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Chapter 6
Ethical Issues in Human
Resource Management
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Definition of HRM
• HRM is a management function involving the
recruitment of suitable human resources, training,
developing and sustaining their competencies,
motivating them, offering them rewards on a
rational and equitable basis, and ensuring their
continued commitment to the organization for
achieving its overall objectives.
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Genesis and Growth of Human Resource
Management
• 1890–1910 – Fredrick W. Taylor formulated scientific
management, which included a careful selection of
employees; finding out the best method of doing the job;
systematic training of workers; provision of suitable
implements; and giving adequate rewards for good
performance.
• 1910–1930 – Greater importance to welfare of workers,
emergence of industrial psychology and improvements in
the mode of recruitment procedures.
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Genesis and Growth of Human Resource
Management (Contd.)
• 1930–1945 – Principle of Hawthorne studies gains
momentum in personnel management in an industrial
organization. Greater emphasis given to motivating
factors affecting worker productivity.
• 1945–1965 – More emphasis on collective bargaining
and labour relations. Compensation and benefits gained
importance as unions negotiated for and obtained paid
vacations, paid holidays and insurance coverage.
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Genesis and Growth of Human Resource
Management (Contd.)
• 1965–1985 – Equal employment opportunity and
affirmative action became crucial human resource
management responsibilities
• 1985–2005 – Increased diversity of the labour force, in
terms of age, gender, race and ethnicity; globalization of
business and the accompanying technological revolution;
focus on HRM as a “strategic function”.
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Big Scope of HRM
The vast scope of HRM can be summarized to include the
following seven functions:
•Determining human resource needs;
•Attracting potential employees;
•Choosing employees;
•Teaching/preparing;
•Rewarding;
•Evaluating performance; and
•Creating a positive work environment.
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Different Aspects of HRM
• Recruitment
• Training and development
• Learning organizations
• Performance management
• Pay
• Team work
• Motivation
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Emerging Challenges of HRM
Some of the challenges that confront HR professionals and
their roles in organizations and the industrial scenario are:
[Link] of markets and intensification of competition
has made employers and employees conscious of their
changing and strategic roles in organizations;
[Link] restructuring has become an absolute necessity
for organizations;
[Link] for reconciling to multiple work ethos as a result of
mergers and acquisitions;
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Emerging Challenges of HRM (Contd.)
e. Emphasis on total quality management;
f. Changing job profiles and the need for and ability to get
adjusted to them;
g. Adoption to changing workforce profile consequent on
structural changes;
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Emerging Challenges of HRM (Contd.)
h. Increasing role of women employees in organizations;
i. Increasing use of Information Technology that is altering
the very nature of work delivery in organizations; and
j. Increasing emphasis on knowledge management and the
need for acquisition and use of knowledge to keep pace
with the fast changing world.
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
HR-related Ethical Issues
• Discrimination issues
• Suppression of democratization in the workplace
• Privacy issues
Recruitment and selection
Performance tracking
Privacy issues of computerized employee records
Electronic surveillance
• Safety and health
• Performance appraisals
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Role of HRM in
Creating an Ethical Organization
• The top management should be committed to ethical
behaviour.
• They should be the role models to their employees.
• The organization should evolve codes of ethics for its
employees and enforce them.
• Ethics committees should be formed with top executives
as members to advice on ethical issues.
Business Ethics and Corporate Governance, 2e A. C. Fernando
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.
Role of HRM in
Creating an Ethical Organization (Contd.)
• Company journals to publish articles on ethical issues
and pose hypothetical ethical dilemmas and discussions
on how to resolve these.
• An ethics office with ethics officers to oversee the
process and help communicate policy to employees.
• Organize employee ethics training which can play an
integral role in ensuring compliance with the ethics code.
• A disciplinary system to deal with ethical violations
promptly and decisively.
Business Ethics and Corporate Governance, 2e A. C. Fernando