Ethical and Legal Issues in the Workplace - Dissertation Example

Ethical and Legal Issues in the Workplace Introduction Successful management especially in today’s increasingly diverse workforce is one of the most important global challenges that human resource management and corporate leaders face. Immigration, employees’ migration and gender, class, religious and ethnic differences continue to dramatically impact the composition of workforce and hence corporate managers are unable to fully comprehend its dynamics and unleash the potential that is embedded in a multicultural working environment. Human capital for no doubt is the most valuable and powerful assets of an organization. Effectively managing the human resources is therefore extremely critical to the success of a firm to help it gain competitive advantages and achieve all other organizational goals. Managing diversity and business-success are closely related because, when diversity in an organization can be effectively managed, the outcome will be that the workforce will be very productive, highly satisfied, extremely happier of the working environment. Many of the large multinational companies depend on different types of staffing like ethnocentric, geo-centric and polycentric and all these approaches in turn create more diverse workforce making it harder to effectively manage it. This research paper explains general impacts of diversity on human resources management and organizational development. This paper will detail some specific issues that diversity in an organization can pose for hiring, management, retention and development etc and described legal as well as ethical issues in relation to the strategic talent management at City-side Financial Services. Managing Diversity There have been greater efforts to implement various programs and activities to be used in organizations as part of diversity management. Managing diversity actually constitutes most important area of global corporate efforts and it can be considered as relatively new organizational paradigm. It encompasses innovative thoughts, evolution and knowledge that management can integrate and incorporate these elements for a better practice of diversity management (Özbilgin and Syed 2010, p. 1). As Ciscio (2002, p. 121) stressed, managing diversity is establishing and developing a heterogeneous workforce so that employees’ potential can be performed in an equitable work environment, and a member or group of members gain no advantage or disadvantage over others. More specifically, people in an organization may belong to very different age, gender, class, religion, ethnicity, education, culture and social background. Human resource managers are expected to manage them all in equal consideration, as no one among them gains advantage over others. Managing diversity thus ensure equitable work-environment for all its people. Diversity management, being quite different from affirmative action, ensures the employees have equal employment opportunity, where as affirmative action is a corrective step from what has been done in past in relation to equal employment opportunity. Friday and Friday (2003, p. 863) detailed the meaning of diversity. Diversity refers to those attributes that happen to be salient to an employer making him perceive that he is different from another individual. Racio-ethnicity, gender, nationality, religion, functional expertise, and age are some of the major attributes that create diversity in an organization. Diversity management has recently become an important element of larger business strategy to improve organizational competitiveness and effectiveness. Almost all different types of organizations have started greater efforts in identifying, considering and implementing variety of practices designed to foster and enhance better diversity business environment as well as to combat discrimination in the workplace (Hur, Strickland and Stefanovic 2009, p. 501). Among various practices and organizational programs designed and developed to manage diversity effectively and combat discrimination among workforce are, a) ensuring management accountability, b) re-examining organizational culture, c) evaluating the culture, d) potential management system for identifying and correcting bias, e) paying attention to the members etc. Many organizations have also been practicing mentoring program, team-works, providing training, promoting of internal identity groups, and emphasizing shared values among the employees (Hur, Strickland and Stefanovic 2009, p. 501). An effective diversity management program, as shown in the figure, necessarily comprises of certain important elements, mainly as seeing it as a commitment throughout the organization, beginning with top management. The diversity results must be measured and management accountability for diversity results need to be emphasized (Mathis and Jackson, 2008, p. 153). Issues and Challenges of Diversity that can pose various HR practices Diversity and Hiring In hiring and staffing of the employees, the human resource managers require to focus on expertise, talent, skills and institutional as well as departmental requirements by considering diversity at its central. Locating diversity at the centre of an institution’s mission and organizational goals will be effective and legally significant for the overall success of the business (Smith, 2009, p. 174). In relation to the hiring, staffing and training programs, diversity creates challenges and problems to the human resource managers, mainly due to the ethnocentrism, prejudices and stereotypes. Ethnocentrism is the belief of a person that his own group is superior to other groups and as a result he favors a particular group and avoid cooperation with other groups that he believes it to be inferior (Erasmus, Ferreira and Groenewald, 2004, p. 438). Prejudices are perceived judgments of a person or a situation that are more likely to be based on the first impressions. In times of hiring employees, human resource managers may have dislikes to a particular person or a group of people, with out being fully familiar with them. Stereotypes are positive or negative assessments of perceived attributes of people or situations. In hiring employees, the managers often behave ethnocentrically, or with prejudice or bias or stereotypes and this cannot be justified on the ground of diversity. Diversity and Management How to effectively manage diversity in an organization is of greater importance in Human resource management. The labor force worldwide is becoming increasingly diverse day by day and it thus creates major challenges on management. For instance, the US labor force is growing more diverse in racial and ethnic terms. The 2006 workforce has been projected to be 72 percent white, 11 percent black, 12 percent Hispanic and 5 percent Asian and other minorities (Noe, Hollenbeck and Gerhert 2003, p. 34). Diversity, if not managed effectively, can also cause ethical and legal issues within the organization. Diversity management is a strategy of good public management practices as it builds on good governing principles that are formulated to ensure human rights as a positive managerial tool. Discrimination, harassment and class-difference are very common between different groups of class, gender, age and religion causing long-term liability and legal risks on management. The human resource management is therefore required to establish a multicultural and diverse culture within the organization so that no one among its people would feel advantages over others. Managing diversity is one of the greatest leadership challenges too. The effectiveness of the managing diversity programs will be more likely to be contingent on leadership and managerial commitment. The development of organizational commitment requires thus to be understood so that organizations can determine best practices and approaches to support their own styles of managing diversity. Diversity and Employee Retention In an organization with diverse workforce, who will be retained and on what criteria an employee can be considered for retention program are some of the major concerns and issues in relation to the diversity. In recent days, retaining older workforce more knowledgeable employees, more talent and skilled workers and more experienced employees has become an extremely important human resource management strategy that in turn ensures increased productivity as well as long term profitability for the firm. But, in a diverse workforce environment, choosing an employee for retention, no matter with extra payment or allowance or not, must be based on his abilities, skills, knowledge and experience and should not be based on prejudice, stereotypes etc. Diversity management practices are implemented by many organizations to retain employees and assist them in experiencing growth and organizational development. Creation of performance model, training, job-model assignments, career development are some of the programs that can be used to improve how all employees including those from diverse groups are treated fairly (Phillips and Connell 2003, p. 178). Talented and experienced employees are to be retained purely based on their abilities, working experiences and knowledge,. It should never be based on their class, religion, gender, nationality etc. Managers are often tempted to recruit and retain only those whom they favor or only those who belong to the class or group or ethnicity that managers feel in favor of it. Retaining in a diverse workplace is thus a challenge to the human resource management. Legal and ethical issues specific to strategic talent management Diversity issue at Cityside Financial Service- Case Summary Cityside Financial Service, a midsized bank which was earlier serving white-upper and middle class neighborhood customers, was later purchased by a racially diverse group of investors. The bank has been operating mainly two departments, Retail operation and External deposits, offering major banking services to its neighborhood customers. When a new team including Ron Wilkins purchased the bank, they found a mismatch between the client demographics and predominantly white male professional and thus they hired more from minority and increased women workforce to nearly half of the total workforce. 53% of middle managers, 42% of senior managers and 25% of executives were African-Americans. Its support staffs were around 90% African-Americans. But, its External Deposits hired mostly from white, middle class college graduates. In general, there have been almost similar opportunities for advancement for both black and white (Ely, 2006). Though diversity helped the bank achieve its excellence in customer service record, it was observed that the bank failed to serve both local and national markets under the Sales Unit. The legal issue In a diverse workforce, talent management has become an overriding concern in recent years due to that management may experience challenges in relation to recruitment, training and organizational development. The case of Cityside Financial Services illustrates how a diversity scenario can raise serious legal issues. The bank has earlier been offering its services to the neighborhood white middle and upper class people, but when more and more African-Americans moved to its neighboring places, the bank has also to offer its services to them, whereas most its predominant staffs were white people. If the company fails to provide its services in an equal way to both the kind of customers, certainly there can be legal issues that black or white customers may go for suing against the bank. Maintaining diversity and managing it effectively are critical elements to organizational success, but the chances of legal issues must be carefully considered. A legal issue that is more likely to occur from the case of Cityside Financial Services is that a White customer complains that a sales man, who is African-American, from the Retail Department has denied to offer a loan or any other banking services to him. It will be considered as a serious legal issue regardless of what the real factor has led him not to offer the service, but the case has been reported legally to a court and it will be a legal issue against the bank. As Walsh (2006, p. 236) noted, diversity is perhaps an asset to the organizational performance, but meeting legal requirements is certainly a serious issue and a remains to be challenge on its management. In contrast to the affirmative action, managing diversity differs in a way that it requires to ensure equal employment opportunities. When it comes to the case of Cityside Financial services, equal employment opportunity is a serious issue, as it managing authority has recruited and trained most of its workers from African-American where as there are large number of White- middle and upper class people in its neighboring places. Both male and female, white and black and people at different ages have almost equal opportunities to be employed, but, preferring one group to other just because of the preference for that ethnicity is a serious legal issue. Ethical Issue Diversity is a challenge, especially in relation to the legal and ethical issues it is likely to cause. Ethics is perhaps one of the most widely used buzzwords in business today. Ethics is a highly important element to the various functional areas of a business. A business requires to think of ethics in relation to its products it offers to the customers, in keeping a closer relation with customers, in managing its employees etc. When it comes to managing diversity, ethics is a more sensitive issue to the business. When analyzing the theoretical and philosophical perspectives of ethics, it can be understood from that ethics is largely concerned with the sufferings that humans cause one another and also the capacity of one group to recognize and address this suffering through the empathetic virtues. Diversity among individuals have caused large number of ethical issues in the past. Where ever there are greater diversity among people, ethical issues are more likely to be more. When it comes to the case of Cityside Financial Services, the managing body has restructured it workers and recruited more percentage of black people. From an ethical perspectives, all the managing bodies and employees must be able to understand the values of multiculturalism and the values of diversity. Each ethnic group must be able to value the ethnicity of the other group. White must be able to value the cultural ideologies of the black and in vice versa. In today’s workplace environment, workers belong to different ethnicity, gender, age, social settings and cultures and all the individuals are required to value the cultural and other perspectives of the other group. Managing the legal and ethical issues of Diversity As detailed above, there can be serious legal and ethical issues in a diverse working environment. Cityside financial services and its case also illustrated how there can be challenges of both legal and ethical issues that management may pause a while at. One of the legal issue identified, for instance, is that a customer complains to the court that a seller or bank employee has denied him to offer bank loan or any other services. The ethical issue being identified is the understanding, recognizing and considering the values of each group or ethnicity by the other ethnic group. The legal issue must be addressed and dealt with the advice of a legal officer, so that business can mitigate all the legal risks associated with the complaint. The HR professional at Cityside Financial Services requires to analyze the case to find whether the Retail employee has denied the service to the plaintiff for a genuine a reason or due to that he is from other ethnic group. The HR professional needs to take all the necessary legal steps to avoid legal risks. More importantly, he is expected to ensure that these sorts of cases will not occur in the future as it can create negative impacts on the reputation of the business and can adversely impact on its long term profitability. In order to ensure that people at Cityside Financial Services considers ethics, the HR professional must take initiative to create and inculcate an understanding among its people that though they all belong to different ethnicity, in an organizational culture, their different cultures and values should be considered as same for the sake of organizational betterment. To address the ethical issues in relation to the diversity, HR professionals must create a multicultural organizational environment through, a) making its people aware of the values of diversity, b) teaching the importance of maintaining multiculturalism, c) helping them behave politely with each other ethnic group or gender or religion. In addressing the ethical issue of diversity, management must be aware of the consequences of any such sort of ethical dilemma a firm experiences and how these can create serious organizational issues in the future. Conclusion Diversity is an opportunity for any organization, but if not managed effectively, it seems to be a greater challenge as well. there are many different types of strategies to manage diversity, including teamwork, training, motivation, multicultural promotion, etc. In order to motivate employees toward diversity and create multicultural values among them, the management has to take initiative to make them aware of its importance and consequences if the firm lacks of it too. This piece of research paper has addressed and highlighted theoretical perspectives of diversity and detailed how it can effectively be managed. This paper has addressed issues and challenges of hiring, management, and retention of employees in relation to managing the diversity. This paper has also detailed what specific legal and ethical issues that Cityside Financial Services experienced and how they can be dealt with in an effective way. References Cascio, W.F 2002, Managing Human Resources, Productivity, Quality of Work life, Profits, Sixth Edition, McGraw Hill Companies Irwin Ely, R 2006, Managing Diversity at Cityside Financial Services, Harvard Business School Erasmus, A, Ferreira, E& Groenewald, D 2004, Administrative Management, Juta and Company Friday, E & Friday, SS 2003, Managing diversity using a strategic planned change approach, Journal of Management Development, Vol. 22 No. 10, MCB UP Limited Hur, Y, Strickland, RA & Stefanovic, D 2009, Managing diversity: does it matter to municipal governments? 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