Ethics and Employee Rights and Discipline Copyright 2013

Ethics and Employee Rights and Discipline Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 6 -1

Ethics In this lecture we will explore issues, policies, and problems related to ethics, fair treatment, discipline, and the termination of employees. With the recent events in large companies , ethics has become a major issue in today’s world. Is there more unethical behavior, have standards changed, or is it simply that today’s media and communications shed more light on perpetual problems? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -2

Learning Objectives 1. 2. 3. 4. 5. Explain what is meant by ethical behavior at work. Discuss important factors that shape ethical behavior at work. Describe at least four specific ways in which HR management can influence ethical behavior at work. Employ fair disciplinary practices. List at least four important factors in managing dismissals effectively. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -3

Explain what is meant by ethical behavior at work. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -4

Reflective Theme 7 • “All employee pay increases and work related benefits should be left to judgment by the immediate manger and him or her alone!” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 -5

Pay • Individual Employee Incentive and Recognition Programs • A. Piecework Plans – Piecework involves paying the worker a sum (piece rate) for each unit he/she produces. Straight piecework entails a strict proportionality between results and rewards regardless of output. With a standard hour plan, the worker gets a premium equal to the percent by which his/her performance exceeds the standard. • B. Merit Pay as an Incentive – Merit pay or a merit raise is any salary increase the firm awards to an employee based on his/her individual performance. It is different from a bonus in that it usually becomes part of the employee’s base salary, whereas a bonus is a one-time payment. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 -6

Pay • C. Incentives for Professional Employees – Professional employees are those work involves the application of learned knowledge to the solution of the employer’s problems, such as lawyers, doctors, economists, and engineers. Making incentive pay decisions for professional employees can be challenging because such employees are usually paid well anyway. • D. Nonfinancial and Recognition-Based Awards – Recognition programs usually refer to formal programs such as employee-of-themonth programs. Social recognition programs are more informal manager-employee exchanges, including praise and approval. Performance feedback is similar but provides quantitative or qualitative information on performance in order to change the performance or maintain it. Most employers combine both financial and non-financial incentives to motivate employees. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 -7

Why Incentive Plans fail! • When incentive plans fail, it can be for a variety of reasons like: employees do not believe that effort will obtain the reward, bad management overrides the plan, rewards are tied to the wrong measures, the plan is complicated and difficult for employees to understand, or standards are too high or too low Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 -8

Ethics and Morality • Ethics and morality are basically the same but differ in their application. An ethic is a set of guiding principles (virtues) while morality is the degree of conformity to such a set of principles. Interestingly, the term "morality" relates to mores or customs. So, one can rightfully ask the probing question, "Whose customs or principles do we adopt? " Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -9

Ethics and Fair Treatment at Work • • What is ethics? Ethics and the law Ethics, justice, and fair treatment Ethics, public policy, and employee rights o Unalienable rights o Public policy o Employment rights Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -10

Ethics • Ethics refers to “the principles of conduct governing an individual or a group. ” Ethical decisions also involve morals, which are society’s accepted standards of behavior. • The law is not the best guide about what is ethical because something may be legal but not right, and something may be right but not legal. Ethics means making decisions that represent what you stand for not just what is legal. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -11

Workplace justice • With respect to the workplace, experts generally define organizational justice in terms of distributive justice and procedural justice. • Distributive justice refers to the fairness and justice of the decision’s result. • Procedural justice refers to the fairness of the process itself. While law can provide guidelines for future behaviors and actions of an organization, ethical procedures depend on the standards we aspire to in our culture and society. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -12

Regulation • Societies don’t rely on employers’ ethics or sense of fairness or morality to ensure that they do what’s right. Societies also institute various laws and procedures for enforcing these laws. These laws lay out what employers can and cannot do. • Laws also carve out explicit rights for employees but not all rights derive from laws. For example, the first 10 amendments to the U. S. Constitution is called the Bill of Rights. Most laws therefore also reflect public policy. In other words, governments enact laws so as to further their public policy aims. Public policy “consists of political decisions for implementing programs to achieve societal goals Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -13

Review • Ethics • The law • Justice, and fair treatment • Public policy, and employee rights Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -14

ETHICS While the law can provide some guidelines about ethical behavior, it is up to us to determine societal standards and abide by them. Justice, with respect to ethical behavior, depends on the extent to which the process and the results are deemed fair. • Finally, public policy exists to help societies protect the rights of individuals. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -15

Discuss important factors that shape ethical behavior at work. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -16

What Shapes Ethical Behavior at Work? • • No one smoking gun The person (bad apples) Situations (bad cases) Outside forces (bad barrels) o Pressures o Ethics policies and codes o Organizational culture Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -17

Acting ethically at work • Whether a person acts ethically at work is usually not a consequence of any one thing. Because people bring to their jobs their own ideas of what is morally right and wrong, the individual must shoulder much of the credit (or blame) for the ethical choices he or she makes. • Three factors combine to determine the ethical choices a person makes. No single “smoking gun” determines ethical behavior. • The first factor may be called “bad apples” or individuals who make unethical choices. • We may call the second factor “bad cases” or ethical situations ripe for unethical choices. • The third may be called “bad barrels” or environments which foster unethical choices culture, the “characteristic values, traditions, and behaviors a company’s employees share. ” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -18

Unethical choices at work? • Individual characteristics: Who are the bad apples? Some people are just more inclined to make unethical choices. Which ethical situations make for bad (ethically dangerous) cases or situations? • Some ethical dilemmas are more likely to prompt unethical choices. Finally, what are the “bad barrels”? What outside factors mold ethical choices? • Some people are just more principled than others. • One study suggests older workers generally have stricter interpretations of ethical standards and make more ethical decisions than younger ones. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -19

Outside Pressures • We also know that outside pressures weaken one’s ethical compass. Common pressures include “meeting schedule pressures, ” “meeting overly aggressive financial or business objectives, ” and “helping the company survive. ” • It’s also hard to resist even subtle pressure, let alone coercion, from your boss. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -20

Ethics policies • An ethics policy and code is a good way to signal that the firm is serious about ethics. However, codifying the rules without enforcing them is futile. As one study noted, “…strong statements by managers may reduce the risk of legal and ethical violations by their work forces, but enforcement of standards has the greatest impact. ” • Finally, employees take their signals about what’s acceptable not just from what managers say, but from what they do. Those signals then mold the company’s organizational culture, the “characteristic values, traditions, and behaviors a company’s employees share. ” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -21

Describe at least four specific ways in which HR management can influence ethical behavior at work. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -22

Using HR Management Methods to Promote Ethics and Fair Treatment • • • Selection Ethics training Performance appraisal Reward and disciplinary systems Managing ethics compliance Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -23

Screening out undesirables actually can start before the applicant applies. This is more likely if the HR department creates recruiting materials containing explicit references to the company’s emphasis on integrity and ethics. Interviewing using questions about ethical behavior and managing other aspects of the selection process sends signals about the company’s ethical values and culture. . Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -24

Ethics Training Ethics training typically plays a big role in helping employers nurture a culture of ethics and fair play. Such training usually includes showing employees how to recognize ethical dilemmas. It also includes how to use ethical frameworks to resolve problems, and how to use HR functions in ethical ways. The firm’s performance appraisal processes provide another opportunity to emphasize a commitment to ethics and fairness. The appraisal can actually measure employees’ adherence to high ethical standards. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -25

Rewarding ethical behaviour Managers and organizations need to reward ethical behavior and penalize unethical behavior. However, care must be taken in rewarding ethical behavior so as not to undermine the intrinsic value of behaving in an ethical manner. Passage of the Sarbanes-Oxley Act of 2002 made ethics compliance mandatory. The act requires that CEOs and CFOs of publicly traded companies personally attest to the accuracy of their companies’ financial statements. Record-keeping in the post-Enron era has become intense so smaller companies face challenges in adhering to the Sarbanes-Oxley Act. As a result, some companies have been taken private to avoid the duties required of the company officers. Nonetheless, privately held or smaller companies should be willing to attest to the validity of the published statements and internal practices Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -26

Review • • • Selection Training Performance Rewards Compliance Selection Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Training Rewards Chapter 14 -27

HR Practices • Specific HR practices can help establish and maintain a framework for ethical behavior within an organization. • Emphasizing ethical practices during the selection process, training programs that reinforce ethical practices and establishing a rewards system that includes consideration of ethical choices as part of the employee’s actions will support the ethical culture of the firm. • Various laws impact organizational ethics including the Sarbanes-Oxley Act requiring CEOs and CFOs remain personally responsible for adherence to proper standards. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -28

Employ fair disciplinary practices. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -29

Managing Employee Discipline and Privacy • Fairness in disciplining • Bullying and victimization • What causes unfair behavior? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -30

Managing Employee Discipline And Privacy • Basics of a fair and just disciplinary process o Rules and regulations o Progressive penalties o Formal disciplinary appeals processes Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -31

Discipline • The employer wants its discipline process to be both effective (in terms of discouraging unwanted behavior) and fair. Employers base such a process on three pillars: clear rules and regulations, a system of progressive penalties, and an appeals process. • First, rules and regulations address issues such as theft, destruction of company property, drinking on the job, and insubordination. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -32

Progressive Penalties • A system of progressive penalties is a second pillar of effective discipline. Penalties typically range from oral warnings to written warnings and, finally, to suspension from the job to discharge. • In addition to rules and progressive penalties, the disciplinary process requires an appeals procedure. Typically, if the decision is not acceptable to an employee, the employee may submit a appeal first to management, then a company officer and finally an executive review procedure Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -33

Discipline without Punishment 1. 2. 3. 4. Oral reminder Formal written reminder Decision-making leave Purge suspension from file Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -34

Fair discipline procedures Discipline should be perceived and fair and its purpose understood to correct inappropriate behavior. The goal is not to fix the blame; the goal is to fix the problem. Typical steps include: 1. Issue an oral reminder. 2. Should another incident arise within 6 weeks, issue a formal written reminder, a copy of which is placed in the employee’s personnel file. 3. Give a paid, one-day “decision-making leave. ” 4. If no further incidents occur in the next year or so, purge the one-day paid suspension from the person’s file. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -35

Managing Employee Discipline and Privacy • Employee privacy • Employee monitoring o Restrictions Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -36

Review • • Fairness Bullying Unfair behavior Rules and regulations • Penalties • Appeals • Discipline, not punishment • Employee privacy & monitoring Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -37

Respect for employees • Much of what we have discussed has to do with common sense, respect for the individual and using a clearly understood system to ensure equity. Fairness, like beauty, is in the mind of the beholder but can be backed up by data. Bullying, unfortunately, continues to grow as a societal norm. • It has to do with power issues, an intent to cause harm and repeating the same behaviors against the same individual or group. Involving employees, helping them understand why actions are being taken, and what the standards are will go a long way to ensure perceived fairness. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -38

Rules and regulations • Rules and regulations are similar to societal laws in that they help guide behavior. Penalties should be administered in a fair and progressive manner, with respect for the individual in mind. If an employee is not satisfied with a decision, he or she should have the right to appeal. Discipline should be perceived as a learning opportunity, not strictly as a punishment for inappropriate behavior. • Finally, there are laws that guide what can and cannot be done with respect to employee privacy and monitoring. The key here is whethere is a genuine business purpose behind what an employee is doing while at work. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -39

List at least four important factors in managing dismissals effectively. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -40

Managing Dismissals • Termination at will and wrongful discharge • Grounds for dismissal o Unsatisfactory performance o Misconduct o Lack of qualifications for the job o Changed requirements Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -41

Termination • Termination at will means that without a contract, either the employer or the employee could terminate the employment relationship at any time for any reason with no advance notice. • Most states are employment at will states. Wrongful discharge is a dismissal that violates the law or that fails to comply with contractual arrangements, either stated or implied. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -42

Dismissal There are four bases for dismissal. In dismissing an employee, the employer should take care to ensure that all keys and company properties are returned, Internet passwords disabled, and employee accounts deactivated. Unsatisfactory performance occurs when there is persistent failure to perform assigned duties or to meet prescribed job standards. Misconduct is a deliberate and willful violation of the employer’s rules. Lack of qualifications for the job results from an employee’s inability to do the work assigned even when he or she is diligent. Changed requirements (or elimination) of the job results from an employee’s inability to do the job after the employer changed the nature of the job. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -43

Managing Dismissals • Other issues in dismissals o Insubordination o Fairness o Security measures Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -44

Insubordination • Insubordination is a form of misconduct that refers to rebelliousness or disobedience. While things like stealing, chronic tardiness, and poor-quality work are easily understood grounds for dismissal, insubordination is sometimes harder to translate into words. However, some acts are usually clearly insubordinate. • These include, for instance: • Direct disobedience of, or refusal to obey, the boss’s orders, particularly in front of others • Deliberate defiance of clearly stated company policies, rules, regulations, and procedures • Public criticism of the boss • Contemptuous display of disrespect Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -45

Dismissals are never pleasant. However, there are three things to do to make them fair. First, provide full explanations of why and how termination decisions were made. Second, institute a formal multistep procedure (including warning) and a neutral appeal process. Third, who actually does the dismissing is important. People who are dismissed face-to-face by their managers tend to accept the circumstances more readily. Finally, use a checklist to ensure that dismissed employees return all keys and company property, and (sometimes) accompanying them out of their offices and out of the building. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -46

Managing Dismissals • Avoiding wrongful discharge suits • Personal supervisory liability • The termination interview o Outplacement counseling o Exit interview Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -47

Wrongful discharge occurs when an employee’s dismissal does not comply with the law or with the contractual arrangement. Avoiding wrongful discharge suits requires a twopronged approach. First, set up employment policies and dispute resolution procedures that make employees feel they are treated fairly. Second, do the preparatory work by paying particular attention to the employee handbook and other company policies and procedures. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -48

Courts sometimes hold managers personally liable for their supervisory actions. Managers should be fully familiar with applicable federal, state, and local statutes and know how to uphold their requirements. Guidelines for the termination interview include: 1) plan the interview carefully, 2) get to the point, 3) describe the situation and explain that the decision is final and irrevocable, 4) listen, 5) review all elements of the severance package, and 6) identify the next steps. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -49

Outplacement counseling is a systematic process by which a terminated worker 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. This employee benefit is not required but is a good idea on a human and a public relations level. Many employers conduct exit interviews with employees who are leaving the firm. They aim to elicit information about the job or related matters that might give the employer a better insight into what is right—or wrong—about the company. Unfortunately, many terminated employees prefer to not “rock the boat” for their future jobs by providing extensive insights into the firm they are leaving. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -50

Layoffs, Downsizing, and the Plant Closing Law • The plant closing law • The layoff process a. b. c. d. e. f. Objectives and constraints Downsizing team Address legal issues Post-implementation actions Security concerns Remain informative Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -51

Layoffs For the employer, reduced sales or profits may require layoffs or downsizing. Layoff generally refers to having selected employees take time off, with the expectation that they will come back to work. Downsizing refers to permanently dismissing a relatively large proportion of employees in an attempt to improve productivity and competitiveness. Congress passed the Worker Adjustment and Retraining Notification Act (popularly known as the WARN or plant closing law) in 1989. It 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. . Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -52

STEPS • The steps in the layoff process are listed in the slide. However, deciding on policies and practices to be implemented in advance is crucial. For example, if it is a multi-state layoff or downsizing, decisions must be made in advance as to how to handle the differing state laws on administering unemployment compensation. • Also, you will need to decide if production can be stopped all on one day or if some things must continue for a short time after the formal announcement. Your downsizing team can help with these considerations. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -53

Managing Dismissals • • • Preparing for layoffs Dismissal’s effects Bumping/layoff procedures Layoff and downsizing alternatives Adjusting to downsizings and mergers o Merger guidelines Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -54

LAYOFFS • In preparing for layoffs, make sure appraisals are up-to-date. Identify top performers and get them working on the company’s future. Be sure to retain or hire committed new leaders. • It’s not surprising that layoffs often result in harmful psychological and physical health outcomes for employees who lose their jobs, as well as for the survivors who face uncertainty. Planning and communicating openly with employees will lessen the impact. • With layoffs, three conditions are usually present: (1) there is no work available for these employees, (2) management expects the no-work situation to be temporary and probably short term, and (3) management intends to recall the employees when work is again available. Layoffs and downsizings are painful for all involved. However, there alternatives. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -55

Volunteers • . Layoffs and downsizings are painful for all involved. However, there alternatives. • Find volunteers who may be willing to accept a layoff, perhaps with a “sweetened” return package. • Use the natural attrition of people who may leave or retire anyway. Consider redeployments to other firms in the area. Some employees may consider a voluntary reduction in pay to help the organization remain vital. Ask your employees to concentrate their vacations during slow periods when a smaller workforce would be appropriate. Ask employees to take voluntary time off (furloughs) without pay. And, don’t forget the possibility of early retirement. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -56

Downsizing issues • Firms usually downsize to improve their financial positions. Yet many firms discover profits don’t improve after major personnel cuts. Low morale among those remaining is often part of the problem. In terms of dismissal, mergers and acquisitions are usually one-sided. In such situations, the acquired firm’s surviving employees may be hyper-sensitive to mistreatment of their soonto-be former colleagues or feel “survivor’s guilt. ” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -57

Improving the situation • Some ways to improve on the situation include: 1. Avoid the appearance of power and domination. 2. Avoid win–lose behavior. 3. Remain businesslike and professional 4. Maintain as positive a feeling about the acquired company as possible. 5. Treating the acquired group with care and dignity will affect the confidence, productivity, and commitment of those who remain. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -58

Review (1) • Termination at will and wrongful discharge • Grounds for dismissal • Insubordination • Fairness • Security measures • Avoiding wrongful discharge suits Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -59

TERMINATION We have defined and discussed termination at will and wrongful discharge as well as grounds for dismissal. Such grounds include things such as unsatisfactory performance and misconduct. Insubordination, while not as clear cut as, say, stealing, is an important element in possible terminations. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -60

TERMINATION • In all circumstances, however, remaining fair and objective while using a well-defined system will help. Obvious security measures include ensuring the terminated employee no longer has access to his or her computer or company property. And, using a common sense, documented and widely understood termination and layoff process will help avoid wrongful discharge suits. Such a process will also contribute to supervisors being less likely to become personally liable should a suit be filed. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -61

Review (2) • • • The termination interview The plant closing law The layoff process and preparation Dismissal’s effects Bumping/layoff procedures Alternatives and adjusting Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -62

Termination • The termination interview should be business-like and conducted with thorough advance planning. The Worker Adjustment and Retraining (WARN) Act provides some protections for employees who are about to lose their jobs. In addition, implementation of the act requires employers to thoroughly plan all aspects of the process to the benefit of the organization and its soon-to-be former employees. • We also discussed the steps in the layoff process and the conditions under which a layoff is more appropriate than termination or permanent downsizing. While the process may be psychologically and physically taxing for some (perhaps many), the employer has the opportunity to make life better for all concerned. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -63

Gaols and alternatives • Develop a strategy for the process, identify the precise goals to be accomplished by doing so and create and communicate a plan that takes into account the needs of the former employees and the needs of the company. • Finally, don’t hesitate to consider alternatives such as voluntary pay reductions or early retirement. If you are in a company that is being acquired by another, it is important to maintain a sense of equitable treatment for all concerned. Behaving in a dominating or condescending manner to the affected employees will have definite long-term impact on profits and productivity. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -64

Reflective theme 8 • How can specific HR practices establish ethical behaviour in an organisation ? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -65

HR and ethics • • • Using Human Resource Management Methods to Promote Ethics and Fair Treatment 1. Selection – Screening out undesirables can actually start before the applicant even applies, if the HR department creates recruitment materials containing explicit references to the company’s emphasis on integrity and ethics. The selection process also sends signals about the company’s values and culture in terms of ethical and fair treatment. 2. Ethics Training – Ethics training typically plays a big role in helping employers nurture a culture of ethics and fair play. Such training usually includes showing employees how to recognize ethical dilemmas, how to use ethical frameworks to resolve problems, and how to use HR functions in ethical ways. 3. Performance Appraisal – The firm’s performance appraisal processes provide another opportunity to emphasize a commitment to ethics and fairness. The appraisal can actually measure employees’ adherence to high ethical standards. 4. Reward and Disciplinary Systems – Managers and organizations need to reward ethical behavior and penalize unethical behavior. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -66

HR and Ethics • 2. Ethics Training – Ethics training typically plays a big role in helping employers nurture a culture of ethics and fair play. Such training usually includes showing employees how to recognize ethical dilemmas, how to use ethical frameworks to resolve problems, and how to use HR functions in ethical ways. • • 3. Performance Appraisal – The firm’s performance appraisal processes provide another opportunity to emphasize a commitment to ethics and fairness. The appraisal can actually measure employees’ adherence to high ethical standards. • • 4. Reward and Disciplinary Systems – Managers and organizations need to reward ethical behavior and penalize unethical behavior. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -67

Enrichment Topics in Human Resources Management • Chapter 14 • Building Positive Employee Relations • Now lets look at ethics, employee fairness, safety, and union relations. • • The main purpose of this chapter is to explain positive employee relations. Our topics include what is employee relations, managing employee relations, using human resource management tools to promote ethics and fair treatment, managing employee discipline, and developing employee engagement and great places to work for. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -68

Learning Objectives (1 of 2) 14 -1. Define employee relations. 14 -2. Discuss at least four methods for managing employee relations. 14 -3. Explain what is meant by ethical behavior.

Learning Objectives (2 of 2) 14 -4. Explain what is meant by air disciplinary practices 14 -5. Answer the question, “How do companies become “Best Companies to Work for?

I. Define employee relations.

What is Employee Relations? • Employee Relations – is the activity that involves establishing and maintaining the positive employee-employer relationships that contribute to satisfactory productivity, motivation, morale, and discipline, and to maintaining a positive, productive, and cohesive work environment.

Building positive relationships • Employers can do many things to build positive employee relations. Some examples include providing good training, fair appraisals, and competitive pay and benefits (all of which we discussed in previous chapters). • However, most employers also institute special “employee relations programs” to maintain positive employee relations. These include employee fair treatment programs, improving employee relations through improved communications, developing employee recognition/relations programs, and having fair and predictable disciplinary procedures. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -73

Employee Relations Programs For Building and Maintaining Positive Employee Relations Fair Treatment • Research Insight • Procedural Justice • Distributive Justice

Fair treatment • Ensuring Fair Treatment – Anyone who has suffered unfair treatment at work knows it is demoralizing. Unfair treatment reduces morale, poisons trust, and negatively impacts employee relations and performance. Employees of abusive supervisors are more likely to quit, and to report lower job and life satisfaction and higher stress. The effects on employees of such abusiveness are particularly pronounced where the abusive supervisors seem to have support from higher-ups. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -75

Improving Performance: The Strategic Context A New HR Strategy at the Foxconn Plant in Shenzhen, China Let’s talk about it…

Improving Performance: The Strategic Context • A New HR Strategy at the Foxconn Plant in Shenzhen, China • The phrase social responsibility tends to trigger images of charitable contributions and helping the homeless, but it actually refers to much more. • For example, it refers to the honesty of the company’s ads; to the quality of the parts it builds into its products; and to the honesty, ethics, fairness, and “rightness” of its dealings with customers, suppliers, and, of course, employees. • The basic question is always whether the company is serving all its constituencies (or “stakeholders”) fairly and honestly. Corporate social responsibility thus refers to the extent to which companies should and do channel resources toward improving one or more segments of society other than the firm’s owners or stockholders. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -77

Fair treatment • A worker uprising at Apple’s Foxconn i. Phone assembly plant in Shenzhen, China, shows that workers around the globe want their employers to treat them in a fair and socially responsible manner. • Producing quality products as efficiently as possible was long the strategy at this plant. • However, after the uprising over pay and work rules at the Foxconn plant, Apple asked the plant’s owner to have the Fair Labor Association (FLA) survey the plant’s workers. • The FLA found “tons of issues. ” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -78

Issues • . ” For example, employees faced “overly strict” product- • • quality demands without adequate training: “Every job is tagged to time, there are targets on how many things must be completed within an hour, ” said Xie Xiaogang, 22, who worked at Foxconn’s Shenzhen plant. “In this environment, many people cannot take it. ” Heavy overtime work requirements and having to work through a holiday week were other examples. To foster the improved behaviors that the plant’s performance required, Hon Hai, the Foxconn plant’s owner, tweaked its efficiency-first strategy and changed its plant human resource strategy and practices, for instance, by raising salaries and cutting mandatory overtime. Those changes were among 284 made at Foxconn after the audits uncovered violations of Chinese regulations. The changes show that fair treatment is a global obligation. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -79

Discussion • How would you explain the fact that workers in such diverse cultures as America and China seem to crave fair treatment? • Source: Based on Daniel Denison, Corporate Culture and Organizational Effectiveness, New York: Wiley, 1990, p. 155; “When the Jobs Inspector Calls, ” Economist, March 31, 2012, p. 73; Alexandra Ho and Tim Culpan, with assistance from Jun Yang in Seoul, Andrea Wong in Taipei, Tian Ying in Beijing, and Jasmine Wang in Hong Kong. “Foxconn Labor Disputes Disrupt IPhone Output for 2 nd Time, ” Bloomberg News, October 8, 2012, www. bloomberg. com/news/ 2012 -1007/foxconn-labor-disputes-disrupt-iphone-output-for-2 ndtime. html. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -80

Bullying and Victimization 1. Imbalance of Power 2. Intent to Cause Harm 3. Repetition • Verbal • Social • Physical • Cyberbullying

Work place Unfairness • Some workplace unfairness, such as bullying, is blatant. Bullying and victimization—singling out someone to harass and mistreat—is a serious problem. • The U. S. government (www. stopbullying. gov) says most would agree that bullying involves three things: • ● Imbalance of power. People who bully use their power to control or harm, and the people being bullied may have a hard time defending themselves. • ● Intent to cause harm. Actions done by accident are not bullying; the person bullying has a goal to cause harm. • to harm others Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -82

Bullying • Repetition. Incidents of bullying happen to the same person over and over by the same person or group, and that bullying can take many forms, such as: 1. • Verbal: name-calling, teasing 2. • Social: spreading rumors, leaving people out on purpose, breaking up friendships 3. • Physical: hitting, punching, shoving 4. • Cyberbullying: using the Internet, mobile phones, or other digital technologies to harm others Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -83

Improving Employee Relations Through Communication Programs • Different Types • Organizational Climate Surveys

Communication • Many employers use communications programs to bolster their employee relations efforts, on the reasonable assumption that employees feel better about their employers when they’re “kept in the loop. ” • This employer uses an open-door policy to encourage communication between employees and managers, an employee handbook covering basic employment information, and “the opportunity to keep abreast of University events and other information of interest through the website, e-mail, and hard copy memoranda. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -85

2 way communication • Two-way communication also helps management know what’s bothering employees. Approaches may include hosting employee focus groups, making available ombudsman and suggestion boxes, and implementing telephone, messaging, and Web-based hotlines. (Some employers use hotline providers to manage their hotlines. • A vendor sets up the hotlines for the employer; it also receives the employees’ comments, and provides ongoing feedback to the employer about employees’ concerns, as well as periodic summaries of comments and trends. ) Exit interviews, discussed in an earlier chapter, provide another opportunity to sample the quality of one’s employee relations. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -86

Organizational Climate Surveys • Using Organizational Climate Surveys – Similarly, employers use attitude, morale, or climate surveys to support employee relations efforts. • They use the surveys to “take the pulse” of their employees’ attitudes toward a variety of organizational issues including leadership, safety, role clarity, fairness, and pay, and to thereby get a sense of whether their employee relations need improvement Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -87

Develop Employee Recognition / Relations Programs

Two way Communications • Opportunities for two-way communications like these improve employee relations, but there are other employee relations programs. Most notable here are the employee recognition and award programs. • Instituting recognition and service award programs requires planning. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -89

Service Award Programme • For example, instituting a service award program requires reviewing the tenure of existing employees and establishing meaningful award periods (1 year, 5 years, etc. ). It also requires establishing a budget, selecting awards, having a procedure for monitoring what awards to actually award, having a process for giving awards (such as special dinners or staff meetings), and periodically assessing program success. • Similarly, instituting a recognition program requires developing criteria for recognition (such as customer service, cost savings, etc. ), creating forms and procedures for submitting and reviewing nominations, selecting meaningful recognition awards, and establishing a process for actually awarding the recognition awards Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -90

Use Employee Involvement Programs Focus Groups

Employee involvement • Employee relations also tend to improve when employees become involved with the company in positive ways, and so employee involvement is another useful employee relations strategy. • Employers encourage employee involvement in various ways. Some organize focus groups. A focus group is a small sample of employees who are presented with a specific question or issue and who interactively express their opinions and attitudes on that issue with the group’s assigned facilitator. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -92

Trends Shaping HR: Digital and Social Media (1 of 2) Employee Involvement Let’s take a look…

Trends Shaping HR: Digital and Social Media • Many employers use social media, such as the pin board-style photo-sharing Web site Pinterest, to encourage involvement. One survey found that just over half of employers use social media tools to communicate with employees and to help develop a sense of community. • For example, Red Door Interactive used a Pinterest -based project it called “San Diego Office Inspiration. ” This encouraged employees to contribute interior design and decor ideas for its new offices. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -94

Using Employee Involvement Teams • • Suggestion Teams Problem-Solving Teams Quality Circle Self-Managing / Self. Directed Work Team • Suggestion Systems

Suggestion teams • Employers also use special teams to gain employees’ involvement. Suggestion teams are temporary teams whose members work on specific analytical assignments, such as how to cut costs or raise productivity. • Some employers formalize this process by appointing semipermanent problem-solving teams. These identify and research work processes and develop solutions to work-related problems. • A quality circle is a type of formal problem-solving team, usually composed of 6 to 12 specially trained employees who meet weekly to solve problems affecting their work area. The team gets training in problem-analysis techniques (including basic statistics). Then it applies these techniques to solve problems in its work area. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -96

Self management team • In many facilities, specially trained teams of self-managing employees do their jobs with little or no oversight from supervisory personnel. • A self-managing/self-directed work team is a small (usually 8 to 10 members) group of carefully selected, trained, and empowered employees who basically run themselves with little or no outside supervision, usually for the purpose of accomplishing a specific task or mission. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -97

Suggestion Systems • Using Suggestion Systems – Most employers understand that employee suggestions can produce significant savings (and, through involvement and rewards, improved employee relations). For example, one study several years ago of 47 companies concluded that the firms had saved more than $624 million in one year from their suggestion programs; more than 250, 000 suggestions were submitted, of which employers adopted over 93, 000 ideas. • Furthermore, employees like these programs. In one survey, 54% of the 497 employees surveyed said they made more than 20 suggestions per year, while another 24% said they made between 10 and 20 suggestions per year. • The accompanying HR as a Profit Center feature on the next slide provides an example. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -98

IMPROVING PERFORMANCE: HR As a Profit Center The Cost-Effective Suggestion System Let’s talk about it…

Improving Performance: HR As A Profit Center • The Cost-Effective Suggestion System • A Lockheed Martin unit in Oswego, New York, developed its “Cost-Effectiveness Plus” suggestion program to encourage and recognize employees for streamlining processes. With the Cost-Effectiveness Plus program, employees electronically submit their ideas. These are then evaluated and approved by the local manager and the program’s coordinator (and by higher management when necessary). This program reportedly saves this facility about $77, 000 per implemented idea, or more than $100 million each year. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -100

Suggestion Boxes • Today’s suggestion systems are more sophisticated than the “suggestion boxes” of years ago. The main improvements are in how the manager formalizes and communicates the suggestion process. The head of one company that designs and installs suggestion systems for employers lists the essential elements of an effective employee suggestion system as follows: • ✓ Senior staff support • ✓ A simple, easy process for submitting suggestions • ✓ A strong process for evaluating and implementing suggestions • ✓ An effective program for publicizing and communicating the program • ✓ A program focus on key organizational goals • Source: Based on Wells, “From Ideas to Results”, HR Magazine Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -101

Talk About it (Discussion) • Based on this, write a one-page outline describing an employee suggestion system for a small department store Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -102

Explain what is meant by ethical behavior.

The Ethical Organization Figure 14 -2 The Wall Street Journal Workplace Ethics Quiz Source: Ethics and Compliance Officer Association, Waltham, MA, and the Ethical Leadership Group, Global Compliance’s Expert Advisors, Wilmette, IL. (printed in the Wall Street Journal, October 21, 1999, pp. B 1–B 4). © 1999 by Ethics and Compliance Officer Association. Reprinted by permission. All rights reserved.

Ethical Choices • People face ethical choices every day. Is it wrong to use a company credit card for personal purchases? Is a $50 gift to a client unacceptable? • Compare your answers by doing the quiz in Figure 14 -2 above. • Ethics are “the principles of conduct governing an individual or a group”—the principles people use to decide what their conduct should be. Of course, not all conduct involves ethics. • Most everyone reading this text rightfully views themselves as ethical people, so why include ethics in a human resource management book? For three reasons: 1. First, ethics is not theoretical. 2. Second, it is hard to even imagine an unethical company with good employee relations. 3. Third, ethical dilemmas are part of human resource management. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -105

Ethics and Employee Rights

Ethics and Rights • Societies don’t rely on employers’ ethics or sense of fairness or morality to ensure that they do what’s right. Societies also institute various laws and procedures for enforcing these laws. • Protecting employee rights is thus part and parcel of all the employment laws we discuss in this book. Although ethics, fairness, and morality help govern how employers treat their employees, the enforceable rights embedded in employment law also govern what employers and employees can do. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -107

What Shapes Ethical Behavior at Work? • Three factors combine to determine the ethical choices we make o The person (bad apples) o Situations (bad cases) o Company Environment (bad barrels) • Pressures • Organizational culture

Ethics • Why do people do bad things? It’s complicated. However, one review of over 30 years of ethics research concluded that three factors combine to determine the ethical choices we make. • The authors titled their paper “Bad Apples, Bad Cases, and Barrels. ” This title highlighted their conclusion that when • “Bad apples” (people who are inclined to make unethical choices), must deal with • “Bad cases” (ethical situations that are ripe for unethical choices), while working in • “Bad barrels” (company environments that foster or condone unethical choices), … then people tend to act unethically. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -109

Ethics • Here’s a closer look at what they found: 1. The Person (What Makes Bad Apples? ) First, because people bring to their jobs their own ideas of what is morally right and wrong, each person must shoulder much of the credit (or blame) for his or her ethical choices. 2. Which Ethical Situations Make for Ethically Dangerous Situations (Bad Cases)? But, it’s not just the person but the situation that’s important. Basically, how much harm can befall victims of the choice, or the number of people potentially affected. People seemed more likely to “do the wrong thing” in “less serious” situations, in other words, the problem is that one thing leads to another; people start by doing small bad things and then “graduate” to larger ones. 3. What Are the “Bad Barrels”? —The Outside Factors That Mold Ethical Choices? Finally, the study found that some companies produce more poisonous social environments (outside factors or “barrels”) than do others; these bad environments in turn foster unethical choices. Those that encouraged employees to consider the well-being of everyone had more ethical choices. Most importantly, companies whose managers put in place “a strong ethical culture that clearly communicates the range of acceptable and unacceptable behavior” suffered fewer unethical decisions. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -110

How Managers Can Create More Ethical Environments • Reduce Pressures • “Walk The Talk”

Job related pressures Reduce Job-Related Pressures – If people did unethical things at work solely for personal gain or because they were “bad people, ” it perhaps would be understandable (though inexcusable). The scary thing is that it’s often not personal interests but the pressures of the job. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -112

Pressures • One study illustrates this. It asked employees to list their reasons for taking unethical actions at work. • For most of these employees, “meeting schedule pressures, ” “meeting overly aggressive financial or business objectives, ” and “helping the company survive” were three top causes. “Advancing my own career or financial interests” ranked about last. In any case, reducing such “outside” pressures helps head off ethical lapses. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -113

Managers Can Create More Ethical Environments (1 of 2) • • Institute Ethical Polices and Codes Enforce The Rules Encourage Whistleblowers Foster The Right Culture

Steps • There also steps the HR group can take. Institute Ethics Policies And Codes – Employers use ethics policies and codes to signal that their companies are serious about ethics. • Enforce The Rules – Codifying such rules without enforcing them is futile. To paraphrase one study, managers’ statements can reduce unethical behavior on the part of employees, but knowing that behavior is actually being monitored and enforced has the biggest impact. • Encourage Whistleblowers – Some companies encourage employees to use hotlines and other means to “blow the whistle” on the company when they discover fraud. In complying with the Dodd. Frank Act, the SEC established a whistleblower reward for people who report unethical corporate behavior to it. It is also tracking possible incidents of retaliation against whistleblowers. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -115

Culture • • • Foster The Right Culture – Organizational culture is the “characteristic values, traditions, and behaviors a company’s employees share. Managers therefore have to think through how to send the right signals to their employees—in other words, create the right culture. Doing so includes: ● Clarifying expectations. First, make clear what values you want subordinates to follow. For example, the IBM ethics statement shows the company takes ethics seriously. ● Using signs and symbols. Symbolism—what the manager actually does— ultimately does the most to create and sustain the company’s culture. As we said earlier, managers need to “walk the talk. ” They can’t say “don’t falsify the financials” and then do so themselves. ● Providing physical support. The physical signs of the employer’s values—its incentive plan, appraisal system, and disciplinary procedures, for instance— send strong signals regarding what employees should and should not do. For example, do the promotions employees get reward ethical behavior or penalize it? The accompanying HR Tools feature on the next slide illustrates ethics management in small businesses. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -116

For Line Managers and Small Businesses Small Business Ethics Let’s talk about it…

Small Business Ethics • When people think of unethical corporate behavior, big companies come to mind, because they’re usually in the headlines. Yet studies show that small and midsize enterprises are prone to the same unethical corporate behavior as big firms. • For example, one study of 20 small to midsize firms found that bribery, corrupt dealings, payoffs to local gangsters, and a general tone of dishonesty were all “business as usual” at many of these firms. Some were clever about their corrupt dealings. When doing business abroad, one U. S. business tried to keep its hands clean by forming a “strategic alliance” with a local firm. • The latter then did the dirty work, for example, handling the local bribes, while the U. S. firm’s managers looked the other way. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -118

Reasons • There are several reasons why smaller firms should be particularly alert to unethical behavior. Small firms don’t have the resources for ethics officers, ethics hotlines, or the ethics training that big firms have. Furthermore, having an unethical accountant in a billion-dollar firm embezzle $10 million is a nuisance. Having the sales manager of a $10 million firm walk off with $1 million cash could be the end. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -119

Small Business owners • Small business owners can take several steps to establish a useful ethics program. • First, size up your company’s current ethics-related activities. Even a self-audit based on guidelines like those in this chapter (the availability of an ethics code, ethics training, internal controls to monitor ethical behavior, and so on) can be worthwhile. • Second, create a code of conduct (Googling “code of conduct” will reveal thousands of examples), and make it clear that you take it seriously. Third, train your people. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -120

Training • Training needn’t be complicated. For example, one expert suggests having your managers develop scenarios, relevant to your business, illustrating which behaviors are ethical and which are not; then meet to discuss these. • Fourth, make it easier to solicit feedback from your employees, so that they can more easily report suspicions of unethical behavior. (“Open door” polices and anonymous suggestion boxes are examples. ) And, perhaps most importantly, walk the talk. In a small business, the owner is so visible that employees will take their ethical signals from him or her. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -121

Talk About it (Discussion): • Create a 50 -word ethics code for a small business. • Then, explain how the owner might use an ethics code to help avoid mistreatment of e Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -122

How Human Resource Managers Can Create More Ethical Environments • • Hire Right Use Ethics Training Use Rewards and Discipline Institute Employee Privacy Policies

Steps • There additional steps the HR group can take. • Hire Right – As one writer says, “The simplest way to tune up an organization, ethically speaking, is to hire more ethical people. ” Start by using recruitment materials that emphasize your firm’s commitment to honest dealings and ethics. Then use screening tools like honesty tests, background checks, and interview questions (such as “Have you ever observed someone stretching the rules at work? What did you do about it? ”) to screen out problematical people. • Use Ethics Training – Ethics training usually involves showing employees how to recognize ethical dilemmas, how to apply codes of conduct to resolve problems, and how to use personnel activities like disciplinary practices in ethical ways. The training should emphasize the moral underpinnings of the ethical choice and the company’s deep commitment to integrity and ethics. Include participation by top managers in the program to emphasize that commitment. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -124

Discipline • Use Rewards And Discipline – Employees expect you to punish unethical conduct and to reward ethical conduct. The employer should discipline executives, not just underlings, who misbehave. • Institute Employee Privacy Policies – Most employees probably view invasions of their privacy by their employers as unethical. At work, employee privacy violations include intrusion (such as locker room and e-mail surveillance), publication of private matters, disclosure of medical records, and appropriation of an employee’s name or likeness for commercial purposes. • In practice, background checks, monitoring off-duty conduct and lifestyle, drug testing, workplace searches, and workplace monitoring trigger most privacy violations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -125

Know Your Employment Law Electronic Monitoring Let’s take a look…

Electronic Monitoring • • What can the employer do to balance privacy concerns with its need to protect itself ? There are two main restrictions on workplace monitoring: the Electronic Communications Privacy Act (ECPA), and common-law protections against invasion of privacy (protections that have evolved from court decisions, for instance, decisions against defaming employees by publicizing highly personal matters about them without their permission). The ECPA is a federal law intended to help restrict interception and monitoring of oral and wire communications. It contains two exceptions. The “business purpose exception” permits employers to monitor communications if they can show a legitimate business reason for doing so. The second, “consent exception, ” lets employers monitor communications if they have their employees’ consent to do so. Electronic eavesdropping is thus legal—up to a point. For example, federal law and most state laws allow employers to monitor employees’ phone calls in the ordinary course of business. However, they must stop listening when it becomes clear the conversation is personal. You can also intercept e-mail to protect the property rights of the e-mail provider. However, court cases suggest employers may have fewer rights to monitor e-mail than previously assumed. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -127

E mail policies • To be safe, employers issue e-mail and online service usage policies, which warn employees that those systems should be used for business only. Employers also have employees sign e-mail and telephone monitoring acknowledgment statements like that in Figure 14 -3. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -128

Monitoring Acknowledgment Figure 14 -3 Sample E-Mail Monitoring Acknowledgment Statement

E mail policy • Many employees probably assume that their communications using the corporate e-mail system are open to review, but that e-mails they send via the employer’s system but using personal e-mail accounts such as Gmail aren’t. • However, that’s not necessarily true. An attorney should review the company’s e-mail policy, but, at a minimum, make it clear that employees should have no expectation of privacy in their e-mail and Internet usage. • Also emphasize that all messages sent and received on the employer’s e-mail system are company property and not confidential. Videotaped workplace monitoring requires more caution. Continuous video surveillance of employees in an office setting may not be a problem. But a Boston employer had to pay over $200, 000 to five workers it secretly videotaped in an employee locker room, after they sued. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -130

Trends Shaping HR: Digital and Social Media (2 of 2) Monitoring Let’s talk about it…

Trends Shaping HR: Digital and Social Media • Monitoring reflects in part a proliferation of online and smart devices and social media tools. For example, a New Jersey court found one employer liable when one of its employees used his company computer at work to distribute child pornography. • Security is another problem: One “ 4 -gigabyte MP 3 player, such as the first generation of i. Pod Mini … can take home a lot of corporate data, ” said one employer (a process some graphically describe as “podslurping”). And, increasingly, disgruntled employees are using their companies’ cloud services to hack into and undermine their employers’ computer systems. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -132

Monitoring • Monitoring today therefore goes far beyond listening in on phone lines. New York’s Bronx Lebanon Hospital uses biometric scanners to ensure that employees who clock in really are who they say they are. Iris scanning tends to be the most accurate authorization device. Some organizations like the Federal Aviation Administration use it to control employees’ access to their network information systems. UPS uses GPS to monitor their drivers’ whereabouts—and therefore productivity. • One restaurant in Dallas digitally monitors most everything waiters do, for instance, tracking every ticket, dish, and drink that they process. This not only makes it easier to track employee theft, but also helps identify exceptionally conscientious waiters. To keep productivity up, the British grocery chain Tesco has some distribution center employees wear “Motorola arm-mounted terminals” (armbands) that keep track of how quickly employees are unloading and scanning goods. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -133

Monitoring • Such monitoring, as we said, raises privacy issues. The dilemma is that it can also boost profits. For example, employers routinely use software to monitor (usually secretly) what their employees are doing online. • When one employer noticed high employee overtime claims, they installed new software, and discovered many employees spent hours each day shopping online instead of working. • Physicians often say that “every medicine contains a little poison, ” since anything, even aspirin, becomes dangerous if misused. For employers, the dilemma is to obtain the profit advantages of monitoring, while minimizing the ethical and privacy issues that it raises. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -134

Talk About it (Discussion): • How would you feel if your employer told you to wear an armband monitor? Why? How would you react? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -135

Explain what is meant by fair disciplinary practices.

Managing Employee Discipline

The Three Pillars of Fair Discipline 1. Rules & Regulations 2. Progressive Penalties 3. Appeal Process

How to Discipline an Employee (1 of 6) 1. Make sure the evidence supports the charge of employee wrongdoing. 2. Make sure to protect the employees’ due process rights. 3. Adequately warn the employee of the disciplinary consequences of his or her alleged misconduct. 4. Have the employee sign form.

Discipline • Even if you’re a manager in a Fortune 500 company, you may find yourself without company guidelines when you have to discipline an employee for violating company rules. An error could trigger a costly appeal, or even litigation. To help head off errors, fair discipline guidelines would include: • ● Make sure the evidence supports the charge of employee wrongdoing. • ● Make sure to protect the employees’ due process rights. For example, did the person have a chance to defend himself or herself? • ● Adequately warn the employee of the disciplinary consequences of his or her alleged misconduct. • ● Have the employee sign a form, as in Figure 14 -4 on the next slide. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -140

How to Discipline an Employee (2 of 6) Figure 14 -4 Report of Employee Discipline

How to Discipline an Employee (3 of 6) 5. “Reasonably Related” to the efficient and safe operation of the environment. 6. Objectively investigate the matter.

How to Discipline an Employee (4 of 6) 7. “The Investigation should produce substantial evidence of misconduct. 8. Apply applicable rules, orders, or penalties without discrimination. 9. Maintain the employee’s right to counsel.

How to Discipline an Employee (5 of 6) 10. Keep Dignity. 11. Listen to what the person has to say. 12. Burden of Proof (employer).

How to Discipline an Employee (6 of 6) 13. Get the Facts. 14. Don’t Act while angry. 15. Adhere to your company’s disciplinary appeal process.

Discipline Without Punishment • Issue an oral reminder. • Issue a formal written reminder and place in the personnel file. • Give “decision-making leave”. • Dismissal if behavior repeats.

V. Answer the question, “How do companies become ‘Best Companies to Work For’? ”.

Employee Engagement Guide For Managers • How Companies Become “Best Companies to Work For” • The Great Place to Work Institution defines a great workplace

Employee Engagement Guide For Managers • How Companies Become “Best Companies to Work For” • We began this chapter by noting that some companies are better to work for than others, and we therefore focused on programs managers use to cultivate the positive employee relations that contribute to being a best place to work. This final section zeroes in on three companies that are known in part for actually being best places to work. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -149

Best Companies • The “Best Companies to Work For” – Each year, several organizations publish “Best Companies to Work For” lists, the most notable of which is probably “Fortune Magazine’s 100 Best Companies to Work For®. ” Based on an extensive multinational survey of employees by the Great Place to Work® Institute (www. greatplacetowork. com), the survey seeks to identify the best companies to work for based on how the employees working in them actually feel about working there. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -150

Great Place to Work • The Great Place to Work Institute defines a great workplace “as one where employees trust the people they work for, have pride in the work they do, and enjoy the people they work with. ” They say that the companies on their great companies list “have the highest levels of trust, strongest evidence of employee engagement and demonstrate the best applied management practices and programs” as defined by the institute’s proprietary models. • We’ll look at three recent “Fortune Magazine’s 100 Best Companies to Work For”—SAS, Google, and Fed. Ex Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -151

SAS: Great Benefits, Trust, and Work -Life Balance

SAS • SAS, headquartered in Cary, North Carolina, is a leader in providing business analytics software and services to companies that include 90 of the top 100 companies on the Fortune global 500 list. Founded in the 1970 s, the company is privately owned and has long been known for the quality of its benefits and for the support it provides for its employees’ work-life balance. It has annual revenues of over $2. 3 billion, and a worldwide workforce of over 13, 000 people, about half of whom work at the company’s North Carolina campus. • They have reportedly never laid off an employee. SAS goes to great lengths to foster its employees’ trust in other ways, for instance by giving them abundant freedom in the hours they work. They also have the Great Place to Work Institute independently survey SAS workers on important characteristics of trust including open communication, respect, career paths, and being treated as a human being. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -153

SAS • What does all this do for SAS? As one long-term employee put it, “I just can’t imagine leaving SAS, and I felt that way for a very long time … if somebody offered to double my salary, I wouldn’t even think about it. ” Employee turnover, about 20% in software companies, is about 3% at SAS, which highlights another important facet of the SAS benefits programs. One person who has studied SAS, estimates that the lower turnover alone saves SAS $60 million to $80 million a year. As another example, letting employees visit on-campus health professionals (as SAS does) can cut hours out of the average employee’s time away from work for doctors’ visits. And, of course, the effect on engagement, morale, and productivity may be priceless. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -154

Google: Happiness and People Analytics

Goggle • When Google founders Larry Page and Sergey Brin began building Google, they wanted to make it a great place to work, and in doing so, they turned to SAS. They met with SAS executives and sent a team there to better understand what made SAS consistently a “Best Company to Work For. ” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -156

Google • It’s therefore not surprising that Google is one of the few employers whose employee benefits equal or exceed those at SAS. In addition to things like healthcare benefits and flexible work hours (and the possibility of making millions on stock options), its benefits include on-site dry cleaners, bowling alleys, cafés, transportation to and from campus, and nap pods. • As Google puts it, “It’s all about removing barriers so Googlers can focus on the things they love, both inside and outside of work. We’re constantly searching for unique ways to improve the health and happiness of our Googlers. ” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -157

Fed. Ex: Guaranteed Fair Treatment

Fed. Ex • Fed. Ex has been one of the “Fortune Magazine’s 100 Best Companies to Work For” for 12 of the past 15 years. Several things —excellent benefits, competitive salaries, and (as we discussed in Chapter 5) a focus on promoting from within (as embodied by its Job Change Applicant Tracking System [JCATS]) help to explain this; however, it may be Fed. Ex’s emphasis on building trust through communications that most sets it apart. • Survey Feedback Action (SFA) – The Fed. Ex survey feedback action (SFA) program is one example. SFA includes an anonymous survey that allows employees to express feelings about the company and their managers, and to some extent about service, pay, and benefits. Each manager then has an opportunity to use the results to help design a blueprint for improving workgroup engagement and commitment. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -159

Fed. Ex • SFA has three phases. First, the survey itself is a standard, anonymous questionnaire given each year to every employee. The questions are designed to gather information about what helps and hinders employees in their work environment. Sample items include: “I can tell my manager what I think” and “My manager tells me what was expected. ” A workgroup’s survey results are compiled and sent anonymously to the manager. • The second phase is a feedback session between the manager and his or her workgroup. The goal here is to identify specific concerns or problems, examine causes for these problems, and devise action plans to correct the problems. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -160

Fed. Ex • The feedback meeting should lead to a third, “action plan” phase. This produces a list of actions that the manager will take to address employees concerns and boost results. It includes: What is the concern? What’s your analysis? What’s the cause? And What should be done? • The Fed. Ex Guaranteed Fair Treatment Process – Fed. Ex’s Guaranteed Fair Treatment Process (GFTP) is a sort of turbocharged grievance process. It goes beyond most grievance procedures in several ways, perhaps most notably in that an appeal can go all the way to Fed. Ex’s top executives. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -161

A Best Company Human Resources Philosophy

Philosophy • There are several things that any manager intent on building positive employee relations can learn from studying any of these Best Companies To Work For…. • The human resource philosophy on which they built their human resource management practices. In Chapter 1, we said that people’s actions are always based in part on the basic assumptions they make, and that this is especially true in regard to human resource management. The basic assumptions you make about people—Can they be trusted? Do they dislike work? Why do they act as they do? How should they be treated? —together comprise your philosophy of human resource management. And every personnel decision you make—the people you hire, the training you provide, your leadership style, and the like— reflects (for better or worse) this basic philosophy. • One of the things molding your own philosophy is that of your organization’s top management. While it may or may not be stated, it is usually communicated by their actions and permeates every level and department. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -163

Chapter 14 Review What you should now know….

Review • You should now be able to: 14 -1. Define employee relations. 14 -2. Discuss at least four methods for managing employee relations. 14 -3. Explain what is meant by ethical behavior. 14 -4. Explain what is meant by fair disciplinary practices. 14 -5. Answer the question, “How do companies become “Best Companies to Work for? ” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 14 -165