Ethics in HR

Group Members

• Aditya Swaminathan• Ashvini Khandekar • Ganesh Kumar• Mithul Zaveri• Riaz Patel

HR Ethics

• No well-established mandatory professional standards

• But it does have a Vital role in HR • Ethics and business knowledge are important

as HR domain expertise • Each situation requires a judgment call

Analyzing HR Dilemmas

• Right vs. Right “Selecting the best option”. • It’s right to tell the truth, but it is also right to

be kind and considerate of peoples’ feelings and emotions.

• It’s right to apply rules and procedures equally, without favoritism, but it is also right to give special treatment to hard-working, dependable, and productive employees.

Guidelines for Fostering an Ethical Culture

• Have a well developed policy and procedures manual

• Enforce policies • Reward compliance • Recruit ethical employees • Create a division to oversee ethics

Ethical culture in Work-life

• Honest communication • Fair treatment • Special consideration • Fair compensation• Responsibility to organisation • Corporate social responsibility • Respect for law

ETHICAL HRM PRACTICES Staffing and selection

Fostering the perception of fairness in the processes of recruitment and hiring of people. – Formal procedures – Interpersonal treatment – Providing explanation – Know your employment law – Follow the ethical recruitment guidelines – Use pre-employment information services – Use reference checking forms

– To recognize ethical issues – Use of ethical guidelines to resolve problems – Targets and methods of ethical training

Training

– Cultural dimensions of collectivism and power distance make objective appraisals a challenge.

– Supervisors and subordinates develop close relationships.

– Organizational loyalty is as important as work performance.

– Employee promotions are frequently based on seniority.

– Annual performance appraisals. – Supervisors provide performance ratings that are

frequently inflated due to personal relationships.

Performance Appraisal

Compensation and Benefits

– In addition to a base salary, compensation includes: • House rent allowance (HRA*). • Medical allowance. • Dearness allowance (DA*). • Leave travel allowance (LTA*).

– Several categories of leave (vacation) exist: • Sick leave: (medical certificate required). • –Casual leave: (for personal and family emergencies, requires

prior permission of boss). • –Annual leave: (after one year of employment). • –Federal holidays

• Age discrimination • Disability • Ethnic/National origin, colour, race, religion,

gender • Fair labour standards

Equal opportunity laws

Ethical discipline

– People not employees – Job description is clear – “What to do ” attitude compared to ”Don’t do

this” attitude – Top managers example

Favouritism, Cronyism & Nepotism

• Favouritism is favouring a person not because he or she is doing the best job but rather because of some extraneous feature-membership in a favoured group, personal likes and dislikes, etc. Favouritism can be demonstrated in hiring, honouring, or awarding contracts.

• Cronyism is a more specific form of favouritism, referring to partiality towards friends and associates.

• Nepotism is an even narrower form of favouritism. Coming from the Italian word for nephew, it covers favouritism to members of the family.

Unjust dismissal

Definition Termination of a contract of employment for unfair or inadmissible reasons. When challenged in a court, the employer must establish that the dismissal was based on a substantial reason such as gross misconduct, lack of qualification, incapability to perform assigned duties, or redundancy. In such cases, the courts usually take the employee's statutory rights into consideration.

Effective dismissal

• Factors – Legal and valid reasons for dismissal – Explain the reasons – Be firm with your decision

• •Process – Informal action – Disciplinary meeting – First written warning – Second written warning

Effects of UNETHICAL HRM PRACTICES: Humans

• Unethical business environments can: – De-motivate individuals – Make good employees leave the company – Attract unethical employees – Lead to the lack of trust by the employees for the

company

The CaseJet airways layoff- what kind of hrm?

JET AIRWAYS AS ON OCT 2008

• Largest Indian Aviation Industry ($6 billion).• A fleet of 107 Domestic aircraft serving 1,009

daily flights.• 82 International routings.• Total strength of 19000 employees.

The retrenchment drama unfolds…

• Oct 16, 2008, Jet announced that it would lay off nearly 1,100 of its staffs to streamline operation.

• A day after it had already laid off around 800 of its cabin crew members.

• Simultaneously announced second phase of lay-off of 1100 employees, mainly from departments like flight attendant, cockpit crew etc.

• Amidst great furor and opposition by various organizations and political parties, Naresh Goyal , chairman of Jet, reinstated the employees a day later the great emotional drama.

• November 2008, Jet decided on a 20% cut in the salaries of its pilots, engineers, and some other staffs.

The retrenchment drama unfolds…

Some salient issues…

• Employees were FIRED with no PRIOR NOTICE• The entire force of unconfirmed staff was

being laid off on a 30-day compensation package

• Company took action only against lower staffs.

Ethical issues…

• Some most crucial questions unanswered….– Where would those 1900 employees go?– Why took action only against lower grade staffs?– Senior management was very less affected.– What would be the future of those students

currently taking courses in cabin crew, captain etc?

Some observations…

• The very existence of any company is because of its employees.

• Company keeps on focusing on customer satisfaction when its own people are so highly dissatisfied.

• Employees are more than just-a-resource.

Morality in Employees

• Think of it as an employment contract provision that stipulates acceptable employee behaviour both inside and outside of the workplace. The purpose is to limit or prevent direct financial or reputational harm to the employer.

• Morality clauses provide employers with a kind of contractual escape clause that protects them from egregious transgressions—criminal or not—on the part of their employees. These clauses have traditionally been included in the contracts of elite athletes and celebrities whose names and endorsements can make or break a brand, but increasingly we’re seeing them included in general employment contracts across Canada.

Clauses when a Morality Clause may be enforceable

• The employee allegedly engages in criminal activity that could damage the employer’s reputation by association—even if the allegations are not proven in court.

• The employee engages in social media or online activity that violates the organization’s code of moral conduct.

• The employee associates with known criminals or other unsavoury characters, and these relations are found to be potentially injurious to the employer’s reputation and brand.

• The employee’s extracurricular behaviour threatens the safety or well-being of others in the workplace when it occurs away from work, or violates provincial occupational health and safety legislation.

Thank you