Ethical Issues in HRM

HRM
• Acquisition, development, motivation and maintenance of human
resources for the achievement of organisational goals effectively and
efficiently.
• Ethical issues in
– Recruitment
– Selection
– Training and development
– Career advancement/ promotion
– Talent management, downsizing
– Whistleblower protection
– Industrial relations
– Privacy of employees
• Many of the ethical issues have been addressed through employment
regulations and labour laws, but many are beyond the scope of law and
regulations.
 Recruitment and Selection
• Recruitment is supposed to be an inclusive
process, while selection is an exclusive process
• Create ‘equal opportunity for all’
• Eliminate bias, discrimination
• What should be the balance of marks in previous
degree/exam, written test and interview
• Written tests and IQ tests can be discriminatory
– CAT is more suited to people with Engg./Maths
background
 Bias in Interviews
• Asking biased questions
• Contrast effect
• Halo effect
– Appearance of candidate
– Background of candidate
• Stereotyping
• Discrimination
– Do you have a boyfriend?
– Marriage plans?
– Geographical mobility?
– Prefer candidates who are more like ‘us’
– Prefer candidates who have thee ‘right attitude’ / ‘conformist’
 Training and Development
• Selection of candidates on the basis of
‘personal likes/dislikes’ rather than
performance
• Disconnect/ mismatch between training goals
and organisational goals
• Calculating outcomes of training only in
money terms
 Employment Contract
• Unfair/ unbiased terms and conditions of
contract
• Increasing contractualisation, informalisation
of workforce creating insecurity among
workers
• Concept of lifelong employment is eroded
 Career Advancement and Promotion
• Performance appraisal system can be biased
• Often done on the basis of non-performance
related factors (loyalty, commitment)
• High performers with ‘attitude problem’ left out
• Talent management and downsizing/ ‘rightsizing’
– Employees considered as ‘costs’ rather than ‘assets’
– Downsizing has negative impact on employee morale
and creates fear/ insecurity
•
Whistleblower Protection
Whistleblowing is an action aimed at drawing the attention of stakeholders to
instances of unethical practices in an organization.
• Mechanism to receive complaints relating to alleged corruption or wilful misuse of
power or discretion.
• A whistleblower can be anyone who chooses to expose wrong practices and has
evidence to support the allegations. They can be either from within or outside the
organization—such as current and former employees, shareholders, external
auditors, and lawyers.
• Whistle Blowers Protection Act, 2014 provides for the protection of the identity of
whistleblowers prevent their victimization.
• An organization cannot initiate proceedings against a whistleblower pending a probe
into allegations.
• According to Companies Act, all listed companies have to follow SEBI’s governance
norms. All listed and public sector firms need to have a whistleblower policy that
outlines procedures and recourses available to complainants.
• If a complaint is proven to be frivolous, the complainant can face a jail term of up to
two years.
• SEBI has introduced a tipping mechanism to report on ‘insider trading’. Sebi will
award up to ₹1 crore for information and successful action against insider traders. It
has also created a “cooperate and confidentiality" mechanism. This means that if
someone guilty of violating securities law is willing to assist in the larger probe, the
person will be given exemption from penal action and their identity will be kept
confidential.
Whistleblowing Complaints
 Industrial Relations (IR)
• Relationship between employees, unions and management
• Provision of labour welfare – legal or voluntary?
• Labour laws
– Made in accordance with International Labour Organisation and
Constitution of India
– Working conditions at factories, hygiene, drinking water, toilets,
canteens
– Safety measures
– Working hours, overtime
– Disability and death due to accidents, occupational diseases
– Medical facilities (through ESIC hospitals and dispensaries) and
pension (through EPF Act) for self and family
– Timely payment of wages, minimum wages
– Maternity benefit for women employees
 Industrial Relations contd.
• Industrial democracy
– Right to form associations/ unions
• Industrial disputes
– Disputes between employees/ unions and employers
– Mechanisms to settle industrial disputes
– Mechanisms for negotiation
• Ethical issues in negotiation
– Manipulation of facts, hiding info
– Coopting/ bribing the other party
– Use of unfair means
 Privacy of Employees
• There is no separate ‘right to privacy’ in India
– But an employee can take an employer to court for practices which
violate their fundamental right to privacy.
• Employers are required to adopt reasonable security practices to
protect sensitive personal data of employees, such as medical
records, financial records, biometric information, etc. If a loss
results to an employee due to lack of these security practices, the
employee will be entitled to compensation under Section 43A of
the Information Technology Act, 2000.
• Workplace surveillance and employee monitoring
– Considered legal and valid whether for enforcement of discipline or for
the protection of business interests
– European Court: the need to strike a balance between the employee’s
right to respect for his private life, and the employer’s right to ensure
the smooth running of the company, such as privacy on their personal
devices, but not on work devices.
 Privacy of Employees contd.
• Justice A.P. Shah’s report on privacy:
• Notice: Employees need to be adequately informed of the fact or possibility of the
surveillance, the nature and extent of the surveillance, and the use the information
collected can be put to. This needs to be made known to employees at the time of hiring
and privacy policies displayed prominently in the workplace.
• Consent: Taking employee consent in writing.
• Degree of intrusion: The extent of monitoring and degree of intrusion are important
factors. It is crucial to establish a difference between monitoring the flow of
communications, such as whether the mail was sent to a professional or personal contact,
and accessing the actual content of the communications, i.e., actually reading the
message. An employer may be justified in actually reading the content of a business
email, but not a personal mail.
• Justify the intrusion: The employer must have legitimate reasons to justify the need for
and extent of workplace surveillance.
• Consequences: The employee must be informed of the consequences for him, such as the
possibility of termination of employment on finding private communications in work
hours.
• Use of collected data: Employees must be informed of the use the data collected can be
put to, for example, will the data be archived, will the data be erased after the employee
leaves employment, etc.
• Employee safeguards: Employees must be provided with adequate safeguards against
employer monitoring, such as preventing access to actual content.
• BYOD: Bring Your Own Device - it is a good practice to require separate devices for work
and private purposes.