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