Ethical HR practices as strategy



Ethical human resource management practices can provide strategic advantage to the firm. It is, therefore, a surprise how some businesses are not always run ethically, including how they deal with employees. But for sure, there are many ethical issues in the workplace involving human resources.

So how can good ethical behavior and practices in business convert to good strategy? It is based simply on the principle that goodness begets goodness. If an organization fosters a strong ethical culture, it gains the confidence and loyalty of its stakeholders, including its employees. Studies have shown that this can translate to improvements in organizational performance. As Dov Seidman, a management writer who advocates corporate virtues, said, “companies that out- behave their competitors ethically will generally outperform them financially.”

Creating workforce diversity is about fostering a culture that values individuals and their needs and contributions. It involves creating a supportive culture in which the employees can be effective. A company, for example, can employ a workplace diversity policy that empowers employees of different cultural and ethnic backgrounds to express their diverse ideas to create products that are more appealing to customers.

Creating a balanced work-life environment can be a key strategic factor in attracting and retaining the most talented employees. By providing such an environment, employees are better able to fit family, community, and social commitments into their schedule. More and more people are seeking to balance work and personal lives and consider time as important as money. This is what the top 100 companies to work for usually have in common—work-life balance policies such as flextime, a compressed work week, job sharing, and telecommuting.

Adequate compensation in cases of separation and retirement is another factor that can attract, retain, and motivate employees to stay in the organization. These benefits are required by law, but employers may offer improved compensation packages as a strategy to keep good employees.

One attractive compensation package is called the “golden handshake scheme” which includes counseling sessions, investment-related services, and medical and insurance benefits that can be availed upon early retirement. Another is the phased-retirement program, under which supposedly retired employees are still allowed to work under a reduced work schedule. This option gives older employees the economic and psychological benefits of easing into retirement rather than being thrust entirely into a new way of life while the organization, on the other hand, continues to enjoy the experience of older workers.

It is the right of every worker to be provided a healthy and safe work environment, but good employers can reinforce safety consciousness by implementing safety incentive programs to reward workers for their support and commitment to safety goals. Such programs can focus on monthly or quarterly goals such as observing good housekeeping practices, adherence to safety rules, and proper use of protective equipment. In this way, the company’s safety consciousness sends a clear signal to the employees that they care about them. At the same time, the company is able to minimize the occurrence of costly work- related accidents and injuries.

Many companies advocate corporate social responsibility, aiming to do good to their customers, suppliers, and the community where they operate. But isn’t it only fair and just to let goodness begin at home by practicing ethical human resource management? It is good for business as well.

Bienvenido Balotro is a Doctor of Business Administration (DBA) student at the Ramon V. Del Rosario College of Business (RVRCOB) of De La Salle University. He welcomes comments at The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.


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