The terms "accountability" and "social responsibility" refer to the way in which an
organisation is run and held responsible for its actions. The word "ethics" refers to actions that are held to be right or wrong. The debate about business ethics centres on whether the only responsibility of organisations and management is to maximise profits. This is the usual driving force behind the founding of an enterprise and is an assumption of most
microeconomic models used to analyse the behaviour of firms.
Most decisions that organisations make will be founded upon one of four basic beliefs:
Deontology: That the organisation has a responsibility to act in ways that respect the
fundamental rights of human beings (as if there is a set moral code that is larger than the organisation). The morality of the actions is to be considered, not just their consequences.
Utilitarianism: That the business should serve the greatest good of the greatest
number.
Teleology: That the end justifies the means, irrespective of the damage that is caused
to people on the way to utopia.
Egoism: That moral behaviour should be considered in terms of personal self-interest.
These are wider views of management responsibility. They can and often do conflict with the profit motive espoused by the purists.
Personnel management has always had an ethical dimension, being associated with people management but for many years personnel managers seemed to attempt to bury this aspect. This is due, in part, to business concerns with bottom line profits being at odds with the concept of a social role for businesses.
The 1980s and early 1990s saw a number of incidents within the business world that highlighted the consequences of unethical and immoral behaviour by businesses. At the same time, increasing involvement of the media in business affairs has resulted in members of the public being more informed and less tolerant of what they consider to be immoral business behaviour. Since then, there has been an increase in ethics, not just as a
personnel issue but more in terms of a general management issue, culminating in the appointment of a Minister for Corporate Social Responsibility in 2000. Now, walk into the reception of almost any large organisation and you'll probably find a statement of the corporate values pinned proudly on the wall.
In this study unit we will:
Examine the importance of ethics and values in the design of human resource strategies
Consider the development of action plans which reflect both organisational priorities and cultural preferences
Identify what constitutes ethical and unethical behaviour within the workplace
Investigate value statements and their practical implications
Consider issues of equality and diversity
Identify the benefits and problems associated with adopting an ethical approach to organisational practices.
B. MAIN ETHICAL ISSUES IN PEOPLE MANAGEMENT
AND DEVELOPMENT
It is not sufficient just to make a statement that the organisation is an ethical organisation or to express these ideas in a value statement. To be effective and to reap the benefits that are claimed for ethical management, these values must be translated into actual practice and must be reflected in all the systems and procedures used by the organisation.
In the same way that we acknowledged that human resource strategies needed to achieve a 'fit' with the business strategies of the organisation, so they must also be seen to 'fit' and to uphold the values and ethics of the organisation.
Case Study 1
At Ulster Bank Group, regular workshops were held in support of the value statements that we looked at earlier. Ulster Bank found these invaluable and in particular they provided information about areas where there were inconsistencies between what the company says and what it does. Staff highlighted, for example, that managers smoking in their offices despite a non-smoking policy wasn't in tune with the value of 'leadership by example'.
Human resource managers are in a unique position to ensure that ethics and value-based management is applied throughout the organisation, by ensuring communication and training programmes are in place. They can also set an example of good practice, by ensuring that all human resource strategies and practice comply with the code.
This compliance or fit is not always as straightforward as it might appear on paper.
It requires a very thorough investigation, to ensure that all policies meet the code, without ambiguity. Michel Syrett, chief executive of New Ways to Work and writing in People Management in 2000 noted that a token approach to implementing strategies based on ethical and value codes is bound to fail. Talking about the introduction of work-life balance initiatives, introduced in support of a family-friendly approach, he said: "It is sheer tokenism
to launch a work-life balance scheme involving, for example, access to parental leave, part- time working and sabbaticals, and then sit back and expect employees to rush in if their line
managers are unconvinced or resentful, or if their departments are overworked, under- resourced and unable to provide cover."
The Institute of Management recommend the following approach to value management:
Make the link between corporate strategy and the ethical values and vision of the organisation
Ensure you have top team commitment and that managers are prepared to ‘walk the talk’
Make sure there is clarity throughout the company about what the values really mean
Incorporate the values into a performance appraisal system
Develop open channels of communication, so employees can give and receive confidential advice and information
Measure and report on business performance in relation to the values of the organisation
Update and review the values regularly, through an inclusive process of dialogue with all employees; values must be shared if they are to be effective.
The Good Corporation Charter provides a useful perspective on ethical issues in HRM (www.goodcorporation.com):
The organisation provides clear and fair terms of employment.
There are clear employment terms and conditions for all employees
There is a process to ensure that the privacy of employees is respected
There is a clear disciplinary procedure that is applied fairly
There is an effective process to deal with employee complaints and grievances
Freedom of association and organisation of employees is respected
There are effective employee communication and consultation processes
There is a process to monitor compliance with relevant employment laws and regulations.
The organisation provides clean, healthy and safe working conditions.
There are procedures to ensure the provision of a healthy and safe working environment and the continuous improvement of health and safety performance
There are processes to provide adequate resources and training for the provision of a healthy and safe working environment
The organisation has a fair remuneration policy everywhere it operates
There is a process to ensure that employees know how and when their pay and benefits are determined
Local cost of living and market rates are taken into account when setting pay and benefits.
The organisation strives for equality and diversity for all present and
potential employees. It does not discriminate on the grounds of disability, colour, ethnic origin, gender, sexual orientation, age, religion, and political or other opinions.
The organisation encourages diversity and recruits, promotes and rewards employees on the basis of merit alone.
The organisation
encourages employees to develop skills and
progress in their careers.
All employees have appropriate learning and development opportunities to support their work
Employees have regular performance reviews that consider skills development and career prospects.
The organisation does not tolerate any sexual,
physical or mental
harassment or bullying of its employees.
There is a process to ensure that no forms of harassment, bullying or discrimination are tolerated.
The organisation employs only voluntary and
appropriately aged employees.
There is a policy not to employ forced, bonded or otherwise exploited labour
There are processes to ensure that
employment practices for young people follow internationally accepted standards.