MGT-351

Human Resource Management

Chapter-14
Ethics, Justice, and Fair Treatment
in HR Management

1
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Ethics and Fair Treatment at Work

The Meaning of Ethics
The principles of conduct governing

an individual or a group.
The standards you use to decide
what your conduct should be.
Ethical behavior depends on a
persons frame of reference.

Ethical Decisions
Normative judgments
Morality

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TABLE 141

Specific Observed Unethical Behaviors

Abusive or intimidating behavior toward employees

21%

Lying to employees, customers, vendors, or to the public

19%

A situation that places employee interests over organizational interests

18%

Violations of safety regulations

16%

Misreporting of actual time worked

16%

E-mail and Internet abuse

13%

Discrimination on the basis of race, color, gender, age, or similar categories

12%

Stealing or theft

11%

Sexual harassment

9%

Provision of goods or services that fail to meet specifications

8%

Misuse of confidential information

7%

Alteration of documents

6%

Falsification or misrepresentation of financial records or reports

5%

Improper use of competitors inside information

4%

Price fixing

3%

Giving or accepting bribes, kickbacks, or inappropriate gifts

3%

Source: From 2005 National Business Ethics Survey: How Employees Perceive Ethics at Work, 2005, p. 25. Copyright 2006, Ethics
Resource Center (ERC). Used with permission of the ERC, 1747 Pennsylvania Ave., N.W., Suite 400, Washington, DC 2006,
www.ethics.org. Reprinted in O. C. Ferrell, John Fraedrich, and Linog Ferrell, Business Ethics (Boston: Houghton Mifflin, 2008) , p. 61.
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Ethics and Fair Treatment at Work (contd)

A behavior may be legal

but unethical.

Ethics and
the Law

A behavior may be illegal

but ethical.
A behavior may be both
legal and ethical.
A behavior may be both
illegal and unethical.

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Ethics, Fair Treatment, and Justice

Components of
Organizational Justice

Distributive
Justice

Procedural
Justice

Interactional
(Interpersonal)
Justice

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What Shapes Ethical Behavior at Work?

Individual
Factors

The Organizations
Culture

Ethical Policies
and Codes

Ethical Behavior
At Work

Organizational
Factors

The Bosss
Influence

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TABLE 142

Principal Causes of Ethical Compromises

Senior
Mgmt.

Middle
Mgmt.

FrontLine
Supv.

Prof.
NonMgmt.

Admin.
Salaried

Hourly

Meeting schedule pressure

Meeting overly aggressive

financial or business
objectives

Helping the company survive

Advancing the career

interests of my boss

Feeling peer pressure

Resisting competitive threats

Saving jobs

Advancing my own career or

financial interests

Other

Note: 1 is high, 9 is low.

Sources: O. C. Ferrell and John Fraedrich, Business Ethics, 3rd ed. (New York: Houghton Mifflin, 1997), p. 28; adapted from Rebecca Goodell, Ethics in American
Business: Policies, Programs, and Perceptions (1994), p. 54. Permission provided courtesy of the Ethics Resource Center, 1120 6th Street NW, Washington, DC: 20005.

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What Is Organizational Culture?

Organizational culture
The characteristic values, traditions, and behaviors a

companys employees share.

How is culture is revealed?

Ceremonial events
Written rules and spoken commands
Office layout
Organizational structure
Dress codes
Cultural symbols and behaviors
Figureheads
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The Managers Role in Creating Culture

Clarify
Expectations

Organize Rites
and Ceremonies

Use Stories

Use Signs and

Symbols

Provide Physical
Support

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Human Resource Managements Role in

Promoting Ethics and Fair Treatment
Ethics
Training

Selection

Performance
Appraisal

Workplace
Aggression and
Violence

HRMRelated
Ethics Activities

Reward and
Disciplinary
Systems

HRs Ethics and

Compliance
Activities

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HRM-Related Ethics Activities

Selection
Fostering the perception of fairness in the processes

of recruitment and hiring of people.

Formal procedures
Interpersonal treatment
Providing explanations
Selection tools
Two-way communication

Training
How to recognize ethical dilemmas.
How to use ethical frameworks to resolve problems.
How to use HR functions in ethical ways.
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FIGURE 145

The Role of Training in Ethics

Source: Susan Wells, Turn Employees into Saints,

HR Magazine, December 1999, p. 52. Reproduced
with permission via Copyright Clearance Center.
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HRM-Related Ethics Activities (contd)

Performance Appraisal
Appraisals that make it clear that the company

adheres to high ethical standards by measuring and

rewarding employees who follow those standards.

Reward and Disciplinary Systems

The organization swiftly and harshly punishes

unethical conduct.

Workplace Aggression and Violence

Taking care that HR actions do not foster perceptions

of inequities that translate into dysfunctional

behaviors by employees.

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HRM-Related Ethics Activities (contd)

HRs Ethics Compliance Activities
Complying with the Sarbanes-Oxley Act of 2002

Requires that the CEO and the CFO of publicly traded

companies personally attest to the accuracy of their
companies financial statements and that its internal controls
are adequate.

Increased the need for ethics training and verification of

training.

Firms are using online ethics training programs to

comply with the acts requirements.

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Building Two-Way Communications

Perceptions of fair
treatment depend on:

Engagement

Explanation

Expectation
Clarity

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Employee Discipline and Privacy

Fair and Just

Discipline Process

Clear Rules
and
Regulations

A System of
Progressive
Penalties

An Appeals
Process

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Formal Disciplinary Appeals Processes

FedEx's Multi-Step Guaranteed Fair Treatment
Program
Step 1: Management review
Step 2: Officer complaint
Step 3: Executive appeals review

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Discipline Without Punishment

(Nonpunitive Discipline)
1. Issue an oral reminder.
2. Should another incident arise within six weeks, issue a
formal written reminder, a copy of which is placed in
the employees personnel file.
3. Give a paid, one-day decision-making leave.
4. If no further incidents occur in the next year, then
purge the one-day paid suspension from the persons
file. If the behavior is repeated, the next step is
dismissal.

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Managing Dismissals
Dismissal
Involuntary termination of an employees

employment with the firm.

Terminate-at-Will Rule
Without a contract, the employee can resign for any

reason, at will, and the employer can similarly

dismiss the employee for any reason (or no reason),
at will.

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Grounds for Dismissal

Unsatisfactory Performance

Bases for
Dismissal

Misconduct

Lack of Qualifications

Changed Requirements of
(or Elimination of) the Job

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Managing Dismissals (contd)

Fostering Perceptions of Fairness in Dismissals
Have a supervising manager give full explanations

of why and how termination decisions were made.

Institute a formal multi-step procedure (including

warning).
Establish a neutral appeal process.

Security Measures
Disable employee passwords and network access.
Collect all company property and keys.
Escort employee from company property.
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Avoiding Wrongful Discharge Suits

Bases for Wrongful Discharge Suits
Discharge does not comply with the law.
Discharge does not comply with the contractual

arrangement stated or implied by the firm via its

employment application forms, employee manuals,
or other promises.

Avoiding Wrongful Discharge Suits

Set up employment policies and dispute resolution

procedures that make employees feel treated fairly.

Do the preparatory work that helps to avoid such

suits.
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