Ethics in human resource management is a crucial element in every business. Today, the role of HR professionals goes far beyond just the arenas of compensation and benefits. When left unaddressed, the ethical pitfalls in a company can easily affect a business brand or reputation.
Several organizational activities tend to operate around the fine line between what is legal and what is right. From retaining loyal customers to fuelling sustainable growth – ethics in HR paves the path for a company’s smooth progress.
But what exactly do ethics bring to the table and why should HR professionals include them in their management arsenal? Read on to understand.
Ethics Form the Core of HR Management
The HR world comes with ethical, moral, and legal layers that need to be explored and implemented. Carving standards around workplace conduct, creating diversity in the workforce, and straightening out issues of inequality are a few of the many challenges HR professionals are tasked with.
Often, human resource ethics policies decide how a business retains and attracts talent. A recent report by The Manifest revealed that about 79% of Americans would turn down a high-paying job from a company that has failed to resolve sexual harassment cases.
Sure, HR departments must take difficult decisions to uphold a company’s ethical standards. But in the long run, these steps pay off by changing the status quo and becoming a symbol of progress.
HR Professionals: The Flagbearers of Ethical Standards
Considering the many benefits of ethics in human resource management, maintaining the highest ethical conduct is critical for any business. For a company’s ship to sail ethically, an HR professional must exhibit individual leadership and become a role model for the employees. This responsibility comes with guidelines that are as follows:
- Be ethical in all company interactions.
- Seek expert or legal guidance when faced with decisions within ethical gray areas.
- Ensure decisions are made from an ethical viewpoint by questioning any pending group or individual actions if needed.
- Make space for the development of others as ethical leaders in the company through effective training and mentoring.
Maintaining Employee Loyalty
Hiring the best talent is just the tip of the iceberg when considering your company’s growth. The real challenge emerges when it comes to retaining your best employees.
Setting and implementing comprehensive ethical standards creates a long road to employee trust and loyalty. When your employees stick with you, they build deeper work experience along the way – fully understanding the inner mechanisms of the company. As a result, their productivity and efficiency continue to increase over time. Loyal employees also help save the costs that would otherwise spill into new recruitment and training processes.
Ethical practices like treating all employees as equals, creating transparent appraisal systems, and making plenty of space for career growth are important to nurture and retain talents.
Paving Sustainable Growth With Ethical Decision-Making
The ethics of decision-making can be incredibly nuanced. But great decisions are the ones that are both ethical and effective. The ripples of each decision are felt by the company’s employees and consumers. In other words, decisions reflect a company’s motives, actions, and expertise.
People, especially, are an organization’s priced assets. It’s critical to make them feel valued to increase their productivity, improve their talents, and stay loyal to the organization. In addition, a single corporate scandal is enough to bring a powerful organization to its knees. To avert any future downfalls, HR professionals must maintain the company’s ethical integrity when important decisions are being brewed at the table.
One way to embed ethical practice is through the promotion and implementation of accountability. When leaders take responsibility for their actions, it becomes easier to incorporate ethics in the process. HR professionals also play an important role when business decisions are taken at executive levels. Executives are often busy and handle a massive bundle of decisions. As a result, they can get trapped in the job’s tactical nature. HR leaders can act as a coach to their executives. They can bring in external examples and case studies to foster ethical decision-making behaviors and thereby change a company’s culture for the better. They can even help leaders decide if bringing in an outside ethics hotline is the right decision for their organization.
Shielding the Company’s Reputation
Any news spreads like a wildfire in the business world. Should legal trouble pop up, the challenges that ensue are often difficult to tackle – considering how ethics watchdog organizations and news outlets do not hesitate to spread the word everywhere.
Issues of unfair employment policies, discrimination, or sexual harassment can drag organizations on the front page of publications focused on businesses or consumers. A report from Ethics.org reveals about 30% of employees in the U.S. have witnessed a rule violation on the job. In 2015 alone, according to the Equal Employment Opportunity Commission (EOCC), legal claims of sexual harassment cost companies about $156 million.
Breach of ethics leaves a negative impact on the company’s reputation – especially among potential employees, strategic partners, or worse, consumers. The heavy risks of corporate scandals can be erased when companies can train the human resource management to stay in compliance with the organization’s ethical standards.
Averting Expensive Legal Lawsuits
Incorporating ethics can help avert another corporate nightmare – the financial burden of lawsuits. Regulatory agencies like the Equal Employment Opportunity Commission and the Better Business Bureau are committed to helping victims of workplace misconduct.
When the HR department puts effective ethics programs in place, minimizing or erasing these scenarios can become easier. For instance, organizations that align with in-depth ethics programs can avoid expensive losses related to hostile-work environments and discrimination issues. As a result, they deal with lower costs for out-of-court settlements and litigation.
Putting Effect Ethics Programs In Place
Having an impressive reputation as an ethical employer is not a walk in the park. Businesses keen on their workforce (and organizational) development invest in comprehensive ethics programs in every business arena – including the HR department. Every supervisor, manager, and the overall workforce must go through valuable ethics training programs to ensure maximum compliance with ethics. These training programs also ensure they remain fully aware of your expectations as an employer.
A critical thing to note – as far as ethics training is concerned – is to ensure the training proves to be effective. To help companies maintain top-notch ethical standards, ComplianceLine offers ethics training that brings real results – especially if your goal is to create a truly ethical corporate culture.
Giovanni Gallo is the Co-CEO of ComplianceLine, where his team strives to make the world a better workplace with compliance hotline services, sanction and license monitoring, and workforce eLearning software and services.
Growing up as the son of a Cuban refugee in an entrepreneurial family taught Gio how servanthood and deep care for employees can make a thriving business a platform for positive change in the world. He built on that through experience with startups and multinational organizations so ComplianceLine’s solutions can empower caring leaders to build strong cultures for the betterment of every employee and their community.
When he’s not working, Gio’s wrangling his four young kids, riding his motorcycle, and supporting education, families, and the homeless in the Charlotte community.