Topic 4: Apply an ethical framework to HR

Apply an ethical framework to HR

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1© NSW DET 2008

Topic 4: Apply an ethical framework to HR

Contents

What is ethics? 3Is ethics a purely personal matter? 3

Ethics and the HR Manager 5Ethics issues in HR 6Practical role of HR 6Making ethical choices 7An ethics framework for HR professionals 8

Guidelines for managing ethics in the workplace 10

Summary: Good ethics is good business13

2© NSW DET 2008

Topic 4: Apply an ethical framework to HR

What is ethics?

Ethics is the study of systems of morals, particularly moral behaviours. It is about how we as individuals and groups decide what is right and wrong in the way we behave with each other.

In broader society, we the citizenry expect ethical behaviour from our governments, be they federal, state or local, and from the leaders of large public and private sector

organisations. It is a matter that occupies the front pages of our tabloid and broadsheet newspapers and, as individual citizens we will all have different views about whether or not any particular public official or corporate leader has behaved ethically in any given circumstance.

Is ethics a purely personal matter?For ethics to play a meaningful role in any field of human endeavour they need to be something more than just a personal thing for individuals to decide. They must involve standards and approaches capable of acceptance by everyone in a group, community or organisation, particularly in times of uncertainty when choices must be made.

Dr Simon Longstaff, Executive Director of St James Ethics Centre, Sydney, New South Wales, in his article Applied ethics for managers, sourced on the St James Ethics Centre website (www.ethics.org.au/about-ethics/ethics-centre-articles/ethics-subjects/management/article-0096.html)1: discusses ethics at length.

He sees ethics as a practical subject which has its roots in Ancient Greek history. The Greek philosopher, Socrates who lived in Athens at around 500 BC posed the question: “What ought one to do?” Dr Longstaff contends that this simple question enables us today to examine our behaviours in acting ethically in our everyday lives.

1 The full article is available to read at http://www.ethics.org.au/about-ethics/ethics-centre-articles/ethics-subjects/management/article-0096.html and a related article at http://www.ethics.org.au/about-ethics/ethics-centre-articles/ethics-subjects/management/article-0135.html#

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Topic 4: Apply an ethical framework to HR

We frequently observe our politicians, particularly Ministers of the Crown, being asked why they did or did not take a particular course of action. We hold them accountable and judge if they acted ethically on the basis of their answer. This is often called trial by media, yet we do base our opinions on what we hear or read. That information also influences decision-making when choosing a candidate to vote for in elections.

Personally-held values underpin our judgments. Where those values conflict with values held by others, we disagree and this often leads to question the ethical practices of the other party.

An ethical dilemma often faced by Local Councils involves development applications. Decision making requires balancing the needs of the individual with policies promoted by the Council and philosophies held by political parties. This rarely results in a decision that satisfies all parties.

In the workplace, ethical dilemmas are more readily resolved when its organisational values, Code of Conduct and its policies and procedures clearly indicate what is expected of its employees. Managers, including HR managers are regularly called upon to make ethical decisions on behalf of the organisation.

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Topic 4: Apply an ethical framework to HR

Ethics and the HR Manager

What should HR managers do when confronted with ethical role conflict situations?

Dr Longstaff’s definition of ethical management in businesses involves technical, financial and legal aspects as well as its values. He further contends that it is not only staff and management that have a view about the underpinning values of the organisation but also others associated with the organisation.

The challenge for the HR manager in promoting and effecting ethical decision-making is increased where the prevailing, traditional culture is

at odds with the values espoused by the organisation. Equally, when operating in an environment of tolerance where certain behaviours that are in conflict with values statements are accepted, the HR manager, supported by Senior Management, requires resilience and patience to challenge it.

Dr Diannah Lowry, Senior Research Fellow, National Institute of Labour Studies, Flinders University, Adelaide, South Australia in her article HR managers as ethical decision-makers: Mapping the terrain in the Asia Pacific Journal of Human Resources 2006 volume 44 number 2 August, page 1712 contends that it is not just decisions made that are subject to ethical scrutiny but also lack of action.

Dr Lowry points out that the ethical dilemmas for HR managers arise in balancing organisational needs with employee needs.

2 If you are interested in expanding your knowledge of this area you can access the full article at: http://apj.sagepub.com/cgi/content/abstract/44/2/171 (free for AHRI members, payment required for non-members)

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Topic 4: Apply an ethical framework to HR

Ethics issues in HRHR functional areas that are particularly prone to ethical issues arising include:

recruitment, selection and promotion

downsizing, restructuring, transmission of business

EEO issues

fair and equitable remuneration

employee training and development

OHS of employees

working conditions

the implementation of a sound performance management program

workplace harassment

grievance procedures etc

There is an ever present temptation for line managers and HR managers alike to ignore ethical issues until they come to the attention of sufficient staff so to cause activity. Grievance policies and ‘whistleblower’ and EEO legislation give voice to staff to formally raise their concerns. At this point the HR manager must become involved in helping to manage the problem that has arisen and to appropriately support the parties involved.

Great care is required to avoid a conflict of interest arising in the role of the HR manager when implementing the organisation’s policy to resolve the problem. It is essential that all parties to the problem feel that they have been appropriately and impartially supported by HR to achieve the outcome.

While the formal role of HR is mandated in policies and legislation, it is not so clear, and therefore much more difficult, for the HR manager to rely on organisational influence to exact incremental change in the workplace toward one of ethical practice and decision-making.

For example, incongruence between the organisation’s values statement and Code of Conduct and its remuneration and reward programs will thwart efforts to inculcate an ethical culture. Awarding financial incentives and promotions based on achievement of revenue targets alone that do not have ethical practice at its foundation will result in a diminution of the values. In such situations HR should promote alignment of HR policies and practice with the values and Code of Conduct. It is through such actions that legitimacy comes and recognition of the role HR can play in effecting change.

Practical role of HRHR can play a practical role in developing an organisational culture based on ethical values through:

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Topic 4: Apply an ethical framework to HR

the development of policies and procedures that encourage ethical behaviour

the development of policy and procedures for whistleblowers

the development and implementation of adequate discipline policies

providing training and seminars on the policies to all levels of staff

acting as a mentor to staff and managers who need advice or mentoring

influencing senior management to act as behavioural models

undertaking personal intervention when necessary.

A note of caution however for the HR manager who chooses to place his/her own interpretation of ethical practice on the organisation’s policies and procedures. HR is one function/department in often complex businesses so it is vital that its policies and procedures are relevant for all aspects of the organisation. Greater success will come from collaborating with key stakeholders to achieve the changes necessary. The ‘fit’ between the HR manager’s own ethical standards and those of the organisation and its key decision-makers are important considerations when it comes to prosecuting the organisation’s policies.

Conversely, the HR manager must be conscious not to become so inured in organisational culture that independence is compromised. Similarly, to be unable to act in an ethical way because it is not consistent with organisational approaches is equally destructive to the role of HR. It is not a solution to this problem to speak privately about one’s moral viewpoint whilst operating from an ethically differently paradigm in a formal capacity.

Making ethical choicesThe range of options available to the HR manager in taking an ethical stance is depicted in the model below which is adapted from Dr Lowry’s article. The model distinguishes the private domain (of one’s own moral views about what constitutes ethical practice – i.e. internal forces) from the public domain (the view promoted in the workplace – i.e. a response to external forces). The left side of the range of options sees apparent compliance or acceptance of unethical behaviour, which is a departure from privately held views. The continuum passes through a public perception of tolerance of unethical acts to the opposite end where the HR manager acts publicly in accordance with privately held views. Dr Lowry introduces the ‘ethically assertive’ manager on the extreme right-hand side of the continuum who has to have moral courage to pursue what is ethically right, despite other prevailing views.

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Topic 4: Apply an ethical framework to HR

The range of ethical choices for HR managers:

Diagram adapted from Lowry, HR managers as ethical decision-makers: ‘Mapping the terrain’, Asia Pacific Journal of Human Resources August 2006

Text alternative for this image: Scale with label at left extreme “Separation of public and private domains” and label at right extreme “Non-separation of public and private domains”. Ranged from left to right the following ethical choices: compliant (accepts unethical acts); neutral (no views expressed); overt tolerance only (private views differ from public views); ethically reactive (responds according to private views); ethically assertive (morally courageous).

An ethics framework for HR professionals

Key point

The HR function is looked to for leading the way in utilising ethical standards in its decision-making. There are a number of tools that assist in this process, including the organisation’s mission, vision, values statements and its code of conduct.

In offering a framework for ethical decision-making it is important to understand that different responses may be called for, according to the nature of the ethical dilemma. For example, a restructure may adversely affect one group of employees. The HR manager may hold back from expressing this view because of an organisational imperative to act quickly. Organisations are complex and dynamic and therefore responses may be sometimes situational. The HR manager must be prepared to be judged on this apparent ‘inaction’ and deal with the consequences.

The framework for ethical decision-making is ideally set by the mission, vision and values statements that translate into behaviourally-based codes of

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Topic 4: Apply an ethical framework to HR

conduct. It is however important to recognise there are other influences on moral behaviour that can impact, including organisational culture; values and behaviours present in stakeholder organisations may also impede efforts to change the culture if they are not considered as part of the change process. Bringing congruence to all these elements provides the best chance of consistent application of ethical standards in decision-making.

Ethics framework for HR professionals:

Text alternative for this image: Cycle starting with (1) Organisational mission & vision, (2) Code of conduct, ethical standards, HR policies and procedures; (3) Organisation culture. Item 3 then leads back to item 1. Label in centre: Congruence for ethical decision-making.

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Topic 4: Apply an ethical framework to HR

Guidelines for managing ethics in the workplace

Many organisations strive for best practice in utilising ethics to guide decision-making in the workplace. One very good example is an article written by Carter McNamara, MBA, PhD Complete Guide to Ethics Management: An Ethics Toolkit for Managers 2008,

www.managementhelp.org/ethics/ethxgde.htm#anchor39675

McNamara identifies 8 guidelines for ensuring that an ethics management program will operate in a meaningful fashion. They are paraphrased and set in an HR context below:

Implementing ethical practice is a journeyCulture is shaped by behaviours exhibited and accepted in the workplace. Cultural change is brought about by management and staff adopting new values and behaving in a way that supports those values. Both short-term and longer-term strategies are utilised to effect this change. Ethical practice requires a similar approach. Value statements, codes of practice and supporting policies and procedures do not in themselves effect change. It is the engagement of staff in developing these and having an opportunity to practice their implementation in a non-threatening environment that will provide the means to reflect on actions (and inaction) that impact the decision-making processes.

Supporting desirable behaviours in the workplaceThe role of HRM is to oversee a fair and just organisation. It is with this in mind that programs, policies and processes are reviewed to ensure preferred ethical behaviours are clearly defined and actively encouraged.

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Topic 4: Apply an ethical framework to HR

Plan up front to avoid ethical dilemmas occurring HRM must be alert to changes in culture and behaviour and pre-empt unethical behaviours through strategies such as re-issuing codes of conduct, relevant policies and/or conducting refresher training and hosting discussion groups. Incentive programs are also useful for reinforcing desired behaviours.

Engage key stakeholders in promoting ethical practicesHRM cannot lead the ethical debate alone. It is essential to engage senior management and other key stakeholders who can promote the organisation’s preferred behaviours. Line authority also brings credibility to the process.

Imbed ethical behaviours in mainstream management processes The starting point for developing/reviewing values is in the strategic planning process. HR policies and procedures must align to strategic directions. This activity provides the driver for updating and re-issuing key documents and reinforcing preferred behaviours.

Invite interested employees from across the organisation to form an ethics working party Where possible include staff from all key business units/functional areas in the working party to develop, pilot and implement the ethics management program. Where resourcing permits, maintain working party involvement in ongoing review and evaluation processes.

Prepare for an initial increase in reporting of ethical issuesAs with any new program, highlighting an issue may result in increased reporting. The organisation needs to consider how it will respond to allegations in the initial implementation period. Will the penalties prescribed in the policy apply immediately or will consideration be given in some circumstances? McNamara suggests the initial response should be to support personnel to become ethical rather than apply sanctions immediately

Maintain the commitment even when all is not perfect Management commitment and fortitude is required when implementing ethics management in organisations in the public eye. Allegations of unethical practice may surface, despite well implemented ethical management strategies. The benefits of publicly notifying an ethics management program is being implemented should outweigh any temporary

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Topic 4: Apply an ethical framework to HR

embarrassment felt from the public scrutiny and critical media reporting should a breach occur.

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Topic 4: Apply an ethical framework to HR

Summary: Good ethics is good business

We have seen that ethics is not an easy concept in the workplace or in life more generally. There are some good frameworks and guidelines available to help HR professionals use ethics to support decision-making in the organisation and the resolution of workplace uncertainties and conflicts.

However, they are not easy to use and require practice and perseverance. Perhaps the most important role that ethics can play in the workplace is to help communicate with those who deal with the organisation, both internally and externally a very clear message about “who we are and how we do business”.

Customers, clients and stakeholders of all kinds are looking for this: organisations who have thought about their standards, talked about them and written down some basic agreements in the form of mission, vision, and values statements and behaviourally-based Codes of Conduct; operational and HR policies must support the identified moral behaviours.

Managerial response to integrating ethical practices in its business can differ significantly and be categorised as either one of:

Social obligation - organisations respond only to legal requirements and competitive market pressures. They resist all else.

Social responsibility - organisations respond to prevailing social norms and expectations. This reduces the incidence of possible conflicts.

Social responsiveness - organisations actively try to minimise any adverse social effects of its activities, and to contribute to the resolution of social and environmental problems. Their management genuinely believe this is desirable.

Human resource managers, because of their areas of responsibility can take an active part in helping their organisations understand the benefits of, and help move to and retain a position of social responsiveness.

The role of HR from that point is to guide the organisation’s decision-makers toward ‘ethical assertiveness’.

13© NSW DET 2008