Ethical and Professional HRM

GSBS 6040 Human Resource Management
PBL Exercise 2 – Ethical and Professional HRM

There is a great deal of agreement that ‘organisations’ and their managers should behave ‘ethically’ towards employees.

Some say managers should behave ethically because it’s the right thing to do, and it has the added benefit of building employee commitment, improving their performance, and thereby contributing to organisational success. Conservative, pro-business advocates, more interested in the bottom line, also argue for ethical behaviour, but on the simple grounds that it is good for business:
The business that treats its customers contemptuously, or its staff unjustly, or its suppliers dishonestly, will often find them hard to retain. In a free market, the most productive staff, the finest suppliers and the cheapest and most flexible sources of finance can do better than to stay with a business that cheats or treats them unfairly … In the long run, unethical business is less likely to succeed (Sternberg, 2000:19).

It is possible that both views are wrong. Lafer finds it striking [notable] that these two groups “share this central conviction: that the drive to maximize long-term profits naturally overlaps with the imperative to treat employees justly. … [This shared conviction, he says] begs for explanation, because … it is so palpably at odds with evidence from the business world” (Lafer 2005:288).

In other words, Lafer says that while the ‘rhetoric’ in business and management is frequently about how it’s in everyone’s interests for employees to be treated fairly and equitably, there are a wealth of examples to show that many organisations survive and actually prosper while treating their employees very poorly.

Can the interest of employees and the interests of business really coincide? What happens when they are in conflict? And what should HR managers do when this happens?

Suggested References:
Lafer, G (2005) The critical failure of workplace ethics, in Budd, J and Scoville, J (eds), The Ethics of Human Resources and Industrial Relations, Illinois, Labor and Employment Relations Association, pp. 273-297
Lowry, D (2006) HR Managers as Ethical Decision-makers, Asia-Pacific Journal of Human Resources, 44(2):171-193
Sternberg, E (2000) Just Business: Business Ethics in Action, 2nd edition, New York, Oxford University Press
Winstanley, D and Woodall, J (2000). The ethical dimension of human resource management, Human Resource Management Journal 10(2): 5-20

Task:
1. Find a current example (that is, within the last 12 months) of a situation in which it seems that the interests of senior management/owners are clearly in conflict with the interests of some or all of their employees.
(NB. Chose an example described in the media/public domain. When you submit your paper, you must append at least one key news article in English providing an independent description of the situation.)
2. Imagine you are an HRM professional in this situation. What are three options available to you to address the conflict? Which option would you chose and why? Defend your choice in relation to what constitutes ethical and professional behaviour.
NOTE: Two-three examples of situations which pose a conflict in interests between managers/owners and employees will be posted in Week 7 in Course Materials. These will form the basis of the class discussion in Weeks 9 and 10. You may use one of these examples as the basis for your work, or find your own situation to analyse. If you use an alternative situation, please confirm the choice with your Lecturer before you proceed.

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