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
• Discussion Questions
© 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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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.
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Terminating an Employee
 Know what an employer should and
should not do when terminating an
employee.
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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.
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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.
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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.
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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.
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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.
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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
 What are the key elements in the whistleblowing process?
 Be able to list and describe the
consequences of whistle-blowing.
 What should employees think about before
going ahead and blowing the whistle?
© 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
•
Know the different protections offered by
SarbOx.
 False Claims Act
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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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