The Ethical Issues That HR Managers Encounter in the Performance of Their Jobs

Over view

Human resources management faces ethical issues every day. Whether adhering to the legalities of Title VII of the Civil Rights Act, affirmative action, and the Americans with Disabilities Act or complying with the Sarbanes-Oxley Act of 2002, human resources managers deal with the ethical treatment of individual employees and ethicality of business decisions.

1. Employee Relations.

Maintaining objectivity in hiring, promotion, discipline, training, retention, termination and compensation lies at the core of human resources. HR ensures that company policies follow anti-discrimination legislature and policies the integrity of performance reviews to ensure that the evaluation process remains fair with like jobs critiqued equally.

2. Business Decisions.

While ethics and compliance officers have become popular components of America’s executive suites, the HR department is best positioned to observe the organization in action and propose change where needed.

3. Communication

Keeping senior management informed on legal and ethical obligations falls under the HR umbrella. HR prepares communication vehicles, for example, documents, seminars, and informal meetings to advise employees of the company’s code of ethics and no tolerance policies. HR must also train employees and supervisors on procedures for reporting violations.

4. Asset Protection

HR’s vigilance toward employment law plays a major role in protecting company assets by minimizing exposure to employee lawsuits. Drafting employment agreements with noncompete and nondisclosure clauses that effectively limit a new hire’s ability to work for a competitor or share confidential information stems risk.

5. SOX Compliance

A key business conduct law that involves ethics and HR managers is the Sarbanes Oxley Act of 2002 also known as SOX, which imposes strict regulations on financial reporting and record-keeping. Section 806 of the law, known as the “whistleblower provision,” requires HR to investigate all fraud allegations and suspected retaliation against tipsters. Section 301 requires HR to administer a formal procedure for fraud grievances. Retirement plans and corporate loan programs must be monitored by HR to respect trading blackout periods (Section 306) and credit restrictions to officers (Sections 402).

6. Interpretation

Linda Gravitt, a senior professional in human resources, notes that “it’s possible to comply with the law and still not be on solid ethical ground. Determining the right choice when people are involved can be challenging.” An HR manager could be faced with deciding to support “what’s right” or ignore unacceptable activity. This dilemma carries economic and personal consequences in the form of job loss or resignation, damaged reputation, and career derailment.

2. Employee Behavior Standards in the Workplace

Businesses have codes of conduct that are developed to outline expected, and acceptable, standards of employee behaviors. Codes of conduct function as resources for the regulations related to the inner workings of an organization. They are usually provided to employees at the start of employment so that they are aware of what is expected of them from their first day forward.

2.1 Behavioral Role Modeling

It is a manager's responsibility to ensure that employees are aware of the organization's values, ethics, expectations, and what the company views as right or wrong. Behavioral role modeling is a leadership theory that supports the concept that a manager's behavior will influence his or her employees. According to the theory, consistent examples of ethical behavior will create an environment of high morale, good principles, and respect for the organization among employees.

2.2 Benefits

While some people may view workplace standards of behaviors as ways for organizations to micromanage their employees, these standards serve many beneficial purposes. For one, codes of conduct protect employees from issues such as harassment. 

In theory, by outlining what types of relational behaviors are acceptable in the workplace, companies decrease the potential for office harassment. Risky behavior in the office can have risky impacts. Therefore, having established codes of conduct in the workplace reduces company liability and creates a safer environment for employees.

2.3 Employee Ethics

When you work for a company, you play by its rules (Emily Rakowski, 2008).

Entering into employment with an organization, people are pledging to abide by expected codes of conduct. One of the most critical and controversial examples of employee behavior standards in the workplace today has to do with ethics. 

Businesses require employees to adhere to ethical codes of conduct that foster agreements stating that the employee will not participate in professional or personal behaviors that jeopardize the moral standards of an organization. This allows companies to hold employees accountable for their actions, and also serves as a guide for employees to understand what the company's ethical expectations are.

2.4 Violating Standards of Behavior

Depending on the organization's internal processes, employees who violate the standards of behavior, and participate in actions that go against the codes of conduct and ethical codes, might be subject to disciplinary action. Disciplinary action is relative to the severity of the violation. If the violation is minor, sometimes the employee will receive a warning. 

A common practice in businesses today is to have clauses in their codes of conduct that state there is a zero-tolerance policy for unethical, dishonest, and illegal behaviors. If a violation is severe enough, probation or termination may be the end result.

References.

George.A.Steiner   &  John  F   Stenier   (2004),   “Business,  Government  and   Society”,  New Delhi:  Tata McGraw Hill Publishing Company

David J  Fritsch   “Business   Ethics:  A  Global   Perspective”. New   Delhi:  Tata  McGraw Hill Publishing Company

Vickers M.R (2005), “Business Ethics and the HR role: Past, present and future”, Human      Resource Planning, vol28 (1) 26-32

Frank H. E., Human Resource Development: The European Approach, Gulf Publishing Co., 1994.

Venkataratnam  C. S.,  Srivastava B.  K.,  Personnel Management   and Human Resources,  Tata McGraw

SHRM; Introduction to the Human Resources Discipline of Ethics and Sustainability; Peter J. Eide, J.D. SPHR; August 2015