Ethics in Human Resource Management

Ethics
• Ethics are moral principles that govern a person's behavior or the conducting of an activity.
• Its about being loyal towards your duty, organization and society in terms of physiological contract.
Characteristics of Ethics
 Leadership
 Values
 Integrity
 Respect
 Loyalty
 Concern
Ethical culture in work life:
• Honest communication
• Fair treatment
• Special consideration
• Fair competition
• Responsibility to organization
• Corporate social responsibility
• Respect for law
HR Dilemmas:
• Right v. Right “Selecting the best option”.
• It’s right to tell the truth, but it is also right to be kind and considerate of peoples’ feelings and emotions.
• It’s right to apply rules and procedures equally, without favoritism, but it is also right to give special
treatment to hard-working, dependable, and productive employees.
Need of Ethics in HR
• Public image
• Values: the cementing force
• Facilitates decision making
• Ethics and profits walk hand in hand
• Low limits, Ethics stimulate
• Contribution to human welfare
• Protection of social interest
• Recognition of neighbors and competitions
• Respect to Employees
• Balancing all stake holders’ interests
Ethical Issues (Unethical Practices) in HR Corruption
Types of corruption:
– Nepotism
– Conformity
– Bribery
– Embezzlement
– Kickbacks
– Godfatherism.
Recruitment & Selection Ethical Issues (Unethical Practices) in HR:
• Placing misleading advertisements for jobs.
• Misrepresenting the requirements of a particular position.
• Responding to a hiring manager who has asked you to find a way “around” not hiring a qualified
candidate for discriminatory purposes.
• Not reviewing candidates based on their merits.
• Matching a job with person or vice-versa
• Role of out side pressures in selection of wrong ones
• Selecting more than required number of people
Training (Unethical Practices) in HR:
• When training need of employee is identified on the basis of a single or nebulous factor.
• When there is absence of relativity between training purposes and training output. • When the trainees
consider attending training programmes merely as a change and a medium of gaining pleasure.
• When there is absence of feedback on training
• When training is considered as an instrument of individual growth by employees.
• When training programme has been ‘finished’ and not ‘completed’.
• When training infrastructure is not fully utilized.
• When a trainer comes unprepared and completes his task in a hampy campy manner.
• When trainers are selected for training programme under pressure of favoritism or nepotism.
• When the feedback about the training programme is featured as ‘dull’ ‘monotonous’ and ‘useless’.
Performance Appraisal: Ethical Issues (Unethical Practices) in HR
• Central tendency, halo effect, mirror personality etc
• Method of appraisal is not proper
• Superfluous reporting of his traits to employee is also unfair and unjust Ethical Issues (Unethical
Practices) in HR
Salary and Wage Administration: Ethical Issues (Unethical Practices) in HR
• Paying same remuneration to one who is serious, sincere and hardworking and also to one whose
contribution is least.
• Loss suffering company being expected to declare bonus.
• Paying at different rate to man and a woman doing the same kind of work.
• Getting an employee signed on full pay and actually paying him less than that. Ethical Issues (Unethical
Practices) in HR
Privacy: Ethical Issues (Unethical Practices) in HR
It is ethical when HR manager do not disclose publically
• Background Information
• Drug/Medical Testing Reports
• Monitoring on/off the job
• Employee records Ethical Issues (Unethical Practices) in HR
Ethical Issues (Unethical Practices) in HR
It is not unethical when
Effective dismissal
(Factors)
– Legal and valid reasons for dismissal
– Explain the reasons
– Be firm with your decision
(Process)
—Informal action
—Disciplinary meeting
—First written warning
—Second written warning
To Create Ethical discipline
• Job description is clear
• “What to do?” attitude compared to ”Don’t do this” attitude
• Top managers example
Some Practical Examples Questions:
Your senior officer highly recommends for a person during selection process, but that person unfit for that
job, what you will do?
Will you select that person directly for happiness of your senior?
OR Put that person in recruitment process with others?
Some Practical Examples Solutions:
If the candidate does not meet the minimum criteria for selection go back to your senior, provide evidence
of the selection scores and feedback, state the reasons why the candidate cannot be recruited and ask
him/her to propose an alternative candidate
You are told to fake appraisal documents to help someone get promoted. What do you do? Solution:
Introduce stringent procedures which require documents to be approved by a number of different
stakeholders so documents cannot be altered without questions being asked.
Measures To control Unethical Practices
• The establishment of ethics codes
• Improved remuneration • Administrative reform
• Compulsory disclosure of assets and gifts
• Policy and programme rationalization
• Introduction of core values and competencies
• Ethical conduct by public servants
• Senior managers increasing and enforcing ethical awareness and taking action against unethical conduct.
Case Study: The Retrenchment Drama, Jet Airways (India)
• The case is about the retrenchment drama that unfolded in one of India’s leading aviation companies, Jet
Airways (India) Limited in Oct 2008.
• More than thousand employees were laid off.
• It was a part of major Cost- cutting exercise to tackle Global slowdown and price hike of Aviation fuel.
Case Study
Events of Case
• Oct 16, 2008, Jet announced that it would lay off nearly 1,100 of its staffs to streamline operation.
• A day after it had already laid off around 800 of its cabin crew members. Simultaneously announced
second phase of lay-off of 1100 employees, mainly from departments like flight attendant, cockpit crew
etc.
• Amidst great furor and opposition by various organizations and political parties, Naresh Goyal ,
chairman of Jet, reinstated the employees a day later the great emotional drama.
• November 2008, Jet decided on a 20% cut in the salaries of its pilots, engineers, and some other staffs.
Case Study
Unethical Practices
• Employees were FIRED with no PRIOR NOTICE
• The entire force of unconfirmed staff was being laid off on a 30-day compensation package
• Company took action only against lower staffs.
Case Study: Why it was wrong
• The very existence of any company is because of its employees.
• Company keeps on focusing on customer satisfaction when its own people are so highly dissatisfied.
• Employees are more than just-a-resource.
Case Study Some most crucial questions unanswered
• Where would those 1900 employees go?
• Why took action only against lower grade staffs?
• Why Senior management was very less affected?
• What would be the future of those students currently taking courses in cabin crew etc?
Is coronavirus the ultimate test in ethical leadership for HR?
By Jo Faragher on 27 May 2020 in Furlough, Onboarding, In-depth, Workplace culture, Coronavirus,
Health and safety, Corporate social responsibility, Latest News, Employer branding, Employee
engagement, Ethics, Leadership
Whether it’s furlough or free healthcare, companies’ actions during the coronavirus have come under
greater scrutiny than ever. Will the organisations that followed a moral compass emerge the strongest? Jo
Faragher investigates.
There’s no doubt that the coronavirus pandemic has been the maker and breaker of not just political
reputations, but also corporate ones. It has seen some accused of being evil empires that rake in millions
in profits yet choose to furlough their workers, while hundreds of bosses are reported to whistleblowing
hotlines for claiming government financial support while asking employees to ‘volunteer’ their time.
This month’s Sunday Times Rich List certainly shone a light into how we perceive employers’ reactions
to the crisis. It revealed that five of the country’s 10 richest people own companies that have furloughed
workers, with some of the biggest users of the scheme (including Wetherspoons owner Tim Martin and
the Weston family, who own Primark) having put tens of thousands onto the government’s job retention
scheme.
Elsewhere, anonymous accounts from employees tell of shambolic returns to work: a fast-food worker in
Sheffield who was forced to pack delivery meals right next to a colleague; construction workers on sites
without social distancing measures; or nannies and cleaners who have been thrust back into households
because their employers struggle with homeschooling and housework.
Announcing the union’s A Better Recovery plan to support the UK’s economic recovery post-
coronavirus, TUC leader Frances O’Grady noted how the crisis had shown “who kept Britain going”
during the crisis and how “we had our priorities all wrong”. Employees that had previously been deemed
low-skilled or low-paid are being clapped as heroes every week, while many high-salary, knowledge-
focused staff continue from the safety of home offices.
Difficult decisions
But have UK employers really been so polarised between those putting employees at risk or refusing to
value them, and others going above and beyond to keep them in work and sane?
Whether it’s the decision to furlough staff or consider redundancies in the longer term, or building a plan
to bring employees physically back into the workplace, the coming months will present employers with a
raft of not just practical, but also ethical dilemmas. And they might not always get it right.
In a recent article for Personnel Today, HR consultancy owner Josh Sunsoa argued that furloughing staff
was “morally wrong” after a number of millionaire-backed businesses such as Victoria Beckham’s
fashion empire (which later reversed its decision) decided to access the government’s job retention
scheme to subsidise workers’ wages. Many readers agreed with his assessment, but some questioned
HR’s power to prevent senior leadership from making the decision to claim that money.
Victoria Beckham faced a backlash for using furlough. At the time a spokesperson said: “We are working
hard to ensure our much-valued VB team are protected by keeping our business healthy. Having carefully
assessed all our options, we made the decision to furlough a proportion of staff on an enhanced package.”
“It’s a situation where we’re all making decisions without the considered approach we would normally
take,” he says. “But there has to be a root of humanitarian responsibility within us. If everything’s a deal,
about the money, then there’s no humanity.”
Sunsoa praises companies such as Burberry, which chose not to place any employees on furlough but
pivoted its business to make masks for key workers.
This humanity should be extended as HR begins to have conversations with employees about returning to
work, he adds. “How do you get people back to work in an environment where people have been in
lockdown for a long time? There will be an impact on mental health, so in these uncertain times I would
like to think we’ll have consultative conversations with those impacted. We need to be reasonable, saying
‘We’d love to have you back but how do you feel?’”
Dr Amy Bradley, author of The Human Moment and faculty member of Ashridge at Hult International
Business School, agrees we’ve seen “the best and worst of organisations in all of this”. She urges
employers to ask themselves: “What stories will be told about your organisation after this, will it be one
your proud of or one that’s counter to your values? Can you stand by that?”
One organisation she cites as displaying a strong moral compass is global packaging business Barry-
Wehmiller, whose CEO Bob Chapman took lessons from the previous financial crash of 2008/9 and
applied them to the company’s reaction to the pandemic.
“He talks about a duty to look after every member of staff as though they’re a member of their own
family,” explains Dr Bradley. “There’s a concept called shared sacrifice – all employees are asked to take
a little pain rather than a few taking it all. By doing that, the trust is there, so when times recover people
give more.”
The key is that leaders also share that sacrifice – they’re not drawing dividends while the rest of the
company accepts a temporary pay cut or a short period of unpaid leave.
Shifting priorities
Emma Loisel, co-founder of independent coffee roaster Volcano Coffee Works, initially furloughed two-
thirds of her staff as clients (many of them in large serviced offices or sandwich chains) cancelled orders.
In the weeks that followed, it was able to shift the business focus to sell some coffee directly rather than
wholesale; those working in the roastery were able to come back with adequate PPE, and many
furloughed workers in non front-line roles able to return to work from home.
“There’s a concept called shared sacrifice – all employees are asked to take a little pain rather than a few
taking it all” – Dr Amy Bradley, Ashridge at Hult International Business School
“Being on furlough is tough for the employees as well as the business,” she says. “At one point it’s all
hands on deck and then it’s go home and wait. You just don’t know when customers will be able to open
again and the volumes they’ll need.” Her company recently ran a survey of workers with a number of
other food brands, which found that 86% of workers would rather be working to improve their employer’s
chance of survival post-pandemic.
Revenues are slowly returning and are now about 40% to 45% of what they were pre-crisis, adds Loisel.
Decisions the company makes now need to be based on “open and honest dialogue” about what’s best for
the individual, not just the company.
“One employee is desperate to get back as it’s not good for them to be at home, and we have furloughed
someone on the packing line who needed to be at home with a young child. You need to protect the
business so it can exist for the people, but put them at the core of what you do.”
The world is watching
The ethical dilemmas presented to senior leaders will evolve and change over the coming months and
weeks: from immediate decisions around who to place on furlough, to more permanent and life-changing
decisions about redundancies.
It’s how these decisions are made that will determine whether those employers emerge from this
challenging period with tarnished reputations, says Jane Sparrow, author of The Culture Builders:
Leadership Strategies for Employee Performance. “The world is looking at how you handle this,” she
says. “How you make those decisions, how you implement them. If your key talent sees you treating
people badly, they may stay for now but not for the long term. People will remember.”
Airbnb co-founder Brian Chesky. Photo: Gabriela Hasbun/News Syndication/NI Syndication/Pixsell/PA
Images
 When engineering company Rolls-Royce announced it was going to make around 9,000 redundancies,
one TV interview with CEO Warren East appeared to show the executive smirking at a colleague in the
background as he discussed lay-offs for almost 18% of the workforce.
Sparrow adds: “Make honest decisions, even if they’re tough, but approach them with a level of
humanity. Equip leaders so that when you have to implement something like this, you do so with care –
that they own it rather than act as a mouthpiece.”
A good example is a long letter from Brian Chesky, co-founder of Airbnb, as it announced it would lay
off a quarter of its staff. Alongside clear details on how the decision was reached and details of how they
would be supported going forward, there was genuine contrition and sadness – with some observers
calling it the perfect example of how to lead in a crisis.
Dr Bradley adds: “Where leaders have to make those decisions, there’s strong evidence that if they are
compassionate, honest, treat people as adults and communicate sensitively, this can help individuals have
a more positive perception of the organisation after the crisis.”
Make honest decisions, even if they’re tough, but approach them with a level of humanity” – Jane
Sparrow, organisational culture expert and author
Conflicting challenge
But Raj Tulsiani, leader of executive search and diversity consultancy Green Park, argues that the balance
between financial survival and being a caring employer can be difficult. “The importance of inclusion,
wellbeing, kindness and empathy has been brought to the fore by the crisis, as have genuine concerns
about viability, cash flows and the very nature of how we organise our workforce,” he explains. “A
somewhat conflicting challenge for many business leaders: How many organisations can really survive
with no or dramatically-reduced revenue for four months?”
Even where organisations are gradually bringing staff back from being furloughed, they will need to
make careful decisions. Janine Woodcock, a leadership coach and author, recently ran some research
among employees that had been furloughed, finding that – contrary to some reports of “furlough fever”
where employees have been enjoying time off in the sun at taxpayers’ expense – many fear a loss of
connection with their employer, not to mention longer-term consequences for their position.
“The assumption was that furloughed staff would find receiving 80% of their salary without having to
work extremely appealing. Yet, in my conversations with those being or about to be furloughed, I was
hearing deep concerns such as loss of connection with teams and colleagues, loss of purpose and, of
course, fear of future redundancy,” she says. “Leaders were putting all their energies into pivoting their
businesses, but employees were concerned. They couldn’t do any work, access their email – for many it
was an extreme experience.”
Those who have spent time away from the workplace will have fears around skills degradation, their
abilities in virtual communication, argues Woodcock, while managers may have felt as though they are
looking after two teams – one eye on the ones at work and the other on those on furlough. “As we return
to work, they need to think about ‘reboarding’ – a bit like we onboard new employees. Those not on
furlough have been working harder than ever – there could be resentment from those that stayed behind,
so managers will need to consider that too.”
Josh Bersin, founder of HR consultancy and academy Bersin & Associates, recently argued that
leadership will have to evolve as we address all of these ethical dilemmas – that CEO will now stand for
“chief empathy officer” as companies put people at the forefront of decisions. He said: “It reinforces a
new model. It reminds us that above all, business is all about people. Without a feeling of truth, trust, and
power, people can’t perform. With these things, people will bring us out of this crisis.”