Ethics, Justice, and Fair Treatment in HR Managment

CSR & Ethics
Ethics and Corporate Values Based on CH 14

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 141
Employee Justice
In this lecture we will examine employee justice, safety, and union relations. The main purpose is to explain ethics, justice, and fair treatment in human resource management, matters essential for positive employee relations. Topics include ethics and fair treatment at work, factors that shape ethical behavior at work, and managers roles in fostering improved workplace ethics, employee discipline, and dismissals.
Todays Tutorial number 11

On Friday I asked you to read the Nike case study article I placed on the website www.-uwcentre.ac.cn/hhu Discussion Questions in LSGs Q.What is the meaning of ethics and fairness at work why is it important? [Chapter 14]. Using the NIKE case study article Q.What were the problems at NIKE factories in Vietnam Indonesia and China? Q.What Corporate Social Responsibility Goals has NIKE set for its operations around the world not just in China?
Tomorrows tutorial
Read the Application Case in Ch 1 : Jack Nelson's Problem Discuss 1. What do you think was causing some of the problems in the bank home office and branches? 2. Do you think setting up a HR unit in the main office would help? 3. What specific functions should it carry out? What HR functions would then be carried out by supervisors and other line managers? What role should the Internet play in the new HR organization?.
Revision notes
I have put some revision notes on the web site these will help you with the exam please read them . www.-uwcentre.ac.ch/hhu
Ethics and HRM

Why include ethics in a module on human resource management ? For two reasons: First, ethics is not theoretical. Instead, it is essential to make businesses work. Second, and more specifically, managers human resource decisions are usually full with ethical consequences.
Ethics and Fair Treatment at Work
The Meaning of Ethics

The principles of conduct governing
an individual or a group.
The standards you use to decide
what your conduct should be.

Ethical behavior depends on
a persons frame of reference.
Ethical Decisions
Normative judgments Morality
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall
147
Unethical Behaviors
Table 14-1 which follows presents the percentage of employees observing various unethical behaviors at work.
148
TABLE 141
Specific Observed Unethical Behaviors
Abusive or intimidating behavior toward employees Lying to employees, customers, vendors, or to the public
21% 19%
A situation that places employee interests over organizational interests

Violations of safety regulations Misreporting of actual time worked E-mail and Internet abuse Discrimination on the basis of race, color, gender, age, or similar categories
18%
16% 16% 13% 12%
Stealing or theft
Sexual harassment Provision of goods or services that fail to meet specifications Misuse of confidential information Alteration of documents Falsification or misrepresentation of financial records or reports Improper use of competitors inside information Price fixing Giving or accepting bribes, kickbacks, or inappropriate gifts
11%
9% 8% 7% 6% 5% 4% 3% 3%
149
Legal Behaviour
Legal behavior isnt always ethical and ethical behavior sometimes may not be legal. For example, the civil rights movement in the USA challenged legalized segregation with civil disobedience behaviors that resulted in a societal change in legal and ethical attitudes toward the legality of discrimination
Ethics and the Law

A behavior may be legal but unethical.
Ethics and Behaviors
A behavior may be illegal but ethical.

A behavior may be both legal and ethical.
A behavior may be both illegal and unethical.
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Fairness
Fairness is inseparable from what most people think of as justice. A company that is just is, among other things, equitable, fair, impartial, and unbiased in how it does things. With respect to employee relations, experts generally define organizational justice in terms of at least two componentsdistributive justice and procedural justice.
Ethics
In theory, ethics, justice, and fair treatment may be separate but related concepts. But in practice most employees probably cant and wont unscramble what is ethical, fair, or just when it comes to how theyre treated at work.
Ethics, Fair Treatment, and Justice
Components of Organizational Justice
Distributive justice
Procedural justice
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FIGURE 142
Perceptions of Fair Interpersonal Treatment Scale
What is your organization like most of the time? Circle Yes if the item describes your organization, No if it does not describe your organization, and ? if you cannot decide. IN THIS ORGANIZATION: 1. Employees are praised for good work 2. Supervisors yell at employees (R) 3. Supervisors play favorites (R) Yes Yes Yes ? ? ? No No No
4. Employees are trusted

5. Employees complaints are dealt with effectively 6. Employees are treated like children (R) 7. Employees are treated with respect
Yes
Yes Yes Yes
?
? ? ?
No
No No No
8. Employees questions and problems are responded to quickly

9. Employees are lied to (R) 10. Employees suggestions are ignored (R) 11. Supervisors swear at employees (R)
Yes
Yes Yes Yes
?
? ? ?
No
No No No
12. Employees hard work is appreciated

13. Supervisors threaten to fire or lay off employees (R) 14. Employees are treated fairly 15. Coworkers help each other out
Yes
Yes Yes Yes
?
? ? ?
No
No No No
16. Coworkers argue with each other (R)

17. Coworkers put each other down (R) 18. Coworkers treat each other with respect Note: R = the item is reverse scored.
Yes
Yes Yes
?
? ?
No
No No
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FIGURE 143
Some Areas Under Which Workers Have Legal Rights
Leave of absence and vacation rights

Injuries and illnesses rights Noncompete agreement rights Employees rights on employer policies Discipline rights Rights on personnel files Employee pension rights Employee benefits rights
Employee distress rights

Defamation rights Employees rights on fraud Rights on assault and battery Employee negligence rights Right on political activity Union/group activity rights Whistleblower rights
References rights
Rights on criminal records
Workers compensation rights
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What determines ethical behaviour at work?

Several things determine an individual employees ethical behavior at work.
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What Influences Ethical Behavior At Work?

Ethical behavior starts with moral awareness. Managers strongly influence ethics by carefully cultivating the right norms, leadership, reward systems, and culture. Ethics slide when people undergo moral disengagement. The most powerful morality comes from within.
. Offering rewards for ethical behavior can backfire. Dont inadvertently reward someone for bad behavior. Employers should punish unethical behavior.
The degree to which employees openly talk about ethics is a good predictor of ethical conduct.
People tend to alter their moral compasses when they join organizations.
What Determines Ethical Behavior at Work?

Individual Factors
Organizational Culture
Ethical Work Behaviors
Organizational Factors
Ethical Policies and Codes
The Bosss Influence
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FIGURE 144 How Do My Ethics Rate?
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FIGURE 145
Using the Company Web site to Emphasize Ethics
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Organisational Culture
We can define organizational culture as the characteristic values, traditions, and behaviors a companys employees share. A value is a basic belief about what is right or wrong, or about what you should or shouldnt do.
What Is Organizational Culture?

Organizational Culture
The characteristic values, traditions, and
behaviors a firms employees share
How Managers Can Support an Ethical Culture

Clarifying expectations with respect to critical values Walking the talk in having their actions align with values Providing physical support through the use of ethical
managerial values
Leading subordinates astray
Here are examples of how supervisors knowingly (or unknowingly) can lead subordinates astray.
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The Bosss Influence on Ethical Behavior

Telling staffers to do whatever is necessary to achieve results Overloading top performers to ensure that the work gets done Looking the other way when wrongdoing occurs
Taking credit for others work or shifting blame
Leading Employees Astray
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Question
Ethics refers to the ________. A) basic beliefs about what is right or wrong B) values, traditions, and behaviors a company's employees share C) principles of conduct governing an individual or group D) standards used by the organization to decide upon proper conduct E) standards of behavior accepted by society Answer
Answer
: Answer C Explanation: Ethics refers to "the principles of conduct governing an individual or a group; specifically, the standards you use to decide what your conduct should be. A normative judgment means that something is right or wrong. Morals are society's highest accepted standards of behavior.
Question
According to surveys, which of the following is the most commonly observed unethical behavior in the workplace? A) misuse of confidential information B) abusive behavior towards workers C) falsification of financial records D) e-mail or Internet abuse E) sexual harassment Answer
Answer
Answer B Explanation: Abusive or intimidating behavior towards employees is the most commonly observed unethical behavior in the workplace according to surveys. Choices A, C, D, and E occur as well but with less frequency.
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Question
What are the two components of organizational justice? A) distributive justice and normative judgments B) procedural justice and distributive justice C) normative justice and ethical treatment D) interactional justice and morality E) interpersonal justice and fairness Answer
Answer
: Answer B Explanation: Experts generally define organizational justice in terms of at least two componentsdistributive 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.
Ethics Test
Some companies urge employees to apply a quick ethics test to evaluate whether what theyre about to do fits the companys code of conduct.
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Fostering Ethical Work Behaviors
What Employers Can Do
Provide manager and employee ethics training
Establish whistleblower policies
Adopt a strong ethics code
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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 companys values?
How will it feel afterwards?

How will it look in the newspaper? Will it reflect poorly on the company?
Ethics Test
Some companies urge employees to apply a quick ethics test to evaluate whether what theyre about to do fits the companys code of conduct. Managers interviewing applicants also need to make sure the screening process is fair. For all practical purposes, ethics training is mandatory. Federal sentencing guidelines reduced penalties for employers accused of misconduct who implemented codes of conduct and ethics training.
How Managers Use Personnel Methods To Promote Ethics and Fair Treatment
HRM Practices that Promote Ethics
Emphasizing ethics and fairness in personnel selection
Providing mandatory employee ethics training
Ensuring fair and objective performance appraisals
Disciplining all instances of unethical conduct
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HRM-Related Ethics Activities

Selection
Fostering the perception of fairness in the processes
of recruitment and hiring of people:

Formal hiring procedures that test job competencies Respectful interpersonal treatment of applicants Feedback provided to applicants
Training Employees
How to recognize ethical dilemmas How to use ethical frameworks to resolve problems How to use HR functions in ethical ways
Fairness and standards
To send the signal that fairness is paramount, standards should be clear, employees should understand the basis upon which they will be appraised, and the appraisal itself should be objective. To the extent that behavior is a function of its consequences, the manager needs to reward ethical behavior and penalize unethical behavior
HRM-Related Ethics Activities (contd)
Performance Appraisal
Appraisals that make it clear that the company adheres to high
ethical standards by measuring and rewarding employees who follow those standards.

Standards are clearly defined. Employees understand the basis for appraisals. Appraisals are objective.
Reward and Disciplinary Systems

The organization swiftly and harshly punishes unethical conduct.
Perceptions of fairness
What seems fair to one person may seem unfair to another. Supervisory actions do influence employees perceptions of fairness.
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Fostering Employees Perceptions of Fairness

Perceptions of fair treatment depend on:
Involvement in decisions
Understanding through explanation
Setting expectations and standards
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Discouraging unwanted behavior
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.
Restrictions on Workplace Monitoring
The Electronic Communications Privacy Act (ECPA)

Restricts employer interception
and monitoring of oral and wire communications

business purpose exception consent exception
Common law
Provides protections against invasion
of privacy
FIGURE 1410 Sample E-Mail Monitoring Acknowledgment Statement
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True of false
Distributive justice refers to the manner in which managers conduct their interpersonal dealings with employees. Answer
: FALSE Explanation: Distributive justice refers to the fairness and justice of the decision's result (for instance, did I get an equitable pay raise?). Procedural justice refers to the fairness of the process.
True or False
Unfortunately, employers have no tools for measuring the ethics of an individual during the applicant screening process, so employers do not realize they have hired an unethical person until it is too late. Answer:
Answer
FALSE Explanation: Employers can use recruitment materials that emphasize ethics, such as honesty tests and background checks. Asking behavioral questions also measures an applicant's ethical nature.
Influences on the strategy of an organisation
Figure 4.1 Influences on strategic purpose
Slide 4.51
Who are the stakeholders?

Stakeholders are those individuals or groups who depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends.
Johnson, Whittington and Scholes, Exploring Strategy, 9th Edition, Pearson Education Limited 2011
Mission statements
A mission statement aims to provide employees and stakeholders with clarity about the overriding purpose of the organisation A mission statement should answer the questions: What business are we in? How do we make a difference? Why do we do this?
Vision statements
A vision statement is concerned with the desired future state of the organisation; an aspiration that will enthuse, gain commitment and stretch performance.
A vision statement should answer the question : What do we want to achieve?
Statement of corporate values
A statement of corporate values should communicate the underlying and enduring core principles that guide an organisations strategy and define the way that the organisation should operate. Such core values should remain intact whatever the circumstances and constraints faced by the organisation.
Objectives
Objectives are statements of specific outcomes that are to be achieved. Objectives are frequently expressed in: financial terms (e.g. desired profit levels) market terms (e.g. desired market share) and increasingly social terms (e.g. corporate social responsibility targets)
Corporate governance
Corporate governance is concerned with the structures and systems of control by which managers are held accountable to those who have a legitimate stake in an organisation.
The growing importance of governance
The separation of ownership and management control defining different roles in governance. Corporate failures and scandals (e.g. Enron) focussing attention on governance issues. Increased accountability to wider stakeholder interests and the need for corporate social responsibility (e.g. green issues).
Corporate social responsibility
Corporate social responsibility (CSR) is the commitment by organisations to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large.1
1
World Business Council for Sustainable Development.
Corporate social responsibility stances
Table 4.2 Corporate social responsibility stances
Questions of corporate social responsibility internal aspects (1)
Table 4.3 Some questions of corporate social responsibility
Questions of corporate social responsibility external aspects (2)
Table 4.3 Some questions of corporate social responsibility (Continued) 61
The ethics of individuals and managers
Ethical issues have to be faced at the individual level : The responsibility of an individual who believes that the strategy of the organisation is unethical resign, ignore it or take action. Whistle-blowing - divulging information to the authorities or media about an organisation if wrong doing is suspected.
Texas instruments guidelines
Is the action legal? . . . If no, stop immediately. Does it comply with our values? . . . If it does not, stop. If you do it would you feel bad? . . . Ask your own conscience if you can live with it. How would this look in the newspaper? . . . Ask if this goes public tomorrow would you do it today? If you know its wrong . . . dont do it. If you are not sure . . . ask; and keep asking until you get an answer.
Stakeholders of a large organisation
Figure 4.3 Stakeholders of a large organisation

Source: Adapted from R.E. Freeman, Strategic Management: A Stakeholder Approach, Pitman, 1984. Copyright 1984 by R. Edward Freeman.
Stakeholder conflicts of expectations
Table 4.4 Some common conflicts of expectations
What is CSR?
Concept of CSR often criticized because of lack of legally defined or commonly accepted definition. Is this criticism justified? Should it matter that CSR is not legally defined or subject to a single universal definition?
What is CSR?
Despite the lack of a single definition, research has shown that by examining different definitions from around the world, it is clear that there are commonly held understandings about what constitutes CSR.
CSR
Lets firstly examine some of these definitions----- then we can seek a common understanding.
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What is CSR?
Canadian Government: CSR is generally understood to be the way a company achieves a balance or integration of economic, environmental and social imperatives while at the same time addressing shareholder and stakeholder expectations.
What is CSR?
UK Government: The Government sees CSR as the business contribution to our sustainable development goals. Essentially it is about how business takes account of its economic, social and environmental impacts in the way it operates maximising the benefits and minimising the downsides.
What is CSR?
European Union: [CSR is] a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.
What is CSR?
World Business Council for Sustainable Development: We define CSR as business' commitment to contribute to sustainable economic development, working with employees, their families, the local community, and society at large to improve their quality of life.
What is CSR?
The Kennedy School of Government (Harvard University), CSR Initiative: The term [CSR] is often used interchangeably with others, including corporate responsibility, corporate citizenship, social enterprise, sustainability, sustainable development, triplebottom line, corporate ethics, and in some cases corporate governance. Though these terms are different, they all point in the same direction: throughout the industrialized world and in many developing countries there has been a sharp escalation in the social roles corporations are expected to play.
What is CSR?
What do these definitions tell us about CSR?

What are some of the common understandings that emerge? How does CSR relate to other concepts? What other issues arise?
What is CSR?
Common Understanding One:
CSR is an idea whereby companies integrate economic, social and environmental concerns in their business operations
Common Understanding One: Integration

Corporate Social Responsibility: The Integrated Approach to Business in the 21st Century
Exchang e Rates Governanc e Climate Change Consumer Confidence Interest Rates Regulation/Policy
Economic
Corruption Communities
Waste
Environment
Social
Biodiversity Resourc e Use Human Rights
Labour/ Workplac e
Common Understanding Two: Stakeholders

Common Understanding Two: CSR relates to the idea whereby a business addresses and balances the needs of stakeholders. Who/what are stakeholders? Individuals and groups who may affect or be affected by the actions, decisions, policies, practices or goals of an enterprise.
Examples: Shareholders and other investors Employees Customers Governments Local communities NGOs Environment
CSR and Related Concepts: Sustainable Development

Many definitions describe CSR as the business pursuit of sustainable development.
Sustainable development: development that meets the needs of the present without compromising the ability of future generations to meet their own needs. (1987 Brundtland Report).
Like CSR, sustainable development is also recognised as having three fundamental pillars: economic development, social development and environmental protection.
CSR and Related Concepts: Corporate Governance

Many definitions highlight the link between CSR and corporate governance. Is CSR a subset of corporate governance or is corporate governance a subset of CSR? Both concepts are closely related which ever way you look at it.
CSR and Other Related Concepts
The term CSR is often used interchangeably with the terms corporate responsibility, corporate citizenship and triple bottom line.
Companies choose the terminology they feel comfortable with.

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CSR & Ethics

Ethics and Corporate Values Based on CH 14

Todays Tutorial number 11

Ethics and HRM

Ethics and Fair Treatment at Work

The Meaning of Ethics

what your conduct should be.

a persons frame of reference.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Specific Observed Unethical Behaviors

A situation that places employee interests over organizational interests

Ethics and the Law

Ethics and Behaviors

A behavior may be illegal but ethical.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Ethics, Fair Treatment, and Justice

Components of Organizational Justice

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Perceptions of Fair Interpersonal Treatment Scale

4. Employees are trusted

8. Employees questions and problems are responded to quickly

12. Employees hard work is appreciated

16. Coworkers argue with each other (R)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Some Areas Under Which Workers Have Legal Rights

Leave of absence and vacation rights

Employee distress rights

Workers compensation rights

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

What determines ethical behaviour at work?

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

What Influences Ethical Behavior At Work?

What Determines Ethical Behavior at Work?

Ethical Work Behaviors

Ethical Policies and Codes

The Bosss Influence

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

FIGURE 144 How Do My Ethics Rate?

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Using the Company Web site to Emphasize Ethics

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

What Is Organizational Culture?

behaviors a firms employees share

How Managers Can Support an Ethical Culture

Leading subordinates astray

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

The Bosss Influence on Ethical Behavior

Leading Employees Astray

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Fostering Ethical Work Behaviors

What Employers Can Do

Provide manager and employee ethics training

Establish whistleblower policies

Adopt a strong ethics code

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Employees and Ethical Dilemmas

Questions employees should ask when faced with ethical dilemmas:

How will it feel afterwards?

Emphasizing ethics and fairness in personnel selection