Ethics in Human

ResourcesModule 1

Ethics and HR Management

Firms with High Ethical StandardsAre more likely to reach strategic goals.Are viewed more positively by stakeholdersAre better able to attract and retain human

resources.Ethics and Global Differences

Different legal, political, and cultural factors in other countries can lead to ethical conflicts for global managers.

Foreign Corrupt Practices Act (FCPA)Prohibits U.S. firms from engaging in bribery and other

practices in other countries.

Leaders are Readers

• The Smartest Guys in the Room (2004)• McLean and Elkind • “The tale of Enron is a story of human

weakness, of hubris and greed and rampant self-delusion; of ambition run amok; of a grand experiment in the deregulated world; of a business model that didn’t’ work; and of smart people who believed their next gamble could cover up their last disaster—and who couldn’t admit they were wrong”.

Business Ethics and HR Management Consequences

Ethical Behavior and Organizational Culture

Ethics Program Elements

Written code of

ethics and standards of

conduct

Employee training on

ethical behaviors

Advice to employees on ethical situations

Confidential reporting of ethical problems

HR’s Role in Organizational Ethics

Legal Question Ethical Question

• Does the behavior or result meet all applicable laws, regulations, and government codes?

• Does the behavior or result meet both organizational standards and professional standards of ethical behavior?

Examples of HR-Related Ethical Misconduct Activities

Culture, Favoritism and Loyalty

HR Ethics and Sarbanes-Oxley (SOX)

• Reduce the likelihood of illegal and unethical behaviors by:

– Having a written code of ethics and conduct standards

– Providing ethical behavior training and advice

– Establishing confidential reporting systems for ethical misconduct

– Providing whistle-blower protection

– Supporting HR’s role as “keeper and voice” of organizational ethics

Ethical Behavior and Organizational Culture

• Classic Management Article– “The perpetuation of unethical

practices in organizations”• Socialization• Attrition• Justification from small to large