Ethics in Human Resource Management

  Ethics in Human Resource Management  

  Marco Köster  

  Content  

1.  Introduction  

2.  Ethical Concerns in HRM  

3.  Ethical Concepts and Frameworks in HRM  

  1 Ethical Egoism  

  2 Deontological Ethics  

  3 Stakeholder Ethics  

  4 Teleological Ethics  

  5 Welfare and Virtue Ethics  

4.  Application of HRM Ethics in Practice  

  1 Obstacles to Ethical HRM  

  2 First Steps into Practice  

5.  Conclusion  

  References  

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Ethics in Human Resource Management

Marco Köster

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1. Introduction

The academic debate on business ethics mainly concentrates on the social and ecological responsibility of companies within the society. Ethics are regarded as crucial in the external self-presentation and public perception of (economic) organisations. The model of ‘enlightened selfinterest’ of business claims that only those companies can be economically successful which manage to convince their stakeholders of their moral integrity. According to the model, the implementation of ethical standards lies in the self-interest of companies. ¹ As some authors state in recent publications, ethics also become more and more an internal concern of organisations. Whereas formerly the interests of employees were ignored or only regarded as one of several stakeholders’ interests, the “ethical management of employees” (Winstanley and Woodall 2000a: 5) itself gains in significance. Johns (1995:32) states that “the time for ethical leadership has come.” Especially human resource management (HRM) plays a decisive role in introducing and implementing ethics.

The essay outlines some aspects of ethics in HRM. It sketches ethical concerns that emerged in recent HRM debates, and reflects the viewpoint that ethics should be a pivotal issue for HR specialists. A number of ethical frameworks and their application in HRM policies and practices are reviewed. Here, the focus is mainly on barriers and obstacles to introducing ethical standards in HRM activities. Finally, some first steps to putting ethics into HRM practice are outlined.

¹ The stakeholder model is proposed by Freeman (1984) and Wheeler and Sillanpaa (1997). The contrasting view is stated by Friedman’s (1962) and Sternberg’s (1994 and

1997) shareholder model. They claim that the only business of business is business, and not ethics.

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Ethics in Human Resource Management

Marco Köster

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2. Ethical Concerns in HRM

Although “ethical problems arise almost continually in human resource management” (Hosmer 1987: 313), in academic debates around HRM ethical issues have been of “marginal significance” (Winstanley and Woodall 2000a: 5) for long and gained increasing interest in publications only a short time ago. ² The attention paid to moral dimensions of HRM was triggered by some objectionable changes in organisations’ management of people, as several recent developments in HRM policies and practices had raised a number of serious ethical questions. Ethically doubtful HRM practices develop, for example, in the field of “insecurity and risk” (Winstanley et al 1996:6), as employers tend to shift economic risks onto the shoulders of their employees. The boom of performance-related pay systems and flexible employment contracts are indicators of these newly established forms of shifting risk.

The “surveillance and control” (Winstanley et al 1996: 6) of employees is another ethically sensitive area in recent HRM. By “evaluating, grading, and classifying individuals” (Winstanley and Woodall 2001: 42) management seeks for transparent employees in order to select those offering not only outstanding professional abilities and knowledge but also displaying desired behaviour, attitudes, motivation and interests. Therefore, modern HRM puts a lot of effort in techniques of evading the autonomy and privacy of employees (e.g. psychometric tests and performance control systems) or even enforcing attitudes and values through change programmes (Winstanley et al 1996: 7).

² Winstanley and Woodall (2000a: 5-7; 2001: 39-40) give a brief historical sketch of ethical issues discussed in the literature on personnel and HRM. Among them are, for example, early concerns with job design in the 1930s, models of industrial democracy in the 1960s, the dabate on human motivational needs during the 1960s and 1970s, the discussion on social responsibility in the 1970s, and the promotion of individual and societal well-being indicated in the Harvard analytical framework for HRM in the 1980s. Only issues of organisational justice were of enduring academic and professional interest.

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Ethics in Human Resource Management

Marco Köster

_______________________________________________________________________

Tendencies of “deregulation” and “rhetoric and deceit” (Winstanley et al 1996: 8) in HRM correspond with the diagnosis of doubtful ethical standards within management circles in general. Winstanley et al (1996) warn of arbitrary HRM practices, that - instead of following transparent rules - are flexibly used by management to acquire short-term benefit. In these cases, inconsistencies in HRM practices and rhetorical deception usually go hand in hand.

The ethical concerns formulated in recent and present academic HRM debates revolve around basic ethical questions concerning the relationship between the employer or manager on the one side and the employee on the other. The main focus of these questions is on the boundaries between the organisational demands and, in opposition to them, the individual rights to subjectivity, privacy, autonomy and dignity of employees (Winstanley and Woodall 2000a).

However, raising ethical questions in HRM make the rights and well-being of employees an increasingly acknowledged issue on the agenda of HRM. HRM academics and practitioners should be concerned with ethics and ethical approaches in their own interest, since the success and failure of business may more and more depend on a satisfying response to ethical demands made by internal as well as external customers (Winstanley and Woodall 2001). A perceived lack of morality would only decrease the credibility and acceptance of HRM and therefore weaken its standing in organisations (and maybe furthermore even the external reputation of the organisation as a whole). Accordingly, ethical concerns on the HRM agenda and ethically inspired HRM practices may even increase the reputation of HR managers within their organisations. Legge (1998: 20) states that “the experience of HRM is more likely … to be viewed positively if its underlying principles are ethical.” For HR practitioners, the positive perception of their profession would not only imply an increased acknowledgement of their work, but possibly also an increased tolerance of sometimes unpalatable measures (Legge 1998).

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