Ethical Context of HRM - Week 10

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                                               Ethical Context of HRM


Business ethics are moral principles that guide the way a business behaves. The same principles that determine an individual”s actions also apply to business.

Acting in an ethical way involves distinguishing between “right” and “wrong” and then making the “right” choice. It is relatively easy to identify unethical business practices. For example, companies should not use child labor. They should not unlawfully use copyrighted materials and processes. They should not engage in bribery.

However, it is not always easy to create similar hard-and-fast definitions of good ethical practice. A company must make a competitive return for its shareholders and treat its employees fairly.  A company also has wider responsibilities. It should minimize any harm to the environment and work in ways that do not damage the communities in which it operates. This is known as corporate social responsibility.

An ethical decision is one that engenders trust, and thus indicates responsibility, fairness and caring to an individual. To be ethical, one has to demonstrate respect and responsibility. Ethical decision-making requires a review of different options, eliminating those with an unethical standpoint, and then choosing the best ethical alternative

In an effort to preserve the franchisor-franchisee relationship, franchise owners should ensure that customers and employees alike understand that the franchisor is not the employer.

Big name franchises in particular often face employee lawsuits due to perceptions of “deep pockets”, negative news and activism in certain sectors. In reality, most franchises are really small business owners trying to run their business, keep up with changing laws, evolving technologies, recruitment and retention challenges and changes in workforce demographics, to name but a few. High profile protests by low-wage fast-food workers have sparked major trends related to minimum wage increases, causing angst for both the franchise owner and the franchisor.

“Most franchises are trying to run their business, keep up with changing laws, evolving technologies, recruitment and retention challenges, and changes in workforce demographics,” says Tracy Morley, Legal Editor, XpertHR. “Franchise owners, both small and large, should have a thorough understanding of federal, state and municipal employment laws, anticipate changes and proactively manage their workforce to reduce the potential for employer liability.”
The ten most common HR compliance issues faced by franchises today are:

  • ·         Employee leaves and reasonable accommodation requests
  • ·         Joint Employer liability
  • ·         Paid sick leaves
  • ·         Minimum wage, employee classification, and overtime requirements
  • ·         Finding and hiring the right employees
  • ·         Onboarding and Training issues
  • ·         Performance management
  • ·         Hours worked
  • ·         Workplace safety

      
               

                                                   The Role of HR in Ethics

•Recruitment – some organizations incorporate ethics into psychometric tests to help ensure the candidate is compatible with their ethical standards
•Induction – new employees should be provided with information about the objective view of the company, organizational culture, work ethic and expected behaviors
•Training – all training session should include a focus on expected behaviors to ensure ethical values are understood and applied
•Upwards of communication – there should be a ‘speak up’ process where stakeholders can raise issues related to bullying, harassment, discrimination etc. A staff survey is a useful way to assess employee experiences, awareness, and perceptions of the organization's ethical values and business practices.
•Downward communication - newsletters, intranet and social media can be used to communicate ethical messages internally.
•Performance management – assess employee application of ethical values through appraisals to encourage them to engage with them.
•Rewards system - could contribute to this (monetary or non-monetary e.g. ‘awards’ for ethical behavior).
•Exit interviews – provide useful information for monitoring the effectiveness of the ethics programme. Are ethical concerns a reason for employees leaving?
(Source: IBE Factsheet, 2014)

Reference

Anglo A, 2017,businesscasestudies.co.uk, Business ethics and corporate social responsibility, June 13 2018, <https://businesscasestudies.co.uk/anglo-american/business-ethics-and-corporate-social-responsibility/what-are-business-ethics.html>
IBE,2014, collaboration between the ethics function and HR, June 13 2018,<https://www.ibe.org.uk/userassets/briefings/b40_hr.pdf>

















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