Ethics and HR

- Kshitij Batra
Roll No. 40, MHRM 1st Year
Ethics commonly refers to the rules or principles that define right and wrong conduct. Many
people believe that we are currently suffering from an ethics crisis. Behaviors that were once
thought unacceptable — lying, cheating, misrepresenting, covering up mistakes — have become
in many people’s eyes acceptable or necessary practices.

Managers profit from illegal use of insider stock information and even college students seem to
have become caught up in the wave where studies show significant increases in cheating on tests.
Concern over this perceived decline in ethical standards is being addressed by organizations, and
companies are relying on HR to build an ethical culture. Human Resource departments are
creating codes of ethics, introducing ethics training programs and hiring ethics officers. Why is
ethics important to Human Resources? When employees in organizations make decisions to act
unethically, they affect not only the company itself, but also its shareholders, employees and
customers. Employees make a myriad of choices every day in businesses — if unethical, they
can damage a company’s productivity, profits and reputation.

These employees must be trusted to do the right thing, especially when no one is looking. It is up
to HR to train, educate and communicate with employees on rights and wrongs in the workplace.
After all, ethics is one topic that begins and ends with people and you cannot separate standards
of behavior from HR. An ethical decision considers six important factors. Individuals and
organizations often consider the factors after an action. The challenge for an HR Professional is
to build them into the decision process. The six factors include:

1. Facts 2. Ethical Issues 3. Stakeholders 4. Consequences 5. Obligations 6. Values

Human Resources and ethics are linked and must be integrated. In today s high-pressured
environment, HR must spell out for employees that ethics come before deadlines or bottom lines.
It s a message that can easily be overlooked in the work rush especially if employees feel
pressured to violate company policies in order to achieve business objectives. Ethics are
becoming more and more important, and HR departments are vital in establishing ethics
guidelines. As we celebrate this growing empowerment of employees, companies must ensure
these employees always act ethically. Ethics should be instinctive when making decisions, and a
good ethics program can successfully guide employees through the decision making process.

Codes of ethics are suggested means for institutionalizing ethical behavior. A code of ethics is a
formal document that states an organization’s primary values and ethical rules it expects
employees to follow. It has been suggested that codes should be specific enough to show
employees the spirit in which they should do things, yet loose enough to allow freedom of
judgment. Human Resources must be careful when establishing a code of ethics. In order for the
code to be effective, HR should be careful not to omit important issues such as personal
character matters, product safety, product quality, environmental affairs, or civic and community
affairs.

The Society of Human Resources Management has a code of ethics. It offers guidance in the
areas of professional responsibility, professional development, ethical leadership, fairness and
justice, conflicts of interest, and use of information. Among other things, it establishes an
expectation that an HR professional:

•    Add value by contributing to the ethical success of their organization,

Ethics are becoming more and more important, and HR must continually revise the code of
ethics to address issues that come up in the changing workplace. Corporations must ensure the
code of ethics is used effectively and not just as window dressing. Their effectiveness depends
heavily on whether management supports them and how employees who break the codes are
treated. When management considers them important, regularly affirms their content, and
publicly reprimands rule breakers, codes can supply a strong foundation for an effective ethics
program. However, winning the ethics battle isn’t only about how an organization punishes those
who engage in unethical behavior, but how the company rewards both good and bad behavior.

It’s up to HR to make sure employees fully understand the repercussions of ethical misconduct
and that such behavior will not be tolerated. Ethics guidelines must be easy to use and even
inviting to employees. A good ethics program provides both verbal and written reinforcements
and offers a variety of packages for employees to learn about or discuss ethics. Although a
usable ethics code and an accessible ethics officer will help get the message out, a successful
effort requires active communication, education and training — a key role of the HR department.
More and more HR departments are setting up hot lines, seminars, workshops and similar ethics
training programs to try to increase ethical behavior.

Human Resources also plays a role in briefing new hires about the ethics program and works
with the ethics department and other company officials to refine policies and procedures. Some
may believe HR plays a tangential role in the ethics debate, but that simply isn’t true. Human
Resources can help design programs, advise on strategy and consult on investigations, as well as
play an ongoing role in educating and training workers about ethics. The basic values of the
company must be visible. Human Resources insures they are visible and communicated during
the selection process, employee interview, orientation sessions and performance reviews to
create a culture that emphasizes ethics. Therefore, whether an organization relies solely on HR
for an ethics program or has a separate ethics office, the HR department is depended heavily
upon to provide support for the underlying structure.
An exhaustive communicative effort is the key to getting the word out. The message must
permeate the entire company from the top to the bottom. We know that communication must also
be supported by education and training. A strong ethical reputation can give a competitive edge
to an organization, improve recruitment, and help retain current employees. It encourages morale
because a good ethics program supports such morale builders as openness and honesty. It can
improve employee interaction and build a workplace atmosphere based on candor, fairness,
integrity and trust, lowering barriers in communications. Bottom line, an effective ethics
program builds morale of employees because most employees like to work for corporations they
think are ethically intended.

CONCLUSION
HR systems are the key to the development and maintenance of ethical culture.  One of the steps
HR managers can take is to focus on how ethics and values fit into the design of key systems
such as performance management and reward systems. HR managers can integrate accountability
for ethics and values into performance management systems so that implementing ethical values
is weighted substantially in promotion and compensation decisions (at least as much as bottom
line results). Additionally, HR managers can focus on reward systems by rewarding 'exemplary'
ethical behavior. To focus on discipline, unethical conduct must be disciplined consistently and
at high levels, to send a powerful signal that management means what it says about ethics. 
Finally, effective ethics management requires regular assessment of the ethical culture. Overall,
HR and ethics managers must focus on how cultural systems fit together or align in support of
ethical conduct, a common goal.