completing those tasks that help the organization reach its objectives. It is the development of strategies for matching the size and skills of the workforce organizational needs .

The Human Resource Planning Process 1. Analyzing a) b) c) d) how many staff do we have? How are they distributed? What is the age profile? How many will leave by resignation or retirement in each of the next 5 years e) What are the present skills of the present workforce? What new skills will be required? .

– Statistical method is based on historical demand. 2.can be done through statistical method or through judgmental. One is through the use of Markov Analysis – Judgmental uses qualitative approach which avails of the opinion of the department managers on their future staffing needs. Forecasting. .. Under normal condition this more precise prediction than judgmental.

• Internal Supply Considerations –through the use of turn-over rate.. Common formula: Number of staff leaving in a year Number of Employees with one year = X 100 Average number of employed in a year Service at 31 December Number employed one year ago = X 100 .

Human Resources Planning Process Analyzing Environmental Factors Organizational Direction Internal Workforce External Workforce Forecasting Demand and Planning Human resources Employee Development Finance and Budget Logistical Implementing Strategic Changes Process Changes Operational Changes Evaluation and feedback Supply .


The firm’s performance.RECRUITMENT • Recruitment is the process of identifying that the organization needs to employ someone up to the point at which the application forms have arrived at the organization. knowledge and attitude required to help the organization to achieve its objectives. then. • Placement is the actual hiring which includes the orientation and acculturation process • Training consists of a range of processes involved in making sure that the job holders have the right skills. depends on his ability to attract a qualified workforce through effective recruitment strategies. • An organization that fails to attract the best qualified people will surely fail to meet its corporate objectives. .

• Adopting a Recruitment. Policy
The policy should be directed to the following objectives: 1. Hire the right people. 2. Conduct a wide and extensive search of the potential candidates. 3. Recruit staff who are compatible with the style of management and the culture of the company. 4. Handle applications with due diligence, speed, and courtesy. 5. Hire from within and develop existing employees to qualify them for consideration for promotion. 6. Make sure that no false or exaggerated claims are made in recruitment announcement. 7. Place individuals in positions with responsibilities and train them to enhance their career and personal development.

• Internal vs. External Applicants
1. Internal Recruitment A. Advantages

• • • • •


Usually cheaper in terms of starting pay and faster to fill-up Easier to train Improve employee morale Potential for a better success rate since track record is already known. Internal employees are already attune to the culture Keeps propriety and industry knowledge inside the organization.

B. Disadvantages
– – – –


Has to replace May upset some inside the company Create negative internal competition Make less criticism

2. External Recruitment A. Advantages
– Draw a wide range of talents – Opportunity to acquire new skills and competencies – Enables the organization to hire people with knowledge of competitors’ secret.

B. Disadvantage


– More costly – Outsider does not fit into the organization’s culture – Risk of failure – Longer time to acclimatize – May demoralize employee who did not get the promotion

Media announcement. Offer to hire. Arrange and conduct interviews. Appointment action . Prepare Job Description and Specification. Reference/background checking. Shortlisting.Stages of Recruitment • • • • • • • • • • Determine whether a vacancy exists. Decision to hire. Managing the response.

Media Announcement • • • • • • • • Bulletin boards Word of mouth Professional journals Employment agencies. headhunters Campus recruitment Website job market Job fairs Newspaper advertisements .

2. whether temporary. probationary or regular. Starting date. casual. salary progression. Tenure of the contract. 3. 4. Benefits and other points of negotiation .Offer to Hire 1. for fixed terms or period. Starting pay.

3. 4. 11. 1. 2. Teamwork Responsibility Commitment to career Commercial awareness Career motivation Decision making communication Leadership Trustworthiness and ethics Result Orientation Problem Solving Organization . 7.Using Competency Framework • Employers typically use some of the following as their competencies. 8. 10. 5. 9. 6.

3. 2. 4. 5. Screening applications and resume Conducting testing of the applicants Interviewing Reference and background checking Hiring decision .Selection • The selection process covers the following: 1.

Conducting Tests of Applicants • • • • Ability tests Aptitude tests Performance tests Personality tests – Rorschach test – Thematic apperception test • Honesty or Integrity tests .

The Interview • • • • • Preparing for the interview Eliciting information Observing behavior Concluding the interview Evaluating results of the interview .

Orientation: The Acculturation Process Human resources Management by R .Payos Questions for disscussion: What topics are covered by the orientation seminar? .Assignment Chapter 8.

. performance standards. place of work. benefits and facilities and the names of immediate superior and other officers.Orientation: The Acculturation Process Objectives of orientation are: 1. Reduce one’s anxiety 3. giving of information such as working hours. Help the employee understand organization’s expectations: and 4. Part of the orientation process includes the introduction of the new employee to coworkers. Convey what he can expect from the job specification. Gain employee commitment 2.

A formal orientation process should include the following: – Welcome to the company – Tour of the facilities – Introduction to Top Management & Co-workers – Completion of paper works – Review of the Employee Handbook – Review of Job Responsibilities Avoid information overload to make the orientation interesting and absorbing.. .

thereby reducing the costs associated with learning the job. Reduce employee turn-over.proper orientation can help the employee “get up to speed” much more quickly. . 2.good orientation shows that the organization values the employees. 1. and helps provide the tools necessary for succeeding the job .Aside from getting “warm-up” and reducing anxiety. a good orientation program has the following salutary effects. Reduces start cost.

and what to expect from others. 4. It helps a new employee bond with the company and develops a hirees as soon as possible what expected of hem.the better the initial induction. they learn about the values and culture of the organization. It must be kept current by reviewing its effectiveness. 3. Saves time for supervisor and co-workers. Furthermore.. Developing positive job expectations. A good orientation eases the sometimes painful transition to a new firm. positive attitude and job satisfaction. . the less likely supervisors and co-workers will have to spend time teaching the employee. A successful orientation creates a “good feel” in the employee and act as a good retention tool and motivator.

.20 • Training & Development Get a training program and discuss the target participants. objectives of the training .Assignment Aug. topics to be discussed.

. • Training focuses on learning the necessary skills required to perform a job. the employee and the organization.Training & Development • Training and development refers to organized learning activities in the organization to improve performance and/or personal growth for the purpose of improving the job. • Development focuses on the preparation needed for future jobs or jobs that an individual may potentially hold in the future.

Enhanced company image 8. Increased capacity to adopt to new technologies and methods 5. Reduced employee turnover 7. Increased employee motivation 3. Improved risk management .. Increased effectiveness in processes. Training And Benefits From Employee Development 1. Increased job satisfaction and morale 2. Increased innovation in strategies and products 6. resulting in financial gain 4.

Evaluating the Training . Training Needs Analysis a) Organizational Analysis b) Task Analysis c) Person Analysis 2. Implementing the training 4. Planning the Training 3.The 4-Stage Training Cycle 1.

Reward Management • • • • • • • Job Analysis Job Description Job Specification Job Evaluation Developing a Pay Structure And Pay Philosophy Broad-banding The Importance of Participation and Communication .

Assignments • Managing People Motivation • Performance Management .

loyal and dependable. and have a happy and safe environment. – Employers expects employees to work hard. Managing People Motivation – In order for the business to succeed effectively.. treated fairly and humanely. provided with opportunities for career development and promotion. – Employee on the other expect that they should be rewarded well and equitably. it is important that we should manage them effectively. . committed to the values of the organization. keep the work standards set by management.

energizes and directs goal-oriented behavior.Motivation is the internal condition that activates behavior and gives it direction. Motivational Theories: Abraham Maslow’s Hierarchy of Needs . .

sleep Physiological . of the family. respect by others Love/Belonging Friendship. of the health Food. water. Family. Creativity Self-actualization Spontaneity. Respect of others. of resources. of employment. of morality.Abraham Maslow Hierarchy of Needs Morality. Problem solving Self-esteem. sex. Confidence Esteem Achievement. Sexual intimacy Safety Security of body. shelter.

The real job satisfiers which motivate employees are recognition. company policy. security. . advancement. These include working conditions. achievement. supervision. relationship with subordinates and pay. a set of factors know as hygenes is used. These factors are extrinsic to the work itself. . These factors are intrinsic to the job. responsibility and personal move employees from dissatisfaction to no dissatisfaction.• Herzberg’s Motivation-Hygiene Theory.

• McClelland’s Learned Needs Theory-proposed that an individual’s specific needs are acquired overtime and are shaped by one’s life experiences.attempt to explain relational satisfaction in terms of perceptions of fair/unfair distributions of resources within interpersonal relationships. X & Y in his book “The Douglas Mc Gregor Theory Human Side of the Enterprise” publish in 1960.• . • Equity Theory by Stacey Adams (1962). . has examined theories on behavior of individuals at work and has formulated two models which he calls Theory X and Theory Y.

. • Expectancy Theory by Victor Vroom..predicts that employees in an organization will be motivated when they believe that : – More effort better performance – Better performance will lead to rewards – Valued organizational rewards • Reinforcement Theory is the process of shaping behavior by controlling the consequence of behavior.

Assignment PERFORMANCE MANAGEMENT Get an example of Performance Evaluation form being used by a company and be able to discuss. .

job security. This is where maintenance of industrial relations comes in which is one of the major functions of HR. In the employer-employee relations. The field of labor relations looks into he relationship between management and workers particularly group of workers represented by union. tension may arise on terms and conditions of employment and wages. harmonious and peaceful relations with its employees. benefits. and other issues. code of organization can never be effective and productive unless it has good. .Managing in a Unionized Environment Labor Relations.

management & government must come together and come up with a set of rules by which the social partners interact and resolve disagreement. the participants labor. and peaceful concerted activities. (labor relations) pertains Accordingly. The Constitution.Article XIII. Section 3 of the Philippine Constitution guarantees the rights of the workers to self organization. industrial relations to the study and practice of collective bargaining.. including the right to strike in accordance with the law. collective bargaining and negotiations. . and labor-management relations. trade unionism. Legal and constitutional framework of labor relationsunder the tripartite system of labor relations.

rational. Collective bargaining must be conducted in a more civilized.involves workers organizing together to meet. discuss and negotiate upon the work conditions with their employers.. quantitative arguments rather than through bluster and threat on either sides. and dispassionate manner whereby negotiations are fashioned and settled on facts and more concrete. The Law. Collective Bargaining. . The ILO Convention-were ratified by the Philippine senate and became part of part of the laws of the land.Article 211 of the Labor Code reiterates these Constitution precepts in more detailed manner.

Finally preparation of a strike contingency plan. 8. Preparing the economic package. Establishing the possible cost of labor agreement. The Preparation Stage 1. 4. . Reviewing the present expiring contract. 3. Anticipating union demands. 9. 11. 6. Aligning CBA with company’s business objectives Choice and training of the management panel Estimate negotiation timetable Gathering information on issues. 10.Strategies in Collective Bargaining A. Establishing the parameter of authority. 7. parties (union) and the environment 5. Preparing and analyzing data. 2.

B. The Hard-ball approach. The Boulware strikes an agreement with the union to negotiate without let up until an agreement is reached on vital issues. 3.” It leaves no elbow room for bargaining.evaluates the needs of the workers and presents a “first. The Marathon approach. makes a very low counterproposal. Stoking the Bargaining Zone approach. The Negotiation Stage Bargaining Strategies .this may be applied when management is ready and willing to suffer a strike rather than giving in to the onerous economic demand.the point at which management is willing to up the ante and the union is willing to lower the demand without restoring to a strike. 2. . 1. The technique is to find out the bargaining zone. last and best offer.

C. Discipline. Grievance procedures. 1. CBA Administration .the law requires parties in the CBA to name and designate in advance a Voluntary organization must always have a set of rules or Code of Conduct which regulates the employees’ behavior. . 2.

Management in a Non-Unionized Environment The freedom of choice of workers to unionized or not is basic in a democratic society. develop strategies to remain non-union. Many companies aware of this choice. . For the past several decades unions have decline in all parts of the world except perhaps in some parts of the Europe.

Year 2002 2203 2004 2005 2006 2007 2008 Number 14.320 15.480 1.263.509.4 Member 1.9 2.116 14.629 15.0 -4.781 are organized.6 3.232.526 15.250 Growth rate 2.965.583.5 1.301. out of 35.3 0.0 1.762 1.091 The Bureau of Labor relations has reported that as of September 2009.598.5 3.0 25. .000 employees only 1.585 1.9 2009 16..193 15.627.611.388 1.2 -2.694 1.507 1.118 1.7 1.563.101 15.536 Growth Rate 3.

separate for rank-&-file. etc. Meralco. .The Philippine Labor Situation The labor union movement in the Philippines has been established since the American regime. Caltex. office employee. PLDT. Notably among the big companies that are unionized are San Miguel Corp. Yet the bigger proportion of business enterprise remain union-free Multinational companies operating in the industrial zones are union-free.. monthly. sales employees. Some have multi-union. daily.. supervisors. Petron. BPI.

Reasons for Maintaining No-Union Status 1. there is no control in individual pay rates. sparks of friction still occur in their day-to-day relations. 4. Promote a Culture of a unionized company. customers who want a high-quality product or service at competitive price and employees who desires interesting work and reasonable remuneration for their services. 3. Maintain a non-adversarial relations with employeeswhile there are indeed a lot of unionized companies where industrial relations are remarkable. Maintain Competitive Posture in the Industrymanagement must satisfy its stakeholders who want a fair return of their investments.there are certain management prerogatives that must be free from the fetters of third party intervention to achieve maximum efficiency and productivity. Freedom to Manage the Business. . 2..

advocates of non-union argue that a unionized company divides loyalties of employee 6.5.strike is the ultimate weapon of he union that it can use as a bargaining leverage. . . Divided loyalty Among Employees. or Strikes. No Work Slowdown. Work Stoppage.

employees wants to know he business plans of the company. . its business performance. Management Policies and Rules Consistently Enforcedpolicies can be a source of friction if not applied consistently by management. Also known as welfarism or paternalism. Union Avoidance Strategies – union avoidance can only be achieved through diligence along with attention to the desires and sentiments of employees. Communication. .a set of principles. how it is faring with competition.Proactive Labor Relations. the problems and challenges it is facing. practices and systems that enable an organization to manage its human resources without he interference of a third party.

make no promise that you cannot is defined as a group of people who combine different skills and talents to work without the usual managerial supervision toward a common purpose or goal.  Supervision.  Quality Circles. . Participation Employees Involvement Programs  Self-directed Work management expert says that the best union avoidance strategy is a relationship between the supervisor and the employee. .  Management Credibility.Competitive Pay and Benefits.companies give their employees better than average pay and benefits.  Labor Management Council.another avenue of participatory employee involvement.volunteer group composed of workers usually under the leadership of the supervisor who are trained to identify and analyze and solve work related problems and present solution to improve the performance of the organization.

There are companies that hire people belonging to a religious group that prohibits its members from joining unions.companies wary of malcontent closely and in the end motivate them to resign before they infect others.Recruitment and Selection Practices. .in every organization. this is discourged. In union-avoidance organization. Coping with “Malcontents”. Handle Self-Appointed Leaders.the choice and selection of applicants is critical in the company’s effort to avoid third party intervention.constant training and manpower development is another distinctive mark of a company trying to sway from unionism. . It begins to raise alarm when a natural leader goes up to management to intercede for somebody’s problem. Training & Development. there will always spring natural leaders.

4. 3. Unusual gatherings of employees who do not belong to the same group.. Exit interviews-people who resigned voluntarily are some of the best sources of determining areas of dissatisfaction. Graffiti. Argumentative questions being asked during department or company meetings.employees express their pent up frustrations by writing grafitis on he wall. 2. . Company Early Warning System 1.

HRM & BUSINESS ETHICS Definition of Business Ethics It is defined as the branch of ethics that examines questions of moral right and wrong arising in he context of business practice or theory. In most basic terms. a definition for business ethics boils down to knowing the difference between right and wrong and choosing to do what is right. It can also refer to written and unwritten codes of principles and values that govern decisions and action within a company. .

Shareholders vs Stakeholders. . Decision are guided by a need to maximize return on investment for he organization’s shareholders. .those who approach ethical decision making from a shareholder perspective focus on making decision that are in the owners’ best interest. Organizations that approach business ethics from a shareholder perspective consider how decisions impact those inside and outside the organization.

4. The four way test may be used to evaluate decisions: 1. 2. it is important to consider the outcomes of the decision making process. When faced with ethical dilemmas.What is Ethical Behavior? Ethical behavior cannot be answered in clear and precise terms. Is my decision a truthful one? Is my decision fair to everyone affected? Will it build goodwill for the organization? Is the decision beneficial to all parties who have a vested interest in he outcome? . 3. .

.basic assumptions and beliefs developed by an organization over time. Ethical issues in business have become more complex because of many government regulations that sometimes impinge on the freedom of the organizations to manage efficiently. An organization’s culture is the sum of its shared values. He acts as the “whistleblower” and sometimes. . the HR professional acts as the catalyst against unethical conduct. As the “conscience’ of the company. It evolves through time. belief and norms of behavior turned into action.Employee handbook Corporate Culture.Major Factors Impacting Organizational Ethics Management by Example-walk the talk Establishment of Code of Ethics. as the prosecutor at the same time.

Emerging Issues .