Ethics in Human Resource Management

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Submitted toProf. Lubina Gonsalves

GROUP MEMBERS: Name

Pranav Gheewala Riddhi Rupani Ashish Shah Jyoti Sharma Jitesh Surti

Roll No
(08) (34) (38) (39) (40)
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A !NO"LE#GEMEN$
Apart from the efforts of us, the success of this project depends largely on the encouragement and guidelines of many others !e ta"e this opportunity to e#press our gratitude to the people $ho ha%e &een instrumental in the successful completion of this project !e $ould li"e to sho$ my greatest appreciation to Prof. Lubina Gonsalves % BMS #e&t of 'arta( olle)e. !e can't say than" you enough for her tremendous support and help !ithout her encouragement and guidance this project $ould not ha%e materiali(ed )he guidance and support recei%ed from Prof. Lubina Gonsalves $ho guided us to complete this project, $as %ital for the success of the project !e are grateful for their constant support and help

TABLE OF CONTENTS

Sr.no

Particulars

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1. . %. +. 5. .. $. *. 2. 10. 11. 1 . 1%.

Introduction to Ethics Ethics in !"#

05 0$

"oles and res&onsi'ilities o( !u)an "esource 0* #anagers in Business Ethics Need o( Ethics in !"# Ethics in ,ecision #a-ing Ethical 'eha/ior at 0orEthical Training Business Challenges (aced '1 !" in Ethics Code o( Ethics (or !" )anagers !" Ethical Issues Case Stud13 4et Air0a1s Conclusion Bi'liogra&h1 . %0 %1 1 1% 15 1$ 1* 0

B5SINESS ET!ICS
thi!s are moral "uidelines whi!h "overn "ood #ehavior$ So #ehavin" ethi!ally is doin" what is morally ri"ht$ %ehavin" ethi!ally in #usiness is widely re"arded as "ood #usiness pra!ti!e$ %usiness ethi!s is the #ehavior that a #usiness adheres to in its daily dealin"s with the world$ &he ethi!s o' a parti!ular #usiness !an #e diverse$ &hey apply not only to how the #usiness intera!ts with the world at lar"e( #ut also to their one)on)one dealin"s with a sin"le !ustomer$
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*any #usinesses have "ained a #ad reputation +ust #y #ein" in #usiness$ &o some people( #usinesses are interested in ma,in" money( and that is the #ottom line$ -t !ould #e !alled !apitalism in its purest 'orm$ *a,in" money is not wron" in itsel'$ -t is the manner in whi!h some #usinesses !ondu!t themselves that #rin"s up the .uestion o' ethi!al #ehavior$ Good #usiness ethi!s should #e a part o' every #usiness$ &here are many 'a!tors to !onsider$ /hen a !ompany does #usiness with another that is !onsidered unethi!al( does this ma,e the 'irst !ompany unethi!al #y asso!iation0 Some people would say yes( the 'irst #usiness has a responsi#ility and it is now a lin, in the !hain o' unethi!al #usinesses$ *any "lo#al #usinesses( in!ludin" most o' the ma+or #rands that the pu#li! use( !an #e seen not to thin, too hi"hly o' "ood #usiness ethi!s$ *any ma+or #rands have #een 'ined millions 'or #rea,in" ethi!al #usiness laws$ *oney is the ma+or de!idin" 'a!tor$ -' a !ompany does not adhere to #usiness ethi!s and #rea,s the laws( they usually end up #ein" 'ined$ *any !ompanies have #ro,en anti)trust( ethi!al and environmental laws and re!eived 'ines worth millions$ &he pro#lem is that the amount o' money these !ompanies are ma,in" outwei"hs the 'ines applied$ %illion dollar pro'its #lind the !ompanies to their la!, o' #usiness ethi!s( and the dollar si"n wins$ A #usiness may #e a multi)million seller( #ut does it use "ood #usiness ethi!s and do people !are0 &here are popular so't drin,s and 'ast 'ood restaurants that have #een 'ined time and time a"ain 'or unethi!al #ehavior$ %usiness ethi!s should eliminate e1ploitation( 'rom the sweat shop !hildren who are ma,in" snea,ers to the !o''ee servin" sta'' who are #ein" ripped o'' in wa"es$ %usiness ethi!s !an #e applied to everythin" 'rom the trees !ut down to ma,e the paper that a #usiness sells to the rami'i!ations o' importin" !o''ee 'rom !ertain !ountries$ -n the end( it may #e up to the pu#li! to ma,e sure that a !ompany adheres to !orre!t #usiness ethi!s$ -' the !ompany is ma,in" lar"e amounts o' money( they may not wish to pay too !lose attention to their ethi!al #ehavior$ &here are many
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!ompanies that pride themselves in their !orre!t #usiness ethi!s( #ut in this !ompetitive world( they are #e!omin" very 'ew and 'ar #etween$

,EFINITION63 2&he e1amination o' the variety o' pro#lems that !an arise 'rom the #usiness environment( and how employees( mana"ement( and the !orporation !an deal with them ethi!ally$ Pro#lems su!h as 'idu!iary responsi#ility( !orporate so!ial responsi#ility( !orporate "overnan!e( shareholder relations( insider tradin"( #ri#ery and dis!rimination are e1amined in #usiness ethi!s$3

2%usiness ethi!s are ethi!s that re'er to the moral rules and re"ulations "overnin" the #usiness world$ -n other words( they are the moral values that "uide the way !orporations or other #usiness ma,e de!isions$3

&4-5S -6 4R*
Adoptin" ethi!al human resour!es mana"ement pra!ti!es !an improve the triple #ottom line item o' people 'or a !ompany$ An en"a"ed wor,'or!e !an lead to in!reased produ!tion( innovation and "ood word o' mouth advertisin" 'or the !ompany as an employer$ 5orporate so!ial responsi#ility pra!ti!es in human resour!e mana"ement in!lude valuin" human !apital( providin" sa'e and healthy wor,pla!es and a wor,7li'e #alan!e8 em#ra!in" diversity in human resour!es and !ontinual s,ills development 'or all employees$ A !ompany !an !hose to e1tend ethi!al human resour!e mana"ement pra!ti!es #y ensurin" that they only wor, with suppliers who value the same human resour!e ideals$ &he #ene'its o' underta,in" ethi!al human resour!e mana"ement in!lude "reater en"a"ement o'
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employees whi!h may lead to de!reased sta'' turnover( opportunities 'or "reater innovation as employees 'eel valued and potential to #e !onsidered an employer o' !hoi!e$ &hese #ene'its !an #e reported to all sta,eholders o' the !ompany throu"h the annual !orporate so!ial responsi#ility report$ A lar"e area o' human resour!e mana"ement is !on!erned with various ethi!al issues( #oth on the part o' upper9 level mana"ement in its #usiness de!isions and lower9level mana"ement in the treatment o' individual employees$ -n ma,in" de!isions the human resour!e mana"er should !onsider alternative solutions to the needs o' the #usiness as well as the e''e!ts the de!isions will have on the lives o' the employees$ :re.uently a human resour!e mana"er will #e "iven instru!tions 'rom hi"her level mana"ement to ta,e a!tion whi!h will #e oppressive to the employee and the mana"er must either present ar"ument to hi"her mana"ement 'or alternate solutions whi!h will have less impa!t on the employee morale or determine the #est method 'or implementin" the instru!tions whi!h have #een "iven$

R;< S = R SP;6S-%-<-&> %?S-6 SS &4-5S

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4R*

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thi!s provide a set o' prin!iples that individuals and "roups use to determine what is ri"ht or wron" in #ehaviors( a!tions and de!isions$ An ethi!al perspe!tive is multi)dimensional$ -t ta,es into !onsideration 'airness( +usti!e( truth'ulness( so!ial responsi#ility and other 'a!tors$ thi!s !an and do "o #eyond the law$ An employer( 'or e1ample( may have the le"al ri"ht to terminate an employee at will$ &he manner and method o' a parti!ular termination may however( violate the ethi!al standards and e1pe!tations o' a wor,"roup$ &he So!iety o' 4uman Resour!es *ana"ement has a !ode o' ethi!s$ -t o''ers "uidan!e in the areas o' pro'essional responsi#ility( pro'essional development( ethi!al leadership( 'airness and +usti!e( !on'li!ts o' interest( and use o'
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in'ormation$ Amon" other thin"s( it esta#lishes an e1pe!tation that an 4R pro'essional@ Add value #y !ontri#utin" to the ethi!al su!!ess o' their or"aniAation( Pra!ti!e 4R at hi"h level o' pro'essional !ompeten!e( Serve as a role model 'or others to 'ollow in ethi!al matters( n!oura"e 'airness and +usti!e( Prote!t the le"itimate #usiness interests o' sta,eholders( 4onor the ri"hts o' individuals with re"ard to the use o' in'ormation$ and(

&he S4R* 5ode o' thi!s is a do!ument$ -t is a !all to a!tion$ -t provides "uidan!e$ -t does not assure or !reate ethi!al #ehaviors amon" 4R Pro'essionals$ -t does say that a true 4R Pro'essional is more than tan"entially aware o' the !on!ept o' ethi!s$ An 4R Pro'essional ventures into the ethi!s arena in many ways$ >ou may develop a trainin" session 'or the %oard o' Bire!tors or wor,pla!e leaders$ >ou mi"ht mediate a dis!ussion a#out whether an employee with a !omplaint is a mal!ontent or a whistle #lower$ >ou !ould #e involved in a tas, 'or!e assi"ned to develop "uidelines 'or doin" #usiness in another !ountry$ 4uman Resour!es *ana"ement is o'ten a#out laws and re"ulations$ -t is also a#out ethi!s$ <on" #e'ore a le"al violation( a series o' events o!!ur$ -n a well) pu#li!iAed se1ual harassment !ase( a hirin" mana"er in a restaurant as,ed appli!ants to !han"e into a serverCs uni'orm$ A we#!am was in the dressin" room so that the mana"er !ould wat!h appli!ants !han"e their !lothes$ &he re.uest to try on the uni'orm may violate the law$ 5ertainly( 'ilmin" an appli!ant while he or she !han"es !lothes violates priva!y( se1ual harassment and other laws$ %e'ore the 'irst appli!ant went to the dressin" room( ethi!al issues were at play$ Remem#er( ethi!s is a#out what individuals and or"aniAations deem to #e appropriate$ -t is di''i!ult to thin, that most individuals or or"aniAations( would 'ind the de!ision to as, a !andidate to !han"e !lothes as part o' an interview( mu!h less #ein" viewed on a we#!am( ri"ht or proper #ehavior 'or a hirin" mana"er or
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employer$ a!h plannin" de!ision in the interview pro!ess raised important ethi!al issues$ -mplementin" the de!isions !reated si"ni'i!ant le"al violations$ An ethi!al de!ision !onsiders si1 important 'a!tors$ -ndividuals and or"aniAations o'ten !onsider the 'a!tors a'ter an a!tion$ &he !hallen"e 'or an 4R Pro'essional is to #uild them into the de!ision pro!ess$ &he si1 'a!tors in!lude@ 1. Facts An ethi!al de!ision starts with a !are'ul analysis o' the 'a!ts$ -t sets aside emotion and investment$ -t !olle!ts in'ormation a#out dates( times( num#ers and other o#+e!tive in'ormation$ -t uses that in'ormation to develop a !lear pi!ture o' the issues involved in the de!ision$ E7a)&le@ A mana"er wants to hire his or her dau"hter 'or a summer +o#$ . Ethical Issues a!h situation is uni.ue$ -t re.uires a !are'ul analysis to determine the ethi!al issues that are involved$ &hose issues may ran"e 'rom 'airness to honesty$ &hey may in!lude so!ial or environmental responsi#ility$ A law( re"ulation( or poli!y may #e involved$ A past pra!ti!e( de!ision( or !ommitment mi"ht play a role$ E7a)&le@ *ana"ement de!ides #ut has not announ!ed a R-:$ Issues@ 4R ,nows a#out a planned R-:( #ut is not a#le to dis!uss it$ mployee tells 4R she is a#out to si"n papers 'or a new house$ mployee will li,ely #e involved in the R-:$ mployee is a#out to ma,e a lon")term le"al !ommitment$ mployer value@ 2 mployees are our most important asset$3 %. Sta-eholders Be!isions a''e!t people$ &hey "o 'ar #eyond the pro'it and loss statement$ &hey involve employees( %oard *em#ers( !ustomers( !ommunities( and others$ An ethi!al de!ision ta,es pause to !onsider who is a''e!ted and how they will #e a''e!ted$

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E7a)&le@ &ru!, manu'a!turer ,nows "as tan,s e1plode upon impa!t Sta,eholders@ %uyers( passen"ers( relatives o' !rash vi!tims( shareholders( et!$ +. Conse8uences An ethi!al de!ision !onsiders the potential !ost o' an a!tion$ 5ost is relative$ -t !an #e 'inan!ial or personal$ -t !an #e immediate or lon" term$ An individual or an or"aniAation !an su''er the !onse.uen!es o' an unethi!al de!ision$ E7a)&le@ &wo mana"ers en"a"in" in an a''air Conse8uences@ D$ <ost !redi#ility 'or ea!h mana"er( E$ Possi#le !on'li!t o' interest in de!ision)ma,in"( 3$ Potential +o# loss ea!h mana"er( 4$ Possi#le em#arrassment 'or the or"aniAation$ 5. O'ligations A de!ision is not made in a va!uum$ &he parties involved in the de!ision have a history with ea!h other$ &hey have developed real or per!eived o#li"ations #etween ea!h other$ &hey e1pe!t ea!h other to live up to those o#li"ations whi!h must #e ta,en into !onsideration when a de!ision is made$ E7a)&le@ 4R Bire!tor terminated 'or insistin" on overtime !omplian!e ;#li"ations@ 1e!utive promised le"al !omplian!e when the Bire!tor was hired poli!y provides 'or daily and wee,ly overtime state and 'ederal laws re.uire overtime payments$ .. 9alues An ethi!al de!ision is one that allows the de!ision)ma,er to sleep well$ -t does not re.uire !omple1 rationaliAation$ People sometimes as,( 24ow will it read in the newspaper0 &he point is that an ethi!al de!ision is !onsistent with #oth personal and or"aniAational values$ -t is not +ust the value system o' an individual or a department in an or"aniAation$ -t is the "enerally a!!epted value system within so!iety( the or"aniAation or similarly situated individuals$
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E7a)&le@ ?sin" a !ell phone while drivin" on !ompany #usiness Falues@ Sa'ety 'or sel' and others$ 5omplyin" with the law and !orporate poli!y$ 5ommitments to !ommuni!ate with others$

!/0 1)/234 24 25P67)A8) 28 /95A8 71469731 5A8A:1518);

Sin!e the se!ond hal' o' the E0th !entury( human resour!e mana"ement has risen to #e!ome one o' the most important areas o' 'o!us in or"aniAational mana"ement$ A "rowin" num#er o' studies have emphasiAed the importan!e o' appropriate human resour!e mana"ement pra!ti!es that ensure that employees are well motivated to enhan!e or"aniAational per'orman!e$ -ndeed( there is not dou#t that or"aniAations that have well motivated and hi"hly trained employees have a !ompetitive ed"e that many !ompetin" or"aniAations may 'ail to repli!ate$ 4owever( e''e!tive human resour!e mana"ement is em#roiled in mana"ement pra!ti!es and !orporate "overnan!e o' the or"aniAation$ *ana"ement is one o' the most important pra!ti!es in #usiness entities sin!e it plays vital 'un!tions o' plannin"( or"aniAin"( dire!tin"( and !ontrollin" the or"aniAation$ &his means that or"aniAation #e!omes what the mana"ement wants$ 4owever( mana"ement !annot a!!omplish all these 'un!tions without the support o' employees in the or"aniAation$ -n the re!ent past( #usiness ethi!s espe!ially in human resour!e mana"ement has #e!ome an important 'a!tor in'luen!in" the overall per'orman!e o' a "iven or"aniAation$ As !areta,er o' the or"aniAation( mana"ement has
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o#li"ation towards all sta,eholders in!ludin" employees( shareholders( !ustomers( !ommunities( and the environment$ %alan!in" #etween the interests o' all sta,eholders is a tri!,y a''air and most or"aniAations tend to serve the interest o' shareholders alone$ &he !ase o' nron is one o' the !ases that !an illustrate 'ailure #y mana"ement to serve the interest o' all sta,eholders and instead 'o!us on short term pro'ita#ility that enri!hed 'ew individuals$ nron remains one o' the #i""est !orporate s!andals in ?nited States history$ &his paper will use the !ase o' nron to loo, into how mana"ement sometimes 'ails to adhere to #usiness ethi!s espe!ially on issues o' human resour!e mana"ement$

&4-5S -6 B 5-S-;6 *AG-6G

An individual !an use three di''erent !riterions in ma,in" ethi!al !hoi!es$ &hey are as 'ollows( ?tilitarian 5riterion$ /histle %lowers$ Justi!e$ ?tilitarianism is to provide the "reatest "ood 'or the "reatest num#er$ -t is !onsistent with "ood "oals li,e e''i!ien!y( produ!tivity and hi"h pro'its$ Ri"hts !alls on individuals to ma,e de!isions !onsistent with 'undamental li#erties and privile"es as set 'orth in do!uments su!h as the %ill o' Ri"hts$ An emphasis on ri"ht in de!ision 9 ma,in" means respe!tin" and prote!tin" the #asi! ri"hts o' individuals su!h as the ri"ht to priva!y( to 'ree spee!h( and to due pro!ess$ ?se o' this !riterion would prote!t Hwhistle 9 #lowersH$ /histle #lowers are individuals who report unethi!al pra!ti!es #y their employers to outsiders$ A third !riterion is +usti!e$ &his re.uires individuals to impose and en'or!e rules 'airly and impartially( so that there is an e.uita#le distri#ution o' #ene'its and !osts$
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A 'o!us on utilitarianism promotes e''i!ien!y and produ!tivity( #ut it !an result in i"norin" the ri"hts o' some individuals( parti!ularly those with minority representation in the or"aniAation$ &he use o' ri"hts as a !riterion prote!ts individuals 'rom in+ury and is !onsistent with 'reedom and priva!y( #ut it !an !reate an overly le"alisti! wor, environment that hinders produ!tivity and e''i!ien!y$ A 'o!us on +usti!e prote!ts the interests o' the under represented and less power'ul( #ut it !an en!oura"e a sense o' entitlement that redu!es ris, 9 ta,in"( innovation and produ!tivity$ thi!s are #ein" re"arded as !ru!ial in the e1ternal sel' 9 presentation and pu#li! per!eption o' or"aniAations$ 4R* plays a vital role in introdu!in" and implementin" ethi!s$ &his paper tries to 'o!us on ethi!al and non 9 ethi!al situations 'a!ed #y the -ndian 4R mana"ers$ thi!al !onsiderations are important 'or or"aniAational de!ision ma,in"$ People with hi"h ethi!al standards are less li,ely to en"a"e in unethi!al pra!ti!es( even in or"aniAations or situations in whi!h there are stron" pressures to !on'irm$ %e!ause ethi!al people essentially avoid unethi!al pra!ti!es( mana"ers should #e en!oura"ed to s!reen +o# !andidates to determine their ethi!al standards$ %y see,in" out people with inte"rity and stron" ethi!al prin!iples( the or"aniAation in!reases the li,elihood that employees will a!t ethi!ally$

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1)/23A< =1/A>2697 A) !67?@ !/A) 4/AP14 1)/23A< =1/A>2697 A) !67?;

:hat sha&es ethical 'eha/ior at 0or-; -ndividual 'a!tors ;r"aniAational 'a!tors &he #ossCs in'luen!e thi!s poli!ies and !odes &he or"aniAationCs !ulture ?nethi!al #usiness environments !an@ Be)motivate individuals( *a,e "ood employees leave the !ompany Attra!t unethi!al employees <ead to the la!, o' trust #y the employees 'or the !ompany

Sta((ing and selection :osterin" the per!eption o' 'airness in the pro!esses o' re!ruitment and hirin" o' people$ :ormal pro!edures -nterpersonal treatment Providin" e1planation &rainin" 4ow to re!o"niAe ethi!al dilemmas$ 4ow to use ethi!al 'ramewor,s (su!h as !odes o' !ondu!t) to resolve pro#lems$ 4ow to use 4R 'un!tions (su!h as interviews and dis!iplinary pra!ti!es) in ethi!al ways$

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Per(or)ance a&&raisal Appraisals that ma,e it !lear the !ompany adheres to hi"h ethi!al standards #y measurin" and rewardin" employees who 'ollow those standards$ Reward and dis!iplinary systems$

!" Ethics Acti/ities &he or"aniAation swi'tly and harshly punishes unethi!al !ondu!t$ /or,pla!e a""ression and violen!e &a,in" !are that 4R a!tions do not 'oster per!eptions o' ine.uitiesthat translate into dys'un!tional #ehaviours #y employees$ <ualities o( a Personnel #anager &rainin" and <earnin" ;pportunities$ mployee /el'are$ A!!ounta#ility alon" with power o' de!ision ma,in"$ 6urturin" innovation and allowin" parti!ipation$

9aluing !u)an Ca&ital and E)&lo1ee Engage)ent &raditionally( many !ompanies have viewed employees as a !ost !entre in relation to the #usiness and may attempt to minimise !osts throu"h ti"ht la#our !ontra!ts and provision o' the #are minimum o' health and sa'ety standards$ thi!al human resour!e mana"ement ta,es the view that employees are 'ar 'rom a !ost #ut are in 'a!t a uni.ue value addin" !omponent o' #usiness operations$

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1)/23A< )7A2828:
thi!s are #ased on values( and value systems are 'i1ed at an early a"e$ %y the time employers hire peoples( their ethi!al values have #een esta#lished$ &he !riti!s !laim that ethi!s !annot #e 'ormally Htau"htH( #ut must #e learned #y e1ample$ thi!s trainin" would #e e''e!tive #e!ause helps employees to re!o"niAe ethi!al dilemmas and to #e!ome more aware o' the ethi!al issues underlyin" their a!tions and it rea''irms an or"aniAationIs e1pe!tations that mem#ers will a!t ethi!ally$

!" "ELATE, SEC5"IT= B"EAC!ES > ANAL=SIS ? P"E9ENTION63 *AJ;R 5A?S S@) D$ -nade.uate internal !ontrols E$ Poor hirin" pra!ti!es 3$ Bilutin" hirin" poli!ies in'ormally

PR F 6&-;6 * &4;B;<;G- S@) D$ E$ ''e!tive pre 9 employment s!reenin"$ 1ternal7 5lient audit review$

3$ -mproved se!urity measures$ 4$ &rain internal auditors$

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%?S-6 SS 54A<< 6G S :A5 B %> 4?*A6 R S;?R5 S -6 &4-5S

As the area o' human resour!e mana"ement #e!omes more strate"i! and more "lo#al it is #e!omin" more important and !riti!al to the or"aniAation$ /hile not all !ompanies are re!o"niAin" this yet( those that are most e''e!tive and most admired( seem to #e the ones that are$ As a !onse.uen!e they are doin" many thin"s that ma,e their mana"ement o' human resour!es as e''e!tive as possi#le$ -n doin" so doin"( several thin"s are #ein" o#served@ D) &he roles that the 4R department and its 4R pro'essionals have traditionally played are !han"in" su#stantially8 E) &he !ompeten!ies re.uired o' the 4R pro'essionals to play these new roles are also !han"in" rapidly with dramati! impli!ations 'or the !urrent 4R sta'' and leaders8 3) &he 4R pro'essionals are wor,in" more !losely( in partnership( with line mana"ers( employees( suppliers and representatives o' la#our unions( strate"i! partners and mem#ers o' !ommunity or"aniAations in order to #e more e''e!tive in mana"in" the 'irmCs human resour!es8 and 'inally( 4) &he stru!ture o' the 4R department and the 4R 'un!tion are #ein" reshaped in order to #etter serve the various sta,eholders o' 4R in order to ma,e the mana"ement o' people and the or"aniAation more e''e!tive$

D$ Growin" -mportan!e ;' 4uman Resour!e *ana"ement@) &he human resour!e department is the "roup 'ormally esta#lished #y an or"aniAation to help mana"e the or"aniAationCs people as e''e!tively as possi#le 'or the "ood o' the employees( the !ompany( and so!iety$ 4R pro'essionals in!lude e1ternal !onsultants and servi!e providers with 4R e1pertise$ At the end o' the day( however( the mana"in" o' human resour!es "ets done throu"h a
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wor,in" partnership o' 4R pro'essionals( line mana"ers( and employees$ At times( this partnership e1tends outside the or"aniAation))'or e1ample( as the 'irm strives to 'or"e #etter wor,in" relationships with its suppliers (S!huler and *a!*illian( D984)$ -t may also venture into lo!al edu!ation 'a!ilities as the 4R sta'' wor,s with s!hools to prepare students 'or internships in the 'irm$ And( in!reasin"ly( !ompanies use 4R !onsultants to help with a!tivities su!h as !ompensation( #ene'its( trainin"( re!ruitin" and sele!tion( and implementin" lar"e)s!ale or"aniAational !han"e (5oo,( D999)$ E$ *ultiple Roles :or 4uman Resour!e *ana"ement8) Addressin" sta,eholdersI !on!erns re.uires 4R pro'essionals to play a variety o' roles$ &he e''e!tiveness with whi!h 4R pro'essionals play these roles depends on leadership e''e!tiveness( the sta''in" o' the department( and the departmentCs or"aniAation$ 3$ &he 4R Partnership &riad Responsi#ility 'or e''e!tively mana"in" human resour!es does not rest only with those in the human resour!es department$ All !ompany mana"ers are responsi#le 'or leadin" people$ 6o department alone !an e''e!tively mana"e a !ompanyIs human resour!es$ So( re"ardless o' whether a line mana"er ever holds a 'ormal position in human resour!e mana"ement( she or he will #e a!!ounta#le 'or the tas, o' mana"in" people (S!huler and /al,er( D990)$ 4$ Sta''in" &he 4uman Resour!e Bepartment ''e!tive mana"ement o' an or"aniAationIs human resour!es depends in lar"e part on the ,nowled"e( s,ills( and a#ilities o' the people in the human resour!e department( parti!ularly the 4R leader( 4R "eneralists( and 4R spe!ialists)) !olle!tively re'erred to as 4R pro'essionals$ &he top human resour!e leaders and sta'' mem#ers are o'ten e1pe!ted to #e !apa#le administrators( 'un!tional e1perts( #usiness !onsultants( and pro#lem solvers with "lo#al awareness$ *ana"ement e1pe!ts the 4R sta'' Hto have it all$H Administrative s,ills are essential 'or e''i!ien!y$ Spe!ialiAed e1pertise also is important( parti!ularly in !om#ination with #usiness ,nowled"e and perspe!tive$ -n 'le1i#le or"aniAations( pro#lem)
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solvin" and !onsultin" s,ills are vital in "uidin" and supportin" new mana"ement pra!ti!es$ J$ ;r"aniAin" &he 4uman Resour!e :un!tion -n traditional( #ureau!rati! or"aniAations( 4R pro'essionals resided almost e1!lusively within a !entraliAed 'un!tional department$ As or"aniAations have restru!tured into a variety o' newer 'orms( however( they have o'ten re)evaluated this approa!h$ As is true 'or many support 'un!tions( there is !urrently mu!h e1perimentin" "oin" on to 'ind the most e''e!tive way to or"aniAe the 4R 'un!tion$ /hen !onsiderin" new or"aniAational 'orms( two ma+or .uestions need to #e addressed are /here are the 4R de!isions made0 /hat level o' investment will the !ompany ma,e0

5;B ;: &4-5S :;R *A6AG RS

4?*A6 R S;?R5
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-ssues 'a!ed #y human resour!es mana"ers raise .uestions a#out 'airness( honesty( sel')dis!ipline( and !onse.uen!es o' #ehavior$ Sin!e the human resour!es department (whi!h deals with employee issues) assumes a ma+or role in the !ompany( there may #e a tremendous #urden pla!ed on human resour!es mana"ers to wal, a very narrow line #etween what is le"ally and morally #est 'or the employee and 'inan!ially advanta"eous to the !ompany$ 4uman resour!es as a pro'essional !areer !hoi!e has resulted in the !reation o' the So!iety o' 4uman Resour!es *ana"ement (S4R*)$ -t is this or"aniAation that developed a 5ode o' thi!s 'or 4uman Resour!es *ana"ers$ 4i"h Standards o' Pro'essional and Personal 5ondu!t8) 4uman resour!es mana"ers must ma,e de!isions on a daily #asis that involve employee issues versus !ompany poli!ies and pro!edures$ -n ma,in" these de!isions( the pro'essional and personal !ondu!t o' the mana"er may !ome into play$ :or e1ample( rather than 'ire an employee( should he #e !onsidered 'or other possi#le alternatives in order to ,eep his 'amily with shelter and 'ood( even thou"h he is not per'ormin" up to !ompany standards0 A valid answer may #e rea!hed with the !onsideration o' appli!a#le laws( or"aniAational standards o' ethi!al #ehavior( and without personal mali!e or opinion$ 5ontinuation o' Personal Growth in the :ield o' 4uman Resour!es@) &he 'ield o' human resour!es is evolvin" and !onstantly !han"in"$ A pro'essional human resour!es mana"er may #e !ommitted to !ontinuin" edu!ation and !erti'i!ations as a pathway to !ontinuous improvement$ S4R* has esta#lished two types o' !erti'i!ation 'or human resour!es pro'essionals$ ;ne is a P4R (Pro'essional in 4uman Resour!es) desi"nation and the other is an SP4R (Senior Pro'essional in 4uman Resour!es) whi!h re.uires more e1perien!e and7or 'ormal edu!ation$ a!h !erti'i!ation re.uires additional human resour!es !ourses( wor,shops( and seminars$ ?phold all <aws and Re"ulations Relatin" to mployerIs A!tivities@) 4uman resour!es is the H!ons!ien!eH o' the !ompany$ -t is the responsi#ility o' the human resour!es mana"er to #e ,nowled"ea#le o' all laws and re"ulations pertainin" to the hirin"( trainin"( !ompensatin" and dis!iplinin" o' employees$
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/hile maintainin" loyalty to the employer( the human resour!es mana"er must !omply and adhere to all 'ederally and state)mandated laws re"ardin" the treatment o' employees$ &he human resour!es mana"er( at times( must ta,e a stand with the employer to in'orm her o' possi#le !onse.uen!es inherent with !ertain a!ts$ *aintain the 5on'identiality o' Privile"ed -n'ormation@) *ost in'ormation a#out employees( whether it #e medi!al( !ompensation or dis!ipline( is !onsidered !on'idential$ -n some !ases( this may in!lude ,eepin" in'ormation 'rom an employeeIs mana"er or releasin" in'ormation in a lawsuit or medi!al #illin" issue$ &hese situations !all 'or #ehaviors and a!tions that !on'orm to the hi"hest ethi!al prin!ipals$ :ollowin" the letter o' the law in these !ases may #e the #est de!ision$ -' !ompany poli!ies are written a!!ordin"ly( it will #e mu!h easier to 'ollow the !orre!t pro!edures$ Re'rain 'rom ?sin" Personal Position 'or -nappropriate Gain@) A human resour!es mana"er !an #e seen as one with power to "et thin"s done$ 4avin" the support and trust o' senior mana"ement !an pla!e a mana"er in a position to ma,e autonomous de!isions$ -t may #e important 'or mana"ers to in!lude others in the de!ision)ma,in" pro!ess 'or !he!,s and #alan!es$ Althou"h it may #e temptin" to use oneIs position to in'luen!e others( it should #e used dis!reetly and only 'or the "ood o' #oth employee and !ompany$ :or e1ample( mana"ers should not allow 'avoritism o' an employee #e!ause o' a personal relationship$

4R &4-5A< -SS? S
thi!al issues a#ound in 4R a!tivities$ Areas o' ethi!al mis!ondu!t in the personnel 'un!tion in!lude employment( remuneration and #ene'its( la#our relations( health and sa'ety( trainin" and development( and 4R-S(4R ethi!al issues)$ 1. Cash and incenti/es &lans63
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&his in!ludes #ase salaries( annual in!entive plans( lon" term in!entive plans( e1e!utive per.uisites( and separation a"reements$ . Base salaries6) &he 4R 'un!tion is o'ten presumed to +usti'y a hi"her level o' #ase salaries( or a hi"her per!enta"e in!rease than what !ompetitive pra!ti!e !alls 'or$ -n some !ases( pressure is e1erted to re)evaluate the position to a hi"her "rade 'or the purpose o' +usti'yin" a lar"er than normal in!rease$ %. Annual incenti/e &lan63 &he 4R mana"er is o'ten 'or!ed to desi"n and administer top)mana"ement in!entive plans( at hi"her rates than what the individuals deserve$ A !ommon rationale presented to the 4R e1e!utive 'or #endin" the rules is the 'ear o' losin" the outstandin" e1e!utives( i' hi"her in!entives are not paid$ +. Long3ter) incenti/e &lan63 Just as with annual in!entive plan( many 4R e1e!utives have the responsi#ility o' desi"nin" and administerin" the 'irmCs lon" term in!entive plans( #ut in !onsultation with 5 ; and an e1ternal !onsultant$ thi!al issues arise when the 4R e1e!utive is put to pressure to 'avour top mana"ement interests over those o' other employees an investors$ 5. E7ecuti/e &er8uisites@) 1e!utive per.uisites ma,e the ethi!al standard o' the 4R e1e!utive di''i!ult #e!ause their !ost is o'ten out o' proportion to the value added$ :or e1ample@ A story relates to %an"alore 9#ased( losin" ma,in" pu#li! se!tor underta,in" whose 5 ; spend E0 la,h to "et swimmin" pool #uilt at his residen!e$ .. Per(or)ance A&&raisal63 Per'orman!e appraisal lends itsel' to ethi!al issues$ Assessment o' an individualCs per'orman!e is #ased on o#servation and +ud"ment$ 4R mana"er are e1pe!ted to ;#serve the per'orman!e in order to +ud"e its e''e!tiveness$ thi!s should #e the !ornerstone o' per'orman!e evaluation( and the overall o#+e!tive o' hi"h ethi!al
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per'orman!e reviews should to provide an honest assessment o' the per'orman!e and mutually develops a plan to improve the rateeC s e''e!tiveness$ $. "ace@ Aender@ Age@ and ,isa'ilit163 &he pra!ti!e o' treatment o' employees a!!ordin" to their ra!e( ethni! ori"in( se1( or disa#ility has lar"ely #een stopped$ A 'ramewor, o' laws and re"ulations ahsevolved that has si"ni'i!antly improved wor, pla!e #ehavior$ 6o enterprise today dare to pu#li!ly state it denies minorities( woman( and the disa#le opportunities 'or employment( remuneration( and "rowth prospe!ts di''erent 'rom those "iven to others$ *. E)&lo1)ent Issues63 /hile dis!rimination and harassment situation re!eives mort pu#li!ity( 4R pra!titioners are more li,ely to 'a!e ethi!al dilemmas in the areas o' employee hirin"$ ;ne !hallen"e !ommonly en!ountered is pressure to hire a relative o a 'riend o' a hi"hly pla!ed e1e!utive$ Another area related to employment is that o' 'a,ed !redentials su#mitted #y a +o# appli!ant$ /hile dis!overy o' this ,ind o' 'a#ri!ation usually leads to termination o' the employment( the !hoi!e #e!omes di''i!ult when the appli!ant has a #lend o' s,ills set and a proven tra!, re!ord with his or her previous employers$

2. Pri/ac1 issues63 Priva!y issues to prote!tin" a personCs private li'e 'rom intrusive and unwarranted a!tions$ &he employee #elieves that his or her reli"ious( politi!al( and so!ial #elieves as well as personal li'e style are private matters and should #e sa'e "uarded 'rom #ein" snooped or analysed$ 1!eptions are permitted "rud"in"ly only when +o# involvement is !learly involved$ :or e1ample( it may not #e inappropriateto intrude into an employeeCs private matter i' it is suspe!ted that he or shedis!usses with !ompetitor( throu"h email messa"es( the spe!i'i!ation o' newly developed produ!t not yet laun!hed into the mar,et$

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10.Sa(et1 and health63 *u!h o' the industrial wor, is haAardous$ &his is #e!ause o' the e1tensive use o' hi"h speed and noisy ma!hinery( produ!tion pro!esses re.uirin" hi"h temperature( an in!reasin" relian!e on !hemi!al !ompounds $A!!idents( in+uries and illnesses are li,ely to o!!ur under these !ir!umstan!es$ ;ver past de!ade( new !ate"ories o' a!!ident and illness have emer"ed( in!ludin" the 'ast "rowin" +o# sa'ety pro#lem o' o''i!e in+uries$ 11."estructuring and La1o((s63 Restru!turin" and !onse.uent layo''s have #e!ome relevant #e!ause o' poor mana"ement( #ut in!ompeten!e does not #e!ome unethi!al$ &here are ethi!al impli!ations in the pro!ess #y whi!h termination de!isions are made and a!tions ta,en$ :or e1ample i' restru!turin" re.uires !losin" a plant ( the pro!ess #y whi!h that plant is !hosen (how the news will #e !ommuni!ated( and the time 'rame 'or !ompletin" the layo''s are ethi!ally important $-' !ondu!ted in an atmosphere o' 'airness and e.uity and with di"nity o' the a''e!ted individuals in mind( the a!tion is ethi!al$ 1 .Ethical ,ile))as63 Several ethi!al dilemmas !om'ort an 4R mana"er$ &he ethi!al dilemmas arise 'rom three sour!es)'a!es to 'a!e ethi!s( poli!y ethi!s( and 'un!tional area ethi!s$ 1%.Ace to (ace ethics63 &hese arise mainly #e!ause there is a human element in most #usiness transa!tions$ %usiness is !omposed o' this human transa!tion8 it should not #e surprisin" that 'a!e to 'a!e ethi!al dilemmas arise o'ten$ -t is li,ely that the .uality assuran!e man overloo,s minor de'e!ts and approves a lot delivered #y a supplier #e!ause o' the personal relationship that the two en+oy$ 1+.Cor&orate &olic1 ethics63 5ompanies are o'ten 'a!ed with ethi!al dilemmas that a''e!t their operations a!ross all departments and divisions$ &he !onse.uen!es o' employment !ontra!tion in la#our intensive #asi! industries #e!ause o' the improved methods o' produ!tion $*odern te!hnolo"y has repla!ed older methods o' produ!tion
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whi!h has in turn resulted in hundreds #ein" +o#less$ &he ethi!al #urden o' de!idin" !orporate poli!y matters normally rests upon a !ompanyCs 4R mana"ement$ &he 4r mana"er and dire!tors are responsi#le 'or ma,in" poli!ies and implementin" them too$ &he ethi!al !ontent o' their poli!ies !an have enormous impa!t throu"hout the !ompany$ -t !an set an ethi!al tone and send ri"ht si"nals to all employees as well as e1ternal sta,eholder$ 15.Functional area Ethics63 :un!tional area o' a #usiness is li,ely to !om'ort ethi!al issues$ A!!ountin" is a !riti!al 'un!tion o' any #usiness$ A!!ountin" statements reveals to the mana"er and owner the 'inan!ial soundness o' a !ompany$ *ana"ers( investors( re"ulatin" a"en!ies( ta1 !olle!tors and trade unions rely on a!!ountin" data to ma,e de!isions$4onesty( inte"rity a!!ura!y are a#solute re.uirements o' the a!!ountin" 'un!tions$ A!!ount standard ensure a hi"h level o' honest an ethi!al a!!ountin" dis!losure$ thi!al dilemmas !rop up in pur!hasin" departments where stron" pressure is to o#tain the lowest possi#le priAes 'rom suppliers and where too 'elt similar need it #a" lu!rative !ontra!ts$ %ri#es( ,i!,#a!,s( and dis!riminatin" pri!in" are temptation to #oth parties$

5AS S&?B>
A'stract63 &he !ase is a#out the retren!hment drama that un'olded in one o' -ndiaCs leadin" aviation !ompanies( Jet Airways (-ndia) <imited (Jet)( in late E008$ A'ter showin" the door to more than D000 employees in a #id to streamline its operations( Jet was 'a!ed with immense !riti!ism and opposition #y various or"aniAations and politi!al parties$ JetCs !hairman 6aresh Goyal (Goyal) reinstated the employees a day later sayin" that he was not aware o' these sa!,in"s$ &he -ndian aviation industry was "oin" throu"h a tou"h phase and e1perts 'elt that it was in the interest o' the !ompany to
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retren!h employees to remain !ompetitive$ 1perts lar"ely 'elt that Goyal had !apitulated under pressure 'rom e1ternal parties while others 'elt that all may not #e well with the or"aniAational !ommuni!ation me!hanisms at Jet$ /e have !reated hi"h morale 'or our people$ ;ur employees #elieve in the !ompany$ &hey #elieve itCs their !ompany$ &hereCs a 'eelin" amon" employees that i' the !ompany ma,es money( itCs their money and i' the !ompany loses money( thatCs their loss$

NA"ES! AO=AL@ C!AI"#AN@ 4ET AI":A=S BIN,IAC LI#ITE,@ IN 45L= 00$.

H/hile the mishandlin" o' the Jet Airways sa!,in" and reinstatement o' D(900 employees was an 4R and PR disaster( the lar"er impli!ations o' what happened are also worth !onsiderin"$ -t is not +ust that the !hairman o' -ndiaCs most su!!ess'ul airline #e!ame the #utt o' +o,es( it is also a .uestion o' what he ,new( when he ,new it( and who did the #un"lin"$H)AnDuli Barga/a@ Colu)nist@ Business Standard@ Octo'er@ 00*. H&he sa!,in"s were !ompletely ille"al$ &here was no noti!e nor was "overnmentCs permission ta,en to sa!, 800 employees$ Perhaps they realiAed their 'olly and de!ided to ta,e these employees #a!,$ &he matter would have landed in the !ourt otherwise$H3 Anand PuDari@ La'our la01er@ SI 4oshi ? Co.@ in Octo'er 00*.

ISS5ES63

AnalyAe the 4R pro#lems 'a!ed #y Jet Airways in E008$ Bis!uss various !on!epts related to hirin"( 'irin"( and !ompensation mana"ement$ ?nderstand the rationale #ehind JetCs de!ision to lay)o'' employees and the reasons #ehind its later de!ision to ta,e #a!, the sa!,ed employees$
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?nderstand the importan!e o' !ommuni!ation in an or"aniAation and analyAe whether there were any loopholes in JetCs or"aniAational !ommuni!ation networ,$ ?nderstand the rationale #ehind the pay !uts initiated at the !ompany$ ?nderstand how environmental varia#les !ould a''e!t a !ompanyCs 4R poli!ies$

Introduction6) -n ;!to#er E008( Jet Airways (-ndia) <imited (Jet)( one o' -ndiaCs leadin" domesti! airlines( de!ided to lay o'' more than D(000 employees to streamline its operations$ &he retren!hment was the se!ond phase o' its trimmin" operations$ &he 'irst phase( whi!h too, pla!e a day earlier( saw the airline showin" the door to 8J0 !a#in !rew mem#ers$ &he se!ond phase o' retren!hment in!luded employees 'rom all operations ) !a#in !rew( pilots( "round sta''( airport servi!es sta''( and employees 'rom mana"ement departments$ &he sudden de!ision not only too, the employees #y surprise #ut also !aused alarm in the -ndian aviation se!tor$ Amidst "reat 'uror and opposition #y various or"aniAations and politi!al parties( 6aresh Goyal (Goyal)( !hairman o' Jet( reinstated the employees a day later amidst "reat emotional drama$ 4e was .uoted as sayin" he had #een appalled #y the retren!hments o' his employees( whi!h he !laimed( he had !ome to ,now only throu"h media reports$ 4e added that he would Hnot #e a#le to live as lon" as he livesH with the tou"h de!ision his mana"ement had ta,en and !lari'ied that he was ta,in" #a!, the employees as they were H'amily to him and as head o' the 'amily he would ta,e !are o' them$
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A month later ) in 6ovem#er E008( Jet announ!ed that it would !onsider serious salary !uts 'or its sta'' to handle the aviation !risis$ /hile many industry analysts were surprised #y the turn o' events that had led to the reinstatement o' the sa!,ed employees( they opined that Jet had #een 'or!ed to ta,e drasti! de!isions su!h as layin" o'' employees or initiatin" pay !uts #e!ause o' the tur#ulent phase throu"h whi!h the aviation industry was passin"$ -n Septem#er E008( the -nternational Air &ransport Asso!iation (-A&A) had predi!ted that world over the aviation industry would lose a#out ?SKJ$E #illion #ased on an avera"e +et 'uel pri!e o' ?SKD40$ &he rise in 'uel pri!es had pushed the 'uel #ills o' the aviation industry to ?SKD8L #illion #y the end o' the year E008$

Bac-ground Note63 Jet( with its head.uarters in *um#ai( -ndia( #e"an as an air ta1i operator in April D99E and started its !ommer!ial operations a year later( in D993$ -t operated with +ust E4 'li"hts a!ross DE destinations initially( #ut showed e1!eptional "rowth with more than 3JM daily 'li"hts to a#out LE domesti! and international destinations in E008$ -t was 'irst listed in the 6ational Sto!, 1!han"e (6S ) in the year E00J$ As o' June E008( it operated over 3M0 daily 'li"hts to a#out L8 destinations #oth in -ndia and a#road in!ludin" San :ran!is!o( 6ew >or,( &oronto( Sin"apore( %russels( <ondon (4eathrow)( 4on" Gon"( Shan"hai( Guala <umpur( 5olom#o( %an",o,( Gathmandu( Bha,a( Guwait( %ahrain( *us!at( A#u Bha#i( Bu#ai( et!$ !" Issues@ #anage)ent and ,ecision #a-ing at 4et63 A!!ordin" to the !ompany( Jet paid the utmost importan!e to the !omposition o' its senior mana"ement and its human resour!es with emphasis on teamwor, as a ,ey su!!ess 'a!tor$ %ein" in the servi!e)#ased industry( Jet "ave priority to hi"h .uality( pro'essional servi!e to its !ustomers$$$ The "etrench)ent ,ra)a 5n(olds63
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&he retren!hment drama un'olded on ;!to#er DL( E008( when Jet announ!ed that it would lay o'' nearly D(D00 o' its sta'' a day a'ter it had already laid o'' around 800 o' its !a#in !rew mem#ers$ &he se!ond phase o' D(D00 employees in!luded those 'rom departments li,e mana"ement( 'li"ht attendants( and the !o!,pit !rew$ &he !ompany de!ided to lay o'' these employees with no prior noti!e #ut o''ered them a monthCs remuneration$ "easons (or "etrench)ent63 &he "rowin" !hallen"es in the -ndian aviation industry were the main reason 'or the lay o''s at Jet( a!!ordin" to the !ompany and other industry analysts$ Tur'ulent Ti)es (or the Indian A/iation Industr163 &he -ndian aviation industry was one o' the 'astest "rowin" aviation industries in the world$ &he Air 5orporations (&rans'er o' ?nderta,in"s and Repeal) A!t D994 opened the -ndian s,ies up to private operators$ Apart 'rom "overnment)owned airlines( the aviation industry was 'looded with private operators and low !ost !arriers$$$ The ,e'ate Leading to the "einstate)ent o( E)&lo1ees63 Jet re!eived !riti!ism 'rom several .uarters 'or retren!hin" its employees$ *any o' its employees protested a"ainst the de!ision to oust them without prior noti!e$ *ost o' them had paid su#stantial amounts to re!eive trainin" at ma+or Aviation &rainin" institutes$$$ #assi/e Salar1 Cuts Follo063 -n the last wee, o' 6ovem#er E008( Jet de!ided on a E0N !ut in the salaries o' its

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pilots( en"ineers( and some other sta''$ &he !ompany planned a J per!ent to D0 per!ent !ut in the salary o' top o''i!ials who drew a salary a#ove Rs$ MJ(000$

5;65<?S-;6
4en!e( 4R pro'essionals are responsi#le 'or addin" value to the or"anisations and serve and !ontri#ute to the ethi!al su!!ess o' those or"aniAations$ &hey should a!!ept pro'essional responsi#ility 'or their individual de!isions and a!tions$ &hey also advo!ate 'or the pro'ession #y en"a"in" in a!tivities that enhan!e its !redi#ility and value$ thi!s )#ran!h o' philosophy(

4i"hest standard o' !ompeten!e( -ndividual leadership( :airness and +usti!e( Prote!t the interest o' sta,eholders( Prote!t the ri"hts o' individuals$

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%-%<;GRAP4>
///$G;;G< $5;* ///$/-G-P B-A$5;* ///$S<-B S4AR $5;* ///$&?&;RE?$6 &

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