Ethics and Human Resource Management

Author : Ishita Alok

Everyone is familiar with the general meaning of the term “ethics”. Ethics is a set of moral principles or values – a sense of right or wrong. Accordingly, business ethics can be defined as the set of moral principles that define right and wrong behaviour in the world of business. Day in and day out, managers and employees are forced to take decisions that have moral implications. These decisions have a direct impact on their companies, peers and the sometimes even stakeholders of the company. 

Conducting business in an ethical manner is incumbent upon every employee of an organization for legal and business reasons. At its most basic level, ethics mean to act and treat people right and fair. However, at a business level, it escalates into having fair and honest competition, acting without deception or misinterpretation, and working within the boundaries of law.

In the wake of corporate scandals over the past several years, most organizations have written or updated their Codes of Conduct and Ethics Rules. Being an employee of a Tata company, I can proudly say that ours is a company that involves itself only in activities beneficial to the national interest. Another rather appealing bit of the Tata Code of Conduct is that we never get involved in any kind of illegal payment remuneration, gifts, donations or comparable benefits to obtain business or favours. The question that arises is how many companies actually do what they claim in their ethical policies? Everyone obviously pulls off rather tall tales with regard to their achievements and the market position of the company. But how many such claims can be proven to be true? Companies can go to any extent in trying to attract real talent from the enormous pool of human resources that is available at their disposal. But employees today realise that these are traps laid out for them to make wrong judgements in their choice of workplace.

Coming back to ethics, there are mainly three general and commonly found business ethics that I would like to highlight: Religion, culture and legal systems. Working in a diverse country like India obviously means having to deal with various kinds of people belonging to innumerable religions, castes, creeds and cultures. All religions preach the necessity for an orderly social system and emphasize on social responsibility with an objective to contribute to general welfare. But do managers and employees realise and implement this in their everyday work life? I highly doubt it. From my personal experience I have come across various people who are absolutely hostile towards people who are non-Hindu. For a moment, let us forget about the religion level, there are misunderstandings and prejudices about people from North and South India amongst themselves! I am a North Indian living in South India for over two decades now and have never been able to come to terms with this attitude of people. I believe that if your chemistry with someone is right, it is at the human level, and certainly not because of him/her being a Hindu/Muslim/Christian or a Kannadiga/Malayali/Gujarati! If people don’t even show the minimum tolerance of being able to stand each other and work together for the company’s welfare, the entire idea of ethics in the organization is a lost cause.

Culture refers to a set of values, rules and standards transmitted among generations and are aimed at modelling behaviours so that they fall within acceptable limits. When in an organization, there are people who come in from various cultural practises. They’ve had a certain way of living their life. It is a well-known fact that the hardest thing for a person to do is bring about changes into his most basic nature that he/she has acquired since their childhood. When so many different kinds of people come together to work collectively to achieve the organizational goal, they are expected to behave like professionals and not let their own personal way of living get in the way of work. I have noticed, and I don’t intend to pin-point or offend anyone here, that UP-ites and Biharis are made the butt of all jokes, emails with Sardar jokes just never fail to amuse us and the very sound and tone of the South Indian languages can send many into titters of laughter! In between all this drama, people (both managers and employees) fail to see the bigger picture. They do not realise that these are practises totally against the basic definition of culture and most certainly tend to damage the ethical system of the organization.

Laws are rules of conduct approved by legislatures that guide human behaviour in any society. They codify ethical expectations and change as new evils emerge. But laws cannot cover all ethical expectations of the society. Ethics that are stated by the law, bind all businesses, and obeying the law is presumed to be an essential component of ethical behaviour. There isn’t even the need to really explain how companies tamper with laws that bind them; it is a part of our daily life which is a very disturbing matter. Taxes are evaded, hundreds of employees die because of occupational diseases, many perish because of industrial accidents, and millions others receive disabling injuries on the job. These kinds of mishaps are most common in manufacturing and chemical industries. Companies that work with hazardous substances are often found to be careless with regard to the safety measures that need to be followed while working in such places. These measures are tightened and followed strictly only when there are external inspections and audits but otherwise there is no one to monitor what conditions employees are working in in these places. There are laws that also clearly state about the disposal of nuclear and hazardous waste, but do companies really follow these? They are not only being unethical, but they are also being careless human beings by harming the environment and other fellow beings.

Having described the three main general ethical issues, I would like to now focus on purely HR-related ethical issues.

Performance appraisal – Assessment of an individual’s performance is based on observation and judgement. HR mangers are expected to observe the performance and understand employee potentials before giving ratings for performance appraisals. Still, there are HR managers who give employees bad ratings because of various irrelevant factors such as a personal grudge or dislike towards the employees attitude, it could also be because the employee is not a local resident of the place where the organization has been set up or also because he/she may not be able to speak the local language. These are factors that have almost negligible or no influence up on an employee’s performance but still these tend to affect his/her appraisal if the HR manager is unethical.

Race, gender, age and disability – To a large extent, discrimination on the basis of race, gender, age and disability has been stopped. But despite laws designed to prevent discrimination, social and cultural practises as well as others, the legislation had a profound discriminatory impact, and discrimination against women, persons with disabilities, indigenous people, and national, racial and ethnic minorities remains to be a problem. In this situation, it is the duty of the HR manager to:

• Monitor the principles and norms of the enterprise to ensure that they reflect the values of the society as expressed in its laws.
• Monitor the selection, reward, development and appraisal systems to ensure that they are consistent with the principles and norms.
• Vigorously pursue violations and, when necessary, work to defend the enterprise against unfounded allegations.
• Protect women against work place harassment – sexual or otherwise.

Privacy issues – Privacy refers to protecting a person’s private life from intrusive and unwarranted actions. This would include protecting employees from intrusion into his work space and matters that could affect, mix and disrupt his/her personal life. For example, the e-mail system that an employee uses while working could be intercepted even though there are regulations prohibiting third party invasions in place to protect the same. His communication with various people could be misused and tampered with and there is no way to monitor or control it. Another dimension of sustaining privacy would be to protect an employee’s illness related issues. A person suffering from AIDS and other such diseases may not be an immediate threat to people around them. They have as much right to work as any other uninfected person, but discrimination is still made on these grounds and people are still being victimized. In such cases, it is the ethical duty of a HR manager to protect an employee’s identity. However, in case of tests conducted on employees pre-joining like drug testing and genetic testing, it becomes a matter that varies from organization to organization.

Downsizing and layoffs – Layoffs are done to save money. Unfortunately, they are usually a short term fix, detrimental to the company. While downsizing has been viewed primarily as a cost reduction strategy, there is considerable evidence that downsizing does not reduce expenses as much as desired, and that sometimes expenses may actually increase. Many a times companies fail to realise that they have tremendous long term capital investment in their employees. Layoff announcements speak of jobs eliminated or percentage reduction of the work force, but behind those pretty words are the company’s people. Whether the company is able to continue to work and compete effectively, is able to fulfil the promise of layoffs made to the investors, will continue to generate the innovation required to survive in the market place depends on the people.

To conclude, I would like to say that unless and until we learn to be ethical in our personal lives, it is going to be really hard to practise the same in our professional lives, and needless to say, our ethical practises at the work place affect not only ourselves but the entire organization. It is in the hands of an employee to make or break the reputation of their organization in public and if everyone realised the significance of being ethical, work life wouldn’t be half as frustrating.