HRM Ethics

HRM Ethics
• People learn business management
automatically even before knowing what
‘Management’ is- Peter Drucker
• To many people management is synonymous
with business management
• But business management is only a part of
management
• For a better understanding of HRM Ethics, it is
essential to know what Management is, what is
HRM, what is Business, what is Ethics and what
is Business Ethics.
 Definition-Management
• Management is the process of planning, organizing,
directing and controlling of organizational resources in
order to achieve personal, organizational and social
goals effectively and efficiently
• This definition envisages the use of organizational
resources including HR very effectively and efficiently to
achieve ends without compromising individual or
organizational or social goals, i.e. there must be
equilibrium among these factors
• The HRM implication is that HR (People) can be used as
a means to achieve organizational and social goals, but
at the same time, it should not be forgotten that they
have their own ends, i.e. in certain aspects they are the
end in themselves, even in the organizational context
 Definition-HRM
• HRM means a process of planning, organizing,
directing and controlling of procurement
(recruitment & selection), development (training),
compensation (salary, wages & other benefits),
appraisal (actual performance & potential
performance), maintenance (welfare & record-
keeping), and separation (retirement,
resignation, retrenchment, etc) of employees or
personnel or HR of the organization in order to
achieve personal, organizational and social
goals effectively and efficiently.
 Definition-HRM
• In this definition, there are two types of functions for the
HR Manager
• Managerial functions-planning, organizing, directing and
controlling
• Operative functions- procurement, development,
compensation, appraisal, maintenance and separation
• Here, the HR Manager is applying all managerial
functions positively in each of the operative functions to
maintain equity, equality and justice. In some operative
functions (compensation, appraisal, maintenance and
separation) s/he has to maintain equity, while in some
others (procurement, development, etc) s/he has to
maintain equality and individual and social justice. It is
also implied that HR (employees) must play their duties
to achieve the organizational and social goals effectively
and efficiently
 Definition-Business
• Business is a process of carrying out
economic activities (providing goods and
services) by any individual or organization
or corporation or partnership firm or
franchisee in order to generate profit
(return on investment) within the legal and
moral framework
• This definition implies that any business
activity/decision has three aspects:
Economic, Legal and Moral (ethical). One
aspect cannot be compromised for
another
 The Organization

• An organization is made of economic

and social (human) elements and
operates within the legal framework
• In an organization the human element
cannot be compromised for the
economic element
 What is Ethics?

• Ethics is a set of moral principles or

values
• Ethics are the principles, norms and
standards of conduct governing an
individual or group
• Ethics is a rational inquiry into how to
act and how to lead one’s life
 What is Business Ethics?
• Business ethics are moral principles that define
right and wrong behaviour in the world of
business
• Business ethics is the evaluation of business
activities and behaviour as right or wrong
• Business ethics is the application of general
ethics to business behaviour
• These definitions say that business ethics is
nothing but an extension of individual/group
ethics to business situations. Also it can be
understood that there can’t be different moral
standards for personal life and business life.
Business ethics is essentially an applied ethics.
 What is HRM Ethics?
• HRM Ethics is “the affirmative moral
obligations of the employer (business)
towards the employees to maintain
equality and equity justice”
• Do not treat people (employees)
simply as a means for our own
purposes without their full and free
consent, because they are ends in
themselves
 Hard and Soft HRM
• Hard HRM- where employees are viewed instrumentally
as a means to achieve organizational goals
• Soft HRM- where employees are viewed as a subject-in-
themselves. Soft HRM promotes employee rights,
empowerment, involvement, participation, etc
• Both soft and hard HRM can be considered as ethical
under “utilitarianism” concept (greatest good to greatest
number), but deontological theory may accept only soft
HRM as ethically correct and not hard HRM
(Deontological ethics or deontology is an approach to ethics that focuses on the
rightness or wrongness of intentions or motives behind action such as respect for
rights, duties, or principles, as opposed to the rightness or wrongness of the
consequences of those actions.)
Stakeholder theory and HRM ethics

• It says that “the corporation and its

managers are responsible for the effects
of their actions on others” and that “the
corporation should be managed for the
benefit of the stakeholders, that is, those
who affect or can be affected by the
corporation”
• This theory also supports “utilitarianism” in
HRM ethics
 To what extent should the
organization follow HRM ethics?
Here, the two ethical concerns are
1. To what extent should people be used as a means to
an end
2. To what extent the mgt has to act in the interest of the
employees
The last part of the definition of HRM “effective and
efficient” utilization of HR supports the first concern
The part “to achieve personal/individual goals” in the
definition supports the second concern
The definition of HRM clearly says that organizational
interest cannot be compromised while doing justice to
employees and vice-versa
 Areas of HRM ethics
• Basic human rights, civil and employment rights. E.g.
Job security, feedback from tests, openness and
consultation over matters which affect the employees
• Social and organizational justice. E.g. procedural justice,
egalitarianism, equity and equal opportunity
• Equity/Distributive justice (proportionate pay for
proportionate contribution), autonomy and respect
• Safety in the workplace
• Respect, fairness and honesty based process in the
workplace
• Privacy
(Egalitarianism (derived from the French word égal, meaning equal) is a political
doctrine that holds that all people should be treated as equals and have the same
political, economic, social, and civil rights)
 Is HRM as a function full of
conflicts? Yes
Rhetoric of HRM Reality of HRM

Flexibility Mgt can do what it wants

De-layering Reducing the no. of middle mgrs
Downsizing/Rightsizing Redundancy

New working patterns Part-timers to replace full-timers

Empowerment Making people take risk/responsibility

Training & Development Manipulation/Exploitation

Employability No job/employment security

Recognizing individual contribution Undermine the trade union and

collective bargaining
Teamwork/synergy Reducing the individual’s discretion
 Employees’ rights and duties
Rights Duties
To work Loyalty to the firm
For just compensation Respect for current legal and moral
norms

To free association and strike Respect the rights of the employer

For privacy Just contribution to the organization

For freedom of speech Maintain secrecy/confidentiality

To due process Cooperation with boss/subordinates

For participation

For healthy and safe working

conditions

To job satisfaction
 Employers’ rights and duties
Rights Duties

Demand minimal productivity from No discrimination in rules for

employees recruitment and conditions for firing
Loyal cooperation from employees Fair compensation

Requirement of correct behaviour at Work oriented code of conduct

the workplace
No disruption in work Acceptance of criticism from workers

Peaceful ways of settlement Acceptance of labour court

jurisprudence in conflicts
Improving QWL
 Some HRM ethics for discussion
• Privacy
• Individualism vs Collectivism
• Restructuring
• Wages and salaries
• Sexual harassment in the workplace
• Discrimination
• Whistle-blowing
• Affirmative Actions
 References
• The Economic Times, October 20, 2006
• Murthy,C.S.V, Business Ethics, Himalaya
Publishing House, 2nd edn, 2006
• Johnson,O.A and Reath.A, Ethics,
Thomas Wadsworth, 2004
• www.jyu.fi
• www.wikipedia.com
• www.Answers.com