CHAPTER FOUR

Ethical Issues in Employees

Rights and Duties

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Ethical Issues in the rights of Employees

• The most common ethical issues in the rights

of employees are:
– Issues of Equity/Justice
– Issues of Freedom of Association and Collective
Bargaining
– Issues of Lay offs or Termination
 Issues of Justice and Fairness
• The implications of fairness and justice on
business sustainability are enormous.
– Employees who perceive injustice may experience
low morale and commitment leading to poor
performance.
– Injustice may also affect the reputation of a
business
 Issues of Justice and Fairness
• Fairness and justice is an approach to ethical
reasoning that includes several somewhat
different concepts under one umbrella.
– Equality principle
– Inequality Principle – linked with the rules of
Equity and Need
• This approach defines the moral act as an act
which treats similarly situated people with
similar ways with regard to both process
and outcomes, and with a sense of
 Components of Justice
Fairness/Justice in work environment has three
dimensions:
• Distributive Justice (majority and minority groups
receive equal pay and promotion).
• Procedural Justice (the same procedures are followed
in recruitment, selection, and development), and
• Interactive Justice- (the interaction between
employees and employers need to be fact driven and
without insult or sarcasm - satire expressions are
unjust in a work place)
 Distributive Justice
• Distributive justice
– has to do with the allocations of
outcomes that some get and others do
not.
– is concerned with the reality that not all
workers are treated alike; the allocation
of outcomes is differentiated in the
workplace.
 Distributive Justice
• The allocation rules that can lead to
distributive justice if they are applied
appropriately are:
– Equality (to each the same),
– Equity (to each in accordance with contributions),
and
– Need (to each in accordance with the most
urgency).
 Distributive justice
What are the fundamental premises that must be
considered when a manager applies the allocation
rules to ensure distributive justice in an organization?
 Distributive Justice
• When we apply the allocation rules to ensure
distributive justice;
• First, it is useful to consider one's strategic goals.
– Equity tends to provide individual rewards for high
performance, whereas equality tends to build esprit
de corps among teammates.
• If one desires to stimulate individual motivation, err
toward equity.
• If one desires to build group cohesion, err toward equality.
 Distributive Justice
• Second, organizations can balance these considerations
by mixing equality and equity together.
– It need not be either-or. Experiments with work
groups suggest that
• it is often best to provide team members with
a basic minimum benefit (This is analogous to
equality)’
• Above that minimum, however, it can be useful
to reward based on performance (this is
analogous to equity)
 Distributive Justice
• Third, different rewards should be provided
in accordance with different rules.
– It is often seen as fair to allocate economic benefits
in accordance with equity (i.e., those who perform
better might earn more).
– On the other hand, social-emotional benefits, such
as reserved parking places, are best allocated equally.
• Allocating social-emotional rewards equally signals
that everyone in the organization matters and is worthy
of respect.
 Procedural Justice

• Procedural justice
– is instrumental, in that it is concerned with
achieving some result or achieving distributive
justice.
– serves two important purposes:
• it makes more likely even distribution of
outcomes
• it encourages the perception that results are
fair because procedures were fair.
 Interactional Justice

• Interactional justice
– may be the simplest of the three
components.
– refers to how one person treats another.
• A person is interactionally just if s/he
appropriately shares information and avoids
rude or cruel remarks.
 Interactional Justice
• There are two aspects of interactional
justice:
– The first part, sometimes called informational
justice refers to whether one is truthful and
provides adequate justifications when things go
badly.
– The second part, sometimes called interpersonal
justice, refers to the respect and dignity with
which one treats another.
 Issues of Freedom of Association and the
Right to Collective Bargaining
• Freedom of association and the right to
collective bargaining
– enable employees to establish and join
organizations of their own with the goal of
collectively expressing their point of view
and defending their interests in the
company.
 Issues of Freedom of Association and the
Right to Collective Bargaining
• Business firms can earn the following
benefits by permitting freedom of
association/collective bargaining:
– Ensure compliance of the legislation governing the
freedom of association of its employees.
– Avoid hindering or obstructing the process of
creating an employee representative organization.
– Ensure that employees can express themselves
freely within the company on issues related to the
conditions in which they carry out their duties.
 Issues of Freedom of Association and the
Right to Collective Bargaining
• The right to collective bargaining and the
role of employee representative organizations
have been recognized by:
– The International Labor Organization.
– The 1966 International Covenant on Civil and
Political Rights.
– The International Covenant on Economic, Social
and Cultural Rights.
The right to collective bargaining and the role of
employee representative organizations have been
recognized by different nations as it has become a
good cause to earn advantages:
For instance, the grand successes of German and
Japan Economies are attributed to co-
determination and Japanese management
respectively.
 The case of Japan
• The great success of Japan owes to Japanese people and
its management.
– In Japan, the industrial relations are more harmonious than that
of any country of the west.
– The employers' and workers' organizations are tolerant to each
other.
– The managers, who are professionals themselves, help maintain
and develop congenial relations between employers and workers.
– The trade unions bargain with employers but they never fight
against the company. Thus it is often said that "American
unions fight the company but Japanese unions fight the
management."
 The Case of Japan
• In Japanese industries
– employees are not only highly paid but are also
highly valued as human beings.
– There is tenure of employment or permanent
employment
– They enjoy psychological security at their work-
place and for these reasons, Japanese industries are
almost free from industrial conflicts of
unimaginable proportion.
 The Case of Germany
• The grand success of German is attributed to
– The unique system of its management, called
"Co-determination." The name itself indicates
that it is participative in nature.
– In fact it ensures the extreme form of workers'
participation in management.
– Important decisions are being taken jointly.
– Managers give due weight to the opinion, efforts
and judgment of their subordinates or employees
or trade unions.
Equal Employment Opportunity
• EEO activities focus on preventing job-
related discrimination, prejudice, and
stereotyping.
• It is a basic human right and is argued to be
one of the most serious issues in HRM today.
• EEO addresses employment discrimination
which is defined as unjust actions against
individuals or groups that deny them
equality of treatment in employment.
Equal Employment Opportunity
• It is prohibited to hire or reject anyone on the basis of
non-professional criteria, such as religion, age, gender,
political opinions, ethnic origin or union membership.
• To avoid employment discrimination, Company’s must:
– Comply with a selection process that applies the
same criteria to every applicant for a given
position.
– Base all hiring decisions exclusively on professional
skills and personal qualities, in line with the needs of
the organization and the applicant’s own attributes.
 EEO Vs. Affirmative Actions
• Affirmative action refers to the positive effort to recruit
subordinate/minority group members including women
for jobs, promotions, and educational opportunities.
• Affirmative actions at its prima facie seems a move
against equal employment actions but is an act
designed to correct past injustices.
• Different writers have different views with regard to
the issue of affirmative actions. Some are against and
others are in favor of this same issue and its application
in different areas.
 Affirmative Actions - Cons and Pros

Cons
Pros
• Reverse Discrimination
Used to justify race, gender or color based past
• injustices and
Unworthy its long-lasting impact
Beneficiaries
• Designed
Does to narrow
not address realdown the gaps that were
problems
• created
A due to unequal treatments of people in
sham/fake
sharing the national economic, political or
• Is not designed to solve all problems
social pies.
• Difficult and slow
• Racial/Gender balance is real goal
Is any departure from merit and
efficiency criteria to correct past
injustices is unjust?
 Reverse Discrimination
• Reverse Discrimination occurs:
– when there is any departure from merit and efficiency
criteria to correct past injustices
– when an affirmative action programme based on
irrelevant criteria overrides merit and efficiency criteria.
– when preferential treatment run counter to the principle
of equality of opportunities.
• However, to justify preferential treatment or
Affirmative action the notion of distributive justice
is often invoked.
 Reverse Discrimination
• In giving shape to the notion of distributive
justice, Aristotle writes: "Injustice arises
when equals are treated unequally and also
when unequal's are treated equally"
 Laying off/Termination
• A layoff can be a temporary cessation of
employment usually initiated because the
company is having financial problems.
• Termination is a permanent end to
employment that can happen for any
reason, usually through poor performance
or policy violations.
 Laying off/Termination
• When laying off employees it is important to consider the following:
– The company must justify and explain its business decision to make
layoffs.
– The company must have written policies that outline downsizing
procedures.
– The company must make sure that there is nothing stated in an
employee’s contract that protects him/her from layoffs or requires
some sort of severance pay in the event of a layoff.
– It is important to predetermine the departments and positions that need
to be cut.
– In addition, there should be clear, objective criteria in place to
determine who will be laid off.
– These criteria should be used universally throughout a company when
downsizing
 Laying off/Termination
• Ethical Considerations at time of termination
• Here are some ways to ensure employees are fired in an
ethical way:
– Be sure to hold conversations prior to firing an
employee. If they are underperforming or not meeting
expectations, having a conversation with them gives them a
chance to course correct.
– Stay consistent across the entire organization.
Consistency can help to avoid discrimination and ensure
unbiased and fair treatment for all.
– Be transparent. Employees should be notified in person
that they are being terminated.
 Whistle Blowing and Loyalty
• Whistleblowing
– is an attempt by a member or former member of an
organization to disclose wrongdoing in or by the
organization.
– is morally problematic because employees are seen
to have a prima facie duty of loyalty to their
employers.
 Whistle Blowing and Loyalty
• Conditions for justified whistle blowing:
– The whistle blower believe that the organization is
engaged in serious moral wrongdoing.
– The whistle-blower has good reason to believe that
blowing the whistle will prevent the harm at a
reasonable cost.
– The whistle-blower has exhausted all additional
internal procedures before s/he discloses the
undesirable behavior to external parties.
 Arguments against Whistle blowing
• If the Law recognizes whistle blowing as a
right,
• It is open to abuse:
– employees might find an excuse to
blow the whistle in order to cover up
their own incompetency and
inadequate performance
• It will also make the environment
difficult for managers to run the company
effectively
 Arguments for Whistle-Blower
• Arguments for whistle blower protection
– Defense of the law protects whistle blowers to
provide best contributions to society
– Defense of the law supports the right of an
employee on his/her freedom to speech
 Participation in Management
• Participation refers to the mental and
emotional involvement of a person in a group
situation which encourages him to contribute
to group goals and share in the responsibility
to achieve them.
 Participation in Management
• Features of Participation in management
– It consists of mental and emotional
involvement.
– Participation is collective.
– It is based on mutual trust ,information
sharing, mutual problem-solving and
decision making.
– Participation can be made at different levels -
Shop floor, Plant , Department and
Corporate level.
 Participation in Management
• Four degrees of participation:
a. Communication : It involves sharing information
about all management decisions with workers.
b. Consultation: workers express their views. Final
decisions are taken by management after
consultation.
c. Joint Decision
d. Self Management: Complete autonomy in hands
of workers.
 Participation in Management
• Objectives
– Economic Objective :Increased Productivity by
increasing job satisfaction and improving
industrial relations.
– Social objective: Human dignity and respectable
status .
– Psychological objective: Changed attitude by
satisfying non economic needs .
 Participation in Management
• Importance
– Mutual Understanding: It increases awareness about employers
and employees problems .
– Higher Productivity: It Increases motivation, Job satisfaction
which leads to higher productivity and lower cost per unit and
greater profits.
– Industrial Harmony :It increases workers loyalty because of
continuous dialogue between workers and management .
– Less Resistance to change :Readily adapt the change because they
understand the need of change by participation in decision making.
– Creativity and innovation: Participation encourages worker to
think and take initiative.
Employment rights and Employment “at
will”
• Employment rights:
– Employers must have the right to reduce its work
force in hard times if that is what it needs to do
to survive.
– In the case of employment “at will”, employers
may dismiss their employees for good cause, for
no cause, or even for cause morally wrong,
without being thereby guilty of legal wrong.
Employment rights and Employment “at
will”
• Employment at will is a uniquely American
doctrine having its source in the common-
law principle that where the employment
relationship is not bound by a contract
specifying the period of employment, the
relationship is considered "at will" and can
be terminated without cause by either
party.
Employment rights and Employment “at
will”
• The employer's right to terminate at will has been grounded in
three ways.
– First, it is grounded historically in the common-law tradition of "at
will" employment.
– Second, the right is grounded in considerations of mutuality
between employee and employer drawn from contract theory.
• Since an "at will" employee has the right to resign at will, it is claimed that
the employer has the corresponding right to terminate at will.
• It is argued that the employer's right to terminate is justified because both
parties enter the relationship freely and both are equally free to terminate at
will.
– The most promising basis for grounding the employer's right to
terminate is the claim that it is an extension of private property
rights.
Employment rights and Employment “at
will”
• Exceptions to the "at will"
doctrine:
– When discharge violates explicit public policy
– When discharge is a result of malice or bad
faith
– When discharge violates an implied contract
between employer and employee
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