HRM is Unethical - Literature review Example

HRM is Unethical Introduction According to Kramar et al (2011) and Greenwood (2002), one of the two forms of ethical analysis of HRM practices or the determination of ethicality of HRM is often viewed from the perspective of application of ethical theories or theories of justice and fairness to HRM practices. For instance, Klikauer (2010) states that as opposed to the predominant utilitarian view where the role of ethics in management is either reduced to auxiliary roles such as supporting value creation for shareholders or adding value to the organization’s goals with respect to bottom line profits, ethics in management should operate under the deontological Kantian categorical imperative-treating others as the ends themselves and never as the means. This illustrates the application of Kantian and utilitarian ethical theories to HRM practices in general. The ethicality HRM practices, especially in employment relations, can also be gauged by the extent to which HRM is ethically endowed or possesses the qualities of fairness and justice (Kramar et al 2011). Such ethical analysis of HRM therefore applies the theories of justice and fairness to specific HRM practices and determines them to be ethical or unethical contingent on demonstration of or consistency with various theories of justice and fairness. The implication for HRM professionals is that they are ethically responsible for fostering fairness and justice for all employees in their organizations. This essay will critically argue for and against the position that HRM is unethical. The essay will first demonstrate how ethical analysis and evaluation of various HR practices can be conducted using both Kantian and utilitarian theories and Rawls’ theory of justice. The essay will demonstrate that by violating distributive justice in the pay gap between men and women and from Kantian deontological ethical theory, HRM can be considered as essentially unethical. In contrast, the essay will demonstrate how HRM can be defended as ethical from a utilitarian perspective. In conclusion, it will be demonstrated that the argument against the ethicality of HRM prevails. Arguments against the Ethicality of HRM There are various conceptions and theories of fairness and justice in employment relationships which can be used to evaluate HRM as ethical (or unethical). Organizational justice involves the perceptions of fairness among individuals and groups within an organization and their behavioural reactions considering such perceptions. There are three components to organizational justice: distributive justice or distributive fairness which concerns the perception that rewards are distributed commensurate to contribution, procedural justice and fairness which focuses on the methods used to determine the outcomes received and interactional justice which refers to the quality of interpersonal treatment in processes. These various conceptions of justice and fairness can be used to evaluate HRM as ethical or unethical (Kramar et al 2011). One of the most prominent philosophers on justice, John Rawls, conceptualised an egalitarian theory of justice which has often been used in evaluating the ethicality of HRM. Rawls attempts to derive the principles of distributive justice acceptable to all rational people and hence universal. For Rawls, justice is the first virtue of social institutions. To him social justice is achieved or realised by an appropriate distribution of the benefits and social cooperation burdens (Klikauer 2010). In conceptualizing distributive justice, Rawls suggests performing a thought experiment where everybody is behind a veil of ignorance- with the knowledge that we are all rational human beings but without knowledge of our characteristics or identities- male or female, rich or poor, talented or untalented, able bodied or disabled. This is Rawls’ philosophical original position. According to Rawls, the principles of justice that we would agree on in such circumstances or the principles that we would consider just or fair from the original position would nullify the accidents of social endowment and the contingencies of social circumstances (Klikauer 2010: Kramar et al 2011). Rawls argues that there would be two principles of justice agreed on: equal right to the most extensive basic liberty and social and economic inequalities arranged in a manner that is both reasonably expected to be to everyone’s advantage, attached to positions and offices open to all and of greatest benefit of the least-advantaged members of society- difference principle (Klikauer 2010: Legge 1997). Rawls favoured maximising the improvement of the least-advantaged in society as a critical component of social justice. The rationale behind Rawls’ argument is that from the original position, parties would be aware that social inequalities only benefit those who get more and that the only way they would benefit everyone is if they benefitted those who get less. Therefore, parties under the veil of ignorance would reasonably be more afraid of becoming poor than they would be eager to become rich and would prefer a system that minimizes their risk of winding up badly off. They would consider the worst possible outcome and try to improve on that position. For example, Rawls argued that parties in the original position would prefer a society which has a higher minimum wage and a lower average wage than one which has a higher average wage and a lower minimum wage structure. Rawls maintained that rational-thinking members of society would choose the principles of justice that most benefited those at the bottom as the best for building or reforming institutions for a just society. Rawls’ conceptualisation of justice would thus evaluate HRM practices ethically by considering these principles of distributive justice. The hypothetical decision rule would be that any HRM practices that are socially unjust would be considered decidedly unethical (Klikauer 2010). An example of the application of Rawls theory of distributive justice in ethical analysis of HRM is on the issue of the pay gap between men and women. The issue of a gender pay gap raises questions over the ethical aspects of HRM in terms of equal pay for work of equal value. Klikauer (2010) argues that from Rawls’ conception of justice, HRM is unethical due to the prevalence and persistence of the pay gap between men and women’s earnings. From Rawls’ egalitarian theory of justice, there is still no wage justice between men’s and women’s earnings, wage justice being a critical component of distributive justice and an essential ingredient of just society. This wage inequality has been documented extensively by various researchers as an indictment of the ethicality of HRM practices. From as early as 1982, Mallan (1982) has presented evidence that despite increased participation of women or the growth of female participation in the labour force in America, the pay gap between men and women had grown considerably. The Australian Bureau of Statistics provided further evidence when it estimated that in the ten year period between 1995 and 2005, the pay gap between men and women actually widened in Australia with the gap increasing from an average difference of $ 155.17 in 1995 to $162.10 (Anonymous 2006). There have been various explanations put forward to account for the gender pay gap. From Rawls’ perspective, the pay gap could be indicative of unethical HRM practices in recruitment, promotion and reward. HRM could be considered unethical in terms of propagating gender discrimination which according to Rawls’ theory is socially unjust in accounting for the growth and stability of the gender pay gap, Mallan (1982) notes that discrimination and role differentiation actually contribute to the stability of the gender gap. On the issue of discrimination, Mallan (1982) notes that employers and HR managers are actually responsible for perpetuating gender discrimination in the workplace through selective and inherently sexually discriminative promotion and reward practices. Mallan shows that work experience is apparently not significant in justifying or accounting for the gender pay gap. In addition, Dickens (1998) highlights the fact that unlike men, women engage in unpaid domestic work and are socially disadvantaged in terms of flexibility and availability in work commitment. Therefore, pay, performance appraisal and benefits systems which do not attempt to resolve this advantage can be considered from a Rawlsian perspective as inherently unethical. Essentially, evaluations of the ethicality of HRM from Rawls’ conception of justice would conclude that HRM managers actually violate distributive justice in their promotion and reward policies and practices. Wilhelm (1993) also demonstrates how HRM violates distributive justice through its performance and reward policies. From an ethical analysis of CEO pay structures in the United States, Wilhelm argues that the various perks and benefits which are enjoyed by CEOs including high salaries and compensation plans that include stock options and cash bonuses (golden parachutes) are not available to lower level employees. Among other negative effects, the compensation structures for CEOs established by their respective HR managers diminish employee morale, contribute to shareholder and employee neglect and imply that other critical expenses such as research and development would face budget cuts. Greenwood (2002) also demonstrates how an ethical analysis of HRM can be conducted using both utilitarian and deontological theories. From the onset, she hints that the very use of the term “human resource” is unethical as the use of the term resource compares human beings to office furniture or computers. Nevertheless, utilitarian theory evaluates the morality and the ethicality of an action by its consequences. From a utilitarian perspective, an action is moral and therefore ethical if when compared to any other alternative it maximises the good or benefit while minimising the negative or producing the least bad consequences for the greatest number of people who are either directly or indirectly affected by it (Shaw and Barry 2010). Therefore, according to Greenwood (2002) the ethical analysis of HRM practices from a utilitarian perspective essentially imposes the criterion of proving that the outcome of HRM is to the maximization of the utility of those concerned or affected. For instance, HR policies or practices such as downsizing in the face of harsh economic circumstances would be justified as maximizing the utility of the employees retained, the company’s stakeholders and society as a whole through cheaper goods and perhaps a more vibrant and competitive industry with attractive wages. Similarly, employee training and development would be approached from the viewpoint of providing the skills necessary for an organization or company to have a more competent workforce which would produce greater profit (Shaw and Barry 2010). However, in the ethical analysis of HRM from a Kantian deontological perspective, Greenwood notes that HRM is only ethical if it treats the employees as the ends and not as the means. Deontological theory is based on the concept of duty and evaluates an action as ethical or moral for reasons other than their consequences (Kramar et al 2011: Klikauer 2010: Greenwood 2002: Legge 1997). An action is moral and therefore ethical from a deontological perspective if the sole motivation for the action is the recognition of moral duty based on a valid rule- an action is only ethical if it conforms to moral law. Treating employees as end-in-themselves implies providing them with some of the things that they need with their sustenance and well-being as the ultimate goals. Most significantly, from a Kantian deontological perspective, the company or organization’s moral obligation should be to provide meaningful work- work which is among other things; freely entered into, provides wages sufficient for physical welfare, supports employees’ moral development and does not interfere with the employees’ perception of how they wish to obtain happiness (Greenwood 2002: Shaw and Barry 2010). Winstanley and Woodall (2000) also adds that deontological or rights based approaches are still relevant to HRM in areas such as selection interviewing, occupational testing, equal opportunity and diversity management, flexible employment contracts and working time and employee development. Ethical analysis and evaluation of most HRM practices and policies from a deontological perspective would logically conclude that HRM is unethical. For example, as indicated, most organizations or companies provide training and development to their employees with an eye on the bottom line. Instead of offering training and development focused on the individual employee’s career path by developing their personal skills and capabilities, HRM often emphasizes on the skills and competencies required at the workplace (Shaw and Barry 2010). In this way, HR managers prioritize the company or organization’s interests above those of the individual employee- treating them as means to an end instead of as the ends themselves (Legge 1997: Grenwood 2002). Kantian deontologists would argue that corporations should among other things empower the employee by enabling them to perform a greater range of tasks and assume more control over their work which would enhance their chances of promotion or improve their income prospects in what has been characterised as “soft” HRM. Several commonly applied HRM practices and policies can also be considered unethical from a deontological perspective. Despite the utilitarian claim that company downsizing through retrenchment maximizes societal benefit, critics have claimed that this justification is completely untenable. It is argued that it is unethical for HR managers to allow the organization’s goals to override the interests of the employees. Empirical research has proven that the employees who are retrenched or who are affected due to policies such as budget cuts suffer greatly at the benefit of others. From both Rawls’ and Kant’s perspective, there is no ethical basis to justify such HR policies. It is not only unjust procedurally by violating procedural justice but also violates the moral obligations under Kantian deontology (Shaw and Barry 2010). Greenwood (2002) proposes two ethical criteria for evaluating HRM ethically- that individuals as employees be treated with respect with certain moral rights that cannot be violated and that no company or HR manager should undermine the autonomy of an individual. Regarding the first proposition, Greenwood argues that in treating employees with respect, organizations and HR managers alike should not violate their rights such as right to freedom, right to well being and the right to equality. However, she notes that modern HRM practices can easily be construed as violating some of these rights. For example, HR programs and policies such as employee assistance, training and development programs or even family friendly work policies which on face value appear to benefit the employee but are actually targeted towards organizational outcomes can be interpreted as a form of manipulation of the employee (Greenwood 2002). Greenwood also argues that by explicitly or implicitly treating employees as not having goals and interests which differ from those of the organization, HRM actually violates the right to well being which stipulates that the employee has a right to pursue their own interests and goals. Some HRM practices which can be considered as violating the individual employee’s autonomy include performance appraisals or evaluations which do not allow the employee to participate. Since these performance evaluations are often used in pay and reward schemes, the organization is violating the employee’s right to participate in decisions which affect their welfare which is inimical to treating them with respect. In addition, referring back to Rawls’ distributive justice, the existence of a socially unjust pay gap between men and women violates the right to equality. In her final evaluation, Greenwood (2002) states that HRM does not pass the ethics test. However, there are several arguments which can be used to defend the ethicality of HRM. Arguments for the Ethicality of HRM From Rawlsian ethical analysis, it was argued that HRM is unethical as it violates distributive justice as manifested in the pay gap between men and women. However, it can conversely be argued that wage injustice as conceptualized by Rawls cannot be exclusively attributed to HRM but must be understood from a societal context. As Mallan (1982) states, the persistence of socially unjust wage gaps between men and women cannot be exclusively attributed to employers of HR managers but that women’s own preferences and adaptations of behaviour based on their assessment of their wages play a role in reinforcing and propagating their discrimination. Defenders of HRM could also argue that HRM policies are becoming increasingly sensitive to the gender gap as evidenced by the rapid increase in affirmative action policies by many employers in ensuring gender equality and equity. While critics would argue that this has been a response to the pressures of legislative obligations, utilitarians would uphold the argument of ethicality. HRM’s main defence comes from utilitarianism. As Legge (1997) and Klilkauer (2010) argue, utilitarianism would provide a more reassuring ethical evaluation of HRM. As indicated, for utilitarians, it is perfectly ethical to use people as the means to an end provided that it is for the greater good of society. Therefore, while Kantian deontologists would dismiss the moral justification for HRM policies or strategies such as downsizing and labour intensification, utilitarians would point to the moral justification of the competitive advantage realized through such strategies. By delivering competitive advantage, such strategies would ensure the survival of the organization which would in turn protect the jobs of employees, maintain the employment of suppliers and satisfy the greater consumer and society needs through lower prices and so forth (Legge 1997). By maximising the greatest good for the greatest number of people, utilitarians depend on the balance of positives over negatives as moral justification for the ethicality of HRM. Conclusion HRM essentially involves the effective management of people to achieve the goals of an organization. Ethics, on the other hand, generally refers to moral beliefs in ethical theory. The study of ethics in the HRM context has become increasingly important given the dynamic and interrelated shifts in the organization of work at organizational, national and international level. There are various theories or frameworks which could be used to evaluate the ethicality or undertake an ethical analysis of HRM. One of the two forms of ethical analysis of HRM practices or the determination of ethicality of HRM is often viewed from the perspective of application of ethical theories or theories of justice and fairness to HRM practices.Ethical analysis of HRM therefore applies the theories of Kantian or utilitarian ethical theories or the theories of justice and fairness to specific HRM practices and determines them to be ethical or unethical contingent on demonstration of or consistency with various theories of justice and fairness. The implication for HRM professionals is that they are ethically responsible for fostering fairness and justice for all employees in their organizations. There are various examples to support the claim that HRM is unethical. From John Rawls egalitarian theory of distributive justice, it can be argued that the persistence of a socially unjust pay gap between men and women shows that HRM is unjust and hence unethical. From Rawls’ perspective, the pay gap could be indicative of unethical HRM practices in recruitment, promotion and reward which violate distributive justice. Wilhelm (1993) also demonstrates how HRM violates distributive justice through its performance and reward policies arguing that that the various perks and benefits which are enjoyed by CEOs including high salaries and compensation plans that include stock options and cash bonuses (golden parachutes) are not available to lower level employees. HRM can also be evaluated from Kantian or utilitarian ethical theories. From Kantian deontological perspectives, HRM is unethical when it treats employees as the means and not as the ends in themselves. Therefore, HR policies such as training and development which intend to provide skills needed by the company or organization at the expense of the employee’s freedom are unethical. Similarly, practices such as performance appraisal and downsizing are also considered unethical. However, HRM can also be defended as ethical. Against the claim that the wage gap is demonstrative of socially unjust HRM, Mallan (1982) states that the persistence of socially unjust wage gaps between men and women cannot be exclusively attributed to employers of HR managers but that women’s own preferences and adaptations of behaviour based on their assessment of their wages play a role in reinforcing and propagating their discrimination. Utilitarian ethical analysis would also argue that it is perfectly ethical to use people as the means to an end provided that it is for the greater good of society. Therefore, ethical analysis of HRM depends on the framework or theory which one applies to HRM practices. In conclusion, and from critical analysis as supported by Legge (1997) and Greenwood (2002), HRM does not generally pass the ethics test since it more frequently violates than upholds both theories of fairness and justice and Kantian deontological ethics. References Anonymous 2006, Pay Gap Widens, Australian Nursing Journal, Vol 13, No. 9, p8. Dickens, L 1998, What HRM means for Gender Equality, Human Resource Management Journal, Vol 8, No. 1, pp 23-40. Greenwood, M.R 2002, Ethics and HRM: A Review and Conceptual Analysis, Journal of Business Ethics, Vol 36, No. 3, pp 261-278. Klikauer, T. 2010, Critical Management Ethics, Palgrave: Basingstoke (UK). Kramar, R., Bartram, T. & De Cieri, H. 2011, Human Resource Management in Australia- Strategy, People, Performance (4th ed.), McGraw-Hill: Sydney. Legge, K 1997, “The Morality of HRM,” in Mabey, C (Ed), Experiencing Human Resource Management, Sage: London. Mallan, L.B 1982, Labour Force Participation, Work Experience, and the Pay Gap between Men and Women, The Journal of Human Resources, Vol. 17, No. 3, pp. 437-448. Shaw, W. H & Barry, V 2010, Moral Issues in Business, Wadsworth: Belmont. Wilhelm, P.G 1993, Application of distributive justice theory to the CEO pay problem: Recommendations for reform, Journal of Business Ethics, Vol 12, No.6, pp 469-482. Winstanley, D & Woodall, J 2000, The ethical dimension of Human Resource Management, Human Resource Management Journal, Vol 10, No. 2, pp 5-20. Read More