Chapter 8Managing Employee Ethics, Engagement, Retention and Fair Treatment

Introduction to Ethics

What is ethics and why is it relevant?

○ Ethics can be defined as: “The principle of conduct governing an individual or group.”

○ People make ethical choices at work everyday○ Ethical decisions always require making

normative judgement and are rooted in morality

○ Ethics are important because manager’s personnel decisions almost always hold ethical consequences

○ Companies that employees view as “fair and just” also tend to score higher on ethics

Organizational Justice

1. Distributive Justice● The perceived fairness of how resources and rewards are

distributed or allocated

2. Procedural Justice● The perceived fairness of the processes and procedures used to

make allocation decisions

3. Interactional Justice● The extent to which people feel fairly treated when procedures are

implementedwww.workplacefairness.org/news

Mistreatment and Bullying● Mistreatment of

employees makes it more likely that the employee will also show higher levels of work withdrawal

● Workplace bullying is an increasingly serious problem

● Bullying involves singling out someone to harass and mistreat them

● Bullying involves three things:

1. Imbalance of power2. Intent to cause harm3. Repetition

● It can take many forms such as: social, physical, and cyber bullying

● Employers must have systems in place to respond

II. Managing Employee Discipline

Discipline is necessary to carry out the rules and regulations of an organization

Three Pillars of the Discipline Process

Utility of Non-Punitive Discipline

● Traditional discipline can be flawed

● Non-punitive discipline involves the

employees acceptance of ruleso Ex: Verbal warning, written warning, conduct

meeting, termination

Employee Electronic Use and Privacy

● Managing and monitoring company e-mail is an urgent problem.o A majority of employers admit that they

monitor their employee’s e-mail.o Some employers check the personal blogs

and social networking sites of their employee’s. Extensive monitoring raises many privacy

issues.

Legal Issues

● Employers are allowed to monitor employee phone calls only if the call pertains to business.o Once the call subject shifts from business it

becomes illegal for the employer to monitor any longer.

o E-mail service may be intercepted by law when it is to protect the property rights of the provider.

Preventative Measures

● Employers have begun to ask employees to sign e-mail and telephone monitoring acknowledgement statements.o If not done,the employer could be found liable

for the action of the employee.o Monitoring statements must make it clear that

employees should have no expectation of privacy in their e-mail, internet, and phone transactions sent or received through employers systems.

Pettigrew Case

● Cameron Pettigrew worked as a client relations manager at Fidelity Investment, but was fired after supervisors found out he was sending email messages about a fantasy football league that he ran.o Pettigrew stated in an interview, “Let’s be

honest: that’s a complete overreaction.”o This is not an isolated case!o http://abcnews.go.com/Business/GadgetGuide/supreme-court-

employee-rights-privacy-workplace-emails/story?id=9345057

Dismissals

Terminate-at-will rule: The employee can resign for any reason, at will; The employer can dismiss for any reason, at will.

Exceptions:

Statutory Exceptions: Federal, state, EEO laws prohibit specific types of dismissals, such as dismissals based on race, color, religion, sex, or national origin.

Common Law Exceptions: Example includes: “For Just Cause” termination rule.

Public Policy Exceptions: An example would be an employee being terminated for refusing to break the law in the workplace.

Dismissals

Grounds for Dismissal:Unsatisfactory Performance

● Persistent failure to perform duties or meet prescribed standards. Misconduct

● Deliberate and willful violation of company rules. Example: Stealing.Lack of Qualifications for the Job

● Inability to complete assigned work. Changed Requirements of the Job (Elimination)

● Incapability of doing the work after the nature of the job changes.

Avoiding Wrongful Discharge:(1) Lay the groundwork and (2) set up safeguards to ensure actions are fair.

Dismissals

Severance Pay Averages● 39 weeks for Executives● 30 weeks for DownSized Employees● Only ⅓ of Employers offer Severance Pay to Employees terminated due to poor

performance. Lump Sum payments vs. Packages Tied to Years of Employment

LayoffsEmployer sends workers home for a time for lack of work; usually not a permanent dismissal.

Dismissals

The Termination Interview: 1. Plan the Interview Carefully2. Get to the Point3. Describe the Situation4. LIsten5. Review Severance Package Offered6. Identify the Next Step

Outplacement Counseling● Help with career planning and job search skills.

Managing Turnover

Voluntary Turnover - the rate at which employees voluntarily leave their firms - varies markedly among industriesEmployer ranked Top 5 reasons for Voluntary Turnover:1. Promotion2. Career development3. Pay4. Relationship with supervisor5. Work/life balance

Retaining EmployeesSelection - selection refers not only to the employees but to the supervisors as well, “retention starts up front, in the selection and hiring of the right employees”Professional Growth - “professionals who feel their company cares about their development and progress are much more likely to stay”Provide Career direction - discuss employees career preferencesMeaningful work and Ownership - making clear expectations regarding performance and responsibility

Recognition and Rewards - in addition to pay & benefits, employees need recognition for a job well doneCulture and Environment - making your company less “political” or tense and making it more comfortable for employeesPromote work/life Balance - “flexible work arrangements” & “telecommuting” were surveyed as the two top benefits that would convince them to choose a jobAcknowledge Achievements - frequent recognition of accomplishments

Engagement

Engagement - being psychologically involved in, connected to, and committed to getting one’s job done

Affects how well a company performso Organizations with higher engagement

perform better

Research/StatisticsGallup Organization Survey

Companies with highest levels of engagement had 83% chance to perform above company median, while companies with lowest levels of engagement had 17% chance to perform above median

Watson Wyatt Worldwide SurveyHighly engaged employees → 26% higher revenue per employee

Director of Recruiting at Fair Trade USABelieves boosting engagement is responsible for 10% drop in

turnoverHarvard Business Review

“Employees should be engaged by providing them with reasons and methods to satisfy customers and then rewarded for appropriate behavior.”

Only about 21% of the global workforce is engaged, and almost 40% disengaged

Components of Engagement

Traits of an Engaged Employee

● Enthusiasmo Enthusiastic about work

● Confidento Sure they can achieve success

● Inspiredo Motivated by their leaders

● Empoweredo Allowed to get the job done their way

Fostering Employee Engagement

Make sure employees1) understand how their departments contribute to

the company’s success2) see how their own efforts contribute to the

company’s success3) get a sense of accomplishment from working at

the firm

Summary● Ethics is a major part of everyday life as well as life within

the workplace● Employers reserve the right to monitor employee

ethics/behavioro Unethical behavior can be grounds for dismissal, or a

less severe punishment● Employees reserve the right to leave the organization as

they pleaseo Sometimes a contract is involved at the beginning of

employment● Employee engagement is a big issue in the workplace and

can affect how well a company performs

Cognitive EngagementINCIDENTA new policy was enacted that required employees to add an outline to the front of their reports. Bill recently submitted a report and forgot to add the mandatory outline as requested in a reminder sent earlier that week. The missing outline was discovered at a presentation meeting, but the missing outline did not hinder the meeting.

WORK HISTORYBill has been working for the company for 6 months and this is the first time he has missed an outline. His performance on the job in general has been virtually error free and satisfactory. Other employees in Bill’s department have forgotten the outline as well.

What would you do?