Building an Ethical CultureThe role of HRM

Professor Pauline Stanton

School of Management

Do we have a problem?

How do we respond?

Blame, name and shame…….and jail?

……..regulate, regulate regulate

……………………..more codes of conduct and compliance

………………………... more policies and procedures

………we undermine trust and create risk averse organisational cultures

Role of HRM

Designing and implementing best practice recruitment and selection, promotion, performance and reward

Developing Codes of Conduct, disciplinary procedures

Role of Leadership

‘The tone from the top’ ‘Walking their talk’ Graycar and Kelly 2014

Signalling theory: the strength of the HRM system

Distinctiveness: the features of the HRM system that capture the attention of staff and arouse interest in the goals: visibility, understandability, legitimacy of authority, relevance

Consistency: how the HRM message is encoded and interpreted: instrumentality, validity, consistent HRM messages

Consensus: agreement amongst employees on the perception of cause and effect relationship: agreement amongst principle decision makers, fairness (distributive, procedural and interactional)

Bowen D and Ostroff C (2004) Understanding HRM-firm performance linkages: The role of the ‘strength’ of the HRM

system” Academy of Management Review 29(2): 203-221

Distinctiveness

People know what is expected, why it is important and that the policies and processes are relevant and meaningful – otherwise they ignore them

If there are no policies and line managers hire and fire – Wild West as managers do their own thing – led to inconsistency ‘its not fair’

If there are too many policies and processes – policy overload – managers do their own thing – work arounds

Consistency

The policies are integrated and pull in the same direction

People are rewarded for the right behaviours not the wrong ones

People see the value of HRM systems and processes to help them do what they need to do

Consensus

Agreement – engagement with staff

Shared decision making

Organisational Justice

- Procedural

- Distributive

- Interpersonal

Leadership at all Levels: ethical challenges facing line managers

We might have to deal with large scale theft or fraud

But often it is more about

Difficult behaviours – bullying, unprofessional emails, moonlighting and misuse of company time or resources, the old mates/family network

Such difficult behaviours if left unchallenged lead to a toxic culture – staff don’t like it – mistrust, undermines team spirit

What don’t line managers challenge difficult unethical behaviours?

It’s too hard

I won’t get support from above

I have no real evidence only hearsay

The union will get involved

It will take too much of my time

I don’t know what to do and how to do it

It will go away

What can HRM practitioners do?

Not just focus on training……

Instead work with the line managers to identify and advise – build relationships with line managers – be at their side – brainstorm possible outcomes and pitfalls

Make sure that they have sensible, practical support

Don’t always be the expert – find help from the right people

Work with the leadership team to provide the tone from the top

An ethical culture is about openness and transparency

It is also about trust

Leadership at all levels as managers walk their talk

Questions and Comments?