COLLEGE OF BUSINESS ADMINISTRATION

Human Resources Management MNGT 103

INTRODUCTIONThe Origin and Development of Human Resource

Management

• 17th Century before the start of Industrial revolution• Steam engine & assembly line• Adam Smith- father of capitalism• 1800-trade unionism started• 20th century- Frederick Taylor- father of scientific

management conducted studies.• Hawthorn studies by Elton Mayo 1927-1932bsignificant

role of social relationship• Today’s focused is seen in enriched jobs, increased

empowerment and participations in decision making

DEFINITION OF HRM• Concepts of Human Resources

People are our greatest assetPeople demand a fair return of their investments

• Definition of Human ResourcesEffective use of the human resources to improve

its performanceStrategic & coherent approach to the management

of the organization’s most valued asset the people.The productive use of people in achieving the

organization’s strategic business objectives and the satisfaction of the individual

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Strategic activity- has moved from traditionally administered function to strategic one that recognizes the link between talented and engaged people and the organization’s success.

Human resources capital-people in the organization with different values, aspirations, culture, education, attitude, etc. It takes a lot of skills, adroitness, people sensitivity to manage the HR.

A Company may have the best strategies and business plans, values and work processes but these processes are useless if the company does not have the right people to implement them.

The Challenge of Managing Human Resources

• Rapidly Changing TechnologyoAdvent of computer

Emphasis on Increased ProductivityoGlobal competitivenesso Increased competitiveness

New Modality of Employment- OutsourcingFlatter OrganizationFall of the Command-and-Control Manager

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• Global Competitiveness economic recessionRedundancy, retrenchmentReduce operating peopleMerger, consolidation, streamlining, reengineering

• Changes in the business• Changing employee expectations

o Silent Generations (before 1946)oBaby Boomer ( 1946-1959)oGeneration X (1960-1979)oGeneration Y (1980-2010)

The Constitutional & Legal Framework of HRM• Introduction1. The Constitutional Basis– In the Declaration of Principles and State Policies:

a) The state affirms labor as a primary socio-economic force. It shall protect the right of workers and promote their welfare. (Art. II Sec. 18)

b) Protects the rights of the employees to form unions, association or societies for purposes not contrary to law.

c) The state shall afford full protection to labor, local and overseas, organized or unorganized.

d) The state shall promote the principal of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes.

e) The state shall regulate the relationship between workers and employers, recognizing the right of labor to its just share of fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.

2. International Basis of Right To Self-Organization

Geneva Convention• ILO Convention 87 (Freedom of Association)• ILO Convention 98 (Right to Collective Bargaining)

3. The Labor Code Enacted during the martial law by virtue of PD

442. It is divided into 6 major parts: Book 1- Pre-employment, Book 2- Human resources DevelopmentBook 3- Conditions of Emp., Book 4- Health, Safety & Social Welfare Benefits, Book 5- Labor Relations, Book 6- Post Employment

Salient Provisions of The Labor Code

Kinds of Employees-Definitions Employer- includes any person acting in the interest of

the employer directly or indirectly. Employee- includes any person in the employ of an

employerManagerial- vested with power or prerogative to lay down

and execute management policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees

Supervisory-effectively recommends managerial functions.Rank & File- not falling under any of the preceding definitions

of managerial or supervisory.

Types of Employees In Terms of Tenure

1. Regular- engaged to perform activities which are usually necessary in the usual business or trade.

2. Project- employment has been fixed for a specific project or undertaking.

3. Casual- Not covered by the preceding paragraph.

4. Probationary- shall not exceed 6 months from the date the employee started working.

Health & Safety & Social Welfare Provisions

• First-aid medicine & trained first-aider• Full time registered nurse (50-200 employees)• Full time registered nurse & part time physician

(200-300)• 300 or more- physician, dentist & nurseIt shall be the duty of the employer to provide all

necessary assistance to ensure the adequate and immediate medical and dental attendance and treatment to an injured or sick employee in case of emergency.

Employee Compensation and State Insurance Fund

• A State Insurance Fund is created out of monthly contributions by the employer to the employee1) Employee Compensation Commission2) Social Security System3) Philhealth4) Pag-IBIG Fund

Labor Relations

• Labor relations can be defined as the aspect or quality that holds together the social partners, labor and capital in the attainment of their mutual goal- just and equitable pay and treatment and fair return on investment.

• It refers to the relationship between employers and employees in industry, and the political decisions and laws that affect it.

Management Prerogative vs. Labor RightsManagement Prerogative Labor Rights

Power to manage Right to participate in decision-making

Power to hire Union security rights which may include closed shop

Power to fire Security of tenure

Power to transfer employee Right to refuse if it is obvious to thwart unionization or any other ULP act

Power to promote/demote Right to question if basis is unfair/discriminatory or is in violation of CBA

Power to lay-off/lockout Right to question basis and manner of lay-off/right to strike

Power to lay down policies Right to participate in decision making/to CBA

Power to discipline Right to due process

Power to set working hours Right to grievance

Fair return in investment and expansion Right to share in the fruits of production

SUMMARY• It is not enough for human resource department to

appreciate the legal environment under which businesses operate. All Managers of people must have a solid knowledge and understanding of all laws that impact on their power to manage. Organizations and heir authorized representatives are accountable for illegal acts committed in the workplace even if these individuals are ignorant of the law.

• The HRD is at the forefront of this education campaign. It must ensure that all departments are properly educated about these pertinent law.

Assignment

• Search reading materials on “The Role of Human Resources Professional” and be able to discuss and submit your reactions and comments

The New Role of Human Resources Management

• HR must balance the demands of several different roles: business partner, internal consultant, operational and administrative expert and both employees and employers’ advocate. The challenge is to maintain strong partnerships with both internal and external customers.

• It is HR job to show that we can be an equal partner with your peers.

• HR balance the needs of the organization and the needs of the managers and the employees.

The Balancing Act of Human Resources Professionals

1. Serving both management and employees.2. As employee advocates and social worker.3. “Owning” the people issues.4. A rubber stamp of other managers rather

than partner.The role of HR is have a seat at the executive

table. This means that you are a strategic partner of he executive committee.

How to Get a Seat at the Executive Table

• Understand your organization’s businessTalk the language of your peers

• Share responsibility for business goals and plans.Align your department objectives to the over-all goals

• Run your department like a businessKnow your people very wellContribute to the attainment of overall business goalsLook into the training activitiesReview past services

The Functions of HR1. Recruitment, selection and placement2. Training and development3. Performance evaluation and management4. Promotions5. Redundancy6. Industrial and employee relations7. Record keeping of all personal data8. Compensation, retirement, incentive programs9. Confidential advice to internal “customers” in relation

to problems at work10.Career development

Developing a Public Statement of HR Philosophy

• Federal Express (FEDEX) one of he most admired companies, explained the company’s philosophy in its Management’s Guide:

‘Take care of our people,they in turn will deliver the impeccable Service demanded by our customers who will reward us with the Profitability necessary to secure our future. People-Service-Profit. These three are the very foundation of Federal Express.”

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• Build and Implement the HR Philosophy• Hire the Right People: Know What you Want• Keep employees

Keep good and potential employee, promote from within and give people a piece of advice.

• Reward wellSkilled, motivated, and involved employees justify high pay for

their exemplary contributions• Protect jobs• Promote from within• Share the wealth• Invest in employees• Empower employees

Allowing employees to participate in problem-solving and decision making

The New Role of the Human Resource

• A strategic partner• Employee advocate• Change champion• Harness the benefits of technology

Continue to upgrade your professional skills and competencies

Assignment

• Read Chapter 4: Skills For Effective Human Resource

Management

Human Resource Management by Ranulfo Payos

Skills For Effective Human Resource Management

• Based on the observation of successful HR practitioners, here is the list of critical skills and attributes that are credited for their success:1. Human relations or interpersonal2. Multitasking3. Organization4. Ability to dual focus5. Trust and confidence6. Dedication to continuous improvements7. Negotiation and problem solving8. Team oriented9. Honesty and integrity

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• Human relations skills- as one deals with the day to day problems of behavior and motivation, no HR professional can succeed if one is poor in interactive skills.

• Multitasking- has to deal with all departments of the company thus, must be able to do what is being asked.

• Organization-orderly and well organize, must be proactive.

• Ability to dual focus- consider the needs of both employees and management

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• Trust and confidence- many confidential records and information are in the hands of HR.

• Dedication to continuous improvement- the goal is continuous improvements and innovation as well as remediation.

• Negotiation and problem solving-achieving conflict resolution requires negotiating prowess and problem solving skills

• Team-oriented- must be gregarious, an extrovert and sensitive to he needs, values, and feelings of others to win their cooperation and collaboration in order to attain the over-all goals of the organization.

• Honesty and integrity-conscience of company and keep of moral image. Must walk the talk and practice what he preaches.

Pointers to Review

• Review Chapter 1-3 of Human Resource Management by Ranulfo Payos.

• Take special note on challenges, employee classifications, employee tenure, due process, functions and roles.

Human Resources Planning

• Human resource planning is the critical step in getting the right people in the right place at the right time.

• Without accurate human resource planning, the organization may not be in a position to compete in the marketplace.

• HR planning , in reality, is a process of honest self assessment that clearly identifies what are the strengths and weaknesses of the firm’s workforce, how many does it need in the future considering its business plans, what are the skills and competencies needed and how much does it cost to get there.

Definition of Human Resources Planning

HR planning is the process by which management ensures that it has the right personnel who are capable of completing those tasks that help the organization reach its objectives. It is the development of strategies for matching the size and skills of the workforce organizational needs

The Human Resource Planning Process

1. Analyzing a) how many staff do we have? b) How are they distributed?c) What is the age profile? d) How many will leave by resignation or retirement

in each of the next 5 yearse) What are the present skills of the present

workforce? What new skills will be required?

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2. Forecasting- can be done through statistical method or through judgmental.– Statistical method is based on historical demand.

Under normal condition this more precise prediction than judgmental. One is through the use of Markov Analysis

– Judgmental uses qualitative approach which avails of the opinion of the department managers on their future staffing needs.

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• Internal Supply Considerations –through the use of turn-over rate. Common formula:

Number of staff leaving in a year = X 100

Average number of employed in a year

Number of Employees with one year

Service at 31 December = X 100

Number employed one year ago

Human Resources Planning ProcessAnalyzing Forecasting Planning Implementing

Environmental Factors

Demand Human resources

Strategic Changes

Organizational Direction

and Employee Development

Process Changes

Internal Workforce

Supply Finance and Budget

Operational Changes

External Workforce

Logistical Evaluation and feedback

RECRUITMENT• Recruitment is the process of identifying that the

organization needs to employ someone up to the point at which the application forms have arrived at the organization.

• Placement is the actual hiring which includes the orientation and acculturation process

• Training consists of a range of processes involved in making sure that the job holders have the right skills, knowledge and attitude required to help the organization to achieve its objectives.

• An organization that fails to attract the best qualified people will surely fail to meet its corporate objectives. The firm’s performance, then, depends on his ability to attract a qualified workforce through effective recruitment strategies.

.• Adopting a Recruitment Policy

The policy should be directed to the following objectives:1. Hire the right people.2. Conduct a wide and extensive search of the potential

candidates.3. Recruit staff who are compatible with the style of

management and the culture of the company.4. Handle applications with due diligence, speed, and

courtesy.5. Hire from within and develop existing employees to

qualify them for consideration for promotion.6. Make sure that no false or exaggerated claims are made

in recruitment announcement.7. Place individuals in positions with responsibilities and

train them to enhance their career and personal development.

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• Internal vs. External Applicants1. Internal RecruitmentA. Advantages• Usually cheaper in terms of starting pay and faster to

fill-up• Easier to train• Improve employee morale• Potential for a better success rate since track record is

already known.• Internal employees are already attune to the culture• Keeps propriety and industry knowledge inside the

organization.

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B. Disadvantages– Has to replace – May upset some inside the company– Create negative internal competition– Make less criticism

2. External Recruitment A. Advantages– Draw a wide range of talents– Opportunity to acquire new skills and

competencies– Enables the organization to hire people with

knowledge of competitors’ secret.

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B. Disadvantage– More costly– Outsider does not fit into the organization’s

culture– Risk of failure– Longer time to acclimatize– May demoralize employee who did not get the

promotion

Stages of Recruitment

• Determine whether a vacancy exists;• Prepare Job Description and Specification;• Media announcement;• Managing the response;• Shortlisting;• Arrange and conduct interviews;• Reference/background checking;• Decision to hire;• Offer to hire;• Appointment action

Media Announcement

• Bulletin boards• Word of mouth• Professional journals• Employment agencies, headhunters• Campus recruitment• Website job market• Job fairs• Newspaper advertisements

Offer to Hire

1. Starting pay, salary progression;2. Starting date;3. Tenure of the contract, whether temporary,

casual, for fixed terms or period, probationary or regular;

4. Benefits and other points of negotiation

Using Competency Framework• Employers typically use some of the following as their

competencies;1. Teamwork2. Responsibility3. Commitment to career4. Commercial awareness5. Career motivation6. Decision making communication7. Leadership8. Trustworthiness and ethics9. Result Orientation10. Problem Solving11. Organization

Selection

• The selection process covers the following:1. Screening applications and resume2. Conducting testing of the applicants3. Interviewing4. Reference and background checking5. Hiring decision

Conducting Tests of Applicants

• Ability tests• Aptitude tests• Performance tests• Personality tests– Rorschach test– Thematic apperception test

• Honesty or Integrity tests

The Interview

• Preparing for the interview• Eliciting information • Observing behavior• Concluding the interview• Evaluating results of the interview

Assignment

Chapter 8; Orientation: The Acculturation ProcessHuman resources Management by R .Payos

Questions for disscussion: What topics are covered by the orientation seminar?

Orientation: The Acculturation ProcessObjectives of orientation are:

1. Gain employee commitment2. Reduce one’s anxiety3. Help the employee understand organization’s

expectations: and4. Convey what he can expect from the job specification.

Part of the orientation process includes the introduction of the new employee to co-workers, giving of information such as working hours, place of work, performance standards, benefits and facilities and the names of immediate superior and other officers.

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A formal orientation process should include the following:– Welcome to the company– Tour of the facilities– Introduction to Top Management & Co-workers– Completion of paper works– Review of the Employee Handbook– Review of Job Responsibilities

Avoid information overload to make the orientation interesting and absorbing.

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Aside from getting “warm-up” and reducing anxiety, a good orientation program has the following salutary effects.1. Reduces start cost- proper orientation can help

the employee “get up to speed” much more quickly, thereby reducing the costs associated with learning the job.

2. Reduce employee turn-over- good orientation shows that the organization values the employees, and helps provide the tools necessary for succeeding the job

.3. Saves time for supervisor and co-workers- the better the

initial induction, the less likely supervisors and co-workers will have to spend time teaching the employee.

4. Developing positive job expectations, positive attitude and job satisfaction- new hirees as soon as possible what expected of hem, and what to expect from others. Furthermore, they learn about the values and culture of the organization.

A good orientation eases the sometimes painful transition to a new firm. A successful orientation creates a “good feel” in the employee and act as a good retention tool and motivator. It helps a new employee bond with the company and develops a commitment. It must be kept current by reviewing its effectiveness.

Assignment Aug.20• Training & Development

Get a training program and discuss the target participants, objectives of the training , topics to be discussed.

Training & Development• Training and development refers to organized

learning activities in the organization to improve performance and/or personal growth for the purpose of improving the job, the employee and the organization.

• Training focuses on learning the necessary skills required to perform a job.

• Development focuses on the preparation needed for future jobs or jobs that an individual may potentially hold in the future.

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Benefits From Employee Training And Development1. Increased job satisfaction and morale2. Increased employee motivation3. Increased effectiveness in processes, resulting in

financial gain4. Increased capacity to adopt to new technologies

and methods5. Increased innovation in strategies and products6. Reduced employee turnover7. Enhanced company image 8. Improved risk management

The 4-Stage Training Cycle1. Training Needs Analysis

a) Organizational Analysisb) Task Analysisc) Person Analysis

2. Planning the Training3. Implementing the training4. Evaluating the Training

Reward Management

• Job Analysis• Job Description• Job Specification• Job Evaluation• Developing a Pay Structure And Pay Philosophy• Broad-banding• The Importance of Participation and

Communication

Assignments

• Managing People Motivation• Performance Management

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Managing People Motivation– In order for the business to succeed effectively, it

is important that we should manage them effectively.

– Employers expects employees to work hard, committed to the values of the organization, loyal and dependable, keep the work standards set by management.

– Employee on the other expect that they should be rewarded well and equitably, treated fairly and humanely, provided with opportunities for career development and promotion, and have a happy and safe environment.

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Motivation is the internal condition that activates behavior and gives it direction; energizes and directs goal-oriented behavior.

Motivational Theories:Abraham Maslow’s Hierarchy of Needs

Abraham Maslow Hierarchy of NeedsMorality, CreativitySpontaneity, Problem solving

Self-

esteem, Confidence

Achievement, Respect of others, respect by others

Friendship, Family, Sexual intimacy

Security of body, of

employment, of resources, of

morality, of

the fa

mily, of

the health

Food, water, shelter, sex, sleep

Self-actualization

Esteem

Love/Belonging

Safety

Physiological

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• Herzberg’s Motivation-Hygiene Theory- to move employees from dissatisfaction to no dissatisfaction, a set of factors know as hygenes is used. These factors are extrinsic to the work itself. These include working conditions, company policy, supervision, security, relationship with subordinates and pay. The real job satisfiers which motivate employees are recognition, achievement, advancement, responsibility and personal growth. These factors are intrinsic to the job.

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• Douglas Mc Gregor Theory X & Y in his book “The Human Side of the Enterprise” publish in 1960, has examined theories on behavior of individuals at work and has formulated two models which he calls Theory X and Theory Y.

• McClelland’s Learned Needs Theory-proposed that an individual’s specific needs are acquired overtime and are shaped by one’s life experiences.

• Equity Theory by Stacey Adams (1962)- attempt to explain relational satisfaction in terms of perceptions of fair/unfair distributions of resources within interpersonal relationships.

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• Expectancy Theory by Victor Vroom- predicts that employees in an organization will be motivated when they believe that :– More effort better performance– Better performance will lead to rewards– Valued organizational rewards

• Reinforcement Theory is the process of shaping behavior by controlling the consequence of behavior.

Assignment

PERFORMANCE MANAGEMENT Get an example of Performance

Evaluation form being used by a company and be able to discuss.

Managing in a Unionized EnvironmentLabor Relations- an organization can never be effective

and productive unless it has good, harmonious and peaceful relations with its employees.

In the employer-employee relations, tension may arise on terms and conditions of employment and wages, benefits, job security, code of discipline, and other issues. This is where maintenance of industrial relations comes in which is one of the major functions of HR.

The field of labor relations looks into he relationship between management and workers particularly group of workers represented by union.

.Accordingly, industrial relations (labor relations) pertains

to the study and practice of collective bargaining, trade unionism, and labor-management relations.

Legal and constitutional framework of labor relations- under the tripartite system of labor relations, the participants labor, management & government must come together and come up with a set of rules by which the social partners interact and resolve disagreement.

The Constitution- Article XIII, Section 3 of the Philippine Constitution guarantees the rights of the workers to self organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with the law.

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The Law- Article 211 of the Labor Code reiterates these Constitution precepts in more detailed manner.

The ILO Convention-were ratified by the Philippine senate and became part of part of the laws of the land.

Collective Bargaining- involves workers organizing together to meet, discuss and negotiate upon the work conditions with their employers.

Collective bargaining must be conducted in a more civilized, rational, and dispassionate manner whereby negotiations are fashioned and settled on facts and more concrete, quantitative arguments rather than through bluster and threat on either sides.

Strategies in Collective Bargaining

A. The Preparation Stage1. Aligning CBA with company’s business objectives2. Choice and training of the management panel3. Estimate negotiation timetable4. Gathering information on issues, parties (union) and the

environment5. Reviewing the present expiring contract.6. Preparing and analyzing data.7. Anticipating union demands.8. Establishing the possible cost of labor agreement.9. Preparing the economic package.10. Establishing the parameter of authority.11. Finally preparation of a strike contingency plan.

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B. The Negotiation StageBargaining Strategies

1. The Hard-ball approach- this may be applied when management is ready and willing to suffer a strike rather than giving in to the onerous economic demand.

2. The Boulware approach- evaluates the needs of the workers and presents a “first, last and best offer.” It leaves no elbow room for bargaining.

3. The Marathon approach- management strikes an agreement with the union to negotiate without let up until an agreement is reached on vital issues.

4. Stoking the Bargaining Zone approach- management makes a very low counterproposal. The technique is to find out the bargaining zone- the point at which management is willing to up the ante and the union is willing to lower the demand without restoring to a strike.

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C. CBA Administration1. Grievance procedures- the law requires parties in

the CBA to name and designate in advance a Voluntary Arbitrator.

2. Discipline- an organization must always have a set of rules or Code of Conduct which regulates the employees’ behavior.

Management in a Non-Unionized Environment

The freedom of choice of workers to unionized or not is basic in a democratic society. Many companies aware of this choice, develop strategies to remain non-union.

For the past several decades unions have decline in all parts of the world except perhaps in some parts of the Europe.

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Year Number Growth Rate Member Growth rate

2002 14,116 - 1,232,762 -

2203 14,629 3.6 1,263,507 2.5

2004 15,193 3.9 1.301,585 3.0

2005 15,526 2.2 1,627,480 25.0

2006 15,101 -2.7 1,563,118 -4.0

2007 15,320 1.5 1,583,388 1.3

2008 15,536 1.4 1,598.250 0.9

2009 16,694 1,611,091

The Bureau of Labor relations has reported that as of September 2009, out of 35,509,000 employees only 1,965,781 are organized.

The Philippine Labor SituationThe labor union movement in the Philippines has

been established since the American regime.Notably among the big companies that are

unionized are San Miguel Corp., PLDT, Meralco, Caltex, BPI, Petron. Some have multi-union, separate for rank-&-file, supervisors,, office employee, sales employees, daily, monthly, etc.

Yet the bigger proportion of business enterprise remain union-free Multinational companies operating in the industrial zones are union-free.

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Reasons for Maintaining No-Union Status1. Freedom to Manage the Business- there are certain management

prerogatives that must be free from the fetters of third party intervention to achieve maximum efficiency and productivity.

2. Maintain Competitive Posture in the Industry- management must satisfy its stakeholders who want a fair return of their investments, customers who want a high-quality product or service at competitive price and employees who desires interesting work and reasonable remuneration for their services.

3. Maintain a non-adversarial relations with employees- while there are indeed a lot of unionized companies where industrial relations are remarkable, sparks of friction still occur in their day-to-day relations.

4. Promote a Culture of Meritocracy- in a unionized company, there is no control in individual pay rates.

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5. Divided loyalty Among Employees- advocates of non-union argue that a unionized company divides loyalties of employee

6. No Work Slowdown, Work Stoppage, or Strikes- strike is the ultimate weapon of he union that it can use as a bargaining leverage.

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Proactive Labor Relations- a set of principles, practices and systems that enable an organization to manage its human resources without he interference of a third party. Also known as welfarism or paternalism.

Union Avoidance Strategies – union avoidance can only be achieved through diligence along with attention to the desires and sentiments of employees.

Communication- employees wants to know he business plans of the company, its business performance, how it is faring with competition, the problems and challenges it is facing.

Management Policies and Rules Consistently Enforced- policies can be a source of friction if not applied consistently by management.

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Competitive Pay and Benefits- companies give their employees better than average pay and benefits.

Participation Employees Involvement Programs Self-directed Work Team- it is defined as a group of people who

combine different skills and talents to work without the usual managerial supervision toward a common purpose or goal.

Labor Management Council- another avenue of participatory employee involvement.

Quality Circles- volunteer group composed of workers usually under the leadership of the supervisor who are trained to identify and analyze and solve work related problems and present solution to improve the performance of the organization.

Management Credibility- make no promise that you cannot fulfill. Supervision- one management expert says that the best union

avoidance strategy is a relationship between the supervisor and the employee.

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Recruitment and Selection Practices- the choice and selection of applicants is critical in the company’s effort to avoid third party intervention. There are companies that hire people belonging to a religious group that prohibits its members from joining unions.

Training & Development- constant training and manpower development is another distinctive mark of a company trying to sway from unionism.

Coping with “Malcontents”- companies wary of malcontent closely and in the end motivate them to resign before they infect others.

Handle Self-Appointed Leaders- in every organization, there will always spring natural leaders. It begins to raise alarm when a natural leader goes up to management to intercede for somebody’s problem. In union-avoidance organization, this is discourged.

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Company Early Warning System1. Exit interviews-people who resigned voluntarily

are some of the best sources of determining areas of dissatisfaction.

2. Graffiti- employees express their pent up frustrations by writing grafitis on he wall.

3. Argumentative questions being asked during department or company meetings.

4. Unusual gatherings of employees who do not belong to the same group.

HRM & BUSINESS ETHICS

Definition of Business EthicsIt is defined as the branch of ethics that examines

questions of moral right and wrong arising in he context of business practice or theory.

It can also refer to written and unwritten codes of principles and values that govern decisions and action within a company.

In most basic terms, a definition for business ethics boils down to knowing the difference between right and wrong and choosing to do what is right.

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Shareholders vs Stakeholders- those who approach ethical decision making from a shareholder perspective focus on making decision that are in the owners’ best interest. Decision are guided by a need to maximize return on investment for he organization’s shareholders.

Organizations that approach business ethics from a shareholder perspective consider how decisions impact those inside and outside the organization.

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What is Ethical Behavior?Ethical behavior cannot be answered in clear and

precise terms. When faced with ethical dilemmas, it is important to consider the outcomes of the decision making process.

The four way test may be used to evaluate decisions:1. Is my decision a truthful one?2. Is my decision fair to everyone affected?3. Will it build goodwill for the organization?4. Is the decision beneficial to all parties who have a

vested interest in he outcome?

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Major Factors Impacting Organizational EthicsManagement by Example-walk the talkEstablishment of Code of Ethics- Employee handbookCorporate Culture- basic assumptions and beliefs

developed by an organization over time.An organization’s culture is the sum of its shared values, belief

and norms of behavior turned into action. It evolves through time.

Ethical issues in business have become more complex because of many government regulations that sometimes impinge on the freedom of the organizations to manage efficiently. As the “conscience’ of the company, the HR professional acts as the catalyst against unethical conduct. He acts as the “whistleblower” and sometimes, as the prosecutor at the same time.

Emerging Issues