Chapter 8Managing Employee Ethics, Engagement, Retention and Fair Treatment
Introduction to Ethics
What is ethics and why is it relevant?
○ Ethics can be defined as: “The principle of conduct governing an individual or group.”
○ People make ethical choices at work everyday○ Ethical decisions always require making
normative judgement and are rooted in morality
○ Ethics are important because manager’s personnel decisions almost always hold ethical consequences
○ Companies that employees view as “fair and just” also tend to score higher on ethics
Organizational Justice
1. Distributive Justice● The perceived fairness of how resources and rewards are
distributed or allocated
2. Procedural Justice● The perceived fairness of the processes and procedures used to
make allocation decisions
3. Interactional Justice● The extent to which people feel fairly treated when procedures are
implementedwww.workplacefairness.org/news
Mistreatment and Bullying● Mistreatment of
employees makes it more likely that the employee will also show higher levels of work withdrawal
● Workplace bullying is an increasingly serious problem
● Bullying involves singling out someone to harass and mistreat them
● Bullying involves three things:
1. Imbalance of power2. Intent to cause harm3. Repetition
● It can take many forms such as: social, physical, and cyber bullying
● Employers must have systems in place to respond
II. Managing Employee Discipline
Discipline is necessary to carry out the rules and regulations of an organization
Three Pillars of the Discipline Process
Utility of Non-Punitive Discipline
● Traditional discipline can be flawed
● Non-punitive discipline involves the
employees acceptance of ruleso Ex: Verbal warning, written warning, conduct
meeting, termination
Employee Electronic Use and Privacy
● Managing and monitoring company e-mail is an urgent problem.o A majority of employers admit that they
monitor their employee’s e-mail.o Some employers check the personal blogs
and social networking sites of their employee’s. Extensive monitoring raises many privacy
issues.
Legal Issues
● Employers are allowed to monitor employee phone calls only if the call pertains to business.o Once the call subject shifts from business it
becomes illegal for the employer to monitor any longer.
o E-mail service may be intercepted by law when it is to protect the property rights of the provider.
Preventative Measures
● Employers have begun to ask employees to sign e-mail and telephone monitoring acknowledgement statements.o If not done,the employer could be found liable
for the action of the employee.o Monitoring statements must make it clear that
employees should have no expectation of privacy in their e-mail, internet, and phone transactions sent or received through employers systems.
Pettigrew Case
● Cameron Pettigrew worked as a client relations manager at Fidelity Investment, but was fired after supervisors found out he was sending email messages about a fantasy football league that he ran.o Pettigrew stated in an interview, “Let’s be
honest: that’s a complete overreaction.”o This is not an isolated case!o http://abcnews.go.com/Business/GadgetGuide/supreme-court-
employee-rights-privacy-workplace-emails/story?id=9345057
Dismissals
Terminate-at-will rule: The employee can resign for any reason, at will; The employer can dismiss for any reason, at will.
Exceptions:
Statutory Exceptions: Federal, state, EEO laws prohibit specific types of dismissals, such as dismissals based on race, color, religion, sex, or national origin.
Common Law Exceptions: Example includes: “For Just Cause” termination rule.
Public Policy Exceptions: An example would be an employee being terminated for refusing to break the law in the workplace.
Dismissals
Grounds for Dismissal:Unsatisfactory Performance
● Persistent failure to perform duties or meet prescribed standards. Misconduct
● Deliberate and willful violation of company rules. Example: Stealing.Lack of Qualifications for the Job
● Inability to complete assigned work. Changed Requirements of the Job (Elimination)
● Incapability of doing the work after the nature of the job changes.
Avoiding Wrongful Discharge:(1) Lay the groundwork and (2) set up safeguards to ensure actions are fair.
Dismissals
Severance Pay Averages● 39 weeks for Executives● 30 weeks for DownSized Employees● Only ⅓ of Employers offer Severance Pay to Employees terminated due to poor
performance. Lump Sum payments vs. Packages Tied to Years of Employment
LayoffsEmployer sends workers home for a time for lack of work; usually not a permanent dismissal.
Dismissals
The Termination Interview: 1. Plan the Interview Carefully2. Get to the Point3. Describe the Situation4. LIsten5. Review Severance Package Offered6. Identify the Next Step
Outplacement Counseling● Help with career planning and job search skills.
Managing Turnover
Voluntary Turnover - the rate at which employees voluntarily leave their firms - varies markedly among industriesEmployer ranked Top 5 reasons for Voluntary Turnover:1. Promotion2. Career development3. Pay4. Relationship with supervisor5. Work/life balance
Retaining EmployeesSelection - selection refers not only to the employees but to the supervisors as well, “retention starts up front, in the selection and hiring of the right employees”Professional Growth - “professionals who feel their company cares about their development and progress are much more likely to stay”Provide Career direction - discuss employees career preferencesMeaningful work and Ownership - making clear expectations regarding performance and responsibility
Recognition and Rewards - in addition to pay & benefits, employees need recognition for a job well doneCulture and Environment - making your company less “political” or tense and making it more comfortable for employeesPromote work/life Balance - “flexible work arrangements” & “telecommuting” were surveyed as the two top benefits that would convince them to choose a jobAcknowledge Achievements - frequent recognition of accomplishments
Engagement
Engagement - being psychologically involved in, connected to, and committed to getting one’s job done
Affects how well a company performso Organizations with higher engagement
perform better
Research/StatisticsGallup Organization Survey
Companies with highest levels of engagement had 83% chance to perform above company median, while companies with lowest levels of engagement had 17% chance to perform above median
Watson Wyatt Worldwide SurveyHighly engaged employees → 26% higher revenue per employee
Director of Recruiting at Fair Trade USABelieves boosting engagement is responsible for 10% drop in
turnoverHarvard Business Review
“Employees should be engaged by providing them with reasons and methods to satisfy customers and then rewarded for appropriate behavior.”
Only about 21% of the global workforce is engaged, and almost 40% disengaged
Components of Engagement
Traits of an Engaged Employee
● Enthusiasmo Enthusiastic about work
● Confidento Sure they can achieve success
● Inspiredo Motivated by their leaders
● Empoweredo Allowed to get the job done their way
Fostering Employee Engagement
Make sure employees1) understand how their departments contribute to
the company’s success2) see how their own efforts contribute to the
company’s success3) get a sense of accomplishment from working at
the firm
Summary● Ethics is a major part of everyday life as well as life within
the workplace● Employers reserve the right to monitor employee
ethics/behavioro Unethical behavior can be grounds for dismissal, or a
less severe punishment● Employees reserve the right to leave the organization as
they pleaseo Sometimes a contract is involved at the beginning of
employment● Employee engagement is a big issue in the workplace and
can affect how well a company performs
Cognitive EngagementINCIDENTA new policy was enacted that required employees to add an outline to the front of their reports. Bill recently submitted a report and forgot to add the mandatory outline as requested in a reminder sent earlier that week. The missing outline was discovered at a presentation meeting, but the missing outline did not hinder the meeting.
WORK HISTORYBill has been working for the company for 6 months and this is the first time he has missed an outline. His performance on the job in general has been virtually error free and satisfactory. Other employees in Bill’s department have forgotten the outline as well.
What would you do?