Ethics Deals with what is good and bad or right and wrong, or with moral duty and obligation. Ethical behaviour may require higher standards than that established by law.
A Code of Ethics is both a standard of behaviour to aspire to and a guide for making ethical decisions. It contains specific language that sets the minimum expected levels of behaviour. Violators are subject to disciplinary action. However, the code is not simply a set of rules. It also creates an expectation that the Practitioners will do the right thing in any given situation.
Ethics ultimately is a matter of personal responsibility. Consistently making ethically correct decisions is not easy. It requires commitment and practice, which require first awareness and then a motivation to act ethically. A code of Ethics provides guidance and support to members of an association or profession.
HR specialists are concerned with ethical standards in 2 ways: first, their conduct as professionals and second, the ethical standards of their firms.
The following may form standards of professional conduct for HR practitioners:
- Accuracy: HR practitioners must maintain high standards of accuracy in the information and advice they provide to employers and employees.
- Confidentiality: They must respect their employer’s legitimate needs for confidentiality and ensure all personnel information remains private.
- Counseling: HR practitioners with the relevant skills must be prepared to act as counselors to individual employees, pensioners and dependants or to refer them, where appropriate to other professionals or help agencies.
- Developing others: HR practitioners must encourage self-development and seek to achieve the fullest possible development of employees in the service of present and future organizational requirements.
- Equal opportunities: They must promote equal, fair, non-discriminatory employment practices.
- Fair dealing: They must maintain fair and reasonable standards in their treatment of individuals.
- Self-development: HR practitioners must seek continuously to improve their performance and update their skills and knowledge.
Based on a review of the literature decisions related to ethics and HR management can be divided into to general areas:
- Pre-employment relationship between the employer and prospective employee.
- Post hiring relationship between the employee and employer
- Actively promote and encourage the highest level of ethics within the government financial management community.
- Conduct yourself with integrity, dignity and respect for others.
- Transmit or use confidential information obtained in your professional work only for the purpose intended and not for personal gain or other advantage or to the disadvantage of others.
- Adhere to the standards of conduct of your employer and any professional associations or organizations of which you are a member.
Professional Competence and Performance
- Strive to perform the duties of your position and supervise the work of your subordinates with the highest degree of professional care.
- Continually seek to increase your professional knowledge and skills to improve your service to employers, associates and fellow members.
- Render opinions, observations or conclusions for official purposes only after appropriate consideration of the pertinent facts and after assuring yourself that you have the appropriate expertise and are free from real or perceived conflicts of interest.
- Exercise diligence, objectivity and honesty in your professional activities and be aware of your responsibility to disclose improprieties that come to your attention to the appropriate parties.
- Be aware of and strive to apply work-related requirements and standards prescribed by authorized government agencies and employers.
Responsibilities to Others
- Consider the public interest to be paramount in carrying out your duties.
- Avoid any activity that creates or gives the appearance of a conflict with your employer-related responsibilities.
HR practitioners are part of the management. They are expected to act professionally and should not speak out and oppose plans or actions, which are clearly at variance with the values of the organisation. And they should do their best to influence changes in those values where they feel they are necessary. They must not tolerate injustice or inequity of opportunity.
ETHICAL STANDARDS IN THE FIRM.
Ethics codes may include the guiding principles the organisation follows in conducting its business and relating to its stakeholders – employees, customers, shareholders, suppliers and society in general. Such activities may include: conflict of interest, giving and receiving of gifts, confidentiality, environmental pollution, health and safety, equal opportunities, sexual harassment, moonlighting and political activity.
MANAGING ETHICS IN THE WORKPLACE.
Benefits of Managing Ethics in the Workplace
- Attention to business ethics has substantially improved society. A matter of decades ago, children in across the world worked 16-hour days. Workers’ limbs were torn off and disabled workers were condemned to poverty and often to starvation. Employees were terminated based on personalities. Influence was applied through intimidation and harassment. Then society reacted and demanded that businesses place high value on fairness and equal rights. Anti-trust laws were instituted. Government agencies were established. Unions were organized. Laws and regulations were established.
- Ethics programs help maintain a moral course in turbulent times. Attention to business ethics is critical during times of fundamental change. During times of change, there is often no clear moral compass to guide leaders through complex conflicts about what is right or wrong. Continuing attention to ethics in the workplace sensitises leaders and staff to how they want to act — consistently.
- Ethics programs cultivate strong teamwork and productivity. Ethics programs align employee behaviours with those top priority ethical values preferred by leaders of the organization. Ongoing attention and dialogue regarding values in the workplace builds openness, integrity and community — critical ingredients of strong teams in the workplace. Employees feel strong alignment between their values and those of the organization. They react with strong motivation and performance.
- Ethics programs support employee growth and meaning. Attention to ethics in the workplace helps employees face reality, both good and bad — in the organization and themselves. Employees feel full confidence they can admit and deal with whatever comes their way.
- Ethics programs are an insurance policy — they help ensure that policies are legal. Ethical principles are often state-of-the-art legal matters. These principles are often applied to current, major ethical issues to become legislation. Attention to ethics ensures highly ethical policies and procedures in the workplace.
- Ethics programs help avoid criminal acts “of omission” and can lower fines. Ethics programs tend to detect ethical issues and violations early on so they can be reported or addressed. In some cases, when an organization is aware of an actual or potential violation and does not report it to the appropriate authorities, this can be considered a criminal act.
- Ethics programs help manage values associated with quality management, strategic planning and diversity management — this benefit needs far more attention. Ethics programs identify preferred values and ensuring organizational behaviours are aligned with those values. Total Quality Management includes high priority on certain operating values, e.g., trust among stakeholders, performance, reliability, measurement, and feedback. Ethics management techniques are highly useful for managing strategic values, e.g., expand market share, reduce costs, etc. Ethics management programs are also useful in managing diversity. Diversity is much more than the colour of people’s skin — it’s acknowledging different values and perspectives.
- Ethics programs promote a strong public image. Attention to ethics is also strong public relations — admittedly, managing ethics should not be done primarily for reasons of public relations. But, frankly, the fact that an organization regularly gives attention to its ethics can portray a strong positive to the public. People see those organizations as valuing people more than profit, as striving to operate with the utmost of integrity and honour. Aligning behaviour with values is critical to effective marketing and public relations programs.
- Overall benefits of ethics programs. Managing ethical values in the workplace legitimises managerial actions, strengthens the coherence and balance of the organization’s culture, improves trust in relationships between individuals and groups, supports greater consistency in standards and qualities of products, and cultivates greater sensitivity to the impact of the enterprise’s values and messages.
- Last – and most important — formal attention to ethics in the workplace is the right thing to do.
STRATEGIC HUMAN RESOURCE MANAGEMENT
- Discuss the meaning of Strategic HRM
- Identify areas of application of strategic HRM
- Design HRM strategies
The changes taking place in technology, demographics, markets, consumers and their preferences and in economies have a significant impact on an organization. Organizations are susceptible to the external environment and make strategic moves to respond to the environmental changes.
The responses made by organizations to changes in the environment are broadly in the nature of changing the portfolios or improving organizational processes, systems and structures.
Any move perceived to be beneficial or to be a source of business gain by or for the organization is termed strategic response. Strategic responses can be classified as:
- Portfolio related strategic responses: Here the businesses change their business nature, products, markets, capital, business collaborations and so on. Strategic responses include; mergers, acquisitions, takeovers, demergers, diversification, divestiture and so on.
- Process related strategic responses: These alter the portfolio of products, business units, finances and markets – aimed at improving their performance by process improvement strategies. They aim at improving quality, benchmarking, cost management, asset utilization and so on. Strategic responses include; building core competences, research and development and so on.
- Structure related strategic responses: These are fundamental changes in organizational designs. This is a move away from monolithic and rigid organizational designs to flexible, agile, flatter designs with decentralization, and business units getting prominent. Delayering is a common feature of such responses.
All the above strategic responses call for the integration of HR strategy and business strategy for business success.
Strategic HRM is an approach to making decisions on the intentions of the organization concerning people. It is about the relationship between HRM and strategic management in the organization.
Strategic HRM refers to the overall direction the organization wishes to pursue in achieving its objectives through people. Strategic HRM is an integral part of the business strategies.
Strategic HRM requires formulation of HR objectives, strategies and policies. Organizational strategic decisions involve choices, and these choices shape HR decisions, so too, do HR decisions affect strategic choices. The premise behind strategic HRM is that HR decisions that “fit” the organizational conditions will positively affect performance.
HR strategy’s purpose is to help guide manager’s personnel decisions and thereby affect the success of the organization.
Strategic HRM covers broad organizational concerns relating to structure and culture, management of change, organizational effectiveness, performance competence, matching resources to future business requirements and employee development, employee reward and employee relations can be formulated.
In a business HR strategy deals with those HR activities used to support the firm’s competitive advantage.
“Strategic HRM encompasses those decisions and actions which concern the management of employees at all levels in the business and which are directed towards creating and sustaining competitive advantage” Strategic HRM is “the means of aligning the management of Human Resources with the strategic content of the business.
THE MEANING OF STRATEGIC HRM
Strategic HRM has four meanings:
- The use of planning
- A coherent approach to the design and management of personnel systems based on an employment policy, and staffing strategy
- Matching HRM activities and policies to some explicit business strategy.
- Seeing the people of the organization as a strategic resource for the achievement of competitive advantage.
Strategic HRM is a human resource based approach to business strategy.
As earlier indicated, HR strategies must be integrated with business strategy. The business strategy is in turn a function of the organizations responses to the external environment.
Having stated that HR strategies must be integrated with corporate or business strategies, we now need to look at examples of HR strategies; we now need to look at examples of HR strategies. To understand this we must understand the overall business strategy.
Environmental Changes Strategic Business Planning Strategic HRM
Organizations can be classified into 3, based on the nature of their business strategies.
- Defenders – organizations operating in a few stable product markets
- Prospectors – organizations that continually search for new product & market opportunities and regularly take risks
- Analyzers – organizations that operate in many product markets, some relatively stable, others changing.
HR strategies and practices must be adapted to meet perceived threats and opportunities in a changing business environment.
BUSINESS & HR STRATEGIES
The following are examples of how HR strategies can be integrated with different business strategies. The important lesson for managers is that human resources represent a competitive advantage that can increase profits when managed wisely.
- Business Strategy – Achieve competitive advantage through innovation.
An innovation strategy is used to develop products or services that differ from those of the competition. It seeks to offer something new and different.
HR Strategies. (To give competitive advantage through innovation)
- Organizational development strategy: culture change: team work, leadership, lateral communication.
- Resourcing strategy: recruit and retain people with innovative skills. Select highly skilled individuals, give them more discretion, use minimal controls. Minimize employee turnover.
- Employee development strategy: make greater investments in human resources, allow for experimentation, and provide learning and career growth opportunities, and team training. Emphasize long-term needs in training programmes for managers.
- Reward strategy: Team rewards – pay/recognition, achievement bonuses for individuals. Allow and even reward for occasional failure and appraise performance.
- Have HR programmes that emphasize on work-life, employee assistance and wellness and ensure a supportive organizational culture.
- Business Strategy – Achieve competitive advantage through quality-Enhancement strategies.
The profile of behaviour appropriate for a quality-enhancement strategy includes; relatively repetitive and predictable behaviours; a high concern for quality with a modest concern for quantity of output; a high concern for how goods or services are made or delivered; low risk-taking activity; and commitment to the goals of the organization.
Since quality enhancement involves greater employee commitment and fuller use of employees’ abilities, fewer employees are needed to produce the same level of output.
HR Strategies (to achieve competitive advantage through quality-Enhancement strategies.)
- Organizational development strategy – develop a culture in which good quality people can thrive.
- Resourcing strategy – develop resourcing strategies which will ensure that the business gets and keeps the people it needs.
- Employee development strategy – set up continuous development programmes & treat the business as a learning organization.
- Reward strategy – maintain competitive levels of reward.
- Since reliable and predictable behaviour is important for quality-enhancement, minimize absenteeism, tardiness and turnover.
- Cost Reduction Strategy.
Due to stiff competition in business markets, cost control has become the mantra for organizations everywhere. Companies pursuing this strategy are characterized by tight fiscal and management controls, minimization of overhead and pursuit of economies of scale. The primary objective is to increase productivity by decreasing the unit cost of output per employee. Strategies for reducing costs include; reducing the number of employees; reducing wage levels; using part-time workers; subcontractors, or automation, changing work rules and permitting flexibility in job assignments.
- Speed Strategy.
Technology is making the computer and fax and other office equipment become faster and faster. Demands by consumers for more choices and faster and more comprehensive services underline the need for speed in the development, production and delivery of products and services. A HR manager can ensure speed in organizational processes through:
- Selecting highly skilled individuals who are committed to speed management and whose beliefs and attitudes and values related to time are consistent with those the organization is seeking.
- Both workers and management must embrace change, rather than resist it.
- Company culture must support the efforts of the managers and workers.
- Both work groups and cross functional teams must share the same norms about time.
- A fluid networked organizational structure rather than the old command and control is appropriate.
- All HR systems including, staffing, training, reward and performance management must support the speed-management philosophy.
In a recession, business needs may not fit with HR values; vet the HR strategy to conform to this. The HR strategy here may focus on redundancies and sackings.
HR managers in such a situation must take care not to damage or destroy a caring corporate image. Such a strategy may be described as tough love – being cruel to be kind in which employees are expected to be both dedicated and disposable.
- Change Strategies – Transformation or change is an inevitable consequence of many HR strategies. There are two types of change strategies.
- Turnaround change. These are financially driven and often are meant to ensure corporate survival by cutting unprofitable products and services. It involves the redesign of organizational structures, disposal of non-core activities and large-scale redundancies. This change is painful but must be undertaken as a HR strategy in response to a need for corporate survival.
- Behavioural transformations. This seeks to change behaviour patterns throughout the organization altitudes behaviour & commitments
Restructuring is the most common form of major organizational change. It should however not be a defensive cost cutting process but rather a proactive attempt to achieve innovative products & services focus without “gaining much fat”.
Unfortunately, employees are a secondary consideration of change in most organizations. In the event that hard negative HR strategies must be undertaken, do not keep the employees in the dark until it’s too late. We should not be scared of letting them know. A favourite question in this scenario is “will the turkeys vote for Christmas?”
Other Examples of Change Strategies
- Shrinkage – seen in downsizing activities.
- Incremental change – through organizational development and business process re-engineering (BPR).
More often than not, HR Managers are involved in dealing with the consequences of re-organization, including closures and redundancies. Positively, they are concerned with growth and strategic alliances. Some of the problems they face include relocation, changing roles and retraining for new skills. Other related attempts include cultural change or behavioural transformations.