The Ethics of Human Resource Management and Employment Relations - Literature review Example

Running Head: The ethics of HRM and ER Student’s Name: Instructor’s Name: Course Code and Name: University: Date Assignment is due: The ethics of HRM and ER Introduction HRM specialists often find themselves in a precarious position as they try to reconcile the needs of the senior management and the ethical practices that should be imposed on employees. The profit motive sometimes drives senior managers and owners into reducing the salaries of employees. Whereas this strategy may seem to succeed at the beginning, the long-term consequences can be overwhelming, and may lead to enormous losses for the company owners. Not only do the senior managers lose valuable employees, they may also face a damaged reputation. According to Bamber, Lansbury & Wailes (2004), employment relations incorporate aspects of both HRM and Industrial relations. The issues that are often addressed in ER relate to regulation of work. However, ER must also handle issues relating to interactions between employers, owners of the company, employees, their respective organizations, unions and the state (Bamber, Lansbury & Wailes, 2004). Many problems arise whenever senior managers interact with their employment in a working environment. Whereas the primary motive of company owners is to maximize profits, that of the employees is ordinarily to earn a living and progress their careers. It is always the task of the HRM department to coordinate employment relations issues by acting as the bridge between the senior managers and the workforce. For HRM officials to understand the employment relations well, an interdisciplinary approach is necessary, with the main areas of focus being law, economics, and history, among others. In today’s era of globalization, there is a need for HRM officials to understand the international environment in which the companies that they work for operate (Leunga & Kwong, 2003). Although a clear-cut distinction seems to exist between the profit motive and the welfare of employees, there is no justification for employees to be treated contemptuously. Meanwhile, membership in labor unions has always been an issue that features whenever the distinction between the profit motive and welfare is being defined. Whenever these two ends are reconciled, the task of HRM become rather easy since they are able to address many issues regarding employment relations such as salaries, overtime hours, career progression and promotion. Apart from traditional standard employment relations, recent changes in the industrial practices have led to development of nonstandard employment relations (Kalleberg, 2000). Agreements in practices such as part-time work, temporary work, short-term work, independent contracting and contract company employment are necessary if conflicts between company owners and employees are to be avoided. Different modern organizations have adopted different strategies in these changing circumstances depending on internal policies as well as external influences (Zhu & Warner, 2000). Unfortunately, notes Kalleberg (2000), a proper understanding of employment relations has become problematic today, largely because of inconsistent definitions of terms. Sometimes, contradictions arise because of the multidisciplinary nature of the issue, and divergent influences of political, macroeconomic and institutional factors. The situation under review in this paper is the conflict between the profit motive by senior management and the need for proper working conditions for employees. This paper will assess the example of protests among employees at Foxconn, a Chinese electronics company. Foxconn is the largest electronics manufacturer in the world. It manufactures various products for Apple Inc., such as iPhones and Nintendo. The protests were hugely publicized after 10 employees committed suicide within one year, spreading fears that working standards at the company are substandard. Employment relations problems at Foxconn In June 2010, Foxconn’s employment relations problems were publicized when The Epoch Times reported that ten employees of the company had committed suicide while three others were seriously injured in suicide attempts. The report also highlighted how the factory’s working conditions resembled a military regime. The main problems cited included 10-hour workdays, forced overtime, banning of communication on the work floor, crowded 12-to-a-room factory dormitories and production lines that move too fast. These working conditions raised stress levels in a factory whereby counseling was rarely given. Reports released by the Chinese media revealed that Foxconn had admitted to forcing workers to do up to 80 hours of overtime every month, while the maximum permitted by local labor laws is only 36 hours. HRM experts at Foxconn must have had a hard time trying to understand how the ER situation had deteriorated to their extent without their awareness. According to Hannan, Burton & Baron (1996) many young technology companies begin their operations on the right footing by integrating their employment relations into their business strategies. These companies adopt ‘star’ and ‘commitment’ models. Unfortunately, owing to a myriad of factors, these models turn out to be less stable. Therefore, they are gradually replaced by ‘engineering’ and ‘factory’ models, which are more stable and accommodative to the process of revolutionizing a technology company. Foxconn may have undergone a similar transformation process. Ethical concerns and professionals behaviors that need redress Most of the claims made against Foxconn if true, need to be addressed by the HRM department in order for the reputation of the company to be repaired. First, the human resource manager should ensure that the overtime hours enforced by the company do not surpass the limit set by China’s labor laws. Employment relations also cover the conduct of supervisors towards production line employees. For a factor with 300,000 workers, the task of coordinating and monitoring the conduct of supervisors is a daunting one. The best HRM manager is one who drafts and presents a coherent policy detailing how all employees should conduct themselves (Huselid, 1995). Additionally, claims of rape, beatings, intimidation against women need to be addressed. The HRM manager should adopt much more than a public relations stance when addressing these issues. The labor laws of a socialist market economy such as China’s are different from those of many other countries, something that HR professionals at Foxconn must understand. Lee (2007) points out that although China is undergoing an economic boom, there are many oppressive labor laws that make it difficult for the country’s working class to benefit from what Chan (1998) refers to as ‘the latest Asian miracle’ in reference to the boom. Unethical professional practices in many factories are commonplace in the country. Many foreign investors who fail to formulate clear policies end up falling prey to the unethical organizational culture of exploiting the working class by subjecting them to oppressive working conditions. In this regard, the profit motive takes precedence to the employee welfare motive. As a Human resource management specialist, an excellent guide during the formulation of these policies would be to pay attention to the fundamental human rights of the workforce. For this reason, the advocacy role of such a specialist should not be gainsaid. The first ever labor law to be enacted in the People’s Republic of China came into existence in early 1995. Ironically, most of the oppressive industrial practices that prevail in this country are in violation of this law Chan (1998). The complaints raised by workers at Foxconn, such as prohibition from speaking to each other during shifts and going to unauthorized toilet visits is against the international labor standards. They are also in violation of the spirit within which the China’s labor law was promulgated in 1995. The labor law was formulated on the basis of a body of existing administrative laws and is a reflection of the country’s complex economic scene. Attention to the competitive atmosphere within which companies operate in China should be adhered to at Foxconn in order for skilled employees to be of long-term benefit to the organization. Although the spirit of China’s labor law was a positive one, it failed to address the repressive attitude of the Chinese government. This situation creates a loophole for human rights violations to take place in industrial settings with no legal actions being taken against the perpetrators. Options available to a HRM/ER professional in this situation Acknowledging wrongdoing is crucial for the person in charge of HRM issues at the company since it hints at openness to dialogue. Although the Chinese government is partly to blame for allowing a culture of industrial oppression of the working class to prevail, ER specialists are also to blame for not failing to negotiate for employee welfare with company owners. By accepting wrongdoing, the owners of the company can signal the beginning of negotiations on how to enter into a collective-bargaining agreement with employees. The issue of salaries should be addressed with immediate effect. The company should adhere to the minimum salary standards set by the Chinese government. Chan (2005) says that the regular reports published in the Western Press about the plight of Chinese paid meager wages after working for long hours are highly accurate. Factory owners, such as Apple Inc., who own Foxconn, ought to be at the forefront in improving industrial labor relations by strengthening their HRM departments in issues of employment management. Knowledge of labor unions is also necessary for the HRM at the factory. Many company owners always oppose labor unions and things are not much different at Foxconn. As long as such unions are managed within the guidelines set in China’s labor law, the senior managers should not be afraid of activism among workers (Ng & Maki, 1997). Additionally, HRM officials who value professional ethics should clearly define the issues that should be addressed through these unions and those that should not. These practices would constitute ethical behavior in a country where the emerging industrial labor market is becoming increasingly market-oriented (Brooks & Tao, 2003). In order to make up for the injustices committed against the workers, the HRM department should pay attention to matters of employee benefits, including career progression, improvement of worker skills and job security (Brooks & Tao, 2003). These measures are necessary as a matter of moral principle as well as predicted future trends in the industrial labor markets Donga & Bowles (2002). Donga & Bowles indicate that the wage advantage that Chinese urban residents enjoy to be disappearing across all the existing ownership categories. For this reason, there is a need for human resource specialists to safeguard the skilled workforce that they have invested in during recruitment, training and induction processes. Although Chinese labor laws are opposed to truly independent trade unions, there are many provisions that can be of considerable help to employment relations planners at Foxconn. For instance, many large companies are following the example of village leaders by allowing competitive elections of trade union representatives (Donga & Bowles, 2002). The first impulse for company owners would be to manipulate the election process in order to lock out radical union leaders. Doing so would not help ease the wave of demonstration such as the one encountered at Foxconn. Under Chinese labor laws, all businesses, including foreign-owned and private ones, are required to put up a union branch at the enterprise level. Foxconn had acted both unethically and illegally by failing to institute such a branch. Not only should such a branch be seen to operate, it should be allowed to freely engage employees in discussions on issues of welfare. For an ER specialist, the challenge lies in ensuring that employees are given enough time to associate at the union level. Conclusion The complaints raised by Foxconn are an indication of the ethical violations made at the company. From a critical HRM analyst’s point of view, these complaints represent a case of conflicting interests between senior managers and employees. In view of company owners, the profit motive matters more than employee welfare. Forcing employees to sign declarations not to commit suicide when because of stress does not solve the prevailing problems. Rather, the core issue of causes of stress among employees should be assessed with utmost urgency. HRM experts at the company should be in the forefront in using their professional knowhow and experience in formulating ethically sound policies while at the same time resolving the crisis amicably. Adopting ethical measures will be of benefit to both the senior managers and employees. For the managers, loyalty from employees will be readily forthcoming while for employees, suicide rates will drop and job satisfaction will increase. References Bamber, G. Lansbury, R. & Wailes, N. (2004). International and comparative employment relations: Globalisation and the developed market economies. London: Routleldge. Brooks, R. & Tao, R. (2003). China's Labor Market Performance and Challenges. IMF Working Paper, 1-25. Chan, A. (2005). Recent Trends in Chinese Labor Issues—Signs of Change. New York: Penguin Books. Chan, A. (1998). Labor Standards and Human Rights: The Case of Chinese Workers under Market Socialism. Human Rights Quarterly, 20 (4), 886-904. Donga, X. & Bowles, P. (2002). Segmentation and discrimination in China's emerging industrial labor market. China Economic Review, 13(2), 170-196. Hannan, M., Burton, D. & Baron, J. (1996). Inertia and Change in the Early Years: Employment Relations in Young, High Technology Firms. 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