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Chapter 7
Stakeholders are defined as those people and groups to whom an
otganization is responsible because they have a "stake" or claim in
some aspect of a company's products, operations, markets, industry, or
Economic Issues

• Contract includes beliefs, perceptions, expectations, and

obligations that constitute an agreement between individuals and
their organizations.
• Informal contract has significant impact on an employee’s actions.
• When promises or expectations are not met, there is an
enormous breach of trust resulting in less loyalty.
Legal Responsibilities to Employees
• Wages and benefits
• Fair Labor Standards Act of 1938 prescribed minimum
wage and overtime pay, record keeping, and child labor
• Employee Retirement Income Security Act set uniform
minimum standards to ensure that employee benefits are
Legal Responsibilities to Employees (cont.)
• Labor unions
National Labor Relations Act legitimized the

rights of employees to engage in collective
bargaining and to strike.
• Health and safety
• Occupational Safety and Health Act sought to ensure
safe and healthy working conditions for all employees.
• Recent rules require organizations to be concerned with
ergonomics, the design, arrangement, and use of
equipment to maximize productivity and minimize
Legal Responsibilities to Employees
• Equal Opportunity Employment
• Civil Rights Act of 1964 prohibits employment discrimination on the basis of race,
national origin, color, religion, and gender.
• Affirmative action programs allow companies
to build balanced workforces.
• Recruiting
• Training
• Promoting
• Equal Employment Opportunity Commission
monitors compliance with the law.
Legal Responsibilities to Employees

Employment at will
a common law-doctrine that allows either the employer or employee
to terminate the relationship at any time.
Legal Responsibilities to Employees
The legal right to pension plan benefits.
Contributions an employee makes to the plan are vested immediately.
Legal Responsibilities to Employees

The design, arrangement, and use of equipment to maximize
productivity and minimize fatigue and physical discomfort.
Legal Responsibilities to Employees
Sexual Harassment
Unwelcome sexual advances, requests for sexual favors, and other
verbal or physical conduct of a sexual nature when submission to or
rejection of this conduct explicitly or implicitly affects an individual’s
employment, etc.
Ethical Responsibilities
to Employees
• Training and development
• -skills
• -knowledge
• -characteristics
• -future employees
- grants legal protection to different types of employees, initiative
in workforce diversity focus on recruiting and retaining a diverse
workforce as a business imperative.
-Initiatives focused on recruiting and retaining a diverse workforce
as a business imperative
Ethical obligation helps employ and empower individuals
regardless of:
-Physical/Mental ability
Work Life Balance
• - a concept including
proper prioritizing
between "work" and
•Work-Life Programs
- Assist employees in balancing
work responsibilities with
personal and family
Philanthropic Issues
- In social responsibility, philanthropic responsibilities
are primarily directed outside the organization, so
they are not directly focused on employees.
Strategic Considerations
• Strong employee initiatives lead to a company being
viewed as the “employer of choice.”
• This allows an organization to attract, optimize, and retain
the best employee talent over the long term.