Business and society ethics sustainability and stakeholder management 9e chapter 17

Part I: BUSINESS, SOCIETY, AND STAKEHOLDERS. 1. The Business and Society Relationship. 2. Corporate Citizenship: Social Responsibility, Performance and Sustainability. 3. The Stakeholder Approach to Business, Society, and Ethics. Part II: CORPORATE GOVERNANCE AND STRATEGIC MANAGEMENT ISSUES. 4. Corporate Governance: Foundational Issues. 5. Strategic Management and Corporate Public Affairs. 6. Issue, Risk, and Crisis Management. Part III: BUSINESS ETHICS AND MANAGEMENT. 7. Business Ethics Fundamentals. 8. Personal and Organizational Ethics. 9. Business Ethics and Technology. 10. Ethical Issues in the Global Arena. Part IV: EXTERNAL STAKEHOLDER ISSUES. 11. Business, Government, and Regulation. 12. Business Influence on Government and Public Policy. 13. Consumer Stakeholders: Information Issues and Responses. 14. Consumer Stakeholders: Product and Service Issues. 15. Sustainability and the Natural Environment. 16. Business and Community Stakeholders. Part V: INTERNAL STAKEHOLDER ISSUES. 17. Employee Stakeholders and Workplace Issues. 18. Employee Stakeholders: Privacy, Safety, and Health. 19. Employment Discrimination and Affirmative Action. Cases.

Chapter 17

Employee Stakeholders and Workplace

Issues

Learning Outcomes

1 Identify the major challenges occurring in the workforce

today.

2 Outline the characteristics of the new social contract

between employers and employees.

3 Explain the employee rights movement and its underlying

principles.

4 Describe and discuss the employment-at-will doctrine and

its role in the employee rights.

5 Discuss the right to due process and fair treatment.

6 Describe the actions companies are taking to make the

workplace friendlier.

7 Elaborate on the freedom-of-speech issue and

whistle-blowing.

Chapter Outline

• The New Social Contract

• The Employee Rights Movement

• The Right Not to Be Fired Without Cause

• The Right to Due Process and Fair Treatment

• Freedom of Speech in the Workplace

• Summary

• Key Terms

Employee Stakeholders and Workplace Issues

• The social contract between organizations

and workers continues to evolve, and is

different from contracts of the past

• Three employee rights issues-

• Right not to be fired without good cause

• Right to due process and fair treatment

• Right to freedom of speech in the

workplace

The New Social Contract

• Today’s worker has held 11.3 jobs on

average All realize their jobs are vulnerable, and they receive a smaller portion of the

The Changing Social Contract

The Employee Rights Movement

• Public sector employees have constitutional

protections We focus on employees in the private sector, not subject to constitutional control because of the concept of private

property

• Individuals and private organizations are free

to use their property as they desire.

• Although labor unions have been successful

in improving pay, benefits and working

conditions, they have not been as active in pursuing civil liberties

The Meaning of Employee Rights

• We approach the topic from the perspective

of the Principle of Rights, justifiable claims that utility cannot override

• We will also cover legal rights

Sources of employee rights

-1 Statutory rights

2 Collective bargaining rights

3 Enterprise rights

3 Models of Management Morality

-•Employees are viewed as factors of

production to be used, exploited,

and manipulated

The Right Not to Be Fired

Without Cause

Good cause norm

-•The belief that employees should only be

discharged for good reasons

•This belief prevails in the United States today, though it conflicts with reality

Employmentatwill doctrine

-•The reality is that the relationship between

employer and employee is voluntary and can be terminated at any time by either party

•The central issue is changing views of the

employment at will doctrine

Legal Challenges

to Employment-at-Will

Public policy

exceptions-•Protects employees from being fired for refusal to commit crimes or for utilizing legal rights.

Implied contract

exception-•Protects employees who they believe have

contracts or implied contracts.

Good faith

principle-•Employers may lose lawsuits to former employees

if they cannot show that employees had

opportunities to improve their performance before termination.

Moral and Managerial Objections to

Employment-at-Will

1 Employees deserve respectful treatment

2 Employees do not have the option of being

arbitrary or capricious with employers

Employers should bear the same

responsibility

3 Employees are expected to be trustworthy,

loyal and respectful with employers

Employers should show employees the same consideration

Dismissing an Employee With Care

1 Fire employees in a private space.

2 Be mindful of employees’ logistics.

3 Preserve the employee’s dignity.

4 Choreograph the notification in

advance.

5 Use transparent criteria for layoffs.

What NOT to do When Terminating an Employee

1 Don’t fire on a Friday.

2 Don’t say that downsizing is finished.

3 Don’t terminate an employee via

e-mail.

4 Stick to the topic and avoid platitudes.

5 Don’t rush through the meeting.

The Right to Due Process

and Fair Treatment Due Process -

•The right to receive an impartial review

of one’s complaints and to be dealt with fairly

•The right of employees to have

decisions that adversely affect them be reviewed by objective and impartial

third parties

The Requirements of a Due Process System

1 It must be a procedure; it must follow rules; it

must not be arbitrary.

2 It must be visible and well-known so that

potential violators and victims are aware of it.

3 It must be predictably effective.

4 It must be institutionalized – a relatively

permanent fixture in the organization.

5 It must be perceived as equitable.

6 It must be easy to use.

7 It must apply to all employees.

Alternative Dispute Resolution

Concerns with the OpenDoor Policy

-• The process is closed.

• One person is reviewing what happened.

• There is a tendency for a manager to

support another manager’s decision

• A hearing procedure helps open up the

process because employees can elect

representation

The Ombudsman

• An ombudsman is neutral and promises

confidentiality.

• An ombudsman can handle employee

concerns in a way that keeps the problem from getting out of hand

• The procedure has been used in Sweden

since 1809 to curb abuses by government against individuals

Factors for a Successful

Peer Review Panel

1 Be sure that people involved in the process

are respected members of the organization.

2 Committee members should be elected rather

than appointed.

3 They must receive training in dispute

resolution, discrimination, fairness, legalities, and ethics for everyone involved.

4 Representatives of both employees and

management should be involved in decision making.

The Future of ADR

• The use of ADR is growing because of

time and cost savings over litigation

• But some employers require new hires to

sign contracts waiving their right to sue their employer in favor of mandatory

arbitration

Arbitration

-• A neutral party resolves a dispute between two

or more parties and the resolution is binding

Mandatory arbitration

• The parties must agree to arbitration prior to

any dispute occurring, and be bound.

Freedom of Speech in the Workplace

• While the U.S Constitution protects an

individual's speech from government

interference, this does not apply to an

employer, and some forbid conflicting political views

WhistleBlower

-• An organization member who discloses illegal,

immoral, or illegitimate practices under the

control of their employers, to persons or

organizations that may be able to effect

action

Key Elements in the Process -

1.The whistle-blower

2.The act or complaint

3.The party to whom the complaint is made

4.The organization against which the complaint is made

Two Views of Employee Responsibility in

a Whistle-Blowing Situation

Corporate Employer Loyalty

Obedience Confidentiality

Employee

Traditional

(Has certain rights)

(Has certain

rights)

Emerging

A Checklist to Follow Before Blowing the Whistle

interest rather than personal or political gain?

the whistle for yourself and your family?

inside and outside the organization, on which you can rely during the process?

claim?

Consequences of Whistle-Blowing

4800 employees reported retaliation -

64% - exclusion from decisions & work

activities

62% - cold shoulder from coworkers

62% - verbal abuse from management

56% - almost lost job

55% - not given promotion or raise

51% - verbal abuse from coworkers

46% - cut in hours or pay

44% - relocated or reassigned

Government Protections

for Whistle-Blowers

• 1978 Civil Service Reform Act

• Sarbanes-Oxley whistle-blower protections

• Michigan Whistle-Blowers Protection Act of

1981

• False Claims Act

Management Responsiveness

to Whistle-Blowing

Whistle-blowing occurs after normal, less dramatic channels of communication have failed To

encourage open communications -

1 Managers must be clear that they invite and

accept suggestions.

2 Managers must refute assumptions and

organizational myths that discourage

communication.

3 Managers should tailor rewards so that

employees share more directly in cost savings or sales increases from ideas they offer.

• false Claims Act

• good cause norm

• good faith principle

• hearing procedure

• implied contract exception

• mandatory arbitration

• Michigan Whistle-Blowers Protection Act of 1981