Ethics in Human Resource Management Myrna L. Gusdorf, MBA, SPHR 2010.

Ethics in Human Resource Management

Myrna L. Gusdorf, MBA, SPHR 2010

Ethical Theories

Class 1

Learning Objectives

• By the end of this module, students will:> Compare and contrast various ethical

theories.> Use ethical theories in the decision-making

process.> Apply ethical theories to the analysis of HR

case problems.> Identify various solutions to ethical case

questions.> Defend their recommended solutions using

the ethical theories discussed in class.

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Ethics Defined

• A science of human choice concerned with the basic guidelines for how one ought to live one’s life. It answers the question, “How should I live?”

• The study and philosophy of human conduct with an emphasis on determining right and wrong.

• The systematic study of general principles of right and wrong behavior.

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Are Ethics and Morals the Same?

> Ethics refers to the systematic study of general principles of right and wrong behavior.

> Morals and morality describe specific, culturally transmitted standards of right and wrong.

> Both ethics and morality involve decisions about right and wrong.

Johnson, (2007).

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Deciding What’s Right and Wrong: Philosophical Theories

• Utilitarian Theory

• Categorical Imperative/Principle of Rights

• Distributive Justice

• Ethics of Care

• Aristotle’s Virtue Ethics

• Ethical Relativism

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Principles of Utilitarianism

> The action taken is ethical if it produces the most good and the least harm for everyone affected.

> Judgment is based on a cost/benefit analysis.

• Some costs and benefits are difficult or impossible to measure.

> Focus is on the results of the action, not on how the results are achieved.

• Assumes the end justifies the means.

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Principles of the Categorical Imperative

> Sometimes called the Principle of Rights.> An action is ethical because the individual

engaging in the action has a moral right to do so.

> A right is an entitlement intended to protect someone’s interests.

> The Golden Rule:• You should engage in an action only if you agree

everyone else should do it, too.• What if the actions were reversed? You should be

willing to have the action done to you.

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Principles of the Ethics of Care

> The morally correct action is one that appropriately cares for the individuals involved.

> A person’s moral obligations are not to follow impartial principles but rather to care for the good of particular individuals.

> This theory emphasizes special relationships.

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Principles of Aristotle’s Virtue Ethics

> The morally correct action is the one that displays good character virtues.

> A virtue is a character trait that manifests itself in the actions of the individual.

> Virtues are traits such as:• Honesty. • Fairness.• Integrity.• Loyalty.

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Principles of Ethical Relativism

> Relativism claims there are no universal ethical principles. Each society determines what is morally right and wrong.

> Because different societies have different moral beliefs, there is no rational way to determine if an action is morally right or wrong.

> Therefore, it would not make sense to criticize any standards in a society as long as its members conform to the standards.

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Moral Development and Making Ethical Decisions

Class 2

Moral Development

• Are individuals born with moral judgment or, like language, does it develop over time?

• How does moral reasoning develop?• Jean Piaget’s two stages of moral

development.• Lawrence Kohlberg’s six stages of moral

development.

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Kohlberg’s Six Stages of Moral Development

• Stage 1: Heteronomous Morality > Obedience and punishment orientation.> Motivated by fear of punishment only.> No concern with the interests of others.> Doesn’t care if actions harm other people.

• Stage 2: Individualism> Egoistic. Actions based on self-interest. > Will follow the rules if it is in own self-interest.> Motivated by incentives or fear of punishment. > Right is “what’s fair” or an equal exchange.

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Kohlberg’s Six Stages of Moral Development

• Stage 3: Conformity and Relationships> Mutual relationships, desire to be a good person.> Approval-oriented, conforms to the majority.> Living up to what is expected by people close to

you.

• Stage 4: Social System and Conscience> Respect for authority, maintaining the social order. > Laws are to be upheld.> Values institutions and the social system as a whole.> Empathy for individuals with whom he/she interacts.

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Kohlberg’s Six Stages of Moral Development

• Stage 5: Social Contract and Individual Rights> Acceptance of fundamental values and rights.> Willing to make personal sacrifices if sacrifice will

produce benefit for others. > Unlikely to engage in unethical behavior.

• Stage 6: Universal Ethical Principles> Individual chooses to live life according to universal

moral principles; i.e., justice, human rights, respect for individual dignity.

> Unlikely to engage in unethical behavior.> Acts according to ideals regardless of the reactions

of others; the whistleblower.

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Kohlberg’s Critics

• Variables in moral development:> Culture.> Gender.

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Moral Judgment and Moral Conduct

What do you think?

• Is there a link between moral judgment and ethical behavior?

• Do people always behave in a way that embodies their moral judgment?

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What Makes Moral People Behave Unethically?

• Research findings:> The desire to conform to one’s peers.

• Environmental pressures.

> Rigid hierarchy. > Fear, insecurity. > Ambition.

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What Makes Moral People Behave Unethically at Work?

• Because ethical action takes place in a social context, situational variables heavily influence ethical behavior.> Work characteristics.> Organizational culture.> Immediate job context.

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Unethical Behavior in the Workplace

• What makes people engage in unethical behavior?> Insecurity, fear of job loss.

• Downsizing, mergers, hostile takeovers, “rank and yank” performance evaluation systems.

> Psychological insecurity.• Bosses who are threatening and controlling.• Competitive environment.

> Materialistic focus. • Focus on the bottom-line concerns above

values.• Bonus pay systems with earnings “at risk.”• Large pay disparities between levels.

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Making Ethical Decisions

• Why are ethical decisions so difficult?> No one clear solution.> Competing interests.> Many unknowns.> Pressure.

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A Process for Making Ethical Decisions

• Recognize an ethical issue.• Get the facts.• Evaluate alternative actions.• Make a decision and test it.• Act and reflect on the outcome.

Source: Markkula Center for Applied Ethics

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Using the Principles of Ethical Theories to Evaluate Your Options• Utilitarian

> Which option will produce the most good and do the least harm?

• Categorical Imperative/Rights> Which option best respects the rights of all

stakeholders?• Distributive Justice

> Which option produces a fair distribution of benefits and costs for all stakeholders?

• Caring> Which option cares for people with whom you have a

special relationship?• Virtue

> Which option leads you to act as the sort of person you want to be?

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Human Resource Management and Ethical Organizations

Class 4

Ethics Compliance Programs

• Written code of ethics.• Written standards of conduct.• Ethics training.• Mechanism for employees seeking advice.• Reporting network where employees can report

inappropriate behavior without fear of retaliation.• Ethical behavior as a part of the performance

appraisal system.• Discipline for violating ethical standards.

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Ethics Compliance Programs

“But we’ve been doing that …and ethical violations are still commonplace.”

Even Enron had a code of ethics!

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Creating a Culture of Ethics

• It’s not the compliance program–it’s the culture.• Management sets the tone.

> Managers must model ethical behavior. They must “walk the talk.”

> Employees must trust management at all levels.> Employees learn appropriate behavior by what they

see managers doing.> The importance of ethics must be communicated at

all levels of the organization.> Reward ethical behavior. Assess how the job was

done, not just “making the numbers.”

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HR’s Role in Organizational Ethics

• Develop policies.• Communicate with employees.• Provide training.• Handle inquiries. • Provide assistance in resolving difficult situations.

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Fostering Ethical Organizations

Strategic Management> Align organizational systems to support ethics.

• Ethics must be an integral part of the organization’s strategy and values.

> Organization leaders must champion ethics. • Management sets the tone.• Leaders must demonstrate and foster integrity.

> Champion diversity and equity across the organization.

> Ensure stakeholder balance that addresses conflicting interests.

> Focus on the long-term perspective.

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Fostering Ethical Organizations

Staffing: Recruitment and Selection> Ensure equal opportunity practices.> Recruit ethically responsible people.> Make ethics a selection criteria.> Interview for ethical values.

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Fostering Ethical Organizations

HR Development• Provide ethics training for all employees.• Ensure equal access to development and career

opportunities.• Performance management and employee appraisal.

> Balanced scorecard assessment.> Appraise ethical behavior as well as task

accomplishment. “Hitting the numbers” is not enough.

> Give employees specifics on how to improve.

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Fostering Ethical Organizations

Compensation and Reward Systems> Decrease pay inequities.

• Control executive compensation.

> Reward group or organization success. > Provide incentives for cooperation.

• Gainsharing.

> Focus on intrinsic motivation. > Continuous learning.> Quality management.

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Fostering Ethical Organizations

Employee Safety and Health• Ensure safety goes beyond compliance.• Make health and safety a priority and not

just words on paper.• Provide safety training and protective

equipment.• Incorporate policies that protect employees

and the organization from risk.• Encourage open dialog and

communication.

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Fostering Ethical Organizations

Employee Relations• Full compliance with all employment and labor

regulations.• Training for all supervisory employees.• Open communication.• Equity in promotion and retrenchment

processes.• Skip-level interviews.• Employee grievance systems.• Whistleblower protection. • Exit interviews.

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Fostering Ethical Organizations

Linking HR Management and Ethical Organizations

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