CHAPTER 3

RESPONSIBILITIES OF THE CORPORATION

A. PURPOSE OF THE BUSINESS FIRM
• SOCIAL POINT OF VIEW
- Firms exists to supply goods and services to
consumers as efficiently as possible.
• INDIVIDUAL PERSPECTIVE
- The company exists to provide income, power,
prestige, creative satisfaction, or a combination of
these to those who work for it or with it.
 B. ETHICAL CONSIDERATIONS IN TRANSACTIONS
WITH EMPLOYEES
1. Identifying ethical concerns in employee transactions
- supervisors and managers are continually involved with employees
and prospective employees.
- They are responsible for numerous decisions that affect self-
esteem, personal growth, morale and economic well-being of those
that they manage.
2. Hiring
- Employers hire people who will maximize the efficiency of the firm.
- Employers must be careful to honor the moral ideal of fair
treatment of employees.
2.1 Screening
- When it is done properly, screening ensures a qualified pool of
candidates and guarantees that everyone been dealt with fairly.
2.2 Selection
- Job Description: lists all pertinent details about a job, including duties
and responsibilities, working conditions, and physical requirements.
- Job Specification: describes the qualifications an employee needs,
such as skills, educational experience, appearance, and physical
attributes.
2.3 Tests
- Are designed to measure the applicant’s verbal, quantitative, and
logical skills.
• Aptitude Tests help determine job suitability.
• Skills Tests measure the applicant’s proficiency in particular
area like speed test in typing and shorthand
• Personality Tests helps determine the applicant’s maturity and
sociability.
2.4 Interviews
3. Promotions
3.1 Seniority: refers to longevity on a job or with a firm.
- frequently, job transfers or promotions are made strictly by
seniority; individuals with the most longevity automatically
receive the promotions. But problems can occur with this
promotion method.
To illustrate:
Personnel Manager Jerry Co needs to fill
the job of quality control supervisor. Mina
Malas seems better qualified for the job than
Tim Plado, except in one: Plado’s been on the
job for 3 years longer than Ms. Malas. If you
were Mr. Co, whom are you going to promote
as quality control supervisor.
Supply your argument:
3.2 Inbreeding: all that we have said about seniority
applies with equal force to inbreeding, which is the practice
of promoting exclusively from within the company.
3.3 Nepotism: is the practice of showing favoritism to
relatives and close friends.
4. Discipline and Discharge
- For an organization to function in an orderly, efficient, and
productive way, personnel departments establish guidelines
for behavior based on such factors as appearance,
punctuality, dependability, efficiency, and cooperation.
DUE PROCESS – refers to the specific and systematic means workers
have of appealing discipline and discharge.
5. Wages
Ethical Guidelines for arriving at a salary
5.1 Prevailing wage in the industry – the salaries similar positions in
the industry earn can provide some directions for arriving at a fair
wage.
5.2 Community wage level – it recognizes that some communities
have a higher cost of living than others. Ayala Alabang in Muntinlupa
City for example is more expensive to live in than Moonwalk Village
in Las Pinas City. The cost of living relates to basic maintenance
needs and must be considered very seriously in establishing a wage.
5.3 Nature of the job itself
5.4 Job security
5.5 Employer’s financial capabilities
5.6 Mandated by law
 ETHICS AND PERFORMANCE APPRAISAL
1. Halo Effect: The individual’s performance is
completely appraised on the basis of a
perceived positive quality, feature or trait.
2. Horn Effect: The individual’s performance is
completely appraised on the basis of a negative
quality or feature perceived. office. He may be
casual at work too!”.
3. First Impression (primacy effect): Raters form an
overall impression about the ratee on the basis of some
particular characteristics of the ratee identified by
them. The identified qualities and features may not
provide adequate base for appraisal.
4. Excessive Stiffness or Lenience: Depending upon the
raters own standards, values and physical and mental
makeup at the time of appraisal, ratees may be rated
very strictly or leniently.
5.Central Tendency: Appraisers rate all employees as
average performers. That is, it is an attitude to rate
people as neither high nor low and follow the middle
path.

6. Personal Biases: The way a supervisor feels about

each of the individuals working under him - whether he
likes or dislikes them - as a tremendous effect on the
rating of their performances.
7. Spillover Effect: The present performance is
evaluated much on the basis of past performance. “The
person who was a good performer in distant past is
assured to be okay at present also”.
8. Recency Effect: Rating is influenced by the most
recent behaviour ignoring the commonly demonstrated
behaviours during the entire appraisal period.