Tuesday, April 16, 2013

Labor Unions

Written By: Catherine Pesta

Labor Unions

Labor unions are employee-organized associations that protect employees’ rights and further their interests within an organization. Labor unions typically require membership in which employees pay union dues to receive union representation.
In 2008, about 12% of America’s workforce was unionized and 50% of working individuals were interested in working for a union (Macaray, 2008).  However, depending on the prominent industry of an area, union represented workers may be much more common. For example, in “The Motor City”, metro Detroit, the United Auto Workers (UAW) represents hundreds of thousands of employees of from Ford, Chrysler and General Motors. 
Aside from the automotive industry, other heavily unionized professions exist in both the private and public sector. These professions include teachers, police officers/firefighters, railroad workers and construction workers.

Labor Union History & Membership
Unions began to form after the industrial revolution in the mid-nineteenth century. Original labor unions were not successful because they lacked communication and leadership. In 1947, Taft-Hartley Act was passed into law, which to this day is the code of conduct for unions.  It gave workers the right to organize and join labor unions, to bargain collectively through representatives of their own choosing, and to strike (Jackson, H. J., & Mathis, L. R., 2009).  Today, the government strictly regulates unions and certifies every newly formed union.  
Union membership in the United State has been decreasing at a steady rate over the past five years. When individuals are hired at organizations with union representation they have the option to pay union dues. Union dues are typically collected monthly and are used towards the salaries of union leaders, legal representation, political campaigns, strike funds, and other purposes. With union membership comes the opportunity to vote on candidates who campaign to represent the employee body as a whole.

Working for a labor union comes with many benefits for employees that are, in most cases, not always experienced by nonunion workers.  Benefits of working for a union-backed company include the following:
·      Employees who work for a union cannot be fired “just because”. Termination within unions requires serious misconduct. Before a unionized employee can be fired they must go through a grievance procedure. Needless to say, there is a higher level of job security for union employees.

·      Union workers typically receive better wages than nonunion workers. The median weekly income of full-time wage and salary workers who were union members in 2010 was $917, for nonunion workers it was two hundred dollars less at $717 (Union Membership, 2012).

·      Union workers typically have more access to benefits. About 93% of unionized workers were entitled to medical benefits compared to 69% of their nonunion peers (Union Membership, 2012).

·      Unionized workers have more power to negotiate wages, benefits and working conditions. By approaching issues as a group there is a better chance for a positive outcome than approaching issues individually.

There are disadvantages of union representation also. For someone who would prefer to act individually rather than have someone negotiate on his or her behalf may not see the benefit of being union-backed. Other disadvantages include:
·      Union representation does cost money. Union dues can be up to several hundred dollars per year and there is sometimes a one-time initiation fee as well (Todate, M., 2010).  Not only is the cost a disadvantage but also the fact that the individual member has no control over how the union dues are spent.
·      For employees hoping to move up quickly within an organization they may be prevented from doing so due to importance of seniority. Employee perks are in most cases offered based on seniority rather than merit. Some union agreements enable displaced workers to “bump” another worker with less seniority and take his or her job (Macaray, 2008).

Generally, when it comes to ethical and moral issues within a workplace, those employees that are union-backed have a greater piece of mind than those that aren’t union-backed. There is strength in numbers and when it comes to fighting for fair employee relations it can be a great benefit to be union backed. It is important for the union leaders to represent and act in the best interests of the entire employee body. Cooperation between an organization’s management and union can result in a very prosperous company.  

Todate, M. (2010). Economic Effect of Labor Unions. Japanese Economy, 37(1), 111-129. doi:10.2753/JES1097-203X370104

Macaray, David. (2008). "Labor unions and Taft-Hartley." Synthesis/Regeneration. General OneFile. Retrieved April 16, 2013.
Household data series union membership tables. (2012, June 21). U.S. Bureau of Labor Statistics. Retrieved April 17, 2013, from http://www.bls.gov/cps/cpslutabs.htm

Jackson, H. J., & Mathis, L. R. (2009). Human Resource Management, 13th Edition. South Western: Cengage Learning.

Child Labor

Written by: Gjergji Gega

If child labor as a mass phenomenon occurs not because of parental selfishness but because of the parents’ concern for the household survival, the popular argument for banning child labor loses much of its force. However this assumption about parental decision-making coupled with the assumption of substitutability in production between child and adult labor could result in multiple equilibria in the labor market, with one equilibrium where children work, and another where adult wage is high and children do not work. (Basu, Van, 1998).
Child labor has been a persistent problem throughout the world. Though restrictions on child labor exist in most nations, many children that live in undeveloped countries do work and leaves them open to exploitation from foreign corporations. The International Labour Office reports that children work the longest hours and are the worst paid of all laborers (Sadiqi and Patrinos, 1998)
Africa and Asia together account for over 90 percent of total employment (Basu and Van, 1998). Underdeveloped countries such as Ghana, Tunisia, Burma, and Cambodia have a really high unemployment rate and a corrupt government that does not enforce child labor laws. This makes it very appealing for companies that want to cut costs down and increase revenue. Companies such as Hershey’s, one of the largest companies in North America are raking in over $6 billion in annual revenues (Bloxam, 2012). After looking at the revenues of these companies, it is not surprising that they are paying workers at an extremely low rate and using child labor.

Attributes to Child Labor
Child labor is especially common in rural areas. For example, 66 percent of the officially employed children aged 6 to 14 years in Peru work in the countryside (Basu and Van, 1998). There are many reasons why child labor occurs in undeveloped countries. The most important reason for child labor is poverty, and the induced pressure upon them to escape from this world of slavery. Schooling is another contributing factor to child labor. All parents would like their children to get an education. When there is no access to school, or there might be a low quality of education, parents will want their children to find ways to make money or learn new skills such as agriculture to bring income to the family. This vulnerable state leaves children prone to exploitation.

Exploitation of underdeveloped countries
During the past decade the economics of the whole world has been in a declining state. Due to the declining state of our economics and prices have kept rising. Companies have found different ways to cut costs down. Some ways that companies have been able to cut costs down are outsourcing and using child labor. Even though this may not be legal or ethical in the United States some companies do capitalize on child labor. Companies such as Nike, Apple, Microsoft, and Hershey’s exploit the lack of laws from underdeveloped countries.
Just this month Whole Foods Market said it has halted orders of Scarffren Company’s artisan chocolate brands over concerns about child labor in Hershey’s West Africa supply chain (Stevens, 2012). Another example of a famous company exploiting child labor is Nike. One of the plants (Subakumi Plant) in Indonesia, say that supervisors frequently throw shoes of them, slap them in the face, kick them, and call them dogs and pigs. It’s understandable that child labor laws are not the same throughout the world. This fact does not mean that company’s such as Hershey and Nike don’t have responsibility for every supply chain or plant managers that break those laws. These companies have to be held responsible, but at the same time need to find solutions and ways to reduce or completely abolish child labor. Most companies have begun to work to find ways to make life better and fair for workers in underdeveloped countries.
Solutions for Child Labor
Abusing human rights can be costly and can have a negative image on a company. Most companies are changing policies and trying to find ways to help workers. Nike is one of the companies that is taking a big step forward and is allowing outsiders from labor and human rights groups to join the independent auditors who inspect the factories in Asia, interviewing workers and assessing working conditions (Cushman, 1998). Another company that is committed to eliminating child labor is Hershey’s. Hershey’s has committed to sourcing 100 percent certified cocoas for all its products by 2020 (Stevens, 2012). Hershey’s also introduced a program called COCOALINK. COCOALINK distributes information about climate and pest control (DuBois, 2012). . Programs such as COCOALINK help farmers double their crop yield in a couple of years (DuBois, 2012). All these different programs and solutions will educate managers to provide better conditions for workers and at the same time, eliminate child labor.
Employers have always capitalized in underdeveloped countries where they know that laborers cannot legally form unions, and where child labor laws are not enforced. This does not make it morally or ethically right for companies to exploit children in poor rural areas. Companies such as Nike and Hershey’s need to lead by example, by following not only the laws of that country but also international laws of child labor. If laws are not forced, then child slavery will continue and these children will be deprived of the simple joys of childhood.

Siddiqiq, Faraaz, Patrinos A., Harry (June 1998). Child Labor: Issues, Causes, and Interventions.

Basu, Kaulshik, Van H., Pham. The Economics of Child Labor. Vol. 88, No 3 (June., 1998), 412-427.

Fallon, Peter,Tzannatos, Zafiris. (February, 1998). Child Labor: Issues and Directions for the World Bank.

Stevens, Harry (October 19,2012). Child Labor Concerns Across Hersheys Supply Chain Prove it Pays to be Proactive   .GreenBiz.

Cushman, H., John, (May13, 1998). International Business; Nike pledges to End Child Labor and Apply U.S. Rules Abroad.

DeBois, Shelley. (February 7, 2012). How Big Chocolate Plans to Save its Cocoa Supply. CNN Money.

Legal Compliance

Written by: Christine Marah
Legal Compliance
Ethics, what is it? Everyone perceives it differently.  What might be considered ethical to one individual may be considered unethical to someone else.   An issue that organizations often encounter is determining whether an employee’s actions are ethical or unethical.  Ethics Resource Center (ERC) is a nonprofit research organization that has been focusing on the ethics department in both public and private organizations for over 88 years (Harned, 2012).  A conclusion that was drawn from one of ERC recent surveys was that within the past year, about 3,000 United States employees witnessed ethical misbehavior (Millage, 2005).  Another observation that was drawn from the same survey, was that there is a strong connection between an organization’s overall ethical culture, and the conduct of its employees. Seventy percent of employees employed within an organization with a weak ethical culture either witnessed and/or experienced ethical misbehavior in the past year, while only 34% of employees within organizations with a strong ethical culture reported witnessing ethical misbehavior (Millage, 2005). 
Every organization has an obligation to make sure they are legally compliant with the current laws.  Teaching what is considered ethical and unethical can be nearly impossible.  The Chairman of the Board of Lockheed Martin, Norm Augustine, stated “We don’t teach ethics, we teach ethics awareness” (Trevino, Weaver, Gibson, & Toffler, 1999).  A challenge that knowledgeable managers are beginning to face is how to create awareness about ethical and legal matters (Trevino et al., 1999).  Unfortunately, organizations can not expect that every employee is knowledgeable with the current laws and regulations that are related to their job title (Trevino et al., 1999).  Since organizations understand that not every employee is knowledgeable of the current laws and regulations, they began to create an ethics and legal compliance program (Trevino et al., 1999). 
Ethics and Legal Compliance Program
About 10,000 employees who are employed by one of the six largest American companies were sent a questionnaire to their home asking:  “What works and what hurts in corporate ethics/compliance management?” (Trevino et al., 1999).  According to the results from the survey, the best approach to the ethics and legal compliance program was a values-based approach (Trevino et al., 1999).  A values-based approach includes making sure every employee is being treated equally, rewards for ethical behavior, and making sure leaders are following through with policies, actions, and proceeding with the proper consequences for unethical behavior (Trevino et al., 1999).  With the values-based approach, leaders of the organization have seen a positive change in the employee attitudes and behaviors (Trevino et al., 1999).  The main observed outcome from the positive change in the employee attitudes and behaviors were an increase in commitment to the organization, awareness of ethical issues, reporting ethical and unethical behaviors amongst co-workers (Trevino et al., 1999).  Also, when employees are aware of the current ethical and legal issues taking place, they are more prone to follow the proper procedure when they either witness or experience any illegal or unethical behaviors (Trevino et al., 1999).  

Bullying in the Workforce
Should there be legal actions against bullying? By definition bullying is considered to be a person that treats a smaller/weaker person in a hostile, overbearing, or threatening manner (“Bullying,” 2003).  Sadly, we hear of bullying becoming more common with the younger generation.  With the results of the younger generation bullying their classmates at school, more children to young adults are committing suicide over it.  Sadly however, who would have thought that bullying would continue from grade school to the workforce. Sexual harassment, discrimination, and favoritism, are the most common types of bullying that employees tend to worry about in the workforce. When sexual harassment comes to mind, we automatically think about how horrifying the situation is along with the health and mental issues this may cause.  Over the past 21 years, there were 110 studies conducted comparing the effects of employees well-being after experiencing bullying and sexual harassment in the workforce (Zeidner, 2008).  The study found that employees who experienced bullying had a decrease of commitment to the organization and an increase in stress, anger, and anxiety compared to employees who experienced sexual harassment (Zeidner, 2008).  Any type of unethical behaviors will cause a rippling effect on an individual, whether the action is committed in the workforce or outside.  Since, there are no legal ramifications against bullying, a consequence of an employee bullying their co-worker would be that the co-worker will become less committed to the organization, which will decrease their job performance and eventually end up quitting (Zeidner, 2008). Every employee works differently under certain circumstances.  Some employees’ job performance increases while under stress and some employees’ job performance decreases while under stress.  But, the cause of stress is different.  With a co-worker being bullied by an employee, the co-worker will experience an increase in stress, anger, and anxiety levels, ultimately harming the co-workers physical and mental health conditions (Zeidner, 2008). Some types of physical health conditions the co-worker may encounter are an increase in blood pressure and heart rate.  A decrease in mental health caused by stress could eventually turn into depression.  Although, there are currently no legal consequences against bullying, every organization must classify bullying as an unethical and intolerable behavior and approach bullying in the ethics and legal compliance program.

Whether a business is considered as a sole proprietorship, partnership, or corporation, all businesses have an equal obligation of making sure it is compliant ethically and legally.  Also, each form of business is liable for any misconduct of an employees’ action on the job.  The leaders and human resource department has a responsibility of making sure that the organization as a whole is operating ethically and legally. It is an essential for the leaders and the human resource department to make sure every employee fully understands the proper behaviors pertaining to their job.  Additionally, each employee must be aware of the consequences of unethical and illegal behavior.

Bullying. (n.d.) The American Heritage® Dictionary of the English Language, Fourth Edition.
(2003). Retreived April 7 2013 from  http://www.thefreedictionary.com/bullying.

Harned, P. J. (2012). About ERC. Ethics Resource Center.  http://www.ethics.org/page/about-erc
Millage, A. (2005). Ethical Misconduct Prevalent in Workplace. The Internal Auditor, 62 (6), 13,15.                http://search.proquest.com.huaryu.kl.oakland.edu/docview/202748581?accountid=12924
Trevino, L. K., Weaver, G. R., Gibson, D. G., & Toffler, B. L. (1999). Managing ethics and legal compliance:     
What works and what hurts. California Management Review, 41 (2), 131-151. http://search.proquest.com.huaryu.kl.oakland.edu/docview/216150439?accountid=12924
Zeidner, R.  (2008). Bullying worse than Sexual Harassment? HR Magazine, 53 (5), 1.

Monday, April 15, 2013

Ethical HR Policy’s

By: Ido Saltarelli

            Human Resource management is an integral part of business today. Often it is the HR departments’ job to keep employees in line with the mission of the company through recruitment, policy, and the organization’s culture. In the recent past there have been many high profile business scandals such as the Bernie Madoff Ponzi scam, Enron, and WorldCom. This has brought ethical behavior to the spotlight for discussion more than ever. (McDowell , 2006) HR departments have been charged with the responsibility of keeping policy and management in line with ethical standards put in place by the government and going beyond them to raise employee morale, put the origination in good standing with the public, and avoid legal complications.
            The government has put some standards in place to deal with unethical behavior. An example of this is the Sarbanes–Oxley Act of 2002. This federal act outlines rules for companies and penalties for non-compliance. (Sloan, Gavin,2010)  Human Resources have the job of keeping the organization in compliance with federal and state law. Every company has different goals and functional areas of operations so the laws and required policies differ from company to company. (To see the Sarbanes-Oxley act go to http://www.sec.gov) It is important for HR leaders to stay in compliance with laws and to offer additional training to avoid legal problems. 
            Ethical issues within the workplace can come in all different shapes and sizes. Often time’s ethical situations are thought of as the company’s policies regarding employees, such as compensation and ethical recruiting practices.  But ethical problems arise at the personal level such as misconduct, bullying, sexual harassment, and discrimination. (Giancola, 2008) HR being the professional liaison between corporate and employee, it is their duty to develop a personal and corporate ethical code. Sloan and Gavin (2010) describe a 3 stage process for HR to develop an ethical policy.
·         Develop core values congruent with an ethical origination,
·         Identify changes to be made and implement them throughout the organization,
·         Create an ethical culture that promotes individual ethical conduct and creates ethical organizational goals.
Using company goals and direction from top management HR can shape culture within an organization over time to become more ethical.
            As HR departments develop strong ethical standards for their company many things will be affected. Thilmany (2007) states that “working within a strong ethical culture can have a positive effect on an employee's level of pride in an organization, confidence in its future and overall satisfaction.” Also as the public perception of an organization shifts there is a strengthening of the corporate brand. For example the shoe company Toms is perceived as an ethical company that donates a pair of shoes for every pair it sells. A strong brand will help organizations grow and be more resilient to hard economic times through customer loyalty.
            Deloitte is an accounting, and consulting firm headquartered in New York. Fortune magazine ranked Deloitte 67 out of the top 100 companies to work for in 2012 and in 2013 they raised 20 spots to 47.  I believe what helped them attain this is solid ethical polices and training. Human Resource professionals did this at Deloitte by identifying key people at the top and aligning their goals for the company and integrating an ethical program. (Mcdowell, 2006) They called this setting the “tone at the top”. Mcdowell writes that the next step was for them to integrate a system of leadership that would allow the “tone” to flow down from the top to the leaders of daily operations. This system worked for Deloitte and the result was that from the first day of employment the ethics policy is understood and reinforced. (Mcdowell) An example of how Deloitte promotes an ethical culture is Deloitte has implemented a program that allows for employees to work for nonprofits for a few months and still get paid partial salary. (http://money.cnn.com, 2013)
             An ethical corporate culture is a vital to a company in the 21st century. The government has put in place regulations to help keep tabs on large organizations and keep them from acting illegally.  HR managers must keep their companies within the bounds of the law. But it is also important for HR managers to go above and beyond. It is a good idea for HR managers to start to think about the mission statement and how they can develop, and research ways for to implement policies that go above and beyond law. Present the findings to upper management and if it is feasible, develop a plan to start implementing the policies across the organization. Most companies have different needs and are at various stages of development and growth, and no one person can change everything overnight. But to be completive in today’s corporate environment it is important to try and instill an ethical code. Deloitte did this and it created a culture within their origination that allowed them to be named one of the top 50 companies to work for in 2013.

Giancola, F. (2008). A tool for developing ethical HR policies and practices. Employee Benefit Plan Review, 63(3), 24-28. Retrieved from http://search.proquest.com/docview/216888020?accountid=12924
McDowell, T. (2006). Deloitte's three ways to instill ethical guidelines. Strategic HR Review, 5(5), 16-19. Retrieved from http://search.proquest.com/docview/217175661?accountid=12924
Thilmany, J. (2007). Supporting ethical employees. HRMagazine, 52(9), 105-106,108,110,112. Retrieved from http://search.proquest.com/docview/205054151?accountid=12924
SLOAN, K. and GAVIN, J. H. (2010), Human Resource Management: Meeting the Ethical Obligations of the Function. Business and Society Review, 115: 57–74. doi: 10.1111
Deloitte - Best Companies to Work For 2013 - Fortune. (n.d.). CNNMoney - Business, financial and personal finance news. Retrieved April 16, 2013, Retrieved from http://money.cnn.com/magazines/fortune/best-companies/2013/snapshots/47.html?iid=bc_fl_list