The Ethics of Human Resource Management - Essay Example

Ethical Considerations in HRM HRM (human resources management) deals with recruitment, orientation, performance, appraisal, training, development as well as industrial relations and health and safety related matters. (Walsh, 2007) The approach towards labour ethics is viewed in differing manners in the sphere of business ethics. Certain schools of thought deal with human resources policies in terms of their augmentation to an egalitarian workplace as well as the personal dignity of the employees. (Kuchinke, 2005) (Dirkx, 2005) The issues of employment, appropriate compensation, right to collective bargaining etc. are considered as inalienable rights for workers (Fredrick, 2002) and these can be considered as negotiable too (Koehn, 2002) (Watson, 2003). Human resources management is also expected to address the issues of discrimination such as age, race, gender, religion, disability, sexual harassment etc. often through the use of affirmative action. (Smith, 1997) In a similar manner the employees of an organisation have certain obligations towards employers such as privacy over intellectual property rights, whistle blowing etc. Employees are expected to deal with these issues on an ethical plane such that the interests of the employer are not transgressed upon. On the other hand, employers have certain ethical obligations towards employees such as workplace safety through either modifying the workplace or through providing training and protection from hazards in the workplace. Within the problems listed above, individual companies can be considered as independent because most of these considerations can be handled in house or with the help of little external help. However there are certain issues that may pervade the limits of a company or firm’s authority to deal with them. The realm of more pervasive economic issues such as trade policies, trade unionism, immigration and globalisation all possess some kinds of ethical dimensions but it is often beyond the power of an individual company to deal with them (Legge, 2007) (Morehead et al., 1997). There are a number of leading theories on dealing with ethical issues in the human resource management sphere including Kantian ethics, consequentialism utilitarianism, virtue ethics and justice ethics. Arguments have been advanced both in favour of and against these theories that tend to make human resources management ethical as well as an unethical field of practice. There is however no denying that ethics plays a large part in human resources management and in order to create a lasting and fruitful relationship between employer and employee, there is dire need to view the relationship through the filter of ethics. There has been an overwhelming cry from certain quarters to exclude ethics from business as ethics is seen to be derogatory to business and market practices and forces. Academics such as Milton Friedman have argued that the “business of business is business” which implies that businesses should be more concerned with returns on investments rather than with ethical considerations. (Friedman, 1970) Proponents of the market economy school of thought argue that the primary concern of any business should be returns and nothing else should be allowed to clutter this focus. It is also argued that if the principle of return on investments is fiddled with, there are chances that the finely balanced market economy would collapse. Classically it is considered that businesses that try to be ethical as well as profitable would fail to achieve these means and that would lead to business failure. Such economic failure is seen as detrimental to the community at large because it would cause loss of capital and unemployment amongst other problems. The survival of the fittest is seen as the only rule that should apply to businesses and markets and it is considered that wealth would trickle down on its own. The use of ethical or other filters to deal with business is considered to be restricting business practices. However over time this approach to business has undergone wide critique and the notion that morality and business have little to do in common have also been challenged. This kind of concern has been voiced by various factions in society including consumer groups, religious groups, charities and political groups. Moreover there has been constant input from business entrepreneurs, researchers and academics (Winstanley & Woodall, 2000) as well as management professionals (Brown, 2003) to evaluate and improve contemporary business ethics. A number of disadvantages resulting from poor ethical standards in business practice have been used to establish the case that ethics and business must go hand in hand. It has been argued that while using unethical practices would offer profit in the shorter run but the cut throat tactics of the free market would erode business in the longer run. The use of ethical standards aids in the creation of a positive environment that aids in the sale and purchase that supports business otherwise corruption, bland poverty and a lack of respect for the environment would render the business community unable to transact in the longer run. It has also been argued that people do not possess moral or religious values and instead they must be imposed in some form. Businesses are composed of people and so they should also have an imposition of ethical standards in order to improve the environment for business. (Rose, 2007) There has been a growing focus towards financial corruption in the business sector especially after the Enron and the WorldCom scandals. However unethical practices in business also take other forms. There has been growing concern over abuse of the world’s physical resources as well as disturbances in the ecological balance by companies such as Esso. Similarly the abuse of human rights for example by Shell in Nigeria has also been brought to the front. The abuse of animal rights by food chains such as McDonald’s and KFC has also been questioned. Moreover the use of aggressive business practices in order to discourage competition by groups such as Wal-Mart has also received attention along with exploitative marketing tactics employed by companies such as Phillip Morris. (Klein, 2000) HRM and businesses are intertwined such that they cannot be pried apart. In similar stint, HRM and ethics are very closely related. HRM has direct implications for business and the manner in which it is carried out at all levels in an organisation. HRM is concerned with both upper level management as well as lower level management in organisations. The upper level management is affected by ethics in the manner in which business decisions are taken while the lower level management is affected in the individual treatment of employees. HRM has to balance these needs and the relationship that exists between employer and employee. The employer is bound by ethics in obligation to both right and duties such as the use of non-discriminatory policies during recruitment and the use of just reason for terminating employment. Similarly the employer must provide fair compensation to employees and must provide space for union presence and activities. The employees must also be provided with a right to criticise policies without any fear of repression and the employees must be kept on board when large policy based decisions are taking place. The workers ought to be consulted and informed so that their rights are not transgressed upon by the employer. On the other hand, employees are also bound by certain rights and duties that need to be dealt with ethically. The employees should be provided with the right to freely associate and to be able to go on a strike as well as be able to bargain collectively and individually. The employees should be provided with a healthy work life balance with just compensation. Moreover employees also have a right to privacy and well as freedom of speech and expression. The employer should also ensure that working conditions are safe and employees should be appropriately be trained and informed over possible hazards in the workplace. The employee on the other hand must ensure complete loyalty with the organisation and must display legal and moral norms appropriately. While the issues outlined above deal with ethics in organisations where the employer and employee are both subject to similar laws, there are a number of problems with employment relationships where similar laws do not apply. Within recent years there has been a growing trend to outsource business operations to foreign countries in order to reduce costs. However the outsourcing has led to the exploitation of millions of people who are given meagre wages. This problem is also compounded by the use of child labour as well as women because both workgroups can be paid less. Increasing competition in world markets has also meant that labour in off shore manufacturing facilities is subjected to longer working hours, meagre wages and denial to the right of collective and individual bargaining. Such efforts have only added to work stress in already stressed environments. On the other hand a new brand of problems has emerged after companies have begun to renege on pension agreements as well as worker benefits and in some cases worker compensation. Similarly the use of dubious practices both during hiring and firing personnel have created complications for ethics and HRM. Studies have shown that consumer’s perceptions of a company’s ethical standards affect sales directly and similarly the perception of a company’s ethical standards affect investor’s attitude to invest directly. This represents losses for a business on two different and major fronts merely because ethical standards are not adhered to. In a similar manner, the poor conduct emanating from the echelons of a company affects employee motivation directly and this in turn tends to compromise organisational goals and objectives. This in turn presents another facet for loss to a business based again on non adherence to ethical standards. (Werther & Chandler, 2006) HRM is entrusted with the job of ensuring that the rights and obligations of both employee and employer are kept well balanced such that no party is negatively affected. HRM has to carry out a number of activities that require balance and able decision making. For this reason, HRM has also been labelled as the “consciousness of organisations” by some scholars. Throughout the domain of recruitment, training, performance appraisal, reward and disciplinary systems and dealing with workplace aggression and violence, HRM has to use ethical principles in order to balance rights and obligations of employer and employee. A number of different perspectives exist on HRM and ethics and the relationship between them. The consequentialism approach states that the morality of an action is determined based on the consequences of the action on people. Hence an action would be moral if it benefits the greatest amount of people. Therefore HRM based on the consequentilalism approach would try to bring benefit to the greatest number of people. However this is not always possible because it is difficult to ascertain what actions bring the greatest possible benefit to all involved. Moreover the utility based concept is vague and the determination of such information is most of the time impossible. Another major approach is the Kantian (or non consequentialist or deontological) approach which stresses that a set of absolute morals should be used such that the actions construed are universally acceptable. Actions should be dealt with through the principle of reciprocity that is “do unto others as you wish done unto you”. However in the field of HRM and ethics, this approach falls short for a number of reasons. For one thing it is hard to judge which rules are good as per implications and if the final implications have really been fair. Moreover agreement across the board may not always be possible and it is difficult to proceed in situations where principles tend to compete. The use of absolute moral principle also means that benefiting one person or party may harm the other such as through a cancelled contract. Similarly another set of ideas is brought forward by justice ethics that require that decisions and actions be just to everyone across the board. However in certain situations it may not be possible to use decisions that are totally just by HRM procedures in order to garner profits. For example workers in China or India are paid far less than their counterparts in the United States for the same work by the same companies which are unjust. Hence the determination and implementation of justice ethics in HRM may not always be a possibility. Another competing view is presented by virtue ethics in HRM. The virtue method of looking at ethics is attributed to Aristotle (384 to 322 BC) who construed the kinds of ethics that a person should cultivate. Aristotle’s most important ethical treatise the Ethica Nichomachea (Nichomachean Ethics) delineates different virtues as they were understood in Greek society in Aristotle’s contemporary era. Furthermore he designates as what can be considered as virtuous and what is only presumed but not actually virtuous. Aristotle built upon the idea of the “Golden Mean” which can be equated to Buddha’s middle path which centres between self indulgence and self denial. As an example, if courage is considered in terms of Aristotle’s virtue theory, it can be seen as the middle path between cowardice and foolhardiness. However the idea of mean does not apply to every single case mechanically but instead there are certain kinds of balance for each different kind of ideas. If the virtue of self restraint is considered, one can easily find an excess of self indulgence of physical pleasures but the opposite that is the denial of self pleasure is rare. This kind of caution in the application of these ideas is important because the use of mean in every case cannot be applied to discover new virtues. The mean in any situation can only be arrived at if the excess and deficiency of the certain kind of trait is already known about from a neutral standpoint about the virtue in question. Moreover some kind of conception of the virtue must exist prior to the evaluation for the excess and the deficiency of that trait. In simpler terms, if the concept of simple mean is used to discover virtue, it would resemble travelling in a circle. The virtues considered by later Christian ideologies and Aristotle’s virtues differed slightly. Both lists of virtues contain courage, temperance and liberality. However Aristotle’s list also contains an element that can be translated directly as “greatness of the soul”. This element corresponds to having a high opinion about oneself. The excess of this particular virtue can be seen as vanity while its deficiency can be seen as humility. In the Christian terms of virtue, humility is itself a virtue and not a deficiency of any kind. The treatment of Aristotle’s accounts of virtue in the Western sphere has traditionally been begun with discussing the virtue of justice. Aristotle has distinctly treated justice in the distribution of wealth as well as other material goods as well as justice for reparation such as punishing an offender. As per Aristotle the pivotal element of justice is to treat similar cases in similar ways. This conception of Aristotle set ground for later thinkers to classify which similarities are required for classifying such cases together. The classifications considered relevant in this manner are need, desert and talent. In a method similar to Aristotle’s dealing of virtue and the requisite mean, the framework for justice must be filled out before it can be put to any use. Moreover Aristotle created distinctions between theoretical and practical wisdom. In terms of HRM, Aristotle’s perspective of practical wisdom is highly significant because it delineates the best methods to achieve whatever goals or objectives that one may have. Furthermore the wise person is considered to have fitting ends as well. This also carries the implication that a person’s ends are not just an issue of raw desire or feelings but rather the right kind of ends are issues that are well known about. Aristotle’s line of reasoning has failed to garner much attention in the modern spheres of human resources. Neither academics nor practising professionals in human resources management have associated much weight to Aristotle’s individual characteristics and virtues. However recent decades have seen a resurgence of virtue ethics in the fields of human resources with the work of Alistair MacIntyre and Robert Solomon. It has often been argued that the ancient scholastic origins of Aristotle’s theory make it difficult to apply in the realm of modern organisations and their human resources management structure. On the other hand, Tim Morris argues in his book “If Aristotle ran General Motors” that Aristotle would have to focus on four major points in order to achieve excellence for both the individuals and the organisation. These four focus areas are truth, beauty, goodness and unity. (Morris, 1998) Morris argues that corporate excellence can be considered as a kind of human excellence chiefly because such excellence is the product of human endeavour and is done by people who have a firm belief in whatever they do. Furthermore it is also argued that both personal satisfaction and success of organisations depend on the fulfilment of these four virtues. Morris concludes his argument by reasoning that the virtues required by people to operate seamlessly to achieve goals are courage, liberality, pride, cordiality, justice, temperance, magnificence, good temper, truthfulness and astuteness. (Morris, 1998) Virtue cannot be treated as a methodology of doing things but rather it should be treated as a state of being. It is often hard to implement virtue in human resource management. It has also been suggested that it is impossible to apply virtue to human resource management. On the other hand Solomon has suggested that six virtues can be applied to human resource management which are community, role identity, integrity, excellence, holism and judgement. (Solomon, 1993) A major issue in applying virtues to human resource is the question of integrity. There is constant debate over how integrity should be applied to ethics in human resource management. Professional codes of practice in the human resources management field show that although debate over integrity is rife but its application is as yet limited. (Legge, 1995) (Woddall, 1996) Based on the arguments presented above, it is apparent that a number of different approaches to HRM and ethics exist that deal with these issues and their relationship on different planes. However, there are loopholes that can be found in every approach being taken to HRM and ethics. There is little doubt however that ethics need to be employed in business to promote sustainability and to HRM processes in order to promote productivity and fairness. Without the use of ethics, business would become too cut throat and people would be exploited beyond measure in employment. The presence of an HRM promotes the use of ethics at all levels in an organisation. Hence the presence of HRM as the “consciousness” of the organisation substantiates the contention that HRM is ethical. Had HRM been more unethical than ethical then the business community would find itself in jeopardy and employees would find themselves at disadvantage in working for organisations. However this is not the practical case so it can be concluded that HRM is more ethical than unethical. 1. Bibliography Armstrong, M., 2006. A Handbook of Human Resource Management Practice. 10th ed. London: Kogan Page. Brown, D., 2003. From Cinderella to CSR. People Management, 9(16), p.21. Dirkx, J.M., 2005. To develop a firm persuasion: Workplace learning and the problem of meaning. London: Elliott & Turnbull. Fredrick, R., 2002. A Companion to Business Ethics (Blackwell Companions to Philosophy). London: Wiley-Blackwell. Friedman, M., 1970. The social responsibility of business is to increase its profits. New Work Times Magazine, 13 September. Golding, N., 2010. Strategic Human Resource Management. In J. Beardwell & T. Claydon, eds. Human Resource Management: A Contemporary Approach. 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