Business & Society
Ethics, Sustainability, and Stakeholder
Management
Eighth Edition
Archie B. Carroll
Ann K. Buchholtz
© 2012 South-Western, a part of Cengage Learning
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Chapter 17
Employee
Stakeholders
and Workplace
Issues
© 2012 South-Western, a part of Cengage Learning
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Learning Outcomes
1. Identify the major changes that are occurring in the
workforce today.
2. Outline the characteristics of the new social contract
between employers and employees.
3. Explain the employee rights movement and its underlying
principles.
4. Describe and discuss the employment-at-will doctrine and
its role in the employee’s right not to be fired.
5. Discuss the right to due process and fair treatment.
6. Describe the actions companies are taking to make the
workplace friendlier.
7. Elaborate on the freedom-of-speech issue and whistleblowing.
© 2012 South-Western, a part of Cengage Learning
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Chapter Outline
• The New Social Contract
• The Employee Rights Movement
• The Right Not to Be Fired Without Cause
• The Right to Due Process and Fair Treatment
• Freedom of Speech in the Workplace
• Summary
• Key Terms
© 2012 South-Western, a part of Cengage Learning
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Global Competition and the Social
Contract
• The social contract between organizations
and their workers has been reshaped.
•
Driven by global competition and the
economic recession.
The trend toward more expansive employee
rights
 Right not to be fired without good cause
 Right to due process and fair treatment
 Right to freedom of speech in the workplace
© 2012 South-Western, a part of Cengage Learning
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The New Social Contract
• Today’s worker has held nine jobs by age
30.
• The workforce is:
•
More mobile
•
Less loyal
•
More diverse
• Employees want:
•
Competitive pay
•
Benefits
•
Opportunities for professional growth
© 2012 South-Western, a part of Cengage Learning
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The Changing Social Contract
Old Social Contract
Job security
Life careers with one
employer
Stable positions/job
assignments
Loyalty to employer
Paternalism
Employee sense of
entitlement
Stable, rising income
Job-related skill training
Focus on individual
accomplishments
© 2012 South-Western, a part of Cengage Learning
New Social Contract
Few tenure arrangements
Few life careers; changes
common
Temporary project
assignments
Loyalty to self
Relationships far less
familial
Personal responsibility for
one’s job future
Pay for value added
Employees in charge of
own education
Focus on team building and
projects
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Employee Loyalty
Loyalty remains important
• Employers must earn employee loyalty
through demonstrating:
 Trust
 Respect
 Commitment
 Uncertainty from the global economic
recession made employees feel more loyal
to their employers.
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Training and the New Social
Contract
Outplacement
• Assistance provided to laid-off employees.
 Is an important ethical responsibility.
•
The duty to treat employees well does not end
when they are terminated.
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The Employee Rights Movement
Private property
• Individuals and private organizations are
free to use their property as they desire.
 Historically, private corporations did not
have to recognize employee rights.
© 2012 South-Western, a part of Cengage Learning
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Employee Rights
Rights
• From the Principle of Rights perspective,
rights are justifiable claims that utility
cannot override.
Sources of employee rights
1. Statutory rights
2. Collective bargaining rights
3. Enterprise rights
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Models of Management Morality
Moral management
• Employees are viewed as a human resource
that must be treated with dignity and
respect.
Amoral management
• Employees are treated as the law
requires.
Immoral management
• Employees are viewed as factors of
production to be used, exploited,
and manipulated.
© 2012 South-Western, a part of Cengage Learning
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The Right Not to Be Fired Without
Cause
Good cause norm
• The belief that employees should only be
discharged for good reasons.
• Prevails in the United States today.
Employment-at-will doctrine
• The relationship between employer and
employee is a voluntary one that can be
terminated at any time by either party.
• Is a fairly unique concept in the world.
© 2012 South-Western, a part of Cengage Learning
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Legal Challenges to Employmentat-Will
Public policy exceptions
•
Protects employees from being fired for
refusal to commit crimes.
Implied contract exception
•
Protects employees who they believe have
contracts or implied contracts.
Good faith principle
•
Employers may lose lawsuits to former
employees if they cannot show that employees
had opportunities to improve their
performance before termination.
© 2012 South-Western, a part of Cengage Learning
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Moral and Managerial Objections to
Employment-at-Will
1. Employees deserve respectful treatment.
2. Employees do not have the option of being
arbitrary or capricious with employers.
Employers should bear the same
responsibility.
3. Employees are expected to be trustworthy,
loyal and respectful with employers.
Employers should show employees the
same consideration.
© 2012 South-Western, a part of Cengage Learning
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Terminating an Employee
1. Fire employees in a private space.
2. Be mindful of employees’ logistics.
3. Preserve the employee’s dignity.
4. Choreograph the notification in advance.
5. Use transparent criteria for layoffs.
© 2012 South-Western, a part of Cengage Learning
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What Not to do When Terminating
an Employee
1. Don’t fire on a Friday.
2. Don’t say that downsizing is finished.
3. Don’t terminate an employee via e-mail.
4. Stick to the topic and avoid platitudes.
5. Don’t rush through the meeting.
© 2012 South-Western, a part of Cengage Learning
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The Right to Due Process
Due Process
• The right to receive an impartial review of
one’s complaints and to be dealt with fairly.
• The right of employees to have decisions
that adversely affect them be reviewed by
objective and impartial third parties.
© 2012 South-Western, a part of Cengage Learning
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The Requirements of a Due Process
System
1.
It must be a procedure and must follow rules.
2.
It must be visible so that potential violators
are aware of it.
3.
It must be predictably effective.
4.
It must be institutionalized.
5.
It must be perceived as equitable.
6.
It must be easy to use.
7.
It must apply to all employees.
© 2012 South-Western, a part of Cengage Learning
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Alternative Dispute Resolution
Open-Door Policy
Hearing Procedure
The Ombudsman
The Peer Review Panel
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Concerns with the Open-Door
Policy
1. The process is closed.
2. One person is reviewing what happened.
3. Tendency for a manager to support another
manager’s decision.
 A hearing procedure helps open up the
process because employees can elect
representation.
© 2012 South-Western, a part of Cengage Learning
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The Ombudsman
•
Has been used in Sweden since 1809 to
curb abuses by government against
individuals.
•
Ombuds handle the concerns of employees
who believe they have witnessed
wrongdoing.
•
They keep the problem from getting out of
hand.
© 2012 South-Western, a part of Cengage Learning
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Factors for a Successful Peer
Review Panel
1.
People in the process are respected
members of the organization.
2.
Elected, rather than appointed,
committee members.
3.
Provide training in dispute resolution,
discrimination, fairness, legalities, and
ethics for everyone involved.
4.
Representatives of both employees and
management should be involved in
decision making.
© 2012 South-Western, a part of Cengage Learning
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Mandatory Arbitration
Arbitration
• A process where a neutral party resolves a
dispute between two or more parties and
the resolution is binding.
Mandatory arbitration
• The parties must agree to arbitration prior
to any dispute occurring.
© 2012 South-Western, a part of Cengage Learning
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Freedom of Speech in the
Workplace
Whistle-Blower
• An organization member who discloses
illegal, immoral, or illegitimate practices
under the control of their employers, to
persons or organizations that may be able
to effect action.
© 2012 South-Western, a part of Cengage Learning
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Whistle-Blowing
Key Elements in the Whistle-Blowing
Process
1.
The whistle-blower
2.
The act or complaint
3.
The party to whom the complaint is made
4.
The organization against which the
complaint is made
© 2012 South-Western, a part of Cengage Learning
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Two Views of Employee Responsibility in
a Whistle-Blowing Situation
Traditional
Corporate
Employer
Employee
Loyalty
Obedience
Confidentiality
Emerging
Corporate
Employer
(Has certain
rights)
Responsibility
Responsibility
Employee
Public
(Has certain
rights)
(Has certain
rights)
Whistle blowing
© 2012 South-Western, a part of Cengage Learning
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A Checklist to Follow Before
Blowing the Whistle
1. Is there any alternative to blowing the whistle?
2. Does the proposed disclosure advance public
interest rather than personal or political gain?
3. Have you thought about the outcomes of blowing
the whistle for yourself and your family?
4. Have you identified the sources of support on
which you can rely during the process?
5. Do you have enough evidence to support your
claim?
6. Have you identified and copied all supporting
records before drawing suspicion to your
concerns?
© 2012 South-Western, a part of Cengage Learning
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Consequences of Whistle-Blowing
 Firing
 More stringent criticism of work
 Less desirable work assignments
 Pressure to drop charges against the
company
 Heavier workloads
 Loss of perquisites
 Exclusion from meetings previously
attended
© 2012 South-Western, a part of Cengage Learning
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Government Protections for
Whistle-Blowers
 1978 Civil Service Reform Act
 Michigan Whistle-Blowers Protection Act
of 1981
 Sarbanes-Oxley Whistle-Blower
Protections
 False Claims Act
© 2012 South-Western, a part of Cengage Learning
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Sarbanes-Oxley Whistle-Blower
Protections
•
•
•
•
•
•
•
•
•
Comprehensive coverage for all employees of
publicly-traded companies
Comprehensive protection for discrimination or
harassment
Any corporate conduct that could threaten
shareholder value
Timely responses
The right to a jury trial
Lessened burden of proof on employee
Compensatory damages and judicial fees
Criminal felony penalties for retaliation
Audit committees required to have complaint
response procedures
© 2012 South-Western, a part of Cengage Learning
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Management’s Responsiveness to
Whistle-Blowing
Whistle-blowing occurs after less dramatic
channels of communication have failed
1. Managers must be clear that they invite
suggestions.
2. Managers must refute commonly held
assumptions and organizational myths that
discourage communication.
3. Managers should tailor rewards so that
employees share more directly in cost
savings or sales increases from ideas they
offer.
© 2012 South-Western, a part of Cengage Learning
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Key Terms
• 1978 Civil Service
Reform Act
• Alternative dispute
resolution (ADR)
• Collective bargaining
• Due process
• Employee Rights
• Employment-at-will
doctrine
• Enterprise rights
• False Claims Act
• Good cause norm
• Good faith principle
• Hearing procedure
• Implied contracts
• Mandatory arbitration
• Michigan WhistleBlowers Protection Act
of 1981
• Ombudsman
• Outplacement
• Open-door policy
• Peer review panel
• Private property
• Public policy exception
• Social contract
• Statutory rights
• Whistle-blower
© 2012 South-Western, a part of Cengage Learning
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