ETHICS in HR Function

Presented by Group 3 Abhishek Raj (F 005) Indrajit Das (F 024) Manu Singhal (F 030) Suhail Pawaskar (F-056) Sourabh Kothari (F- 055) Ankit Kumar (F-069) Hemant Agrawal (F-104)

Agenda
Introduction Assess Alternatives Ethical Approaches Laws Cases and Examples Survey

Ethics in HRM-Introduction
HRM Ethics is the affirmative moral obligations of the employer (business) towards the employees to maintain equality and equity justice

Do not treat people (employees) simply as a means for our own purposes without their full and free consent, because they are ends in themselves

Covers those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee.

Benefits of ethics in HRM

Attention to business ethics has substantially improved society Ethics programs help maintain a moral course in turbulent times

Ethics programs cultivate strong teamwork and productivity

Ethics programs support employee growth Ethics programs are an insurance policy -- they help ensure that policies are legal Ethics programs help avoid criminal acts of omission and can lower fines Ethics programs help manage values associated with quality management, strategic planning and diversity management -- this benefit needs far more attention

Human Costs
Demotivate individuals Make good employees leave the company Attract unethical employees Lead to the lack of trust by the employees for the company

Ethical Issues in Management

Most Common Forms of Unethical Conduct International Ethical Issues
Lying to supervisors Employee drug use or alcohol abuse Falsification of records

Gift giving and bribery Discrimination in hiring and treatment

Addressing Ethical Issues

Code of ethics Training managers and employees

Common Unethical Business Practices

Business Espionage
Many spies in the world of business hoping sift out important corporate trade secrets that may benefit their own business agendas pretending to be customers or clients but interested in the important details on how you run and manage your business

Cold Treatment

Professional and confidential communication line is essential in business transactions and correspondences but not answering clients and customers after initial e-mail exchanges, telephone conversations, and business information sharing is not a good business practice

Fake Customer Testimonials Shady Contracts and Delinquent Payments Breach of Contract

Getting favourable reviews and testimonials can boost business reputation and reliability

Contracts are important business documents and changing it frequently and not paying the dues agreed upon are mortal sins in business transactions

Terminating a contract abruptly for made up reasons can spark legal actions from them

Other Unethical HR Practices

Off-shoring and exploiting cheap labour markets Reneging on company pension agreements

Favoritism in hiring, training and promotion

Sexual harassment Inconsistent disciplinary measures Non performance factors used in appraisal Not maintaining confidentiality

Unethical practices in termination of employees

On basis of sex, race, color, ethnicity On basis of medical disability

On basis of religious faith

On basis of pregnancy

On base of age, etc

Reasons for Unethical Behavior

Pressure can drive people to do things they wouldnt normally do. Pressure to succeed, pressure to get ahead, pressure to meet deadlines and expectations, pressure from co-workers, bosses, customers, or vendors to engage in unethical activities or at least look the other way

Some people make unethical choices because they are not sure about what really is the right thing to do. Often, ethical problems are complicated, and the proper choice may be far from obvious

Self-interest, personal gain, ambition, and downright greed are at the bottom of a lot of unethical activity in business

Misguided loyalty is another reason for unethical conduct on the job. People sometimes lie because they think in doing so they are being loyal to the organization or to their bosses

Managers at automobile companies who hide or falsify information about defects that later cause accidents and kill people or managers at pharmaceutical companies who hide information about dangerous side effects of their drugs

Some people have no personal ethical values, they do not have any basis for understanding or applying ethical standards in business and they do not think about right and wrong

Dealing with Unethical Behavior

Avoid unethical management, the quality of the management tends to reflect the quality of workers that are being hired, and the management's refusal to act on unethical circumstances and even encouraging certain behaviors also reflects corruption

Address the issue assertively and confidently

Inform a Supervisor , Speak with a supervisor and explain the situation

Unethical behavior can result in legal issues if it continues to go unaddressed and is discovered

Change jobs because if the behavior continues and management does not act accordingly, it is best to find another job.

Code of Ethics
Statement of values adopted by company, its employees and directors and sets official tone of top management regarding expected behavior Code of ethics establishes rules by which organization lives and becomes part of organizations corporate culture

Ethics Officer
Larger

firms appoint ethics officer Keeps code on front burner for employees Ethics committee often established

Guidelines for managing ethics in workplace

Recognize that managing ethics is a process.

The bottom line of an ethics program is accomplishing preferred behaviors in the workplace.
The best way to handle is to avoid their occurrence in the first place. Make ethics decisions in groups. Use cross-functional teams when developing and implementing the ethics management program

Areas of HRM ethics

Basic human rights, civil and employment rights. E.g. Job security, feedback from tests, openness and consultation over matters which affect the employees Social and organizational justice. E.g. procedural justice, egalitarianism, equity and equal opportunity Equity/Distributive justice (proportionate pay for proportionate contribution), autonomy and respect Safety in the workplace Respect, fairness and honesty based process in the workplace Privacy

(Egalitarianism (derived from the French word gal, meaning equal) is a political doctrine that holds that all people should be treated as equals and have the same political, economic, social, and civil rights)

Is HRM as a function full of conflicts? Yes

Rhetoric of HRM Flexibility De-layering Downsizing/Rightsizing New working patterns Empowerment Training & Development Employability Recognizing individual contribution Teamwork/synergy Reality of HRM Mgt can do what it wants Reducing the no. of middle mgrs Redundancy Part-timers to replace full-timers Making people take risk/responsibility Manipulation/Exploitation No job/employment security Undermine the trade union and collective bargaining Reducing the individuals discretion

Assessing Options Ethical Approaches

Utilitarian Approach Non Consequentialist Approach Virtue Approach Rights Approach Distributive Justice Approach

Approaches to Assess Alternatives Ethically

Utilitarian Approach
Main premise suggests that the morality of an act is determined by its consequences People should do that which will bring the greatest utility (which is generally understood to mean whatever the group sees as good) to the greatest number affected by a given situation.

Which action will do the most good and the least harm for everyone who is affected? How did you determine what is the most good and the least harm? Did all team members agree?

Non- consequentialist Approach

This approach, associated with Immanuel Kant (17241804), is sometimes referred to as duty ethics. Kants aim was to establish a set of absolute moral rules, developed through the application of reason. He also put forward an acid test for evaluating the quality of moral rules and this is termed: the categorical imperative Moral rules should follow the principle of reciprocity: do as you would be done by.

The development of codes of good or ethical practice within organisations and professional associations stems from the deontological approach. However, the approach has been seen to present problems in its implementation, as follows: How do you judge that a rule is a good one? What, in the nal analysis, is fair? Can we all agree? How should we proceed in cases where

Approaches to Assess Alternatives Ethically

Virtue Approach
This is concerned with identifying the qualities of good people rather than that of good acts, or principles. The virtues include both intellectual and character virtues. Macintyre includes the need to feel that what one is doing is good and right; to have an emotional as well as a cognitive appreciation of morality is an essential component of virtue What action(s) displays virtuous character traits (e.g., integrity, honesty, fairness, loyalty, etc.)? What virtues are displayed? What action(s) displays vices (e.g., dishonesty, deceit, selfishness, etc.)? What vices are displayed?

Rights Approach
There is recognition of a core set of human rights. Where a human right exists, there must also be a duty or responsibility to recognize, support and acknowledge that right. Which action protects and furthers the rights of the stakeholders? When stakeholder rights are in conflict, how do you decide whose rights take precedence? Which action would you want done to you if the roles were reversed?

Approaches to Assess Alternatives Ethically

Distributive Justice Approach
Distributive justice is conceptualized as fairness associated with outcomes decisions and distribution of resources.
The outcomes or resources distributed may be tangible (e.g., pay) as well as intangible (e.g., praise). Distributive justice affects performance when efficiency and productivity are involved (CohenCharash & Spector, 2001). Improving perceptions of justice increases performance (Karriker & Williams, 2009).

Which action produces a fair distribution of benefits and costs for all stakeholders? How do you determine what is fair? Who decides? What action provides stakeholders with equal liberty and equal opportunity?

Laws governing HRM in India Indian Constitution

Article 14 there shall be equal protection of the law and equality before the law the Courts or any Law enforcement agency should not discriminate between a man and a woman Article 15 guarantees the right against discrimination Article 15(3) talks about the special protection for women Article 16 provides the right to equal opportunity in terms of public employment irrespective of the sex of the person

More Acts related to HRM

Maternity Benefit Act - 90 days of paid leave on delivery or on miscarriage Equal Remuneration Act, 1976 - Payment of equal remuneration to men and women workers Industrial Disputes Act, 1947 Regulating the rights of the employers and employees for investigation Empowers the government to constitute a court of inquiry, for inquiring into any matter pertaining to an Industrial Dispute Provision for resolving the Industrial Dispute by way of arbitration, which leads to a final and binding award Trade Dispute Act, 1929 - Provisions for restraining the rights of strike and lock out but no machinery was provided to take care of disputes.

Laws in other countries (UK)

Equal Pay Act, 1970 - covers everything relating to pay and conditions

Sex Discrimination Act, 1975 covers those areas which fall outside the purview of the EPA

EPA implies an equality clause into the employment contract ensuring that there is no less favourable treatment than the treatment a comparable person receives

Sex Discrimination Act covers four forms of discrimination, direct, indirect discrimination, harassment and victimisation

Also includes contracts of service; apprenticeship and personal contracts for execute any work or labour and related expressions

The Equality Act, 2006, has a provision creating a public duty to promote equality on the grounds of gender

Cases & Examples

Jet Airways Case IT Companies CapGemini Walmart

Ethical issues in Jet Airways retrenchment case

Oct 16, 2008, Jet announced that it would lay off nearly 1,100 of its staffs to streamline operation. A day after it had already laid off around 800 of its cabin crew members. Simultaneously announced second phase of lay-off of 1100 employees, mainly from departments like flight attendant, cockpit crew etc November 2008, Jet decided on a 20% cut in the salaries of its pilots, engineers, and some other staffs.

Case

Ethical issues

Employees were FIRED with no PRIOR NOTICE The entire force of unconfirmed staff was being laid off on a 30day compensation package Company took action only against lower staffs. Where would those 1900 employees go? Why took action only against lower grade staffs? Senior management was very less affected. What would be the future of those students currently taking courses in cabin crew, captain etc?

Case IT companies in India

Nasscom in nexus with IT companies promoting dubious policies To restrict attrition proposal for a longer notice period of 3 months Collecting caste information

Mandatory relieving letter, experience letter Blacklisting sharing exaggerated information with networked companies to breed sub-ordination and obedience Forcing new joiners to accept bizarre policies like flexibility of working in night shifts and weekends etc

Case Cap Gemini

During recession, the company sent out an email to employees saying they need not serve a 90-day notice period when they quit their jobs

The notice period was reduced to 30 days

This method has been adopted to lay off around 2,000 employees and results in huge savings

as per Indian laws, companies cannot shrink the notice period in the case of permanent employees. But it can be done with those still on probation

Few who decided to raise their voice to the HR was responded by de-activating their email IDs

Case WALMART
Case
Collision with a trailer left Deborah Shank handicapped A court settlement of $ 417k from the trucking company After 6 years Walmart sues her for $470k, it had spent on her treatment

Issues

In the fine print of employment contract it said that money won in damages after an accident belonged to Wal-Mart Wal-Mart was fully entitled to the money. Judge had to rule in favor of Walmart Treatment of employees as a commodity Lack of compassion

Ethics in HR Function - Survey

Survey Results
Do you think you can perform your role while being ethical at the same time? Yes 34%

No 66%

How important are the rules and regulations(ethical) for a company?

Not important 17%

Very Important 38%

Little ImportanT 45%

Survey Results
What according to you is the biggest problem wrt an ethical code of conduct in HR? 60% 50% 40% 30% 20% 10% 0% Less ease of working Low Awareness Tough Reporting Procedure Public firms 30% 50% 40% 40% 50%

10%

Private firms

Survey Results
What can be the most effective way to prevent unethical practices in HR 90%

80%
70% 60% 50% 40% 30% 20% 10% 0%

85%

55% 45%

60%

Code of conduct

Auditing

Reporting procedure clarity

Training

Survey Results
In HR function, how often do you have to manipulate the employees to working hard towards the organizational goal? 50% 45% 40% 35% 30% 25% 20% 35% 45%

20%

15%
10% 5% 0% Always Never Yes but according to situation

Survey Results
How strongly is the HR function in your company committed towards ethical behaviour and morality in its routine activities? 50% 45% 40% 35% 30% 25% 20% 25% 30% 45%

15%
10% 5% 0%

Strongly

Weakly

Not at all

References

http://hr.blr.com/HR-news/HR-Administration/WorkplaceEthics/Common-Reasons-for-Unethical-Behavior/

http://highered.mcgrawhill.com/sites/dl/free/0077111028/536508/EHR_C02.pdf
http://www.shrm.org/education/hreducation/documents/gusdorf_ethic s%20in%20human%20resource%20management_im_final.pdf http://www.managementstudyguide.com/ethics-in-human-resourcemanagement.htm http://www.managementstudyguide.com/ethical-issues-in-hr.htm Paper on A ROLE FOR HR IN CORPORATE ETHICS? by Lj Van Vuuren and Rj Eiselen

THANK YOU