Creating an Ethical Culture through the HR Function

This is the first of a series of blogs on ethics and the HR function. In this blog I deal with issues related to creating an ethical culture in an organization through the HR function.

Age discrimination, sex and gender discrimination, racial discrimination, sexual harassment, health and safety issues and compliance with federal and state laws and regulations make up the core of ethical issues faced by HR professionals. Today, HR managers and supervisors must be attuned to the ethical issues to ensure employees are protected in the workplace and creates an ethical corporate culture. The issues have become more complex with changing societal values and now create a minefield that can explode on an organization and lead to damage to its reputation and legal liability.

The overriding ethical issue is to treat employees in the workplace the way HR managers and supervisors would want to be treated. The highest ethical standard with respect to HR issues is fairness. The mistake some HR folks make is to equate ethics with the law. It is not true that so long as an organization follows all the workplace laws it is operating ethically. This notion of ethical legalism misses the point that issues may arise in today’s workplace that are not covered by a law or regulation. The question then becomes how best to handle it and the answer is in accordance with the ethical concept of justice: Treat equals equally; treat unequal's unequally.

It’s not uncommon for the law to have to catch up with the needs and rights of workers for specific protection. For many years’ workers with disabilities were discriminated against, at least until the Americans with Disabilities Act was passed in 1990. Employers who were sensitive to ethics issues of fairness, respect, caring and compassion would have acted without the need for a law to require accommodations.

The same can be said about transgender workers who have not been protected, although a 2012 decision from the federal Equal Opportunity Commission (EEOC) held that such discrimination violates Title VII of the 1964 Civil Rights Act. The EEOC’s ruling in Macy v. Holder is binding on the federal government and establishes specific protections for federal transgender workers. We have a way to go before all such workers are equally protected.

Going beyond legalities, creating an ethical organization environment is critical to managing workers in a way that promotes their interests as well as those of the organization. Both HR and the Ethics function have a powerful role to play in the embedding of ethical values into an organization and collaboration operates in two directions. The departments mutually support each other in a number of areas. HR has an important role to play in strategic hiring to develop an ethical workforce including:

• Employee retention by treating them with dignity, respect, and making them accountable for their actions through performance management and appraisals that measure ethical behavior
• Developing training programs that incorporate an ethical dimension
• Monitoring ethical behavior with other participants in the process, such as ethics officers; and
• Enhancing the reputation of the organization by treating stakeholders (i.e., employees, customers, suppliers) fairly and being responsive to their needs.

Employee perception of how the Ethics department and HR work together is an important aspect of embedding an ethical culture within an organization. It’s best to keep the two teams distinct and independent to avoid any perceived (or actual) conflicts of interest. It is important that employees know that an area of ethical concern will be handled independently from the department dealing with disciplinary issues, promotions, and so on. It’s best that the two departments have different reporting lines and are physically very separate within the office.

The HR function plays a key role in ethics by developing policies that treat employees ethically. The result is to garner long-term employee trust and loyalty, which conveys a range of distinct benefits to employers. Loyal employees gain more experience working with their employers and can help to better understand the inner workings of the organization. This can increase employees’ productivity and efficiency over time in addition to keeping recruiting and training costs under control.

A solid reputation as an ethical employer occurs over time by gaining the commitment of employees to identify with the ethical values of the organization as embedded in a code of ethics and strengthened through ethics training. Ethical leadership is essential to promoting a culture of ethics and a tone at the top that fosters ethical behavior. Ethical leaders lead by example and create a culture of mutual respect and dignity, where ethical decision-making is valued and rewarded.

Blog posted by Dr. Steven Mintz, aka Ethics Sage, on February 18, 2016. Professor Mintz is on the faculty of the Orfalea College of Business at Cal Poly San Luis Obispo. He also blogs at: www.ethicssage.com.