hrm and ethics
TRANSCRIPT
Ethics and HRMEthics and HRM
K. Michele Kacmar K. Michele Kacmar
Ethics, Morality and ValuesEthics, Morality and Values
Ethics is the study of moralityEthics is the study of morality Morals are the standards used to Morals are the standards used to
judge right and wrongjudge right and wrong Values are the degree of conviction Values are the degree of conviction
about the way to conduct life about the way to conduct life
ConvictionConviction
The degree of conviction to your The degree of conviction to your values can be described as primary, values can be described as primary, secondary, or peripheral secondary, or peripheral • Primary – core values, unchangingPrimary – core values, unchanging• Secondary – Important, but changeable Secondary – Important, but changeable
occasionallyoccasionally• Peripheral – Values that are known but Peripheral – Values that are known but
not lived bynot lived by
How Do We Get Values?How Do We Get Values?
Parents, family and friendsParents, family and friends Experiences Experiences The environment (media, education)The environment (media, education)
Conflict of ValuesConflict of Values
Dramatic outcomes can occur when Dramatic outcomes can occur when individuals and groups hold individuals and groups hold conflicting core values:conflicting core values:• Religious warsReligious wars• Business scandalsBusiness scandals• CrimeCrime
Environmental FactorsEnvironmental Factors
Over the last decade, ethical Over the last decade, ethical scandals in business have been on scandals in business have been on the rise:the rise:• EnronEnron• WorldComWorldCom• TycoTyco• Health SouthHealth South
How To Stop Unethical BehaviorHow To Stop Unethical Behavior
A combination of external regulations A combination of external regulations and compliance programs and and compliance programs and voluntary corporate ethics programs voluntary corporate ethics programs is the most effective way to combat is the most effective way to combat inappropriate corporate behavior inappropriate corporate behavior (Trevino, Weaver, Gibson, & Toffler, (Trevino, Weaver, Gibson, & Toffler, 1999). 1999).
External RegulationsExternal Regulations
Sarbanes-Oxley Act (SOX)Sarbanes-Oxley Act (SOX)• Requires CEOs and CFOs to sign Requires CEOs and CFOs to sign
statements making them personally statements making them personally responsible for the accuracy of the responsible for the accuracy of the quarterly financial statements quarterly financial statements
• Knowingly misrepresenting the Knowingly misrepresenting the financials opens them up to financials opens them up to punishments including fines and jail punishments including fines and jail time time
• Protection for whistleblowers Protection for whistleblowers
Other External RegulationsOther External Regulations
Other external regulations include Other external regulations include regulations related to:regulations related to:• Minimum wageMinimum wage• Overtime compensation Overtime compensation • Discrimination Discrimination • Health and SafetyHealth and Safety• PrivacyPrivacy
Organizational ResponsesOrganizational Responses
Codes of ethics including:Codes of ethics including:• Explicit standards of rules to be followedExplicit standards of rules to be followed• Corporate values statementsCorporate values statements
Explicit StandardsExplicit Standards
Explicit standards define precisely Explicit standards define precisely acceptable and unacceptable acceptable and unacceptable conduct such as accepting gifts and conduct such as accepting gifts and the amount allowablethe amount allowable
Corporate Values StatementsCorporate Values Statements
Describes the core values the Describes the core values the company wants its employees to company wants its employees to exhibit including:exhibit including:• How employees are to treat one another How employees are to treat one another • How employees are to treat customers How employees are to treat customers
and stockholdersand stockholders
Effective Values StatementsEffective Values Statements
Must come from the top with the CEO Must come from the top with the CEO being directly involved in its being directly involved in its development development
Top management must actively Top management must actively disseminate the values statement disseminate the values statement and then live by it and then live by it
The values statement must be The values statement must be focusedfocused
HR ResponsesHR Responses
Conduct surveys to determine:Conduct surveys to determine:• What behaviors are routinely being What behaviors are routinely being
rewarded and reinforced rewarded and reinforced • What values and attitudes are prevalentWhat values and attitudes are prevalent• How strong the pressure to engage in How strong the pressure to engage in
misconduct is misconduct is
HR Responses ContinuedHR Responses Continued
Take steps to eliminate and Take steps to eliminate and discourage reasons for misbehavior discourage reasons for misbehavior and introduce and encourage and introduce and encourage reasons to behave ethically reasons to behave ethically
HR Responses ContinuedHR Responses Continued
Develop an appraisal system that Develop an appraisal system that rewards individuals for ethical rewards individuals for ethical behaviors and punishes those who behaviors and punishes those who act unethicallyact unethically
HR Responses ContinuedHR Responses Continued
HR can use its expertise to HR can use its expertise to communicate with the workforce to communicate with the workforce to get out the ethical message get out the ethical message
Costs of Corporate Ethics Costs of Corporate Ethics ViolationsViolations
$7 trillion in stock market losses $7 trillion in stock market losses Loss of jobs and retirement savings Loss of jobs and retirement savings
by employeesby employees
Costs of Corporate Ethics Costs of Corporate Ethics ProgramsPrograms
Costs of implementing and Costs of implementing and maintaining compliance to create an maintaining compliance to create an ethical business environment ethical business environment
Human CostsHuman Costs
Unethical business environments Unethical business environments can:can:• Demotivate individualsDemotivate individuals• Make good employees leave the Make good employees leave the
companycompany• Attract unethical employeesAttract unethical employees• Lead to the lack of trust by the Lead to the lack of trust by the
employees for the companyemployees for the company
Ethics Effectiveness Quick-TestEthics Effectiveness Quick-Test
Ethics Effectiveness Quick-Test asks Ethics Effectiveness Quick-Test asks eight questions about twelve eight questions about twelve different areas that can help to different areas that can help to increase the ethical effectiveness in increase the ethical effectiveness in an organization an organization
Guidelines for Fostering an Ethical Guidelines for Fostering an Ethical CultureCulture
Have a well developed policy and Have a well developed policy and procedures manual procedures manual
Enforce policiesEnforce policies Reward complianceReward compliance Recruit ethical employeesRecruit ethical employees Create a division to oversee ethicsCreate a division to oversee ethics
ConclusionConclusion
Whenever you are required to make Whenever you are required to make a difficult decision, especially one a difficult decision, especially one that is ethically challenging, select that is ethically challenging, select an option that you would be an option that you would be comfortable describing to the nation comfortable describing to the nation on the evening news on the evening news