Spotlight on ETHICS

What Is a “Right” Behaviour?

Ethics are moral principles that guide human behaviours and are often based on a society’s cultural values, norms, customs, and beliefs, which means that different cultures and even individuals within the same society have widely varying standards of behaviour. How are we to differentiate “right” from “wrong” or “good” from “bad”? There are no simple answers. Many adopt one of the following postures in dealing with such ambiguous situations:

1. Universalist approach: Persons who embrace this view assert that some moral standards are universally applicable. In other words, regardless of society or place, a wrong act (such as killing, stealing, or lying) is wrong. There are no exceptions to moral “rights” and “wrongs.”

2. Situational approach: What is right or wrong depends essentially on the situation or culture surrounding the actor. While telling the truth is desirable, there may be situations in which lying is acceptable or even necessary, or other cultures may not value truth to the same extent. Similarly, while killing is bad, there may be situations in which this act is justified. It all depends on the situation. While high morals are to be followed, an individual may have to make exceptions when the context justifies them.

3. Subjectivist approach: In this approach, the individual decision-maker facing a situation determines what is right and wrong after considering all aspects of the situation. Moral decisions are based on personal values and preferences. Needless to say, the standards imposed by individuals are vastly different depending on their upbringing, current circumstances, values, and beliefs. Another useful model by which to understand and guide ethical behaviour is offered by Lawrence Kohlberg, an American psychologist. Kohlberg posits six stages that form an invariant and universal sequence in individual development; thus, everyone is supposed to go through the same stages in the same sequence. It is possible, however, for a person to be “stuck” at one of the following stages and not proceed to the next level. The six stages of moral development identified by Kohlberg90 are as follows:

Stage 1: Obedience and Punishment Stage: The only reason for a person to perform the “right” act at this stage is obedience to others who have the power to punish.

Stage 2: Reciprocity Stage: Here, the individual enters into reciprocal agreements with others in order to receive the greatest good or reward. The focus is on achieving one’s own objectives and on self-interest; for this, the individual concerned is willing to take actions that others want them to take.

Stage 3: Interpersonal Conformity Stage: What is “right” is determined by expectations of others who are close to the individual. Close relatives, friends, and other “reference groups” help the individual identify the “right” action in any setting.

Stage 4: Law and Order Stage: Doing one’s duty and obeying society’s rules is considered the “right” behaviour at this stage.

Stage 5: The Social Contract Stage: Here, the individual goes beyond the minimal standards established by laws and rules. “The greatest good of the greatest number” in the society is the maxim that guides the individual’s behaviour at this stage.

Stage 6: Universal Ethical Principles Stage: At this stage, the individual is guided by high moral principles. People are to be treated as ends in themselves, not just as means to one’s ends or even to the ends of a whole group or society. People are considered as inherently valuable and to be treated in the “right” way. Very few individuals reach this level. The field of human resource management is full of situations that involve hard choices between good and bad, right and wrong, desirable and undesirable.

The Spotlight on Ethics feature in this book will introduce you to one or more ethical challenges associated with the topic discussed in each chapter. Once you have identified your responses, compare your answers to those of your friends or family members. Find out why each person chose differently. Try to categorize the responses under the three categories and six stages of moral development listed above. Which approach seems to be used by most of your friends and acquaintances? At what stage of moral development are you and your friends? Why? What are the implications for you and for your employer? What prevents you and your friends from moving to the next stage?

Instructions: Consider the following situation. Make a note of your answer and compare it with those of your friends and acquaintances.

“Blind” review versus social media

Your organization has taken to using “blind” reviews of applicant information to diminish the potential for unconscious bias in recruiting efforts. In a bid to appeal to Generation Z applicants, your organization has decided to hire an individual to serve as a social media “influencer” on behalf of your organization. One member of the search committee has indicated that they would like to review the social media presence of all candidates. Another member of the committee has reminded the group about the importance of “blind” review. The discussion has become somewhat heated among the group with no obvious conclusion in sight. As a member of the search committee, what would you offer as a path forward?

Organizational Culture

department’s role within the firm. For instance, in a highly formal bureaucracy that is structured along functional lines (e.g., marketing, finance, production, etc.), HR’s role is often to preserve the existing division of work by providing clear job descriptions, hiring specialists for each division, and introducing training systems that foster functional expertise. In contrast, in organizations that have flexible structures, the socialization of employees to create an organization-wide perspective and the creation of broad job classes may assume greater importance. Finally, an organizational culture, the core beliefs and assumptions that are widely shared by all organizational members, shapes work-related and other attitudes and significantly influences overall job commitment and performance. Clearly, human resource management has a role in shaping this; however, even here, the culture has to be consistent with the overall mission and strategy of the organization concerned.

The core beliefs and assumptions that are widely shared by all organizational members.

Step 4: Choice and Implementation of Human Resource Strategies

Giving consideration to both the internal and external environments provides the opportunity for the human resource professional to begin evaluating potential human resource practices and activities and whether each is viable. Unsuitable strategic options must be dropped from consideration. The ones that appear viable should be scrutinized in detail for their advantages and weaknesses before being accepted for implementation.

Strategic choice and implementation involve identifying, securing, organizing, and directing the use of resources both within and outside the organization. Ultimately, there should be a clear line of sight between the HR strategy and the corporate goals (see Figure 1-10). Similarly, the strategic human resource plan needs to integrate with other plans in the organization.

As the above example shows, the HR strategy must reflect every change in the organizational strategy and support it. Simply stating that “we are strategic in our focus” does not, in fact, result in a contribution to organizational strategy.

A survey of 1,030 HR and non-HR business leaders revealed that 60 percent of HR teams spend more time performing administrative tasks than strategic ones. Interestingly, 85 percent of HR professionals believe that strategic HR is important, while only 67 percent of non-HR leaders believe the same.92 In another study, 73 percent of the respondents believe that the word strategic is overused in human resources.93

Creating an organization’s HR strategy is often a complex task. Because of the dynamic nature of both the internal and external environments, it is not uncommon to see a difference between an organization’s stated HR strategy and its “emergent” HR strategy.94 Although in any given organization there tends to be a dominant HR strategy, multiple bundles of HR practices are likely to develop to cater to the unique needs of organizations in a subgroup or industry.95 Mere use of the term strategic without clear actions that support it simply reduces the credibility of the HR profession and its members.

In formulating strategies, HR professionals must continuously focus on the following activities:

1. Identifying opportunities, risks, and challenges

Strategic human resources necessitates a constant vigilance on foreseen and emergent opportunities, risks, and challenges that can be addressed through either people or the processes and systems by which we organize people in organizations. For instance, human resource planning as covered in Chapter 3 enables the determination of the demand and the supply of various types of human resources within the firm. Proactive human resource professionals, however, also ensure that there are regular systematic reviews of the current state of HR practices in an organization and the identification of needed HR processes, tools, and activities. The results of human resource planning shape the overall human resource strategies in the short and long run and identify any gaps in people or processes that need to be fulfilled.

2. Making data-informed decisions aligned to strategy

A second element of the strategic process is the eventual choice of appropriate human resources or the practices that will fill the gaps identified in the first stage. Many of the details of this choice environment will be discussed in the chapters that follow. Regardless of the decision environment, a key focus must remain on utilizing data to support decisions and confirmation of whether those decisions are consistent with the strategy.

3. Optimizing for high performance

With the right talent in the right place along with the right processes and practices, attention must turn to optimizing both the employee’s time and the activities and processes that guide human resources in a company. For example, once hired, new employees need to be oriented to the organization’s policies and procedures and placed in their new job positions. Since new workers seldom fit the organization’s needs exactly, they must be trained to perform effectively. They must also be prepared for future responsibilities through systematic career planning and development.

The human resource strategy should ensure that the productive contribution from every member is at the maximum possible level. In today’s work setting, internal work procedures and organizational policies must be continuously monitored to ensure that they meet the needs of a diverse workforce and ensure safety for every individual.

To be effective, a strategy should also have clearly defined action plans with target achievement dates. Otherwise, it will simply end up being an exercise on paper.

Step 5: Review, Evaluation, and Audit of Human Resource Strategies

Human resource strategies, however effective they prove to be, must be examined regularly. An organization’s contextual factors, such as technology, environments, government policies, and so on, change continuously; so too do several of its internal factors, such as membership characteristics, role definitions, and internal procedures. All these changes necessitate regular strategy evaluation to ensure their continued appropriateness.

Hewlett-Packard has carried out formal research to identify links between employee experience and the firm’s operational performance. The company grouped employees based on their function, recognizing that certain functions have more direct impact on operational outcomes. Results from the study indicate that “effective collaboration” combined with “empowerment to make decisions” tends to be related to customer attitudes.96

Results of program evaluation such as the above produce valuable feedback, which is information to help evaluate success or failure. Such information, in turn, helps the firm to fine-tune its practices or even abandon some actions that do not seem to have performance potential. Alternatively, additional resources can be allocated to successful projects to reap full benefits.

A holistic review of the HR strategies in an organization with the intention of identifying and correcting deficiencies is referred to as a human resource audit. The audit may include one division or an entire company. The benefits of a human resource audit are many and include the following:

Human Resource Audit

An examination of the human resource policies, practices, and systems of a firm (or division) to eliminate deficiencies and improve ways to achieve goals.

• The audit helps align the HR department’s goals with larger organizational strategies.

• It almost invariably uncovers better ways for the department to contribute to societal, organizational, and employee objectives. This, in turn, clarifies the human resource department’s duties and responsibilities.

• It ensures timely compliance with legal requirements.

• It discloses how well managers are meeting their human resource duties.

• It uncovers critical human resource problems and possible solutions.

• It reduces human resource costs through more effective procedures.

• It provides specific, verifiable data on the human resource department’s contributions.

• It stimulates uniformity of human resource policies and practices.

• It helps review and improve the human resource department’s information system.

• It enhances the professional image of the department among various stakeholders.

Human resource research grows more important with each passing year, for several reasons. First, human resource work carries with it many legal implications for the employer. Failure to comply with equal employment or safety laws, for example, subjects the organization to potential lawsuits. Second, “people costs” are significant. Pay and benefits are often major operating expenses for most employers. Improper compensation plans can be costly, even fatal, to the company’s survival. Third, the department’s activities help shape an organization’s productivity and its employees’ quality of work life. Fourth, the critical resource in many organizations today is not capital but, rather, information and knowledge. This means that an audit of the calibre of a critical resource—namely, human resources—is necessary for the success of the organization. Human resource audits provide the information needed by human resource managers to validate the alignment (or misalignment) of human resource strategies with those of the organization as well as the organization’s key performance indicators. Human resource audits will typically focus on compliance, best practices, strategic elements, and function-specific areas. 97

Finally, the growing complexity of human resource work makes research necessary. Today, more than ever before, human resource activities aimed at productivity improvement, succession planning, and cultural change are critical to competitive survival. More and more executives expect the department to make strategic contributions and place the function at a higher level in the organizational hierarchy.

Over 50 percent of organizations surveyed in one study were found to have human resource departments report to the CEO or the president/ owner of the organization.98

Moreover, HR departments are being reviewed for their effectiveness. One study, conducted by Aon, found that 68 percent of HR’s time continues to be spent on administrative functions. The same study found that 35 percent of typical HR functions could be automated.99

Today, organizations are participating in human resource metric benchmarking. Through this process, organizations contribute information about human resource practices and associated metrics. In return, the participating organizations have access to aggregated data about other organizations so that they may benchmark their own practices and performance.100

The metrics established through an audit also result in the initiation of new programs, such as literacy training, and better responses to employees with disabilities, which can significantly improve employee productivity and morale. The major areas covered in such an audit are described in Figure 1-11.

Preparing for the Future

Evaluations and audits are necessary, but they are backward-looking. They uncover only the results of past decisions. Although past performance should be evaluated, human resource departments also should look to the future to be proactive. A proactive approach requires HR managers and their staff to develop a future orientation. They must constantly scan their professional and social environment for clues about the future. New developments may mean new challenges.

Human Resource Management Information

Human rights legislation and employment legislation

• Information on compliance

Job analysis information

• Job standards

• Job descriptions

• Job specifications

Recruiting

• Source of recruits

• Availability of recruits

• Employment applications

Training and orientation

• Orientation program

• Training objectives and procedures

• Learning rate

Performance appraisals

• Standards and measures of performance

• Performance appraisal techniques

• Evaluation interviews

Human resource controls

• Employee communications

• Discipline procedures

• Change and development procedures

Human resource plans

• Supply and demand estimates

• Skills inventories

• Replacement charts and summaries

Compensation administration

• Wage and salary levels

• Benefit package

• Employee value proposition

Staffing and Development

Selection

• Selection ratios

• Selection procedures

• Human rights legislation compliance

Career development

• Internal placement success

• Career planning program

• Human resource development effort

Labour–management relations

• Legal compliance

• Management rights

• Dispute resolution problems

Human resource audits

• Human resource function

• Operating managers

• Employee feedback on human resource department

LO3 The Organization of Human Resource Management

The responsibility for human resource management activities rests with each manager. If a manager does not accept this responsibility, then human resource activities may be done only partially or not at all. This is not to suggest that every manager needs to be a human resources professional, but even when an HR team is created, the manager continues to have a key role in enabling, following, and administering HR practices.

As noted earlier, a separate HR department or HR group usually emerges only when human resource activities need to be coordinated in a manner that cannot be done organically or when the expected benefits of a human resource usually exceed its costs. Until then, managers handle HR activities themselves or may delegate them to subordinates. When a human resource department emerges, it is typically small and reports to a middle-level manager.

Figure 1-12 illustrates a common placement of a human resource department at the time it is first formed. The activities of such a depar tment are usually limited to maintaining employee records and helping managers find new recruits. Whether the department performs other activities depends upon the needs of other managers in the firm.

As demands on the department grow, it increases in importance and complexity. Figure 1-13 demonstrates the increased importance by showing the head of human resources reporting directly to the chief operating officer, who is the company president in this figure. The greater importance of the head of human resources may be signified by a change in title to vice-president. In practice, increased complexity also results as the organization grows and new demands are placed on the department or as jobs in the department become more specialized. As the department expands and specializes, it may become organized into highly specialized subdepartments.

The Service Role of the Human Resource Department

Although they are organizational strategic partners, human resource departments continue to be service and support departments. They exist to assist employees, managers, and the organization. Their managers do not

Staff Authority

Authority to advise, but not to direct, others.

have the authority to order other managers in other departments to accept their ideas. Instead, the department has only staff authority, which is the authority to advise, not direct, managers in other departments.

In contrast to staff authority, line authority, possessed by managers of operating departments, allows these managers to make decisions about production, performance, and people. It is the operating managers who normally are responsible for promotions, job assignments, and other people-related decisions. HR specialists advise line managers, who alone are ultimately responsible for employee performance.

new employee. In the case of employee and labour relations, the line manager is likely to communicate with employees, implement motivational structures, coach employees, provide conflict resolution, and promote teamwork. The HR professional is then left to focus on establishing grievance handling procedures, negotiating with the bargaining unit, and planning and initiating change initiatives. In short, HR departments tend to provide technical expertise while line managers use this expertise to effectively manage their subordinates.

Line Authority

Authority to make decisions about production, performance, and people.

For something like recruitment and retention, the line manager may provide details of performance standards and job success, interview job candidates, and utilize the information provided by human resources to make a final decision. The HR professional, on the other hand, will ensure compliance with human rights laws and organizational policies regarding equity in addition to planning and organizing all of the activities related to recruiting, interviewing, hiring, and communicating about a

In highly technical or extremely routine situations, the HR department may be given functional authority. Functional authority gives the department the right to make decisions usually made by line managers or top management. For example, decisions about fringe benefits are technically complex, so the top manager may give the HR department the functional authority to decide the type of benefits offered to employees. If each department manager were to make separate decisions about benefits, there might be excessive costs and inequities. To provide control, uniformity, and the use of expertise, functional authority allows HR specialists to make crucial decisions effectively.

Functional Authority

Authority that allows staff experts to make decisions and take actions normally reserved for line managers.

LO4 Today’s Human Resource Management Professional

In the last 50 years, there has been a surge in the number of HR managers. In 1971, there were only 4,055 human resource managers in this country.101 In 2018, the corresponding number was more than 50,000.102 However, historically, the status of HR professionals within organizations has not been high.

Despite its enormous growth, human resource management was slow to evolve into a full-fledged profession. Since the actual capability of practising HR experts varied widely, however, it became increasingly evident that professionalism of the human resource management field was needed.

In a recent study, a majority of CEOs reported that HR professionals need to further develop business acumen and a deeper connection to the business in order to enrich the value of HR. 103 Furthermore, HR professionals need to be well versed in data-driven decision making and financial operations. 104

To achieve these goals, accreditation and/or certification of the HR professional was considered imperative. The Chartered Professionals in Human Resources Canada is a collaborative effort of human resource associations across Canada (except Ontario) that currently represents the interests of most HR practitioners in this country and coordinates the nationally recognized designation in HR called the Chartered Professional in Human Resources (CPHR), based on a series of national standards. Although the CPHR is granted by each provincial HR association, it is recognized and transferable across Canada—except in Ontario.

Chartered Professional in Human Resources (CPHR) Human resource practitioner, formally accredited to practise, who reflects a threshold professional level of practice.

Based on extensive national and regional consultations with employers, HR professionals, and researchers, CPHR Canada has identified a set of competencies referred to as the “Chartered Professional in Human Resources Competency Framework” in key HR areas, such as strategy; engagement; labour and employee relations; learning and development; human resource metrics, reporting, and financial management; professional practice, workforce planning, and talent management; health, wellness, and safe workplaces; and total rewards.

These standards are regularly being reviewed and updated. For a summary of the requirements for the CPHR designation, see CPHR Canada.

Ontario Human Resource Professionals are accredited through the Human Resource Professional Association (HRPA). In Ontario, a series of HR designations are available, including the Certified Human Resources Professional (CHRP), Certified Human Resources Leader (CHRL), and Certified Human Resources Executive (CHRE). Similar to the CPHR, the designations available through the HRPA are based on a set of competencies.

A third credentialing body for human resource professionals is the International Personnel Management Association.

Certification or designation alone does not make human resource management a profession or improve its status in the eyes of organizations. One approach to improving the HR manager’s status within the