There
has been a growth in the importance of the role that HR practitioners have in
business ethics over the last 10 years, and as Parkes and Davis (2013)
highlighted, the 2008 financial crisis was a driver. This is because of the
impact of companies such as RBS, that collapsed (Brinded, 2015) (Boden, 2009) and
was bailed out by the UK government because of a toxic, unethical internal
culture that had led to poor and risky decision making. Furthermore, Gladwell
(2002) showed that HR has a role in the ethical behaviour of companies because
they can reinforce unethical cultures through an aggressive use of targets
reinforced by appraisals and firings. This happened at RBS, where the ruthless
culture of ‘Fred the Shred’ (Brinded, 2015) led to a huge financial loss with the
UK taxpayer baling RBS out with £45billion (BBC, 2012). Staff at RBS had seen
colleagues fired and became unwilling to question unethical or risky practices
out of fear (Boden, 2009). The global financial crisis has highlighted that
unethical business decisions can destroy a business’s reputation and profits.
This attracts negative media attention and thereby dramatically reduces the
trust and confidence that the public has in companies (Boddy, 2011). It is
argued in this essay that HR practitioners have important roles as a role model,
leader, protector, trainer and enforcer within business ethics and this is
emphasised in the work of Parkes and Davis (2013) and Winstanley and Woodall
(2000). This essay is presented in three main parts. In the first section, it
is argued that HR practitioners have a role within business ethics because of HR’s
historical roots that shared a common ground of ethical and social values and
also because of the definitions of HR itself. Secondly, this essay argues that
HR should take an active role in protecting whistle blowers through
implementing and maintaining processes and providing training in building an
ethical culture. Lastly, this essay argues that there are challenges inhibiting
HR practitioners in having a role within business ethics. This is because of
the innate conflict between business profit and an ethical approach (Vickers,
2005).

 

Firstly, HR practitioners
have a role within business ethics because of HR’s historical roots and the definitions
of HRM itself. Ethical and social values underpinned HR in the first place
(Winstanley and Woodall, 2000). The CIPD itself dates back to 1913, when the Welfare Workers’
Association stood up for human welfare, (CIPD, 2017). This movement was linked
to ethical Quaker businesses (Winstanley
and Woodall, 2000). Thus, the roots of HR practitioners came from both moral
and civic values. However, the 2008 financial crisis highlighted that there was
a widening gap between HR practitioners and ethics (Klikauer, 2008) because they were no longer connected to those
historical roots. HR had over time moved away from welfare and moved to strategic
and profitability targets (Parkes & Davis, 2013). As a result, there is a
need for HR to refocus and return back to its roots where it had a role within
business ethics. This can in part be achieved through communicating and raising
ethical behaviour through training for all employees (Winstanley and Woodall,
2000) and will thus provide HR practitioners with an important and influential
role as an educator within the business. A comparison of Wilkinson.A, Redman.T, Snell.S.A, and Bacon.N (2009) and the
CIPD (2015) definitions of HRM show overlapping themes that reiterate that HR
practitioners do have a role within business ethics. This is because culture
and relationships are both key words in these definitions. This reinforces that
HR practitioners have a role as educators and communicators of business ethics.
To conclude, HR practitioners have a role within business ethics because HR grew
from social, moral and ethical concerns. Furthermore, the HRM definitions cited
also include an ethical element and although this was not emphasised before the
financial crisis, it is has come become important again. The role of HR
practitioners within business ethics can also be that of a protector,
particularly in the case of whistle-blowing.

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Secondly,
this essay argues that HR practitioners should take an active role in business
ethics by providing whistle-blowing policies (Buss, 2004). There is an
inevitable conflict between some aspects of whistle blowing and the
organisations priorities and interests (Vickers, 2005). Near and Miceli (1985) identified, that whistle
blowing was often seen as a challenge to an organisations authority and that
whistle blowers therefore needed alternative income or employment to be able to
have the confidence to blow the whistle. The whistle blower was also seen as a
troublemaker in conflict with the organisation they worked for. HR
practitioners can do much to reduce this conflict through formalising ethical
standards, particularly whistle-blowing within an organisation. This will
ultimately promote a culture of openness because employees will be assured that
the business supports ethical behaviour (Parkes and Davis, 2013). This
highlights that HR practitioners can help give employees the bravery to question
the things they believe are wrong. In achieving this, HR practitioners have a
number of important roles such as the development and implementation of whistle-blowing
policies; the enforcement of these policies: the training and management
development of employees in ethical behaviour and the development of a culture
that promotes fairness, equality and openness (Parkes and Davies, 2013). In
particular HR practitioners should ensure that whistle-blowers are not
threatened by the process so that their employment, income or status in the
organisation is protected from attack (Vickers, 2005). Parkes and Davies (2013)
not only showed that protection from organisational persecution encouraged
ethical behaviour but that there was a direct link between a whistle blowing
policy and higher levels of ethical behaviour. Effective whistle-blowing
policies formalised by HR practitioners emphasise to employees that raising
ethical concerns is valued and encourages them to confront unethical decision making
(Back, 2015). However, such a culture is difficult to create because HR
practitioners inevitably face tensions between the needs of the shareholder and
the needs of other stakeholders.

 

Lastly,
this essay argues that there are challenges inhibiting HR practitioners having
a role within business ethics. HR practitioners biggest challenge is the
natural tension between the profit objectives of a business and the wider need
to work in an ethical manner (Vickers, 2005). This is often countered by HR practitioners
formalising ethical practices, communicating codes of conduct and through
training in ethics (Winstanley and Woodall, 2000). The corporate culture that
exists in a business is also an issue (Boden, 2009) and this is influenced by
the board and the CEO. Until
the global financial crisis, senior HR practitioners often saw themselves as
helping the CEO to deliver their visions and manage change and gave little
regard to ethics. There was little recognition that HR practitioners might raise
social and ethical issues (Parkes & Davis, 2013) and no recognition of the
value good ethical decision-making could add (Fitzpatrick, 1998). Furthermore, Klikauer
(2008) highlighted that HR practitioner’s self-image, pay and promotion
prospects were, like other employees, at risk if they sided with being ethical,
moral and decent, rather than supporting a results driven profit approach. This
pressure still exists today (Parkes & Davis, 2013) and can lead to HR
practitioners being silent in support of ethical behaviour. This is partly
evidenced by HR practitioners lack of representation on boards and remuneration
committees. It is rare for an HR practitioner to be on the board of a listed
company in the UK (Nixon and Penfold, 2011). Also, it is clear that HR
manager’s decisions are occasionally overruled and their advice ignored by
board directors (Klikauer, 2008) which can reduce the perceived legitimacy of
the HR practitioner. As the ethical role of the HR practitioner is continually
under challenge there is also need to keep informed of the changing environment
and develop a structured approach that builds an ethical culture and values
across a business and across time.

To
conclude, there is role for HR practitioners within business ethics. Firstly,
they need to be an ethical leader fighting for visibility and awareness,
promoting ethical behaviour in employees and across the board or management
team. This means ensuring that ethical behaviour is promoted to the point that
it becomes part of the strategy of a business or is a top priority (Parkes and
Davis, 2013) (Vickers 2005). They need to be a role model prepared to challenge
unethical culture and practices and defend whistle-blowers from the
organisation. They need to be the protectors of good ethics, putting in place
codes of conduct and ethical polices such as whistle-blowing that promote and
sustain an ethical approach (Buss, 2004) and a culture of openness. This will
need to include enforcement, benchmarking and review to ensure that
effectiveness is maintained over time. They need to become educators putting in
place programmes to promote ethical behaviour. This will not only improve awareness
but promote a dialogue enabling employees to feel more
confident and empowered to enable them to raise questionable ethical activities.
Together these actions can reduce the conflict between a profit driven approach
and an ethical approach. Finally, HR practitioners need to keep up to speed
with the changing business and social world. Not only will the law change over
time but the social, moral and ethical standards of stakeholders such as
customers, governments, suppliers, employees and society will also change over
time. HR practitioners will need to refine their approach to avoid new ethical
problems arising from new corporate and social values. Although these steps will enable HR to come
closer to its roots, there will continue to be clashes between the business
profit driven approach and the needs of an ethical business and society. This
means that HR practitioners will need to have the courage to question unethical
behaviour where they find it.