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© 2005 Prentice Hall Inc. All rights reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama t e n t h e d i t i o n Gary Dessler Part 5 Employee Relations Chapter 14 Ethics, Justice, and Fair Treatment in HR Management
After studying this chapter, you should be able to: 1. Explain what is meant by ethical behavior at work. 2. Discuss important factors that shape ethical behavior at work. 3. Describe at least four specific ways in which HR management can influence ethical behavior at work. 4. Employ fair disciplinary practices. 5. List at least four important factors in managing dismissals effectively. 1. Explain what is meant by ethical behavior at work. 2. Discuss important factors that shape ethical behavior at work. 3. Describe at least four specific ways in which HR management can influence ethical behavior at work. 4. Employ fair disciplinary practices. 5. List at least four important factors in managing dismissals effectively. © 2005 Prentice Hall Inc. All rights reserved. 14–2
© 2005 Prentice Hall Inc. All rights reserved.14–3 Ethics and Fair Treatment at Work Ethics –The principles of conduct governing an individual or a group; specifically, the standards you use to decide what your conduct should be. –Ethical behavior depends on the persons frame of reference.
© 2005 Prentice Hall Inc. All rights reserved.14–4 The Wall Street Journal Workplace-Ethics Quiz Figure 14–1 Source: Wall Street Journal, October 21, 1999, pp. B1–B4; Ethics Officer Association, Belmont, MA; Ethics Leadership Group, Wilmette, IL; surveys sampled a cross-section of workers at large companies and nationwide.
© 2005 Prentice Hall Inc. All rights reserved.14–5 Factors affecting ethical decisions Normative judgments –Judging something as good or bad, right or wrong, better or worse. Moral standards (Morality) –Societys accepted standards for behaviors that have serious consequences to its well-being. Behaviors that cannot be established or changed by decisions of authoritative bodies. Behaviors that override self-interest.
© 2005 Prentice Hall Inc. All rights reserved.14–6 Ethics and Fair Treatment at Work (contd) Ethics and the law –An behavior may be legal but unethical. –An behavior may be illegal but ethical. –An behavior may be both legal and ethical. –An behavior may be both illegal and unethical.
© 2005 Prentice Hall Inc. All rights reserved.14–7 Ethics, Fair Treatment, and Justice Distributive justice –The fairness and justice of a decisions result. Procedural justice –The fairness of the process by which the decision was reached. Interactional (interpersonal) justice –The manner in which managers conduct their interpersonal dealings with employees.
© 2005 Prentice Hall Inc. All rights reserved.14–8 Perceptions of Fair Interpersonal Treatment Scale Figure 14–2 Sources: Michelle A. Donovan et al., The Perceptions of Their Interpersonal Treatment Scale: Development and Validation of a Measure of Interpersonal Treatment in the Workplace, Journal of Applied Psychology 83, no. 5 (1998), p Copyright © 1997 by Michelle A. Donovan, Fritz Drasgow, and Liberty J. Munson at the University of Illinois at Urbana-Champaign. All rights reserved.
© 2005 Prentice Hall Inc. All rights reserved.14–9 What Shapes Ethical Behavior at Work? Individual factors Organizational factors The bosss influence Ethics policies and codes The organizations culture
© 2005 Prentice Hall Inc. All rights reserved.14–10 Employees and Ethical Dilemmas Questions employees should ask when faced with ethical dilemmas: –Is the action legal? –Is it right? –Who will be affected? –Does it fit the companys values? –How will it feel afterwards? –How will it look in the newspaper? –Will it reflect poorly on the company?
© 2005 Prentice Hall Inc. All rights reserved.14–11 Principal Causes of Ethical Compromises Table 14–1 Sources: O.C. Ferrell and John Fraedrich, Business Ethics, 3rd ed. (New York: Houghton Mifflin, 1997), p. 28; adapted from Rebecca Goodell, Ethics in American Business: Policies, Programs, and Perceptions (1994), p. 54. Permission provided courtesy of the Ethics Resource Center, th Street NW, Washington, DC: Note: 1 is high, 9 is low.
© 2005 Prentice Hall Inc. All rights reserved.14–12 What Is Organizational Culture? Organization culture –The characteristic values, traditions, and behaviors a companys employees share. How is culture is revealed? –Ceremonial events –Written rules and spoken commands. –Office layout –Organizational structure –Dress codes –Cultural symbols and behaviors –Figureheads
© 2005 Prentice Hall Inc. All rights reserved.14–13 The Managers Role in Creating Culture Clarify expectations for values to be followed. Use signs and symbols to signal the importance of values. Provide physical (the firms rewards) support for values. Use stories to illustrate values. Organize rites and ceremonies reinforcing values
© 2005 Prentice Hall Inc. All rights reserved.14–14 HRs Role in Fostering Ethics and Fair Treatment Why treat employees fairly? –Theyre not employees, theyre people Management guru Peter Drucker –Avoidance of employee litigation –Enhanced employee commitment –Enhanced satisfaction with the organization, with jobs, and with leaders –Increased organizational citizenship behaviors
© 2005 Prentice Hall Inc. All rights reserved.14–16 HR Ethics Activities Staffing and selection –Fostering the perception of fairness in the processes of recruitment and hiring of people. Formal procedures Interpersonal treatment Providing explanation Training –How to recognize ethical dilemmas. –How to use ethical frameworks (such as codes of conduct) to resolve problems. –How to use HR functions (such as interviews and disciplinary practices) in ethical ways.
© 2005 Prentice Hall Inc. All rights reserved.14–17 HR Ethics Activities (contd) Performance appraisal –Appraisals that make it clear the company adheres to high ethical standards by measuring and rewarding employees who follow those standards. Reward and disciplinary systems –The organization swiftly and harshly punishes unethical conduct. Workplace aggression and violence –Taking care that HR actions do not foster perceptions of inequities that translate into dysfunctional behaviors by employees.
© 2005 Prentice Hall Inc. All rights reserved.14–18 The Role of Training in Ethics Figure 14–5
© 2005 Prentice Hall Inc. All rights reserved.14–19 The Role of Training in Ethics (contd) Figure 14–5 (contd)
© 2005 Prentice Hall Inc. All rights reserved.14–20 Building Two-Way Communications Perceptions of fair treatment depend on: –Engagementinvolving individuals in the decisions that affect them by asking for their input and allowing them to refute the merits of others ideas and assumptions –Explanationensuring that everyone involved and affected understands why final decisions are made and the thinking that underlies the decisions –Expectation claritymaking sure everyone knows up front by what standards they will be judged and the penalties for failure.
© 2005 Prentice Hall Inc. All rights reserved.14–21 Employee Discipline and Privacy Basis for a fair and just discipline process –Clear rules and regulations Define workplace issues Inform employees –A system of progressive penalties The range and severity of the penalty is a function of the offense and number of occurrences. –An appeals process The right of the employee to grieve the decision helps to ensure that supervisors mete out discipline fairly and equitably.
© 2005 Prentice Hall Inc. All rights reserved.14–22 Disciplining an Employee Does the facts support the charge of employee wrongdoing? Were the employees due process rights protected? Was the employee warned of disciplinary consequences? Was a rule violated and was it reasonably related to the efficient and safe operation of the work environment? Was the matter fairly and adequately investigated before administering discipline? Did the investigation produce substantial evidence of misconduct? Have rules, orders, or penalties been applied evenhandedly? Is the penalty reasonably related to the misconduct and to the employees past work history? Did the employee have the right to counsel? Did anger, hearsay, or personal impression affect the decision?
© 2005 Prentice Hall Inc. All rights reserved.14–23 Disciplinary Action Form I Figure 14–6 Source: Reprinted with permission of the publisher, HRNext.com. Copyright HRNext.com, 2003.
© 2005 Prentice Hall Inc. All rights reserved.14–24 Employee Grievance Form Figure 14–6 Source: NC State University. Used with permission.
© 2005 Prentice Hall Inc. All rights reserved.14–25 Formal Disciplinary Appeals Processes FedExs guaranteed fair treatment multi-step program –Step 1: Management review –Step 2: Officer complaint –Step 3: Executive appeals review
© 2005 Prentice Hall Inc. All rights reserved.14–26 Discipline without Punishment (Nonpunitive Discipline) 1.Issue an oral reminder. 2.Should another incident arise within six weeks, issue a formal written reminder, a copy of which is placed in the employees personnel file. 3.Give a paid, one-day decision-making leave. 4.If no further incidents occur in the next year, the purge the one-day paid suspension from the persons file. If the behavior is repeated, the next step is dismissal.
© 2005 Prentice Hall Inc. All rights reserved.14–27 Employee Privacy Employee privacy violations upheld by courts: –Intrusion (locker room and bathroom surveillance) –Publication of private matters –Disclosure of medical records –Appropriation of an employees name or likeness Actions triggering privacy violations: –Background checks –Monitoring off-duty conduct and lifestyle –Drug testing –Workplace searches –Monitoring of workplace
© 2005 Prentice Hall Inc. All rights reserved.14–28 Employee Privacy (contd) What do employers monitor about employees: – activity –Internet use –Telephone calls Employers monitor employees to: –Improve productivity. –Protect from computer viruses –Detect leaks of confidential information –Guard against liability for illegal acts and harassment suits caused by employee misuse
© 2005 Prentice Hall Inc. All rights reserved.14–29 Restrictions on Workplace Monitoring The Electronic Communications Privacy Act (ECPA) –The business purpose exception permits employers to monitor communications if they can show a legitimate business reason for doing so. –The consent exception allows employers to monitor communications if they have their employees consent to do so. Common-law provides protections against invasion of privacy.
© 2005 Prentice Hall Inc. All rights reserved.14–30 Sample Telephone Monitoring Acknowledgement Statement Figure 14–8 Source: Reprinted with permission from Bulletin to Management (BNA Policy and Practice Series) 48, no. 14, Part II, (April 3, 1997), p. 7. Copyright 1997 by The Bureau of National Affairs, Inc.
© 2005 Prentice Hall Inc. All rights reserved.14–31 Managing Dismissals Dismissal –Involuntary termination of an employees employment with the firm. Terminate-at-will rule –Without a contract, the employee can resign for any reason, at will, and the employer can similarly dismiss the employee for any reason (or no reason), at will. –Limitations on terminate-at-will Violation of public Implied contract Good faith
© 2005 Prentice Hall Inc. All rights reserved.14–32 Managing Dismissals (contd) Limitations on terminate-at-will –Public policy exception Discharge is wrongful when it was against an explicit, well-established public policy: employee fired or refusing to break the law. –Implied contract exception Employer statements about future employment create a contractual obligation for the employer to continue to employ the employee. –Covenant of good faith exception Suggests that employers should not fire employees without good cause.
© 2005 Prentice Hall Inc. All rights reserved.14–33 Grounds for Dismissal Unsatisfactory performance –Persistent failure to perform assigned duties or to meet prescribed standards on the job. Misconduct in the workplace –Deliberate and willful violation of the employers rules: stealing, rowdy behavior, and insubordination. Lack of qualifications for the job –An employees inability to do the assigned work although he or she is diligent. Changed requirements or elimination of the job. –An employees inability to do the work assigned, after the nature of the job has changed. –Elimination of the employees job.
© 2005 Prentice Hall Inc. All rights reserved.14–34 Insubordination 1.Direct disregard of the bosss authority. 2.Flat-out disobedience of, or refusal to obey, the bosss orders particularly in front of others. 3.Deliberate defiance of clearly stated company policies, rules, regulations, and procedures. 4.Public criticism of the boss. Contradicting or arguing with him or her is also negative and inappropriate. 5.Blatant disregard of reasonable instructions. 6.Contemptuous display of disrespect and, portraying these feelings while on the job. 7.Disregard for the chain of command, shown by going around the immediate supervisor or manager with a complaint, suggestion, or political maneuver. 8.Participation in (or leadership of ) an effort to undermine and remove the boss from power.
© 2005 Prentice Hall Inc. All rights reserved.14–35 Managing Dismissals (contd) Foster a perception of fairness in the dismissal situation by: –Instituting a formal multi-step procedure (including warning). –Having a supervising manager give full explanations of why and how termination decisions were made. –Establishing a neutral appeal process also fosters fairness.
© 2005 Prentice Hall Inc. All rights reserved.14–36 Avoiding Wrongful Discharge Suits Bases for wrongful discharge suits: –Discharge does not comply with the law. –Discharge does not comply with the contractual arrangement stated or implied by the firm via its employment application forms, employee manuals, or other promises. Avoiding wrongful discharge suits –Set up employment policies and dispute resolution procedures that make employees feel treated fairly. –Do the preparatory work that helps to avoid such suits.
© 2005 Prentice Hall Inc. All rights reserved.14–37 Typical Severance Pay Nonexempt employeeone week of pay for each year with a minimum of four weeks and maximum of two months. Exempt employee to $90,000two weeks for each year with a minimum of two months and a maximum of six months. Exempt employee over $90,000 to director or VP leveltwo to three weeks for each year with a minimum of three months and maximum of nine months. Director or VP to company officerthree weeks for each year with a minimum of four months and maximum of a year. Officerusually covered by an employment contract or Change of Control provisions and can be all the way from one year of pay to three or four years, with other perks that may be continued. Figure 14–9 Source: downloaded March 6, 2004.
© 2005 Prentice Hall Inc. All rights reserved.14–38 Steps in Avoiding Wrongful Discharge Suits Have applicants sign the employment application and make sure it contains a clearly worded statement that employment is for no fixed term and that the employer can terminate at any time. Review your employee manual to look for and delete statements that could prejudice your defense in a wrongful discharge case. Have clear written rules listing infractions that may require discipline and discharge, and then make sure to follow the rules. If a rule is broken, get the workers side of the story in front of witnesses, and preferably get it signed. Then make sure to check out the story, getting both sides of the issue. Be sure to appraise employees at least annually. If an employee shows evidence of incompetence, give that person a warning and provide an opportunity to improve. All evaluations should be in writing and signed by the employee. Keep careful confidential records of all actions such as employee appraisals, warnings or notices, memos outlining how improvement should be accomplished, and so on.
© 2005 Prentice Hall Inc. All rights reserved.14–39 Steps in Avoiding Wrongful Discharge Suits (contd) A final 10-step checklist would include: 1.Is employee covered by any type of written agreement, including a collective bargaining agreement? 2.Have any representations been made to form a contract? 3.Is a defamation claim likely? 4.Is there a possible discrimination allegation? 5.Is there any workers compensation involvement? 6.Have reasonable rules and regulations been communicated and enforced? 7.Has employee been given an opportunity to explain any rule violations or to correct poor performance? 8.Have all monies been paid within 24 hours after separation? 9.Has employee been advised of his or her rights under COBRA? 10.Has employee been advised of what the employer will tell a prospective employer in response to a reference inquiry?
© 2005 Prentice Hall Inc. All rights reserved.14–40 TJP Inc. Employee Handbook Acknowledgment Form Figure 14–10
© 2005 Prentice Hall Inc. All rights reserved.14–41 Personal Supervisory Liability Avoiding personal supervisory liability: –Be familiar with federal, state, and local statutes and know how to uphold their requirements. –Follow company policies and procedures –Be consistent application of the rule or regulation is important. –Dont administer discipline in a manner that adds to the emotional hardship on the employee. –Do not act in anger. –Utilize the HR department for advice regarding how to handle difficult disciplinary matters.
© 2005 Prentice Hall Inc. All rights reserved.14–42 The Termination Interview Plan the interview carefully. –Make sure the employee keeps the appointment time. –Never inform an employee over the phone. –Allow 10 minutes as sufficient time for the interview. –Use a neutral site, never your own office. –Have employee agreements, the human resource file, and a release announcement (internal and external) prepared in advance. –Be available at a time after the interview in case questions or problems arise. –Have phone numbers ready for medical or security emergencies.
© 2005 Prentice Hall Inc. All rights reserved.14–43 The Termination Interview (contd) Get to the point. –Do not beat around the bush by talking about the weather or making other small talk. –As soon as the employee enters, give the person a moment to get comfortable and then inform him or her of your decision. Describe the situation. –Briefly explain why the person is being let go. –Remember to describe the situation rather than attack the employee personally –Emphasize that the decision is final and irrevocable.
© 2005 Prentice Hall Inc. All rights reserved.14–44 The Termination Interview (contd) Listen. –Continue the interview until the person appears to be talking freely and reasonably calmly about the reasons for his or her termination and the support package (including severance pay). Review all elements of the severance package. –Describe severance payments, benefits, access to office support people, and the way references will be handled. However, under no conditions should any promises or benefits beyond those already in the support package be implied.
© 2005 Prentice Hall Inc. All rights reserved.14–45 The Termination Interview (contd) Identify the next step. –The terminated employee may be disoriented and unsure what to do next. –Explain where the employee should go next, upon leaving the interview.
© 2005 Prentice Hall Inc. All rights reserved.14–46 Termination Assistance Outplacement Counseling –A systematic process by which a terminated employee is trained and counseled in the techniques of conducting a self-appraisal and securing a new job appropriate to his or her needs and talents. Outplacement does not imply that the employer takes responsibility for placing the person in a new job. Outplacement counseling is part of the terminated employees support or severance package and is often done by specialized outside firms.
© 2005 Prentice Hall Inc. All rights reserved.14–47 Termination Assistance (contd) Outplacement firms –Can help the employer devise its dismissal plan regarding: How to break the news to dismissed employees. Deal with dismissed employees emotional reactions. Institute the appropriate severance pay and equal opportunity employment plans.
© 2005 Prentice Hall Inc. All rights reserved.14–48 Interviewing Departing Employees Exit Interview –Its aim is to elicit information about the job or related matters that might give the employer a better insight into what is rightor wrongabout the company. The assumption is that because the employee is leaving, he or she will be candid. The quality of information gained from exit interviews is questionable.
© 2005 Prentice Hall Inc. All rights reserved.14–49 Exit Interview Questions How were you recruited? Why did you join the company? Was the job presented correctly and honestly? Were your expectations met? What was the workplace environment like? What was your supervisors management style like? What did you like most/least about the company? Were there any special problem areas? Why did you decide to leave, and how was the departure handled?
© 2005 Prentice Hall Inc. All rights reserved.14–50 The Plant Closing Law Worker Adjustment and Retraining Notification Act (1989) –Requires employers of 100 or more employees to give 60 days notice before closing a facility or starting a layoff of 50 people or more. –The law does not prevent the employer from closing down, nor does it require saving jobs. –The law is intended to give employees time to seek other work or retraining by giving them advance notice of the shutdown.
© 2005 Prentice Hall Inc. All rights reserved.14–51 The Plant Closing Law (contd) Worker Adjustment and Retraining Notification Act (1989) –Employment losses covered by the law: Terminations other than discharges for cause, voluntary departures, or retirement Layoffs exceeding six months Reductions of more than 50% in employees work hours during each month of any six-month period. –Penalty for failing to give notice One days pay and benefits to each employee for each days notice that should have been given, up to 60 days.
© 2005 Prentice Hall Inc. All rights reserved.14–52 Layoffs Layoff are not terminations. Temporary layoffs occur when: –There is no work available for employees. –Management expects the no-work situation to be temporary and probably short term. –Management intends to recall the employees when work is again available.
© 2005 Prentice Hall Inc. All rights reserved.14–53 Bumping/Layoff Procedures Seniority is usually the ultimate determinant of who will work. Seniority can give way to merit or ability, but usually only when no senior employee is qualified for a particular job. Seniority is usually based on the date the employee joined the organization, not the date he or she took a particular job. Companywide seniority allows an employee in one job to bump or displace an employee in another job, provided the more senior person can do the job without further training.
© 2005 Prentice Hall Inc. All rights reserved.14–54 Alternatives to Layoffs Voluntarily reducing employees pay to keep everyone working. Concentrating employees vacations during slow periods. Taking voluntary time off to reduce the employers payroll. Taking a rings of defense approach by hiring temporary workers that can be let go early. Offering buyout packages to find enough volunteers to avoid dismissing people.
© 2005 Prentice Hall Inc. All rights reserved.14–55 Adjusting to Downsizings and Mergers Guideline for implementing a reduction in force: –Identify objectives and constraints. –Form a downsizing team. –Address legal issues. –Plan post-reduction actions. –Address security concerns.
© 2005 Prentice Hall Inc. All rights reserved.14–56 Adjusting to Downsizings and Mergers (contd) Guidelines for treatment of departing employees during a merger: –Avoid the appearance of power and domination. –Avoid win–lose behavior. –Remain businesslike and professional. –Maintain a positive feeling about the acquired company. –Remember that how the organization treats the acquired group will affect those who remain.
© 2005 Prentice Hall Inc. All rights reserved.14–57 Employee Morale and Behavior Improves When Justice Prevails Source: Tony Simons and Quinetta Roberson, " Why Managers Should Care about Fairness. The Effects of Aggregate Justice Perceptions on Organizational outcomes, Journal of Applied Psychology 88, no. 3 (2003), p. 432.
© 2005 Prentice Hall Inc. All rights reserved.14–58 Figure 14–12 HR Scorecard for Hotel Paris International Corporation* Note: *(An abbreviated example showing selected HR practices and outcomes aimed at implementing the competitive strategy, To use superior guest services to differentiate the Hotel Paris properties and thus increase the length of stays and the return rate of guests and thus boost revenues and profitability)
© 2005 Prentice Hall Inc. All rights reserved.14–59 Key Terms ethics distributive justice procedural justice interactional (interpersonal) justice organizational culture nonpunitive discipline Discipline without punishment Electronic Communications Privacy Act (ECPA) dismissal unsatisfactory performance misconduct insubordination wrongful discharge termination interview outplacement counseling exit interviews bumping/layoff procedures downsizing
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