Ethics And Human Resource Management

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What's Inside?

What is Ethics and Its Importance?
What is Ethics in HRM?
Why is Ethics Important in the Management of People?
Types of Ethics in HRM?
What is the Role of HR in Ethics?
What is the Role of Professional Ethics in the Workplace?
What is the Role of Ethics in an Organization?
Business Ethics in HR Management
Corporate Ethics in HRM
Best practices and real-life case studies related to ethical HR management
Integrating Ethics into HR Processes: Actionable Steps and Examples
Further Reading

Ethics are principles or morals that are imbibed within an individual or reinforced externally that help them to differentiate between right and wrong and to act accordingly.

What is Ethics and Its Importance?

Ethics refers to the adherence to moral principles. These are core values that individuals and organizations decide to abide by. It includes standards of behavior that dictate how employees should behave in various encounters within the organization. Ethics ensure good conduct across the organization. This is why the Business Code of Ethics is developed to guide such behavior. More importantly, ethical conduct is key to maintaining social order, protecting rights, and ensuring justice and fairness in the workplace. Organizations that are known for good ethical practices are well-respected in the community they operate. Ethical organizations get better employee satisfaction and lead to sustainable business success.

What is Ethics in HRM?

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Ethics in human resource management indicates the treatment of employees with ordinary decency and distributive justice. It is a subset of business ethics. Human resource managers should avoid any kind of discrimination among the employees based on specific factors such as color, caste, culture, appearance, religion, employment fight, etc. Ethical business contributes to the business goals as the employees will feel motivated and they will work with efficiency and effectiveness.

Ethics in human resources is a practice where professionally acceptable principles and values guide decisions on human resources. The people who must uphold these principles and values are HR professionals and the collective leadership of an organization. It calls on HR professionals and leaders to incorporate ethical considerations in the whole human resource value chain from recruitment to termination.

National Pardon offers insights on the importance of ethical and fair practices, especially when dealing with sensitive human resource issues that require justice and transparency.

CIPD research shows that HR professionals have a strong desire to make ethical decisions, but they face constraints. The biggest constraint is balancing people and business issues. Many have compromised their principles because of the pressure from the business. Few HR professionals have the guts and stamina to challenge organizational decisions that are unethical.

Ethics in human resources or HRM is based on key principles that must be followed. Such principles guide decision-making across the HRM value chain. The principle of fairness and justice calls on HR professionals to ensure that all employees are treated equitably free from discrimination and bias. All employees must have access to equal opportunities. One of the most important core principles is respect for human dignity, which means making sure every human being is treated with dignity and respect. HR professionals and leaders must know that workers are human beings, and all human rights principles apply to them as enshrined in constitutions and international treaties. People issues must be handled with the highest level of transparency and honesty. Lastly, privacy and confidentiality are core principles in HRM ethics as they ensure employees' information is protected from abuse. Other research from CIPD shows that the biggest pressure to compromise principles and ethics by HR professionals comes from senior stakeholders.

Why is Ethics Important in the Management of People?

The management of people in organizations requires extreme care due to the effect it may have on the individuals concerned. Ethics ensures fair treatment and equity. At the core of ethics in people management is the need to treat people with respect and create inclusive workplaces. Such practices help in creating a positive work culture.

The Importance of Ethics in HR

The importance of ethics in human resources management is due to globalization which has affected the organizational policies to work in the world economy; the growing competition which forces the company to find a competitive advantage and increase profitability. With the increasing scope of companies to do business at the international level, there is an increasing need to address the ethical issues dealing with human resources. The company now considers human resources as strategic importance and has considered being of competitive advantage for ethical decision-making. This is because it is imperative to ensure only appropriate information is used in decisions affecting the employment relationship.

What are the Benefits of Ethics?

Ethics play a significant role in society at large and in organizations. Organizations with sound ethical practices experience enhanced corporate culture, improved stakeholder relationships, and increased competitive advantage. Ethical practices lead to better human resources practices which also lead to better business performance.

Types of Ethics in HRM?

HR professionals need to adhere to various ethics as they deal with the multiple facets of human resources. The starting point in ethics is to adhere to professional ethics. These are ethics that are dictated by the profession. The values of honesty, integrity, and transparency are some of the profession-related ethics. The other type of ethics that HR professionals need to adhere to is organizational ethics. These are collective values and ethics that apply to everyone in the organization but are necessary to create a conducive work environment. CIPD has guidelines on ethics for HR professionals, and you need to follow them. The Society for Human Resources Management (SHRM) provides a code of ethics for HR Professionals, and it's worth reading.

What are the 5 Ethics in HRM?

The top 5 ethics in HRM are key to the sustainability of the organization and the management of human resources.

Fairness and Justice: HR is mandated to ensure that all human resources policies and practices uphold the principle of fairness and justice thereby promoting equity. This covers fair treatment in the hiring process, promotion, and all disciplinary processes.
Confidentiality: HR professionals and the whole HR process must be anchored on confidentiality. HR professionals are custodians of sensitive employee information which must be confidentially treated all the time.
Transparency: Given the significance of HR professionals and the extent to which they handle multitudes of employees on sensitive HR issues, it is only fair that they practice transparency in all their dealings with staff. Employees desire open and transparent communication about company policies and developments that affect them.
Respect for Individuals: This is one of the core principles of ethical human resources practices. Ensuring that every employee is treated with respect and dignity is key. It is a human right. Any organization that ill-treats its employees is likely to get a backlash from the community. This is why we see social media posts by employees sharing how they have been treated by employers. Even those who are exiting for whatever reason still need to be treated with respect.
Compliance with Laws and Regulations: Employers need to comply with the law. The costs of noncompliance are huge. Employers need to make a deliberate effort to keep up to date with legal developments that affect HR practices and ensure they comply fully.

What is the Role of HR in Ethics?

HR is key in developing ethical policies and promoting them throughout the organization. Johnson and Johnson are cited as an example of good practice when it comes to the role of HR in ethics. Research consistently shows that the role HR plays in ethics has a positive impact on the organization's ethical climate and business outcomes. The role of HR in ethics is well-studied. Top among one of the roles is to ensure all employees comply with ethical policies.

When employees join an organization, they need to understand how the business operates and how they, as employees, will be expected to contribute and behave within the organization. It is the Human Resources' responsibility to come up with employee handbooks that give guidance to employees on what is right and wrong. This increases employee trust within the organization which is important since people are organizations most valuable resource.

What is the Role of Professional Ethics in the Workplace?

Professional ethics are key in shaping the behavior of individuals. It helps promote harmonious and a fair workplace. Compliance with ethical standards helps create an environment where ethical behavior is a norm, and this has been found to lead to reduced staff turnover. Professional ethics help in creating decision frameworks that help organizations when making decisions including very difficult decisions. Overall professional ethics positively impact business outcomes.

What is the Role of Ethics in an Organization?

Research shows that companies that prioritize ethics are more profitable in the long term. One interesting study by the Ethisphere Institute shows that companies rated as the most ethical companies outperformed the large-cap sector.

Related: Become a Human Resources Consultant: Empowering Businesses with HR Solutions

Business Ethics in HR Management

Business ethics in human resource management deals with the affirmative moral obligations of the employer towards employees to maintain equality and equity justice. Areas of ethics in HRM include safety in the workplace, respect, fairness, privacy, basic human rights, justifiable treatment of employees, and honestly based processes in the workplace. As an example, employee monitoring is deemed necessary in many companies that work remotely. With ethical time tracking, employee productivity can be monitored in a more ethical way, by intentionally downgrading videos and pictures taken. The notion surrounding ethical decisions is thought of as an individual responsibility therefore once Human Resources navigates the ethical challenges of their job they will be able to effectively attract and retain a talented workforce.

Corporate Ethics in HRM

Corporate Ethics in HRM is key to the progress of any organization. I have first-hand experience with infractions of corporate ethics in HR. In one instance, the Board Chairman hired someone without following due process. The job was not advertised, and the person was not interviewed. They were given an offer letter which they signed quickly. After we raised concerns the Chairman wanted the process rectified post-event, but the process could not be reserved as the employee was already holding valid employment. This we refused because the recruitment policy was not followed. This led to the Chairman being dismissed for corrupt activities. Research shows that when HR is involved in ethics initiatives, there are positive outcomes for the organization. It is evident from research that effective ethical HRM practices increase the corporate reputation and aid in building a sustainable ethical organizational culture.

The importance of ethical practices in the management of human resources is paramount. Given that HR expenses are the biggest expense, it makes sense that HR practices are ethics driven. People are a major driver of productivity in any organization, and that makes ethical HR practices a top priority for the organization. It is prudent to practice ethical human resources management to avoid the consequences of unethical practices. The cost of unethical human resources practices can run into millions of dollars as organizations can be sued by employees and incur costs related to bad publicity. Some research shows that ethical HR practices do lead to a positive work environment. Ethical HR practices ensure compliance with statutory requirements and other relevant policies. Here are some of the good ethical human resources practices that advance good practices in HR.

Blind Hiring

A sizeable number of organizations now use blind hiring to ensure fairness and transparency. A Havard Review article reports that a survey of over 800 US organizations shows that 20% of HR practitioners in those organizations indicated that their organization uses blind hiring. Blind hiring is an ethical HR practice that is used to increase the diversity of candidates as it reduces bias and discrimination. The practice removes all demographic markers from candidates' profiles. A McKinsey study{336 public companies studied} found that companies in the top quartile in both gender and racial diversity had 35% better financial returns above the industry median. Research has consistently shown that candidates from minority groups get fewer interview call-ups. A study by the US National Bureau of Economic Research – which involved sending out 40,000 fictional job applications – found that the fictional workers aged 49-51 received 19 percent fewer responses than those aged 29-31. Those aged 64-66 received 35 percent more interview invitations than those aged 29-31. Research published in 2003 found that people with ethnic-sounding names needed to send out 50 percent more CVs than people with white-sounding names to get a call back from recruiters. The Korean government is one of the first national governments to introduce blind hiring.

Confidentiality and Data Protection

In human resources, keeping employee data confidential is key. Data protection laws have been enacted to advance this cause. Facebook's Cambridge Analytica scandal is a testament to what could go wrong if user data is not protected. It's a lesson to anyone who keeps confidential information, including human resources professionals.

Equal Pay Initiative

The Salesforce equal pay initiative is one of the good ethical practices in human resources. This philosophy shows Salesforce's commitment to equality and fairness, and this initiative started in 2015. To show that this is a serious initiative, the company annually conducts a pay equity analysis to address systemic disparities. They spotlight factors like race, gender, and ethnicity. Interestingly, in 2024, the company started reporting adjusted pay ratios focusing on gender and race. This case study showcases ethical human resources practices.

Ethical Termination

Uber faced serious backlash for its unethical employee termination. This calls on human resources professionals to ensure that the human resources practices they supervise are managed ethically. Anything short of that can lead to bad publicity and increased costs for the organization.

Diversity and Inclusion

Google has implemented numerous diversity and inclusion initiatives across the human resources value chain. The company is committed to creating an inclusive workplace. The Google Diversity and Inclusion Report showcases the results of these initiatives.

Addressing Discrimination and Harassment

Discrimination issues, sexual harassment, and unfair employment policies can land companies in trouble with consumers, potential strategic partners, and potential future employees. The questions of how employees should be treated, how they should be paid, how they should be trained, under what conditions they should be expected to work, how hard they should work, how they should be disciplined, and how their employees should be terminated, are fundamental to HRM. These are to be answered in the code of ethics designed by Human Resource professionals and ethical HR leaders must make tough decisions.

Integrating Ethics into HR Processes: Actionable Steps and Examples

Incorporating ethics into human resources remains a strategic imperative for any organization that employs people. This ensures that the organization operates with the highest level of integrity and fairness. Below are the action steps you can take to integrate ethics into human resources practices.

Recruitment and selection

Ethical practices in recruitment and selection start with developing inclusive job descriptions that are free from bias. Take time to ensure that your hiring process begins with an inclusive job description. This article shares the top tools you require to prepare inclusive job descriptions. When developing interview questions, use consistent and standardized questions. Each job candidate must be given an equal opportunity. Ask all candidates the same questions and in the same way. It also helps to ensure that your panel is made of diverse individuals. Microsoft is one company that has implemented the ethical practices highlighted above, as shown in its Annual Diversity Report.

Compensation and Benefits

Salesforce's fair pay initiative remains a good example of how to integrate ethical practices in human resources practice. They have invested heavily in eliminating unexplained differences in pay. Such an initiative shows their commitment to ethical human resources practices. Carry out a pay equity analysis every year to ensure that this issue is addressed more frequently.

Work-life balance

Google's work-life balance epitomizes the highest level of ethics in HR by focusing on the well-being of employees. Many employers neglect the wellness of their employees, but Google is an exception as it has a well-structured employee work-life balance program. Periodically your organization must carry out a work-life balance survey so that your interventions are structured in a way that supports real-life employees' wellness issues.

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