The ethical role of HR
Legge (1998: 20–21) commented that: ‘In very general terms I would suggest that the experience of HRM is more likely (but not necessarily) to be viewed positively if its underlying principles are ethical.’ HR professionals have a special responsibility for guarding and promoting core values in the organization on how people should be managed and treated. They need to take action to achieve fair dealing. This means treating people according to the principles of procedural, distributive, social and natural justice, and seeing that decisions or policies that affect them are transparent in the sense that they are known, understood, clear and applied consistently.
Kochan (2007: 600) suggested that: ‘HR derives its social legitimacy from its ability to serve as an effective steward of a social contract in employment relationships capable of balancing and integrating the interests and needs of employers, employees and the society in which these relationships are embedded.’ But he also noted that most HR professionals have ‘lost any semblance of credibility as stewards of the social contract because most HR professionals have lost their ability to seriously challenge or offer an independent perspective on the policies and practices of the firm’ (ibid: 604). And, Parkes and Davis (2013: 2427) pointed out the risk that the HR role can become ‘rather passive, favouring communicating standards rather than actively promoting ethical behaviour’.
To overcome this problem and thus fulfil an ethical role Winstanley and Woodall (2000b: 7) remarked that: ‘HR professionals have to raise awareness of ethical issues, promote ethical behaviour, disseminate ethical practices widely among line managers, communicate codes of ethical conduct, ensure people learn about what constitutes ethical behaviours, manage compliance and monitor arrangements.’
There are three approaches that HR can adopt. The first is to ensure that HR policies and the actions taken to implement them meet acceptable ethical standards. HR can press for the production of a value statement that sets out how the organization intends to treat its employees. Value statements may be set out under such headings as care and consideration for people, belief that people should be treated justly and equitably and belief that the views of employees about matters that concern them should be listened to.
This requires advocacy skills to persuade management to adopt and act on these policies and the courage and determination to make out the ethical case even when management favours a conflicting business case. But value statements are meaningless until the values are put into practice; the ethical role of HR involves helping to ensure that this takes place.
Second, HR practitioners can act as role models, leading by example and living and breathing good ethical behaviour. As a respondent to the survey conducted by Parkes and Davis (2013: 2426) commented: ‘If HR does not act ethically, how can it expect employees to do so?’
The third approach, and the hardest, is to challenge unethical behaviour on the part of management. Such behaviour can take many forms, including management tolerance for exploitation and bullying; the lack of a whistle-blowing policy, which provides routes for reporting malpractice and performance management criteria that emphasize organizational gain over all else. The latter was the case at the Royal Bank of Scotland (RBS) before the financial crisis, where the performance management concentrated on target achievement, ignoring behaviour. The courage to challenge is less likely to be forthcoming in organizations where the culture is one of command and control – and obedience is expected to whatever is dictated by management (features of the pre-crash RBS culture). Power, politics and culture shape norms of behaviour and, as Herb Kelleher (the CEO of Southwest Airlines) put it, culture is ‘what people do when no one is looking’ (reported by Lee, 1994). One respondent to the Parkes and Davis survey (2013: 2425) commented: ‘It can be difficult on a personal level to be speaking out – HR do not have the power’. Another said: ‘Speaking out can be career suicide’. It is too easy in these circumstances for HR to be mere bystanders. Neil Roden, former head of HR at RBS, explained HR’s position in relation to the financial debacle at the bank as follows: ‘I’m not absolving myself totally… (but) I can’t see what HR could have done… I wasn’t running the bank… the CEO makes the decisions, not me. HR is a support function, no more, no less important than sales or IT.’
An HR director who is a member of an executive board can question decisions from an ethical viewpoint but if the comments are not heeded then the director will either have to accept the decision or resign. It is important to challenge – and the courage to do so is listed by the CIPD as one of the qualities required by an HR professional. But it is difficult and there may be limits to what HR can do. If HR professionals cannot do anything about the way their organization does things they either have to carry on and do whatever they can in other less confrontational ways, or they must leave.