HRM Ethics

HRM Ethics

• People learn business management automatically even before knowing what ‘Management’ is- Peter Drucker

• To many people management is synonymous with business management

• But business management is only a part of management

• For a better understanding of HRM Ethics, it is essential to know what Management is, what is HRM, what is Business, what is Ethics and what is Business Ethics.

Definition-Management• Management is the process of planning, organizing,

directing and controlling of organizational resources in order to achieve personal, organizational and social goals effectively and efficiently

• This definition envisages the use of organizational resources including HR very effectively and efficiently to achieve ends without compromising individual or organizational or social goals, i.e. there must be equilibrium among these factors

• The HRM implication is that HR (People) can be used as a means to achieve organizational and social goals, but at the same time, it should not be forgotten that they have their own ends, i.e. in certain aspects they are the end in themselves, even in the organizational context

Definition-HRM• HRM means a process of planning, organizing,

directing and controlling of procurement (recruitment & selection), development (training), compensation (salary, wages & other benefits), appraisal (actual performance & potential performance), maintenance (welfare & record-keeping), and separation (retirement, resignation, retrenchment, etc) of employees or personnel or HR of the organization in order to achieve personal, organizational and social goals effectively and efficiently.

Definition-HRM• In this definition, there are two types of functions for the

HR Manager• Managerial functions-planning, organizing, directing and

controlling• Operative functions- procurement, development,

compensation, appraisal, maintenance and separation• Here, the HR Manager is applying all managerial

functions positively in each of the operative functions to maintain equity, equality and justice. In some operative functions (compensation, appraisal, maintenance and separation) s/he has to maintain equity, while in some others (procurement, development, etc) s/he has to maintain equality and individual and social justice. It is also implied that HR (employees) must play their duties to achieve the organizational and social goals effectively and efficiently

Definition-Business• Business is a process of carrying out

economic activities (providing goods and services) by any individual or organization or corporation or partnership firm or franchisee in order to generate profit (return on investment) within the legal and moral framework

• This definition implies that any business activity/decision has three aspects: Economic, Legal and Moral (ethical). One aspect cannot be compromised for another

The Organization

• An organization is made of economic and social (human) elements and operates within the legal framework

• In an organization the human element cannot be compromised for the economic element

What is Ethics?

• Ethics is a set of moral principles or values

• Ethics are the principles, norms and standards of conduct governing an individual or group

• Ethics is a rational inquiry into how to act and how to lead one’s life

What is Business Ethics?• Business ethics are moral principles that define

right and wrong behaviour in the world of business

• Business ethics is the evaluation of business activities and behaviour as right or wrong

• Business ethics is the application of general ethics to business behaviour

• These definitions say that business ethics is nothing but an extension of individual/group ethics to business situations. Also it can be understood that there can’t be different moral standards for personal life and business life. Business ethics is essentially an applied ethics.

What is HRM Ethics?

• 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

Hard and Soft HRM

• Hard HRM- where employees are viewed instrumentally as a means to achieve organizational goals

• Soft HRM- where employees are viewed as a subject-in-themselves. Soft HRM promotes employee rights, empowerment, involvement, participation, etc

• Both soft and hard HRM can be considered as ethical under “utilitarianism” concept (greatest good to greatest number), but deontological theory may accept only soft HRM as ethically correct and not hard HRM

(Deontological ethics or deontology is an approach to ethics that focuses on the rightness or wrongness of intentions or motives behind action such as respect for rights, duties, or principles, as opposed to the rightness or wrongness of the

consequences of those actions.)

Stakeholder theory and HRM ethics

• It says that “the corporation and its managers are responsible for the effects of their actions on others” and that “the corporation should be managed for the benefit of the stakeholders, that is, those who affect or can be affected by the corporation”

• This theory also supports “utilitarianism” in HRM ethics

To what extent should the organization follow HRM ethics?

Here, the two ethical concerns are 1. To what extent should people be used as a means to

an end2. To what extent the mgt has to act in the interest of the

employeesThe last part of the definition of HRM “effective and efficient” utilization of HR supports the first concernThe part “to achieve personal/individual goals” in the definition supports the second concern

The definition of HRM clearly says that organizational interest cannot be compromised while doing justice to employees and vice-versa

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 égal, 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 Reality of HRM

Flexibility Mgt can do what it wants

De-layering Reducing the no. of middle mgrs

Downsizing/Rightsizing Redundancy

New working patterns Part-timers to replace full-timers

Empowerment Making people take risk/responsibility

Training & Development Manipulation/Exploitation

Employability No job/employment security

Recognizing individual contribution Undermine the trade union and collective bargaining

Teamwork/synergy Reducing the individual’s discretion

Employees’ rights and dutiesRights Duties

To work Loyalty to the firm

For just compensation Respect for current legal and moral norms

To free association and strike Respect the rights of the employer

For privacy Just contribution to the organization

For freedom of speech Maintain secrecy/confidentiality

To due process Cooperation with boss/subordinates

For participation

For healthy and safe working conditions

To job satisfaction

Employers’ rights and duties

Rights Duties

Demand minimal productivity from employees

No discrimination in rules for recruitment and conditions for firing

Loyal cooperation from employees Fair compensation

Requirement of correct behaviour at the workplace

Work oriented code of conduct

No disruption in work Acceptance of criticism from workers

Peaceful ways of settlement Acceptance of labour court jurisprudence in conflicts

Improving QWL

Some HRM ethics for discussion

• Privacy

• Individualism vs Collectivism

• Restructuring

• Wages and salaries

• Sexual harassment in the workplace

• Discrimination

• Whistle-blowing

• Affirmative Actions

References

• The Economic Times, October 20, 2006

• Murthy,C.S.V, Business Ethics, Himalaya Publishing House, 2nd edn, 2006

• Johnson,O.A and Reath.A, Ethics, Thomas Wadsworth, 2004

• www.jyu.fi

• www.wikipedia.com

• www.Answers.com