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Ethics and HRM

Ethics and HRM. K. Michele Kacmar . Ethics, Morality and Values. Ethics is the study of morality Morals are the standards used to judge right and wrong Values are the degree of conviction about the way to conduct life . Conviction.

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Ethics and HRM

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  1. Ethics and HRM K. Michele Kacmar

  2. Ethics, Morality and Values • Ethics is the study of morality • Morals are the standards used to judge right and wrong • Values are the degree of conviction about the way to conduct life

  3. Conviction • The degree of conviction to your values can be described as primary, secondary, or peripheral • Primary – core values, unchanging • Secondary – Important, but changeable occasionally • Peripheral – Values that are known but not lived by

  4. How Do We Get Values? • Parents, family and friends • Experiences • The environment (media, education)

  5. Conflict of Values • Dramatic outcomes can occur when individuals and groups hold conflicting core values: • Religious wars • Business scandals • Crime

  6. Environmental Factors • Over the last decade, ethical scandals in business have been on the rise: • Enron • WorldCom • Tyco • Health South

  7. How To Stop Unethical Behavior • A combination of external regulations and compliance programs and voluntary corporate ethics programs is the most effective way to combat inappropriate corporate behavior (Trevino, Weaver, Gibson, & Toffler, 1999).

  8. External Regulations • Sarbanes-Oxley Act (SOX) • Requires CEOs and CFOs to sign statements making them personally responsible for the accuracy of the quarterly financial statements • Knowingly misrepresenting the financials opens them up to punishments including fines and jail time • Protection for whistleblowers

  9. Other External Regulations • Other external regulations include regulations related to: • Minimum wage • Overtime compensation • Discrimination • Health and Safety • Privacy

  10. Organizational Responses • Codes of ethics including: • Explicit standards of rules to be followed • Corporate values statements

  11. Explicit Standards • Explicit standards define precisely acceptable and unacceptable conduct such as accepting gifts and the amount allowable

  12. Corporate Values Statements • Describes the core values the company wants its employees to exhibit including: • How employees are to treat one another • How employees are to treat customers and stockholders

  13. Effective Values Statements • Must come from the top with the CEO being directly involved in its development • Top management must actively disseminate the values statement and then live by it • The values statement must be focused

  14. HR Responses • Conduct surveys to determine: • What behaviors are routinely being rewarded and reinforced • What values and attitudes are prevalent • How strong the pressure to engage in misconduct is

  15. HR Responses Continued • Take steps to eliminate and discourage reasons for misbehavior and introduce and encourage reasons to behave ethically

  16. HR Responses Continued • Develop an appraisal system that rewards individuals for ethical behaviors and punishes those who act unethically

  17. HR Responses Continued • HR can use its expertise to communicate with the workforce to get out the ethical message

  18. Costs of Corporate Ethics Violations • $7 trillion in stock market losses • Loss of jobs and retirement savings by employees

  19. Costs of Corporate Ethics Programs • Costs of implementing and maintaining compliance to create an ethical business environment

  20. Human Costs • Unethical business environments can: • Demotivate individuals • Make good employees leave the company • Attract unethical employees • Lead to the lack of trust by the employees for the company

  21. Ethics Effectiveness Quick-Test • Ethics Effectiveness Quick-Test asks eight questions about twelve different areas that can help to increase the ethical effectiveness in an organization

  22. Guidelines for Fostering an Ethical Culture • Have a well developed policy and procedures manual • Enforce policies • Reward compliance • Recruit ethical employees • Create a division to oversee ethics

  23. Conclusion • Whenever you are required to make a difficult decision, especially one that is ethically challenging, select an option that you would be comfortable describing to the nation on the evening news

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