Ethical And Unethical Issues Human Resource Management,Finacial,Management

Human Resource Management:-

Human Resource Management (HRM) is the term used to describe formal systems devised for the management of people within an organization. The responsibilities of a human resource manager fall into three major areas: staffing, employee compensation and benefits, and defining/designing work. Essentially, the purpose of HRM is to maximize the productivity of an organization by optimizing the effectiveness of its employees. This mandate is unlikely to change in any fundamental way, despite the ever-increasing pace of change in the business world. As Edward L. Gubman observed in the Journal of Business Strategy, "the basic mission of HR will always be to acquire, develop, and retain talent; align the workforce with the business; and be an excellent contributor to the business. Those three challenges will never change."

Ethical Issues in Human Resource Management:- 

1. Employment Issues:-

HR professionals are likely to face maximum ethical dilemmas in the areas of hiring of employees.
Major challenges in this area are: -

 

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a. Pressure to hire a friend or relative of a highly placed executive.
b. Faked credentials submitted by a job applicant.
c. Discovery that an employee who has been with the organisation for some time, is skilled and has established a successful record, had lied about his educational credentials.

2. Cash and Incentive Plans:-

Cash and incentive plans include issues like basic salaries, annual increments or incentives, executive perquisites and long term incentive plans:-

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Basic Salaries:-
HR managers have to justify a higher level of basic salaries or higher level of percentage increase than the competitors to retain some employees. In some situations, where the increase is larger than normal they have to elevate some positions to higher grades. Annual increment/incentive Plans. This situation is particularly true in case of top management executives. The fear of losing some outstanding executives, the HR managers is forced to give higher incentives to them than what the individuals actually deserve.
Executive Perquisites:-
In the name of executive perquisites, sometimes excesses are often committed, the ethical burden of which falls on the HR managers. Sometimes the costs of these perquisites are out of proportion to the value added. For example, the CEO of a loss making company buys a Mercedes for his personal use or wants a swimming pool built at his residence.
Long term incentive Plans. Long term incentive plans are to be drawn by the HR managers in consultation with the CEO and an external consultant. Ethical issues arise when the HR manager is put to pressure to favour top executive interests over the interests of the other employees and the investors.

3. Employees Discriminations:-

A framework of laws and regulations has been evolved to avoid the practices of treatment of employees on the basis of their caste, sex, religion, disability, age etc. No organisation can openly practice any discriminatory policies, with regard to selection, training, development, appraisal etc. A demanding ethical challenge arises when there is pressure on the HR manager to protect the firm or an individual at the expense of someone belonging to the group which is being discriminated against.

 4. Performance Appraisal:-

Ethics should be the basis of performance evaluation. Highly ethical performance appraisal demands that there should be an honest assessment of the performance and steps should be taken to improve the effectiveness of employees. However, HR managers, sometimes, face the dilemma of assigning higher rates to employees who are not deserving them; based on some unrelated factors eg. closeness to the top management. Some employees are, however, given low rates, despite their excellent performance on the basis of factor like caste, religion or not being loyal to the appraiser.
                                 

5. Privacy:-

The private life of an employee which is not affecting his professional life should be free from intrusive and unwarranted actions.

HR managers face three dilemmas in this aspect:-

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(i) The first dilemma relates to information technology. A firm’s need for information particularly about employees while on job may be at odds with the employee’s privacy. Close circuit cameras, tapping the phones, reading the computer files of employees etc. breach the privacy of employees.
(ii) The second ethical dilemma relates to the AIDS testing. AIDS has become a public health problem. HR managers are faced with two issues: Whether all the new employees should be subject to AIDS test and what treatment should be melted out to an employee who is affected with the disease. It is however generally understood that since AIDS cannot be contracted by casual and normal workplace contract, employees with this illness should not be discriminated against and they should be allowed to perform jobs for which they are qualified.
(iii) The third ethical dilemma relates to Whistle Blowing. Whistle blowing refers to a public disclosure by former or current employees of any illegal, immoral or illegitimate practices involving their employers. Generally, employees are not expected to speak against their employers, because their first loyalty in towards the organisation for which they work. However, if the situation is such that some act of the organisation can cause considerable harm to the society, it may become obligatory to blow the Whistle. The HR manager is in the dilemma how to solve this issue between the opponents and defenders of whistle blowing.

6. Safety and Health:-

Industrial work is often hazardous to the safety and health of the employees. Legislations have been created making it mandatory on the organisations and managers to compensate the victims of occupational hazards. Ethical dilemmas of HR managers arise when the justice is denied to the victims by the organisation.

7. Restructuring and layoffs:-

Restructuring of the organisations often result in layoffs and retrenchments. This is not unethical, if it is conducted in an atmosphere of fairness and equity and with the interests of the affected employees in mind. If the restructuring company requires closing of the plant, the process by which the plant is chosen, how the news is to be communicated and the time frame for completing the layoffs is ethically important.

 

Unethical Issues in Human Resource Management:-

1. Misusing company time:-

Whether it is covering for someone who shows up late or altering a time sheet, misusing company time tops the list. This category includes knowing that one of your co-workers is conducting personal business on company time. By "personal business" the survey recognizes the difference between making cold calls to advance your freelance business and calling your spouse to find out how your sick child is doing.

2. Abusive behavior:-

Too many workplaces are filled with managers and supervisors who use their position and power to mistreat or disrespect others. Unfortunately, unless the situation you're in involves race, gender or ethnic origin, there is often no legal protection against abusive behavior in the workplace. To learn more, check out the Workplace Bullying Institute.

3. Employee theft:-

According to a recent study by Jack L. Hayes International, one out of every 40 employees in 2012 was caught stealing from their employer. Even more startling is that these employees steal on average 5.5 times more than shoplifters ($715 vs $129). Employee fraud is also on the uptick, whether its check tampering, not recording sales in order to skim, or manipulating expense reimbursements. Ethical alert: The FBI recently reported that employee theft is the fasting growing crime in the U.S. today.

4. Lying to employees:-

 

The fastest way to lose the trust of your employees is to lie to them, yet employers do it all the time. One of out every five employees report that their manager or supervisor has lied to them within the past year.

5. Violating company internet policies:-

Cyberslackers. Cyberloafers. These are terms used to identify people who surf the Web when they should be working. It's a huge, multi-billion-dollar problem for companies. A survey conducted recently by Salary.com found that everyday at least 64 percent of employees visit websites that have nothing to do with their work. Who would have thought that checking your Facebook page is becoming an ethical issue?

The good news from the ERC study is that most American workers and employers do the right thing. The survey reveals that most of us follow our company's ethical standards of behavior, and we are willing to report wrongdoing when we see it (unless it's the company's Internet use policy). But for those of us who track ethical behavior in the workplace, there are some troublesome trends in the ERC survey. The percentage of employees who experienced some form of retaliation for reporting non-ethical behavior climbed from 15 percent to 22 percent. Confidence in the ethics of senior leaders declined from 68 percent to 62 percent. When it comes to the ethical workplace, we may be on a downward shift.

 

Ethical Issues and Their Impact on Marketing:-

Advertisements are a great way to spread knowledge about a product or service, but sometimes the messages in advertisements are questionable. Vintage advertisements from the 1950s and 1960s, for example, were created in an era with far less oversight. Today, many of these ads are more offensive and unethical than persuasive. If you look at an ad for Camels cigarettes from the 1950s, you’ll see a doctor smiling while holding a cigarette, and the caption, “More doctors smoke Camels than any other cigarette”. This ad demonstrates hypocrisy, since doctors spend their careers advocating for healthy lifestyles. It also sends a message to society that if doctors are smoking, then it must not be all that bad.
In marketing, the strategy of promotion is used to gain the interest of consumers and to persuade them to try a product or service, but too often, the objectification of women is implemented in this strategy. Carl’s Jr. is well known for doing so. Since 2000, the majority of their advertisements include models eating hamburgers and wearing revealing clothing. Carl’s Jr. defends their actions by saying “We believe in putting hot models in our commercials, because ugly ones don’t sell burgers.” Because of their unethical choice to objectify women, many women believe they are not the target audience, but that males age 18 – 35 are.

Ethical and Unethical Data Collection:-

Before a new product or service is released, research is conducted to gain feedback on how well it will test in the market. An ethical marketing research strategy used to gain this information is focus groups. The main purpose of focus groups is to get the consumers’ opinions, beliefs, or perceptions about a product or service. This form of qualitative research consists of a moderator that interviews a small group of people, or respondents. The interview is set up in an informal way, so the respondents are free to give their stance without restrictions.

Another strategy is data collection. Many websites like Google, Facebook, and Amazon collect their users’ data, including web search habits, name and contact information, and location. They use this to build a profile of their customers which they then use to show ads for products and services that are tailored to consumers’ interests. Data privacy issues are currently a very hot topic – there is a serious trade-off between protecting individual privacy, and building more effective marketing strategies.

Ethical Issues in Finance:-

Ethics in general is concerned with human behavior that is acceptable or "right" and that is not acceptable or "wrong" based on conventional morality. General ethical norms encompass truthfulness, honesty, integrity, respect for others, fairness, and justice. They relate to all aspects of life, including business and finance. Financial ethics is, therefore, a subset of general ethics.
Ethical norms are essential for maintaining stability and harmony in social life, where people interact with one another.

 Recognition of others' needs and aspirations, fairness, and cooperative efforts to deal with common issues are, for example, aspects of social behavior that contribute to social stability. In the process of social evolution, we have developed not only an instinct to care for ourselves but also a conscience to care for others. There may arise situations in which the need to care for ourselves runs into conflict with the need to care for others. In such situations, ethical norms are needed to guide our behavior. As Demsey (1999) puts it: "Ethics represents the attempt to resolve the conflict between selfishness and selflessness; between our material needs and our conscience."