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Social Responsibility

&
Role of Human Resource

Name : Supriya Gharat


Course : PGDBA-DLP
No : DPGD/JL06/0163

Index

Sr no

Particulars

Page no

Introduction
Social Responsibility and HRs role

4
HR practices

6
Strategic opportunities for HR

8
Getting it together: tackling the CSR agenda

11
Case study: I & II

19
HRD policy response

25
Corporate Social Responsibility ( CSR ) in the Business Community

26
Challenges to the Business Case for CSR

29
HRs Leadership Role

10
11

30
CSR in the Global Arena
Setting up a CSR programme

12

33
36

Case Study III - AXA


13

37

14

Case Study IV O2

41

15

Case Study V Work life Balance


What Does the Future Hold?

42

16

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INTRODUCTION
According to Milton Friedman, a business has no social responsibilities other than to maximize its
profits. However, today there is a growing perception among enterprises that sustainable business
success and shareholder value cannot be achieved solely through maximizing short-term profits,
but instead through market-oriented yet responsible behavior. This responsible behavior of
corporations can be called corporate social responsibility If profit is not enough, companies have
to decide what they are in business for. Possible answers include:
to improve the living standards of employees and others
to contribute to scientific and technological progress as a basis for improving the quality of life
to provide employment and support
to meet customer needs or requirements.
Unless companies can identify aims that advance human welfare in some way, they will find it
increasingly
difficult to stay in business. These are of course issues about leadership rather than management;
about
doing the right thing as much as doing things right.
social responsibility is most frequently used to describe a companys relations with its wider
community. However, employees are an important component of that community. So what exactly
does Social Responsibility add to human resource management as a basis for managing
employees?

How HR fits with Social Responsibility


Ethical issues have historically been seen as marginal to academic debate about human resource
management. There is no agreement about what specific ethical framework should apply or about
what
course of action would be most ethical in particular circumstances. But it would be wholly wrong
on that
account to conclude that people management practices and the activities of HR practitioners are
lacking any
moral or ethical foundation. For a start, HR is necessarily about managing, developing and
motivating people.It is about relationships, and in this sense it differs significantly from the finance
or IT functions, for example.
They too require effective people management if they are to perform effectively, but that is not their
mission. Beyond that, there is evidence that effective people management practices have a pay-off
on the bottom line.The development of the personnel function early in the twentieth century
reflected an assumption that thegood employer profits by his goodness and the belief that labour
should be treated on the basis of human rather than economic values. More recently, Dave Ulrich
has identified one of four key roles for HR as that of employee champion. The HR manager is not
simply another function within management but has the unique privilege and challenge of
reconciling employer and employee interests. There is already a clear ethical content to the job of
HR management within the wider business framework. With their responsibilities for employee
behaviour, relations with trade unions and employment law, employee relations practitioners have
traditionally focused on the rules or standards to be applied in organisations.
Social Responsibility and HRs role

The argument for HR people taking the Social Responsibility agenda seriously can be summarised
as follows:
Companies are increasingly required to take account of the impact of their activities on
society.
The credibility of Social Responsibility is dependent on delivery, not on rhetoric.
HR is responsible for many of the key systems and processes (eg recruitment, training,
communications)
on which effective delivery depends.
HR people have relevant knowledge and skills in relation to eg organisational learning and
culture change.
Managing trust and risk raises fundamental issues about how people are managed.
Social Responsibility offers the HR community opportunities to demonstrate its strategic focus.
Social Responsibility does not change so much as broaden the HR agenda. The Work Foundation
has suggested that
employment relations are the missing link between companies and Social Responsibility. It
argues that while Social Responsibility has focused on environmental, international labour
standards and human rights issues arising from concerns about the activities of multinational
enterprises, progressive employment practices have been partially globalised out of social
responsibility. Nevertheless the rise in new forms of workplace regulation and other labour market
challenges will regardless require organisations to develop and maintain a range of policies and
practices which speak to responsible corporate behaviour beyond basic standards.
The wider issue for HR practitioners is how far they are going to be involved in promoting and
implementing Social Responsibilityinitiatives. They cannot afford to be either cynical or retiring, but
need to seek ways of extending their existing knowledge and skills into new areas. Unless Social
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Responsibilityis part of an organisations culture, it will not survive. HR practitioners know quite a
lot about the significance of trust and risk in the context of managing change. Trust is a fragile
commodity but is essential for building durable relationships. Managing risk means looking at what
individuals might do that could damage the organisation. Both are strategic areas for the HR
community.
All this reinforces the proposition that managing and developing people is firmly in the mainstream
of corporate strategy. Arguments in support of companies adopting Social Responsibilityinitiatives
are reinforced by a business model linking HR practices to customer behaviour. The model
assumes that suppliers, employees and customers are all more likely to choose to do business
with a company that conducts its operations on an ethical basis. The way it treats its employees,
including its practices on diversity, employee representation and development, will contribute to
the picture of a company that is willing to accept its wider responsibilities.
Social Responsibility is on the boundary of HR and PR. There are dangers for companies and for
the HR function if it is allowed to slide too far towards PR. The same issues arise around
statements of corporate values, many of which are common to large numbers of companies and
offer little that is distinctive. A useful statement of values will reflect the aims of the particular
organisation, be credible to stakeholders, including employees, and take into account their views,
and be communicated and applied over a lengthy period. Values of this kind offer a broad
standard against which a companys behaviour can be judged and can often provide a useful
launch-pad for a Social Responsibility programme.

HR practices
A moments reflection confirms that good HR practices have a clear ethical component. This is
obvious in relation to employee learning and development, the handling of redundancies and
policies on diversity and worklife balance. Organisations are increasingly interested relationships
and issues about fairness and trust. A key issue for HR is how far the social and ethical
components underlying good people management practice can be translated into stakeholder
relationships with others outside the workplace. Why should partnership apply to one and not the
other? A key message from psychological contract thinking is that all healthy relationships are
built on trust, fairness and the confidence that the other party will deliver. Consultation and
communication are at the heart of effective relationships. The 1998 Workplace Employment
Relations Survey (WERS)6 shows that, in parallel with the decline in collective bargaining,
employers have been making more use of direct communication practices. These include
workforce and team meetings and surveys of employee attitudes. Work by Neil Millward and John
Forth for the CIPD, drawing on the WERS data, shows that the practices that have increased in
frequency most in the last few years are those by which managers listen to employees, not those
where they are telling them what to do. Case studies by Professor Mick Marchington at UMIST
and colleagues7 confirm that senior managers believe that practices supporting employee voice,
including various forms of communication and consultation, have a positive impact on the
business: If you can capture the hearts and minds of people in the business, then very high levels
of energy are released. If we think that we can manage organisations in a hierarchical way, we are
in for a big shock. The WERS 1998 survey found that the practices that had most impact as
business drivers were high involvement practices, including the use of formally designated teams,
employee attitude surveys, problem-solving groups and regular meetings of the entire workforce.
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There was also support from the Marchington case studies for the benefits of managementunion
relations based on some form of partnership.
What about the psychological contract?
Discussions about ethics and morality often stumble over the difficulty of establishing absolute
values. But this need not be a problem if the issue is how to restore and maintain trust, which can
be decided on pragmatic rather than theoretical grounds. Here the model of the psychological
contract is extremely helpful because it is grounded in research evidence about how employees
feel about their work and the impact that specific employment practices have on their attitudes and
behaviour.
Survey evidence suggests that 90 per cent of senior HR managers see the idea of the
psychological contract as offering a useful framework for managing people (although many
employers prefer to use other language, such as the employment proposition). The basic
assumption, which few wish to challenge, is that in order to motivate and retain employees,
employers have to treat them properly. And the evidence from a substantial body of research in
both the United States and the UK, including a good deal of work funded by the CIPD, suggests
that this will be reflected not only in increased employee satisfaction and commitment but in higher
productivity and profitability. The proposition underlying the psychological contract is that working
relations essentially rest on a deal between employer and employees. If both sides honour the
deal, this will generate the trust on which good working relationships are founded. The idea of
procedural justice or fairness underpins effective grievance and disciplinary procedures. Similar
principles can be applied to handling customer and supplier relationships, which also depend
crucially on maintaining trust. What is the current state of the psychological contract? Many people
argue that employee well-being is in a poor condition; long hours and insecurity lead to
unhappiness, stress and poor health.

Undoubtedly there is some truth in this, but not by any means as much as might be thought on the
strength of press reports. The CIPD has undertaken national surveys of employee attitudes now
for seven years, and the picture that has consistently emerged shows that a majority of employees
continue to feel satisfied with their work and fewer than one in five feel insecure. The picture in
relation to worklife balance is more mixed, and there are particular issues here for the NHS and
local government. But we need to guard against a belief that employment is fundamentally inimical
to human values because, for example, it limits employees individual autonomy, fails to empower
them and stifles their ability to express themselves. Some workplaces do all these things; but work
can equally be a source of challenge, recognition and self-fulfilment; the chronic lack of it, for
example, through long-term unemployment, helps to underline the positive and life-enhancing
qualities of work. In order to maintain a positive psychological contract, employers need to
establish a climate of trust and fairness and a belief that management will deliver on the implicit
deal between company and employees. This means looking at a whole range of issues including
culture, communications, consultation, organizational design and employer brand. A few years
ago, the area giving most cause for concern in terms of souring relationships in a big way was
large-scale redundancies. Employers moving away from final-salary pensions and reducing the
scale of their contribution to pension schemes for their employees has provided another example
of how the psychological contract, and its bottom-line benefits for performance, can be put at
risk.si
Discussion about the rights and wrongs of companies behaviour on occupational pensions is
clouded by continuing uncertainities about employers legal obligations. Protests at the decline in
the final-salary (or defined-benefits) schemes tend to ignore the real problems resulting from their
lack of flexibility and employees increased longevity. The best way of addressing the impact on
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the employment relationship of company responses is to look at it in terms of the psychological


contract. Employees in final-salary schemes have built up legitimate expectations that certain
benefits will accrue on their retirement. They have generally made contributions from their pay,
supplemented by employer contributions. Their hopes of financial security and retirement are
heavily dependent on their pension expectations being fulfilled. When employers unilaterally
abrogate these expectations by closing or radically amending schemes, they are in serious breach
of the psychological contract. The negative impact on trust and commitment may be powerful and
direct. No wonder John Monks has said that he is militant on pensions.
The funding issues for employers should not be underestimated: company failure can have equally
(or more) damaging effects on employee well-being and expectations than changing the terms of
occupational pension schemes. But before announcing dramatic changes employers will want to
consult employees or their representatives, explain the circumstances that have required a review
and listen to positive comments or suggestions. Strategic businesses seek to protect their
relationships with stakeholders. CIPD research highlights that employer breaches of the
psychological contract can be forgiven if they are seen to be driven by external circumstances.
The price of neglecting to communicate is high.

Strategic opportunities for HR


Few people would suggest that HR practitioners should lead in negotiations between companies
and major NGOs that are pushing hard under a CSR banner for changes in corporate behaviour in
relation to their overseas suppliers, for example. But significant opportunities for HR to engage
with wider business issues may arise in relation to:
relationships with customers and suppliers, drawing on HR experience in handling employee
relationships (the psychological contract)
ensuring that corporate policies are effectively implemented and applied
helping to identify, and monitor the practical application of, corporate culture and values
influencing line management attitudes
risk management
corporate brand
corporate governance.
It is worth looking at a few of these issues to illustrate how HR can engage with them.
Corporate governance
The issue of corporate governance requires us to revisit the debate about stakeholding. In
substance this debate is about who the company is, and what kind of company it is. There are two
areas in which stakeholder arguments are likely to be influential.
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One is employee involvement and consultation. The EU directive on information and consultation,
which was adopted recently, will require companies with more than 50 employees to have effective
arrangements for informing and consulting employees about a range of business issues. The
emphasis is on representative consultation and many companies are likely to respond by
establishing employee forums or works councils. However, the evidence suggests that this is more
likely to be effective where it is supported by a high level of individual employee involvement. The
challenge for government, employers and trade unions will be to use the directive to bring about
changes within organisations that will lead to genuine consultation and better decision-making.
The second area where the stakeholder debate may prove fruitful, at least in the longer term, is
company reporting.
Risk management
The Turnbull report urged companies to adopt best practice in relation to managing risk. The
report emphasised the need for effective internal control, and said that the whole board, not just
the finance director, is responsible for reporting on it. For companies in the financial sector, like
NatWest, for example, risk control has clear implications for the people management process.
They started by focusing primarily on people issues, taking the view that most audit
transformation programs dont deal responsibly with people and therefore changes arent really
everything they should be. They also changed the recruitment profile of people to work in the new
audit function, on the grounds that a different set of qualities and skills was needed to deal with
risk in areas such as technology, human resources, compliance and change.

A key area for managing risk is the maintenance of trust. An initiative was reported recently in the
construction industry to make trust a central feature of commercial relationships in order to guard
against the practice of putting in a low bid in order to win the contract and subsequently inflating
the price with various forms of unanticipated extras. Within the employment relationship, trust is
also central to a positive psychological contract. We know that trust is built up over time, that it
develops in response to consistent and predictable behaviour; and that it is strongest when there
is a sense of shared values. Individuals then feel able to take decisions on behalf of others and, in
effect, put themselves in their shoes. We also know that when trust is lost it can take a long time to
be re-established. There is an ongoing debate about how far individuals today are willing to trust
organisations and people in authority generally. The results of CIPD surveys of employee attitudes
in this respect are interesting. They show that trust in the immediate line manager is quite high, but
that trust in senior management, and in the organisation as a whole, is much lower. They also
suggest that commitment to the organisation could be stronger: while 54 per cent of employees
say they feel a lot of loyalty to their organisation, only 26 per cent feel proud to tell people who
they work for. It is those in central government who are most doubtful about their commitment.
These findings underline the diminishing margins of trust which organisations can rely on
when things go wrong. HR managers have a significant contribution to make to managing risk in
organisations.
One example is in the area of diversity. If senior managers discriminate against individual
employees on the grounds of race or sex, for example, this can lead to employment tribunal claims
which can be highly damaging to the organisation. Or to take another example, financial
misbehaviour and dishonesty can prove fatal to a companys reputation or, in some
circumstances, to its survival.
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Brand
Employer brand is the pitch employers make to attract and retain employees. The CIPD survey of
graduate workplace attitudes in 20019 found that two-thirds of graduates said that a companys
ethical reputation would influence their decision whether or not to apply for a specific job. Nearly
one in four said it would influence them very much. The Institutes recruitment and retention
survey for 200310 found that more than two out of five employers had made efforts to promote
their image as a good employer, in order to help them retain staff. This was the fourth most
important inducement they relied on after pay, training and development and improved
communication. Employees of companies that have been criticised for a lack of social
responsibility testify to the negative effects this has had for them. Shell employees, for example,
who had been used to being respected, found themselves blamed [for the companys mistakes]
even their children were targeted at school.
When Nike faced charges by anti-sweatshop campaigners, its staff did not enjoy the campaigns
against the company. They would go to barbecues and people would say, according to the
companys vice-president for social responsibility, How can you work for Nike?
Companies increasingly see their corporate brand as a key source of competitive advantage. The
growth of the brand concept reflects its success in breeding customer loyalty not only for core
products but for new, diversified lines of business. Tight labour markets have encouraged
employers to use branding to promote themselves as an employer of choice. Organisations are
increasingly seeking to adopt an integrated approach to branding. Recruitment and retention is no
longer the main focus of internal brand management as companies want brand values to be
reflected in everything that the organisation does. There are clear issues for HR, principally how to
ensure that brand values are reflected in policies and practices for managing people, including, for
example appraisal and reward, employee involvement and the psychological contract. This
requires some reconciliation between the philosophy and values of HR and the marketing function.

Being strategic
All these issues, in one way or another, require HR practitioners to operate outside the box.
Although drawing on many of their existing skills, sticking within the confines of traditional HR
practice will not be enough. A key issue for HR practitioners is how far their support for fairness
and consistency requires an element of bureaucracy. Is this compatible with the creativity,
dynamism and perhaps opportunism that will be required to meet strategic challenges such as
CSR? And what about imagination, getting onto the front foot, being exploratory and marketoriented? How far does HR attract people with the personal qualities needed to address these
wider business issues? HR needs to review the concept and tools at its disposal to make a
strategic difference. Within the framework of HR practice, there are extensive opportunities to
develop understanding and skills that will be replicable in a wider business context, for example, in
relation to:
organisation development
the psychological contract
employee support/mentoring
effective teamworking
communication and consultation.
One model that brings many of these ideas together is that of high-performance working. Highperformance practices can be defined in terms of autonomous working, devolved decision-making,
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relationships based on trust rather than control and people having the ability to learn new skills
and behaviours and to direct their own learning.
HR people will recognise that there are unlikely to be any easy answers to dealing with the
complex ethical issues that face modern businesses. Tackling them will require confidence,
experience and political skills. But HR practitioners should not see that as disqualifying them from
engaging in the process. They need to have the ear of board members and to do that they need to
think and talk in business terms. As one HR director said when interviewed for the most recent
CIPD study of the impact of people management on business performance
It is very important for an HR director to manage upwards. Particularly because up until recently
the bottom line finance figures have been what interested [CEOs] because that is what they have
been judged on and only latterly have they been judged on HR performance if you like.
The research also found that for many board-level people good people management is seen to
be as much about the way front-line supervisors, team leaders and middle managers interact and
engage with their staff as it is about the implementation of particular HR policies and practices.
CSR aims to minimise downside risks and generate positive business opportunities. It can be part
of a companys business model for its own future business performance and sustainability. There
are many recent examples of firms that have been seriously weakened by not paying enough
attention to CSR. Most companies, and certainly most public services, have paid scant attention to
strategies designed to underpin or sustain future performance. This is partly because most chief
executives are concerned with todays business strategy, and not with the future. It should be the
board, and particularly the chairman, who is concerned with the longer term.

Getting it together: tackling the CSR agenda


As companies have taken more interest in ethical issues, they have turned to a range of different
functions to handle them. The HR function is clearly a credible candidate in many organisations for
leading on CSR. A recent survey shows that, although nearly half of companies look to their legal
department or company secretary to be responsible for a code of ethics, the HR department is
next in line with responsibility in 20 per cent of companies (up from 7 per cent in 1995). Codes of
ethics intended to guide employees behaviour can offer a sound starting point for developing CSR
programmes. As change management specialists, those in the HR function have important skills to
offer in designing and implementing such programmes.
Key elements in establishing a corporate responsibility programme are:

ensuring top management is on side


getting endorsement for core values and principles
identifying key stakeholders
establishing what issues affect stakeholder relationships
consulting internal and external stakeholders
implementation, including communications and training.

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Further advice on how to set up a CSR programme is contained in the appendix.


Unless there are measurable changes in employee attitudes and behaviour, CSR will have little
impact. The HR function will be closely involved in the process of implementing such changes and
making CSR happen. Employees are a key stakeholder group and their views and concerns need
to be taken into account. But HR should also be responsible for implementing appropriate values
and behaviour through the performance management process. Values like teamwork and
customer focus need to be translated into specific practices that can be reflected in criteria for
recruitment, appraisal and reward. Outcomes can be monitored by a balanced scorecard
approach, which recognises the dependency of financial outcomes on contributing factors,
including customers, internal processes and people. Further advice on how to set up a CSR
programme is contained in the appendix.
The employee agenda
The findings of employee attitude research do not suggest that employees are unhappy and
insecure. However, there are important issues about worklife balance and about trust that
employers need to address. A high proportion of employees believe that their employer does not
look to act in their best interests. This is a business issue: employee trust and confidence in
management are critical to ensuring effective communication, knowledge-sharing and creativity.
Organisations that do not maintain a positive psychological contract with employees are unlikely to
achieve consistently high productivity and profitability.

Key areas for promoting high levels of satisfaction and commitment include:

redundancy policies
learning opportunities, including volunteering and mentoring
effective teamworking
diversity practices and consistent treatment of all employees
consultation and communication processes
compliance with employment law standards
effective grievance and disciplinary procedures.

CSR in the public sector


In one sense, CSR is built into the fabric and structure of public sector organisations. Public
services have always been seen as having social good as their underlying objective. In recent
years more political attention has been paid to strengthening their relationships with clients and
customers, as in the Modernising Government agenda. It is unclear, however, how far a separate
public service ethos survives or, if it does,how it should be defined. The public sector has serious
problems of morale to sort out, and this may partly reflect uncertainties about the proper boundary
between the public and private sectors. What does the concept of public service mean today for
people working in national or local government or the NHS? Is it reinforced or weakened by the
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emphasis on performance targets and customer service? What happens to the culture and climate
of public sector activities that are privatised? These issues would benefit from further study.
Government interest in CSR, reinforced by pressure for regulation from the EU, is likely to have
particular influence on the public sector. Several employers in the NHS and local government have
adopted CSR policies aimed at benefiting both staff and customers, for example, by:

adopting recruitment practices based on valuing diversity and making services more accessible
and
responsive to the needs of different groups

adopting a model of shared governance aimed at empowering staff and patients to influence
the decision-making process.
Companies that do substantial business with government departments may also conclude that it is
in their commercial interests to develop a convincing CSR programme.
Reporting
Putting numbers around performance has become a mantra for a sceptical world that is desperate
for reassurance and ever more anxious to distinguish between rhetoric and reality. This
enthusiasm for measurement has been reflected in pressure for triple bottom line accounting.
Clearly the intention is to give social and environmental issues equal prominence to financial
indicators such as profitability. On similar grounds the DTI is proposing to extend the reporting
requirements for listed companies to include information about their relations with key
stakeholders including employees, customers and suppliers.

The CIPD is undertaking research into the measurement of human capital. There is a fundamental
truth underlying the maxim that what gets measured gets managed. Clearly indicators can help to
focus management attention on those activities and/or outcomes that are being monitored. Too
much should not, however, be expected from performance indicators in terms of changing
corporate behaviour, at least in the short term. The process may be more important than the
numbers. Indicators cannot do more than capture a part of the wider reality. On the other hand,
numbers can usefully feed into discussions among those in senior management and with
stakeholders to give substance to the debate about the effectiveness of programmes. A range of
indicators is always likely to be more helpful than looking at a single indicator in isolation. The
most visible short-term evidence of CSR activities in many companies may well be the scale of
public reporting on their employment, social and environmental performance. This will provide HR
with a broader framework and wider readership for the findings of employee attitude surveys on
key issues such as trust, commitment and diversity.
Responding to pressure

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Large companies, including multinationals and members of the FTSE100, may come under
pressure to take action on CSR from investors or other stakeholders. Investors may seek
reassurance that their money is invested in an ethical business. High-profile companies in
particular may be susceptible to campaigns by consumers. Trade unions may seek reassurance
that the company and its suppliers meet international standards on workers rights. They may
also look for an ongoing dialogue on a range of business issues.
How should companies respond to pressures of this kind? In the first place, by gearing up to
address what is clearly a strategic issue with long-term implications for the business. It may be
useful to establish a taskforce led at a senior level. Each organisation will have its own issues, but
a key question will often be whether or not to adopt a code which can provide visible backbone to
the companys values and/or CSR activities. Specific issues to be considered in relation to a code
include:

What issues should a code cover?


Is the code consistent with company values and guidelines?
Should the code draw on an existing external code?
Should the code apply to suppliers or other business partners?
Should there be provision for external verification?

It requires planning, co-ordination, clear performance measures and regular internal audit. It
requires the support and ongoing commitment of senior management, clear lines of accountability
for delivery and a management structure ensuring interdepartmental consultation and cooperation.
Corporate social responsibility (CSR) and sustainable development is gaining increasing
prominence in the global business culture, as many businesses attempt to accommodate the CSR
agenda. The concept of corporate sustainable development is still the subject of controversy and
therefore the indicators used to measure CSR continue to be the topic of debate. However, no
matter what indicators are used, the notion of responsibility includes responsibility for people in the
collective sense (such as communities) and also for individuals.

An Australian measurement process, the Reputex Social Responsibility Ratings provides a system
to measure social responsibility performance and attempts to integrate the expectations of a
variety of stakeholders. Two of its four criteria reflect the impact on people and have direct
relevance to HR. Four categories of measurement are used: environmental impact; corporate
governance; social impact and workplace practices.
The criteria used to measure workplace practices relate specifically to HR practices. The criteria
include: employee involvement; fair and reasonable rewards and conditions; a positive
commitment to diversity and work-life balance; industrial relations arrangements based on mutual
respect; occupational health and safety arrangements; executive remuneration that is fair and
reflect the concerns of internal stakeholders; independently verifiable performance measurement
and evaluation systems and training and development policies. These criteria indicate that an
organisation that is seen as socially responsible creates a culture that is perceived as open, fair
and attractive to potential and existing employees.
But is CSR nothing more than a religion with too many priests, in which there is no need for
evidence or theory driven by top managements personal beliefs, as management guru Michael
Porter said at the 2004 European Business Forum.
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Not according to recent research. Research demonstrates CSR initiatives have a positive impact
on employee morale, motivation, commitment, loyalty, training, recruitment and turnover. Benefits
in these areas have been found to improve the bottom line of companies. Three surveys across
Europe, the USA and a survey involving 25 countries found employees felt greater loyalty,
satisfaction and motivation when their companies were socially responsible.
A recent survey of 257 CEOs by Korn/Ferry shows that 65 per cent of CEOs are taking
responsibility for managing company reputation. Almost three-quarters of the CEOs regarded
recruitment and retention as the main business objective of corporate reputation and almost the
same percentage identified the hiring and retaining of key and talented people as one of the three
top objectives of corporate and social responsibility initiatives. These HR concerns were regarded
as more important than more commercial and business outcomes.
Therefore, corporate initiatives can contribute to the branding of organisations in the labour
market. These initiatives can make the organisation attractive to employees with similar values
and so assist the organisation to become an employer of choice for these potential employees.
And, if it lives out the values and initiatives on a daily basis it will assist the retention of desirable
employees.
This is supported by the experience at the 2004 Economic Forum in Switzerland. Less than 20 per
cent of the 1,500 delegates, most of whom were business leaders, identified profitability as the
most important measure of corporate success. Almost 30 per cent identified criteria that reflected
CSR almost one in four cited reputation and integrity of the brand and one in 20 cited CSR as
the most important measure of corporate success (Economist 2004).
CSR certainly seems to be the emerging flavour of the month, but is it a reflection of a two-faced
capitalism?

In some senses it could be.


First, Porter argues CSR initiatives need to be undertaken not for feel good reasons or as
defensive actions to avoid scandals, but they should be integrated into an organisations
competitive strategy. Companies need to be clear about how CSR initiatives contribute to
organisational success and efficiency. This view reflects an emphasis on the desired outcomes of
one stakeholder: shareholders.
Second, many CSR initiatives could just reflect the intention of management and be no more than
rhetoric. The intention to further corporate and social responsibility does not appear to be
implemented in many cases. Research by Business in the Community (BiTC) found that 60 per
cent of firms are not living up to their values. In addition, a report by a charity, Christian Aid cites
Shell, British American Tobacco (BAT) and Coca-Cola as paying lip service to CSR, but in reality
the community development projects they undertake are ineffective.
It appears that many CSR initiatives reflect the essence of human resource management
activities. So what is the role of HRM in CSR? At present, it appears HR is falling down in this task.
A survey by Cronin and Zappala in Australia revealed that HR played a negligible role in decision
making in corporate citizenship. However, CSR will become an even more widespread and
accepted way of doing business and it should have a further impact on HRs role. Not only will HR
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need to see its role as strategic from the shareholders viewpoint, but it will also need to
accommodate this view with the need to create a situation in which the workforce and the
organisation is sustainable over the longer term.
HR has a role in demonstrating the benefits of workplace practices that both reflect CSR and at
the same time, contribute to organisational efficiency and success. In order to do this, HR needs to
be familiar with the latest research on work practices and employee performance and also the
language of business. It requires HR to integrate CSR initiatives through its roles as business
partner, employee champion, administrative expert and change agent. It also requires HR to be an
organisational advocate in the community and with other external stakeholders.
CSR provides HR with opportunities. It provides a further opportunity to contribute to business
success and employee satisfaction and performance. It also provides additional opportunities to
contribute to community wellbeing.
A growing number of research projects and surveys reveal strong linkages between an
organization's CSR activities and improvements in a company's traditional performance drivers,
such as competitiveness, market positioning, investor relations, recruiting and risk management.
There are now scores of investment funds available to people who wish to invest in companies or
producers that are socially and environmentally responsible.
Although this definition may be at odds with certain financial expectations of maximizing
shareholder value, American companies are becoming much more aware of their responsibilities
to the communities and markets in which they operate. And they are vigorously, but not universally,
embracing these objectives.
Indeed, corporate annual reports are indicating significant citizenship activities that add value to
their stakeholders. PepsiCo, for example, clearly articulates its responsibilities regarding the
environment and community affairs. It has established measurement indexes for human,
environmental, and talent sustainability that impacts executive decision making. Kellogg's donates
over 20 million dollars of their products each year to fight world hunger. In 2005, Ben & Jerry's
opened a store in Austin, Texas for a community organization that helps at-risk youth and families.
The store provides job opportunities for the community's clients and all profits from the store go
directly to the organization. Ben & Jerry's does not collect a franchise fee.
Regionally, Maine, New Hampshire and Vermont have established state-wide organizations that
provide resources, share best practices, and discuss public policy issues related to CSR practices.
The Maine Businesses for Social Responsibility is an organization made up of diverse businesses
who believe, in theory and in practice, that companies can be a powerful force for positive change
in their communities in which they conduct their operations. Their mission statement is quite clear:
Successful management of the dual bottom line of profitability and social responsibility will be the
goal of every business in the state.
CSR can be defined by many variables. Yet more and more stakeholders are requesting and
demanding that companies in their communities and portfolios focus as much attention to their
CSR as they do to their financials.
Human Resources shares the lead in advancing and articulating the company's approach to CSR.
In the quest for top notch employees, recruiters at colleges are routinely being asked about their
company's commitment to and examples of CSR. Generation X'ers and Generation Y'ers are
aggressive in their desire to work for companies that are socially responsive in addition to their
financial and business acumen.
Corporate Social Responsibility will not solve all of society's ills, but it will go along way to making
16

the world a better place. In corporate terms, CSR makes good business sense. It gives everyone a
reason to smile. It is what the future of business is all about.
Here are some suggestions for Human Resources leaders on how to promote corporate social
responsibility within their organization:
1. Define corporate social responsibility for your company or industry.
What works for a bank or furniture manufacturer may be significantly different from a bottling
company or a grocery store chain.
2. Conduct extensive and continual research on the concepts of Corporate Social Responsibility.
3. Establish metrics for measuring the impact of the company's CSR practices.
For example, what percentage of after tax dollars is used to support these activities? How does it
compare to other comparable companies? How many labor hours per month or per year are set
aside for CSR activities? Quantitative metrics are easier to defend and promote than qualitative
metrics.
4. Involve employees in defining and advancing CSR.
Form ad-hoc groups to decide how best to be appropriately socially responsible with the resources
available. Give them the authority and responsibility to figure out a way to make it happen. They
will do it far faster than some corporate committee.

5. Keep track of all measurable costs.


As much as the company wants to be socially responsible, it also has an obligation to be fiscally
accountable to other shareholders;
6. Communicate to everyone - sometimes subtly, sometimes loudly.
Publicize your activities internally to all employees and externally to all other stakeholders as
appropriate. Invite civic, religious, and corporate leaders in to show what you are doing and
encourage them to join you in their efforts.
7. Establish positive and pro-active relationships with other socially responsible companies.
There is power in numbers and they are always a great source of ideas that might work for your
organization.Socially responsible training is where HR meets corporate social responsibility (CSR).
So says Jan Levy, director of Three Hands, a company that specialises in training that marries
corporate and community needs. Socially responsible training is bespoke team leadership and
personal development programmes achieved through community action.
17

"It is learning and development - personal development, team development and leader
development - through engagement in real-life community projects," says Levy. "It's instead of
sending people off to the Lake District to build a raft. We believe people get a lot more out of it
because it's real and therefore they will also put a lot more into it."
Morag Aitken, team leader of learning and development, tribunals, at the Department for Work and
Pensions, says the real-life element makes all the difference.
Community training
Her department has done a couple of training events with Three Hands. The first was with 12
regional office managers and involved building a garden for a drop-in centre run by mental health
charity Mind. The idea was to improve the service offered to customers through spending time with
them and gaining a greater understanding of their lives, and through learning new personal and
team skills at the same time.
The managers were set the task of building the garden in three days without incurring any costs.
They had to either raise the funds to buy the necessary materials or persuade local businesses to
donate them. Aitken says having to get help and support from the community was an alien
situation for many of the managers - unlike their customers. "So people learned some new and
very different skills, including negotiation."
But the most telling benefit came from spending time with customers and seeing things from their
perspective. "The given challenge was building the garden," says Aitken. "But the real challenge
was to get managers out there working with people and getting their views."
Levy says community training events always result in improved communication skills, whether it's
negotiation skills, influencing others, setting and achieving goals, or problem solving. These skills
all benefit the individuals and therefore the organisation.
But, says Levy, the actual process of community engagement is also hugely beneficial to
organisations. "The healthier a community is, the healthier a business will be," he says. "The
business case for that is really very clear, and means that bringing community engagement and
learning and development makes perfect sense."
It is not something that many training organisations do, however. Several offer community-based
programmes as part of their overall training package, but Levy says he doesn't know of any other
organisations that do it exclusively.
Three Hands' programmes last from one to five days and cost from 100 to 500 per person per
day. The one-day programmes usually concentrate on team development, with the leadership
programmes lasting three or five days.
In 2004, mobile telephone company Motorola sent 20 senior leaders to a small village in rural
Malawi for a three-day leadership programme. Their task was to rebuild a community centre and
two run-down houses. They slept in tents, shared the work with the villagers, and worked with the
local community on the building project.
According to Vanessa Loughlin, director of leadership and diversity at Motorola, the aim was to
improve the participants' capabilities around risk-taking, decisiveness, thinking laterally, getting
tasks done in whatever way necessary, personal leadership and teambuilding.
Challenge people
"The key was taking people out of their known environment, challenging them with a seemingly
impossible task, and supporting them through the learning process to enable them to see the true
extent of what they were capable of in difficult circumstances," she says.

18

As a result, claims Loughlin, those leaders have a much better understanding of team dynamics
and the impact of sound leadership practices. These include setting expectations, leading by
example, the value of feedback and the need for continuous open communication.
For senior managers who have been on numerous training courses, working on a project like the
one in Malawi really does stand out for them and challenge the way they work and think. "It gave
them a renewed sense of purpose and feeling of direct impact," says Loughlin. And that is worth a
lot for many companies.

Case study: I
Mobile communications provider Orange has sent staff on two socially responsible training days.
One involved 30 managers providing new facilities for people with learning disabilities, and the
other involved another 30 organising the opening of a new caf and day centre for older people.
In both instances, Three Hands worked alongside Orange's employee engagement team.
With the first event, the team were set their challenge at 9am and had to complete it by 4pm that
day. In terms of team development, the driving force behind both projects was to help people get
to know each other better and understand individuals' styles and strengths, improve leadership,
communication and team-working skills and encourage a collaborative approach.
By the end of the projects, says Orange, the teams felt closer and there was a huge sense of
personal achievement for the participants.
After each event, the managers completed evaluation forms and took part in group discussion to
ensure the HR objectives had been met and that the learning would be translated back into the
working environment.

Case Study : II
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Growing number of people are drawn to careers that have purpose, that enable them to make a
contribution to society. Workplace communication consultancy CHAs view was that this trend
would benefit the charity and public sectors at the expense of the private sector and that the trend
was taking hold given younger workers particular interest in CSR.
Methodology
An online survey carried out by OnePoll.com last January with a representative sample of more
than 1,500 employees in private, public and charity organisations with 500 or more staff.
Findings
Our report, entitled Worthwhile Work, found that private companies were witnessing a damaging
brain drain to the public and charity sectors. The younger the worker, the more likely they were to
consider crossing over, spurred on by what they saw as socially or environmentally more valuable
work.
More than 40 per cent of 18-25 year-olds said they were considering a move to the public or
charity sectors, as did 38 per cent of 26-35 year-olds. Almost half said they hankered after a more
worthwhile job. The findings show that private-sector firms need to be clearer about their wider
benefit to society in delivering goods and services as well as in contributing to the exchequer.
More than 70 per cent of respondents said private companies efforts on climate change and social
responsibility helped to strengthen their reputation. Top of the corporate responsibility list came
local community support, followed by reducing impact on climate change. Corporate donations to
charity trailed a poor third.
The Institute for Employment Studies, commenting on the findings, noted that many employees,
especially younger ones, wanted to make a positive impact on society. It suggested that helping
them to get involved in worthwhile activities would pay dividends in terms of motivation,
teambuilding, pride and positive employee advocacy.
The private sector is a big contributor to society but is not getting the message across. The
consolation is that there will be some reverse migration. Almost a quarter of those in the public or
charity sectors said they planned to move into the private sector in search of higher salaries and
less red tape.

Learning points
- A third of private-sector workers are contemplating a move into the public or charity sectors.
- Those aged 18-35 are the most keen to cross over.
- Private-sector employers must communicate better the beneficial purpose of their organisation.
Taking corporate social responsibility seriously

20

Definitions of corporate social responsibility (CSR) range in their degree of detail and prescription.
Carroll (2000) maintains that all corporations hold economic, legal, ethical and philanthropic
responsibilities, moving beyond the notion of simply complying with laws and avoiding harm to
society, to an expectation that business organisations actively contribute to the public good. In this
sense corporate social responsibility encompasses notions of corporate citizenship and
community involvement (Zappal 2004), as well as corporate sustainability (van Marrewijk 2003).
This broader notion contrasts with minimalist conceptions which perceive corporations as
responsible only to owners and shareholders, and contest the nature of the duties that business
organisations ought to accept. This view, informed by a particular and influential school of
economic thought, is still widely held, and was evident in a 14-page feature in The Economist
(Crook 2005) which caricatured CSR initiatives in firms. Other disciplines, not surprisingly, look at
businesssociety relationships through different lenses from those adopted by economists. The
field of business ethics, for example, is informed by the discipline of philosophy, andto a lesser
extent sociology, social psychology and political economics. When these lenses are used, it
becomes clear that business decisions are never solely economic ones: they are interrelated with
the social systems within which they operate. There will always be some impact on humans or
ecosystems. In essence society, through political, legal and institutional means, grants
corporations their right to exist and operate.

This must be borne in mind when considering corporate social responsibility; it is erroneous to
isolate business considerations from those of society. Bowie (1999, 82) views the firm as a moral
community, based on co-operative relationships first and foremost. These rela-tionships depend
on the values held by decision-makers within organisations. Corporations act as moral agents
through the decisions and actions of their managers, so that just as they can make rational
economic or strategic decisions so they also make ethical decisions. Businesses (and managers)
21

can never be considered intrinsically amoral, or devoid of any moral considera-tions (Carroll 2000,
3940). For these reasons, ethicists argue that corporations can and should be held responsible
for the consequences of their actions (Margolis and Walsh 2003; Carroll 2000, 346).
Further argument for an increased acceptance of social responsibility on the part of business
organisations stems from a recognition of the widespread negative effects of the global economic
system. One of the chief criticisms of our contemporary global economy is that the living
conditions of the worlds poorest are declining relative to that of the worlds wealthiest. The needs
of those at the bottom of the economic pyramid remain largely unmet. The International Labour
Organization (ILO) has reported that one-third of the worlds labour force of approximately 3 billion
people are unemployed, under-employed, or earn less than is needed to keep their families out of
poverty . Yet the worlds largest corporations, which together account for 25 per cent of global
economic activity, employ less than 1 per cent of its workforce (Anderson and Cavanagh 2000).
The ILO has found, not surprisingly, that low-skilled labour bears much of the adverse effects of
global economic activity (ILO 2003). Although this situation cannot be directly attributed to the
actions of any particular corporation, the global reach of corporate activity extends in many ways
into the lives of those marginalised by low income, job insecurity or market changes. Trade in
agricultural commodities, exploitation of natural resources, foreign investment activity and the
production of low cost goods all contribute in aggregate to the polarisation of wealth and
opportunity.Non-government organisations (NGOs), investor groups and some government
agencies have contended that if business organisations enjoy the benefits of the global economy
they should help to solve some of its problems (Margolis and Walsh 2003, 26870). The fact that
market mechanisms have largely replaced the state as the primary vehicle for resource allocation
(UNCTAD 1994) renders this argument particularly salient. From an ethical perspective, the rights
of corporations to participate in global and local economic systems are always connected to their
responsibilities towards those affected by their actions, regardless of whether those effects are
intended or not.
Teleological orientations point to the need to weigh up the consequences of any actions on those
affected by it, as we have here. A deontological orientation is represented in the Kantian notion of
duty (Bowie 1999). A central tenet of this notion is the duty held by social actors (organisations in
this case) to respect the humanity of all people, and not to treat people as means to ends (Bowie
1999, 435). In a sense, both of these orientations are integrated in stakeholder theory,
which holds that organisations have duties to diverse stakeholders and ought to consider the
consequences of proposed actions for these stakeholders. The broad view of corporate social
responsibility thus considers the duties owed to social as well as economic stakeholders. This
perspective encourages us to consider the big picture implications of corporate strategies and
decisions. Of particular interest are the decisions that contribute to new patterns of employment
and work-life, and the impact of those decisions on the livelihood of individuals and communities.
These issues will be explored in the following sections.The dominant global economic framework,
with its associated values and priorities, often leaves little space for consideration of the human in
human resources. More generally, Kochan (2004, 134) sees the HR profession as turning inward,
that is, not considering the needs of stakeholders apart from those of their own business unit or
company.

He argues human resource professionals have lost their credibility as steward of the social
contract, as evidenced by the huge increases in CEO salaries, apparently condoned by
human resource managers, and the low prioritising of workforce needs.Human resource
development, which remains an important component of human resource management, is
characterised by an interlocking array of perspectives, with important policy work carried out in the
macro as well as micro (or organisational) domains. A consideration of macro policies and
22

micro practices provides important insight into the interconnection between HRD activities in
individual organisations and the wider global systems within which these activities are embedded.
In considering both domains, the grounds for acknowledging HRD as an element of CSR become
clear. In the organisational domain, training and development and the associated adult learning
activities have largely escaped rigorous ethical investigation, due to the relatively innocuous
nature of these activities (Woodall and Douglas 2000, 116). Increasingly, though, like many other
areas of human resource management, the strategic spin has put many of the foundational
ethical givens of HRD at risk, with employees primarily considered as instruments for achieving
corporate goals which centre on the enhancement of a firms knowledge capital may ignore
individual needs entirely. For ethicists, the recasting of adult learning in this manner is problematic
as it risks ignoring the Kantian imperative that humans should never be seen as means to an end,
but as ends in themselves.
The adoption of a macro perspective throws light on the importance of education and training to
social and economic responses to globalisation (ILO 2001b); access to education and training is
intrinsically linked to the well-being of a society. An ethical analysis of HRD should thus consider
the contributions, both positive and negative, of HRD activities to the global scenarios outlined
earlier in this paper. According to the ILO, if countries are to take full advantage of the
opportunities presented by the information economy, they must ensure their populations access
to, and raise public and private investment in, education and training (ILO 2001b). This reduced
commitment on the part of business has particular consequences for those workers who are
marginalised through the cumulative effects of organisational priorities and regulatory decisions,
as will be explored below. In this sense, they are typically captive and disposable (Wilcox and
Lowry 2000, 34). The experience of contingent workers who are no longer protected by unions
and industrial awards is thus one of increased vulnerability and decreased security. Employers
are the main beneficiaries of the flexibility associated with contemporary employment practices,
while the social and economic costs are, again, increasingly assumed by individuals navigating the
external labour market. As precarious and contingent employment arrangements increase in
prevalence, employment security becomes dependent on the possession of competencies
relevant to organisational and industry needs. For many people, though, there is little choice in
terms of employment or skills development. Contingent and contract workers are significantly less
likely to receive work related training, regardless of gender or industry Further, the responsibility
for providing occupational training has shifted from the organisations that benefit to publicly funded
universities .This transferring of responsibility away from businesses parallels the shifting of risk
noted earlier. Employees who find themselves marginalised by a lack of appropriate or valued
competencies are typically not in a position to bargain for the enhancement of those skills that
would maintain their employability. Van Buren (2003) argues that, in the current global business
environment, employers have an obligation provide employees with the resources needed to
maintain employability, if only for reasons of fairness. In practice this obligation translates into a
duty on the part of employers to provide their employees with opportunities to develop appropriate
competencies, given that these employers enjoy the economic benefits of flexibility. For many
workers, it is not just the problem of acquiring and accrediting employability skills that is
contributing to their marginalisation. It is also the denial of opportunities for life-long learning
(Cullen 1998).

Those confined to this secondary labour market face long-term poverty and disenfranchisement
(Warren 1996, 50). The result of this is social exclusion: the exclusion of individuals or groups from
the benefits to be gained from full participation in society benefits like education, adequate health
care and meaningful work (Atkinson and Hills 1998). Social exclusion stemming from the lack of
secure employment has become a serious issue, and the need for what the ILO has called a
Decent Work agenda to address this issue has been recognised . A related issue is the
marginalisation of women in many sectors. Gender segregation both reinforces and is reinforced
23

by workplace and vocational education and training practices. In the service sector, for example,
the majority of women are confined to junior positions, while career development opportunities
tend to favour men .
This imbalance is partly a result of HRD practices which tend to restrict the training of frontline
service sector employees to narrowly defined job processes, while minimising development
opportunities. Even if these employees have secure employment with some commitment to
training, the methods used to promote and deliver skills development can exclude particular
groups of employees. For example, a lack of support structures addressing workfamily conflicts
may keep women away from skills development opportunities. Similarly, older workers suffer more
discrimination than their younger counterparts, and are less likely to have access to the kind of
training and skills development that would keep them employable (Hirsch, Macpherson, and Hardy
2000), in part because of negative stereotypes regarding the learning and development capacity of
older workers (Gray and McGregor 2003).
The contextual changes discussed earlier also have clear implications for the career development
of employees who are fortunate enough to have secure employment. Van Gramberg, Teicher and
Griffin (2000, 20) have argued that as employment relationships become more individualised,
employees must be prepared to take an autonomous and proactive stance in terms of their own
professional development. In an era of boundaryless careers, all employees are being made
responsible for undertaking projects of self in relation to work and employment as job security
and career development opportunities within organisations decline. The state has also contributed
to this situation, by failing to provide an economic and policy environment that supports ongoing
employment, instead expecting responsible citizens to lift themselves up to be employable. In
these cases, organisations benefit not only from the flexibility discussed earlier but also from the
ongoing updating of skills on the part of individuals seeking employment. Where they do exist in
firms, career development strategies are commonly enfolded in succession planning schemes
which may rely on the identification of ill-defined and often value-laden attributes. These attributes
can have inbuilt gender, age or ethnic biases, which may be exacerbated by a lack of
transparency in the succession planning process. The fortunate employees who are anointed
through talent-spotting exercises often enjoy fast-track developmental opportunities including
mentoring and networking; opportunities that may be denied to equally capable women,
indigenous or migrant workers, and members of other minority groups.
As we have seen, one of the most significant HRD ethical issues remains the issue of equity and
access to the range of developmental opportunities necessary for full participation in society. A
right to employability has important implications for HRD, not the least of which is that learning and
development programs would need to go beyond narrow job-related outcomes. Other concerns
relevant to HRD include elements of career and succession planning, mentoring and the
availability of the social networks necessary for full development of ones occupational potential.

If we consider the interconnections between organisational decisions, collective social harm and
social responsibility, there is some scope for some positive intervention, at least, within the HRD
profession. A exploration of the three forms of duty owed by organizations.
The first type of duty outlined by these authors is the duty to respond to situations or conditions to
which an organisations actions have contributed, where a causal relationship exists. From an
HRD perspective, this duty would arise where training of local employees of multinational
corporations is inadequate and fails to prevent the harm which may result from occupational or
environmental accidents. A simple HRD response to this scenario would be the adoption of
common training standards across the global operations of a corporation. The failure to do this has
24

been acknowledged as one of the causes of the catastrophic accident at the Union Carbide plant
in Bhopal, India in the 1980s.
The second form of duty is that owed when an organisation benefits from,but does not cause,
conditions which are unjust or harmful. Child labour in unregulated economies provides an
example here. HRD activities can form a central plank of the organisational response to this
second form of duty. In Vietnam, for example, footwear manufacturer Adidas has set up
classrooms to educate children who would otherwise have been working in subcontractors
factories. The third form of duty, the most far-reaching, is what has been called aduty of
beneficence. Beneficence encompasses the duty to aid others when in a position to do so, even if
the organisation is not directly responsible for the hardship or harm experienced. It is the duty to
help because one can. This notion parallels Carrolls idea of discretionary or philanthropic
responsibility.
Recognition of these three types of duty necessarily means that any notion of skills development
should incorporate the learning needs of those often excluded from skill development programs; in
particular those marginalized workers canvassed earlier. Such programs in turn need to be
supported by social systems and structures to facilitate ongoing learning. Support could
include childcare, funding support for training, and linkages with job-finding databases (Cullen
1998). In order to deal with some of the social consequences discussed beforehand, governments
and employers (and the HRD professionals representing those employers) will need to assume
some of the responsibility and risk that is currently being shifted to individual employees. In what
at face value appears to be a step in the right direction For some employer groups, however,
employability encompasses more than generic or work-related technical and interpersonal skills; it
includes employer-preferred values and personality characteristics (Sheldon and Thornthwaite
2005, 41518). Sheldon and Thornthwaite (2005) note the irony in employer expectations of these
attributes, given the insecure and contingent nature of much employment.Earlier it was noted that
education and training policies can be effective instruments for tempering many of the negative
effects of globalisation. HRD professionals acting as individuals and collectively as a profession
are seen as essential catalysts in this process (ILO 2001b). Hatcher (2002, 188) goes further,
suggesting that HRD practitioners could, for example, assist educators and trainers in the
community and advise administrators and policy-makers. Such activity would be particularly
effective in multinational corporations. At the workplace level, a number of HRD policies can
promote inclusion, equitable access, and employability. These policies and practices can serve to
temper some of the social consequences discussed in the previous sections. Some possible firmlevel policy responses are outlined in table 1.Most of the policy responses shown in table 1
represent no more than good practice HRD, yet implementing policies based on well-founded
strategies in these areas could have a major cumulative impact on the ethical issues noted
here.
From appropriate HRD policies and practices, a collective good can eventuate. A comprehensive
utilitarian analysis would reveal benefits to society as a whole, including a reduction in the
cumulative costs of social exclusion. Such costs include those associated with welfare, crime, and
the perpetuation of problems from generation to generation (Atkinson and Hills 1998).
Management and executive development is another area of HRD practice that offers much
potential for positive ethical intervention. Coupled with performance management systems, these
practices signal and reinforce what is important to the organisation. These practices can be
revised to encourage ethical decision-making skills and a broader recognition of stakeholder
concerns, as well as a critical reflection on prevailing values and practices. It is here that the
articulation of business cases for ethical HRD has a place.
HRD policy response
25

Entry-level skill deficits, vulnerability to job loss


Skill differential for women, older workers and minority groups
Social exclusion for marginalised workers
Differential access to career and succession planning
Uneven distribution of benefits of flexibility,access to career opportunities for part-time
employees
Lack of access to developmental opportunities for workers with carer responsibilities

The redesign of junior jobs to allow exposure to avariety of tasks of differing complexity
Equity, access, and affirmative action programs Regular training and life-long learning
opportunities for low-skilled employees and junior, older and contingent workers
Regular review of training needs, linked to employee development plans; clear and
transparent career progression paths Two-way flexibility of working time, and
progression available to part-time employees Family-friendly policies available to all grades of
employees
Drawing links between socially responsible practices and organizational performance, HRD
professionals can facilitate the legitimation of CSR strategies within an organisation.
The World Business Council for Sustainable Development has defined corporate social
responsibility as embracing a continuing commitment by businesses to behave ethically and
contribute to economic development while improving the quality of life of the workforce and their
families, as well as the local community and society at large. The view presented in this paper
sees human resource development as part of this broad and encompassing notion of social
responsibility, particularly when the connections between macro and micro HRD are recognised.
On a macro level, the manner in which global economic systems operate can give rise to
unintended consequences which can cause hardship and harm to individuals. The strict
separation of business and society, or ethics and economy is not valid. At workplace and
policy levels, recognition of corporate duties can lead to the kinds of improvements in the quality of
life suggested by the World Business Council for Sustainable Development here. A distinguishing
feature of ethical thinking is that one does the right thing because it is right, not merely because of
a compelling business case. Ethical thinking provides normative rather than purely instrumental
reasons for acting in certain ways. It is on this understanding that HRD professionals are
invited to think differently about their role in the global economy.

CSR in the Business Community


Worldwide, companies and their HR leadership are coming to grips with what exactly CSR means
in their organizations and how to strategically include CSR within business goals and objectives.
There is growing evidence pointing to the validity of and the demand for CSR. For example, 82%
of companies noted that good corporate citizenship helps the bottom line and 74% said the public
26

has the right to expect good corporate citizenship. However, as Niall FitzGerald, chairman of
Unilever, explained in his presentation at the London Business School, the reality of corporate
social responsibility is there are no precedents to fall back on, and decisions must be based on
judgment rather than tried and tested formulae.
As the concept of CSR becomes more widely accepted and integrated in business, it is helpful in
this discussion to understand that the development of CSR in organizations is in transition (see
Figure 1). There are basically three generations of CSR in varying stages of sophistication. The
first generation has demonstrated that companies can contribute to society without risking
commercial success. Today, the second generation is developing more fully as CSR gradually
becomes an integral part of companies long-term business strategies. Finally, the third generation
addresses significant societal issues, such as poverty and cleanup of the environment. 5 Evidence
of the transition of CSR will be discussed throughout this article, with suggestions of how HR
professionals can take on leadership roles that can contribute to CSR initiatives in their
organizations. The article will also highlight some examples of the impact of CSR and how it may
link to the bottom line.

Making the Business Case for CSR


In recent years, intangible assetscompany values, human and intellectual capital, reputation and
brand equityhave become increasingly important to organizations. Companies that exhibit good
corporate citizenship are likely to gain a competitive edge. Below are just a few examples of
todays CSR success factors that are fast becoming the primary measures of an organizations
credibility.
27

Reputation and Brand Enhancement


Company reputation and brand are greatly influenced by public perception. For example, in the
largest global survey of the publics expectations, the Millennium Poll on Corporate Social
Responsibility documented that over 25,000 individuals across 23 countries on six continents
revealed they form their impressions of companies by focusing on corporate citizenship and two
out of three people want companies to go beyond making money and contribute to broader society
goals.7 Increasingly, there are success stories that show companies are listening to the public. A
recent example is that of Ecolab of St. Paul, Minnesota, that quickly developed new products to
address unexpected hazards with an antimicrobial disinfectant product in response to foot and
mouth disease in livestock and another new product to combat SARS at the Toronto airport.
Today, companies are also seeking avenues of public acknowledgment of their employer brand.
For example, Business Ethics Corporate Social Responsibility Report publishes a list of the 100
best corporate citizens. Companies are ranked by social scores regarding environment,
community and customer relations, employee relationships, and diversity. One of the 2004 winners
was Proctor & Gamble, which donated funds to help disadvantaged youth in Vietnam, combat
childhood malnutrition in India and provide earthquake relief in Turkey.
Another critical aspect of reputation and brand, as a CSR success factor, is the impact on a
companys sustainabilitythat is, the conditions or characteristics that support an organization to
continue its business, including environmental, social and economic aspects of the company.
Ultimately, the environmental, social and economic health of a company transfers into dollars that
either directly or indirectly affect reputation and brand, and thus the bottom line. For example, a
company whose product contributes to the safety of the environment will likely be favorably viewed
by the public. Or, a company that supports community events may generate public approval. Both
examples may yield additional applications for employment or employee referrals, thus potentially
lowering the time and cost per hire. The final CSR report card is directly linked to the companys
sustainability and consequently influences critical success factors such as reputation and brand.
Accountability and Transparency
Open, reliable and regular reporting of a companys performanceknown as accountability and
transparency in CSR terminologyis quickly becoming a public issue and one that HR leaders will
need to keep in the forefront (see Figure 2). As a sign of the times, large companies are beginning
to publish company information, once deemed as too sensitive to release, with expectations for
their suppliers and their internal human resources practices. However, few companies give robust
performance measures, with fewer yet being independently verified. 10 The clothing industry, for
example, has been criticized for how workers are treated in factories in their supply chain. Setting
an example, Gap, Inc. released its first Social Responsibility Report, emphasizing the
organizations commitment to working with key players to create industry-wide change. It also took
a proactive stance on employee treatment by prohibiting child labor, forced labor and
discrimination and protecting freedom of association for workers.

28

Risk Management
Managing investor confidence is another factor supporting the business case for CSR. Today, the
financial community is examining organizations CSR report cards and their risk profile. The rapid
rise of socially responsible investment illustrates that corporate citizenship is becoming a key
measure that investors consider when aligning ethical concerns with publicly held corporations.
For example, the Dow Jones Sustainability Indexes (www.sustainability-index.com) track the
financial performance of the leading sustainability-driven companies worldwide, and the Domini
Social Investments (www.domini.com) screen companies for corporate citizenship, diversity,
employee relations, non-U.S. impact, environmental responsibility and safe and useful products. In
view of the increasing importance placed on socially responsible investment, this is an opportunity
for HR leaders to consider programs, such as community events, that may generate investor
confidence linking CSR initiatives to the bottom line.

The Talent War


With the anticipated labor shortage in the next 10 to 25 years, attracting, developing, motivating
and retaining talent is, and will continue to be, very important. Correspondingly, CSR influences a
companys competitive advantage today through two key value drivers: 1) company reputation and
brand; and 2) human capital. HR leaders have begun to assume leadership roles to address both
29

areas. For example, a positive CSR initiative was documented by an employee survey that
illustrated the pride of employees regarding their companys contribution to a local AIDS
organization.
In addition, the talent war is evidenced by an influx of best places to work awards (e.g., Fortune
magazines 100 Best Companies to Work For, www.fortune.com/fortune/fortune500). There are
many such programs, located in communities and business organizations, that highlight the
company and/or the HR professional. By applying for and winning these awards, HR leaders can
gain invaluable exposure for their organizations and use the award as a key feature in recruiting
campaigns. Thus, a strong argument for CSR is talent management in both the short and the long
term.
Challenges to the Business Case for CSR
The business case for CSR is not necessarily a simple one. Among the challenges is that social
and/or environmental impact differs across industries, complicated by the fact that the term CSR
has different meanings to different industry sectors in different parts of the globe. Also, some may
question if the message CEOs communicate about CSR is an add-on or part of company core
business activitiesor is it merely an insincere effort to boost public relations? In some
organizations, CSR is still considered to mean compliance and philanthropy, although some large
companies are now placing CSR in a more strategic framework.
Further, there is the question of how to measure CSR. For example, a survey of 539 CEOs in 40
countries examined the strategic importance of communication regarding corporate citizenship to
investors. One of the largest obstacles noted was the lack of a rigorous, credible business case
backed up by performance indicators and metrics that can be quantified and benchmarked.
Further, investment in CSR is not yet being taken seriously by some organizations. Only 30% of
executives said their company increased overall business investments in corporate citizenship in
the last year. The same report indicates resources and resistance as barriers to practicing
corporate citizenship and CSR.
Not all organizations may have the resources (e.g., funds, time, staff) to funnel into CSR initiatives.
However, CSR programs may not be expensive or require a significant time commitment.
Organizations that are interested in CSR may choose to start with small projects that showcase
their commitment to their workforce and the community. HR leaders can help address this
challenge by considering different options and developing creative approaches to CSR to present
to their company. Below are recommendations to consider:

Network with other HR professionals to learn about their organizations CSR initiatives
(ideas and information about programs; what worked and lessons learned).
Explore partnering with other organizations (e.g., co-sponsor a community event).
Contact local business organizations, such as the Chamber of Commerce, to learn what
events they sponsor and how the company may contribute.
Solicit employee suggestions regarding CSR initiatives.

Thus, it is at this point that HR leadership, as the eyes and ears of the organization, is key to the
CSR equation. As discussed in the next section, HR has the opportunity, through well-managed
programs, policies and practices, to engage the organization and its stakeholders (e.g., owners,
employees, management, customers, creditors, the government and other public organizations) in
30

the value of CSR by focusing on communications, employee relations, health, safety and
community relations to provide their organizations with a competitive advantage.
HRs Leadership Role
With company reputation, viability and sometimes survival at stake, one of the critical roles of HR
leadership today is to spearhead the development and strategic implementation of CSR
throughout the organization and promote sound corporate citizenship. Attracting and retaining
competent people is one of the primary business reasons for CSR. While strategically including
CSR in the organization can begin from different points (e.g., product safety, the board of directors,
business development), it makes good business sense for HR to head the process and partner
with strategic leaders in the firm because human capital is arguably the number one intangible
value driver. Many HR leaders are already looking ahead to the future. According to the SHRM
2004-2005 Workplace Forecast, key HR trends are 1) demonstrating HRs return on investment;
2) HRs role in promoting corporate ethics; and 3) building people management and human capital
components into key business transactions. As this report documents, some HR leaders are taking
action now:

63% are increasing spending on learning and training initiatives.


40% are changing company policy as a response to environmental issues.
36% are changing company policy as a response to grassroots pressure to change specific
business practices.
32% are increasing involvement in social programs.

The Status of CSR in the Organization


HR leaders can influence three primary standards of CSRethics, employment practices and
community involvementthat relate either directly or indirectly to employees, customers and the
local community, as outlined below.16 By considering these three CSR standards, HR leaders can
then identify the CSR stage of their organization before making decisions to develop and
implement CSR initiatives (see Figure 3).
EthicsEthical standards and practices are developed and implemented in dealings with all
company stakeholders. Commitment to ethical behavior is widely communicated in an
explicit statement and is rigorously upheld.
Employment PracticesHuman resource management practices promote personal and
professional employee development, diversity at all levels and empowerment. Employees
are valued partners, with the right to fair labor practices, competitive wages and benefits
and a safe, harassment-free, family-friendly work environment.

Community InvolvementThe company fosters an open relationship that is sensitive to


community culture and needs and plays a proactive, cooperative and collaborative role to
make the community a better place to live and conduct business.

31

Next, prior to launching and/or evaluating CSR initiatives in the organization, consideration
of principles, implementation and employer brand will assist HR leaders in determining how
and/or why to include CSR initiatives in their company (see Figure 4). First, questions of
principle provide the broad view of CSRmoving from philanthropy and donations to
contributing solutions to help solve the large issues such as poverty. Second, questions of
implementation address practical issues such as incorporating CSR into the performance
appraisal process and the softer issues of creating an organizational culture that supports
CSR initiatives. And third, questions regarding employer brand provide an opportunity for
HR leaders to look closely at how their current policies and programs can more positively
affect recruitment, retention and talent management.

32

HRs CSR Checklist


Taking the long-range view, HR leaders can use a checklist to track the HR scorecard on
CSR as initiatives are developed and implemented over time (see below). 19 As appropriate,
changes in direction can be made to correspond with the organizations overall strategy.
o
o
o
o
o
o
o

Create a strong organizational culture around core company values.


Scan the environment to identify potential threats (e.g., competition for talent within
the organizations industry sector).
Build personal and professional capability of the workforce (e.g., expand intellectual
capital within the organization and in collaboration with other organizations).
Include ethical concerns in staff performance measures.
Support participative decision-making.
Ensure highest standards in workplace health and safety.
Encourage active engagement in community activities.

Moving Forward with CSRHR as a Change Agent


Focusing on company values, HR leaders set the tone for an organizational culture that is
open to and understands CSR. HRs role as a change agentgrounded in mutual respect,
and open and honest communicationis essential to educate management and employees
about including CSR when setting business goals and objectives. Three practical steps to
promote change regarding CSR are to 1) establish a workable stakeholder consultation
process; 2) use the process to understand the local culture (e.g., internalthe workforce
or externalthe community) at all stages of implementing CSR; and 3) create a sense of
ownership between staff who set up a project and those who implement it.
Beyond including CSR in the HR management system, HRs role as a change agent
continues through keeping the CEO and other members of the senior management team
informed of human capital initiatives, the status of community relations, measurements of
employment activities and development of partnerships for CSR programs, both inside and
outside the organization.

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HR and Community Relations


One of the most visible CSR initiatives is community relations. Strong community relations
can have a positive impact on company reputation and brand. Through community
programs that highlight the company doing good work, HR can link critical issues
decreasing turnover, savings on cost per hire and attracting talented individualsto CSR
and the bottom line. There are many other possibilities that HR leaders could explore to
match both company and community needs (e.g., cultural facilities for the community,
recreational facilities for employees and their families, an educational project to help
prepare tomorrows workforce). For example, employees from high-tech companies could
work with students on science projects that require technical skills. Further, programs that
affect both short- and long-term goals are also strategically advantageous as CSR
initiatives. An illustration of such a program is the literacy initiative developed by Time
Warner when the company saw that the reading public could have an impact on their shortand long-term goals of product sales.

CSR in the Global Arena


Internationally, CSR has a strong human rights dimension. This is evidenced, for example,
by the United Nations Global Compact that addresses 10 principles in the areas of human
rights, labor and the environment with the goal to have the private sector help realize United
Nations vision of a more sustainable and inclusive global economy. Global companies are
increasingly placing a stronger emphasis on corporate citizenship activities. The top four
citizenship priorities are 1) employee health and safety; 2) sustainability; 3) equal
opportunities/global diversity; and 4) globalization of contributions. Further, companies
worldwide are beginning to emphasize the importance of citizenship activities beyond
philanthropy. For example, a recent study documents that about 60% of global managers
polled indicated these activities result in an enhanced reputation with customers and
goodwill that opens doors in local communities.
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The global CSR agenda is associated with multilateral processes and guidelines. In recent
years, there has been a significant growth of codes of conduct worldwide, sometimes
referred to as a global regime of soft law (see Figure 5). These voluntary business
conduct principles cover a wide range of corporate citizenship topics, from corporate social
and environmental responsibility to transparency and fair business practices. Following
these international codes of conduct has been shown to yield similar outcomes as domestic
CSR initiatives, such as enhancement of company reputation, increased stakeholder
confidence and higher standards of business accountability.
Globally, CSR has a significant impact on HR management. For example, HR must be
aware that effective CSR means respect for cultural and developmental differences and
sensitivity to imposing values, ideas and beliefs when establishing global HR policies and
programs. Externally, global organizations are publishing mission statements, such as the
one below by Shell, to publicly announce their intentions of corporate citizenship, using
terms such as respect and cultural differences, and focusing on CSR priorities of
diversity, health, safety and equal opportunity.
We aim to treat everyone with respect. We strive to protect people from harm from
our products and operations. We aim to respect and value personal and cultural
differences and try to help people realise their potential.
Internally, HR leaders are beginning to take steps regarding CSR by developing and
implementing incentives and appraisal systems that reflect citizenship vision and purpose
as well as hiring personnel that reflect these traits. For example, research by The
Conference Board reveals that 50% of global managers report their companies do, or plan
to, include citizenship as a performance evaluation category. Additionally, 68% of
respondents cite the link between citizenship and performance appraisal as increasingly
important.

Setting up a CSR programme


The key points below are extracted from an article :
1 Find out the company values
Get the board to reiterate the core company values and principles and how they underpin
business goals. You need to know what the company is about and where it wants to be in
the future. Answers to these questions will ensure that the link can be made between
normal work behaviour and programme goals. Employees will often play a role in explaining
that programme to other stakeholders. If you havent stated your business principles and
values, identify them. Without them, you dont have the basic building blocks.
2 Consider outside help
Think about using external expertise. The large management consultancies have CSR
practices, and there are many smaller specialist consultancies. You may want help
designing and implementing the programme, or with specific projects.
35

3 Identify key stakeholders


Identify key stakeholders people with whom there is a financial or legal agreement, or
where the company is bound to do something for that stakeholder. Investors, employees,
suppliers and customers all come into this category. People and groups who are affected by
or can affect the activities of the company, but donot have legal or financial rights, are
other interested parties. The communities within which your organisation is located and the
media are examples. You will still want to be involved with them, but be aware of the
different nature of the relationship.
4 Assess the situation
Does your code of practice or statement of business principles need reviewing? What other
policies have a direct impact on stakeholder relationships? Ask opinion-formers throughout
the business what other issues need addressing.
What are other businesses in your sector doing? Does your trade association have a
programme that answers your need
5 Consider internal disclosure
Think about setting up a disclosure mechanism if you dont already have one. Although not
part of CSR, speak-out processes allow staff to raise issues of perceived irresponsible
behaviour within the company, rather than blowing the whistle outside. An open and
informal culture or regular line management communication are not enough.

6 Plan ahead
Draft a programme and an implementation plan. Think about a global framework that can
be fleshed out locally. Be sure it ties in with overall goals. Evidence of success should
include observable indicators of benefits to business performance and stakeholder
relationships. Include mechanisms for reviewing the programme and assessing feedback
from stakeholder groups.
7 Consult
Get comments from the board and all business areas, functions and levels. If you have
union representatives, involve them now. External consultation is best handled by the
departments that have the business relationship; for instance, the purchasing function with
suppliers. You might want to use specialist firms if you need to consult on a large scale
with customers of the local community, for example, or if stakeholders are remote or
dispersed.
8 Implementation
Publish the programme internally and externally. Translate it where appropriate.
Communicate and train this includes general awareness-raising of programme goals and
activities. Training may also be needed for anyone involved in implementing and managing
the programme, as well as for employees whose role will be changed as a result. Review
and align the companys policies and practice. For HR, this will include selection and
36

recruitment; performance management; reward systems and employee incentive schemes;


and health and safety.

Case Study III


A look at what a company has done through HR policies

Promoting equal opportunities


"At AXA, Diversity and Inclusiveness means acknowledging and respecting individual differences,
recognizing and appreciating multiple backgrounds, cultures and perspectives and building on the
unique contribution and merit of each and every one of our people, regardless of physical
attributes or group identity. This reflects our values and contributes to our Ambition 2012, which is
to gain the preference of our clients and employees".
Henri de Castries, Chairman of the AXA Group's Management Board
37

AXA is committed to being an employer of choice when it comes to equal opportunities, and has
made it one of the priorities for its sustainable development strategy. Recruitment and working
methods and organizations are designed to promote equal opportunities and respect for diversity,
as well as contributing to the fight against all forms of harassment and discrimination. This
inclusion policy aims to be exhaustive, built around three key areas: gender equality, diversity and
the integration of disabled staff.
1) Group HR policy on equal opportunities
The AXA Group diversity and integration policy, signed by the CEO in 2006, seeks to maximize
AXA's ability to meet business challenges worldwide and fulfill our customers' and employees'
expectations while helping to stimulate innovation and performance.
At AXA, developing a culture of diversity and integration means recognizing and respecting
individual differences, recognizing and appreciating a variety of backgrounds, cultures, and
perspectives. It also means putting each employee's unique contributions and abilities to good
use, regardless of physical traits or whether the person belongs to a particular group within
society.

This policy should be a force for change in the corporate culture. It provides a practical,
sustainable approach to diversity designed to ensure that AXA's management practices:
Guarantee equal employment opportunity for all workers at every AXA company, based on merit
and ability. Raise awareness of and promote a belief in the advantages of diversity;
Make diversity the responsibility of all employees and executives.
1.1) Implementation
AXA's efforts focus primarily on three specific goals:
Promote awareness of diversity issues within the organization while demonstrating the company's
commitment to diversity, particularly through executive-level involvement and an effective
communication campaign.
Create an integration-friendly workplace that allows teams to flourish by incorporating diversity
themes into management practices and requiring documentation of how this has been done.
Encourage a diverse workforce by systematically incorporating diversity issues into recruitment
planning and assignment of shifts.
The content of this policy must be implemented in accordance with local laws and should be
adapted to local circumstances. This AXA Global Diversity and Integration Policy requires all AXA
38

companies to define long-term action plans designed to help achieve our objective: to ensure
equal employment opportunity for all our workers based on merit and ability.
1.2) Tracking Progress
AXA Group's progress toward achieving diversity and integration is tracked through an annual
review by the chairman of the Group, senior managers, and the HR Steering Committee. This
review focuses primarily on actions and progress toward achieving awareness, integration in the
workplace, and a diverse workforce. The results of the review are presented to the Sustainable
Development Governance Committee.
The HR Steering Committee adopted this policy in 2006. A preliminary international HR workshop
was held in July 2006. It included an initial exchange of best practices, prior to development of
local action plans (for 2007 to 2009) by the end of 2006. A review is slated for October 2007.
Some Group companies, such as AXA France, AXA Equitable (US) or AXA Canada, have carried
out a number of proactive actions in line with this Group policy.

2) Equal opportunities : gender


In the area of people management, the organization is formally committed to ensuring that all
employees - regardless of their gender or age - receive equal treatment when it comes to
opportunities for employment, advancement and training, as well as in terms of compensation.
Continuing education and professional training programs are designed to enable all employees,
regardless of gender, to expand their skills set and, in so doing, enhance their employability and
contribute to the performance of their company. Nevertheless, based on findings from its own
strategic data, AXA recently decided to take further steps to ensure equal opportunities for career
advancement based on a specific Group-wide policy adopted in 2006.
The aim is to improve global performance trends in this area by capitalizing on the best practices
on display within certain companies, such as AXA France. The process is a long one, and it will be
several years before the impact can be seen in our statistics.
On June 7, 2006, AXA France was awarded the Equality Label by AFAQ/AFNOR: today, it is the
first French insurance company to have been recognized for its innovative measures to promote
equality within the workplace. Indeed, gender equality at work represents one of the key elements
underpinning the human resources policy at AXA France. This label, covering a three-year period
39

with an intermediate review after 18 months, recognizes the actions taken by AXA France in this
field.
3) Workplace diversity
In addition to gender equality, the Group HR policy on equal opportunities is based on a certain
number of actions aimed at promoting minorities. Some of the Group's companies, such as AXA
France, AXA Equitable (US) or AXA Canada, had been particularly active in this area.
Diversity in Canada and the US
AXA Canada has adopted an innovative human resources strategy. Indeed, this company
represents a model when it comes to diversity, with four women on its Executive Committee out of
a total of 12 members, and an exemplary site in Toronto, where 27 ethnic groups are represented
and 22 languages spoken.
In the United States, AXA Equitable is going to develop a 4-point Diversity Action Plan: 1)
Transform the corporate culture through training of executives and then managers; 2) Take
advantage of recruitment opportunities to increase the percentage of minorities and women in
senior positions;3) Develop talent through a process that is still being finalized;4) Use targeted
internal communication.
AXA Equitable has also created a Diversity Advisory Council whose job is to establish programs to
encourage diversity in recruitment, development, and retention of talented individuals who belong
to minorities, and to raise awareness of this among outside audiences such as clients and
suppliers. This is particularly important since members of the Hispanic, African American, and
Asian communities will make up 28% of the U.S. workforce by 2008.

The anonymous resume in France


In 2004, AXA France signed the Diversity Charter, which notably sets out the principle to promote
plurality and seek out diversity through hiring and career management as a source of progress for
the business. Similarly, the proposals presented in a report on job discrimination submitted to the
French Prime Minister in late 2004 by Claude Bbar, entitled Des entreprises aux couleurs de la
France, raised awareness on this important issue. One of these proposals, calling for the use of
anonymous resumes for job applicants as a way of ensuring fair treatment, quickly became part of
AXA France's official hiring policy. In this way, as of January 2005, AXA France began rolling out a
policy of accepting only anonymous resumes, initially covering applications received over the
Internet for open sales positions (around 20,000 resumes received in 2004). For other types of
resume, including those sent in by mail or email, a review is currently underway. The possibility of
ramping up this operation to include Direct Assurance and AXA Assistance will also be looked into.
The entire process will be carried out under the control and moral authority of a prominent figure or
organization, possibly from outside of the company.
4) Hiring the disabled

40

AXA companies around the world are particularly sensitive to the issue of hiring disabled staff. Like
AXA France, many of them are developing employment policies that promote hiring people with
disabilities. The proportion of disabled staff is available in the "Performance" section.
Disabled employees at AXA France
In 2003, AXA France signed a four-year agreement with the trade unions promoting workplace
opportunities for people with disabilities. In addition to new hires, the agreement also covers
disabled people who were already employed by the company when it was ratified. AXA France's
objective in signing the agreement is to have five to six percent of its total workforce comprising
people with disabilities by the end of 2006. Apprenticeship and training contracts leading to
accreditation will also be offered to young workers with disabilities. Other initiatives include job
adaptation training and ongoing support for employees with disabilities. The latter include
identifying work tasks that are compatible with the disability, improving site accessibility, and
reorganizing workstations and work schedules.
A dedicated team ("Mission Handicap") has been set up to oversee this commitment.
At December 31, 2004, the number of disabled employees covered under the agreement was 490,
i.e. 4.1% of AXA France's total workforce. One year on, at the end of December 2005, 785
employees were identified, representing 6.2% of the total workforce at AXA France. The increase
seen in relation to 2004 is partly down to efforts made by the Mission Handicap team to train
personnel administrators to refine the methods used to identify workplace disabilities and, in so
doing, enable a greater number of employees to take advantage of the services offered through
Mission Handicap. In 2006, the system used for legal purposes to count the number of disabled
employees was changed: previously, a disabled employee counted for several units (due to the
added weight of his or her disability). This is no longer the case. Accordingly, the number of
disabled employees as expressed in units was 426 for 2006, which represents about 4% of AXA
France's workforce.

Case Study IV

O2
The company
O2 is a leading provider of mobile communications services in Europe, with wholly owned
businesses in the United Kingdom, Germany, Ireland and the Isle of Man. The O2 Group also has
other businesses on the Isle of Man and it owns O2 Airwave a digital emergency
communications service. It has over 25 million customers and approximately 15,000 employees.
It has recently been taken over by Telefnica, a Spanish telecommunications company.
O2s primary goal is to create shareholder value by becoming the fastest growing major European
mobile operator in revenue and profitability. It has a number of specific growth opportunities
including further investment in its networks in Germany, improving customer retail and service in
41

the UK and Ireland, O2 Airwave moving into full operations, and maximising the potential of key
partnerships such as Tesco Mobile and Tchibo Mobilfunk.
Its mission is to build a relationship with its customers by understanding their needs and delivering
wireless solutions that they truly value. It aims to achieve its mission by employing core values:
Bold, Clear, Open and Trusted.
O2s initial approach to its workplace and staff through corporate social responsibility (CSR) came
from its original parent BT who had gained a reputation for its human rights and diversity policies.
Since O2s de-merger from BT in 2001, CSR in this field has progressed and companies are more
aware of its importance of staff. O2 have reflected this understanding in their HR policies.
However, a challenge remains in moving from policy to implementation.
The company in 2003, owing to costs incurred through absenteeism, set itself a target of reducing
work-related injury and illness by 10%. Through improved data collection from monitoring of the
cause of absenteeism it was subsequently able to confirm that the number of days lost from workrelated accidents was actually very low. So its main focus shifted to improving the general health
of its workforce.
The drivers
Staff illness has an impact on all business as it affects continuity and performance. The HR team
at O2 assessed the amount of days that were lost due to sickness absence. Although it does not
suffer above average rates of absenteeism compared to other comparable business it concluded
that there was a business case for doing something, due to the cost of absenteeism. O2 thought
that if it could encourage their staff to take an active responsibility for their own health and wellbeing then staff and the business would benefit. For example, O2s training and personal
development programmes would be more effective if participants performance was not affected by
their health, for example by tiredness.

Taking action
After assessing levels of non-attendance in early 2004, O2 considered how it could contribute to
improving attendance at work. In addition to traditional attendance management programmes the
HR team wanted to take a different approach to the issue of non-attendance. They wanted their
approach to be seen as more preventative than cure and one that would not be wrongly
interpreted by employees. In other words, we did not want something that would be seen by our
staff as a top down approach with the company spying on its staff, said Tracey Flashman, Head
of HR Policy and Diversity. The personnel team embarked on researching the latest findings in the
links between health, well-being and productivity. The team concluded that O2 should be doing
something positive about staff well-being because peoples lifestyle at work can contribute to wellbeing, for example through healthy eating.
Through discussing the findings of this research within the personnel department, O2 developed
the idea of Balance to improve awareness and well-being at work and at home. Balance aims to
42

help O2 staff achieve a good work/life balance, through the provision of a number of well-being
initiatives in the convenience of the workplace.
The concept was developed during autumn 2004 and launched to O2 employees in January
2005. The development phase involved staff consultations so that they could help shape the
programme, making it relevant to them and their requirements. This was a practical approach that
fitted with O2s employee engagement programme (between employees and their managers).
Balance comprises four strands covering nutrition, exercise, well-being for example, stress
awareness and O2s existing services. The latter strand covered re-publicising and re-focusing
existing initiatives, for example O2s employee assistance programme, which provides a
counselling service that was little known within O2. The strands were identified through a
grouping exercise across the range of activities. Among the activities/services are stress
management, mobile massages, weight watching, nutritional advice, cholesterol testing, yoga
classes, and drug and alcohol awareness. The criteria for selecting and developing activities for
each strand were:
longevity it runs for a number of months;
cost-effective affordable and delivers results;
reach and penetration so it covers its retail stores, its seven major facilities and is relevant to the
home as well as workplace; and
opt-in allows employees to choose rather than it being mandatory.

The selection criteria were important as they helped identify the most relevant activities. Balance
was launched through the O2 intranet website, a poster campaign and physical events in O2
buildings, for example masseurs visited call centres and stress awareness seminars were run.
The overall reaction from staff (gained from informal feedback) was positive although there were
some challenges. Some of the activities, for example with Weight Watchers, gained a high level of
interest but when rooms for events were booked the attendance was poor. O2 realised that if
Balance was to succeed it needed to ensure that individuals were personally committed to the
activity.
Operational HR managers in each of the business units further revised the selection criteria
through informal consultation with employees. The consultation helped to identify where
improvements could be made with the existing popular activities. For example, better signposting
on the intranet would help participants in stress awareness workshops to find more information on
where to go for help.
Balance was re-launched in September 2005, with a revamped website which includes an on-line
stress awareness section so its retail staff can get involved. It is also more anonymous to use as
43

the consultation revealed some people might not feel happy about attending an open stress
awareness event.
The Balance re-launch included the promotion of a big idea to gain and sustain the interest of
staff. This idea was an on-line pedometer programme allowing staff to download their data,
collected by wearing a pedometer, and monitor changes to their mobility. Staff can get access to
an interactive website run by Fit Bug, an on-line trainer. O2 subsidises the pedometer, which staff
need to buy. Staff can sign up to 6 months online support that includes a personal assessment
after 3 days. It has been a real success, with staff setting themselves daily or weekly targets to
increase the amount of steps they take. The O2 intranet lists teams of staff who are competing
with others and leagues have been formed to rank the top teams taking paces. O2 has provided
prizes for winning teams. O2 recognises that there is a downside to this activity, as pedometers
cannot be fitted to wheelchairs, so it does exclude some staff.
Measuring the effectiveness of the Balance programme has been difficult because the obvious
indicator is sick absenteeism. There is a range of factors that can affect this, making it difficult to
isolate the exact contribution Balance has made. So, responses to specific initiatives have been
measured instead. For example, feedback sheets for the mobile masseurs, workshops and feelgood ripples from emails have revealed a positive response. Not all feedback has been positive.
For example, some staff at its 300 retail stores felt left out because they could not go to the
locations and participate in the Balance events, owing to the practicalities of getting to the
locations. For O2, the logistics of visiting 300 retails stores as opposed to seven centres (call
centres and corporate offices) informed the initial design of the programme. O2 are currently
talking to trade unions and HR staff to further develop the programme to include retail staff and
have already made sure that some activities are not location based, for example, on-line facilities
such as the pedometer and a stress awareness tool.
O2 can also measure progress in each of the strands through indicators. For example, in the
nutrition strand there has been an increase in sales of healthy food at O2 canteens. This increase
has allowed O2 to talk to the caterers (catering is outsourced) about providing healthier meal and
snack options. For the Fit-Bug activity, O2 set a target of selling 800 Fit-Bug pedometers over 9
months. By the end of December 2005 over 500 had been sold.

The business benefits


Balance helps to deliver O2s people strategy through employee engagement. By demonstrating
how it values its staff, O2 hopes that it can retain and attract the right people to grow its business.
It is too early to ascertain whether tangible benefits have been realised, but O2s internal
management tool reflect will be used to evaluate the Balance programme.
Why is it CSR?
Looking after the well-being of staff whilst at work is an area where a company can demonstrate
its CSR. The Balance programme goes beyond the traditional company response to health and
safety of its staff. Participation is voluntary and O2s investment in the programme goes beyond
compliance to existing health and safety legislation. For these reasons, the Balance programme is
CSR.
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What next?
O2 is currently piloting a new scheme in the UK with Active Health Partners. Staff who ring in sick
are connected to a qualified nurse or practitioner for information and advice. A pilot scheme run at
a call centre found that 15% of absenteeism is caused by childcare problems rather than ill health.

Case Study V
Work-Life Balance
A Case of Social Responsibility
The role of work has changed throughout the world due to economic conditions and social
demands. Originally, work was a matter of necessity and survival. Throughout the years, the role
of work has evolved and the composition of the workforce has changed. Today, work still is a
necessity but it should be a source of personal satisfaction as well. One of the vehicles to help
provide attainment of personal and professional goals is work-life benefits and programs.
Implementation of these programs in the United States (U.S.) and the European Union (EU)
countries differs, due to fundamental beliefs about the goals of such programs. Are work-life
balance programs in existence as a result of a social responsibility to employees or to provide a
competitive advantage to employers?
Before we can answer this question, we need to define what work-life balance is. Many
people think of work-life balance only in the framework of what the company does for the
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individual. However, work-life balance is a two prong approach. The other prong of work-life
balance, which many individuals overlook, relates to what individuals do for themselves.
, Work-life balance is meaningful achievement and enjoyment in everyday life. The primary way
companies can help facilitate work-life balance for their employees is through work-life programs
and training. Achievement and enjoyment at work is a critical part of anyones work-life balance.
Furthermore, achievement and enjoyment in the other three quadrants of ones life (e.g. family,
friends and self) is critical as well.
Work-life balance programs in the U.S. have become increasingly popular through the years.
The following lists some of the more common work-life benefits:
Flex-time
Telecommuting
Child care
Elder care
Leave (e.g. paternity, etc.)
Job-sharing
Employee Assistance Programs
In-house store/services
Gym subsidies
Concierge services
Vacation
Work hours
In addition to the work-life balance programs listed above, primarily due to the internet boom in
the mid-90s and the growth in the economy, more companies offered other perks as well.
Items such as company cars and a set number of free flights per year were normal for many
companies. A four-day work-week as well as flexible hours and casual dress were common also.
These perks were primarily instituted to attract, motivate and retain a superior quality workforce.
According to a position paper published by Caux Round Table and written by David
Rodbourne in 1996, While many leading U.S. companies have extensive work-life programs,
policies and practices, most have not yet changed their organizational cultures to support
employees and managers who want to use work-life options.

This philosophy appeared to be widespread in the 1990s, because work-life programs were in
place, however if an employee wanted to be a manager, they were not allowed to work four day
weeks.
In light of the recent economic conditions, there has been a dramatic change in how
corporations view work-life balance programs. Corporations are much more cost conscious
about these programs, but still realize their importance. Despite this more critical view about
work-life programs, according to Jim Bird, benefits such as Employee Assistance Programs are
considered as a standard offering. I do not see them going away. In the heart of the Internet
bubble, work-life balance programs were an added bonus to attract and retain quality employees.
Today, the work-life benefits have switched from company cars, significant bonuses, and other
perks to employee fitness centers and dry-cleaning services.
Now work-life balance programs are in place as Recession Perks according to Challenger Gray
and Christmas, Inc.
Many corporations can no longer afford the monetary compensation they were handing out in the
1990s. But with layoffs commonplace, these companies are looking to use their inexpensive
Recession Perks as tools to build loyalty and encourage teamwork and camaraderie with
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coworkers. Through these benefits, along with the traditional programs such as insurance and
retirement plans, managing the remaining workforce after layoffs is vital. When the struggling
economy turns around, the remaining employees will be responsible for bringing their respective
companies back to life, and back to a competitive force. Some of the more prevalent work-life
programs listed above are discussed in more details below:
Work Hours
America currently legally limits non-exempt workers from working more than 40 hours a
week without additional compensation. This legislation is a result of some of the earliest
lobbying efforts by labor unions. Exempt workers do not currently have such a restriction
resulting in a wide disparity in how exempt workers are treated. Some companies expect extra
hours to be put in without extra compensation while at the other end of the spectrum some firms
compensate exempt workers as well as non-exempt for overtime.
Paternity Leave
Paternity leave is an issue that has recently received attention with the passing of the
Family and Medical Leave Act. The intent of the Family and Medical Leave Act was to
standardize the rights employees have to family leave. While originally intended to protect
working mothers, the scope of the law was expanded to incorporate the changing needs of the
American family. As more of the population deals with elderly parental care, single parenting,
etc., the mandated leave affords a broad spectrum of demographic groups coverage. The current
minimum in the U.S. is 12 weeks but 19 percent of companies currently go beyond the scope of
the law and offer more leave.
Childcare
Of conventional families (mother & father) in the U.S., 62.8 percent are dual-income
households. As a result, many companies offer child care benefits as an enticement to workers
with families. The methods used to support workers are varied and few concepts are universally
accepted. In-house child care facilities, after school programs, subsidized child care, and referral
services are all ways that employers use to help employees care for their children. One fairly
common program is child care spending accounts. These programs take advantage of tax relief
provided by the federal government and are offered by over 90 percent of employers.
Vacation
Vacation time in the U.S. is one area where the federal government has not weighed in
with significant legislation. While most companies offer two weeks to new employees as a
standard, each company in the U.S. can determine their own vacation policy. Therefore,
disparities exist between vacation policies which are a source of competitive advantage.
Typically, those employees with more seniority receive more vacation time. Many companies
offer the ability to accrue more vacation time in relation to the length of service. However, very
few companies offer additional vacation time as a reward for good work.
Telecommuting
Telecommuting is a relatively new concept brought about by the widespread availability
of computers and the internet. This primarily allows workers in white collar jobs to work from
home by linking employees to a companys network and completing work from home. One of
the primary purposes of telecommuting is to allow employees to spend less time commuting, as
well as allowing their schedule to be a bit more flexible. Currently 30 percent of U.S. firms
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allow some form of telecommuting.


In contrast to the U.S., there are different approaches to work-life balance in Europe.
These approaches depend on cultural characteristics of the various member countries and the
level of development of the economies. However, the EU is trying to establish certain guidelines
for all countries that aim to reduce discrepancies between the work-life initiatives of the
countries.
According to Cary Cooper, professor of organizational psychology and health at the
University of Manchester Institute of Science and Technology, the Americanisation of working
practices in Europe, including an increase in outsourcing, hours at work, delayering and
freelancing, is increasing stress levels.
This Americanization had led the EU to investigate guidelines regarding work hours, holidays, and
parental/paternity leave. Telecommuting and child care are also topics of interest to the EU in
relation to overall work-life health of its member countries.
The European Employment Strategy emphasizes that member states should design,
implement, and promote policies which favor the family, including the establishment of
affordable, accessible and high quality child-care services. In March of 2000, the French
Presidency administered a set of questionnaires to the EU countries to gather data about worklife balance indicators so that overall EU guidelines could be recommended.
While the EU may want to establish uniform standards for all its member countries, because the
statistical data varies greatly from country to country, individual goals are more feasible at this
time. Some of the more prevalent work-life programs in the EU are discussed below:
Work Hours
In 1995, the Council of the EU recommended a maximum 48-hour work week in order to
protect the safety and health of workers. However, hours that employees actually work among
the EU countries still varies. A report published in 2000 by the Trade Unions Congress found
British employees were working an average of 43.6 hours a week, compared with 39.6 in France,
38.5 in Italy and 40.1 in Germany.

While Frances average number of hours worked per week is 38.5, France mandates time and a
half or bonuses paid for working more than 35 hours per week. According to a study by the
European Community Household Panel, 12 percent of workers believe they have a low number of
work hours, and 44.8 percent believe they have a high number of work hours.
Paternity Leave
Paternity Leave is a relatively new trend some EU countries but not in others. In
Denmark where paternal rights have existed for more than 20 years, regulations have been
refined to give fathers more rights in taking care of their children. In particular, under new rules
implemented in March 2000, parental leave is granted to fathers for the first time and leave
entitlement is extended to a total of 10 months leave at 30 percent of regular salary until the
childs third birthday. Any period of leave cannot exceed six consecutive months. As of
December 2001, 40 percent of Nordic fathers actually took advantage of these rights, encouraged
by tax penalties if they did not and generous financing at about 80 percent of average salaries if
they did.
In contract the government in the UK recognized paternal rights at the end of the last
decade. For too long, family friendly policies were simply equated with policies for working
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mothers. The EU Directive on Parental Leave has since put the UK on par with the rest of
Europe, and two weeks paid paternity leave is promised starting 2003. Some companies have
taken initiative to implement paternal leave prior to the EUs directive. Four out of 10 UK
employers chose to make provisions prior to the Directive. The next challenge to the scope of
family leave comes from across the Atlantic. In the U.S., family leave is not limited to care for
young children but includes everyone in the family from the spouse to elderly relatives through the
Family and Medical Leave Act.
Vacation
In addition to a recommended maximum number of work hours, the EU also in 1993
formally recommended that employees receive four weeks mandatory vacation. Again, the
length of holiday varies among EU countries. Flexible holiday policies are a trend that some EU
nations are embracing. Under current Dutch law, employees who do not take their full holiday
entitlement cannot receive cash in lieu, other than as part of a termination package. New
proposals would allow employees to have surplus holiday paid off, provided that they actually
take at least 20 days holiday leave. Historically, companies would just close their operations and
have all employees take holiday leave at the same time. With the increase in globalization,
companies are interested in being open for business all the time which creates opportunities for
employees to take partial holiday leave and work the remainder of the holiday for the extra
income. However, holiday time is still valued by European workers. Facts 2000 survey claimed
that employees would rate having more than 30 days holiday as a more attractive benefit than
having a company car or a pension.
A quick scan of vacation time in the countries where U.S. firms do most of their
European business reveals that four weeks is below the average vacation time most Europeans
already enjoy. For example, in France 25 days is the minimum required by law, though 25 to 27
days is standard. Germany requires employers to give 20 days, though 30 is standard practice.
(Some Germans enjoy as much as 15 weeks of paid leave each year). The Netherlands likewise
requires 20 days but most employers offer between 25 and 27 days. Only the United Kingdom
had no mandated vacation time prior to the spring of 1998. At that time, Prime Minister Tony
Blair ushered in the European Working Time Directive, which set forth mandatory annual leave
and brought the country into compliance with EU regulations. While the new legislation marks a
shift from hands-off to hands-on governmental policy, it should not affect operations at most
companies in the U.K.
The majority of employers already offered four to five weeks vacation time.
Childcare
Developing childcare provision systems in the EU appears to have been an emerging
priority for the past 15 years. This concern is related to the need to promote equal opportunities
for men and women in the labor pool. In a published report in 1988, the European Commission
Equal Opportunities Unit recognized the need for consistent information about childcare as a
major component of the work-life equilibrium. As a basis for this, the EC Childcare Network
undertook a study of routine data already existing on the subject in the member states followed
by further reviews of the subject.
Despite discrepancies in statistics and information about
childcare available across EU member countries, the EU does its best to gather information and
recommend guidelines to benefit both working parents and children.
Childcare subsidies are available throughout the EU, but the cost of childcare remains a
controversial issue. In the UK, parents face the highest European childcare costs. The Daycare
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Trust says, on average, parents in Europe contribute just 25 percent of the full cost of a nursery
place, compared the 75 percent paid by parents in the UK. Despite the large EU government
subsidies and tax credits (outside the UK), the Daycare Trust says that the high charges are still
preventing some parents from returning to work.
Telecommuting
Research from a UK Labor Force Survey, conducted by industry analyst Datamonitor
shows that 1.7 million people, about six percent of Britons, now telecommute at least one day a
week. The figure falls to 1.1 million or 4.2 percent if you exclude those who do it only
occasionally. The number of people working from home across Europe could jump by more
than 50 percent between now and 2005. The driving force is a desire among employees for a
better balance between work and life and, among employers, to hang on to their best people. The
events of September 11 added a third reason: even if they can get to work without delay and
disruption, many people would prefer not to work in a high-rise office tower.
Other EU countries expect telecommuting to become more prevalent as well. A survey
conducted in late 1998 shows the percentage of European executives that expect telecommuting
to become widespread in use by 2003. Asked about work practices they expect to be prevalent in
their own companies within five years, 53 percent of UK executives expected telecommuting to
be in widespread use
Work-life balance programs are a matter of interest in both the U.S. and EU. However,
the approach to implementing these programs is different in the two regions. In the U.S.,
companies implement work-life balance programs, and the government has little involvement.
For U.S. companies, work-life balance offers a competitive advantage, in that they are able to
recruit the best candidates and potentially increase their loyalty to the company. In the EU, the
different countries impose more strict regulations on employers which reduce their flexibility in
regard to programs such as vacation time, paternal leave, flex-time, telecommuting, etc.
Due to the fact that the social, political, and cultural factors are more closely tied in the
EU, work-life balance programs are commonplace and are thought more as a social
responsibility than in the U.S. However, the EU is behind the U.S. in regards to recognizing the
PERSONAL responsibility of the individual. In the EU, it is time to address the individuals
need to have tools, through training for example, to better create their own work-life balance.

A direct comparison between the U.S. and EU is difficult to establish, because in the U.S.
there are few federal work-life balance policies. Companies ultimately shoulder the
responsibility for developing and implementing these programs. Although, there will probably
never be a single mandate for work hours, vacation, paternity leave, childcare and telecommuting
that applies to all EU countries, the EU does an excellent job of recommending policy with
members representing the different cultures and work values of the region.
Both the U.S. and EU can learn a lot from each other regarding work-life balance. The
market forces that significantly influence U.S firms are good for business. In addition, U.S.
firms must keep in mind that social change fuels much of the momentum behind these market
factors. EU countries and firms must realize that the Americanisation of Europe is a side
effect of market globalization. In other words, European countries and firms must realize that
in order to maintain a strong economic position, social responsibility is equally as important as
developing competitive human capital programs.
The argument for or against work-life balance programs often hinges on the companys
ability to show significant financial gain as a result of these programs. Many corporate decisions
rely on a positive net present value to be shown for any project to move forward. Interestingly,
for all the emphasis on such financial justification, very few hard numbers exist on the success or
failure of work-life programs. More often companies have quantified the benefits of such
programs through a variety of performance measures indirectly related to financial return. The
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following paragraphs look at some ways companies have attempted to develop a justification for
programs.
Since work-life programs are a part of a companys compensation and culture, their
benefits are most often seen on the human resources front. One of the first ways that firms have
shown a benefit is in recruiting. Effective work-life programs are an effective marketing method
for attracting employees. Additionally, oftentimes job seekers are drawn to Best Place to Work
lists that are published in magazines such as Fortune and Working Mother. Once potential
applicants are recruited, work-life programs are often a deal maker. They often sway a potential
applicants choice of job offers to the company offering the best programs.Most importantly,
effective work-life programs help forge a symbiotic relationship between an employer and
employee that leads to mutual benefits. Employees who are better able to balance the demands
on their time are more satisfied and content. This in turns leads to real benefits for the employer in
terms of productivity gains, lowered turnover rate, a stronger team spirit, and loyalty to the
employer. Operationally, a lower turnover rate leads to reduction in new employee training costs,
as well as the more elusive costs associated with informal training that existing employees provide
to new team members. While these gains have been sporadically measured, no definitive study
has been able to associate performance gains directly with financial performance gains. The
trends in the data do show improvements in the areas listed
In fact, a study by Vanderbilt University and Hewitt Associates found the companies on the Best
Place to Work list outperformed similar companies that werent on it, and also did better than the
broad market, showing substantial financial performance advances. and thus are related to
greater profitability derived from the improved efficiency of the workplace.
Concrete measurements are difficult to get for any indirect business effort - even the
impact of most technology. For work-life balance, there have been studies which indicate a
direct correlation between work-life balance programs and customer service ratings. For
instance, Worklifebalance.com conducts surveys for productivity improvement due to the tools
taught in their work-life balance training. Of thousands of people surveyed 85 percent to 95
percent report being more productive (on average over 20 percent more productive). These
statistics are the average of opinions and backed up by anecdotal evidence so they are not hard
numbers. Even though this evidence is subjective in nature, it is important to note that the
opinions and anecdotal evidence from both employees and management are strongly positive.

Generally, U.S. firms have awoken to the benefits of work-life programs and the EU is
continuously evaluating work-life initiatives as part of its larger labor policies. According to Jim
Bird, the most important workplace issue in the U.S. over the next 30-40 years will be the worklife balance issue. Currently, programs are based around what an employer can do for the
employee. However, for true work-life balance to occur, employees need to be responsible for
adopting certain behaviors which help them balance work and the other parts of their life (e.g.
family, friends and self). Companies with a long-term strategy on work-life balance will
recognize this and provide employees with training which addresses personal shortfalls they
might have that keep them from achieving work-life balance. Even if companies implement
programs to address the personal shortfalls of employees, will long-term work-life balance be
achieved? Changing the habits of employees does not necessarily imply a change in work-life
balance particularly if the culture of the work environment does not change. When both
company plans and employee efforts are complimentary, true work-life balance can be achieved.
The current cultural, political, and social framework of the U.S. and the EU leads to
different rationales for implementing work-life programs. While U.S. companies generally offer
work-life programs as a competitive advantage, the EU mandates them as a function of social
responsibility. However, the effects of the work-life programs demonstrate that competitive
advantage and social responsibility are not opposite goals but intertwined: companies gain a
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competitive advantage from recruiting, retention, productivity increases and better customer
service while also helping the society in which they operate.
Are work-life balance programs a case of social responsibility or competitive advantage?
According to Jim Bird, it is not an either or question, and looking at it as one is what has hurt
both its advocates and the businesses who are trying to address it. It is not a case of - do we
address work-life balance and increase costs and decrease profits? - or - do we increase profits
and not address work-life balance? The right work-life programs definitely offer a competitive
advantage in recruiting, retention, productivity and customer service levels - and as a result
profitability. Work-life balance programs are definitely competitive advantage but not to the

What Does the Future Hold?


CSR is not a commodity that can be taken down off the shelf. Its shape and focus will
depend on the scale and kind of business involved. At the very least CSR represents an
awareness that business operates in a wider community and its future is irrevocably bound
up with the interests of that community. As the limitations on government action become
more evident, the pressures on companies to show leadership become stronger. For many
companies the community is global and for them the challenge is correspondingly great;
smaller companies can find opportunities in their own backyard, either individually or in
partnership. Strong brands will reflect a public perception that companies are seeking to
behave responsibly and take account of the interests of employees and customers as well
as their wider environment.

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For the HR community, CSR offers a way to strengthen its functional links with other
departments, including corporate affairs or regulation. If HR wants to demonstrate its
bottom-line business relevance, leading or supporting CSR activities can draw on skills in
training, communicating, teambuilding and change management. Sustainability is an issue,
not just about natural resources but about an organisations relationship with its employees.
Top management support for CSR is critical, but HR can give initiatives much needed
credibility by seeing that they are embedded in an organisations culture and day-to-day
behaviour, not simply a feed for positive-sounding press releases. Meanwhile HR will
continue to give substance to company aspirations to be a good employer by championing
enlightened people management practices on diversity, worklife balance, employee
involvement and development. Can HR do it? Can HR people take the lead in influencing
the ethical culture and climate of big organizations so as to prevent another Enron? Richard
Donkin12 has suggested that, in order to answer yes, the HR director must be able either
to interpret the financial data or have authority to order an independent audit. But this is to
confuse skills, authority and influence. It is not being suggested that HR people need to be
able to take on the finance director on his own ground. Many HR directors are effective and
have influence in the organisation precisely because they have the confidence of their chief
executive. Responsibility for preventing or discouraging misconduct by chief executives or
finance officers must lie mainly with company boards. But many senior HR people clearly
have the experience, the political skills and above all the opportunity to steer organisations
towards the kinds of strategic behaviour that will enhance rather than damage their
standing and their business.
The impact of CSR is under close scrutiny. There are four primary areas of concern: 1)
product responsibility; 2) strategies for sustainability; 3) the quality of CSR management;
and 4) the future of CSR overall. Importantly, indications are that organizations will
increasingly be held accountable for their actions. According to PricewaterhouseCoopers,
within the next 10 years evaluation methods used by Wall Street analysts will include new
metricssocial performance and intellectual capitalto more accurately assess the net
worth of a company, and within the next five years, 70% of North American and European
companies will assign board responsibility for reputation and social responsibility.

Over the next five to 10 years, one of the primary tests of how society will judge companies
will be based on where corporations place their facilities, how they source goods and
services and what economic impact they have on poor and disadvantaged communities.
Companies will increasingly adopt a comprehensive view of corporate citizenship that
includes the environment and community engagement. A proactive and perhaps
controversial recommendation regarding human capital and emerging markets is that global
corporations consider putting the worlds five billion or so poorest people at the heart of
their profit-making strategies.

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Not surprisingly, evidence suggests that companies have a long way to go to clearly
demonstrate substantive CSR performance. For example, a global ranking report notes that
the worlds 100 largest companies have a poor record of accounting for their impact on
society and the environment. A range of measures that include strategy, governance and
stakeholder involvement show these companies scoring an average of 24 out of 100 points
with only five companies scoring more than 50% and only one U.S. company, HewlettPackard, placing among the 10 highest scorers. Further, the level of effort that the
worldwide community is putting into the achievement of the United Nations Millennium
Declaration goals is less than half the effort necessary to meet any of the goals.
Consequently, since the CSR initiatives of most organizations tend to be peripheral and
isolated from their core businesses and the initial momentum gained in the past few years
appears too disjointed to make a significant impact in the world, the CSR movement must
significantly shift gears in order to reach its full potential.
In conclusion, with the growing importance of human capital as a success factor for todays
organizations, the role of HR leadership will become evermore critical in leading and
educating organizations on the value of CSR and how best to strategically implement CSR
policies and programs domestically and abroad.

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