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The ethical nature of HRM

There is a strong tradition in business that insists that business should not be concerned with ethics. As Milton Friedman, a vociferous proponent of this position, has put it: The social responsibility of business is to its shareholders. . . . The business of business is business (1970). The core concern of business proponents of the market economy argue is in attempting to secure the best possible return on any investment. Any dilution of this focus will lead to the corruption of what is a finely balanced system. Businesses that seek to be ethical as well as profitable will probably fail economically, following which the whole community may suffer. Rather, let the invisible hand guide the market and all will prosper. Any constraint on the freedoms of the market be they motivated by ethical angst or vote-seeking government policy will just mess everything up. Concern has surfaced from a variety of sources: from consumer groups, political groups, religious and charitable organisations. A case can be made that negative consequences flow from poor ethical standards: While short-term goals may be achieved through the cut-throat tactics of free market principles, in the long run business will survive better if good standards of conduct are maintained; Ethical business creates a positive environment in which to buy and sell, as corruption, poverty and lack of respect for the environment generate problems for the business community in the long term; Finally, people neither hold moral values nor have religious beliefs to guide the conduct of their lives. Why should the area of business be exempt?

The unethical practice of HRM itself has also hit public attention: Off-shoring and exploiting cheap labour markets; Using child labour; Reneging on company pension agreements; Longer working hours; Increasing work stress; The use of disputed and dubious practices in hiring and firing of personnel.

Ethics is personal.

Information is neutral and amoral.

Business and ethics do not mix. 5 MYTHS

Good business means good ethics.

Business ethics is relative.

Employee Rights
In the context of ethical human resource management, HR managers must view employees as having basic rights. Such a view reflects ethical principles embodied in the U.S. Constitution and Bill of Rights. A widely adopted understanding of human rights, based on the work of the philosopher Immanuel Kant, as well as the tradition of the Enlightenment, assumes that in a moral universe, every person has certain basic rights:

Right of free consent People have the right to be treated only as they knowingly
and willingly consent to be treated. An example that applies to employees would be that employees should know the nature of the job they are being hired to do; the employer should not deceive them.

Right of privacy People have the right to do as they wish in their private lives, and
they have the right to control what they reveal about private activities. One way an employer respects this right is by keeping employees personal records confidential.

Right of freedom of conscience People have the right to refuse to do what


violates their moral beliefs, as long as these beliefs reflect commonly accepted norms. A supervisor who demands that an employee do something that is unsafe or environmentally damaging may be violating this right if the task conflicts with the employees values. (Such behavior could be illegal as well as unethical.)

Right of freedom of speech People have the right to criticize an organizations


ethics, if they do so in good conscience and their criticism does not violate the rights of individuals in the organization. Many organizations address this right by offering hot lines or policies and procedures designed to handle complaints from employees.

Right to due process If people believe their rights are being violated, they have
the right to a fair and impartial hearing.

One way to think about ethics in business is that the morally correct action is the one that minimizes encroachments on and avoids violations of these rights.

Ethics in business environment


Winstanley and Woodall (1996) highlight a number of ethical concerns about standards of HR practice, arising from this strategic focus. These include: Increased job insecurity arising from flexible work practices; short-term and temporary conditions of employment; fear of job loss due to outsourcing and offshoring; increased stress; and a widening imbalance of power between management and workforce; Increase in surveillance and control this ranges from the use of psychometric tests to electronic surveillance of work patterns through the application of ICT; Deregulation freedom of the market place has been imposed by global regulators such as the WTO, and has led to what Storey (1993) has termed: impatience with rule and can-do outlook amongst line managers, which in practice may be seen to push HR into compromising good practice, for business needs. In professional services organisations, for example, fee-earners may be challenged to decide between doing good and doing well; Aligned to this is a decline in management integrity, leading to accusations of recourse to rhetoric and deceit among HR professionals. For example, the current emphasis on managing organisational culture and commitment of employees can be contrasted with a highly instrumental approach to the supervision of the employment contract.

HR interest in ethics
The welfare concept
HR people have long held a strong interest in ethics, although it was usually caricatured as welfare. HR specialists do not have separate places and conventions of work which they leave in order to advise managements. They are employed in no other capacity than to participate closely in the management process of the business. They do not even have the limited degree of independence that company accountants have, as their activities are not subject to external audit, and it is ludicrous to expect of them a fully-fledged independent, professional stance. The change in general management orientation during the 1980s and 1990s towards the idea of leaner and fitter, flexible organisations, downsizing, delayering, outplacement and all the other ideas that eventually lead to fewer people in jobs and fewer still with any sort of employment security have usually been implemented by personnel people. HR and personnel managers cannot behave like Banquos ghost and be silently disapproving of their colleagues actions. What they can do is to argue vigorously in favour of what they see as the best combination of efficiency and justice, but they can onlyargue vigorously if they are present when decisions are made. If they are not generally on side, they do not participate in the decision making and they probably do not keep their jobs. Either they are a part of management, valued by their colleagues, despite their funny ideas, or they are powerless. There are no ivory towers for them to occupy, and no more employment security for them than for any other member of the business.

Job enrichment and humanising the workplace


HR managers have not abandoned their interest in welfare; they have moved away from an approach to welfare that was trivial, anachronistic and paternalist. In the HR vocabulary the term welfare is code for middle-class do-gooders placing flowers in the works canteen. Personnel managers increasingly shun the traditional approach to welfare not for its softness, but because it is ineffectual. It steers clear of the work that people are doing and concentrates on the surroundings in which the work is carried out. It does not satisfy the HR obsession with getting progress in the employment of people, and it certainly does not do enough to satisfy the people who are employed. In many undertakings HR specialists are taking their management colleagues along with them in an enthusiastic and convinced attempt to give jobs more meaning and to humanise the workplace. Their reasoning is that the business can only maintain its competitive edge if the people who work there are committed to its success, and that commitment is volitional: you need hearts and minds as well as hands and muscle. Investment in training and the dismantling of elaborate, alienating

organisation structures do more for employee well-being than paternalistic welfare programmes ever did.

Myths about Ethics Five myths about ethics prevail in literature. They are

Ethics is personal and confined to self

Source of Ethics
Religion
It is one of the oldest foundations of ethical standards. Religion wields varying influences across various sects of people. It is believed that ethics is a manifestation of the divine and so it draws a line between the good and the bad in the society. Depending upon the degree of religious influence we have different sects of people; we have sects, those who are referred to as orthodox or fundamentalists and those who are called as moderates. Needless to mention, religion exerts itself to a greater degree among the orthodox and to lesser extent in case of moderates. Fundamentally however all the religions operate on the principle of reciprocity towards ones fellow beings!

Culture
Culture is a pattern of behaviors and values that are transferred from one generation to another, those that are considered as ideal or within the acceptable limits. No wonder therefore that it is the culture that predominantly determines what is wrong and what is right. It is the culture that defines certain behavior as acceptable and others as unacceptable. Human civilization in fact has passed through various cultures, wherein the moral code was redrafted depending upon the epoch that was. What was immoral or unacceptable in certain culture became acceptable later on and vice versa. During the early years of human development where ones who were the strongest were the ones who survived! Violence, hostility and ferocity were thus the acceptable. Approximately 10,000 year ago when human civilization entered the settlement phase, hard work, patience and peace were seen as virtues and the earlier ones were considered otherwise. These values are still pt in practice by the managers of today! Still further, when human civilization witnessed the industrial revolution, the ethics of agrarian economy was replaced by the law pertaining to technology, property rights etc. Ever since a tussle has ensued between the values of the agrarian and the industrial economy!

Law
Laws are procedures and code of conduct that are laid down by the legal system of the state. They are meant to guide human behavior within the social fabric. The major problem with the law is that all the ethical expectations cannot be covered by the law and specially with ever changing outer environment the law keeps on changing but often fails to keep pace. In

business, complying with the rule of law is taken as ethical behavior, but organizations often break laws by evading taxes, compromising on quality, service norms etc.

Importance of Ethics