Ethical Issues in HRM

  • Post last modified:10 August 2023
  • Reading time:9 mins read
  • Post category:Business Ethics
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What are Ethical Issues in HRM?

HRM involves managing an organization’s workforce, and this can raise several ethical concerns. Discrimination, harassment, privacy, fairness, employee relations, and labor practices are some of the key ethical issues in HRM.

Ethical Issues in HRM

In an organisation, Human Resource Management (HRM) plays a crucial role in maximising employee performance with an aim to accomplish organisational goals and objectives. It involves a number of activities such as recruitment, selection, training and development, compensation, rewards, induction and orientation.

Thus, it can be said that the HRM function is related to the management of people in an organisation. Any unethical issue in HRM may negatively affect employee motivation and organisational performance.

Major ethical issues in HRM include inequitable performance appraisal and discrimination of employees on the basis of age, gender, religion or disability. Apart from this, unfair compensation practice is another area of concern, which leads to employee dissatisfaction.

There are a number of multinational organisations that run their businesses in both developed and developing countries. However, these organisations barely compensate people fairly. For example, an American transferred to India might get more salary than his/her Indian colleague for the same job.

Let us discuss these ethical issues in detail.

Unfair Performance Appraisal

The performance appraisal system is the most significant factor of an employee’s work life. It is directly related to the increment in compensation, promotion and recognition of an employee.

On the other hand, it is indirectly related to job satisfaction, employee morale, motivation, productivity and industrial relations. Unfair performance appraisal may adversely affect the level of job satisfaction and motivation of employees.

Discrimination in Employment

It is unethical to make distinction among individuals on the basis of caste, colour, sex and creed while selecting them for jobs. Such discrimination is generally based on personal perceptions of the recruiter. For example, a recruiter may be more inclined to select a candidate who belongs to the same community as that of the recruiter.

It is a serious unethical practice related to HRM as the selection should rather be done on the basis of skills, performance, education or knowledge. Such unethical practices affect the productivity and quality of tasks within an organisation.

Privacy Issues

It is important for an HR professional to secure the confidentiality of individuals and the organisation. As per the regulations supporting privacy, every individual has the right to protect his/her personal life. For example, scanning the personal mails of an employee is an unethical practice as it breaches the privacy rights of an employee.

Similarly, an organisation also has its privacy rights. It is not compulsory for an organisation to share or disclose all crucial details to stakeholders. If an employee, without the consent of the organisation, discloses any official record or information to any other person/organisation, he/she can be found guilty of the breach of confidentiality and privacy rights of the organisation.

Safety and Health Issues

Employees are the assets of any organisation; therefore, it is the responsibility of organisations to provide them with a safe and healthy work environment. Any type of intentional harm to the health and safety of employees or any person at the workplace is unethical.

For example, Nike Shoe Plant in Vietnam was in focus for a long time for the poor safety and health conditions, and the employees were forced to work under such conditions.

As per an inspection report given by Ernst & Young, workers at the factory near Ho Chi Minh City were exposed to carcinogens that exceeded local legal standards by 177 times in parts of the plant and that 77 per cent of the employees suffered from respiratory problems.

Organisations take various measures for the health and safety of employees, such as prevention of accidents, arrangement of clean drinking water, hygienic toilet facilities, etc.

Unjustified and Discriminative Work Conditions

Poor employment conditions cause various ethical concerns in organisations. These conditions may lead to stress, work pressure and adverse work practices. Some working conditions causing ethical issues are discussed as follows:

Cultural Diversity

It refers to the difference in culture among employees at a workplace. This restricts support and cooperation among employees.

Unjustified Dismissal

It refers to the termination of employment without any valid reason. This can be a forced discharge or dismissal of an employee from his/her job.

Violation of Privacy Rights

It involves disclosure of an employee’s confidential or sensitive information, illicit access into his/her personal accounts or property, etc.

Unfair Compensation

It involves the payment of basic salary, bonus, incentives or any other form of due compensation in an unfair and unjustified way.

Layoff Discrimination

It refers to a partial and unfair approach during layoff. For example, people drawing higher salaries are generally the first ones to be laid off.

Glass Ceiling Practices

The term ‘glass ceiling’ was coined in 1986 by Hymowitz and Schellhardt in a Wall Street Journal report on corporate women. The term is used to denote a concept, according to which, women who aim to attain senior positions in various fields, such as corporate, government, education etc. face multiple barriers as compared to men.

In other words, according to this concept, ‘glass ceiling’ acts as an invisible ceiling beyond which women employees cannot rise in an organisation.

Sexual Harassment

It is one of the major unethical issues that typically affects female employees in an organisation. Such type of harassment can force employees to work under hostile conditions that may include the use of abusive behaviour or language.

Considering the severity of such harassment cases, the Government of India has announced a ‘zero tolerance’ policy for violence against women.

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