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Organizations in the 21st century are being increasingly monitored for the ethical compliances by the important stakeholders. The organizations have to fulfill the ethical and legal obligations which they have towards the external as well as internal stakeholders. Despite the regulatory and compliance mechanisms there are still moral lapses happening in the business activities. The ethics promotion efforts are basically in the form of written formal rules however, the research suggests that there are other instruments which are necessary and can potentially tackle this issue. Therefore, with this study the role of Human resource management (HRM) in ethics promotion shall be explored. This is because HRM practices are related to the management of employees, building of a sound organizational culture and effective leadership.
Ethical behavior in an organization implies that its actions are in accordance with the ethical valued being held by that organization. Ethics are important in the organization as with an ethical leadership better corporate images are created and this also leads to improved reputation and financial performance (Zhu, Sun, and Leung, 2014). Therefore, there is a higher and longer-term interest of the stakeholders in an organization that is complying with the ethical standards and values. Corporate ethical identity is one of the intangible assets as the strength of an organization is not just dependent on the financial performance. The organizations which operate in ethical manner provide stability and ensure longer term survival (Berrone, Surroca, and Tribó, 2007).
The corporate ethics particularly when followed as internal ethics are found to be strongly related to the collective organizational commitment of the employees. When the employees perceive that the organization is adhering to the ethical and legal standards then they demonstrate more organizational commitment. The endorsement of the ethical standards leads to reduction in the ambiguity associated with the behaviors and roles of employees and this offers then a clear sense of what is expected from them and how they are supposed to behave in the organization. Additionally, the internal ethics also promotes a climate of justice inside the organization which causes the employees to have increased commitment to their workplace (Chun, et al 2013).
The 2008 financial crisis had sparked the debate over ethics in businesses. The compliance with the ethical standards is significant for the organization. It has been noted that there are several firms which have benefitted from their business ethics practices. However, these are for the longer term and are mostly in the form of improved market goodwill. Further, the firms adopting ethical practices in their operations have been found to have higher financial returns in the longer-term (Sabbaghi, and Xu, 2013).
HRM has it scope beyond the hiring, training, promoting and compensating the employees. The HRM is regarded with a high ethical standard owing to their influence on the livelihood and productivity of the employees and also the manner in which the employees conduct themselves in the organization. The HRM activities impact the business principles, corporate citizenship and the organizational ethical behavior. Following are some of the ethical aspects which are relevant for the HRM in an organization.
Fair treatment to all the employees- the HR managers have to strive for a consistent implementation of the organizational policies which is irrespective of the status and rank of the employees. This implies that the employees should be held accountable against what is expected from them by the company. Hiring practices have to be ethical so that conflicts can be reduced and the ethical standard of the organization is upheld (Valentine, Hollingworth, and Eidsness, 2014). Therefore, even the executive leaders have to be held accountable when anything goes ethically wrong. This aspect is met by the managers by ensuring that the orientation training to all the new employees is given to all irrespective of their designation in the company. This is because it encourages the new recruits to embrace the organizational philosophy of ethics and thereby adopt the organizational ethical standards. responsible (Newman, et al 2016). Apart from it, the HRM has role in business ethics in the form of maintaining pay equity. The HR managers have to demonstrate the organizational policy of ethics when granting compensation to the employees. There has to be equal pay for equal work and this is one of the principles for pay equity.
Ethical organizational culture- It is important that the HRM ensures that the ethics is the top priority for the organization. This is particularly important in the wake of current business scandals which have negatively impacted the organizations as well as its employees. The HR managers have a bigger role in monitoring the overall organizational cultures for promoting and maintaining ethical standards. Apart from it, the HR managers have to select and develop such leaders for the organization who have an ethical approach. Therefore, their selection and development processes for the leaders have to be inclusive of an ethical element. This is because the leaders model the expected ethical behavior and hence, they are able to communicate their ethical standards to the employees and create an ethical organizational culture. It is the role of HRM to convince the top management and the board members to adopt ethics and participate in ethical training so that the organization can be socially responsible as well (Voegtlin, and Greenwood, 2016).
Ethical workplace environment- The HRM has role in managing the workplace environment so that the employees demonstrate an ethical approach. Ethical behaviors of the employees have to be fostered by the HR managers so that collaborative workplace relationship can be developed. These are related to the moral and ethical dimensions of the organizational policy (Kramar, 2014). Ethical aspect which is particularly important for the international organization is that of diversity. HRM has to ensure that workplace diversity is maintained and all the employees must be treated equally irrespective of their age, gender, color, race, religion, national origin, or generational preferences. The HR manager contributes to the ethics promotion by focusing on the ethical behavior of all the employees and this is done by providing training and development, counselling, coaching and mentoring.
HRM has key role in promoting ethics in the organizations. The HR manager can work in different areas for promoting the ethics at the different levels of the organization. The HR professionals can act ethical stewards. The ethical stewardship has been defined as the practice of respecting the duties which are owed towards the society, stakeholders and the employees in the pursuit of the wealth creation in the longer term. The theory of ethical stewardship relates to the organizational governance where the leaders have to strife for the best interests of all the stakeholders by creating organizational culture that are founded on trusts. This stewardship role is described as the principle-centered, committed to the stakeholder’s welfare and is value based (Caldwell, et al 2011). Therefore, the HR managers have to act like a ethical steward for the employees and the top leaders of the company so that they can align the business activities to remain ethical.
HR managers can promote ethics by hiring and developing leaders who have an ethical approach towards the business operations. This can be done by assessing their actions during past ethical dilemmas situations. Apart from this, the HR managers have to impart training to the top management and the board members on the ethical practices which are to be followed by the company. The importance of ethical practices within the business should be demonstrated to the top management during the ethical training.
The HR managers must help in creating organizational cultures which are based on ethical standards. Such a culture should include the ethical principles like mutual respect, equality, transparency and work commitment. This can be done by creating policies for the organizations and these have to include in the orientation training of every employee.
The HR managers have to adopt fair recruiting and selecting processes. This can be done by creating a transparent approach in the hiring process so that all the recruits are aware of the fair approach of the organization in hiring. Further, the HR managers have to establish equity in pay both internally and externally. This implies that the compensation should be equated within the organization and this must in accordance with the industry salary standards.
Another important way in which HR manager can promote ethics is by working on the workplace diversity. The HR managers must strive for maintaining employee diversity and further, policies for respecting this diversity have to be formulated. Further, they can work to make the organization more socially responsible by incorporating the ethical values in the organizational policies and acting as ethical stewards (Martin, and Woldring, 2001).
Therefore, it is concluded that the HRM has a significant role in maintaining and promoting ethics within an organization. The ethics are important for the business as this helps in having a good corporate image and employee commitment, and these impacts the organizational performance. Thus, the HR managers must take the steps for promoting ethics within the organization.
Berrone, P., Surroca, J., & Tribó, J. A. (2007). Corporate ethical identity as a determinant of firm performance: A test of the mediating role of stakeholder satisfaction. Journal of Business Ethics, 76(1), 35-53.
Caldwell, C., Truong, D. X., Linh, P. T., & Tuan, A. (2011). Strategic human resource management as ethical stewardship. Journal of business ethics, 98(1), 171-182.
Chun, J. S., Shin, Y., Choi, J. N., & Kim, M. S. (2013). How does corporate ethics contribute to firm financial performance? The mediating role of collective organizational commitment and organizational citizenship behavior. Journal of management, 39(4), 853-877.
Kramar, R. (2014). Beyond strategic human resource management: is sustainable human resource management the next approach?. The International Journal of Human Resource Management, 25(8), 1069-1089.
Martin, G., & Woldring, K. (2001). Ready for the mantle? Australian human resource managers as stewards of ethics. International Journal of Human Resource Management, 12(2), 243-255.
Newman, A., Miao, Q., Hofman, P. S., & Zhu, C. J. (2016). The impact of socially responsible human resource management on employees' organizational citizenship behaviour: the mediating role of organizational identification. The international journal of human resource management, 27(4), 440-455.
Sabbaghi, O., & Xu, M. (2013). ROE and Corporate Social Responsibility: Is There a Return On Ethics?. Journal of Accounting and Finance, 13(4), 82-95.
Valentine, S., Hollingworth, D., & Eidsness, B. (2014). Ethics-related selection and reduced ethical conflict as drivers of positive work attitudes. Personnel Review, 43(5), 692-716.
Voegtlin, C., & Greenwood, M. (2016). Corporate social responsibility and human resource management: A systematic review and conceptual analysis. Human Resource Management Review, 26(3), 181-197.
Zhu, Y., Sun, L. Y., & Leung, A. S. (2014). Corporate social responsibility, firm reputation, and firm performance: The role of ethical leadership. Asia Pacific Journal of Management, 31(4), 925-947.
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