Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Ethical Issues in Human

Resource Management

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Definition of HRM

HRM is a management function involving :

• The recruitment of suitable human resources
• training,
• Developing and sustaining their competencies
• Motivating them,
• Offering them rewards on a rational and equitable
basis,
• Ensuring their continued commitment to the
organization for achieving its overall objectives.

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Big Scope of HRM

The vast scope of HRM can be summarized to include the

following seven functions:
•Determining human resource needs;
•Attracting potential employees;
•Choosing employees;
•Teaching/preparing;
•Rewarding;
•Evaluating performance; and
•Creating a positive work environment.

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Different Aspects of HRM

• Recruitment(Identify a suitable pool of applicants quickly,

cost effectively and legally)
• Training and development
• Learning organizations (employees share learning with
one another, existence or creation of procedures for
gaining and sharing knowledge, freedom to think
critically, rewards to employees,encouragmenet of
flexibility and innovation among employees)
• Performance management (rewards for and compensation
of employees)
• Pay (fairness and equity)
• Team work
• Motivation (for the purpose of retention of staff, reducing
turnover, minimizing absenteeism at work)

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Emerging Challenges of HRM

Some of the challenges that confront HR professionals and

their roles in organizations and the industrial scenario are:
a.Globalization of markets and intensification of competition
has made employers and employees conscious of their
changing and strategic roles in organizations;
b.Corporate restructuring has become an absolute necessity
for organizations;
c.Need for reconciling to multiple work ethos as a result of
mergers and acquisitions;

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Emerging Challenges of HRM (Contd.)

e. Emphasis on total quality management;

f. Changing job profiles and the need for and ability to get
adjusted to them;
g. Adoption to changing workforce profile consequent on
structural changes;

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Emerging Challenges of HRM (Contd.)

h. Increasing role of women employees in organizations;

i. Increasing use of Information Technology that is altering
the very nature of work delivery in organizations; and
j. Increasing emphasis on knowledge management and the
need for acquisition and use of knowledge to keep pace
with the fast changing world.

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
HR-related Ethical Issues

• Discrimination issues (on the basis of

age/gender/race/religion/disabilities/weight/attractiveness)
• Suppression of democratization in the workplace
• Privacy issues
 Recruitment and selection
 Performance tracking (call monitoring,desktop tracking
etc to track on-job performance,work habits,client
management)
 Privacy issues of computerized employee records
 Electronic surveillance
• Safety and health
• Performance appraisals (assesse’s relationship with
assessor,colleagues, sometimes based on caste,religion etc.)

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Role of HRM in
Creating an Ethical Organization

• The top management should be committed to ethical

behaviour.
• They should be the role models to their employees.
• The organization should evolve codes of ethics for its
employees and enforce them.
• Ethics committees should be formed with top executives
as members to advice on ethical issues.

Business Ethics and Corporate Governance, 2e A. C. Fernando

 Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Role of HRM in
Creating an Ethical Organization (Contd.)

• Company journals to publish articles on ethical issues

and pose hypothetical ethical dilemmas and discussions
on how to resolve these.
• An ethics office with ethics officers to oversee the
process and help communicate policy to employees.
• Organize employee ethics training which can play an
integral role in ensuring compliance with the ethics code.
• A disciplinary system to deal with ethical violations
promptly and decisively.

Business Ethics and Corporate Governance, 2e A. C. Fernando