Group 10-Ethics in HR

In Human Resource Management

Group Members

Name Roll No.

Sunil Kewalramani 5

Sandeep Sharma 28

Meena Babal 39

Ajit Joy 45

Rachna Chandrashekhar 56

Bindal Thakkar 58

InformationTechnology

Ethical Practices in IT

• Recruitment system

• Safe, Healthy and Happy Workplace

• 360 Degree Performance Management Feedback System

• Confidentiality of information

• Open Book Management Style

• Open house discussions and feedback mechanism

Unethical Practices in IT

• Long working hours

• Delay in joining date

• Compensation problem

• Referral commission disputes

Case Study 1

Satyam Scam

Manufacturing

Ethics in manufacturing industry

• This area of business ethics usually deals with the duties of a company to ensure that products and production processes do not needlessly cause harm to the employees, society etc.

• Production may have environmental impacts, including pollution, habitat destruction and exploitation of workers.

• Product testing protocols have been attacked for violating the rights of both humans and animals.

• An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain – i.e. Suppliers, Contractors, Distributors, Sales agents etc.


A business cannot claim to be ethical firm if it ignores unethical practices by its suppliers –

• Use of child labour and forced labour• Production in sweatshops• Violation of the basic rights of workers• Ignoring health, safety and environmental standards

Leading European and US retailers have come under growing pressure to ensure that workers in their supply chain - particularly in labour-intensive markets such as India and China - are not exploited

Eg : UK clothing firm Primark has fired three Indian suppliers because they used child labour to finish goods.


Few ethical practices followed in manufacturing industry are:

• Creating a fabulous & neat environment for the workers

• Timely payment of wages, sanction of valid leaves, allowing reasonable breaks.

• Employing a full time housekeeper / cook who cooks lunch for all the staff fresh from scratch every day.

• Ensuring that the basic labour rights of the employees of the third world suppliers from developing countries are respected.

• Investing in social, economical and environmental improvements.

Preventing Unethical Practices

• An appeal process must be in place so that any unethical practice can be brought into light.

• The employees / labourers should be made aware of the importance of ethical work culture.

• Compliance officers must be appointed to keep a check on fraud, corruption, and abuse within the workplace.

• To promote ethical behaviour, performance management system of the organization must be modified to incorporate ethical behaviour as a parameter for appraisal and rewards.

• WRAP (worldwide responsible accredited production) certified production.

Case Study 2

Foxconn Employee Suicides

About

• Hon Hai Precision Industry Co., Ltd. (trading as Foxconn) is a multinational electronics manufacturing company headquartered in Tucheng, New Taipei, Taiwan.

• It is the world's largest maker of electronic components.

• Foxconn is a major manufacturer catering to companies such as Apple, Dell, HP, Motorola, Nintendo, Sony and Nokia.

On July 16, 2009, Sun Danyong, committed suicide after reporting he lost a prototype model for a fourth generation iPhone.

Upon filing his report on July 13, Chinese media reported that his residence was searched by Foxconn employees, and that he was beaten and interrogated by his superiors.

A suicide cluster in 2010 saw 18 workers throw themselves from the tops of the

company's buildings, with 14 deaths.

Almost 140 workers at a supplier in China were injured two years ago using a poisonous chemical to clean iPhone screens.

Two explosions last year killed four people while injuring more than 75.

The Incidents

In January this year, around 150 Chinese workers threatened to commit suicide by leaping from their factory roof in protest at their working conditions.

'Work hard on the job today or work hard to find a job tomorrow‘

Banner in Chengdu plant

Conditions at Foxconn

• Foxconn employs thousands of young migrant workers between the ages of 18 and 25, many of whom come from rural areas to live and work on the company complex.

• Factories often described as "white collar prison".

• Working excessive overtime without a single day off during the week

• Living together in crowded dormitories

• Standing so long that their legs swell and they can hardly walk after a 24-hour shift.

"We were not allowed to talk during work. We weren't even allowed to look around. Our superiors used a stop watch to time us. We were fined for any mistakes we made.“


• verbal and emotional abuse by Foxconn superiors

• alleged wrong disposal of hazardous waste

• health and safety risks

• In 2009, Foxconn guards were videotaped beating employees.

• workers were forced to sign a legally binding document guaranteeing that they would not kill themselves


It has even started putting up nets around buildings, designed to catch workers who decide to jump. Workers were also installing wire barriers across open balconies on high floors at Foxconn dormitories.

Business Philosophy of Foxconn

Since 1974, Foxconn had always been guided by three Foxconnian visions;

• Through the most efficient "Total Cost Advantages" to make

comfort of electronic products usage an attainable reality for all mankind;

• Through the proprietary one-stop shopping vertical integrated eCMMS model to revolutionize the conventional inefficient electronics outsourcing model;

• Through the devotion to greater social harmony and higher ethical standards to achieve a win-win model for all stakeholders including shareholders, employees, community and management.

• Apple states its policy on how it influences the corporate culture of its suppliers in its Supplier Responsibility Progress Reports.

• Apple stated that "[our] procurement decisions take into account a facility’s social responsibility performance, along with factors such as quality, cost, and timely delivery. When social responsibility performance consistently fails to meet Apple expectations, we terminate business.

• Given Apple's stated policy, terminating relationships with such suppliers may be difficult without incurring huge financial losses.

• Foxconn is still a major Apple supplier.

• Apple executives claim the firm has improved its factories in recent years and issues a supplier code of conduct on labour and safety - but problems still exist, according to labour advocacy groups

• Apple CEO Tim Cook was in China last week to visit an iPhone production line in Foxconn's Zhengzhou plant.

Finance & Banking

Ethics in financeThere are certain codes which are to be followed by persons providing services in the financial sector.

• Knowledge of the law – compliance with applicable laws & regulations

• Independence & Objectivity – not accepting gifts, benefits, compensation that might affect independence and objectivity.

• Avoiding Misrepresentation – Need for integrity in areas like investment analysis, recommendations, etc.

• Checking Misconduct – Avoiding dishonesty, fraud and deceit.

• Material non public information – not to be misused

• Market manipulation – to be avoided

• Duties to clients

• Duties to the employer

Unethical practices in financial services

Ethical violations in finance can be attributed to an inconsistency in the conceptual framework of modern financial-economic theory and the widespread use of a principal-agent model of relationship in financial transactions. They can be in the form of :

• Fraud : Credit cards Bank cheques Tax

• Churning : or continually moving a client's investments in order to "earn" commissions on the same monies without concern for the client's best interest is a common one.

• Lack of Full Disclosure• Insider trading• Falsifying financial statements of the company

Preventing unethical practices

Companies need to have a strict Code of Conduct for its employees and keep a check on the unethical practices in the company. Persons/employees dealing in such practices should be punished accordingly.

• Monitoring the Cheques• Maintaining Employees Manual• Annual review of financial statements• Review of sensitive documents• Checking employee references• Safeguarding the payroll

Case Study 3

Nagarjuna Finance Scam

Hospitality

Unethical practices in Hospitality

• Staff for kitchen and F&B from ‘simple family’ backgrounds.

• Long working hours with minimal pay.

• Privacy issues within management and employees. Eg:

Surveillance cameras in kitchen without informing the

employees.

• Wastage of food, electricity when occupancy is less.

• Preferential treatment to expats and NRIs

Ethical practices

• Some chains associate themselves with NGOs for children

and environmental concerns.

• Some chains employ less fortunate people

• Orchid Mumbai practices the recycle and reuse policy.

Case Study 4

26/11 and the Taj Hotels

Taj Hotelsthe very model of ethical, selfless behaviour

• Employee behavior during 26/11 What could possibly explain it? Getting To The Bottom Of It.

• A study in the Harvard Business Review proposed an answer to that question

• "It perhaps has something to do with the kinds of people that they recruit to become employees at the Taj, and then the manner that they train them and reward them,"

Ethical conduct

• Every employee of a Tata company, including whole-time directors and the managing director, shall deal on behalf of the company with professionalism, honesty and integrity, as well as high moral and ethical standards. Such conduct shall be fair and transparent and be perceived to be as such by third parties.

TATA Code of Conduct

• In their search to find maids and bellhops, the Taj avoids big cities and instead turns to small towns and semi-urban areas. There the Taj develops relationships with local schools, asking the leaders of those schools to hand-select people who have the qualifications they want.

• They don't look for students who have the highest grades, but personal characteristics, most specifically, respect and empathy.

• For managers, they deliberately go to second-tier business schools, on the theory that the people there will be less motivated by money.

From A To Z Recruitment To Reward

• Managers have mapped the number of interactions that happen between customers and hotel employees in a typical 24-hour stay.

• There are on average 42, often unsupervised, interactions between employees and guests.

• Each of these interactions is viewed by the company as an opportunity for employees to delight their customers with their kindness.

• So everything about the training and rewards systems set up by the Taj is designed to encourage kindness.


• If guests say something or write something very complimentary about an employee, within 48 hours of the recording of that compliment, there is some sort of reward that is made. Rewards range from gifts to job promotions.

• It’s done by-the-book conditioning, the same kind of conditioning used by B.F. Skinner to train his pigeons.

• The employees were essentially performing the behaviours they were selected and trained to perform. In this case, it was extreme kindness to customers.


• The Taj People Philosophy displays our commitment to and belief in our people. We see Talent Management as the most important sustainable competitive advantage in the future. You are an important member of the Taj family.

• We endeavor to select, retain and compensate the best talent in the industry.

• We reward and recognize quality customer care based upon individual and team performance.

• We commit to providing you with opportunities for continuous learning and development.

• We abide by fair and just policies that ensure your well-being and that of your family, the community and the environment.

• We commit to regular and formal channels of communication, which nurture openness and transparency.

• We strongly believe that you are the Taj.

Taj People Philosophy

Can ethics be engineered?

• But Tom Donaldson, professor of business ethics at the Wharton School, says producing ethics isn't so simple.

• "If ethics could be engineered by the organization infallibly, we wouldn't be hearing about so many scandals in church organizations," he says.

Documents

Group 10-Ethics in HR