Topic 10: Ethics of HRM

1. Topic 10: Ethics of HRM

2. Topic overview Approaches to ethics 2. Methods of ‘ensuring’ ethical practice in organisations 3. Ethical practice vs. Ethical reflection 2 www.newcastle.edu.au

3. Readings Required reading: • Winstanley, D and Woodall, J (2000). The ethical dimension of human resource management, Human Resource Management Journal 10(2), pp. 5-20. Recommended readings: • Kochan, T. (2004) Restoring trust in the human resource management profession, Asia Pacific Journal of Human Resources 42(2): 132-146. www.newcastle.edu.au

4. Reading: Winstanley and Wood What are ‘ethics’? How do ‘ethics’ relate to an organisation? Who, in an organisation, has responsibility for ethics? Why? What constitutes ethical behaviour for HRM/ER professionals?

5. Some ethical frameworks are more relevant to the study and practice of HRM than others ....

6. Moral Preferences Scale Please consider each style below and mark the extent to which you would prefer it to be the dominant style in the organization you work for on a scale of 1–5 (with 5 indicating ‘to a very great extent’ and 1 indicating ‘not at all’). 1. Organizational decisions should be based on a fair distribution of organizational resources according to each employee’s contribution 2. In the organization people should look out for themselves in order to accomplish their goals; therefore decisions should maximize benefits to the decision maker 3. The organization should be managed in a way that will allow all employees to enjoy the benefits the organization can provide. The organization should aim to maximize the benefits received by employees as a group even at the expense of one or some of the employees 4. The organization should be managed according to management principles customarily used in similar business organizations 5. Organizational decisions should be based on good intentions so as not to wrong employees or harm them in any way 6. Organisational decisions are made by people; and good people can be trusted to make ethical decisions Adapted from Shultz and Brender-Ilan, 2004:312

7. Early approaches to ethics Deontological (from the Latin meaning ‘duty’) Actions are inherently right or wrong, regardless of their consequences Commonly associated with religious belief Eg. Kant – we should only act in a way we would want others to act (hence Kantian ethics) We should treat others with respect and dignity Teleological (from the Greek meaning ‘goal’) the moral quality of a particular action depends on the benefits that it yields rightness or wrongness of our actions are determined by a comparative assessment of their consequences eg. Mill – we should act to provide the greatest good to the greatest number (hence utilitarianism

8. Making different HR decisions based on ethical perspective …. • How would someone who takes a Kantian ethical perspective regard employees, applicants and former employees? • How would someone who takes a utilitarianethical perspective regard employees, applicants and former employees?

9. Other approaches to ethics in management Rights Basic rights for all – eg. privacy, safety, freedom of speech In the context of work to make certain decisions, to be given procedural and distributive justice Often framed in terms of reciprocal rights & responsibilities Can extend beyond employees to stakeholders, recognising range of interests Also cultural/ethical relativism – ethical behaviour depends on context – and egoism – each person should do what is right for them. Values humanistic values (OD) – eg. quality of life, health, potential, empowerment, freedom, responsibility, dignity, integrity, openness, participation, democratic decision making Virtue ethics makes human virtues or excellences rather than principles central to ethics. Ethics is about the kind of person one is more than about the kind of acts one performs. Communitarianism – shared values of individuals within a community or purpose

10. Moral Preferences Scale Which of these statements relate to which approach to ethics? 1. Organizational decisions should be based on a fair distribution of organizational resources according to each employee’s contribution 2. In the organization people should look out for themselves in order to accomplish their goals; therefore decisions should maximize benefits to the decision maker 3. The organization should aim to maximize the benefits received by employees as a group even at the expense of one or some of the employees 4. The organization should be managed according to management principles customarily used in similar business organizations 5. Organizational decisions should be based on good intentions so as not to wrong employees or harm them in any way 6. Organisational decisions are made by people; and good people can be trusted to make ethical decisions Adapted from Shultz and Brender-Ilan, 2004:312

11. Three types of ethical challenge facing HR managers • Requiring the need for discernment – determining the right thing to do in very complex situations • (this may turn into type 2 or 3 once the HR manager determines a course of action) • Addressing a conflict between the HR manager’s professional judgement of what is right and their responsibility as an agent of the employer to do what the employer asks • Addressing a conflict of interest (or the appearance of a conflict of interest) when the HR manager’s personal interest differs from the responsibility as an agent of the employer

12. Methods to ensure Ethical Practice in Organisations • How do organisations seek to ensure that employees and associates behave ‘ethically’? • How well do these methods work?

13. Method 1: Code of practice Eg. Code of conduct for The University of Newcastle The University of Newcastle is firmly committed to the principles of cooperation, collaboration, inclusion, flexibility and innovation. As a result, the University is a model for integrity, excellence, achievement and has a clear sense of identity.  ... The code aims to maintain public trust and confidence in the integrity and professionalism of our graduates, the teaching and learning, research and research training, and community service activities of the University and the facilities and services that make up the University experience. This code applies to students, staff, [and others eg. University Council] ... What is required to make a Code of Conduct effective?

14. Method 2: Organisational values Values can be defined as: “central desires or beliefs regarding final states or desirable conducts that transcend specific situations, guide the choice and evaluation of our decisions and, therefore of our conducts, becoming an integral part of our way of being and acting to the point of shaping our character … Values are normative: they tell us how we should behave - although they are often presented in positive terms.” Can organisations have values? Argandona 2003: 16

15. A Clash in Values? Which values might come into conflict? How would you decide which is most important? Values espoused by public sector managers in a US study Equity Efficiency Professionalism Political responsiveness Merit

16. Method 3: Whistleblower protection • One definition of ‘whistleblowing’ is: • … the disclosure by organisation members (former or current) of illegal, immoral or illegitimate practices under the control of their employers to persons that may be able to effect action. [Select Committee, 1994] • In Australia, legislation is generally limited to people with information about public sector organisations • Protections may include anonymity, protection from reprisal or prosecution • What might barriers to effective whistleblower protection within private sector organisations?

17. Method 4:Special role of HRM managers HRM managers are often seen as employee champions • Promoting initiatives such as family-friendly workplaces, back-to-work programs • Ensuring that line managers abide by regulation/legislation eg. EEO, fair dismissal • Providing (confidential?) counselling/welfare services • Promoting benefits of training and development • Ensuring good process in application of policies, agreements eg. Access to leave

18. Method 5:Professionalism Traditionally linked to Bodies of recognised professional knowledge Roles where poor practice/unethical practice has a potentially significant impact on clients/patients Eg. medicine, law, engineering More recently psychology, and now HRM Relevance/ importance depends on? • Acknowledgement of role of professional body • sanctions

19. Australian Human Resources Institute HR competencies Model Where is employee champion?

20. AHRI model of excellence

21. Methods depend on Understanding of “ethics” and values Perceptions of the role of organisations in promoting or ensuring ethical behaviour Available or appropriate methods Societal / institutional / organisational context Resources available?

22. Ethical practice vs. Ethical reflection So, while HR professionals and academics might well be more inclined to investigate potential options for action, such as devising and upholding codes of practice or establishing procedures for ‘whistleblowing’ and ‘ethical ombudsmen’ or introducing social auditing or staff charters, they might be less inclined to reflect on the ethical principles guiding such actions and the inevitable value conflict and dilemmas that arise. [Winstanley and Woodall 1999: 8]

23. Can the interest of employees and the interests of business really coincide? What happens when they are in conflict? And what role should HR managers take when they do?

24. Ethics and HRM professionals [HR managers] face constant ethical pressure . . . . [They] straddle the often fine line between the individual rights of employees and corporate interests . . . . As industries restructure, merge, downsize and expand internationally, the HR manager’s work becomes even more complicated. Human rights versus corporate profit will always be a tightrope these professionals must walk in making decisions. [Weiss, 1994: 49 in Martin and Woldring, 2001:245]

25. What processes can be used to encourage ethical inquiry, reflection and debate? Winstanley and Woodall 2000

26. References Argandoña, A (2003) Fostering Values in Organizations, Journal of Business Ethics, 45(1/2): 15-28 Australian Human Resources Institute webpage Lafer, Gordon (2005) The critical failure of workplace ethics, in Budd, J and Scoville, J (eds), The Ethics of Human Resources and Industrial Relations, Illinois, Labor and Employment Relations Association, pp. 273-297 Longstaff, S. (1995) Ethical issues and human resource development: Some tentative thoughts, St James Ethics Centre, Sydney, sourced 26 March 2009, http://www.ethics.org.au/about-ethics/ethics-centre-articles/ethics-subjects/human-resources/ Martin, G. and Woldring, K. (2001)Ready for the mantle? Australian human resource managers as stewards of ethics, International Journal of Human Resource Management, 12(2):243–255 Renwick, D. (2002) HR managers: Guardians of employee wellbeing? Personnel Review, 32(3): 341-359 Select Committee on Public Interest Whistleblowing (1994), In the Public Interest, Senate, Canberra, pp. 7–12. Shultz, T. and Brender-Ilan, Y. (2004) Beyond justice: introducing personal moral philosophies to ethical evaluations of human resource practices, Business Ethics: A European Review, 13(4):302-316 Sillanpaa, M and Jackson, C (2000) Conducting a Social Audit: Lessons from the Body Shop Experience, in Winstanley, D and Woodall, J (eds) Ethical Issues in Contemporary Human Resource Management, New York, Palgrave Macmillan, pp. 227-49 Sternberg, E (2000) Just Business: Business Ethics in Action, 2nd edition, New York, Oxford University Press Winstanley, D. and J. Woodall (2000) 'The ethical dimension of human resource management', Human Resource Management Journal 10(2): 5-20