Ethics & The IHR

Ethics refers to a system of moral principles- a sense of right and wrong, the
goodness and badness of actions and the motives and consequences of these
actions. As applied to business firms , ethics is the study of good and evil , right
and wrong and just and unjust actions of business persons.
The corporations must successfully manage the demand for ethical conduct
from groups concerned with racial , social and human rights justice.There has
to be a fair competition , acting without deceptionand operationg within the
boundaries of the law.
To build an ethical behaviour framework, HR employment practices must not
only adhere to legal guideleines but also adhere to the business core values.

Sources of Ethics :
The managers in every society are influenced by three main repositories of
ethical values.They are as follows:
1. Religion.
2. Cultures of respective countries
3. Legal System.

1. Religion: One of the oldest sources of ethical values is the religion

dominating in that particular region.There are more than 1,00,000 different
religions existing across the globe and the major religions converge on the
belief that ethics is an expression of divine which reveals the right and the
wrong practices in the business areas.
2. Culture : Culture refers to a set of values , rules , and standards
transmitted among generations and acted upon to produce behaviours that
fall within the acceptable limits.
3. Legal system: Laws are rules of conduct , approved by legislatures that
guide human behaviour in any society .They codify ethical expectations and
 keep changing as new evils emerge.Whatever ethics that law codifies , it is
binding on business .Society expects business to abide by the law and
obeying the law is presumed to be ethical behaviour.
Role of Ethics in Business:
1. Managing ethics matters to employees , employers , stakeholders
and the public.For international organisations it matters even more.
2. For the management , managing ethically means saving billions of
dollars each year on tax penalities , law suits , settlements and
thefts.Corporations have to pay huge penalty for acting in an ethical
manner.
3. Implementing business ethics managing with integrity .Integrity
cascades throughout an organisation and impacts every activity of
management , such as hiring , promoting and compensating.
4. Implementation of ethics involves decision making as well. An ethical
attitude helps managers take decisions which are in the interest of
public, employees and organisation .
5. Ethically strong companies tend to make more profit .Ethical
considerations are consistent with business pursuits , in particular,
with the pursuit of profit.Eg: Tata group is known for their ethical
conduct and they also turned to be a successful conglomerate.

Ethical issues in IHR function:

There are various issues where IHR has to adhere to rules & regulations
Some of the HR Ethical dimensions are mentioned below:
1. Job discrimination/ International Compensation.
2. Sexual Harassment.
3. Wages.
4. Safety & Health.
5. Performance Appraisal.
6. Privacy.
7. Restructuring & Lay offs.
8. Bribery & Corruption.
1. Job Discrimination/International Compensation.
The individuals can intentionally be discriminated out of personal prejudice or
on the basis of stereotypes.Eg: Requests from women to work in the
production department may be rejected on the basis that they do not
understand machines.
Some organisations too discriminate on the basis of gender.They do not let
women take the senior leadership positions.
According to the Kantian theory all human beings should be treated as ends
and never used merely as means.This principle implies that each individual has
a moral right to be treated as a free person and that all individuals have a
correlative moral duty to treat each individual as a free and equal person.
Discrimination can be corrected in the following ways:
 Hiring people purely on jo-related considerations.
 Giving equal and justified pay for work of similar nature.
 Offering Job promotions on the basis of performance .
 Treating all employees fairly.
2. Sexual Harassment:
Sexual Harassment refers to unwelcome sexual advances , requests for sexual
favours and other verbal or physical conduct of sexual nature.Though the
harassment is more severe in the case of women always but even men are not
far from it .
Sexual harassment is of 3 types:
 Sexual threats: They force women to comply or else their jobs are at
stake.
 Sexual offers: This includes incentives of jobs, promotions in exchange
for personal satisfaction.
 Hostile Work environment: The sexual nature of conduct of the co-
workers and others causes a woman to feel highly uncomfortable and
affecting her performance.
Role of IHR Manager :
 Design a sexual harassment policy.
 Communicate the policy to the staff.
 Establish procedures.
 Take appropriate actions to implement the policy.
In Indian companies there are harassment committees constituted with
representatives from women and NGO’s who investigate in such matters.
3. Wages: The ethical issue involved in the payment of wages relates to the
parity to be maintained between remuneration paid to employees in the
home country with those working in a foreign location.
It is well known that employees working in subsidiaries , particularly in
developing countries , are paid less than their counterparts in home
countries.Low wages being paid to employees in developing countries is
sought to be justified on the ground that it is the cost advantage (Cheap
labour) that makes these countries attractive.
It is a known fact that an individual from a developing country desires to take
up an assignment in any developed country so that he can earn better.
MNC’s generally keep prevailing salary structures in host countries as
benchmarks.Such practices help maintain parity in compensations.
4. Safety & Health: Due to rapid technology advancement and nature of work
the stress too has increased in the workplaces. Employees face various health
problems due to video – display terminals and computer keyboards and tasks
requiring repetitive motion.
IT becomes the prime duty of the IHR to take care of this aspect.MNC’s
organise fire-drills , awareness workshops , onsite health camp and innovative
ways to enable employees to take care of their health and safety of its
employees.
5. Performance Appraisal :
The performance appraisal is the method by which the employer assesses the
performance of its employees .The employer should neither underrate nor
over rate the performance of its employees.The management should be fair in
judging the performance of its employees.’
A proper assessment of performance of employees determines the pay hike ,
promotions and training needs of an employee.The IHR managers role in
identifying loopholes and closing them is critical.

6. Privacy:
Privacy refers to protecting an employees private life from intensive and
unwarranted actions.The employee believes that his or her religious , political
and social beliefs , as well as his or her personal lifestyle private affairs and
should be safeguarded from being snooped or analysed.
One of the major areas where the MNC’s have to be extra cautious with regard
to privacy are the passwords used in their computer systems to safe guard
their privacy.
7. Restructuring and Lay off:
This is yet another ethical area of HR where in there is restructuring and
consequently there is lay of of employees.
Lay –Off consequent to restructuring is not wrong as such if this move arises
out of poor management or incompetent management.
There has to be an ethical justification for the termination of any employee in
the company.
8. Bribery:
A bribe is a sum of money offered to someone to persuade them to perform a
dishonest act.This bribe amounts to a payment made with an intention to
corrupt.There are justifications which support bribery in the corporate world
by saying that the corporate will not survive without it but it is definitely
unethical in any case.

Demographic diversities and its impact on global execution of Business:

Demographic change is the main reason why organisations need to adapt their
practices in order th respond to increasing diversity within labour markets.
Some common and major demographic and social changes are:
1. Family structures are changing.
One parent families more common.
Parents juggle between work , parenting , household chores and
childcare.
2. Labour force diversity :
Womens participation.
 Ethnic & religious diversity.

3. Less Social service support:

People with disabilities
Health & stress issues.

These demographic changes have profound implications for

organisations and managers .Significant changes in the workplace have
occurred due to downsizing & outsourcing which has greatly affected HR
management.Globalisation and new technology have changed
workplace practices and there has been a trend towards longer working
hours.
Impact on Global business can be understood from the following:
I. International trade will continue to grow.
Due to growing population and increased dual income group
families there has been an increased demand for the goods and
services.
2. Getting talented staff becomes more challenging:
Due to Globalisation more and more people are gaining education due to
which there is a rise in immigration.This has also led to a rise in talent pool of
the developing nations.Recently there has been outsourcing , setting up of
offshore call centers etc which has increased job opportunities.
3. Investments will move beyond traditional equity and property markets.
The savings are now being channelized into public infrastructure like roads and
bridges etc.
4. Diminishing of Family business:
As the international trade has grown , the second generation of family
members shows preference towards more rewarding & prestigious jobs.This
has resulted in closing down of small business units and the younger
generation is moving towards more rewarding careers.