Ethics in Human Resource Management - Essay Example

Human Resource Ethics: An Examination of Key Issues Introduction In the modern business world, there are several issues being faced by HR mangers which have an ethical dimension and it becomes difficult to say that one is more important that the other. Even in business terms, it is not easy to deduce what effect an issue will have on the bottom line of the company as compared to another therefore all have to be treated more or less equally. Of course depending on the situation of the company, some issues may carry a sense of urgency while others could be put on the back burner but it must be kept in mind that all HR related issues will need to be tackled sooner or later. Recruitment and Hiring Since human resource management begins with recruitment and hiring, it is a good idea to first discuss the ethical issues associated with recruitment. The two central ethical issues for a company undergoing the recruitment and hiring process can be understood as the need to follow anti-discrimination practices and equal opportunity guidelines (Lockwood, 2005). Simply put, all candidates must be viewed and hired based on their strengths and weaknesses as applicants without giving any weight to their race, gender, age, physical abilities except in situations where such requirements are an intrinsic part of the job (Alleyne, 2005). As reported by Clarke (2005), a lot remains to be done in this particular field. Given that the nature of the job in a modern office often includes guidelines for inclusion and makes accessibility a mandatory requirement, there are very few exceptions to the ethical guidelines as well as the legal requirements which can be obtained by the company. Without exception, recruiters for the company should follow ethical principles and it should be assumed by them that the law applies in the fullest sense during the hiring process. Even before a person is hired, there are ethical requirements which must be followed in the selection and interview process which mainly deal with ensuring confidentiality and the privacy of all candidates seeking positions within the company. While making the application for the job, candidates may give out information which is considered to be private information in the eyes of the law and that must be kept secure by the company. Even things such as the candidates’ email addresses and telephone numbers may be required by ethical rules to be kept secure. It is probably a good idea for the company to speak with a legal consultant or obtain legal advice from individuals in the company who have had experience with recruitment procedures in the past. By having an ethical recruitment and by showing the values of the company to prospective employees the company can begin the process of establishing its own values for the employees. Personality Profiling The study and practice of HR uses principles from the areas of economics, sociology, political science and most importantly psychology to predict, control and explain the behavior of certain elements in any organization. Since organizations are mainly composed of people and the interactions between them make up the behavior of the organization, therefore, this field can also be taken as a look at the interactions of different personalities in an organizational setting. In terms of psychology, it is understood that certain personality types are better at handling certain positions than others and even though personality itself is rather complex to define but the generally accepted notion has been the collection of emotional and behavioral properties as well as the thoughts and ideas of a person. The earlier work in this field is attributed to Jung which was later on expanded by others. While we may say that person X has a cheerful personality, scientists prefer to classify personality in three different models including Factorial models, typologies and circumplexes which are directly connected with how they perform in given situations (Clarke & Robertson, 2005). This process can be used to profile candidates but modern discussions of ethics in HR also question if such a process would be valid in ethical terms. There is a significant amount of research and information which shows that there is a definite link between personality and certain job roles. Of course much of the evidence presented is based on anecdotes and observations by individuals but scientific research into the field also supports this position. On an individual level, it has been shown that having a proactive personality can have a positive effect on an individual’s performance and career (Erdogan, 2005). As research continues both in terms of organizational behavior and personality studies, we might have to consider additions or alterations to the ethics of human resource management. There is a newly discovered higher order personality trait called Honesty-Humility which impacts the tendency towards antisocial behavior at work (Lee, et. al. 2005). It is therefore logical to say that further research into personality and personality traits will certainly open more criteria for performance assessment and personality evaluations even if they are implicit evaluations and not explicit tests for performance. The Psychological Contract While there is an explicit contract of employment for many employees, there are also implicit contracts which Emott (2006) suggests are the implicit concepts and understandings between the organization and the workers as they relate to both the expectations of the employees and the obligations of the employer. While a company may be under no legal obligations to uphold a psychological contract, there is certainly an ethical obligation and a business reason. For example, when employees are being selected for rewards or promotions, the psychological contract is bound to come into play. Emott (2006) takes a wide view of the contract in such situations where new bonds are being formed and firmly recommends that the full understanding of the psychological contract should be based on ethics and fairness to both parties. This may be difficult to achieve in some case because the management and the employees may not have enough time to give and take on a ethereal contract. As the contract is implicit, it is difficult to judge how it will be impacted when changes come to the company, but at the same time it is important to ethically consider the psychological contract before any change is announced. For example, if a certain group of employees are to be rewarded for good performance and if the employees thought they deserved the reward then the psychological contract is merely reinforced with the company. For some reason, the employees thought themselves capable and deserving enough to be rewarded and the company thought the same therefore there is no conflict between them. It does not come as a surprise to the employee; rather it comes as a reward or even as expected entitlement. This situation would validate the belief of the employee in his/her own abilities as well as improve the strength of the psychological contract. The ethics of upholding a psychological contract comes with the issues of power, trust and fairness as the central forces in making the psychological contract and all these issues should be reflect positively in HR related issues. The company management has to display its trust in the employee and the employee have to show that they are worthy of the trust shown to them. If psychological contracts are confirmed and reaffirmed then employees can be expected to show a greater amount of commitment to the company, be more satisfied with their work and have a stronger intention of staying on with the same company (Emott, 2006). Reward Management Another part of human resource management is the process of reward management with selects and gives rewards to the best performers in the company. Such a process of reward management has to be linked with ethical principles to see which individuals have actually performed for the company and which have merely coasted by. The best example for ethical reward management comes from GE which uses a forced ranking system that places employees in absolute terms with which reward management can be handled. I feel that this is certainly an ethical method since no two individuals can be absolutely equal and a tenant of ethics is being fair which GE certainly is. Rewards at GE are linked to the mission of the company which is certainly an ethical way to reward good performance. Welch (2005, Pg. 16) says that “Every decision or initiative was linked to the mission. We publicly rewarded people who drove the mission and let go of people who couldn’t deal with it for whatever reason.” GE’s own mission when Jack Welch was running the company was to be the most competitive company in the world which fits with the two pronged approach of rewarding and doing the utmost to keep the best talent within the company and letting go of those who do not perform to a certain level. Performance Appraisals Many experts have commented on and have given glowing tributes to the innovative ways employees are managed at GE. The company has been in existence for more than a century and has often been the top ten of Fortune Magazine’s list of most admired companies (Demos, 2006). From 1998-2002 it retained the No. 1 spot and this year’s list places GE at the top of Both the American and the global list of most admired companies (Fisher, 2006). GE’s performance appraisals methods were outlined by Jack Welch (2005) and can be summarized as follows. Appraisal Factor Reason Effect Timely (Quarterly Appraisals) Continual and rapid feedback to employees on their output and work done for the company Employees know where they stand and those who are going to be let go are not blind sided by the decision when it comes Honest (Open discussion on all points) It lets the employee know exactly where they stand and what they can do to improve the situation Employees can be motivated and can also suggest ways on their own to bring up their performance levels Broad ranged Covers a variety of methods by which an employee can give input the company and all aspects of performance are analyzed for improvements or rewards Employees know that they can work on all aspects of their job to improve their relationship with the company as per the given values Directly connected to rewards Performance connected to rewards ensures that the same performance would likely in the future Employees are motivated to work towards a goal and seek further rewards. As early as the 1930s, GE was focused on cooperative labor relations and had created profit based employee bonuses as well as pension plans. It is difficult to find companies which have innovated to such an extent that their name becomes associated with certain management practices. The vast majority of organizations will fade into history without establishing any leadership in management innovations but GE holds the unique position of not only having an established name, they have been the leaders in management innovation for the better part of their existence (Colvin, 2006). International HRM As the world expands, more and more companies are looking towards things such as outsourcing and having offshore production plants which means that there are going to be a whole new set of ethical considerations and cultural sensitivities which future HR managers will need to have. The primary method for a company to control cultural conflict between the home office and other locations is the establishment of ethical guidelines which take into account these differences and are sensitive to them. The effective positioning of ethical HRM policies is a difficult thing to manage and a company can choose to take several different paths depending on its present situation. For example, GE is one such company which went all the way and summarily dismissed all individuals from service who were seen to have a cultural mismatch with the company (Welch, 2005). While that is one way to handle cultural differences, a company may not be in the position or have the ability to fire a significant number of workers at once. To make a single ethical and cultural policy to manage all departments in all locations of a company would be more or less impossible. Managers who are situated in the company head office may not be able to effectively translate their ethical policies for global locations without understanding and appreciating local cultures and customs. Strategic HR decisions should not be made in isolation since it would be difficult to implement these decisions with offices abroad (Edwards & Kuruvilla, 2005). In effect, the cultural differences between nations create an ethical need for increased international human resource management which makes a company run better. Other than the national culture, there is also the concept of an organizational culture which has a definite impact on how things are run with or without ethical principles within a company. In many cases, the organizational culture which is created within a company will take several cues from the national culture since the majority of individuals working for the company would be residents of the same location. For a brief time or in times of stress, the culture of the organization can be more powerful that the national culture but that the effect will be temporary and can be detrimental to the enforcement of HR policies (Edwards & Kuruvilla, 2005). In such situations, HRM becomes difficult since ethics may be ignored for the sake of expediency which is always a dangerous thing to do. Conclusion While a lot has been done in terms of defining modern ethical issues which human resources managers contend with, it seems there is still a lot of room for improvement in our current body of knowledge. Ethical approaches to the management of human resources requires a lot more than simply following the law of the land or making individual judgments about what is right and wrong. Quite often, ethical principles and guidelines may ask a manager to go against what s/he feels and place them in situations where they have to act as whistle blowers or informants against their own company. However, if ethical principles are followed to the letter in the first place, then it does not seem likely that any issue could come to such a boiling point where a company member has to seek outside help in order to make the company come back to the right path. Works Cited Alleyne, S. (2005). But Can You Walk the Walk. Journal of Black Enterprise, 36(2) Pg. 100-105. Clarke, R. D. (2005). Workplace Bias Abounds. Journal of Black Enterprise, 36(2) Pg. 38-39. Clarke, S. and Robertson, I. T. (2005). A meta-analytic review of the Big Five personality factors and accident involvement in occupational and non-occupational settings. Journal of Occupational & Organizational Psychology, 78(3), Pg. 355-376. Colvin, G. 2006. What Makes GE Great? Fortune. 153(4): 90-96. Demos, T. 2006. The World’s Most Admired Companies. Fortune. 153(4): 72. 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