HUMAN RESOURCES: SOCIAL RESPONSIBILITY AND BUSINESS ETHICS
Chapter Objectives • Describe changing attitudes toward social responsibility and business ethics. • Describe concept of corporate social responsibility. • Explain attempts at legislating social responsibility. • Explain what is meant by stakeholder analysis and the social contract. • Understand the model of ethics and describe human resource ethics. • Understand the importance of a code of ethics and describe ethics and the HR manager.
Changing Attitudes Toward Social Responsibility and Business Ethics • It includes……. • Foundations • Religious organizations • Community Development (Source: Social Investment Forum)
Changing Attitudes Toward Social Responsibility and Business Ethics • To meet society’s expectations, managers will need to be more socially responsible. • Most of 500 largest U.S. corporations now have a code of ethics.
Corporate Social Responsibility (CSR) Defined The implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. • Simple Terms: • How a company behaves towards society
Corporate Social Responsibility What is Rule 14? When in doubt, do what’s right!
Corporate Social Responsibility Companies leading the charge Patagonia (1% of net sales for socially and environmentally initiatives) Norm Thompson Keen Footwear Timberland Footwear Nike
Legislating Ethics and Social Responsibility • Procurement Integrity Act of 1988 --passed after reports of military contracts for $500 toilet seats • Federal Sentencing Guidelines for Organizations (FSGO) --softer punishments for companies that have an ethic program in place
Stakeholder Analysis and the Social Contract • Worker Adjustment and Retraining Notification Act of 1988 --firms employing 100 or more to give 60 -days notice when a plant is closing or layoffs off affecting 50 or more 90 days notice
Legislating Ethics and Social Responsibility (Continued) • Corporate and Auditing Accountability, Responsibility and Transparency Act --known as Sarbanes Oxley Act, primary focus is to redress accounting and financial reporting abuses in light of recent corporate scandals --provides a whistle-blower protection
Legislating Ethics and Social Responsibility • What is new in corporations: • 90% have written ethics program • Hired an Ethics Officer --Collaborate with Management --Implement strategies to reinforce conduct --Work with employees across all levels to determine the right course of action • Holding professionals accountable
The Social Contract Individuals The Organization Other Organizations Government Society
Social Audit Systematic assessment of a company’s activities in terms of its social impact
Social Audit Three Types • Inventory of activities --Minority employment and training • Compilation of social expenditures --Corporate giving's • Social Impact --Involvement in selected communities
Ethics • What is Ethics? --Discipline of dealing with what is good and bad, or right and wrong, or with moral duty and obligation • Sources of Ethical Guidance --a number of sources to determine what is right or wrong, good or bad, moral or immoral
A MODEL OF ETHICS Sources of ethical guidance Our beliefs about what is right or wrong Lead to Determine Our actions Type I Ethics Type II Ethics
Human Resource Ethics • The application of ethical principles to human resource relationships and activities • A Code of Ethics --establishes the rules by which the organizations lives
Ethics and HR Manager The Role • Restore trust in the organization • Help instill ethical practices in cultural SHRM Code of Ethics As HR professionals, we are responsible for adding value to the organizations we serve and contributing to the ethical success of those organizations
Ethics and HR Manager What Can HR Do?
Ethics and HR Management • 2 areas where HR can have a major impact on ethics Two Areas Impact on Corporate Ethics • Corporate Governance • Executive Compensation
Ethics Case Study • Read HRM Incident 1: An Ethical Flaw • Discuss and answer questions related to case study