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C V Krishna Rao 09/04/2013 NALSAR University

but raise several ethical questions Employees spend most of their time producing goods and building relations with customers If a business is to maximize long-term owner value it must behave ethically towards its employees …    .ETHICAL ISSUES IN HRM  The manner in which the business deals with its employees is a clear indication of its ethical character Decisions that do not flout law.

…  Treating employees ethically does not mean that the business should work towards maximizing of employee satisfaction but Employees should be given their due reward for contributing towards achievement of business objectives   Ethics in personnel function deals with all the issues in the relationship between the employee and the business .

NATURE OF EMPLOYMENT CONTRACT  Legal document governs the relationship Spell out tasks and responsibilities of the employee. travel requirements   Terms of employment contract tend to be clear for manual worker than a professional Business has obligation to continue to provide work to its employee . remuneration. location. as long as it is viable for the business This moral obligation was widely practiced by Japanese business …   .

…  Life time employment – stability than growth – leads to higher employee loyalty. and productivity Whether this policy helps business to fulfill its obligations to other stakeholders Just as business has moral responsibilities employees have certain responsibilities to business    The responsibility depends on the nature of employment … .

…  A casual laborer‟s responsibilities may be limited to doing the work for which he is paid A permanent employee is expected to have some degree of loyalty to the business which gives him job security. and prospects growth and well being while in employment  . a sense of belonging.

non-coercive and legal Based on the same criteria …     . fair.honest.HIRING – THE PRINCIPLE OF ETHICAL SELECTION  most important step in hiring is selecting the person who should be selected Right principle of selection would be to hire that individual who is perceived as having the abilities to contribute to the long term ownership value Applies to other activities of personnel like promoting able employees and deciding who is to be fired Ethical selection .

…  All the requirements and benefits of a job are clearly conveyed to the applicants Ethical principle is not followed – wrong candidate may hired – leads to dissatisfaction among employees – valuable resources wasted – growth of business gets affected Selecting the right candidate – not just to eliminate unsuitable persons Not possible to find the best person always – forced to accept the best among the available …    .

driver   Some times character of a person plays an important role in the selection for a job eg. actor.. Policeman.…  Unethical practices in hiring are: discrimination on the basis of age. Cashier etc. religion and nationality Discrimination   Functional qualities require to do the job. – demands a high level of honesty and integrity …. Purchase Officer. Painter. . gender.

…  Irrelevant criteria limits the pool of talent Referrals for hiring: referral network is extremely beneficial depending solely is unethical as good candidates have no access over qualification: managers feel subordinate may be a threat ageism: youngsters perceived to be more capable of adopting to new circumstances and more willing to learn new skills older people are considered for jobs that demand experience and responsibility … .

CREDENTIALS  Degrees. expertise in a particular field May not always reflect the applicant‟s functional abilities to do a job   . Certificates or Citations Simplifies the job of recruiter but fails to differentiate between academic qualifications and intelligence and vocational.

TESTING  Better method of assessing an applicant Objective tests focus on specific aptitude. programming etc. writing. psychological characteristics to effectively perform a job Directly test the proficiency in the job( typing.) Out come of the test may be defective some times unless well designed    .

EQUALITY OF OPPORTUNITY    Important principle of ethical selection Rules apply equally to all the prospects No prospective applicant is prevented from subjecting to rules. using coercive means No applicant is rejected for reasons other than those laid down by the rules for hiring Screening every applicant with the same criteria Quotas are reservation for some communities is considered a case of “reverse discrimination‟ even though such practices are aimed at providing social justice    .

grants. medical assistance etc The business helps itself by helping its employees in need  . rehabilitation   Remedial benefits – loans.EMPLOYEES WITH PROBLEMS IN PERSONAL LIFE  Either part with the person or help him out Counseling.

ETHICAL REMUNERATION SENIORITY AND LOYALTY  Experience that does not translate in to a higher degree of contribution is of no use Down playing the seniority‟s importance does not mean that employees putting in best efforts should not be rewarded Employees who understand long term goals of business. prepared to forego rewards in order to achieve the goals are the employees who can make the greatest contribution to business   .

ETHICS IN RETRENCHMENT  Common at times of recession – „lean and mean” style of management Downsizing  .

misuse of authority Lay offs – right sizing. acts of sabotage. Who should be fired first – least productive       . dishonesty. legal and without coercionis a critical decision Poor performance. fair.FIRING  Employers include “at-will” clause in the contract Fire the employee “at-will” or for a „cause‟-unethical Firing may have a devastating effect firing-honest. down sizing.

possessing them alone will not lead to rewards Ethical business does not reward any thing other than results …   . EFFORT AND ABILITY  Principle of ethical remuneration: Should not reward any thing other than contributions to long-term owner value   Need is not a consideration Effort.ETHICAL REMUNERATION – NEED. talent and abilities are desired in a person.

deserves no reward but sympathy    .…  Remuneration s not driven by employees need Mere possession of superior skill and abilities will not automatically qualify for greater remuneration (remuneration depends solely on results) Employees who work hard to perform a task need not be rewarded more than those who do it effortlessly A person who works hard but fails to achieve results.