employees & business ethics-iv

8/8/2019 Employees & Business Ethics-IV

1/10

PCV 1

Employees & Business Ethics


2/10

PCV 2

Employee as a stakeholder Employees are closely integrated into the firm, whereas shareholders

basically own all material and immaterial assets of a firm. Employees represent the company towards most other stakeholders and

act in the name of the organization towards them.

This essential contribution, as well as the fact that employees benefitfrom the existence of their employers, and are quite clearly affected bythe success or otherwise of their company , is widely regarded to give

employees some kind of definite stake in the organization. This brings out the focus on the legal as well as economic side of the

relation between employees and the organization.

On the legal level there is some kind of contract between theorganization and employee which stipulates rights and duties of the twoparties.

Although some sort of legal stipulation binds all the stakeholders, theemployee-organization relationship is peculiar in a sense that it hastraditionally been a subject of governmental regulation since the onsetof industrial revolution.


3/10

PCV 3

Economic Dimension in the Relationship

The relationship between the employee andorganization is characterized by some externalities onboth sides.

There are costs to each that are not included in the

employment contract. These hidden costs ,at times, lead to situations of

asset specificity that is, employees invest time andeffort in developing assets specific to a particular

employer, and vice versa. Such specificity can create a moral hazard for both

parties, opening up a wide range of ethical issues.


4/10

PCV 4

Hazards of Specificity

Commitment required by a job may involve a physical move

to a new town, a shakeup of circle of friends, an investment in

education or special training etc.

Long periods of working for a company may result in a

considerable amount of dependency on the organization and

employer can become the financial basis of employeesexistence. Similarly, much of the employees knowledge might

become related to one particular organization, meaning that

redundancy could set in and be disastrous for their career.

Another aspect is about making a living for having a job, thisresults in considerable amount of dependency of the employee

on his employer.


5/10

PCV 5

On the part of Employers

Inability to predict 100% of the activities of employees leads the employersto tightly monitor and control employees behavior.

Increasing shift from low skilled , manufacturing related work to moreknowledge based service economy has given birth to a situation where aconsiderable amount of value creation is carried out by highly skilledspecialists whose knowledge the company can only partly control. Constantrisk of poaching by competitors threatening companys competitiveadvantage is a constant danger.

It is very difficult to fully discover the true capabilities of a futureemployee. Uncertainty always lurks behind a new hiring whether theinvestment in the new employee will be rewarding or not.,

Some of the moral hazards of employer-employee relationships, thus, have

not been subjected to legislation, and hence a subject of ethicalconsideration more than a contractual obligation.

This, in turn, makes us look at the ethical issues involved in thestakeholder relationships..


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PCV 6

Ethical Issues

The HRM considers the humans as an importantresource, and in most cases the most costly one.

Consequently, employees are subject to a strict

managerial rationale of minimizing costs and

maximizing the efficiency of this resource. Ethical dilemma in HRM lies in the fact that people

in the firm , under economic criteria , are nothing else

than a resource, next to and often competing with

other resources like new technology or cheaperresources from overseas.


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PCV 7

The Rhetoric and Reality in HRM

New Working Patterns

Flexibility

Empowerment

Training and Development

Recognizing the contribution of

the Individual

Team-working

Part-time instead of full time

Management can do what it wants

Making someone else take the risk &

responsibility

Manipulation

Undermining trade union and

collective bargaining

Reducing the individuals discretion


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PCV 8

Employee Rights and Issues involved

Right to Freedom fromdiscrimination

Right tp privacy- (Physical, Social,Informational, Psychological)

Right to due process

Right to participation and

association Right to healthy & safe working

conditions

Right to fair wages

Right to freedom of conscience &speech

Right to work

Equal opportunities

Affirmative action

Reverse discrimination Sexual &racial discrimination

Health & drug testing

Work-life balance

Presenteeism

Electronic privacy and data protection

Promotion

Firing Disciplinary proceedings

Organization of workers in councils &trade unions

Participation in companys decisions

Working conditions

Occupational health & safety

Pay New forms of work

Whistleblowing

Fair treatment in interview

Non-discriminatory rules forrecruitment.


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PCV 9

Employee Duties & Issues as stakeholders

Duty to comply with laborcontract

Duty to comply with law

Duty to respect theemployers property

Acceptable level ofperformance

Work Quality

Loyalty to the firm

Bribery

Working time

Unauthorized use ofcompany resources for

private purposes Fraud,theft and

embezzlement.


10/10

PCV 10

Some Yardsticks for Ethical Decision-making

Issues are more a subject matter of debate than a

consensus.- Re-humanize workplaces, Wider

Employment, Work-life balance.

Human rights as a basic compass for providing

direction (Universal Declaration of Human Rights ratified in 1948through UN)

Difference in wages and labor conditions whether

due to the economic development of the developing

country

employees & business ethics-iv

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