Ethics in HR

Group Members

Fawad Ur Rahman (6317)

Ihtisham Khan (6318)

Dawood Khan (6324)

Contents HR Ethics

Analyzing HR Dilemmas

Examples of Right vs Right Dilemmas

Guidelines for an Ethical Culture

ETHICAL HRM PRACTICES

Staffing and selection

Training

Performance Appraisal

Compensation and Benefits

Equal opportunity laws

Ethical discipline

Effective dismissal

UNETHICAL HRM PRACTICES

Effects of Unethical HR Pract ices

THE CASE

HR Ethics

• No well-established mandatory professional standards

• But it do have a Vital role in HR

• Ethics and business knowledge are important as HR domain expertise

• Each situation requires a judgment call

Analyzing HR Dilemmas

• Right v. Right “Selecting the best option”.

• It’s right to tell the truth, but it is also right to be kind and considerate of peoples’ feelings and emotions.

• It’s right to apply rules and procedures equally, without favoritism, but it is also right to give special treatment to hard-working, dependable, and productive employees.

Guidelines for Fostering an Ethical Culture

• Have a well developed policy and procedures manual

• Enforce policies

• Reward compliance

• Recruit ethical employees

• Create a division to oversee ethics

Ethical culture in worklife

• Honest communication

• Fair treatment

• Special consideration

• Fair competition

• Responsibility to organisation

• Corporate social responsibility

• Respect for law

ETHICAL HRM PRACTICES

Staffing and selection

• Fostering the perception of fairness in the processes of recruitment and hiring of people.

• Formal procedures

• Interpersonal treatment

• Providing explanation

Staffing and selection

• Know your employment law

• Follow the ethical recruitment guidelines

• Use pre-employment information services

• Use reference checking forms

Training

• To recognize ethical issues

• Use of ethical guidelines to resolve problems

• Targets and methods of ethical training

Performance Appraisal

Cultural dimensions of collectivism and power distance make objective appraisals a challenge.

Supervisors and subordinates develop close relationships.

Organizational loyalty is as important as work performance.

Employee promotions are frequently based on seniority.

Annual performance appraisals.

Supervisors provide performance ratings that are frequently inflated due to personal relationships.

Compensation and

Benefits • In addition to a base salary, compensation includes:

– House rent allowance (HRA*). – Medical allowance. – Dearness allowance (DA*). – Leave travel allowance (LTA*).

• Several categories of leave (vacation) exist:

– Sick leave: (medical certificate required). – Casual leave: (for personal and family emergencies, requires prior

permission of boss). – Annual leave: (after one year of employment). – Federal holidays

Equal opportunity laws

• Age discrimination

• Disability

• Ethnic/National origin, colour, race, religion, gender

• Fair labour standards

Ethical discipline

• People not employees

• Job description is clear

• ”What to do ” attitude compared to ”Don’t do this” attitude

• Top managers example

Effective dismissal

• Factors

– Legal and valid reasons for dismissal

– Explain the reasons

– Be firm with your decision

• Process

– Informal action

– Disciplinary meeting

– First written warning

– Second written warning

UNETHICAL HRM PRACTICES

Effects of UNETHICAL HRM PRACTICES: Humans

Unethical business environments can:

• Demotivate individuals

• Make good employees leave the company

• Attract unethical employees

• Lead to the lack of trust by the employees for the company

THE CASE The Retrenchment Drama,

Jet Airways (India)

THE CASE

• The case is about the retrenchment drama that unfolded in one of India’s leading aviation companies, Jet Airways (India) Limited in Oct 2008.

• More than thousand employees were laid off.

• It was a part of major Cost-cutting exercise to tackle Global slowdown and price hike of Aviation fuel.

The retrenchment drama unfolds…..

• Oct 16, 2008, Jet announced that it would lay off nearly 1,100 of its staffs to streamline operation.

• A day after it had already laid off around 800 of its cabin crew members.

• Simultaneously announced second phase of lay-off of 1100 employees, mainly from departments like flight attendant, cockpit crew etc.

The retrenchment drama unfolds…..

• Amidst great furor and opposition by various organizations and political parties, Naresh Goyal , chairman of Jet, reinstated the employees a day later the great emotional drama.

• November 2008, Jet decided on a 20% cut in the salaries of its pilots, engineers, and some other staffs.

Some silent issues……

• Employees were FIRED with no PRIOR NOTICE

• The entire force of unconfirmed staff was being laid off on a 30-day compensation package

• Company took action only against lower staffs.

Ethical issues……

Some most crucial questions unanswered….

Where would those 1900 employees go?

Why took action only against lower grade staffs?

Senior management was very less affected.

What would be the future of those students currently taking courses in cabin crew, captain etc?

Ethical issues……

Why did the Jet CEO enter the competitive market, instead of playing down after foreseeing risks?

Some quotes made by higher officials…..

"A total of 1,900 people are being served separation notice. 800 have already been served notice. In the next few days the others will also be served notice. It is an attempt to save the jobs of remaining 11,100 employees,“

Saroj Datta (Exe Director)

“It is a difficult decision but we had to take it,

Wolfgang Schaeur (CEO)

It throws a serious question towards the accountability of an organization to its employees……….

Some observations…..

The very existence of any company is because of its employees.

Company keeps on focusing on customer satisfaction when its own people are so highly dissatisfied.

Employees are more than just-a-resource.

Protest against Management

Points to ponder

No company would know of a risk over night, its built over a period and there should not be any drastic decision which may endanger its employees.

More accountability from top management.

The role of HR executive is important to ascertain that people’s interests are not left aside in the race for profits

The HR executive to ensure no discrimination in pay cut and lay off.

Before reaching to decision, make environment conducive to acceptance of decision.

ANY QUESTIONS….?