Ethical Consideration in Compensation
Compensation is confidential information and should be kept very well. Unethical issues can arise when the compensation details leak to others. As an HR, we should make sure that the compensation information does not leak from the HR side. The other issue is how to determine employee salary. The HR should try not to manipulate the amount of salary that the candidate can get from the company. In the other way, HR should consider the manpower budget and internal comparison as well. The unethical issue when we give new joiner compensation without proper consideration and evidence of previous earnings. The HR should make sure that the compensation that employees receive is suitable and match with their skills and contribution to the company.
Ethical Consideration in Reward System
Organizations have a bad habit of developing reward systems that run counter to the behavioral outcome which they desire. Organization may hope for ethical behaviors, but they may have a tendency to reward individual for unethical acts, and actually develop reward contingencies that facilitate unethical behavior (e.g Janson & Van Glinow, 1985). The reward system should be fair and objective to everyone. Sometimes the reward is given to someone who is not worthed to get. But the reward is given to increasing someone's confidence or to retain employees. Others can debate that it's justified and the right thing to do. But it's not fair to someone who really showed their best performance to the organization. Or probably we give the reward just because of a short period of achievement without seeing the entire time period of performance. The ethical practice is when we give the reward to someone who really shows their performance in the entire time period of the reward and with all the achievements.
Ethical Consideration in Organizational Exit/Downsizing
According to Ferris, Bergin and Howard (1996) downsizing has not proven to be consistently related to future increases in profitability and productivity. From an ethical decision-making perspective, one needs to ask how these downsizing decisions are made. Look back when the Covid19 pandemic hit the global market, there were many companies downsizing. Some of the downsizing practice that can be unethical is when they decide to cut off the employees without a measurement and objectively. They just cut off employees with high cost or high salary to reduce the fixed cost from salary. They don't even think about future productivity. Before we do the downsizing, we have to talk to the employees related to the current issue and the reason why we take this decision. On the other hand, we have to give a time at least 30 days before the termination.
Consequences of Unethical Cultures
Unethical culture can be a crisis in the organization. Unethical culture will ruin the organization from inside out. Successful organizations are generally based on a network of trust which binds managers, employees, shareholders, suppliers and customers. In unethical culture it will ruin the trust among the internal members. Employees with high personal integrity may become disenchanted and go elsewhere. Cynicism will arise among the employees because of the unethical culture. This cynicism is cultivated by companies that embody expedient, self-serving values, that support managers who engage in deceptive and exploitative practices, and that communicate in a one-sided, hype up and disingenuous fashion to their employees (Kanter & Mirvis, 1989, pg.19). Thus, we would argue that this phenomenon is at least partially caused by lack of trust, lack of faith and lack of belief in self-interest and oftentimes in unethical management.
Another thing is destructive politics. Whereas politics are prevalent in all businesses, they range from being useful and productive to being quite dysfunctional and destructive. In an unethical business environment, people may just "get the job done" without any concern for how this objective is achieved.
In unethical organizations, the workplace can be aggressive and violence. This is because the culture forces them to be self-centered. They will just think about themselves and lack teamwork in the workplace. Â Other events create perceived inequities, such as being laid off, passed over for promotion, terminated and pushed too hard on the job will result in a high level of job stress.
Benefit of Ethical Culture
