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Ethics, Employee Rights, and Fair

Treatment at Work


• Standards, values, morals and ethics have become

increasingly complex in a postmodern society where
absolutes have given way to tolerance and ambiguity.
• This particularly affects managers in HR, where
decisions will affect people’s jobs and their future

• Discussing ethical behaviour and values that relate to


• Human Resource Management is a business function
that is concerned with managing relations between
groups of people in their capacity as employees,
employers and managers.
• Inevitably, this process may raise questions about what
the respective responsibilities and rights of each party
are in this relationship, and about what constitutes fair

Learning Objectives
• By the end of this chapter, you should be able to:
• u Critically explore and evaluate the ethical nature of
human resource management;
• u Identify and define current ethical and moral issues
confronting HR managers;
• u Compare, contrast and critically appraise a range of
approaches to ethical analysis;
• u Critically appraise the relevance and usefulness of
philosophical analysis to HR practice.

The Meaning of Ethics

– The principles of conduct governing an individual or a

group; specifically, the standards you use to decide
what your conduct should be.
– Ethical decisions characterized by two factors:
• They involve normative judgments which imply
that something is good or bad, right or wrong
• They involve morality, which is a set of behavior
standards accepted by a society

Ethics and morality

• Ethics and morality are terms that are often used

• interchangeably in discussions of good and evil.
• The term ‘ethics’ is usually applied to persons (ethics
comes from the Greek ethos, meaning character) – and
‘morality’ to acts and behaviour (moral comes from the
Latin moralis, meaning customs or manners).
• Morality is a set of conduct accepted by society.

• What Role Should Ethics Play in Business?
• Business ethics are based on society’s ethics and those of the
people who work for and buy from them.

• A Code of Ethics
• Some companies write a code of ethics, a document that explains
specifically how employees should respond in certain situations.

Ethics in workplace
• Ethics is based on the recognition of certain human
rights. OSHA
• An individual has the right not to be deliberately
• He has the right not to be forced to go against his
• He has the right to expect other parties to live up to their
commitments and to behave according to the law.
• In the workplace, the employer has the right to expect
employees to behave according to company policy.

World Ethical Issues:
• Much of the recent focus on business ethics has been directed
against financial corruption, especially a concern with accounting
standards. The scandals involving
• Enron Corp.
• Abuse of the world’s physical resources, and the global ecological
balance (Esso);
• Abuse of human rights ;
• Animal rights (KFC, McDonald’s);
• Aggressive treatment of competitors (Wal-Mart);
• Logging

KFC case
• In July 2004, PETA revealed the results of an investigation into a
KFC-supplying slaughterhouse in Moorefield, West Virginia, where
workers were caught on video stomping on chickens, kicking them,
and violently slamming them against floors and walls. Workers also
ripped the animals' beaks off, twisted their heads off, spat tobacco
into their eyes and mouths, spray-painted their faces, and squeezed
their bodies so hard that the birds expelled feces—all while the
chickens were still alive. Dan Rather echoed the views of all kind
people when he said on the CBS Evening News, “[T]here's no
mistaking what [the video] depicts: cruelty to animals, chickens
horribly mistreated before they're slaughtered for a fast-food chain.”

• Air pollution is just one form of unethical behavior in

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall. 9-11

The unethical practice of HRM identified

• Using child labour

• Exploiting ‘cheap’ labour markets;
• Reneging (breaks contract) on company pension agreements;
• Longer working hours;
• Increasing work stress;
• Widening imbalance of power between management and workforce;
• Increase in surveillance and control – this ranges from the use of
• The use of disputed practices in hiring and firing of personnel –
• short-term and temporary conditions of employment;
• fear of job loss due to outsourcing

Unethical behavior

• Deliberate Deception
• Deliberate deception in the workplace includes taking credit for work
done by someone else, calling in sick in order to go to the beach,
sabotaging the work of another person and, in sales,
misrepresenting the product or service to get the sale. In a sales
function, it can result in lawsuits from deceived customers.
• Unlawful Conduct
• Padding an expense account with non-business expenses. Stealing
from the company by padding her expense account or taking
supplies for personal use.

• Violation of Conscience /judgement
• Your sales manager calls you into his office and threatens to fire you
unless you sell 50 large toasters. You know the large toasters are
inferior products and you have been selling the small toasters to
your customers, instead. To keep your job, you must violate your
conscience and recommend that your customers buy the large
toasters. Your boss is engaging in unethical behavior by forcing you
to do something you know is wrong, and also risking. He may be
engaging in unethical conduct because top management has forced
him by threatening his job, too.
• Disregard of Company Policy
• An employer who disregard company policy and other employees as
to remain in business and angry customers.

• Failure to Honor Commitments
• Your boss promises you an extra day off if you rush out
an important project by a certain date. You work late
hours and finish the project before the deadline. Ready
for your day off, you mention it to your boss who
responds "No, we have too much work to do." Your boss
engaged in unethical behavior that has virtually
guaranteed your future distrust and unwillingness to
extend yourself to assist in department
emergencies. In addition, you are likely to complain to
your co-workers, causing them to distrust the promises
of the boss and be unwilling to cooperate with his
requests. 9-15
What Happens When People Do Not Behave Ethically?

• When an individual acts unethically, his or her behaviour will most

likely harm others.
• The individual could also be sent to jail for his or her actions.
• Major ethical issues include fraud, accounting scandals, and
insider trading.
• Fraud
• Fraud is a crime of lying or pretending. Some businesses mislead
consumers and trick them to buy their products or services. Such fraud
and deceptive business practices and defines these as:
• false or misleading advertising ( weight losing, weight gain eg: slim
world?? )
• “bait and switch” selling (menang dan gores)
• double ticketing items for sale (3 in 1? )
Accounting Scandals: Enron Click here for a link!

• An accounting scandal occurs when accountants or senior

executives alter accounting records for personal benefit.
When accounting irregularities are uncovered, a forensic accountant
investigates legal and financial documents to find evidence of
Embezzlement, a type of accounting fraud, happens when an
accountant or senior executive creates false accounts and redirects
money into them for personal gain.

Business owners rely on outside accountants, auditors, to check and

report on the validity of financial records.

• Insider Trading
• Insider trading is buying or selling shares of a company based on
• confidential information. This type of trading is illegal.
• Prosecution for insider trading falls under the provincial securities
• commissions. Punishment includes
• • fining the individual(s) for up to $1 million
• • turning over all profits from trading
• • incarcerating the person(s) for up to two years
• • being banned from future trading in securities

How Can Businesses Resolve Ethical Dilemmas?

• A dilemma is a situation where a difficult choice must be made

between two or more options.
• An ethical dilemma is a moral problem with a choice between
potential right and wrong. Some questions to consider are
• Who will be helped by what you do? Eg new succession plan.
• Who will be hurt by what you do? Eg retrenchment
• What are the benefits and problems of such a decision? Eg new
• Will the decision survive the test of time?
Whistle-blowing happens when an employee informs officials or the
public about an illegal or ethical violation.

What Affects Ethical Behavior at Work?

• Individual factors
• Organizational factors
• Societal, cultural and religious factors
• Superstition and traditional beliefs

What Affects Ethical Behavior at Work?

• Individual factors
– Individuals take the credit/blame for the ethical
choices they make
• Organizational factors
– Unethical behavior at work is normally not driven by
personal interest, such as scheduling pressure, etc.
– An example: In 2004, Worldcom’s CFO covered up
the company’s deteriorating financial situation to
preserve the company to allow it to withstand as
what he believed were temporary financial
What Affects Ethical Behavior at Work?

• Societal, cultural and religious factors

– Asian societies’ Confucianism, collectivism
and paternalism emphasize on relationship
and loyalty
• However, too much emphasis may result in
cronyism and nepotism

HR Management’s Role in Ethics and
Fair Treatment
• Staffing and selection
• Training
• Performance appraisal
• Reward and disciplinary systems
• Addressing workplace aggression and
violence issues
• Building two-way communication

Employee Discipline and Privacy

• HRM must adhere to the Three Pillars in order

to create a fair and just disciplinary system
– Clear rules and regulations
– A system of progressive penalties
– Maintain an appeals process

Fair Discipline Guidelines

• Make sure the evidence supports the charge of

employee wrongdoing
• Make sure to protect the employees’ due
process rights
• Adequately warn the employee of the
disciplinary consequences of his or her alleged

Fair Discipline Guidelines, cont.
• Fairly and adequately investigate the matter before
administering discipline
• The investigation should produce substantial evidence of
• Apply applicable rules, orders or penalties without
• Remember that the burden of proof is on you
• Get the facts

Fair Discipline Guidelines, cont.

• Don’t act while angry

Discipline Without Punishment

• Issue an oral reminder

• Should another incident arise within six weeks,
issue a formal written reminder and place a copy
in the employee’s personnel file
• Give a paid, one-day “decision-making leave”
• If no further incidents occur in the next year or
so purge the one-day paid suspension from the
person’s file

Employee Privacy

• People view invasions of privacy as unethical and

• Privacy violations include:
– Intrusion
– Publication of private matters
– Disclosure of medical records
• About 1/3 of US companies recently investigated
suspected leaks, via e-mail, or confidential or proprietary
• HRM must take legal issues into consideration
Grounds for Dismissal

• Unsatisfactory performance
• Misconduct, including insubordination
• Lack of qualifications for the job
• Changed requirements or elimination of the job

What Is Insubordination?

• Direct disregard of the boss’ authority

• Direct disobedience of, or refusal to obey, the
boss’s orders, particularly in front of others
• Deliberate defiance of clearly stated company
policies, rules, regulations and procedures
• Public criticism of the boss
• Contemptuous display of disrespect

What Is Insubordination?, cont.

• Disregard for the chain of command

• Participation in (or leadership of) an effort to
undermine and remove the boss from power

The Termination Interview

• Plan the interview carefully

• Get to the point
• Describe the situation
• Listen

Exit Interviews

• Exit interviews are often conducted with

employees who are leaving the firm for any

Layoffs and the Plant Closing Law

• Layoffs occur when workers go home for a time

due to lack of work and managements intend to
recall employees when work is available –
usually not permanent
• Downsizing is reducing, usually dramatically,
the number of people employed by a firm
• Both require compliance of WARN – the Worker
Adjustment and Retraining Notification Act –
which requires employers of 100+ employees to
give 60 days’ notice before closing a facility or
starting a layoff of 50 or more people
Ethics and Corporate Social Responsibility

• A business exhibits corporate social responsibility

(CRS) through their values, ethics, and the contributions
it makes to communities.
• CRS is driven by a desire to protect customers and to
treat employees and shareholders fairly.

CSR Principles

• Businesses that practice CSR principles support their

employees and consumers by:
• providing a safe and healthy work environment
• • adopting fair labour polices
• • protecting the environment
• • being truthful in advertising
• • avoiding price discrimination
• • donating to charity

Business Goals

• • First leg: financial goals

• • Second leg: environmental goals
• • Third leg: social goals

• Problem: Corporate resources spent on environmental

and social goals never equal what is spent trying to
generate profits (financial goals).