PART FIVE EMPLOYEE RELATIONS C H A P T E R F o u r t e e n Ethics, Justice and Fair Treatment in HR Management 14 Lecture Outline Strategic Overview Ethics and Fair Treatment at Work The Meaning of Ethics Ethics and the Law Ethics, Fair Treatment, and Justice What Shapes Ethics Behavior at Work? Individual Factors Organizational Factors The Boss’s Influence Ethics Policies and Codes The Organization’s Culture The Role of HR Management in Fostering Ethics and Fair Treatment Why Treat Employees Fairly? HR Ethics Activities Building Two-Way Communications Employee Discipline and Privacy Basics of a Fair and Just Disciplinary Process Formal Disciplinary Appeals Processes Discipline Without Punishment Employee Privacy Managing Dismissals Grounds for Dismissal Avoiding Wrongful Discharge Suits Personal Supervisory Liability The Termination Interview Layoffs and the Plant Closing Law Adjusting to Downsizings and Mergers In Brief: This chapter explores issues, policies, and problems related to ethics, fair treatment, discipline and termination of employees. These issues have become more critical in today’s environment. Interesting Issues: With the recent events at Enron, WorldCom and other scandals, ethics has become a major issue in today’s world. It is worth discussing what has changed to make this an issue. Is there more unethical behavior or have standards changed, or is it simply that today’s media and communications shed more light on the problems? ANNOTATED OUTLINE I. Ethics and Fair Treatment at Work A. The Meaning of Ethics – Ethics refers to “the principles of conduct governing an individual or a group.” Ethical decisions also involve morality, which is society’s accepted standards of behavior. It would simplify things if it was always clear which decisions were ethical and which were not. Unfortunately, it is not. B. Ethics and the Law – The law is not the best guide about what is ethical, because something may be legal but not right, and something may be right but not legal. “Don’t lie, don’t cheat, don’t steal. We were all raised with essentially the same values. Ethics means making decisions that represent what you stand for, not just what is legal. C. Ethics, Fair Treatment, and Justice – Experts generally define organizational justice in terms of its three components—distributive justice, procedural justice, and interpersonal or interactive justice. Distributive justice refers to the fairness and justice of the decision’s result. Procedural justice refers to the fairness of the process. Interactional or interpersonal justice refers to “the manner in which managers conduct their interpersonal dealings with employees,” and in particular to the degree to which they treat employees with dignity as opposed to abuse or disrespect. The New Workplace: Employment Contracts – In Europe, most countries require employers to give detailed information to new employees about their employment contract. Most of these include such things as grievance procedures. ➢ NOTES Educational Materials to Use II. What Shapes Ethics Behavior at Work? A. Individual Factors – Because people bring to their jobs their own ideas of what is morally right and wrong, the individual must shoulder much of the credit (or blame) for the ethical choices he or she makes. B. Organizational Factors – The scary thing about unethical behavior at work is that it’s usually not driven by personal interests. Being under the gun to meet scheduling pressures was the number-one factor in causing ethical lapses. Most ethical lapses occurred because employees felt pressured to do what they thought was best to help their companies. C. The Boss’s Influence – The boss sets the tone, and by his or her actions sends signals about what is right or wrong. According to one report, for instance, “the level of misconduct at work dropped dramatically when employees said their supervisors exhibited ethical behavior.” D. Ethics Policies and Codes – An ethics policy and code is one signal that the firm is serious about ethics. Sometimes ethics codes work, and sometimes they don’t. E. The Organization’s Culture 1. What is Organizational Culture? – Organizational culture is the characteristic values, traditions, and behaviors a company’s employees share. A value is a basic belief about what is right or wrong, or about what you should or shouldn’t do. To an outside observer, a company’s culture reveals itself in several ways. You can see it in employees’ patterns of behavior, such as ceremonial events and written and spoken commands. You can also see it in the physical manifestations of a company’s behavior, such as written rules, office layout, organizational structure, and dress codes. 2. The Manager’s Role – When it comes to creating a corporate culture, effective managers do not leave it to chance. Things that help are: Clarify Expectations, Use Signs and Symbols. Symbolism, Provide Physical Support, Use Stories, Organize Rites and Ceremonies ➢ NOTES Educational Materials to Use III. The Role of HR Management in Fostering Ethics and Fair Treatment A. Why Treat Employees Fairly? – There are some practical reasons for taking care that you treat the firm’s employees with the fairness and justice that all employees deserve. An increasingly litigious workforce is one reason. Perceptions of fairness relate to enhanced employee commitment; to enhanced satisfaction with the organization, with jobs, and with leaders; and to organizational citizenship behaviors. B. HR Ethics Activities 1. Staffing and Selection – Screening out undesirables can actually start before the applicant even applies, if the HR department creates recruitment materials containing explicit references to the company’s emphasis on integrity and ethics. The selection process also sends signals about what the company’s values and culture really are, in terms of ethical and fair treatment. 2. Training – Ethics training typically plays a big role in helping employers nurture a culture of ethics and fair play. Such training usually includes showing employees how to recognize ethical dilemmas, how to use ethical frameworks to resolve problems, and how to use HR functions in ethical ways. 3. Performance Appraisal – The firm’s performance appraisal processes provide another opportunity to emphasize its commitment to ethics and fairness. First, the appraisal can actually measure employees’ adherence to high ethical standards. 4. Reward and Disciplinary Systems – ensure that the firm rewards ethical behavior and penalizes unethical behavior 5. Workplace Aggression and Violence – workplace aggression and violence are increasingly serious problems. Many HR actions, including layoffs, being passed over for promotion, terminations, and discipline can prompt perceptions of unfair treatment that translate into dysfunctional behavior. 6. Other HR Activities – Employers’ ethics committees will often include HR professionals. Improving Productivity Through HRIS: Complying with Sarbanes-Oxley – Among other things, the act requires that the CEO and the CFO of publicly traded companies personally attest to the accuracy of their companies’ financial statements, and also to the fact that its internal controls are adequate. With their personal credibility on the line, the new law has focused top management’s attention on ensuring that all the firm’s employees take ethics very seriously. The problem is, training and following up programs like this can be very expensive. All of one company’s employees have easy access to a standardized ethics training program through their PCs, and they can easily track who has taken the training and who has not. C. Building Two-Way Communication - The opportunity for two-way communication plays an important role in our perceptions of how fairly we’re being treated. When You’re on Your Own, HR for Line Managers and Entrepreneurs: Small Business Ethics – studies suggest that small and midsize enterprises are prone to the same unethical corporate behavior as big firms. There are several steps a small business owner can take to establish a workable, simple ethics program. First, size up your company’s current ethics-related activities as they stand now. Second, create a code of conduct, and make it clear to all employees that you take it seriously. Third, train your people. Fourth, make it easier to solicit feedback from your employees. ➢ NOTES Educational Materials to Use IV. Employee Discipline and Privacy A. Basics of a Fair and Just Disciplinary Process - The purpose of discipline is to encourage employees to behave sensibly at work. In an organization, rules and regulations serve about the same purpose that laws do in society; discipline is called for when one of these rules or regulations is violated. A fair and just discipline process is based on three pillars: clear rules and regulations, a system of progressive penalties, and an appeals process. When You’re on Your Own, HR For Line Managers and Entrepreneurs: Disciplining an Employee – Even if you’re a manager in a Fortune 500 company, you may find yourself without company guidelines when you’re thinking of disciplining or discharging an employee for violating company rules. Guidelines are given to assist the manager who must implement disciplinary action. Supervisors traditionally apply the four points of “the hot stove rule” when applying discipline: warning, consistent, impersonal, and immediate. The New Workforce: Comparing Males and Females in a Discipline Situation – A study is cited in which female employees were disciplined much more harshly for the same violations than were male employees. The gender of the boss made no difference in the differential treatment. B. Formal Disciplinary Appeals Processes – even companies without unions may have a very formalized appeals process. Some companies establish independent ombudsmen, neutral counselors from outside the normal chain of command to whom employees can turn for confidential advice. C. Discipline Without Punishment – aims to avoid disciplinary problems. It does this by gaining employees’ acceptance of the rules and by reducing the punitive nature of the discipline itself. D. Employee Privacy – The four main types of employee privacy violations upheld by courts are intrusion, publication of private matters, disclosure of medical records, and appropriation of an employee’s name or likeness for commercial purposes. Background checks, monitoring off-duty conduct and lifestyle, drug testing, workplace searches, and monitoring of workplace activities trigger most privacy violations. ➢ NOTES Educational Materials to Use V. Managing Dismissals Dismissal is the most drastic disciplinary step the manager can take. Because of this, special care is required to ensure that sufficient cause exists for it. Without a contract, either the employee or the employer could terminate at will the employment relationship. However, EEO and other laws and court rulings increasingly limit management’s right to dismiss employees. Wrongful discharge is a dismissal that violates the law or that fails to comply with contractual arrangements, either stated or implied. Statutory, common law and public policy exceptions to termination at will exist. A. Grounds for Dismissal – There are four bases for dismissal. In dismissing an employee the employer should take care to ensure that all keys and company property are returned, Internet passwords disabled, and employee accounts inactivated. 1. Unsatisfactory performance – occurs when there is persistent failure to perform assigned duties or to meet prescribed job standards. 2. Misconduct – is a deliberate and willful violation of the employer’s rules. Insubordination is a form of misconduct, referring to rebelliousness or disobedience. 3. Lack of qualifications for the job – results from an employee’s inability to do the work assigned even when he or she is diligent. 4. Changed requirements (or elimination) of the job - results from an employee’s inability to do the job after the employer changed the nature of the job. Know Your Employment Law: Gross Misconduct – There are instances in which the employee’s conduct is so outrageous that it qualifies as “gross misconduct.” A list of factors extracted from court decisions on gross or willful misconduct by employees in other contexts will aid the employer in writing its policy on gross misconduct B. Avoiding Wrongful Discharge Suites – Wrongful discharge occurs when an employee’s dismissal does not comply with the law or with the contractual arrangement. Avoiding wrongful discharge suits requires a two-pronged approach. First, set up employment policies and dispute resolution procedures that make employees feel they are treated fairly. Second, do the preparatory work – paying particular attention to the employee handbook to avoid such suits. C. Personal Supervisory Liability – Courts sometimes hold managers personally liable for their supervisory actions. Managers should be fully familiar with applicable federal, state, and local statutes and know how to uphold their requirements. D. The Termination Interview – Guidelines include: 1) Plan the interview carefully, 2) Get to the point, 3) Describe the situation, 4) Listen, 5) Review all elements of the severance package, 6) Identify the next step. 1. Outplacement Counseling – is a systematic process by which someone you’ve terminated is trained and counseled in the techniques of conducting a self-appraisal and securing a new job appropriate to his or her needs and talents. 2. Exit Interview – Many employers conduct exit interviews with employees who are leaving the firm. They aim to elicit information about the job or related matters that might give the employer a better insight into what is right—or wrong—about the company. E. Layoffs and the Plant Closing Law 1. The Plant Closing Law – requires employers of 100 or more employees to give 60 days’ notice before closing a facility or starting a layoff of 50 people or more. It simply gives employees time to seek other work or retraining by giving them advance notice of the shutdown. 2. The Layoff Process – There is a survivor mentality that exists among those who remain where there have been layoffs. 3. Bumping/Layoff Procedures – Employers who encounter frequent business slowdowns and layoffs may have procedures that let employees use their seniority to remain on the job. 4. Alternatives to Layoffs – Given the investments they have in recruiting, screening, and training employees, many employers are hesitant to lay off people at the first sign of business decline. There are several alternatives. F. Adjusting to Downsizings and Mergers Firms often use downsizing—reducing, usually dramatically, the number of people the firm employs—to better their financial position. Yet many firms discover operating earnings don’t rise after major cuts. Low morale among those remaining may be part of the problem. Regardless of why you’re downsizing, think through the process, both to avoid unnecessary consequences and to ensure the process is fair. Some guidelines for implementing a reduction in force are provided. ➢ NOTES Educational Materials to Use DISCUSSION QUESTIONS 1. Explain how you would ensure fairness in disciplining, discussing particularly the prerequisites to disciplining, disciplining guidelines, and the discipline without punishment approach. There are many things that can be helpful: • Make sure the evidence supports the charge of employee wrongdoing. • Ensure that the employee’s due process rights are protected. • Warn the employee of the disciplinary consequences. • The rule that was allegedly violated should be “reasonably related” to the efficient and safe operation of the particular work environment. • Fairly and adequately investigate the matter before administering discipline. • The investigation should produce substantial evidence of misconduct. • Rules, orders, or penalties should be applied evenhandedly. • The penalty should be reasonably related to the misconduct and to the employee’s past work history. • Maintain the employee’s right to counsel. • Don’t rob a subordinate of his or her dignity. • Remember that the burden of proof is on you. • Get the facts. Don’t base a decision on hearsay or on your general impression. • Don’t act while angry. • Create a formalized appeals process. • Make sure all rules and policies are communicated and clearly explained in advance. 2. Why is it important in our highly litigious society to manage dismissals properly? If you do not follow the law, and your own policies and procedures, you are likely to have the courts rule against you. This can be very costly and damaging to employee morale and your reputation. 3. What techniques would you use as alternatives to traditional discipline? What do such alternatives have to do with “organizational justice”? Why do you think alternatives like these are important, given industry’s need today for highly committed employees? If you are going to attract and retain top quality employees, it is critical to have a strong sense of organizational justice. Disciplinary techniques and methods can be related to the legal techniques and methods in our society at large. If they work well, people believe justice is served. If the do not work well, people feel there is injustice. 4. List ten things your college or university does to encourage ethical behavior by students and/or faculty. Answers will vary by college, but use of multiple test forms, policies, ethics courses, software to identify plagiarism, etc. are examples common to most colleges. Colleges and universities encourage ethical behavior through academic integrity policies, honor codes, ethics workshops, and promoting diverse perspectives. They also implement codes of conduct, plagiarism detection tools, ethical decision-making courses, and provide support resources like counseling for personal and academic challenges. 5. You need to select a nanny for your or a relative’s child, and want someone ethical. Based on what you read in this chapter, what would you do to help ensure you ended up hiring someone ethical? Asking questions about values, and paying attention to both the answers and the nonverbals that accompany them, finding out how the nanny acted in past situations and clarifying expectations as fully as possible will all go a long way toward ensuring that the nanny is ethical. 6. You believe your employee is being insubordinate. How would you verify this and what would you do about it if true? It is important to conduct a full investigation of suspicions. Asking trusted employees for feedback on performance in the unit on a regular basis often will assist in clarifying where problems exist. Once the allegations are clear, meeting with the employee to discuss the situation, and their reasons for it is crucial. Depending on the situation, the reasons and the severity of the offense, progressive discipline would be the next step. 7. Wal-Mart instituted a new scheduling system that makes it more difficult for its employees to know for sure what hours they would be working, or when (please see chapter vignette). Based on what you read in this chapter, is the new system ethical? Why or why not? Is it fair? What would you do if you were a Wal-Mart employee? If employees have a clear understanding of the system, and know what the rules are regarding availability, it would seem that the system is not unethical. However, asking that an employee reserve the time, and then sending them home for reasons beyond their control does not seem fair. Wal-Mart employees are likely to express their dissatisfaction with increased turnover, which will result in higher recruiting and training costs for the store. DESSLER COMPANION WEB SITE We invite you to visit the Dessler homepage (http://www.prenhall.com/dessler) on the Prentice Hall Web site for the best online business support available. This site provides professors with a customized course Web site, including new communication tools, one-click navigation of chapter content, and great resources, such as Internet Resources, an HRCI Exam Prep Guide, assessment exercises, and more. INDIVIDUAL AND GROUP ACTIVITIES 1. Working individually or in groups, interview managers or administrators at your employer or college in order to determine the extent to which the employer or college endeavors to build two-way communication, and the specific types of programs used. Do the managers think they are effective? What do the employees (or faculty members) think of the programs in use at the employer or college? Encourage students to be precise and inquisitive in their pursuit of this information. 2. Working individually or in groups, obtain copies of the student handbook for your college and determine to what extent there is a formal process through which students can air grievances. Based on your contacts with other students, has it been an effective grievance process? Why or why not? Ask what effect this has on the sense of organizational justice. 3. Working individually or in groups, determine the nature of the academic discipline process in your college. Do you think it is effective? Based on what you read in this chapter, would you recommend any modifications? Encourage students to be inquisitive and insightful as they examine this critical and real issue. 4. The HRCI “Test Specifications” appendix at the end of this book lists the knowledge someone studying for the HRCI certification exam needs to have in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development). In groups of four to five students, do four things: (1) review that appendix now; (2) identify the material in this chapter that relates to the required knowledge the appendix lists; (3) write four multiple choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam; and (4) if time permits, have someone from your team post your team’s questions in front of the class, so the students in other teams can take each others’ exam questions. Material from this chapter that applies to the HRCI exam would include: the meaning of ethics, ethics and the law, ethics fair treatment and justice, what shapes ethics behavior at work, ethics policies and codes, the organization’s culture, HR ethics activities, building two-way communications, formal disciplinary appeals processes, discipline without punishment, employee privacy, grounds for dismissal, avoiding wrongful discharge suits, personal supervisory liability, the termination interview, layoffs and the plant closing law, adjusting to downsizings and mergers. 5. In a recent research study at Ohio State University, a professor found that even honest people, left to their own devices, will steal from their employers. In this study, the researchers gave financial services workers the opportunity to steal a small amount of money after participating in an after-work project for which the pay was inadequate. Would the employees steal to make up for the underpayment? In most cases, yes. Employees who scored low on an honesty test stole whether or not their office had an ethics program that said stealing from the company was illegal. Employees who scored high on the honesty test also stole, but only if their office did not have such an employee ethics program—the “honest” people didn’t steel if there was an ethics policy. In groups of four or five students, answer these questions: Do you think findings like these can be generalized? In other words, would they apply across the board to employees in other types of companies and situations? If your answer is yes, what do you think this implies about the need for and wisdom of having an ethics program? You should receive a wide variety of responses to this question. It is a real question of whether the employees who score high on honesty tests will, in fact, respond differently based on the existence of an ethics policy. Experiential Exercise: Discipline or Not? The purpose of this exercise is to provide the student with some experience in analyzing and handling an actual disciplinary action. Students have the opportunity to look at a disciplinary action that went to arbitration and see if they come up with the same decision that the arbitrator did. Application Case: Fire My Best Salesperson? 1. What should you do now? The salesperson should be fired. 2. Why should you do it? Because his actions represent gross misconduct. 3. How would you do it? Guidelines in the textbook for a termination interview include: 1) Plan the interview carefully, 2) Get to the point, 3) Describe the situation, 4) Listen, 5) Review all elements of the severance package, 6) Identify the next step. Continuing Case: Carter Cleaning Company Guaranteeing Fair Treatment 1. What you do if you were Jennifer, and why? The difficulty is that even though they have always “felt strongly about not allowing employees to smoke, eat, or drink in their stores,” they had apparently never established any policies about this. Given this, it seems appropriate to give them a strong verbal warning, including the explanation that future violations will result in more severe disciplinary action. 2. Should a disciplinary system be established at Carter’s Cleaning Centers? Definitely. 3. If so, what should it cover, and how would you suggest it deal with a situation such as the one with the errant counter people? It should cover all behavior and performance that is expected of employees. It would identify the steps of the process, including verbal warnings, written warnings, and dismissal. 4. How would you deal with the store manager? The real question is whether the store manager knew about their beliefs about eating in the store. If he or she did, then a written warning is appropriate, if not, then a strong verbal warning similar to the employees. Translating Strategy into HR Policies and Practice Case: The Hotel Paris The Hotel Paris’ s New Ethics, Justice and Fair Treatment Process - The continuing case study of Hotel Paris is discussed here. In this example, Lisa Cruz, the HR manager, is developing a program to increase the degree of ethics, justice and fair treatment in the organization. 1. List three specific steps Hotel Paris should take with respect to each individual human resource function (selection, training, and so on) to improve the level of ethics in the company. Answers will vary. However, some possible steps would be to incorporate honesty testing in selection, to train employees using ethics cases, to discipline immediately and severely for ethics breaches on the part of any employee, etc. 2. Based on what you learned in this chapter, write a short (less than one page) explanation Lisa can use to sell to top management the need to improve the hotel chain’s fairness and justice processes. Each answer will vary. EXPERIENTIAL EXERCISES & CASES KEY TERMS ethics The principles of conduct governing an individual or a group; specifically, the standards you use to decide what your conduct should be. ethics code A doctrine which memorializes the standards to which the employer expects its employees to adhere distributive justice The fairness and justice of a decision’s results. procedural justice The fairness of the process. interactional justice The manner in which managers conduct their interpersonal dealings with employees. organizational culture The characteristic values, traditions, and behaviors a company’s employees share. nonpunitive discipline Discipline without punishment. discipline without A disciplinary process in which employees who violate policies are given punishment oral reminders, then a written reminder, then a one-day decision- making leave, then dismissal. bumping/layoff procedures Let employees use their seniority to remain on the job. PowerPoint Presentation by Charlie Cook The University of West Alabama 1 Human Resource Management ELEVENTH EDITION G A R Y D E S S L E R Ethics, Justice, and Fair Treatment in HR Management Chapter 14 Part 5 | Employee Relations 14–2 After studying this chapter, you should be able to: 1. Explain what is meant by ethical behavior at work. 2. Discuss important factors that shape ethical behavior at work. 3. Describe at least four specific ways in which HR management can influence ethical behavior at work. 4. Employ fair disciplinary practices. 5. List at least four important factors in managing dismissals effectively. 14–3 Ethics and Fair Treatment at Work • The Meaning of Ethics ➢The principles of conduct governing an individual or a group. ➢The standards you use to decide what your conduct should be. ➢Ethical behavior depends on a person’s frame of reference. • Ethical Decisions ➢Normative judgments ➢Morality 14–4 FIGURE 14–1 The Wall Street Journal Workplace- Ethics Quiz Source: Wall Street Journal, October 21, 1999, pp. B1–B4. Reproduced with permission via Copyright Clearance Center. Note: The spread of technology into the workplace has raised a variety of new ethical questions, and many old ones still linger. 14–5 TABLE 14–1 Specific Observed Unethical Behaviors Abusive or intimidating behavior toward employees 21% Lying to employees, customers, vendors, or to the public 19% A situation that places employee interests over organizational interests 18% Violations of safety regulations 16% Misreporting of actual time worked 16% E-mail and Internet abuse 13% Discrimination on the basis of race, color, gender, age, or similar categories 12% Stealing or theft 11% Sexual harassment 9% Provision of goods or services that fail to meet specifications 8% Misuse of confidential information 7% Alteration of documents 6% Falsification or misrepresentation of financial records or reports 5% Improper use of competitors’ inside information 4% Price fixing 3% Giving or accepting bribes, kickbacks, or inappropriate gifts 3% Source: From 2005 National Business Ethics Survey: How Employees Perceive Ethics at Work, 2005, p. 25. Copyright © 2006, Ethics Resource Center (ERC). Used with permission of the ERC, 1747 Pennsylvania Ave., N.W., Suite 400, Washington, DC 2006, www.ethics.org. Reprinted in O. C. Ferrell, John Fraedrich, and Linog Ferrell, Business Ethics (Boston: Houghton Mifflin, 2008) , p. 61. 14–6 Ethics and Fair Treatment at Work (cont’d) A behavior may be legal but unethical. A behavior may be illegal but ethical. A behavior may be both legal and ethical. A behavior may be both illegal and unethical. Ethics and the Law 14–7 Ethics, Fair Treatment, and Justice Distributive Justice Interactional (Interpersonal) Justice Components of Organizational Justice Procedural Justice 14–8 FIGURE 14–2 Perceptions of Fair Interpersonal Treatment Scale Source: Michelle A. Donovan et al., “The Perceptions of Their Interpersonal Treatment Scale: Development and Validation of a Measure of Interpersonal Treatment in the Workplace,” Journal of Applied Psychology, 83, no. 5 (1998), p. 692. 14–9 What Shapes Ethical Behavior at Work? Individual Factors Organizational Ethical Behavior Factors At Work Ethical Policies and Codes The Boss’s Influence The Organization’s Culture 14–10 FIGURE 14–3 How Do My Ethics Rate? Source: Adapted from A. Reichel and Y. Neumann, Journal of Instructional Psychology, March 1988, pp. 25–53. With permission of the authors. 14–11 TABLE 14–2 Principal Causes of Ethical Compromises Senior Mgmt. Middle Mgmt. Front- Line Supv. Prof. Non- Mgmt. Admin. Salaried Hourly Meeting schedule pressure 1 1 1 1 1 1 Meeting overly aggressive financial or business objectives 3 2 2 2 2 2 Helping the company survive 2 3 4 4 3 4 Advancing the career interests of my boss 5 4 3 3 4 5 Feeling peer pressure 7 7 5 6 5 3 Resisting competitive threats 4 5 6 5 6 7 Saving jobs 9 6 7 7 7 6 Advancing my own career or financial interests 8 9 9 8 9 8 Other 6 8 8 9 8 9 Note: 1 is high, 9 is low. Sources: O. C. Ferrell and John Fraedrich, Business Ethics, 3rd ed. (New York: Houghton Mifflin, 1997), p. 28; adapted from Rebecca Goodell, Ethics in American Business: Policies, Programs, and Perceptions (1994), p. 54. Permission provided courtesy of the Ethics Resource Center, 1120 6th Street NW, Washington, DC: 20005. 14–12 Employees and Ethical Dilemmas • Questions employees should ask when faced with ethical dilemmas: ➢Is the action legal? ➢Is it right? ➢Who will be affected? ➢Does it fit the company’s values? ➢How will it “feel” afterwards? ➢How will it look in the newspaper? ➢Will it reflect poorly on the company? 14–13 What Is Organizational Culture? • Organizational culture ➢The characteristic values, traditions, and behaviors a company’s employees share. • How is culture is revealed? ➢Ceremonial events ➢Written rules and spoken commands ➢Office layout ➢Organizational structure ➢Dress codes ➢Cultural symbols and behaviors ➢Figureheads 14–14 The Manager’s Role in Creating Culture Clarify Expectations Use Signs and Symbols Use Stories Provide Physical Support Organize Rites and Ceremonies 14–15 Human Resource Management’s Role in Promoting Ethics and Fair Treatment Ethics Training Reward and Disciplinary Systems HR’s Ethics and Compliance Activities Selection Performance Appraisal Workplace Aggression and Violence HRM–Related Ethics Activities 14–16 HRM-Related Ethics Activities • Selection ➢Fostering the perception of fairness in the processes of recruitment and hiring of people. ❖ Formal procedures ❖ Interpersonal treatment ❖ Providing explanations ❖ Selection tools ❖ Two-way communication • Training ➢How to recognize ethical dilemmas. ➢How to use ethical frameworks to resolve problems. ➢How to use HR functions in ethical ways. 14–17 FIGURE 14–4 U.S. Data Trust Web site Source: Reprinted with permission of U.S. Data Trust Corporation. www.USDataTrust.com/company. 14–18 FIGURE 14–5 The Role of Training in Ethics Source: Susan Wells, “Turn Employees into Saints,” HR Magazine, December 1999, p. 52. Reproduced with permission via Copyright Clearance Center. 14–19 HRM-Related Ethics Activities (cont’d) • Performance Appraisal ➢Appraisals that make it clear that the company adheres to high ethical standards by measuring and rewarding employees who follow those standards. • Reward and Disciplinary Systems ➢The organization swiftly and harshly punishes unethical conduct. • Workplace Aggression and Violence ➢Taking care that HR actions do not foster perceptions of inequities that translate into dysfunctional behaviors by employees. 14–20 HRM-Related Ethics Activities (cont’d) • HR’s Ethics Compliance Activities ➢Complying with the Sarbanes-Oxley Act of 2002 ❖ Requires that the CEO and the CFO of publicly traded companies personally attest to the accuracy of their companies’ financial statements and that its internal controls are adequate. ❖ Increased the need for ethics training and verification of training. ➢Firms are using online ethics training programs to comply with the act’s requirements. 14–21 Building Two-Way Communications Engagement Expectation Clarity Perceptions of fair treatment depend on: Explanation 14–22 Employee Discipline and Privacy Clear Rules and Regulations An Appeals Process Fair and Just Discipline Process A System of Progressive Penalties 14–23 Guidelines for Fair Discipline • Does evidence support the charge of employee wrongdoing? • Were the employee’s due process rights protected? • Was the employee warned of disciplinary consequences? • Was a rule violated and was it “reasonably related” to the efficient and safe operation of the work environment? • Was the matter fairly and adequately investigated before administering discipline? • Did the investigation produce substantial evidence of misconduct? • Have rules, orders, or penalties been applied evenhandedly? • Is the penalty reasonably related to the misconduct and to the employee’s past work history? • Did the employee have the right to counsel? • Did anger, hearsay, or personal impression affect the decision? 14–24 FIGURE 14–6 Disciplinary Action Form Source: Reprinted from www.HR.BLR.com with permission of the publisher Business and Legal Reports, Inc., 141 Mill Rock Road East, Old Saybrook, CT © 2004. 14–25 Formal Disciplinary Appeals Processes • FedEx's Multi-Step Guaranteed Fair Treatment Program ➢Step 1: Management review ➢Step 2: Officer complaint ➢Step 3: Executive appeals review 14–26 FIGURE 14–7 Grievance Form as Part of Appeal Process Source: http://www.wfu.edu/hr/forms/ staff-grievance.pdf. Accessed May 24, 2007. 14–27 Discipline Without Punishment (Nonpunitive Discipline) 1. Issue an oral reminder. 2. Should another incident arise within six weeks, issue a formal written reminder, a copy of which is placed in the employee’s personnel file. 3. Give a paid, one-day “decision-making leave.” 4. If no further incidents occur in the next year, then purge the one-day paid suspension from the person’s file. If the behavior is repeated, the next step is dismissal. 14–28 Employee Privacy • Employee privacy violations upheld by courts: ➢Intrusion ➢Publication of private matters ➢Disclosure of medical records ➢Appropriation of an employee’s name or likeness • Actions triggering privacy violations: ➢Background checks ➢Monitoring off-duty conduct and lifestyle ➢Drug testing ➢Workplace searches ➢Monitoring of workplace 14–29 Employee Privacy (cont’d) • What Is Monitored: ➢Identity ➢Location ➢E-mail activity and Internet use ➢Telephone calls • Why Employers Monitor: ➢To guard against liability for illegal acts and harassment suits caused by employee misuse. ➢To improve productivity. ➢To detect leaks of confidential information. ➢To protect against computer viruses. 14–30 Restrictions on Workplace Monitoring • The Electronic Communications Privacy Act (ECPA) ➢Restricts employer interception and monitoring of oral and wire communications. ❖ “business purpose exception” ❖ “consent exception” • Common law ➢Provides protections against invasion of privacy. 14–31 FIGURE 14–8 Sample Telephone Monitoring Acknowledgement Statement Source: Reprinted with permission from Bulletin to Management (BNA Policy and Practice Series) 48, no. 14, Part II, (April 3, 1997), p. 7. © 1997 by The Bureau of National Affairs, Inc. 14–32 Managing Dismissals • Dismissal ➢Involuntary termination of an employee’s employment with the firm. • Terminate-at-Will Rule ➢Without a contract, the employee can resign for any reason, at will, and the employer can similarly dismiss the employee for any reason (or no reason), at will. 14–33 Managing Dismissals (cont’d) Statutory Exceptions Public Policy Exceptions Protections Against Wrongful Discharge Common Law Exceptions 14–34 Grounds for Dismissal Unsatisfactory Performance Misconduct Lack of Qualifications Changed Requirements of (or Elimination of) the Job Bases for Dismissal 14–35 Insubordination 1. Direct disregard of the boss’s authority. 2. Direct disobedience of, or refusal to obey, the boss’s orders, particularly in front of others. 3. Deliberate defiance of clearly stated company policies, rules, regulations, and procedures. 4. Public criticism of the boss. 5. Blatant disregard of reasonable instructions. 6. Contemptuous display of disrespect. 7. Disregard for the chain of command. 8. Participation in (or leadership of) an effort to undermine and remove the boss from power. 14–36 Managing Dismissals (cont’d) • Fostering Perceptions of Fairness in Dismissals ➢Have a supervising manager give full explanations of why and how termination decisions were made. ➢Institute a formal multi-step procedure (including warning). ➢Establish a neutral appeal process. • Security Measures ➢Disable employee passwords and network access. ➢Collect all company property and keys. ➢Escort employee from company property. 14–37 FIGURE 14–9 Typical Severance Pay • Nonexempt employee—one week of pay for each year with a minimum of four weeks and maximum of two months. • Exempt employee to $90,000—two weeks for each year with a minimum of two months and a maximum of six months. • Exempt employee over $90,000 to director or VP level—two to three weeks for each year with a minimum of three months and maximum of nine months. • Director or VP to company officer—three weeks for each year with a minimum of four months and maximum of a year. • Officer—usually covered by an employment contract or Change of Control provisions and can be all the way from one year of pay to three or four years, with other perks that may be continued. Source: www.shrm.org, Accessed March 6, 2004. 14–38 Avoiding Wrongful Discharge Suits • Bases for Wrongful Discharge Suits ➢Discharge does not comply with the law. ➢Discharge does not comply with the contractual arrangement stated or implied by the firm via its employment application forms, employee manuals, or other promises. • Avoiding Wrongful Discharge Suits ➢Set up employment policies and dispute resolution procedures that make employees feel treated fairly. ➢Do the preparatory work that helps to avoid such suits. 14–39 FIGURE 14–10 TJP Inc. Employee Handbook Acknowledgment Form 14–40 Personal Supervisory Liability • Avoiding Personal Supervisory Liability ➢Be familiar with applicable statutes and know how to uphold their requirements. ➢Follow company policies and procedures. ➢Be consistent with application of rules or regulations. ➢Don’t administer discipline in a manner that adds to the emotional hardship on the employee. ➢Allow employees to tell their side of the story. ➢Do not act in anger. ➢Utilize the HR department for advice regarding how to handle difficult disciplinary matters. 14–41 The Termination Interview 1 2 3 4 5 Guidelines for the Termination Interview Get to the point. Plan the interview carefully. Describe the situation. Listen. Review all elements of the severance package. 6 Identify the next step. 14–42 Termination Assistance • Outplacement Counseling ➢A systematic process by which a terminated employee is trained and counseled in the techniques of conducting a self-appraisal and securing a new job appropriate to his or her needs and talents. ❖Does not imply that the employer takes responsibility for placing the person in a new job. ❖Is part of the terminated employee’s support or severance package and is often done by specialized outside firms. 14–43 Termination Assistance (cont’d) • Outplacement Firms ➢Can help the employer devise its dismissal plan regarding: ❖How to break the news to dismissed employees. ❖Dealing with dismissed employees’ emotional reactions. ❖Instituting the appropriate severance pay and equal opportunity employment plans. 14–44 Interviewing Departing Employees • Exit Interview ➢Its aim is to elicit information about the job or related matters that might give the employer a better insight into what is right—or wrong—about the company. ❖The assumption is that because the employee is leaving, he or she will be candid. ❖The quality of information gained from exit interviews is questionable. 14–45 FIGURE 14–11 Employee Exit Interview Questionnaire Source: http://www.fin.ucar.edu/forms/HR/ exit_form/exit.pdf. Accessed May 24, 2007. 14–46 FIGURE 14–11 Employee Exit Interview Questionnaire (cont’d) Source: http://www.fin.ucar.edu/forms/HR/ exit_form/exit.pdf. Accessed May 24, 2007. 14–47 The Plant Closing Law • Worker Adjustment and Retraining Notification Act (1989) ➢Requires employers of 100 or more employees to give 60 days notice before closing a facility or starting a layoff of 50 people or more. ➢The law does not prevent the employer from closing down, nor does it require saving jobs. ➢The law is intended to give employees time to seek other work or retraining by giving them advance notice of the shutdown. 14–48 Layoffs and Downsizing • Bumping/Layoff Procedures ➢Seniority is usually the determinant of who will work. ➢Seniority can give way to merit or ability. ➢Seniority is usually based on the employee’s hiring date, not the date he or she took a particular job. ➢Companywide seniority allows an employee in one job to bump or displace an employee in another job. 14–49 Layoffs and Downsizing • Alternatives to Downsizing ➢Voluntarily reducing employees’ pay. ➢Concentrating employees’ vacations. ➢Taking voluntary time off. ➢Releasing temporary workers. ➢Offering early retirement buyout packages. 14–50 Adjusting to Downsizings and Mergers • Reduction in Force Guidelines ➢Identify objectives and constraints. ➢Form a downsizing team. ➢Address legal issues. ➢Plan post-reduction actions. ➢Address security concerns. 14–51 Adjusting to Downsizings and Mergers (cont’d) • Guidelines for treatment of departing employees during a merger: ➢Avoid the appearance of power and domination. ➢Avoid win–lose behavior. ➢Remain businesslike and professional. ➢Maintain a positive feeling about the acquired company. ➢Remember that how the organization treats the acquired group will affect those who remain. 14–52 K E Y T E R M S ethics ethics code distributive justice procedural justice interactional (interpersonal) justice organizational culture nonpunitive discipline Electronic Communications Privacy Act (ECPA) dismissal wrongful discharge unsatisfactory performance misconduct insubordination termination interview outplacement counseling exit interviews bumping/layoff procedures downsizing Solution Manual for Human Resource Management Gary Dessler 9780133029864, 9789353942205, 9780135226803, 9780136089964, 9780134235455, 9780130141248, 9780131746176
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