© Oxford University Press Southern Africa, 2008. All rights reserved.
Chapter 8
Ethical issues and challenges in HRM
© Oxford University Press Southern Africa, 2008. All rights reserved.
© Oxford University Press Southern Africa, 2008. All rights reserved.
Learning outcomes
After reading this chapter you should be able to:
• define the concepts of ‘ethics’ and ‘business ethics’
• identify and discuss the ethical dimensions of a strategic
HRM paradigm
• explain the ethical decision-making frameworks of
utilitarianism, Kantian deontology, justice and rights and be
able to apply them to the HR function and activities
• identify and discuss issues that arise in the employment
relationship from the perspective of utilitarianism, Kantian
deontology, justice and rights
• discuss the role of HR professionals in the management of
corporate ethics programmes
© Oxford University Press Southern Africa, 2008. All rights reserved.
Chapter Content
•
•
•
•
•
•
Opening case: Voluntary Resignations at Orbolay
Introduction
ethics and its relevance
ethical dimensions of a strategic HRM paradigm
ethical decision-making frameworks
role of HR professionals in the management of
corporate ethics programmes and corporate ethics
cultures
© Oxford University Press Southern Africa, 2008. All rights reserved.
Ethics and the SA business
environment
• most definitions characterise ethics as referring to standards of
conduct or codes of conduct for specialised groups
• term is also used to denote the field of moral philosophy
(concerned with principles of conduct that govern behaviour)
• theories or principles provide the ultimate ground of justification
for our ethical beliefs about right and wrong behaviour
• Peter Singer: ethics deals with values, with good and bad, with
right and wrong. We cannot avoid involvement in ethics for what
we do and we don’t do is always a possible subject of ethical
evaluation. Anyone who thinks about what he or she ought to do
is, consciously or unconsciously, involved in ethics.
© Oxford University Press Southern Africa, 2008. All rights reserved.
Business ethics
• focuses on moral standards as they apply to organisations
and the behaviour of organisational members
• requires an integrated approach to decision-making
• if ethics is about relationships between people then
business ethics is about relationships between stakeholders
and the recognition that their divergent interests must be
accommodated
• different levels of analysis (the individual, the organisational,
the professional, the business system and societal levels)
© Oxford University Press Southern Africa, 2008. All rights reserved.
Business ethics
• two important anchors in South African-based public and
private enterprises
– the Constitution - founding values of human dignity, the
achievement of equality, and the advancement of human
rights and freedom
– the King (II) Report on Corporate Governance instrumental in moving ethics onto the agenda of
corporate boards in South African-based enterprises
© Oxford University Press Southern Africa, 2008. All rights reserved.
Ethical dimensions of a
strategic HRM paradigm
• 2 problems:
– dual loyalties
– the role of the HR professional in an
integrity based approach to strategic
business partnership
Ethical dimensions of a strategic
HRM paradigm
aims of the
traditional
welfare
aims of a
new
strategic
role
problems arise
because the
transformation
of the HR
function has left
unresolved
tensions
between
admin &
service
roles
© Oxford University Press Southern Africa, 2008. All rights reserved.
Ethical dimensions of a
strategic HRM paradigm
• emphasis on strategic HRM heightens the potential conflict of
loyalties for HR professionals who have to balance their dual
membership in the HR profession grounded in the values of ‘fair
and efficient’ management of people and in the corporate
environment focused on values which have more to do with
economic rationalism
• HR function has developed out of a concern for the individual, the
enterprise and society in response to relevant management and
social problems of the day
• HR practices have been driven by multiple values including
efficiency, competitiveness, care, respect for individuals, rights
and justice
© Oxford University Press Southern Africa, 2008. All rights reserved.
Ethical dimensions of a
strategic HRM paradigm
• as long as HR professionals are concerned with both the
management of systems and the management of people,
it is difficult to see how they could give up any one of these
values
• operationalising the proper balance between conflicting values
remains complex and goes to the heart of strategically
managing human resources with integrity
• to be regarded as a profession, HR practitioners must have a
degree of independence commensurate with them exercising
critical analyses of corporate policies and practices in the
service of the public good
© Oxford University Press Southern Africa, 2008. All rights reserved.
Dual loyalties
• conflict between ‘friends of the workers’ and new role as
management’s instruments of competitive advantage
• 3 examples:
1. unrealistic/overly aggressive business objectives and
deadlines to be met (causing organisational members to
compromise their companies’ ethical standards)
2. Schwoerer, May & Benson’s study: “many organisations
report difficulty establishing a balanced and coherent
strategy between employee and employer rights”
3. Hendry: difficult to act as a “neutral go-between” and HR
manager “became more unequivocally the representative of
management, counter-balancing the power of trade unions
and individual rights enshrined in legislation”
© Oxford University Press Southern Africa, 2008. All rights reserved.
Dual loyalties
• Hendry:
– workers and management have different interests
• developing strategies and policies that protect
employee interests (whilst balancing operational and
human resource needs) is a difficult mandate, it
requires HR professionals to quantify the
contribution of human resources to organisational
performance in ways that do not compromise
respect for, and the dignity of, individual
organisational members
© Oxford University Press Southern Africa, 2008. All rights reserved.
HR professional codes of conduct
• serve as “moral anchors” - embody a profession’s
values, help it to establish an ethical climate and
provide a framework for evaluating alternative
courses of action
• reassure stakeholders (the public, employees,
managers and shareholders) that a profession’s
activities are underpinned by moral principles, and
provide stakeholders with a benchmark by which to
evaluate the ethical performance of a profession
© Oxford University Press Southern Africa, 2008. All rights reserved.
HR professional codes of conduct
• Traditionally - loyalty is owed to affected
stakeholders in the following order of priority: the
public (including employees and consumers), the
profession, the client/employer, and the individual
professional
• HR professional bodies:
– SHRM
– Australian Human Resources Institute (AHRI)
– South African Board for Personnel Practice (SABPP)
© Oxford University Press Southern Africa, 2008. All rights reserved.
HR professional codes of conduct
• codes were revised:
– SHRM & AHRI by-passed the issue of dual loyalties - now refer to
standards and values (advancing the profession, honesty, integrity,
confidentiality, justice, competence, lawfulness and organisational
capability)
– SABPP addresses issues in their code:
 dual loyalty
 obligation of HR professionals to uphold respect for the dignity
of all human persons and empowers them to be vigilant and
aggressive in this pursuit
 hold in tension the plurality of values it has inherited from
multiple traditions (not only including HRM paradigms, but also
South Africa’s Constitution)
 important vehicle for providing direction and counsel to the HR
profession in South Africa
© Oxford University Press Southern Africa, 2008. All rights reserved.
An integrity-oriented approach to
strategic business partnership
• roles undertaken by HR professionals - corporate ethics
• study by SHRM & the Commerce Clearing House (CCH)
• HR literature - emphasis on the administrative-service role
frustrates a transformation of the HR function
• Business ethics - law specifies an ethical minimum and that
ethics involves more than minimal legal compliance
• emphasis on legal compliance – reasons
• strategic HRM paradigm calls for HR professionals to move
beyond the roles of “policy police and regulatory watchdog”,
to business partner
© Oxford University Press Southern Africa, 2008. All rights reserved.
An integrity-oriented approach to
strategic business partnership
•
•
•
•
problems with HR being a business partner
integrity
integrity-based business partners
combine concern for the competitive use of human capital
with managerial responsibility for the ethical dimensions of an
enterprise’s strategic operations
• without an integrity-oriented approach to business
partnership, there is the danger that HR professionals may
continue in the administrative-service role under the guise of
being a strategic player
Moral Rights
Individual entitlements which impose obligations on others.
© Oxford University Press Southern Africa, 2008. All rights reserved.
Ethical decision-making frameworks
Utilitarianism
(consequentialism)
The greatest good for the
greatest number (net
utility)
(Teleological theory)
Moral Rights
Individual entitlements
which impose obligations
on others
Kantian Duty
(nonconsequentialism)
Universal respect for
autonomous beings
(Deontological theory)
Justice
Due process and due outcome
Rawls’s Egalitarianism: Fair
distribution of benefits and burdens
Nozick’s Entitlement Theory: Uphold
property rights and liberty
© Oxford University Press Southern Africa, 2008. All rights reserved.
Consequences of actions:
teleological theory
• consequences which result from an action or practice –
consequentialism
• utilitarianism – the right thing to do is that which maximises
the greatest good for the greatest number of people
• act utilitarianism and rule utilitarianism - decides right and
wrong on the basis of the consequences of an action
– difference is between whether a utility analysis should be
applied to every action whenever it occurs (act
utilitarianism) or to classes of actions (rule utilitarianism)
– example - breaking a contract
© Oxford University Press Southern Africa, 2008. All rights reserved.
Consequences of actions:
teleological theory
• Egoism - the right action is that which maximises selfinterest
• Ubunthu - principle of reciprocity and interdependence.
Mbiti translates the term as “I am, because we are; and
since we are, therefore I am”.
© Oxford University Press Southern Africa, 2008. All rights reserved.
The importance of duty to others:
deontological theory
• nonconsequentialist
• emphasises the concept of duties and challenges
• management to treat every stakeholder with respect and integrity
rather than viewing them instrumentally for the collective good
• human rights and justice
• Kant
– human reason could “work out a consistent set of moral
principles that cannot be overridden”
– 3 key characteristics of reason:
• consistency which requires that moral actions must not be
self-contradictory
• universality which requires that we treat others the way we
want to be treated and not make an exception in matters
relating to ourselves
• it is a priori, or not derived from
© Oxford University Press Southern Africa, 2008. All rights reserved.
The importance of duty to others:
deontological theory
• Kant
– a moral principle/law must follow a particular form:
(i) must be possible for it to be made consistently
universal
(ii) respect rational human beings as ends in
themselves
(iii) respect the autonomy of rational beings
• Ross
– prima facie duties require managers to choose between
conflicting duties on the basis of which is the more
fundamental or obligatory
© Oxford University Press Southern Africa, 2008. All rights reserved.
Fairness: the idea of justice
• justice - expressed in terms of fairness and equality
• issues involving questions of justice are divided
into four categories:
– distributive
– procedural
– retributive
– compensatory
© Oxford University Press Southern Africa, 2008. All rights reserved.
Individual entitlements: rights
• to claim a right is to claim that one is ethically entitled to
something and this places a duty on other people to act
(or refrain from acting) in a way which brings about the
fulfillment of one’s right
• classified as either negative or positive:
– negative rights are liberty rights (e.g. the right to
privacy)
– positive rights are claim or welfare rights (e.g. the
right to employment at a living wage)
• most specific rights are derived from the 3 major
Lockean rights of life, liberty and property
• criticism – opens the way for people to claim a right to
‘anything and everything’
• employee rights and HR activities
© Oxford University Press Southern Africa, 2008. All rights reserved.
Convergence across normative
ethical theories
• discussion of ethical theory generates four key questions that
HR managers can usefully employ to evaluate prospective
responses to ethical challenges and dilemmas they may face.
These questions are as follows:
– Who is affected and how? Which action will result in the
greatest good for the greatest number of people affected by it?
(utilitarianism)
– Is the action one that universally respects autonomous rational
beings as ends in themselves? (Kantian deontology)
– Is the action one that treats all stakeholders fairly? (justice)
– Is the action one that upholds fundamental human rights?
(rights)
© Oxford University Press Southern Africa, 2008. All rights reserved.
Ethical issues and challenges in
the workplace
• selection
– screening
– employment interview
– psychological testing
• compensation
• promotion and performance management
© Oxford University Press Southern Africa, 2008. All rights reserved.
The role of HR professionals in the
operationalisation of
corporate ethics programmes
• corporate ethics programmes
– responsibility for corporate ethics programmes
has been assigned to existing functional areas of
management, primarily HR departments in
Australia, Canada, South Africa and the U.S.A.,
and legal departments or corporate services in
the U.K.
– to be effective, corporate ethics programmes
must have the support of top level management