TERM PAPER

OF
HUMAN RESOURCE
MANAGEMENT

TOPIC: ETHICAL DILEMMA IN

HRM

SUBMITTED TO: SUBMITTED BY:

JATIN KHURANA

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 ACKNOWLEDGEMENT
With the blessing of almighty god we are able to finish our term paper. We would
like to thanks our class lecturer honorable Gurneet ma’am for her wonderful co-
operation, without which this work can’t be completed. And I m also thankful to
that it gave me chance to work on this project, as it gave me knowledgeable
experience regarding my subject.

JATIN KHURANA

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CONTENT: P. NO.
1) INTRODUCTION- 4

 Ethical Dilemma 4

 Ethical Dilemma in HRM 4

2) ETHICAL NATURE OF HRM 5

 Conviction 5

3) ISSUE OF ETHICAL DILEMMA IN HRM 6

4) EXAMPLE OF ETHICAL MISCONDUCT IN HR 10

5) MOTIVATING ETHICAL BEHAVIOR 11

6) REVIEW OF LITERATURE 12

7) CONCLUSION 17

8) REFERENCE 18

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INTRODUCTION:
Ethical dilemma is a complex situation that will often involve an apparent mental conflict
between moral imperatives, in which to obey one would result in transgressing another. This is
also called an ethical paradox since in moral physiology; paradox plays a central role in ethics
debates. For instance, an ethical admonition to "love thy neighbor as thy self" is not always just
in contrast with, but sometimes in contradiction to an armed neighbor actively trying to rape you:
if he or she succeeds, you will not be able to love him or her. But to preemptively attack them or
restrain them is not usually understood as loving. This is one of the classic examples of an ethical
decision clashing or conflicting with an organism decision, one that would be made only from
the perspective of animal survival: an animal is thought to act only in its immediate perceived
bodily self-interests when faced with bodily harm, and to have limited ability to perceive
alternatives.

What Is an Ethical Dilemma?

Ethical dilemmas, also known as moral dilemmas, have been a problem for ethical theorists as
far back as Plato. An ethical dilemma is a situation wherein moral precepts or ethical obligations
conflict in such a way as to make any possible resolution to the dilemma morally intolerable. In
other words, an ethical dilemma is any situation in which guiding moral principles cannot
determine which course of action is right or wrong.

ETHICAL DILEMMA IN HUMAN RESOURCE MANAGEMENT

Human resource management (HRM) is currently undergoing rapid professionalization. One

area, which has not been fully examined from a scholarly nor practitioner perspective, is that of

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ethical dilemmas. Ethical dilemmas in HRM can be seen as multifaceted, involving personal,
professional, and organizational considerations. A general model of five ethical dilemmas [Acad.
Manage. Rev. 8 (1983) 690.] Is applied to HRM in general and to eight HRM functions,
illustrating 40 specific examples of potentially unethical behavior. Ethical codes of five
professional associations are reviewed in relation to general categories of ethical dilemmas, and
their coverage is discussed.

Human Resource management is a business function that is

concerned with managing relation between group of people in their capacity as employees,
employers, and managers, inevitably, this process may raise question about what the respective
responsibilities and right of each party are in the relationship and about what constitutes fair
treatment. These questions are ethical in nature and this chapter will focus on
debates about the ethical basis of human resources management.

THE ETHICS NATURE OF HRM

All HR practice has an ethical foundation. HR deals with the practical consequences of
human behavior.
- JOHNSON, 2003
“The entire concept of HRM is devoid of morality”
- HART, 1993: 29
The core concern of business- proponents of the market economy argue- is in attempting to
secure the best possible return on any investment. Any dilution of this focus will lead to the
corruption of as well as profitable will probably fail economically. Following which the whole
community may suffer. Invisible hand guides the market and all will prosper, like some
evolutionary force. The best will always service, wealth will trickle down from successful
enterprise and humanity will be best served.

CONVICTION:-
The degree of conviction of values can be described as primary values, can be described as
primary, secondary or peripheral.

DEGREE OF CONVICTION

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 PRIMARY SECONDARY PERIPHERAL

- Core values - Important -Values that are know but

- Unchanging - Changeable not lived.

ISSUES OF ETHICAL DILEMMAS IN HRM

Human resource issues
Human is the most important resource to an organization. Issues associated with human
resources occur as a result of employees working together. These issues are by far the
largest category of ethical dilemmas in business.

The four main types of human resource issues are as follows:

• Hiring and Termination Issues

Recruitment or hiring process is the first step in selecting human resource into an
organization, and will significantly influence the successful performance of the organization.

Ethics plays a very important role during the recruitment of new employees. Law and
regulations dictate that we have to be ethical in hiring. However, ethical hiring practice goes
beyond them as well. It has been widely reported by many researchers that ethical hiring
practices actually result in better employees being recruited.

It is therefore important that sound ethical rules are followed when hiring a new employee.

It is of vital importance that candidates are to be selected based on merits. Applicants are
to be hired based purely on merits such as knowledge, skills, and ability in accordance to the
needs of the organization.

If a company provides any special considerations, for example affirmative action, where

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certain groups are given special considerations, these considerations should be well stated
in the company's policy statement. In any case, any preferential treatment should be one
that is legally allowed.

While preferential treatments to certain specific group may be allowed, there should be no
discrimination to people from any other group due to race, religion, gender, marital or even
pregnancy status.

Consistency and objectivity during the recruitment process are very important. Criteria,
including any changes in the criteria, used for evaluating candidates should be stated and
explained to order to avoid unnecessary claim of biasness in the recruitment process.
Objective evaluation results in the best employees being recruited while consistency ensures
high morale among employees.

When we recruit new employees, we should tell the applicants about the true state of the
organization. We should not mislead the applicants. In particular, the applicants should be
told all pertinent information, including those information that are not publicly known but that
will materially affect the new employee's future employment prospect with the organization.
We can learn from the case involving Phil McCaskey. Phil McCaskey was recruited but he was
not aware that the company was in the process of being taken over by another entity. One
year after joining the company he lost his job with the new company. He sued the company
for with-holding important information from me during the recruitment process. He won the
case and was awarded $10 million.

We should never place misleading job advertisement in order to get applications if we are
offering a job contract different from what we advertised for. For instance, if we want to
engage independent contractors instead of normal salaried employment. The reason why
we choose to engage independent contractors is that we do not have to be burdened with
high salary cost for employees that are not competent, but we are willing to compensate
employees according to performance. We should always state clearly our terms of
employment. In any case, we do not want to be accused of any job scam.

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We have to be extra careful when we are recruiting employees from organizations that have
material dealing with us include our suppliers, customers and competitors. If we are not
careful ethical issues very damaging to us can arise.

When we employ somebody from our suppliers, the suppliers may feel that we have
unethically poached their good employee. After all, it is through the working relationship we
have with the suppliers that we can to know the quality of this employee.

When we employ somebody from our customers we can be accused of returning favor to that
person. This rule applies especially when employing a former senior government employee
that has an influence on the awards of contracts to an organization like yours. The case of
Ms. Darleen Durum at the Department of Defense and Mr. Michael Sears at Boeing is a good
illustration of the importance of such a rule. In this case, employment favor was apparently
granted by Boeing in exchange for favorable consideration for the awards of contracts by
Department of Defense. Also, be careful not to employ former government employees for the
purpose of lobbying for contracts from their previous government departments. At least, do
not do so within the first two years of the employee leaving the government service.

It is also not very wise to employ somebody from our competitors because we can be
accused of stealing trade secrets from our competitors. If that employee can pass on his
previous employer's secrets unethically, what is there to stop him from passing your trade
secrets to others?

Even though it may not be considered as unethical by some employers, as a matter of

courtesy and good public relationship to inform an unsuccessful applicant.

When an employee is asked to leave, it is also of vital importance that it is handled with
fairness and care. If it is a case of poor performance or disciplines, the employee has to be
given prior warning (unless it is violation of a well stated policy or is of a very serious nature)
and fair hearing. In any case, do not hurt the dignity of the employee and offer to provide

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the necessary assistance where appropriate.

Before an employee leave for any reason, provide him/her with an opportunity to provide
feedback on the overall state of the organization by conducting exit interviews.

• Discrimination
Discriminations the unfair or preferential treatment of a person on the basis of one or
more uncontrollable characteristics, including race, gender, age, color, religion, or national
origin, as well as handicapped or pregnancy status.

Discrimination against others in the workplace can impair your ability to perform your job
according to company expectations.

In most countries, there are laws that protect potential and current employees from
discrimination based on age, race, color, national origin, religion, and gender, as well as
pregnancy or handicapped status.

• Performance Appraisal
Performance appraisal is conducted to evaluate an employee’s performance over a set
period of time.

When evaluating subordinates, one has to remain consistent and objective. Consistency is
even more important when evaluating an existing employee than a prospective employee.

Consistency requires that you treat every employee's misbehavior the same way. For
example, it would be wrong to punish one employee's tardiness while leaving another
employee's tardiness unchecked.

In order to maintain objectivity, the company’s standardized evaluation forms should be

used. In this way, uniform criteria can be used for the appraisal of all employees under you.
Also, all employees in the company are evaluated based on the same criteria.

Constant feedback and communication between you and your subordinates is necessary to
facilitate a positive and productive working relationship. Don’t wait until periodic performance
evaluations to express your observations and suggestions. In fact, it is unethical to base

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salary adjustments upon performance problems that have not been brought to the employee’
s attention.

For employees being evaluated, honesty and acceptance of responsibility for performance
problems are important ethical considerations.

• Disciplinary issues
Disciplining employees are one of the most difficult parts of a manager’s job. Nevertheless, it
is vital to the growth and overall success of the organization.

Disciplining employees both ensures productivity and sets standards for the future.

Discipline should occur immediately after a problem has occurred. It is imperative that the
disciplinary actions remain consistent for all employees.

A serious disciplinary issue is sexual harassment where female employees (less so for male
employees) are subjected to an unwanted sexual behavior that creates an intimidating or
hostile work environment. This includes unwelcome sexual advances, requests for sexual
favors, and other verbal or physical conduct of a sexual nature. This conduct is not only
unethical, but illegal as well.

Some points which show poor ethical standards.

 While short – term goals may be achieved through the cutthroat tactics of free market
principles, in the long run business will served well if good standard of conduct are
maintained.

 Ethical business creates a positives environment in which to buy and sell, as corruption,
poverty and lack of respect for the environment generate problem for the business
community in the long term.

 Finally people neither hold moral values nor have religious beliefs to guide the conduct
of their lives.

EXAMPLE OF ETHICAL MISCONDUCT IN HR ACTIVITIES.

TYPES OF MISCONDUCT EXAMPLE OF EMPLOYEES, SUPERVISOR &

MANAGERIAL BEHAVIOUR

 Compensation - Misrepresent hours & time worked.

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 -Falsifying expense report.

-Personal bias in performance appraisal & pay increase.

-Inappropriate overtime classification.

- Employee lying to supervisors.

 Employee Relations -Personal gains/gifts from vendors.

-Misusing/ stealing organizational assets & suppliers.

-Intentionally violating safety/ health regulations.

Staffing & Equal - Favoritism in hiring & promotion.

MOTIVATING ETHICAL BEHAVIOUR

STAGES

“Self – Interest” “The only crime is getting caught”

“Self – Interest”: “what’s in formed – I will scratch back if scratch mine”

Group norms are important: “Do you duty to those whose opinions

Universal ethical principles

STAGE: 1 “Self – Interest”, “The only crime is getting caught”.

 Make it more likely to catch bad behavior.

• Anticipate possible bad behavior.

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 • Create rules expectations: what’s unacceptable?

• Communicate rules & expectation.

 Increase the penalties for bad behavior.

 Have formal policies that describe the escalating sanctions.

STAGE: 2 “Self – Interest”: “what’s in it formed- I will scratch back if you scratch mine”.

 Create incentives for good behavior & to avoid bad behaviors.

• Punish bad behaviors.

• Withhold benefits valued by the employed for bad behavior.

 Create positive incentives for good behavior.

• Tie rewards to good behaviors.

• Watch for unintended incentives for bad behavior.

STAGE: 3 “Group norms are important: “Do you duty to those whose opinions”.

 Focus on co-workers & direct supervisors.

• Monitors for workgroup with bad norms.

• Screen applicants in hiring for the desired norms.

• Use formal socialization, orientation & training sessions to teach the desired
norms.

 Use self – managed teams & coach them to have the desired norms.

 Direct supervisors should formally praise good behaviors.

STAGE: 4 Universal ethical principles.

 Create & use a mogul’s office.

 Create method for employees to report illegal or unethical behavior.

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 • Ethics hotline.

• Ethics webpage on company website.

 Embeds office investigates complaints, report’s findings, & helps to resolve issues.

• Guided by independence, confidentially, objectivity & ethics.

REVIEW OF LITERATURE:

Articles No. 1
Lee, j (2000) analyzed that the most appropriate factor determines whether an issue or a dilemma
can be resolved or not. Employment and employees should have an inter-dependent relationship
that is driven by belief in each other. While employees should believe that the decisions taken by
the employer would be in their best interest, employers should believe that employee’s work
ethics are only for the development of the organization.

Articles No. 2
Karve, V (1998) analyzed that Ethical fitness of an individual before recruiting, promotion or
assigning an important post or task to an individual. When recruiting new people, or promoting
or appointing persons to senior or sensitive positions, a number of attributes ( hard skill and soft
skills) like professional competence, Managerial proficiency, Domain-specific or technical skill,
and even physical and medical fitness are assessed, evaluated and given due consideration.
Reference: - Vikram karve, Link: - http:// ezinearticles.com/? Ethical-fitness-assessment-for-
recruitment-promotion-&-human-resource-management & type=sv&id=2577241.

Articles No. 3
Jain, R (2000) analyzed that Ethics are important not only in business but in all aspects of life
because it is the vital part and the foundation on which the society is build. A business/ society
that lack ethical principles are bound to fail sooner or later. Ethics refers to a code of conduct
that guides an individual in dealing with others. Ethics are related to all disciplines of
management like accounting information, human resource management, sales and marketing,
production, intellectual property knowledge and skill, international business and economic
system.

Reference: - Repel Jain, http:// ezinearticles.com/? Important-of-Ethics-in-business &

type=su&id=1212419.

Articles No. 4

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Buchanan, K (1987) analyzed that the role of the Human Resources Department has changed
dramatically over the past 30 years and will become increasingly more strategic in nature in the
future, said a leading light of the HR community in the recent 2006 Annual Conference and
Exposition of HR practitioners in Washington, DC.

Reference: - Kadence Buchanan, http:// ezinearticle.Com/? Trends-in-Human-resource

type=su&id=320884.

Article No. 5
King, W (1999) in this article discusses the fundamental steps or techniques help towards
making your business competitive in the market. These are the steps used by businesses to know
their strengths and weaknesses. These help to identify problem, highlight areas of opportunity for
improvement or stimulate discussion on how to make their business more efficient and effective
to compete.

Reference: - William King, http:// ezinearticles.com/? Steps-Involved-in Making-your-

Business-Competitive & type=su&id=344183.

Article No. 6
Shoemaker, D (1980) analyzed that as a leader, HR training can be useful in teaching you how
to ensure ethical outcomes in the workplace. This should begin with an agreement between
leaders and all team members that pledges to act in an ethical manner at all times. The agreement
should also mention the importance of making sure team members always discuss issues as a
group, rather than breaking into factions and holding discussions separately.

Reference: - David shoemaker, http:// ezinearticles.com/? Human-resource-Training—How-to-

Implement-Ethical-practice&type=sv&id=4078444.

Article No. 7
Marti, C (2002) analyzed that companies spend huge amounts of money trying to be socially
responsible. Its consideration that concerned about why companies are "socially" and "ethically"
active and what are the main issues involved in corporate social responsibility (CSR). CSR
means a commitment by a company to manage its role in a society in a responsible & sustainable
manner.

Reference: - Carlos Marti, http:// ezinearticles.com/? Corporate-social-Responsibility-and-HR-

Implication & type=su&id=1601516.

Article No. 8

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Caliqiuri, P (1988) analyzed that the new free agent mentality for managing careers is forcing
employees to ask themselves some ethical questions about dual or outside employment. This
article explores the question and offers standards to guide ethical decision-making when consider
additional income streams.

Reference: - Paula Caliqiuri, http://ezinearticles.com/? You-did-not-take-a-vow-of-poverty-

when-you-took-that-job&type=su&id=3995033.

Article No. 9
Sharma, V (1987) analyzed that the benefits business owners can and that many have derived
from outsourcing their bookkeeping tasks are obvious and are worth considering. The advantages
include their ability to focus their precious time on other core business activities. This may
include marketing their products, procurement, client liaison and relationships, human resource
management and many others.

Reference: - Vish K Sharma, http://ezinearticles.com/? Benefits-from-outsourcing

type=su&id=4168950.

Article No.10

Gallagher C (1987) analyzed that “borrowing" the money. Seems like famous last words from
someone who is living in denial. Being a "thief" is very real and has very real consequences. As
a Motivational Speaker, he shares experiences with audiences talking about choices and
consequences. Here's an example of what he hear about frequently.

Reference: - Chuck Gallagher, http://ezinearticles.com/?But-I-was-only-Borrowing-money---

An-ethics-dilemma & type=su&id=648183.

Article No.11
Purdy, G (1986) analyzed that the Human resources are an integrated part of an organization
and it is one of the valuable assets. Effective human resource management is very important for
the success of any organization. In the modern world where companies are facing talent crunch
and higher attrition threat, one cannot ignore the benefits offered by effective management as far
as human resources are concerned.

Reference: - George Purdy, http:// ezinearticles.com/? Human-Resources-can-be-Managed-

Effectively-using-conference-caltservice&type=su&id=701797.

Article No.12

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Morgan, E (1976) analyzed that the interesting role of a Human Resources (HR) Manager
ranges from interviewing prospective candidates, to providing the best possible environment for
task efficiency at a minimal cost to the company.

Reference: - Elizabeth Morgan, http:// ezinearticles.com/? Human-Resource-job-Description

type=su&id=139056.

Article No.13
Bustamants, M (1978) analyzed that the Degrees from Organizational Management Schools
apply to all aspects of business and business administration. Graduates are prepared to conduct
business activities and make decisions; study designs and applications of computer support
systems; and to take leadership roles in business organizations.

Reference: - Michael Bustamante, http://ezinearticles.com/? Organizational-Management-

School-cover-all-Aspect-of-business&type=su&id=265419.

Article No.14
McGee, R (1990) analyzed that the performance appraisal process with performance-based 360-
feedback and training and development programs. Credible and relevant feedback can help
employees understand the consequences of their behavior and act as a catalyst for implementing
needed change. Organizations would do well to appraise performance in order to accelerate and
maximize it for the development of their people and to the ensure the viability of their
organization.

Reference: - Renate McGee, http:// ezinearticles.com/? Align-your-Performance-Appraisal-

Process-with-performance-Based-360-Degree-Feedback&type=su&id=220187.

Article No.15
Clinch, T (2005) analyzed that the Ten years ago many Australian small businesses didn't think
they needed human resource management. In 2010, we are seeing businesses with only thirty
staff, employing a part-time HR Manager. HR management has obviously become an important
role in small businesses.

Reference: - Taimi clinch, http:// outsourcing-HR-in-Australia-small-Business

type=su&id=4162012.

Article No.16

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Gehrke, J (2008) analyzed that the A very common dilemma, which most managers experience
at one time or another in their career, occurs when they get a call from someone representing
another company's HR department, or perhaps a hiring manager, who is calling to ask for a
reference about one of our old employees or work colleagues. This article discusses this and
other common dilemmas and whether or not we ethically should provide more information.

Reference: - James Gehrke, http:// The-Ethical-Dilemmas-of-Providing-or-Not-Providing-

Reference&type=su&id=934024.

Article No.17

Pitts, D (2000) analyzed that the sitting at a local coffee shop enjoying the company of two
business colleagues, a significant question was posed that caused time to stop for a brief
moment: "Skipper, how does your organization measure leadership ROI in plain language for an
executive to understand when considering hiring your team.”

Reference: - Damian D. Pitts, http://ezinearticles.com/? Factors-that-Drive-positive-Impact-and

ROI-for-Executive-leadership-programs type=su&id=2599923.

Article No.18

Adebi, P (1990) analyzed that the Organizations face a tough challenge when key employees
exhibit disruptive behavior. Also known as top contributors, these employees possess specialized
knowledge or skills that are critical to the success of the business or manage important clients or
large accounts that might be lost if they left. The actions of key employees often have a direct
impact on the bottom line.

Reference: - Peter Adebi, http:// ezinearticles.com/? Purning-Thorns-from-Roses-HRs-

InManaging-Disruptive-Key-Employees&type=su&id=137384.

Article No.19

Miller, G (2007) analyzed that there are now increasing demands on members of the Board of
Directors in companies to take steps to 'avoid risk', to be more 'aware' of how the company is
managed and to do 'risk analysis'. The current trend in measuring the quality of governance in
organizations is to measure their success in applying good governance principles at the Board
level. However, we must remember that members of the Board do not lead or manage an
organization on a day-to-day basis and the overall general 'health' of the organization's integrity
and ethics rests in the hands of the managers inside the company.

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Reference: - Gay Miller, http://ezinearticles.com/? Leadership-and-Integity-Ensuring-it-Exits-
in-Your-company&type=su&id=2619108.

Article No. 20

Brown, J (1990) analyzed that the Physical attraction is a natural reaction, so it's no wonder you
might find yourself attracted to someone in the workplace. But is it a good idea to follow through
on those feelings? Sure, in a perfect world others would mind their own business leaving you to
wine and dine the object of your heart's desire with no worries. But the world isn't perfect, and
we need to get real: people will talk and there could be ramifications.

Reference: - J Blair Brown, http://ezinearticles.com/? Seemed-like-a good-idea-at-the-Time—

Whats-wrong-with-office-dating&type=su&id=132146.

CONCLUSION: -
Ethical conduct in business practice and HR procedure is no longer a matter of choice
for any organization and any company. In 2000, the European Union included a requirement for
social and environment mental reporting in its fourth company law directive. Ethics are very
important in business as well as in HRM without ethics any company didn’t work properly and
effectively. In HRM ethics is also very important because in HRM manager and worker doing
various activity which is related with humanity so, ethics is important. All workers have same
right and duties so they work with them. Company has doing some CSR activity for the name of
ethics. Whenever a company or organization required making a difficult decision especially one
that is ethically challenging, select an option that company would be comfortably work with that
decision.

REFERENCE:
1) Brown, D. (2000) From Cinderella to CSR Management Vol.9, No. 16, P-21.
2) Crowe, R. (2002) No. Scruples, London; Spiro press.
3) Darnley, J. Harrick, E, Strickland, D and Sullivan, G (1991) HR ethics situation Human
Resource Management, Vol.26, pp 1- 12.
4) Good aster, K,E (1984) Ethics in management Boston Harvard Business Book.

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5) Greenwood, M.R (2002) ethics and HRM: a review and conceptual analyzed.
6) Klein, N (2002) No logo, Hammersmith Flamingo.
7) Macintyre, A (1981) after virtue, London Duckworth.

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