EMPLOYEES RIGHTS AND BUSINESS ETHICS

Management of human ‘resources’: an ethical problem between rights and duties

  • The term ‘human resource management’ and its implications have been a subject of intense debate in business ethics
  • Humans treated as important and costly resource
  • Consequently, employees are subject to a strict managerial rationale of minimising costs and maximising the efficiency of the ‘resource’

Rhetoric and reality in HRM

Rhetoric Reality
‘New working patterns’ Part-time instead of full-time jobs
‘Flexibility’ Management can do what it wants
‘Empowerment’ Making someone else take the risk and responsibility
‘Training and development’ Manipulation
‘Recognizing the contribution of the individual’ Undermining the trade union and collective bargaining
‘Teamworking’ Reducing the individual’s discretion
Based on Legge (1998)

Rights of employees as stakeholders of the firm

Employee rights Issues involved
Right to freedom from discrimination Equal opportunities, Affirmative action, Reverse discrimination, Sexual and racial harassment
Right to privacy Health and drug testing, Work-life balance, Presenteeism, Electronic privacy and data protection
Right to due process Promotion, Firing, Disciplinary proceedings
Right to participation and association Organization of workers in works councils and trade unions, Participation in the company’s decisions
Right to healthy and safe working conditions Working conditions, Occupational health and safety
Right to fair wages Pay, Industrial action, New forms of work
Right to freedom of conscience and speech Whistleblowing
Right to work Fair treatment in the interview, Non-discriminatory rules for recruitment

 

Employee duties Issues involved
Duty to comply with labour contract Acceptable level of performance

Work quality

Loyalty to the firm
Duty to comply with the law Bribery
Duty to respect the employer’s property Working time

Unauthorized use of company resources for private purposes

Fraud, theft, embezzlement

Duties of employees as stakeholders of the firm Discrimination

  • Discrimination in the business context occurs when employees receive preferential (or less preferential) treatment on grounds that are not directly related to their qualifications and performance in the job
  • Managing diversity prominent feature of contemporary business
  • Extensive legislation
  • Institutional discrimination: discrimination deeply embedded in business

Women in top management positions

Female Directors in FTSE 100 Companies 2000-2008

  2000 2004 2008
Female held directorships (in % of total directorships) 69

(5.8 %)

 110

(9.7 %)

 131

(11.7 %)
Female

executive directors

 11 17 17
Female

non-executive directors

 60 93 114
Companies with 2 women directors 14 19 39
Companies with no women director 42 31 22
Source: Singh, V. & S. Vinnicombe. 2007 & 2008

Sexual and racial harassment

  • Issues of diversity might be exploited to inflict physical, verbal, or emotional harassment
  • Regulation reluctant
  • Blurred line between harassment on one hand and ‘joking’ on the other
  • Influenced by contextual factors such as character, personality, and national culture
  • Companies increasingly introduced codes of practice and diversity programmes

Equal opportunities and affirmative action

  • How should organizations respond to problems of discrimination?
  • Equal opportunity programme
  • Generally targeted at ensuring procedural justice is promoted
  • Affirmative action (AA) programmes: deliberately attempt to target those who might be currently under­represented in the workforce
  • Recruitment policies
  • Fair job criteria
  • Training programmes for discriminated minorities
  • Promotion to senior positions

Reverse discrimination

  • In some cases, people suffer reverse discrimination because AA policies prefer certain minorities
  • Justification for reverse discrimination
  • Retributive justice: past injustices have to be ‘paid for’
  • Distributive justice: rewards such as job and pay should be allocated fairly among all groups (Beauchamp 1997)
  • Stronger forms of reverse discrimination tend to be illegal in many European countries

Employee privacy

  • Four different types of privacy we may want to protect (Simms 1994)
  • Physical privacy
  • Social privacy
  • Informational privacy
  • Psychological privacy

Health and drug testing

  • Highly contested issue
  • Three main issues
  • Potential to do harm
  • Causes of employee’s performance
  • Level of performance
  • Despite these criticisms, such tests have increasingly come common in the US

Electronic privacy and data protection

  • Increasingly relevant as technology advances and electronic ‘life’ becomes more important
  • Computer as a work tool enables new forms of surveillance
  • Time and pace of work
  • Usage of employee time for private reasons
  • E-mail and internet
  • Issue of privacy in situations where data is saved and processed electronically
  • Data protection

Due process and lay-offs

  • Ethical considerations in the process of downsizing
  • Right to know well ahead of the actual point of the redundancy that their job is on the line
  • Compensation packages employees receive when laid off

Employee participation and association

  • Recognition that employees might be more than just human ‘resources’ but should also have a certain degree of influence on their tasks, job environments, and company goals – right to participation
  • Financial participation – allows employee share in the ownership or income of the corporation
  • Operational participation can include a number of dimensions:
  • Delegation
  • Information
  • Consultation
  • Codetermination

Evolution of trade union membership

Based on Visser, 2006: 45

Working conditions

  • Right to healthy and safe working conditions one of the very first ethical concerns for employees
  • Dense network of health, safety and environmental (HSE) regulation
  • Main issue is enforcement and implementation
  • Newly emergent HSE issues relate to changing patterns of work
  • Ethical issues in the context of:
  • Excessive working hours and presenteeism
  • Flexible working patterns

Excessive working hours and presenteeism

Excessive work hours

  • Thought to impact the employee’s overall state of physical and mental health ‘Presenteeism’
  • phenomenon of being at work when you should be at home due to illness or even just for rest and recreation (Cooper 1996)

Flexible working patterns

  • Another way of saying that management can do what it wants? (Legge, 1998)
  • ‘Non-standard’ work relationships
  • Part-time work, temporary work, self-employment and teleworking (Stanworth 2000)
  • Less secure legal status for periphery workers
  • Potential for:
  • Poorer working conditions
  • Increased insecurity
  • Lower pay
  • Exclusion from training and other employment benefits

Fair wages

  • The basis for determining fair wages is commonly the expectations placed on the employee and their performance towards goals
  • Note discussion about excessive compensation for executives after the stock market collapse of 2008
  • Problems of performance-related pay (PRP)
  • Risk
  • salaries and benefits become less secure
  • Representation
  • individualized bargaining

Freedom of conscience and freedom of speech in the workplace

  • Normally guaranteed by governments
  • Situations in business where freedom of speech might face certain restrictions
  • Speaking about ‘confidential’ matters related to the firm’s R&D, marketing or accounting plans
  • Usually unproblematic, since most rational employees would find it in their own best interests to comply with company policy
  • Some cases where those restrictions could be regarded as a restriction of employee’s rights
  • Whistleblowing – can involve considerable risk

The right to work

  • Fundamental entitlement of human beings established in the Declaration of Human Rights
  • The right to work in a business context cannot mean that every individual has a right to be employed
  • The right to work should result in every individual facing the same equal conditions in exerting this right

Employing people worldwide

The ethical challenges of globalization

National culture and moral values

  • Different cultures will view employee rights and responsibilities differently
  • This means that managers dealing with employees overseas need to first understand the cultural basis of morality in that country
  • Raises the question of whether it is fair to treat people differently on the basis of where they live – Relativism vs. absolutism
  • Absolutism: ethical principle must be applicable everywhere
  • Relativism: view of ethics must always be relative to the historical, social and cultural context

The ‘race to the bottom’

  • Many critics argue that MNCs play a role in changing standards in countries
  • Globalisation allows corporations to have broad range of choice of location
  • Developing countries compete to attract foreign investment
  • Large investors tend to choose country with most ‘preferable’ conditions
  • Lowest level of regulation and social provision for employee
  • Leads to ‘race to the bottom’ in environmental and social standards
  • Argument that MNEs have a duty to promote minimally just social & political institutions where they operate if these do not exist, because of duty to avoid harm (Nien-he Hsieh, 2009)

Migrant labour and illegal immigration

  • Growing mobility of workers is a recent phenomenon of globalization
  • Typically north-south, can also be in other regions (e.g. UAE)
  • Workers can also be attracted to particular industries in areas where there is no local labour (e.g. mining)
  • Numerous ethical issues here. Examples:
  • Migrant labour often leads to questionable social phenomena (e.g. drug use)
  • Migrants are often from poor countries; willing to accept pay & working conditions normally unacceptable in host country
  • Migrant workers are often in a country illegally (but a record of employment may later be the basis for legal residency)

The corporate citizen and employee relations

The corporate citizen and employee relations in a global context

  • Anglo-American and European models: differences
  • Continental Europe takes interest of employees into account to a greater degree than the Anglo-American model
  • ‘Co-determination’
  • In developing countries
  • Level of regulation (or at least enforcement) is often poor, though employee protection often strengthens over time (e.g. China’s 2008 Labour Contract Law)
  • Corporate actions therefore often voluntary ‘good citizenship’
  • Ruggie’s framework for responsibility in human rights
  • Protect (states’ duty to prevent abuses)
  • Respect (firms’ duty to respect human rights)
  • Remedy (general duty to create systems to remedy abuses)

Towards sustainable employment

Re-humanized workplaces

  • ‘Alienation’ of the individual work in the era of industrialised mass production
  • Brought tremendous efficiencies and material wealth, but have also created the prospect of a dehumanised and deskilled workplace
  • Attempts to re-humanize the workplace
  • ‘empowering’ the employee
  • ‘job enlargement’
  • ‘job enrichment’
  • Success of such schemes contested
  • Suggested that ‘humanized’ approach might be more appropriate and effective in some cultures (e.g. Scandinavia) than others

Wider employment

  • Large numbers of unemployed people becomes the norm in many countries due to mechanisation
  • This threatens:
  • Right to work
  • Social fabric of particular communities
  • New technologies herald the ‘end of work’? (Rifkin 1995)
  • From sustainability perspective: ensure that what work exists is shared out more equitably

Green jobs

  • ‘Green jobs’ are:
  • In industries making environmentally-friendly products
  • Workplace & organization of labour is also more environmentally sustainable
  • Gained attention in late 2000s; part of broader debate on restructuring economies to be more sustainable
  • Examples of specific measures:
  • Car-pooling
  • Paperless office
  • Video-conferencing rather than business travel
  • Home-based teleworking
  • Potential benefits are social, economic and ecological

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