Ethics Issues and Challenges in Human Resource Management - Coursework Example

Ethics Issues and challenges in Human Resource Management By (Student) (Course) Instructor: Institution: Date: Introduction Ethical conduct is emerging as a major force affecting virtually all the aspects of a business in the 21st century. The human resource function (HR) in businesses is particularly more often judged from an ethical perspective than other aspects of management [Sim07]. As noted by Varma (2013), the HR function today regularly encounters ethical issues surrounding discrimination, restructuring and layoffs, and discrepancy in pay structure. According to a report quoted by ABC News, six in ten LGBTI people in Australia have experienced verbal abuse in the workplace. Nearly half of them hide their sexuality as they fear experiencing discrimination [Ong16]. Recently, an engineering firm, Laing O'Rourke has had to defend itself from public criticism of its move to lay off 850 workers abruptly after ending its contract with a major partner [Can17]. In November 2016, Commonwealth Bank shareholders voted to reject a remuneration plan by the board that aimed at increasing the CEO’s pay by pegging it on soft targets [Yea16]. These ethical Human Resource challenges require practitioners to decide the right course of action to be followed. This is not always easy as what is right or wrong may not be expressly stated in the company’s guidelines, regulations or the law. However, a business can effectively handle ethical dilemmas and uphold integrity by applying ideologies that focus on the motivation and consequences of the actions taken by the human resource function. This paper will analyse the identified human resource challenges in an effort to provide a solution that is within the boundaries of ethical acceptability. Utilitarianism Utilitarianism is a moral philosophy whose underpinning is centred on the rightness or wrongness of the effects of an act. The theory does not necessarily consider the motive of an act but is concerned with its outcome [Mil15]. According to the theory, an act is ethical if it promotes the happiness of the majority. This means that if an act only promotes the happiness of a single entity, it is morally wrong (Conway and Gawronski, 2013). The theory basically aims to find a balance of good consequences for all involved instead of having a few satisfied while the majority suffer [And13]. From a utilitarian perspective, restructuring and layoffs should not be a desirable occurrence in society. Restructuring and layoffs lead to job losses. Job losses affect people’s lives as they cannot afford good quality of life and may often struggle to pay loans and mortgages due to loss of income (Gilbert, 2000). On the other hand, employers struggling with low profit margins or loss of crucial revenue streams may make a rational decision to lay off some workers to ensure the business survives. Gilbert (2000) further notes that if an employer decides to retrench some workers, the company has higher chances of surviving but the affected employees suffer as they no longer have a source of income. Therefore, restructuring and layoffs are morally wrong from a utilitarian point of view as they do not promote happiness to all involved. In the case of 850 workers laid off abruptly by Laing O'Rourke after its contract with a major partner ended, the workers ended up being the negatively affected party. The decision served the company well as it could no longer support unutilized workers. However, the employees of such a company are exposed to psychological and economic suffering as they could no longer rely on their employment contracts to earn a living (Christopher et al, 2012). From a utilitarian perspective, the company ought to have developed a responsible plan that considered the plight of the workers. (Christopher et al, 2012) suggests that such a plan should consider options such as monthly half-pay for the remaining contract time or redeployment to other areas. This would have reduced the damage and ensured both parties are satisfied with a compromise decision. Kantian deontology According to Emmanuel Kant’s categorical imperative, the only thing that is truly good is chosen out of feeling or moral duty. Moral duty forces one to adhere to laws that guide his/her behaviour [Smi11]. This means that moral laws and rules are more important to a doer than the consequences of his/her act. Kantian deontology also demands that one acts in a manner that he/she will be willing to have another person act as so in a similar situation [Har12]. From a Kantian deontology perspective, lay-offs and loss of jobs due to restructuring might not necessarily be wrong if the intentions are good (Tanner et al, 2008). For instance, a company may want to ensure its survivability by eliminating the wage costs of a non-performing unit. This will save the jobs of some workers, which is better than having the company collapse due to debts and losses. The morality of the actions is not determined by the consequences but rather the rationality or the good motivation behind the decisions [Har12]. The management of Laing O'Rourke may not have been morally wrong by terminating the contracts of 850 workers as they made a rational decision to save the company from making significant losses in form wages paid to idle workers. The management should thus not be judged by the effects of the layoffs but the motivation to cut losses that would affect the performance of the entire organisation and put other people’s jobs at risk. According to (Carr and Valinezhad, 1994) interpretation of Kantian ethics, the idea of paying hefty remuneration packages to top CEOs should not be considered ethically wrong if it is grounded on good motives. The decision to award such CEOs hefty pay leads to unfairness. However, it may be morally good if the CEO improves the performance of the company significantly through his/her managerial skills and knowledge (Wilhelm, 1993). Evidently, the Commonwealth Bank board may be morally right by aiming to increase the earnings of the business’s CEO as the improved benefits could motivate him to perform better or stay with the organisation. Such a move should, however, consider the eventual implication of widening the pay gap between the top CEOs and lowest paid workers. Justice Justice is often interpreted in terms of fairness, equality and impartiality in matters affecting humanity and society in general [Bot12]. According to John Rawls principles on distributive justice, each person should be entitled to the most extensive basic liberty as is compatible to that of others (Rawls, 2009). The principles also hold that social and economic inequalities are to be arranged in such a way that they are to everyone’s advantage and attached to positions open to all. The core of this egalitarian theory is the argument that everyone should have liberty over various aspects of their lives including speech, association, movement and freedom (Wilhelm, 1993). The theory also emphasises the need to protect the disadvantaged by offering equal opportunities and removing structural unfairness [Ajn08]. From the principles outlined by Rawls, discrimination of LGBTIs people based on their colour is morally wrong since it limits their liberty and effectively denies them equal access to opportunities and positions. The practice of paying CEOs significantly more than the lowest paid workers may not be necessarily wrong from an egalitarian understanding of justice since the disadvantaged workers have access to the CEO position through fair performance appraisal systems. According to (Jasso et al, 2008), this implies that such workers can also receive higher pay if they actually worked towards improving their credibility. Nozick’s and libertarian views of justice in anchored on the notion that everyone should have free choice without any external interference (Zamulinski, 2005). In addition, libertarian view also holds that one should receive economic reward that is directly proportionate to their contribution towards the generation of the same. This implies that a person can own as much as they want provided they do not worsen the position of anyone else [Bot12]. The discrepancy between CEO and least paid workers earnings is justified by the libertarian view of justice as the CEO have contributed proportionately in the generation of profits (Jasso et al, 2008). However, it is only fair for a business such as the Commonwealth Bank to consider the fact that all workers play a pivotal role in generation of revenue and should, therefore, not be subjected to unfair wages and salary administration system. Rights According to van Hooft et al, (1995), a right can be viewed as person’s claim to entitlement to be treated in a certain way. It is also something that one decides to exercise freely as they desire. Most importantly, Hooft et al (1995), notes that a right puts an obligation on others to act in a certain way towards an individual. This means everyone has a duty to ensure the other person enjoys their rights to the maximum. The 850 employees abruptly retrenched by Laing O'Rourke have a right to fair dismissal, which the company failed to honour. The company had an obligation to ensure the employees enjoy this right but failed to do so deliberately. The company is not only ethically wrong but is also liable to a legal offence as employees rights are comprehensively protected under various labour laws and regulations. LGBTIs and every other person should enjoy the right of freedom from discrimination. This means that no one should be treated unfairly or denied an opportunity on the basis of their sexual orientation, skin colour, religion, disability or any other factor [Nic10]. The government and relevant stakeholders in Australia should enact laws and initiate awareness programs to reduce the high levels of work place discrimination affecting LGBTIs and other groups. The human resource practitioners in Australia and any other country should actively seek to protect vulnerable groups from discrimination in the workplace. Normative ethical relativism Normative ethical relativism theory holds that principles of morality cannot be applied universally as they differ from one culture to another [Jam051]. This theory simply means that what is wrong in one culture may be right in another and vice versa. This puts a greater challenge to interpretation of what is right or wrong since everyone will make subjective ethical decision based on the culture or social norms that they subscribe to. According to Hinman (2012), it is practically impossible to apply this theory in the world today since businesses and people from different cultures often interact with each other to an extent that their actions cannot be regulated by their individual cultural or social values. Discrimination of LGBTIs and other groups should be wrong irrespective of the society where it happens. Similarly huge discrepancies between CEO and least paid employees pay should be wrong especially if the latter fail to lead a quality life due to low income. The inability to uphold objectivity in normative ethical relativism makes it inapplicable in addressing challenges in HRM practice and other aspect of business (Macklin, 1998). Conclusion From the analysis made thus far, it is evident that ethical consideration cannot be disassociated from matters relating to human resource decision-making. Most organisations have not been able to fully protect vulnerable groups from discrimination. However, practitioners can apply fair policies that guarantee the ultimate good and protection of rights of all involved as suggested by the theories of utilitarianism and rights. Issues such as arbitrary employee dismissals and huge discrepancies between CEO and workers’ pay only exacerbate the notion of unfairness promoted by the human resource function. Such issues should be addressed by developing fair moral principles that uphold the principles of deontological ethics and distributive justice. Indeed, it is possible to enhance fairness, justice and protection of rights by upholding to universal principles of ethics, justice and rights that seek to promote the common good of society irrespective of cultural heterogeneity and conflicting social norms. References Sim07: , (Sims, 2007), Ong16: , (Ong, 2016), Can17: , (Canna & Notzon, 2017), Yea16: , (Yeates, 2016), Mil15: , (Mill, 2015), And13: , (Gustafson, 2013), Smi11: , (Smith & Dubbink, 2011), Har12: , (Harris, et al., 2012), Bot12: , (Bothma, et al., 2012), Ajn08: , (Prasad, 2008), Nic10: , (Wolterstorff, 2010), Jam051: , (White, 2005), Read More

Gilbert (2000) further notes that if an employer decides to retrench some workers, the company has higher chances of surviving but the affected employees suffer as they no longer have a source of income. Therefore, restructuring and layoffs are morally wrong from a utilitarian point of view as they do not promote happiness to all involved. In the case of 850 workers laid off abruptly by Laing O'Rourke after its contract with a major partner ended, the workers ended up being the negatively affected party.

The decision served the company well as it could no longer support unutilized workers. However, the employees of such a company are exposed to psychological and economic suffering as they could no longer rely on their employment contracts to earn a living (Christopher et al, 2012). From a utilitarian perspective, the company ought to have developed a responsible plan that considered the plight of the workers. (Christopher et al, 2012) suggests that such a plan should consider options such as monthly half-pay for the remaining contract time or redeployment to other areas.

This would have reduced the damage and ensured both parties are satisfied with a compromise decision. Kantian deontology According to Emmanuel Kant’s categorical imperative, the only thing that is truly good is chosen out of feeling or moral duty. Moral duty forces one to adhere to laws that guide his/her behaviour [Smi11]. This means that moral laws and rules are more important to a doer than the consequences of his/her act. Kantian deontology also demands that one acts in a manner that he/she will be willing to have another person act as so in a similar situation [Har12].

From a Kantian deontology perspective, lay-offs and loss of jobs due to restructuring might not necessarily be wrong if the intentions are good (Tanner et al, 2008). For instance, a company may want to ensure its survivability by eliminating the wage costs of a non-performing unit. This will save the jobs of some workers, which is better than having the company collapse due to debts and losses. The morality of the actions is not determined by the consequences but rather the rationality or the good motivation behind the decisions [Har12].

The management of Laing O'Rourke may not have been morally wrong by terminating the contracts of 850 workers as they made a rational decision to save the company from making significant losses in form wages paid to idle workers. The management should thus not be judged by the effects of the layoffs but the motivation to cut losses that would affect the performance of the entire organisation and put other people’s jobs at risk. According to (Carr and Valinezhad, 1994) interpretation of Kantian ethics, the idea of paying hefty remuneration packages to top CEOs should not be considered ethically wrong if it is grounded on good motives.

The decision to award such CEOs hefty pay leads to unfairness. However, it may be morally good if the CEO improves the performance of the company significantly through his/her managerial skills and knowledge (Wilhelm, 1993). Evidently, the Commonwealth Bank board may be morally right by aiming to increase the earnings of the business’s CEO as the improved benefits could motivate him to perform better or stay with the organisation. Such a move should, however, consider the eventual implication of widening the pay gap between the top CEOs and lowest paid workers.

Justice Justice is often interpreted in terms of fairness, equality and impartiality in matters affecting humanity and society in general [Bot12]. According to John Rawls principles on distributive justice, each person should be entitled to the most extensive basic liberty as is compatible to that of others (Rawls, 2009). The principles also hold that social and economic inequalities are to be arranged in such a way that they are to everyone’s advantage and attached to positions open to all.

The core of this egalitarian theory is the argument that everyone should have liberty over various aspects of their lives including speech, association, movement and freedom (Wilhelm, 1993).

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