Organizational Ethics

HR’s Role in Organizational Ethics

The human resource department of an organization plays a huge role in ethical behavior. They set the tone for the rest of the company. They make the ethical programs and train employees on how to be ethical and what to do in unethical situations. They set up the hotlines for employees to leave anonymous tips and they also make ethical models, just like the one I have shown above. They ensure that all of the activities going on inside of the organization are ethical, legal, and up to par on government standards and regulations.

 Employee Engagement

According to the textbook, the 13^th edition of Human Resource Management, employee engagement is defined as, “the extent to which individuals feel linked to organizational success and how the organization performs positively”. (Mathis and Jackson 12)

Employee organization is essential in an organization and it can make or break the success of the company. If employees feel that they are part of the group and can contribute, they are more likely to be motivated to do good work. An employee needs to feel valued in order to be driven and inspired.

Ethics Program

When a company has an ethics program, it helps to make it possible to be more ethical. There are four main elements of an ethics program. They are as follows:

1. “A written code of ethics and standards of conduct” (Mathis and Jackson 13)
2. “Training on ethical behavior for all executives, managers, and employees” (Mathis and Jackson 13)
3. “Advice to employees on ethical situations they face, often made by HR” (Mathis and Jackson 13)
4. “Systems for confidential reporting of ethical misconduct or questionable behavior” (Mathis and Jackson 13) 

Ethical Model

An ethical model is made to help everyone in the organization better understand business ethics and how to make sure they are always being ethical. There have been many different ethical models that have been created over time by all different kinds of business people and managers. I found the ethical model below that was made in late 1980's and early 1990's. 

“Trevino (1986) offered a general theoretical model, whereas Ferrell and Gresham (1985), Hunt and Vitell (1986), and Dubinsky and Loken (1989) offered models that focus on marketing ethics. Rest (1986) presented a theory of individual ethical decision making that can easily be generalized to organizational settings. Among the empirical contributions to date are the works of Hegarty and Sims (1978, 1979), Fritzsche and Becker (1983), Frederick (1987), Laczniak and Inderrieden (1987), Fritzsche (1988), Dubinsky and Loken (1989), and Weber (1990). One reason for this relative paucity of theoretical and empirical work in ethics may be that few scholars are interested in both ethics and organizational behavior and decision making. The models that have emerged are the products of scholars in psychology or psychology-based disciplines, including organizational behavior and marketing.” (Jones 366-395)

HR-Related Ethical Misconduct Activities

Three main examples of human resource related misconduct activities are as follows:

1. Compensation - being unfair during performance reviews, lying on work reports, lying about the number of hours or time worked, etc.
2. Employee Relations – lying, stealing, giving false information, etc.
3. Staffing and Equal Employment – favoritism, discrimination of any kind, false background checks, giving or using false information, etc. 

Organizational Ethics: A Stacked Deck

“The idea of a ‘stacked deck’ has three elements which are of significance here. There is (1) a magician, ‘the deck stacker’, (2) a ‘straight man’, the member of the audience asked by the magician to ‘pick a card’, and (3) a situation in which the ‘straight ma’s’ choice turns out to be exactly the card the ‘deck stacker’ had intended to be chosen. Similarly, in organizational ethics there is (1) an organization which has so structured relationships within it that (2) members in the performance of their responsibilities typically choose (3) the organizations preferred way of doing rather than alternative behaviors which might be though by some to be ethically superior.” (Carroll 95-100)

Sarbanes – Oxley Act (SOX)

“The Sarbanes – Oxley Act (SOX) was passed by congress to make certain that publicly traded companies follow accounting controls that could reduce the likelihood of illegal and unethical behaviors.” (Mathis and Jackson 16)

There are three main rules that SOX enforces, they are listed below.

Rule One: “The first rule deals with destruction, alteration, or falsification of records” (Rouse)

“Sec. 802(a) ‘Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.’” (Rouse)

Rule Two: “The second rule defines the retention period for records storage” (Rouse)

“Sec. 802(a)(1) ‘Any accountant who conducts an audit of an issuer of securities to which section 10A(a) of the Securities Exchange Act of 1934 (15 U.S.C 78j-1(a)) applies, shall maintain all audit or review workpapers for a period of 5 years from the end of the fiscal period in which the audit or review was concluded.’” (Rouse)

Rule Three: “This third rule refers to the type of business records that need to be stored, including all business records and communications, including electronic communications” (Rouse)

“Sec. 802(a)(2) ‘The Securities and Exchange Commission shall promulgate, within 180 days, such rules and regulations, as are reasonably necessary, relating to the retention of relevant records such as workpapers, documents that form the basis of an audit or review, memoranda, correspondence, communications, other documents, and records (including electronic records) which are created, sent, or received in connection with an audit or review and contain conclusions, opinions, analyses, or financial data relating to such an audit or review.’” (Rouse)

References

Mathis , Robert L. , and John H. Jackson . Human Resource Management . 13th ed. . Mason : South-Western Cengage Learning , 2011. Print.

Jones , Thomas M. . "Ethical Decision Making by Individuals in Organizations: An Issue-Contingent Model." Academy of Management Review . 16.2 (1991): 366-395. Print. <http://www.jstor.org/stable/pdfplus/258867.pdf?acceptTC=true&acceptTC=true&jpdConfirm=true>.

Carroll, Archie B. . "Organizational Ethics: A Stacked Deck ."Journal of Business Ethics . 3.2 (1984): 95-100. Print.

Rouse, Margaret . "Sarbanes-Oxley Act (SOX)."searchcio.techtarget. N.p., n.d. Web. 2 Dec 2013. <http://searchcio.techtarget.com/definition/Sarbanes-Oxley-Act>.