class: middle, title-slide # Business Ethics — Ethics and Economics ## The Workplace ### Dennis A. V. Dittrich ### 2022 --- layout: true <div class="my-footer"> <span><img src="img/tcb-logo.png" height="40px"></span> </div> --- # Introduction .row[.col-7[ Traditionally a business’s single obligation toward its employees was to pay them for their work. Today’s workplace philosophy is much more complex, involving social, political, and moral issues. .question[ * What are the obligations of an employer toward its employees? ] * How does American emphasis on civil liberties affect the workplace? ]] --- # Civil Liberties in the Workplace .row[.col-6[ **Authoritarianism at the workplace** David Ewing, formerly of **Harvard Business Review**, believes that too many corporations routinely violate the civil liberties of their employees. Historically, this authoritarianism stems from: * The rise of professional management and personnel engineering * The common-law doctrine that employees can be discharged without cause (“employment at will”) ] .col-6[ **Modifications to “employment at will”** doctrine * **The Wagner Act of 1935** prohibited firing workers because of union membership or union activities. * **The Civil Rights Act of 1964** and subsequent legislation prohibited discrimination on the basis of race, creed, nationality, sex, or age. * **Public sector employees** enjoy some constitutional protections on the job and can be fired only “for cause.” ]] --- # Civil Liberties in the Workplace ## Current trends .row[.col-7[ The law seems to be moving away from the doctrine of “employment at will.” But, some business people support it as a desirable legal policy and embrace it as a moral doctrine. * They deny that employers have any obligations to their employees beyond those specified by law or by explicit legal contract. * They view employees as lacking any meaningful moral rights, seeing them as expendable assets, as means to an end. ]] --- # Companies that look beyond the bottom line .row[.col-7[ Those that respect employee rights and ensure a fair workplace tend to **outperform** others. * Some successful companies have led the way in respecting employees’ rights and human dignity. * Examples include: **Polaroid**, IBM, Donnelly Mirrors, Delta Air Lines, and others ]] --- # Hiring .row[.col-6[ Organizational conduct affects the welfare and rights of employees via personnel policies and procedures ( **hiring**, **firing**, **paying**, and **promoting** ). Fair policies and decisions evolve from criteria that are clear, job-related, and applied equally. Determining what is fair is not always easy. But, the hiring process may be fairly approached based on its principal steps – **screening**, **testing**, and **interviewing**. ] .col-6[ **Screening** The first step of the hiring process, the pooling and ranking candidates with qualifications – when done improperly, it undermines effective recruitment and invites injustices into the process * A **description** lists the details of the job * A **specification** describes the required professional qualifications * Both must be complete and accurate ]] --- # Hiring ## Wrongful discrimination .row[.col-7[ A moral concern in which candidates are judged on physical or ethnic traits rather than qualifications. * **Sex**, **age**, **race**, **national origin**, and **religion** are generally not job-related and generally should not affect hiring decisions * Discrimination against the **disabled** is illegal * Considering language, lifestyle, appearance, ill-considered educational requirements, or gaps in work history may also be unfair ]] --- # Hiring .row[.col-5[ ## Testing Tests are an integral part of the hiring process, especially in large firms – often designed to measure the applicant’s verbal, quantitative, and logical skills. ] .col-7[ **Tests must be valid** Validity refers to whether test scores correlate with performance in some other activity (i.e., whether the test measures the skill or ability it is intended to measure). **Tests must be reliable** Reliability refers to whether test results are replicable (i.e., whether a subject’s scores will remain relatively consistent from test to test). Tests that lack **validity** or **reliability ** are unfair. Tests may be unfair if they are culturally biased or if the skills they measure do not relate directly to job performance. ]] --- # Hiring ## Interviewing .row[.col-7[ Moral issues in interviews usually relate to the manner in which they are conducted. **Interviewers** should focus on the humanity of the candidate and not allow biases, stereotypes, and preconceptions to color the evaluation. **Situational interviews** Those interviews in which job candidates must role play in a mock work scenario – some believe this makes it harder for a candidate to put on a false front. ]] --- # Promotions .row[.col-7[ **Inbreeding** The practice of promoting exclusively from within the firm – it presents similar moral challenges as in the case of seniority. **Nepotism** The practice of showing favoritism to relatives and close friends – it is not always objectionable (especially in family-owned businesses) but may affect managerial responsibilities, hurt morale, create resentment, or result in unfair treatment of other employees. ]] --- # Discipline and Discharge .row[.col-7[ **Two basic principles** in the fair handling of disciplinary issues: * **Just cause:** requires that reasons for discipline or discharge deal with job performance * **Due process:** refers to the fairness of procedures used to impose sanctions on employees **Dismissing employees** : Employers have the right to fire employees who perform inadequately – but should provide sufficient warning, severance pay, and sometimes displacement counseling. ]] --- .row[.col-7[ ![](img/Shaw9e_PPT_Ch082.jpg) ] .col-5[ The 2009 movie Up in the Air relates the story of a corporate downsizer. .question[ What ethical obligations do you believe companies have to employees they terminate? ] ]] --- # Wages .row[.col-7[ Salaries should reflect an employee’s value to the business and be based on **clear**, **publicly available criteria that are applied objectively**. For example: * What is the law? * What is the prevailing wage in the industry? * What is the community wage level? * What is the nature of the job itself? * Is the job secure? * What are the employer’s financial capabilities? * What are other inside employees earning for comparable work? ]] --- # Wages .row[.col-7[ **Two other factors in determining the wage level** * The employee’s job performance * The fairness of the wage agreement terms A **living wage** is supported by moral grounds: * Utilitarian element promoting human welfare * Kantian principle of respect for human dignity * Commonsense view that some wages are so low as to be inherently exploitative Critics of living-wage laws believe they cost jobs ]] --- # Today’s Challenges .row[.col-7[ According to the U.S. Supreme Court, privacy is “the right to be let alone.” The Court considers privacy to be one of the most comprehensive and valued rights of citizens. .question[ What moral issues arise in the workplace regarding privacy? What are a company’s responsibilities regarding employee privacy? ] ]] --- .row[.col-7[ ![](img/Shaw9e_PPT_Ch091.jpg) ] .col-5[ .question[ How would you feel about being asked to supply a urine sample for drug testing by an employer? ] .question[ Do employees have a right to privacy? ] ]] ??? Our right to privacy could be based on our right to noninjury. Reckless behavior is immoral because of the harm that can result and our “right not noninjury.” Our right to noninjury doesn't just forbid people from actually harming us. Instead, lots of dangerous or reckless behavior is wrong because it's likely to harm us --- # Organizational Influence in Private Lives .row[.col-7[ **Privacy** is widely acknowledged to be a **fundamental right**. Yet corporate behavior and policies often threaten privacy, especially in the case of employees. This can happen through the release or exchange of personal (or “privileged”) information about employees It also occurs when imposing employer values upon employees. ] .col-5[ .question[ Is there a justification for our right to privacy? ] ] ] --- # Organizational Influence in Private Lives .row[.col-5[ **The importance of privacy** – Our concern for privacy has three aspects: 1. We want to control intimate or personal information about ourselves and not permit it to be freely available to everyone. 2. We don’t want our private selves to be on public display. 3. We value being able to make certain personal decisions autonomously. ] .col-7[ There is no consensus among philosophers or lawyers about the following: * How to define the concept of privacy * How far to extend the right to privacy * How to balance a concern for privacy against other moral considerations The burden is on the organization to establish the legitimacy of encroaching on the personal sphere of the individual. ] ] --- # Organizational Influence in Private Lives .row[.col-6[ **Legitimate and illegitimate influence** A firm is legitimately interested in whatever significantly influences work performance. It has a legitimate interest in employee conduct **off the job** only if conduct affects work performance. It is difficult to say precisely what constitutes a significant influence on job performance. It is also difficult to spell out exactly when **off-duty** conduct truly affects company image. ] .col-6[ **Issues of privacy interference in the workplace** * Legitimate and illegitimate influence * Involvement in civic activities * Participation in wellness programs <br/> .question[ Suppose that an employee (male or female) works as an “exotic dancer” during off hours. Does the employer have the moral right to ask that the employee to stop working as an “exotic dancer” because it impacts or has the potential to impact on the company’s image? ] ]] --- # Obtaining Information .row[.col-7[ Businesses often obtain information about their employees through **testing** and/or **monitoring**. **Informed consent** Its presence or absence is the main ethical issue in testing and monitoring – it implies **deliberation ** and **free choice** . **Deliberation** Employees must be provided all key facts concerning the information gathering procedure and understand its consequences. Free choice: The decision to participate must be voluntary and un-coerced. ] .col-5[ .question[ If you are an employer seeking to hire the best, most conscientious employee you can, are any and all means of obtaining information about prospective employees legitimate? What constraints, if any, ought to be put on your efforts to obtain information about prospective employees? ] ] ] --- # Obtaining Information .row[.col-7[ **Monitoring employees on the job** This may be necessary, but it can be abused and can violate privacy. Like testing, it often gathers personal information about workers without their **informed consent**. Organizations frequently confuse **notification** of such practices with employee consent, but notification does not constitute consent. ]] --- # Working Conditions .row[.col-5[ **Health and safety** The number of occupational hazards is awesome and generally unrecognized. **U.S. Census Bureau** indicates that about 4,300 workers are killed on the job each year. ] .col-7[ **Census Bureau statistics** reveal that the rate of industrial injury has been declining since 1960. But, the absolute number of workers disabled at work every year is ever increasing – about 3.7 million men and women. Job-related injuries and illnesses cost the nation \$65 billion a year – \$171 billion when indirect costs such as lost wages are included. ]] --- # Working Conditions .row[.col-6[ Employers clearly **have a moral obligation** not to expose workers to needless risks or to negligently or recklessly endanger their lives or health. Employers, however, **are not morally responsible** for all workplace accidents caused by coworkers’ **negligence** or **failure to exercise due care**. In some circumstances or in certain occupations, an injured worker can reasonably be said to have **voluntarily assumed the risk**. ] .col-6[ **Problems with voluntary assumption of risk** It presupposes **informed consent** , which requires the worker to have been fully informed of the danger and to have freely chosen to assume it. Employees have a moral right to refuse dangerous work (upheld by the U.S. Supreme Court). Employers, in turn, have a moral obligation not to expose workers to needless risk. ]] --- # Working Conditions .row[.col-6[ **Management styles** Nothing affects environment more than management style and quality. In **The Human Side of Enterprise,** Douglas McGregor described two management styles: * **Theory X managers** believe that workers dislike work and try to avoid it. * **Theory Y managers** assume that employees basically like work and view it as something natural and potentially enjoyable. ] .col-6[ **Theory X managers** coerce and bully workers into conformity with organizational objectives. **Theory Y managers** believe that workers are motivated by pride and self-fulfillment as well as money and job security, not dodging responsibility but accepting it and even seeking it out. Other management styles include **Theory Z managers**, who hold Japanese-style respect for workers. ]] --- # Working Conditions .row[.col-6[ **Day care and maternity leave** Women still bear the primary responsibility for child rearing. So their increased participation in the paid workforce has led to a growing demand for maternity-leave policies and child-care services. In its research of 168 countries, a **Harvard School of Public Heath study** found that more than 160 guarantee paid maternity leave, whereas the U.S. mandates only unpaid leave (except in California and Washington). ] .col-6[ **Business and child care** Some argue that offering child care as a fringe benefit, and dealing flexibly with employees’ family needs, can prove advantageous for most employers. Such policies can be cost-effective in the narrower sense – decreasing absenteeism, boosting morale and loyalty, enhancing productivity, and attracting new recruits. ]] --- # Three moral concerns .row[.col-7[ 1. Women have a right to compete on equal terrain with men, and paid leave can reinforce that right. 2. Development of potential capacities is a moral ideal, and perhaps a human right, so women should not be forced to choose between childbearing and pursuing careers. 3. The work world often reproduces the traditional male-female division of labor within the family. ]] --- # Job Satisfaction .row[.col-6[ **Sources of dissatisfaction** Studies since the 1970s have cited workers’ feelings of powerlessness, meaninglessness, isolation, and self-estrangement or depersonalization. **Factors affecting job satisfaction** Employees at all occupational levels value interesting work, enough support and information to accomplish the job, enough authority to carry out the work, good pay, the opportunity to develop special skills, job security, and a chance to see results of their work. ] .col-6[ **Importance of job satisfaction** The design of work materially affects the total well-being of workers. * Example: Studies show that job satisfaction is the strongest predictor of longevity. * Therefore, work content and job satisfaction are paramount moral concerns. * Satisfied workers are also more productive. * Business has an economic reason as well as a moral obligation to improve work quality. ]] --- # Quality of work life .row[.col-7[ For some firms, this means providing workers with less supervision and more autonomy. For others, it means providing work opportunities to develop and refine skills. For still others, it means providing for greater participation in the conception, design, and execution of their work – that is, with greater responsibility and a deeper sense of achievement. ]]