Unlike chief financial and legal officers, HR executives do not have well-established professional standards to help guide them. HR executives must be respected for their ethics and business knowledge as much as for their human resource domain knowledge if they are going to be taken seriously. HR executives must be able to make their case in terms of impact on the workforce and customers. HR professionals should have sound business and legal knowledge. HR ethics are no different from other ethical issues. They are situational. Nevertheless, there are some general approaches to analyzing HR ethical issues.
If one option in the decision is identified as being “right” and another as being “wrong,” most people should choose to do what is right. There may be the temptation to do the wrong thing. For example, paying taxes on under-the-table income. The decision to select an option that one clearly knows is wrong reflects not on one’s ability to make decisions, but on one’s lack ethical clarity and moral courage. Right v. right dilemmas involve situations where there is a clear moral backing for each option, but where the two are mutually exclusive. Normal behavioral guidelines don’t clearly or easily apply—where picking one of the rights means violating the other one. These Right v. Right situations require one to choose between two equally balanced alternatives and seemingly defies a satisfactory solution. There are no easy or obvious answers. Let’s look at an example, Bob, who is a new Human Resources Director for an agency, is preparing the agency’s annual report concerning its EEOC compliance to submit to the S.C. Human Affairs Commission. Bob has discovered that when the agency’s prior report was submitted by his predecessor, a major error was reported concerning the agency’s demographics. As a result, the agency has fewer minorities than were previously reported, but the new numbers since Bob has been HR director indicate an increase in the number of minorities employed by the agency. The agency’s Board chair, realizing that the legislature and the public will react negatively to this discrepancy, asks Bob not to identify the error in the new report. Should Bob insist on presenting a factual report or should he remain loyal to the Board chair and not include the error? This common type of dilemma pits truth against loyalty. And this dilemma also demonstrates the unfortunate reality that one person’s Right v. Wrong decision often puts someone else in a Right v. Right decision. Let’s look at the types of Right v. Right decisions that exist.
Let’s look at some examples of other Right v. Right dilemmas. Truth v. loyalty. Individual v. Community.
Short-term v. Long-term. Short-term v. Long-term.
Indian organizations spend quite a bit of money on training because it is considered an extension of academic learning, which is very valued in India. It also relates to the cultural dimension of future orientation, which makes employees seek any form of learning to have constant marketable skills. Among Indians, training creates loyalty to the company. For entry-level employees, there is often a large disconnect as to what they are taught in graduate school and what they have to do when they enter the workplace. Therefore elaborate entry-level training focuses on soft skills such as effective communications, team dynamics and also relevant product-based and technical knowledge. Training programs in India are more extensive and longer in duration. Entry-level employees are in training for between three and 12 months, depending on the size of the company. The average annual corporate training hours can range anywhere between 60 and 120 hours. The best company in providing training is Infosys, with an annual training budget of about $145 million. Entry-level Infosys employees spend about four weeks on initial training. Organizations often pair with both well-known local and international universities to provide continuing education for their employees. To learn more about training in India, instructors may want to review the following articles: Training 2008: World View, Focus on India (available at http://www.itapintl.com/focusonindia.htm ). Top 5 IT firms spend $438 million on training (available at traininghttp://www.livemint.com/2007/11/12001337/Top-5-IT-firms-spend-438-mn-o.html).
The collectivist culture of India makes performance management quite challenging. Superiors and subordinates develop close relationships, making a formal appraisal process difficult. Supervisors frequently inflate the work performance of subordinates because personal friendships between supervisors and subordinates blur objective evaluations. The Indian work culture also emphasizes organizational loyalty over performance and efficiency. Further, promotions are usually based on seniority, making organizational tenure an important performance criteria. Organizations usually have annual performance reviews with the supervisor providing comments on employees performance. However, leading Indian companies are adopting a very progressive approach to performance management by adopting a 360-degree approach or management by objectives (MBO). Instructors: Please read “Performance appraisal takes center stage” for more information about the Indian performance management system. This article is available online at http://hrinindia.multiply.com/journal/item/43/Performance_Appraisals_take_centre_stage_ .
A base salary is provided with several other allowances that are typical to Indian employers. The base salary usually accounts for 40 to 50 percent of an employee’s salary. The remaining salary is comprised of several allowances. Housing is expensive in India, and employers often reimburse a portion of the housing expenses through a House Rent Allowance, or HRA. Medical allowances come in a variety of forms. Organizations may reimburse expenditures incurred by the employee or his or her family for medical treatment; pay a fixed allowance for routine check-ups; or participate in a group medical insurance policy. The dearness allowance (known as cost-of-living in the United States.) is calculated as a percentage of the base salary. It is an allowance provided to adjust the cost of living and may vary depending on the job’s location (rural vs. urban areas). Leave travel allowance (LTA) permits two tax-free travel opportunities in India within a four-year period. LTA is provided based on an employee’s salary and level in the organization . This includes employees and their family members. For more information about these additional allowances, instructors may want to read the following online articles: http://www.pacificbridge.com/publication.asp?id=31 : Recruiting in India http://www.pacificbridge.com/publication.asp?id=30 : Recruiting in India For public holidays in India, please read: http://www.worldtravelguide.net/country/120/public_holidays/Indian-Subcontinent/India.html
There is a distinct retirement age in the private and public sectors. Public-sector employees retire at age 60. Private-sector employees have a choice of retiring anytime between ages of 55 and 60. Two specific retirement funds are available to all Indian employees: Provident Funds: This fund is similar to the 401(k) in the United States, where both employees and employers contribute. Gratuity: Employees do not contribute to this fund. It is calculated based on years of service.
Organizations are seen as an extension of the family, and they often help employees achieve both personal and material goals by providing short- and long-term loans. Some organizations provide a variety of food at a subsidized cost, encouraging a family atmosphere.
Executives or senior management are frequently offered special perks. These special perks are associated with increased social status. Employees in the Indian culture like to have visible indicators of increased status and wealth because they signify work achievement.
Affirmative action has been the subject of much controversy since its inception. Comparable worth is still a problem, especially for women.
These laws can seem intimidating but the basic principals behind them are fairness and equality.
Ethics in hr(bev)
ANUPAM CHAUHANUMA BHARTIMANJU BAGHEL
HR Ethics⌂ No well-established mandatory professional standards⌂ Ethics and business knowledge as important as HR domain expertise⌂ Each situation requires a judgment call
Analyzing HR Dilemmas⌂ Right v. Wrong “No one will know if I do not pay taxes on this under-the-table income, so I can save myself quite a bit of money.”⌂ Right v. Right Selecting the best option
Examples of Right v. Right Dilemmas⌂ It’s right to tell the truth, but it is also right to be kind and considerate of peoples’ feelings and emotions.⌂ It’s right to apply rules and procedures equally, without favoritism, but it is also right to give special treatment to hard- working, dependable, and productive employees.
Examples of Right v. Right Dilemmas (cont’d)⌂ It’s right to spend more time adding more quality to your work but it is also right to meet deadlines and avoid “diminishing returns” on your efforts.⌂ It’s right to be concerned about short-term results, but it is also right to focus on long- term growth and stability.
Guidelines for Fostering an Ethical Culture⌂ Have a well developed policy and procedures manual⌂ Enforce policies⌂ Reward compliance⌂ Recruit ethical employees⌂ Create a division to oversee ethics
Guidelines for Fostering an Ethical Culture⌂ Have a well developed policy and procedures manual⌂ Enforce policies⌂ Reward compliance⌂ Recruit ethical employees⌂ Create a division to oversee ethics
Ethical culture in worklife⌂ Honest communication⌂ Fair treatment⌂ Special consideration⌂ Fair competition⌂ Responsibility to organisation⌂ Corporate social responsibility⌂ Respect for law
In Past⌂ In 50’s – Employees were recruited not to question ‘WHY’ but only ‘To do’.⌂ In 60’s – Terms like manpower, staff and personnel came to used.⌂ In Late 70’s – People realized that beyond a point, productivity depended on people.
Evolution Of HR in IndiaPeriod Development status Emphasis Role1920s-1930s Beginning Welfare clerical stroke disciplinary ,dismissal of workers]1940s-1960s Struggling for Recognition Introduction to HR Administrative techniques and IR [leave, bonus, retirement etc]1970s-1980s Strong industrial relations Managerial and disputes,Regulatory [housing, medical leave etc]1990s Promising Human values, Executive productivity through [formulating policies, T&D people programs, MDPs etc] and managerial role
Starting of hrm in india⌂ The world’s first management book, titled ‘Arlhashastra’, written three millennium before Christ, codified many aspects of human resource practices in Ancient India.⌂ John Patterson, the president of the company, formed a personnel department to manage the griefs of workers after a bitter union strike in 1901.
Continued…⌂ The first Factories Act was adopted in 1881. The Factory Commission was appointed in 1885. The Factories Act, 1948 (Amended On 1987).⌂ In 1929 – Royal commission of labour in India.⌂ In 1931 – J.H. Whitely recommended the abolition of ‘JOBBER SYSTEM’ and the appointment of labour officers in industrial enterprises.
Continued…The scope of the function of labour officer was widened during the second world war such facilities as housing, medical etc. Labour officer <=> Welfare Officer Under the Industrial Disputes Act, 1946.Formulating policies on human resource planning, recruitment and selection , training and development etc.. Welfare Officer <=> Personnel officer Under section 49 of factories Act, 1948.
Two professional bodies were found In 1948 - Indian Institute Of Personal Management (IIPM) at Kolkata . In 1950 - The National Institute Of Labour Management (NILM) at Mumbai. In 1980 – These two professional bodies merged together and formed ‘National Institute Of Personnel Management’ (NIPM) headquartered at Kolkata. In 1990 – Milestone was achieved by renaming of American ‘Society For Personnel Administration’ (ASPA) as the ‘Society For Human Resource Management’ (SHRM).
LIST OF AMENDING ACTS AND ADAPTATION ORDERS⌂ The Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948.⌂ The Adaptation of Laws Order, 1950.⌂ The Part B States (Laws) Act, 1951 (3 of 1951).⌂ The Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956 (36 of 1956).
ContinueD… The Industrial Employment (Standing Orders) Amendment Act, 1961 (16 of 1961) . The Industrial Employment (Standing Orders) Amendment Act, 1963 (39 of 1963). The Central Labour Laws (Extension to Jammu and Kashmir) Act, 1970 (51 of 1970). The Industrial Employment (Standing Orders) Amendment Act, 1982 (18 of 1982).
Equal opportunity laws⌂ Age discrimination⌂ Disability⌂ Ethnic/National origin, colour, race, religion, gender⌂ Fair labour standards
Reward and disciplinary systems⌂ Performance appraisal⌂ Appeals and grievance procedure⌂ Discipline system
Ethical discipline⌂ People not employees⌂ Job description is clear⌂ ”What to do ” attitude compared to ”Don’t do this” attitude⌂ Top managers example
Effective dismissal⌂ Factors ⌂ Legal and valid reasons for dismissal ⌂ Explain the reasons ⌂ Be firm with your decision⌂ Process ⌂ Informal action ⌂ Disciplinary meeting ⌂ First written warning ⌂ Second written warning
Termination interview⌂ Be straightforward⌂ Explain the purpose of the interview⌂ Benefits after losing the job⌂ Document the exit interview⌂ Be prepared for questions
A salary and benefit audit identifies a grading error whichadvantages a high performing employee, but the managerinstructs that the error be concealed A senior managers serious disciplinary offence is hushedup, while for the same misconduct, ER practitioners haveinstructions to institute an immediate disciplinary enquiry inthe case of junior managers and line supervisors A line manager dismisses an employee with a knownterminal illness, or a disability, which causes the family to losethe death benefit, and leave with nothing, even though theemployee could have been retained until demise;
In a labour dispute in the High Court , the ER Manager orlegal representative deliberately does not call the HRpractitioner as a key witness, and crucial evidence is notgiven and an unfair outcome happens In the recruitment process, a Safety Manager placespressure on an HR practitioner to disclose confidential healthstatus information, which is then used to justify not hiring theperson The HR executive places insurance business with aspecific insurer or broker in order to receive a kickback orcommission for doing so
The employers Employment Equity Plan as submitted tothe Department of Labour is deliberately not being followed;An contracted-in medical practitioner decides to side withthe IR Manager in a disciplinary enquiry into an allegation ofmisconduct for intoxication at work, to maintain goodrelations and keep their contract with the employer A Safety Manager ignores a medical practitioners HealthRisk Report, or fails to respond within a reasonable time (orto respond at all) to the key safety and health compliancerecommendations by the doctor in it
An HR Manager pressurises the medical practitioner todeclare an employee unsafe, to allow the employee to beremoved from their post or to dismiss or retrench them; A line manager or senior practitioner appoints his or herrelative or business associate in contravention of theestablished recruitment procedure An employed practitioner decides not to confront theManager they report to, because the annual performancereview cycle is coming up; A line manager refuses to establish posts which can be usedfor return to work from benefits or sick leave, or to provide lightduty;
Human Costs⌂ Unethical business environments can: ⌂ Demotivate individuals ⌂ Make good employees leave the company ⌂ Attract unethical employees ⌂ Lead to the lack of trust by the employees for the company
What Is Trade Union?⌂ A trade union or labour union is an organization of workers who have banded together to achieve common goals in key areas such as wages, hours, and working conditions.
Role of trade unions⌂ To negotiate better wages with the employers ⌂ Basic pay, Overtime payments, pensions⌂ To negotiate the number of working hours⌂ To ask for suitable holidays ⌂ Maternity & Paternity rights⌂ To demand for better working conditions ⌂ Health rights, Safety rights⌂ Unions also help with educating & training of workers to improve skills
Role of trade unions⌂ Unions sometimes participate in measures to improve product demand.⌂ Unions sometimes provide workers benefits like pay during strikes, sickness & unemployment.⌂ Some Unions are also known to run co-operative societies to offer benefits like loans at lower interest rates.⌂ Unions work with the governments to introduce legislations to benefit workers – example fixing a national minimum wage.
Social responsibilities of trade unions include:⌂ promoting and maintaining national integration by reducing the number of industrial disputes⌂ incorporating a sense of corporate social responsibility in workers⌂ achieving industrial peace
Trade Unions & Wage Claims⌂ Trade Unions demand wage increase on account of ⌂ Hard work & increased productivity ⌂ Increased profits ⌂ Comparing wages of similar workers – Comparability argument ⌂ Increased cost of living
Strikes⌂ A strike is a very powerful weapon used by trade unions and other labor associations to get their demands accepted. It generally involves quitting of work by a group of workers for the purpose of bringing the pressure on their employer so that their demands get accepted. When workers collectively cease to work in a particular industry, they are said to be on strike.
Causes of strikesStrikes can occur because of the following reasons:⌂ Dissatisfaction with company policy⌂ Salary and incentive problems⌂ Increment not up to the mark⌂ Wrongful discharge or dismissal of workmen⌂ Withdrawal of any concession or privilege⌂ Hours of work and rest intervals⌂ Leaves with wages and holidays⌂ Bonus, profit sharing, Provident fund and gratuity⌂ Retrenchment of workmen and closure of establishment⌂ Dispute connected with minimum wages
Legal Aspects Of HRM⌂ Discrimination ⌂ When someone is denied a job or position for non job related reasons⌂ Equal Employment Opportunity ⌂ The right to employment and advancement without regard to race, religion, sex, color or national origin⌂ Affirmative Action ⌂ An effort to give preference in employment to women or other minorities⌂ Comparable Worth ⌂ Persons performing jobs of similar worth should receive comparable pay⌂ Bona-fide Occupational Qualifications ⌂ Employment criteria justified by capacity to perform a job
INTRODUCTIONIn India the first Factories Act was passed in 1881. This Actwas basically designed to protect children and to provide fewmeasures for health and safety of the workers. This law wasapplicable to only those factories, which employed 100 ormore workers. In 1891 another factories Act was passedwhich extended to the factories employing 50 or moreworkers.
Definition of a Factory:-“Factory” is defined in Section 2(m) of the Act. It means any premises including the precincts thereof-ii. Whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on; oriii. Whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on;But does not include a mine subject to the operation of the Mines Act,1952 or a mobile unit belonging to the Armed forces of the Union, a railway running shed or a hotel, restaurant or eating place.
mployer to ensure health of workers pertaining toCleanliness Disposal of wastes and effluents -Sec 12Ventilation and temperature dust and fume - Sec 13Overcrowding Artificial humidification Lighting – Sec. 14Drinking water Spittoons. - Sec. 18
afety Measures Fencing of machinery – Sec. 21 Work on near machinery in motion. – Sec 22 Employment prohibition of young persons on dangerous machines. – Sec 23Self-acting machines.- Sec 25 Casing of new machinery.-for cutting off power. – Sec 24 Striking gear and devices Sec 26 Prohibition of employment of women and children near cotton-openers.- Sec 27
Welfare Measures• Washing facilities – Sec 42• Facilities for storing and drying clothing – Sec 43• Facilities for sitting – Sec 44• First-aid appliances – one first aid box not less than one forevery 150 workers– Sec 45• Canteens when there are 250 or more workers. – Sec 46• Shelters, rest rooms and lunch rooms when there are 150or more workers. – Sec 47• Crèches when there are 30 or more women workers. – Sec
Working Hours, Spread Over & Overtime of Adults• Weekly hours not more than 48 - Sec: 51• Daily hours, not more than 9 hours. - Sec: 54• Intervals for rest at least ½ hour on working for 5hours. - Sec: 55• Spread over not more than 10½ hours. - Sec: 56• Overlapping shifts prohibited. - Sec: 58• Extra wages for overtime double than normal rate ofwages - Sec:59• Restrictions on employment of women before 6AM andbeyond 7 PM. - Sec: 60
Annual Leave with Wages• A worker having worked for 240 days @ one day for every20 days and for a child one day for working of 15 days.• Accumulation of leave for 30 days. Sec. 79
Sec.92 to 106OFFENCE PENALTIES• For contravention of the Provisions of the Act or • Imprisonment upto 2 years or fine uptoRules Rs.1,00,000 or both• On Continuation of contravention • Rs.1000 per day• On contravention of Chapter IV pertaining tosafety or dangerous operations. Not less than Rs.25000 in case of death. Not less than Rs.5000 in case of serious injuries.• Subsequent contravention of some provisions • Imprisonment upto 3 years or fine not less than Rs.10, 000 which may extend to Rs.2, 00,000.• Obstructing Inspectors • Imprisonment upto 6 months or fine upto Rs.10, 000 or both.• Wrongful disclosing result pertaining to results • Imprisonment upto 6 months or fine uptoof analysis. Rs.10, 000 or both.• For contravention of the provisions of Sec.41B,41C and 41H pertaining to compulsory disclosure Imprisonment upto 7 years with fine upto Rs.2,of information by occupier, specific responsibility 00,000 and on continuation fine @ Rs.5, 000 perof occupier or right of workers to work imminent day.danger.
Coping with Turbulent Times in the Indian Aviation Industry Jet airways layoff- what kind of HRM?
THE CASE⌂ The case is about the retrenchment drama that unfolded in one of India’s leading aviation companies, Jet Airways (India) Limited in Oct 2008.⌂ More than thousand employees were laid off.⌂ It was a part of major Cost-cutting exercise to tackle Global slowdown and price hike of Aviation fuel.
The retrenchment drama unfolds…..⌂ Oct 16, 2008, Jet announced that it would lay off nearly 1,100 of its staffs to streamline operation.⌂ A day after it had already laid off around 800 of its cabin crew members.⌂ Simultaneously announced second phase of lay-off of 1100 employees, mainly from departments like flight attendant, cockpit crew etc.
Retrenchment drama unfolds……⌂ Amidst great furor and opposition by various organizations and political parties, Naresh Goyal , chairman of Jet, reinstated the employees a day later the great emotional drama.⌂ November 2008, Jet decided on a 20% cut in the salaries of its pilots, engineers, and some other staffs.
Some salient issues……⌂ Employees were FIRED with no PRIOR NOTICE⌂ The entire force of unconfirmed staff was being laid off on a 30-day compensation package⌂ Company took action only against lower staffs.
Ethical issues……Some most crucial questions unanswered….Where would those 1900 employees go? Why took action only against lower grade staffs? Senior management was very less affected. What would be the future of those students currently taking courses in cabin crew, captain etc?
Ethical issues……. Why did the Jet CEO enter the competitive market, instead of playing down after foreseeing risks? Some quotes made by higher officials….. "A total of 1,900 people are being served separation notice. 800 have already been served notice. In the next few days the others will also be served notice. It is an attempt to save the jobs of remaining 11,100 employees,“ Saroj Datta (Exe Director) “It is a difficult decision but we had to take it,” Wolfgang Schaeur (CEO) It throws a serious question towards the accountability of an organization to its employees……….
Some observations….. The very existence of any company is because of its employees. Company keeps on focusing on customer satisfaction when its own people are so highly dissatisfied. Employees are more than just-a- resource.
Points to ponder No company would know of a risk over night, its built over a period and there should not be any drastic decision which may endanger its employees. More accountability from top management. The role of HR executive is important to ascertain that people’s interests are not left aside in the race for profits The HR executive to ensure no discrimination in pay cut and lay off. Before reaching to decision, make environment conducive to acceptance of decision.
Questions for discussionQ.Can there should be separate canteen for top level management and lower level management?
Q.Should IIM charge high fee than other B-School?
Before joining any MBA Course) What - What type of institutes you can get admission? Why - Why you want to do MBA – for getting good job , starting your own company as an entrepreneur or getting one more degree? Where - Where can you afford to do MBA – Foreign Country, any reputed institute in India or any institute with low budget ? When - When you want to do MBA – Just after graduation, after getting 4 -5 years experience, or along with your job? How - How will you pay back your fees and ROI for the same? Which - Which specialization attracts you or can get job for you?
All reputed B Schools of North America, Europe and Oceania are verycostly – Fees & Stay costs varying from Rs 30 Lakhs to 60 Lakhs (allinclusive)The popular institutes like ISB (Hyderabad), IIMs etcnormally charge between Rs 7 Lakhs to Rs 20 Lakhs (New IIMs andmanagement institutes of IITs charge less).FMS Delhi charges very less fees for their high quality education, butmost of other institutes approved or run by Govt. Universities charging verylow fees are other type of FMS (Factory for ManagementStudies!) giving very low quality education, without proper faculty, facilityand infrastructure.Any private institute charging less than Rs 3 or 4 Lakhs fees may notbe in position to impart high standard education.But private B Schools charging high fees and comparing them withIIMs, also may not be providing good quality education . These couldbe other type of IIM – ‘Interested In Money!’ only.
Categorization of MBA colleges in India and theirfee structureThe business schools in India are categorized into three. Theyare Class-A, Class-B and Class-C.The B-Schools coming under Class-A are the most reputedinstitutes in the country offering MBA courses. One of theexamples for the Class-A institutions is the Indian Institute ofManagement. There are 10 IIM’s that are spread all over thecountry. The admission in these institutes is given only for theoutstanding students. Thus the fee structure for the programmesin these institutes will also be higher. To pursue the MBAgraduation from IIM, one has to pay about Rs. 12 lakhs. Thepresent scenario states that IIM is going to raise the feestructure for the MBA programmes. In such situation studentshave to spend around Rs.15 lakhs in order to pursue degreefrom these institutes.
The Class-B institutes are considered as the second top optionchosen by the students who fail to land up in IIMs. This classincludes the B-Schools like XLRI, Narsee Monjee, FMS Delhi andmany more. For pursuing MBA in these institutions students haveto spend around Rs.5 to 8 lakhs. It will vary according to theinstitute.The Class-C institutions are the last choice favored by thestudents for pursuing MBA. These least choice institutes chargesaround Rs.2 to 6 lakhs for the two year programme.The admission to all these institutions is made based on the scoreobtained by the candidates in the concerned entranceexaminations organized by the universities. Some of the entrancetests for MBA in India are MAT, CAT, XAT, etc.Besides all, the reputed business institutions in abroad chargesaround Rs.20 to 30 lakhs and this is considered as the standardfees for the MBA courses offered there.