Ethical issues in the management of human resources

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  • Editorial

    Ethical issues in the management of human resources

    This introduction provides an overview of the articles appearing in this special issue. We

    attempt to synthesize the issues raised and addressed into a general framework, by

    summarizing authors arguments about causes and consequences of ethical issues in the

    management of human resources.

    The management of human resources (HR) in organizations raises many complex ethical

    issues. For example, the low unemployment rate in many markets in the US has led many

    employers to provide additional employee benefits at considerable cost; Marriott International

    offers 24 h on-call social workers to help with personal problems, and Mirage Hotels pays a

    substantial portion of day care costs (Grimsley, 1997). But to what extent do employers have

    an ethical obligation to support employees in balancing work and life demands? Where labor

    markets are flush with qualified workers, is this obligation lessened, since prospective and

    current employees may be more willing to forego personal time in order to keep a job?

    As another example, what is the best approach to the design of training programs intended

    to enhance the ethical decision-making and behavior of employees (Cropanzano & Byrne,

    2001; OLeary-Kelly & Bowes-Sperry, 2001)? Can and should training focus on fostering the

    enhancement of moral reasoning? Or do some employees change behavior only when they

    understand the legal or other adverse consequences of not doing so? Organizations spend

    billions of dollars on training, with varying success (e.g., Morrow, Jarrett, & Rupinski, 1997);

    thus the consequences of training program design have implications not only for enhancing

    the ethical behavior of organizations and their members, but also for profitability and

    organizational effectiveness.

    Resolution of these questions creates unique problems and opportunities for organizations.

    For example, the organizations process of downsizing in order to become more productive

    may reduce organizational commitment among survivors, thereby further reducing organiza-

    tional productivity (Buckley et al., 2001). Paradoxically, the management of HR has in this

    case reduced performance, not enhanced it.

    Thus, improving the identification of and resolution of ethical issues can benefit

    organizations, their HR managers, and line managers who engage in HR activities such as

    recruitment, selection, coaching, training, performance appraisal, and merit pay increases.

    This process can be informed by a review of existing research pertinent to these ethical issues

    and the further development of theory to guide future research. The contributors to this

    volume have thus identified some difficult ethical issues and proposed means for addressing

    these issues. Thus, the purpose of this essay is to provide an overview and synthesis of the

    1053-4822/01/$ see front matter D 2001 Elsevier Science Inc. All rights reserved.

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    Human Resource Management Review

    11 (2001) 19

  • contributions to this volume. We propose a general framework by which ethical considera-

    tions in HR practices and outcomes can be identified.

    The papers in this volume address a wide variety of issues. Readers may see some conflicts

    among authors perspectives and approaches, which illustrates the complexity of the ethical

    problems raised in HR. For example, some authors propose that selecting people who adhere

    to firms or cultures ethical values may reduce sexual harassment or other wrongful behavior

    (OLeary-Kelly & Bowes-Sperry, 2001), but from other authors perspectives, selection based

    on values may also reduce desired cultural diversity (Buckley et al., 2001). As another

    example, some authors call for greater consideration of procedures and in some cases more

    consistency (Buckley et al., 2001), while others suggest that in many organizations, this has

    gone too far (Cropanzano & Byrne, 2001). We will leave it to readers to form their own

    conclusions but also to note where conflicts still exist because of an empirical void,

    requiring future research to resolve important issues. Our contributors summarized some of

    what is known about ethical practice, but they intended also to provoke more thought and

    stimulate more research to help resolve issues. Thus, it is our hope that this essay and the

    other papers in this volume will stimulate both further research and more ethical HR practices

    in organizations.

    1. Why ethical problems arise in HR management

    Ethical questions arise in every type of traditional HR management activity. In some cases,

    these involve questions of what constitutes wrongdoing, why it occurs, and appropriate

    responses to it. In other cases, these may involve questions of choosing between two or more

    courses of action that each can be considered right in some ways (Badaracco, 1997).

    We focus on unethical behavior, which encompasses behavior deviant from societal

    standards, rather than exclusively upon behavior that is seen as deviant from the perspective

    of others in the organization within which one is operating (Miceli & Near, 1997). Deviant

    behavior by societal standards has been widely studied by sociologists since the 1950s

    (Merton, 1957). In contrast, workplace or employee deviance is voluntary behavior that

    violates significant organizational norms and in so doing threatens the well-being of an

    organization, its members or both (Robinson & Bennett, 1995, p. 556). Robinson and

    Bennett distinguished (workplace) deviant behavior from (un)ethical behavior, because in the

    latter the employee relies on societal rather than organizational standards to define wrong-

    doing (Robinson & Bennett, 1995). Therefore, insofar as societal and organization norms

    may conflict, unethical behavior is not always deviant from the organizations perspective.

    For example, Robinson and Bennett (1995, pp. 556557) noted that dumping toxic waste in

    a river is not deviant if it conforms with the policies of ones organization. However, most

    people would probably agree that this act is unethical. Conversely, reporting this dumping to

    authorities may be an ethical act, but it would also be a deviant act in this particular example

    if it violated organizational norms.

    Researchers on unethical behavior (as defined by societal standards) have suggested three

    classic reasons why wrongdoing occurs: (a) the norms for what behavior constitutes

    wrongdoing are unclear, (b) an opportunity arises for the perpetrator to commit wrongdoing,

    Editorial / Human Resource Management Review 11 (2001) 192

  • (c) pressures, whether real or perceived, force the perpetrator to engage in wrongdoing.

    Studies of corporate wrongdoing, for example, have concluded that all three variables may

    explain corporate wrongdoing (Baucus & Baucus, 1997; Baucus & Near, 1991). In addition,

    personal or socialpsychological variables (e.g., likelihood to sexually harass, Pryor, Lavite,

    & Stroller, 1993; moral judgment development, Rest, 1979) play important roles with respect

    to certain actions (Miceli & Near, 1992).

    Likewise, in studies of organizational wrongdoing that arises in the context of HRM, we

    see evidence of unclear norms, opportunity for wrongdoing and pressure for wrongdoing

    (Miceli & Near, 1992). Authors in this issue have considered possibilities of wrongdoing in

    selection (Buckley et al., 2001; Weaver & Trevino, 2001); and compensation and reward

    systems (Buckley et al., 2001; Wells & Schminke, 2001). They have also investigated

    downsizing decisions (Buckley et al., 2001); training and development (Weaver & Trevino,

    2001; Wells & Schminke, 2001); and the day-to-day work routines and interactions among

    people within the organization (Cropanzano & Byrne, 2001).

    Although these activities are treated separately in these articles to enable focus and depth,

    ideally, all HR activities should be viewed as part of a system (Gerhart, Trevor, & Graham,

    1996). For example, as shown in prior research (e.g., Rynes & Rosen, 1995), training and

    development will have temporary effects if not accompanied and supported by ongoing

    modeling, support, and reinforcement (Wells & Schminke, 2001, p. 147).

    In all of these HR activities, the possibility of unethical actions increases when the

    manager or employee is not sure what stance is an ethical one (because normative standards

    are unclear), when he or she has a clear opportunity to engage in unethical actions, and when

    she or he experiences pressure to behave unethically. For example, an HR manager might not

    be sure whether a particular selection tool constitutes a fair and appropriate test. Or HR

    managers might see the selection process as an opportunity to select employees who hold

    values similar to their own but contrary to values of the organization, standards of ethical

    conduct, or the law. Finally, their CEOs may force them to use unethical selection methods or

    suffer sanctions.

    These possibilities are depicted graphically in Fig. 1, along with a broad classification of

    articles appearing in this issue (identified by authors names). Several of the articles cut across

    several categories in this figure, but to simplify the classification, we attempted to judge the

    primary focus of the article in terms of our classification and to place it in only one cell.

    Further, Fig. 1 deals only with organizational causes of ethical behavior. As noted earlier and

    by a number of the authors in their articles (OLeary-Kelly & Bowes-Sperry, 2001), personal

    variables and person-by-situation interactions are also hypothesized (and in some prior

    research, shown) to be important. Such individual differences are particularly important in the

    selection function, obviously.

    These articles describe opportunities for wrongdoing and/or pressures to commit wrong-

    doing that seem to be endemic to organizations. Further, the authors describe the consequences

    of ambiguous situations or norms against wrongdoing. For example, individuals who do not

    recognize their decision or situation as involving a moral issue are less likely to engage ethics

    schemata and to behave in ethical ways (OLeary-Kelly & Bowes-Sperry, 2001, p. 76).

    In short, the norms must be known before unethical actions can be recognized. In role

    episodes where role conflict, role ambiguity, and role multiplicity create confusion for HR

    Editorial / Human Resource Management Review 11 (2001) 19 3

  • professionals, the standards for ethical action may be ambiguous (Wooten, this issue).

    Further, although policies may have been implemented to increase efficiency or promote

    fairness (e.g., in treating similar situations consistently), for many reasons they can be

    overdeveloped to the point of undermining these intentions (Cropanzano & Byrne, 2001).

    Ironically, policies meant to protect the employee may have the unintended consequence of

    providing the opportunity for wrongdoing or pressure to engage in wrongdoing.

    In another article, these issues are placed in a cross-cultural and international context

    (Grossman & Schoenfeldt, 2001), particularly for multinational organizations. Drawing from

    the work of Hofstede (1980, 1991) and Hofstede and Bond (1988), the authors develop the

    notion of ethical distance between the parent organizations ethical values and those of the

    host nation. They propose that ethical distance interacts with the extent to which international

    HR management activities are ethnocentric, polycentric, or regiocentric to influence the

    organizations performance and other variables.

    We begin by addressing some general definitional and taxonomic issues. More specific

    issues are addressed by each article.

    2. The consequences of ethical problems in HR management

    All of the articles here examine the consequence of ethical problems in HR management,

    in some form. Where such ethical issues arise, their consequences are diverse. Among those

    negative consequences noted by authors in this issue are individual-level (employee)

    responses, group or team effects, and organizational-level effects.

    Fig. 1. A classification of articles appearing in this special issue.

    Editorial / Human Resource Management Review 11 (2001) 194

  • 2.1. Individual effects

    Employees may react negatively to ethical problems through their attitudes and

    behaviors. Some attitudinal reactions include increased disillusionment (Buckley et al.,

    2001), reduced organizational commitment (Buckley et al., 2001), and poor acceptance of

    ethical standards (Weaver & Trevino, 2001). Behavioral responses could include workplace

    violence (Buckley et al., 2001), external whistle-blowing rather than use of internal channels

    to report wrongdoing (Weaver & Trevino, 2001), low levels of Organization Citizenship

    Behaviors (OCBs) (Weaver & Trevino, 2001), a dysfunctionally high number of grievances

    (Cropanzano & Byrne, 2001), increased propensity to unionize (Cropanzano & Byrne,

    2001), underutilization of targets of harassment (OLeary-Kelly & Bowes-Sperry, 2001),

    and poor use of time on the job, leading to lower overall productivity (Cropanzano &

    Byrne, 2001).

    2.2. Group effects

    Negative consequences of unethical actions can be seen when group members sacrifice the

    good of the group to protect the rights of one individual (Cropanzano & Byrne, 2001). An

    example of this situation might be where one group member engages in unethical behavior

    (e.g., reporting inflated work expenses) and other members collude to hide the unethical

    behavior from authorities, because of loyalty to the group (Miceli & Near, 1992).

    2.3. Organization effects

    Effects at the organization level tend to be more amorphous and difficult to specify (or

    quantify). For example, if the organization selects only members with similar ethical views,

    decreased cultural diversity may result (Buckley et al., 2001). If managers engage in

    behavior perceived to be unethical, lower trust among employees may result (Cropanzano

    & Byrne, 2001). The organization may ignore its accountability to society at large (Buckley

    et al., 2001), be viewed as unacceptable by society at large (Grossman & Schoenfedlt,

    2001), experience decreased firm valuation (Buckley et al., 2001), or lowered firm success

    (defined as effectiveness or profitability) which may reduce long-term organizational

    survival (Cropanzano & Byrne, 2001; Grossman & Schoenfeldt, 2001). All of these

    consequences tend to be interrelated and often one ethical lapse can cause several of them

    to occur simultaneously.

    3. Recommendations for future research and practice

    Authors in this issue have offered interesting propositions for future empirical testing.

    Since the propositions for research are and should remain specific to the topics, we wont

    attempt to integrate them here. However, there are some common themes across the

    suggestions for practitioners.

    Editorial / Human Resource Management Review 11 (2001) 19 5

  • Ideally, best practices, or recommended solutions, should be derived from research and

    analyses of problems, rather than from a polling of...


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