Business Ethics for HR
Professionals
Prepared by the SHRM Ethics Special Expertise Panel
SHRM2012
©
Ethical Issues in Human Resources
“Ethics is learned by modeling,
not by reading a bunch of
books over the weekend.”
-- John Bruhn
Former Provost
Penn State University - Harrisburg
SHRM2012
©
Agenda
• What is ethics?
• The Business Case
• The HR Professional’s Role
SHRM2012
©
Part I: What is Ethics
Definition of Ethics
The rules of conduct or moral principles
guiding individual or group behavior
Source: www.shrm.org
SHRM2012
©
Moral Principles
What are the rules of conduct or moral
principles?
• No single, universal standards or rules
• Individual or cultural self-interests,
customs, and religious principles
• Serves one’s self interests and needs
SHRM2012
©
Moral Decisions
Where does one learn to make moral
decisions?
•
•
•
•
In the home
In their social community
From the media
In the workplace
SHRM2012
©
Values
• What are your personal values? What matters
most to you?
• What are your organization’s values? What
matters most to the organization?
• What happens when your values and your
organization’s values do not match?
SHRM2012
©
Ethical Principles
Ethical Principles in the
Workplace
SHRM2012
©
Ethical Decision-making Principles
Utilitarianism
• Judged on consequences
• Net benefits over costs are greatest
for the majority
• The greatest good for the greatest
number
SHRM2012
©
Ethical Decision-making Principles
Universalism
• The means justify the ends
• Intention of an act treats all persons
with respect
• Everyone should act this way
SHRM2012
©
Ethical Decision-making Principles
Rights
• Entitlement
• Individual rights guaranteed to all
SHRM2012
©
Ethical Decision-making Principles
Justice
• Fairness and equality
• Opportunity, wealth, and burden are
fairly distributed
SHRM2012
©
Situational
Opportunity
Improper Behavior
Pressure or
Motive
Rationalization
Source: Choosing Ethical Excellence 2006
SHRM2012
©
Part II
The Business Case
SHRM2012
©
Definition of Business Ethics
The art and discipline of applying
ethical principles to examine and
solve complex moral dilemmas.
Source: Business Ethics: A Managerial, Stakeholder Approach 1994
SHRM2012
©
Business Ethics
Corp Social Responsibility
Culture
Ethical
Leadership
SHRM2012
©
“What executives do and value is minutely
watched throughout the whole
organization. And nothing is noticed more
quickly – and considered more significant
– than a discrepancy between what
executives preach and what they expect
their associates to practice.”
-- Peter Drucker
SHRM2012
©
The 4 Rs
Does an ethical organization have a
competitive advantage?
Risk
Recruiting
Reputation
Raking in the dough
SHRM2012
©
Top Ethics/Standards Practices
• Discipline for employees who violate their
organization’s ethics standards
• Formal ethics program including written
standards
• A means for anonymous reporting of ethics
standards violations
• Written non-retaliation policy for
employees who report perceived violations
Source: The Ethics Landscape in American Business 2008
SHRM2012
©
Sarbanes-Oxley Act of 2002
• Intended to foster truthful
communication between company
officers and shareholders
• Code of ethics required
• Requires training
• Protects Whistleblowers
SHRM2012
©
Old and New Company Ethics
Old Ethic
New Ethic
Do the minimum required by law
Do the right thing
Keep a low profile
Show you are doing the right thing
Downplay public concerns
Seek to indentify and address public
concerns
Reply to shareholders inquires when
necessary
Be responsible to stakeholders
Communicate on a need-to-know
basis
Communicate openly
Make decisions on the bottom line &
laws only
Integrate all of the above into
decision-making
SHRM2012
©
How to nurture employees to make
ethical decisions
• Position ethics as the #1 value and
consideration for the organization
• Don’t pigeon hole employees by their
demographic
• Need check and balance for how results are
achieved to ensure ethical practices were
followed in the process
SHRM2012
©
Corporate Social Responsibility
Business commitment and
contribution to the quality of life of..
> Employees
> Employee’s families
> Local community
> Overall society
..to support sustainable economic
development
SHRM2012
©
The HR Professional’s Role
SHRM2012
©
Role of HR Professionals in
Organizational Ethics
• The HR department is a primary resource for
ethics-related issues in the organization – 83%
• HR is involved in formulating ethics policies for
their organization – 72%
Source: The Ethics Landscape in American Business 2008
SHRM2012
©
Role of HR Professionals in
Organizational Ethics
• HR is held to a higher standard
• You are the guardians of organizational culture
• HR determines and facilitates training needs
for the organization
• HR employs reward and punishment systems to
reinforce what kind of behavior is valued
• HR uses information gleaned from exit
interviews to support and improve the ethical
environment
SHRM2012
©
The PLUS Rule:
Framework for Ethical Decision-Making
•
•
•
•
P - Policies and Professional Standards
L - Laws and Regulations
U - Universal/Organizational Values
S - Self/Personal Values or Standards
Source: www.ethics.org
SHRM2012
©
The CLICK Rule:
Framework for Ethical Decision-Making
• What are the CONSEQUENCES if I do this? Who will
benefit? Who will suffer?
• Is it LEGAL?
• Would I like to see this as my IMAGE on the front
page of the newspaper? Would I like to tell this to
my kids?
• Does this decision support or damage our corporate
CULTURE and values?
• Does it cause a KNOT in my stomach?
Source: Developed for Florida Power Corp by Lee Gardenswartz, Anita Rowe, and Patricia Digh
SHRM2012
©
Six Essential Elements of an Ethics Program
1.
2.
3.
4.
5.
Written standards of conduct
Training on ethics
Mechanisms to seek ethics advice or information
Means to report misconduct anonymously
Discipline of employees who violate ethical
standards
6. Evaluation of employees performance based on
ethical conduct
SHRM2012
©
Resources
• www.shrm.org > The Ethics Landscape in American Business
> Business Ethics: The Role of Culture and
Values for an Ethical Workplace
> Ethics and Generational Differences:
Interplay between Values and ethical
business decisions
• www.ethics.org - Ethics Resource Center
> Choosing Ethical Excellence Alan V. Funk
> Business Ethics: A Managerial, Stakeholder
Approach Joseph W. Weiss
SHRM2012
©
SHRM Special Expertise Panel - Ethics
This training product would not be possible without the
creative work and contributions of the following Members
of the SHRM Ethics Special Expertise Panel:
•
•
•
•
•
•
•
Marty Val Hill, SPHR, Live your Legacy
Linda Magyar, SPHR, Pillsbury Winthrop Shaw Pittman LLP
Cathie Bishop, SPHR, Great West Casualty Co.
Nancy Volpe, SPHR GPHR, Center for People Solutions LLC
Michael J. Colledge, SPHR, CCP, Brigham Young University
Joyce LeMay, SPHR, Bethel University
Bonnie Turner, SPHR, Ph.D., MBCI
SHRM2012
©