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12
OVERVIEW:
In this chapter, we will cover . . .
Employee Relations
Employee Relations Programs For Building and
Maintaining Positive Employee Relations
The Ethical Organization
Managing Employee Discipline
Employee Engagement Guide For Managers
Maintaining Positive
Employee Relations
LEARNING OBJECTIVES
When you finish studying this chapter, you should be able to:
1. Define employee relations.
2. Discuss at least four methods for managing employee relations.
3. Explain what is meant by ethical behavior.
4. Explain what is meant by fair disciplinary practices.
5. Answer the question, “How do companies become ‘Best Compa-
nies to Work For’?”
398 PART 5 EMPLOYEE AND LABOR RELATIONS
INTRODUCTION
Enrique had worked as a waiter at a well-known all-night restaurant in the Coney
Island section of Brooklyn, New York for several years. He enjoyed the job, but not
the commute. Unless he left the restaurant promptly at 1:00 a.m., he’d miss his Q
train connection to his home in Queens. Then, what should be a 45-minute train
and bus ride would take him 2 1/2 hours. One night, two noisy out-of-town men sat
down at one of his tables at about 12:45 a.m. When he explained he’d have to leave
in 15 minutes, they objected loudly. Enrique’s supervisor came over and told him
he’d just have to stay until they finished their meal. That could keep him working
until 2:00 . Enrique followed his supervisor back to the kitchen and told him, “Let A.M
someone else take over; you know I have to get home.” His supervisor smiled and
said, “Enrique, if you don’t like your job here, I know many people who would.”
Source: Franek Strzeszewski/Getty Images.
LEARNING OBJECTIVE 1
Define employee
relations.
Employee Relations
It’s obvious to anyone who has worked for even a few days that some companies
are better to work for than are others. Some companies we’ve touched on in this
book—Wegmans, SAS, and Google, for instance—show up repeatedly on “Best
Companies to Work For” lists, while others seem to always have labor problems
and negative press. This commonsense observation reflects the fact that some
companies do have better employee relations than do others.
Employee relations is the management activity that involves establishing and
maintaining the positive employee–employer relationships that contribute to sat-
isfactory productivity, motivation, morale, and discipline, and to maintaining a
positive, productive, and cohesive work environment.
1
Whether you’re recruiting
employees, asking employees to work overtime, managing union organizing cam-
paigns, or doing some other task, it obviously makes sense to have employees “on
your side.” Many employers therefore endeavor to build positive employee rela-
tions, on the sensible assumption that doing so beats building negative ones. Man-
aging employee relations is usually assigned to HR and is a topic human resource
management certification tests address.
B
A
S
E
K
N
O
W
L
E
D
G
E
employee relations
The activity that involves establish-
ing and maintaining the positive
employee–employer relationships
that contribute to satisfactory
productivity, motivation, morale,
and discipline, and to maintaining
a positive, productive, and cohe-
sive work environment.
CHAPTER 12 MAINTAINING POSITIVE EMPLOYEE RELATIONS 399
Employee Relations Programs For Building
and Maintaining Positive Employee Relations
HR activities such as effective training, fair appraisals, and competitive pay and
benefits (all of which we discussed in previous chapters) can go far toward building
positive employee relations. However, most employers also institute special
“employee relations programs.” These programs include employee fair treatment
programs, programs for improving employee relations through improved com-
munications, employee recognition/relations programs, employee involvement
programs, and having fair and predictable disciplinary procedures. We’ll begin
with how to ensure fair treatment.
Ensuring Fair Treatment
Unfair treatment at work is demoralizing. It reduces morale, poisons trust, increases
stress, and negatively impacts employee relations and performance.
2
Employees of
abusive supervisors are more likely to quit and to report lower job and life satisfac-
tion and higher stress.
3
The effects on employees of such abusiveness are particu-
larly pronounced where the abusive supervisors seem to have support from
higher-ups.
4
Even when someone witnesses abusive supervision vicariously—for
instance, by seeing a coworker being abused—it triggers adverse reactions,
including further unethical behavior.
5
At work, fair treatment reflects concrete
actions such as “employees are treated with respect,” and “employees are treated
fairly” (see Figure 12.1).
6
B
A
S
E
K
N
O
W
L
E
D
G
E
fair treatment
Reflects concrete actions, such
as “employees are treated with
respect,” and “employees are
treated fairly.”
LEARNING OBJECTIVE 2
Discuss at least four
methods for managing
employee relations.
What is your organization like most of the time? Circle Yes if the item describes your
organization, No if it does not describe your organization, and ? if you cannot decide.
IN THIS ORGANIZATION:
1. Employees are praised for good work Yes ? No
2. Supervisors yell at employees (R) Yes ? No
3. Supervisors play favorites (R) Yes ? No
4. Employees are trusted Yes ? No
5. Employees’ complaints are dealt with effectively Yes ? No
6. Employees are treated like children (R) Yes ? No
7. Employees are treated with respect Yes ? No
8. Employees’ questions and problems are responded
to quickly
Yes ? No
9. Employees are lied to (R) Yes ? No
10. Employees’ suggestions are ignored (R) Yes ? No
11. Supervisors swear at employees (R) Yes ? No
12. Employees’ hard work is appreciated Yes ? No
13. Supervisors threaten to fire or lay off employees (R) Yes ? No
14. Employees are treated fairly Yes ? No
15. Coworkers help each other out Yes ? No
16. Coworkers argue with each other (R) Yes ? No
17. Coworkers put each other down (R) Yes ? No
18. Coworkers treat each other with respect Yes ? No
Note:
R = the
item is reverse scored
Figure 12.1
Perceptions of Fair
Interpersonal Treatment
Scale
Source: “The Perceptions of
Fair Interpersonal Treatment
Scale: Development and
Validation of a Measure of
Interpersonal Treatment in the
Workplace” by Michelle A.
Donovan, Journal of Applied
Psychology, 1998, Volume
83(5).
400 PART 5 EMPLOYEE AND LABOR RELATIONS
There are many reasons why managers should be fair, including the golden
rule. What may not be so obvious is that unfairness can backfire. For example,
victims of unfairness exhibit more workplace deviance, such as theft and sabo-
tage.
7
They also suffer a range of ill effects including poor health, strain, and
psychological conditions.
8
Unfairness leads to increased tensions between the
employee and his or her family or partner.
9
Abusive supervisors undermine their
subordinates’ effectiveness and may prompt them to act destructively.
10
In terms
of employee relations, employees’ perceptions of fairness correlate with enhanced
employee commitment; enhanced satisfaction with the organization, jobs, and
leaders; and enhanced organizational citizenship behaviors.
11
A study illustrates the effects of unfairness. College instructors first completed
surveys concerning the extent to which they saw their colleges as treating them
with and justice. ( refers to justice in the procedural distributive Procedural justice
allocation of rewards or discipline, in terms of the procedures being even-handed
and fair; refers to a system distributing rewards and discipline distributive justice
in which or outcomes are even-handed and fair.) Procedural the actual results
justice items included, for example, “In general, the department/college’s proce-
dures allow for requests for clarification or for additional information about a
decision.” Distributive justice items included, “I am fairly rewarded considering
the responsibilities I have.”
Then the instructors completed organizational commitment questionnaires,
with items such as “I am proud to tell others that I am part of this department/
college.Their students then completed surveys, with items such as “The instructor
was sympathetic to my needs” and “The instructor treated me fairly.”
The results were impressive. Instructors who perceived high distributive and
procedural justice were more committed. Furthermore, these instructors’ students
reported higher levels of instructor effort, prosocial behaviors, and fairness, and
had more positive reactions to their instructors.
12
So in this case, treating profes-
sors badly backfired on the university. Treating others fairly produced improved
employee commitment and results.
The accompanying HR Practices Around the Globe feature shows how one
employer in China improved the fairness with which it treated employees.
procedural justice
Refers to just procedures in the
allocation of rewards or discipline,
in terms of the actual procedures
being even-handed and fair.
distributive justice
Refers to a system of distributing
rewards and discipline in which
the actual results or outcomes are
even-handed and fair.
HR Practices Around the Globe
The Foxconn Plant in Shenzhen, China
The phrase social responsibility tends to trigger images of charitable contributions and
helping the homeless, but it actually refers to much more. For example, it refers to the
honesty of the company’s ads; to the quality of the parts it builds into its products; and
to the honesty, ethics, fairness, and “rightness” of its dealings with customers, suppliers,
and, of course, employees. The basic question is always whether social responsibility
the company is serving all its constituencies (or stakeholders”) fairly and honestly.
Corporate thus refers to the extent to which companies should social responsibility
and do channel resources toward improving one or more segments of society other
than just the firm’s owners or stockholders.
13
A worker uprising at Apple’s Foxconn iPhone assembly plant in Shenzhen, China
shows that workers around the globe want their employers to treat them in a fair and
socially responsible manner.
After the uprising over pay and work rules at the Foxconn plant, Apple asked the
plant’s owner to have the Fair Labor Association (FLA) survey the plant’s workers. The
FLA found “tons of issues.” For example, employees faced “overly strict” product-
14
quality demands without adequate training: “Every job is tagged to time, there are
targets on how many things must be completed within an hour,” said Xie Xiaogang, 22,
who worked at Foxconn’s Shenzhen plant. “In this environment, many people cannot
take it.” Heavy overtime work requirements and having to work through a holiday
15
week were other examples.
social responsibility
Refers to the extent to which
companies should and do channel
resources toward improving one
or more segments of society
other than the firm’s owners or
stockholders.
CHAPTER 12 MAINTAINING POSITIVE EMPLOYEE RELATIONS 401
Hon Hai, the Foxconn plant’s owner, soon changed its plant human resource prac-
tices, for instance, raising salaries and cutting mandatory overtime. Those changes were
among 284 made by Foxconn after the audits uncovered violations of Chinese regula-
tions.
16
The changes show that fair treatment is a global obligation.
Talk About It 1
If your professor has chosen to assign this, go to www.pearson.com/mylab/
management to discuss the following question. How would you explain the fact that
workers in such diverse cultures as America and China seem to crave fair treatment?
People who bully use their
power to control or harm,
and the people being bullied
may have a hard time
defending themselves.
Source: Purestock/Getty Images.
Bullying Some workplace unfairness is subtle. For example, unstated policies
requiring law firm associates to work seven days per week may unfairly eliminate
working mothers from partner tracks. Other unfairness is blatant. For example,
one survey of 1,000 U.S. employees concluded that about 45% said they had
worked for abusive bosses.
17
Unfortunately, bullying and abusiveness—singling out someone to harass and
mistreat—is a serious problem. The U.S. government (www.stopbullying.gov/) says
bullying involves three things:
Imbalance of power. People who bully use their power to control or harm,
and the people being bullied may have a hard time defending themselves.
Intent to cause harm. Actions done by accident are not bullying; the bully
has a goal to cause harm.
Repetition. Incidents of bullying happen to the same person over and over by
the same person or group, and that bullying can take many forms, such as:
Verbal: name-calling, teasing
Social: spreading rumors, leaving people out on purpose, breaking up
friendships
Physical: hitting, punching, shoving
Cyberbullying: using the Internet, mobile phones, or other digital tech-
nologies to harm others
Undoubtedly, the perpetrator is to blame for bullying. However, how some people
behave do make them more likely victims.
18
Those “more likelyinclude submissive
402 PART 5 EMPLOYEE AND LABOR RELATIONS
victims (who seem more anxious, cautious, quiet, and sensitive), provocative vic-
tims (who show more aggressive behavior), and victims low in self-determination
(who seem to leave it to others to make decisions for them). High performers can
earn colleagues’ envy and thus suffer victimization.
19
Victims of abusive super-
vision will often suffer in silence because they fear retribution.
20
Building team
cohesion through team-building training, social gatherings, and friendly inter-team
competition can head off such envy and victimization.
21
The employer and the manager are responsible for ensuring that the employee
is treated fairly and with respect, and that its employees treat each other respect-
fully.
22
Techniques for minimizing unfairness (discussed in previous chapters)
include hiring competent and well-balanced employees and supervisors, ensuring
equitable pay, instituting fair performance appraisal systems, and having policies
requiring fair treatment of all employees. Communications systems and employee
involvement programs (discussed next) can also reduce unfairness and improve
employee relations.
Improving Employee Relations Through Communications
Programs
Many employers use communications programs to bolster their employee relations
efforts. They do this, first, on the reasonable assumption that employees feel better
about their employers when they’re “kept in the loop” about what is happening. For
example, one university’s website says, “We believe in keeping our employees fully
informed about our policies, procedures, practices and benefits.”
23
This employer
uses an open-door policy to encourage communication between employees and man-
agers, an employee handbook covering basic employment information, and “the
opportunity to keep abreast of University events and other information of interest
through the , and
website, e-mail hard copy memoranda.
24
To paraphrase one writer, no one likes getting complaints, but actively solicit-
ing complaints is important for employers who want to find out what’s bother-
ing employees, and to short-circuit inequitable treatment and maintain positive
employee relations.
25
Options include hosting employee , making focus groups
available and , and implementing telephone and ombudsman suggestion boxes
Web-based hotlines.
Some use hotline providers. A vendor sets up the hot lines for the employer,
receives the employees’ comments, and provides ongoing feedback to the employer
about employees’ concerns, as well as periodic summaries and trends. Exit inter-
views
provide another opportunity to sample ones employee relations.
26
And
supervisors can use open-door policies and “management by walking around” to
informally ask employees “how things are going.”
Using Organizational Climate Surveys Employee attitude, morale, or climate
surveys often play a part in employee relations efforts. Employers use the surveys
to “take the pulse” of their employees’ attitudes toward organizational issues such
as leadership, safety, fairness, and pay, and to thereby get a sense of whether their
employee relations need improvement. The dividing lines between attitude surveys,
satisfaction or morale surveys, and climate surveys are somewhat arbitrary; several
experts define as the perceptions a company’s employees organizational climate
share about the firm’s psychological environment, for instance in terms of things
like concern for employees’ well-being, supervisory behavior, flexibility, apprecia-
tion, ethics, empowerment, political behaviors, and rewards.
27
Many such surveys are available off the shelf. For instance, one SHRM sample
survey has employees use a scale from 1 (“to a very little extent”) to 5 (“to a very
great extent”) to answer questions such as, “Overall, how satisfied are you with
your supervisor?”, “Overall, how satisfied are you with your job?”, and “Does
doing your job well lead to things like recognition and respect from those you work
with?”
28
Many employers use online surveys from firms like Know Your Company
organizational climate
The perceptions a company’s
employees share about the firm’s
psychological environment, for
instance, in terms of things like
concern for employees’ well-being,
supervisory behavior, flexibility,
appreciation, ethics, empower-
ment, political behaviors, and
rewards.
CHAPTER 12 MAINTAINING POSITIVE EMPLOYEE RELATIONS 403
(http://knowyourcompany.com).
29
Google conducts an annual Goo glegeist
survey focusing on matters such as engagement and willingness to leave.
30
Other
employers create specialized surveys. For example, we’ll look at the FedEx Survey
Feedback Action (SFA) program at the end of this chapter.
Develop Employee Recognition/Relations Programs
In addition to using two-way communications tools like climate surveys to help
improve employee relations, employers use other methods.
Most notable are employee recognition and award programs like those we
touched on in Chapters 10 and 11. For example, one trade journal notes how
one employer, the Murray Supply Co., held a special dinner for all its employees,
at which it gave out special awards for things like safe driving, tenure with the
company, branch employee of the year, and companywide employee of the year.
31
As here, employers often distribute such awards with much fanfare at special
events such as awards dinners. One SHRM survey found that 76% of organiza-
tions surveyed had such employee recognition programs, and another 5% planned
to implement one within the next year.
32
Instituting recognition and service award programs requires planning.
33
For example, instituting a requires reviewing the service award program tenure
of existing employees and establishing meaningful award periods (one year, five
years, etc.). It also requires establishing a budget, selecting awards, having a pro-
cedure for monitoring what awards to actually award, having a process for giving
awards (such as special dinners or staff meetings), and periodically assessing
program success. Similarly, instituting a recognition program requires developing
criteria for recognition (such as customer service, cost savings, etc.), creating
forms and procedures for submitting and reviewing nominations, selecting mean-
ingful recognition awards, and establishing a process for actually awarding the
recognition awards.
Use Employee Involvement Programs
Employee relations also tend to improve when employees get involved with the
company in positive ways, and so employee involvement is another useful employee
relations strategy.
Getting employees involved in discussing and solving organizational issues
provides several benefits. Employees often know more about how to improve their
work processes than anyone, so asking them is often the simplest way to boost
performance. Getting them involved in addressing some issue will also hopefully
boost their sense of ownership of the process. It may also signal to them that their
opinions are valued, thereby contributing to better employee relations.
Employers use various means to encourage employee involvement. Some orga-
nize focus groups. A focus group is a small sample of employees who are presented
with a specific question or issue and who interactively express their opinions and
attitudes on that issue with the focus group’s assigned facilitator.
TRENDS SHAPING HR: Digital and Social Media
SOCIAL MEDIA AND EMPLOYEE INVOLVEMENT Many employers
use such as the photo-sharing website Pinterest to encourage social media
involvement.
34
One survey found that just over half of employers use social
media tools to communicate with employees and to help develop a sense of
community.
35
For example, Red Door Interactive used a Pinterest-based proj-
ect it called “San Diego Office Inspiration.” This encouraged employees to
contribute interior design and decor ideas for its new offices.
36
404 PART 5 EMPLOYEE AND LABOR RELATIONS
Using Employee Involvement Teams Employers also use teams to gain
employees’ involvement in organizational issues. are temporary Suggestion teams
teams whose members work on specific assignments, such as how to cut costs or
raise produc tivity. One employer, an airline, split employees such as baggage han-
dlers and ground crew into separate teams, linking team members via its website
for brainstorming and voting on ideas.
37
Some employers formalize this process
by appointing semipermanent . These teams identify and problem-solving teams
research work processes and develop solutions to work-related problems.
38
They
usually consist of the supervisor and five to eight employees from a common work
area.
39
A quality circle is a special type of formal problem-solving team, usually com-
posed of 6 to 12 specially trained employees who meet weekly to solve problems
affecting their work area.
40
The team first gets training in problem-analysis tech-
niques (including basic statistics). Then it applies the problem-analysis process
(problem identification, problem selection, problem analysis, solution recommenda-
tions, and solution review by top management) to solve problems in its work area.
41
In many facilities, specially trained teams of self-managing employees do their
jobs with little or no oversight from supervisors. For many, such teams epitomize
employee involvement. A self-managing/self-directed work team is a small (usually
8 to 10 members) group of carefully selected, trained, and empowered employees
who basically run themselves with little or no outside supervision, usually for the
purpose of accomplishing a specific task or mission.
42
The “specific task or mis-
sion” might be an Acura dashboard installed or a fully processed insurance claim.
In any case, such teams have two distinguishing features. They are selected, trained,
and empowered to supervise and do virtually all of their own work, and their work
results in a specific item or service.
For example, the GE aircraft engine plant in Durham, North Carolina is a self-
managing team-based facility. The plant’s workers work in teams, all of which report
to the factory manager.
43
In such teams, employees “train one another, formulate
and track their own budgets, make capital investment proposals as needed, handle
quality control and inspection, develop their own quantitative standards, improve
every process and product, and create prototypes of possible new products.”
44
As
the vice president of another company said about organizing his firm around teams,
“People on the floor were talking about world markets, customer needs, competi-
tors’ products, making process improvements—all the things managers are supposed
to think about.”
45
Using Suggestion Systems Employee suggestion systems can produce significant
savings and, through involvement and awards, improved employee relations. For
example, one study several years ago of 47 companies concluded that the firms
had saved more than $624 million in one year from their suggestion programs;
more than 250,000 suggestions were submitted, of which employers adopted over
93,000 ideas.
46
Furthermore, employees like these programs. In one survey, 54%
of the 497 employees surveyed said they made more than 20 suggestions per year,
while another 24% said they made between 10 and 20 suggestions per year.
47
The
accompanying HR in Practice feature provides an example.
suggestion teams
Temporary teams whose members
work on specific analytical assign-
ments, such as how to cut costs or
raise productivity.
problem-solving teams
Teams that identify and research
work processes and develop solu-
tions to work-related problems.
quality circle
A special type of formal problem-
solving team, usually composed of
6 to 12 specially trained employees
who meet once a week to solve
problems affecting their work area.
self-managing/self-directed
work team
A small (usually 8 to 10 members)
group of carefully selected, trained,
and empowered employees who
basically run themselves with little
or no outside supervision, usually
for the purpose of accomplishing a
specific task or mission.
HR in Practice
The Cost-Effective Suggestion System
48
A Lockheed Martin unit in Oswego, New York developed what it called its “Cost-Effec-
tiveness Plus” suggestion program to encourage and recognize employees for stream-
lining processes. With the Cost-Effectiveness Plus program, employees electronically
submit their ideas. These are then evaluated and approved by the local manager and
the program’s coordinator (and by higher management when necessary). This particular
CHAPTER 12 MAINTAINING POSITIVE EMPLOYEE RELATIONS 405
program reportedly saves this facility about $77,000 per implemented idea, or more
than $100 million each year.
Today’s suggestion systems are more sophisticated than the “suggestion boxes”
of years ago. The main improvements are in how the manager formalizes and com-
49
municates the suggestion process. The head of one company that designs and installs
suggestion systems lists the essential elements of an effective employee suggestion
system as follows:
50
Senior staff support
A simple, easy process for submitting suggestions
A strong process for evaluating and implementing suggestions
An effective program for publicizing and communicating the program
A program focus on key organizational goals
Talk About It 2
If your professor has chosen to assign this, go to www.pearson.com/mylab/
management to discuss the following: Based on this, write a one-page outline
describing an employee suggestion system for a small department store.
HR and the Gig Economy
Getting Gig Workers Involved
51
Can an employer do anything to make short-term gig workers who are “just passing
through” feel engaged in its activities? The answer, it seems, is “yes.”
First, understand that (like everyone), gig workers each come to the job with his or
her own set of needs. Most important, some gig workers are more “hobbyists,” while
others are in it full-time to support themselves and their families.
For example, one researcher interviewed Uber and Lyft drivers. He found that how
the drivers reacted to things like pay cuts depended on why the drivers were driving.
Many were not primarily driving for the money, but for social interaction and to relax
from their full-time jobs. (For example, one full-time psychotherapist who earned over
$100 per hour as a therapist wasn’t too upset by Uber pay cuts. He was just happy to
have a chance to unwind from 40 hours per week of helping people deal with their
problems). Most such “hobbyist” drivers weren’t financially dependent on driving. On
the other hand, drivers who more financially dependent on driving were under-were
standably quite upset by the cuts.
In any case, here are several suggestions for improving gig-worker employee
relations:
Don’t treat gig workers like they’re disposable. Even if it’s a short gig,
communicate with the worker and get to know him or her. Recognize their
contributions.
Make signing on as frictionless as possible. Many gig workers are looking for
part-time flexible gigs, and they want to work, not do paperwork.
Research shows that most employers put little or no time into onboarding gig
workers, which is a mistake: even an abbreviated onboarding-welcoming process
is better than nothing. Put some time into giving them a brief background on
your company and project, and on making them feel part (but clearly an indepen-
dent-contractor part) of your business.
Although it’s important legally to make it clear that they are independent con-
tractors, to the extent possible share company news and seek feedback from
your gig workers, and include them in intracompany communications and, to the
extent possible, in company social and educational events.
406 PART 5 EMPLOYEE AND LABOR RELATIONS
The Ethical Organization
People face ethical choices every day. Is it wrong to use a company credit card for
personal purchases? Is a $50 gift to a client unacceptable? Compare your answers
by doing the quiz in Figure 12.2.
Most everyone reading this book rightfully views themselves as an ethical
person, so why include ethics in a human resource management book? For three
reasons: First, ethics is not theoretical. Instead, it greases the wheels that make
businesses work. Managers who promise raises but don’t deliver, salespeople who
say “The order’s coming” when it’s not, production managers who take kickbacks
from suppliers—they all corrode the trust that day-to-day business transactions
depend on.
Second, it is hard to even imagine an ethical company with good employee un
relations.
Third, ethical dilemmas are part of human resource management. For example,
your team shouldn’t start work on the new machine until all the safety measures
are checked, but your boss is pressing you to start: What should you do? One
survey found that 6 of the 10 most serious ethical work issues—workplace safety,
Figure 12.2
The Wall Street Journal Workplace Ethics Quiz
Source: Ethics and Compliance Officer Association, Waltham, MA and the Ethical Leadership Group, Global
Compliance’s Expert Advisors, Wilmette, IL. (Printed in The Wall Street Journal, October 21, 1999, pp. B1–B4).
© 1999 by Ethics and Compliance Officer Association. Reprinted by permission. All rights reserved.
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LEARNING OBJECTIVE 3
Explain what is meant by
ethical behavior.
CHAPTER 12 MAINTAINING POSITIVE EMPLOYEE RELATIONS 407
employee records security, employee theft, affirmative action, comparable work,
and employee privacy rights—were HR-related.
52
Another found that 54% of
human resource professionals surveyed had observed misconduct ranging from
violations of Title VII to violations of the Occupational Safety and Health Act.
53
Ethics are “the principles of conduct governing an individual or a group”—the
principles people use to decide what their conduct should be.
54
Of course, not all
conduct involves ethics.
55
For example, buying an iPad usually isn’t an ethical
decision. Instead, ethical decisions are rooted in . Morality refers to morality
society’s accepted standards of behavior. To be more precise, morality (and there-
fore ethical decisions) always involves the most fundamental questions of what is
right and wrong, such as stealing, murder, and how to treat other people.
Ethics and Employee Rights
Societies don’t rely on employers’ ethics or sense of fairness or morality to ensure
that they do what’s right. Societies also institute various laws and procedures for
enforcing these laws. These laws lay out what employers can and cannot do, for
instance, in terms of discriminating based on race. In so doing, these laws also
carve out explicit rights for employees. For example, Title VII of the Civil Rights
Act gives employees the right to bring legal charges against an employer who they
believe discriminated against them due to race.
Employee rights is thus part and parcel of all the employment laws we discuss
in this book. For example, the National Labor Relations Act established the right
of employees to engage in collective bargaining. And the Fair Labor Standards Act
gave employees the right to a minimum wage and overtime pay.
The bottom line is that although ethics, fairness, and morality certainly help
determine how employers treat their employees, remember that the enforceable
rights embedded in employment law also govern what employers and employees
can do.
What Shapes Ethical Behavior at Work?
Why do people do bad things? Its complicated. However one review of over
30years of ethics research concluded that three factors combine to determine the
ethical choices we make.
56
The authors titled their paper “Bad Apples, Bad Cases,
and Bad Barrels.” This title highlighted their conclusion that when
“Bad apples” (people who are inclined to make unethical choices) must deal
with
“Bad cases” (ethical situations that are ripe for unethical choices) while working
in
“Bad barrels (company environments that foster or condone unethical
choices), . . . then this mixture combines to determine whether someone acts
ethically.
Here’s a closer look at what they found.
The Person (What Makes Bad Apples?)
First, because people bring to their jobs their own ideas of what is morally right
and wrong, each person must shoulder much of the credit (or blame) for his or
her ethical choices.
For example, researchers surveyed CEOs to study their intentions to engage
in two questionable practices: soliciting a competitor’s technological secrets and
making illegal payments to foreign officials. The researchers concluded that the
CEOs’ personal predispositions more strongly affected their decisions than did
outside pressures or characteristics of their firms.
57
The most principled people,
with the highest level of “cognitive moral development,” think through the impli-
cations of their decisions and apply ethical principles. How would you rate your
ethics
The study of standards of conduct
and moral judgment; also the stan-
dards of right conduct.
B
A
S
E
K
N
O
W
L
E
D
G
E
408 PART 5 EMPLOYEE AND LABOR RELATIONS
own ethics? Figure 12.2(page 406) presented a short self-assessment survey (you’ll
find typical survey takers’ answers ). Furthermore, employees who on page 425
identify more strongly with the organization are also more likely to engage in
unethical actions to support it, so strong loyalty isn’t always a blessing.
58
Similarly,
employees who worry about being excluded from a group may support the group’s
unethical behavior just to stay in the group.
59
Which Ethical Situations Make for Ethically Dangerous
(Bad Cases) Situations?
But, it’s not just the person but the type of decision that’s important. For example,
these researchers found that “smaller” ethical dilemmas prompt more bad choices.
What determines “small”? Basically, how much harm can befall victims of the
choice, or the number of people potentially affected. People seemed more likely to
“do the wrong thing” in “less serious” situations, in other words. That obviously
doesn’t mean that some people don’t do bad things when huge consequences are
involved; it just means that people seem to cut more ethical corners when small
things are involved. The problem is that one thing often leads to another; people
start by doing small bad things and then “graduate” to larger ones.
60
What Are the “Bad Barrels”?—The Outside Factors
That Mold Ethical Choices
Finally, the study concluded that some companies produce more poisonous social
environments (“outside factorsor “barrels”) than do others; these bad environ-
ments in turn trigger unethical choices.
61
For example, companies that encouraged
an “everyone for him or herself” culture were more likely to suffer from unethical
choices. Those that encouraged employees to consider the well-being of everyone had
more ethical choices. Most important, a company whose managers put in place “a
strong ethical culture that clearly communicates the range of acceptable and unac-
ceptable behavior” was associated with fewer unethical decisions in the workplace.
62
Steps Managers Take to Create More Ethical
Environments
Given this, here are some steps managers can take to create more ethical environments.
Reduce Job-Related Pressures If people did unethical things at work solely for
personal gain, it perhaps would be understandable (though inexcusable). The scary
thing is that it’s often not personal interests but the pressures of the job. As one
former executive said at his trial, “I took these actions, knowing they were wrong,
in a misguided attempt to preserve the company to allow it to withstand what I
believed were temporary financial difficulties.”
63
A study illustrates this. It asked employees to list their reasons for taking
unethical actions at work.
64
For most of these employees, “meeting schedule pres-
sures,” “meeting overly aggressive financial or business objectives,” and “helping
the company survive” were the three top causes. “Advancing my own career or
financial interests” ranked about last.
65
Reducing such “outside” pressures helps
head off ethical lapses.
“Walk the Talk” It’s hard to resist even subtle pressure from one’s boss. So it’s not
surprising that according to one report, “the level of misconduct at work dropped
dramatically when employees said their supervisors exhibited ethical behavior.”
66
Examples of how supervisors lead subordinates astray ethically include:
Tell staffers to do whatever is necessary to achieve results.
Overload top performers to ensure that work gets done.
B
A
S
E
K
N
O
W
L
E
D
G
E
CHAPTER 12 MAINTAINING POSITIVE EMPLOYEE RELATIONS 409
Look the other way when wrongdoing occurs.
Take credit for others’ work or shift blame.
67
Some managers also urge employees to apply a quick “ethics test” to evaluate
whether what they’re about to do fits the company’s code of conduct. For example,
Raytheon Co. asks employees who face ethical dilemmas to ask:
Is the action legal?
Is it right?
Who will be affected?
Does it fit Raytheon’s values?
How will it “feel” afterward?
How will it look in the newspaper?
Will it reflect poorly on the company?
68
Have Ethics Policies and Codes Managers use ethics policies and codes to signal
that their companies are serious about ethics. For example, IBM’s code of ethics
says, in part:
Neither you nor any member of your family may, directly or through
others, solicit or accept from anyone money, a gift, or any amenity that
could influence or could reasonably give the appearance of influencing
IBM’s business relationship with that person or organization. If you or
your family members receive a gift (including money), even if the gift was
unsolicited, you must notify your manager and take appropriate measures,
which may include returning or disposing of what you received.
69
Enforce the Rules Having rules without enforcing them is futile. Managersstate-
ments and encouragement can reduce unethical employee behavior, but knowing
that one’s behavior is actually being monitored and the rules enforced is what
has the biggest impact.
70
Ethics audits monitor things like conflicts of interest,
giving and receiving gifts, employee discrimination, and access to company infor-
mation.
71
One study found that fraud controls such as whistleblower hotlines,
surprise audits, fraud training for employees, and mandatory vacations can each
reduce internal theft by around 50%.
72
Firms, such as Lockheed Martin Corp.,
also appoint chief ethics officers.
73
Encourage Whistleblowers Some companies encourage employees to use hot-
lines and other means to “blow the whistle” on the company when they discover
fraud. Several U.S. laws, including Dodd Frank, the False Claims Act, the U.S.
Financial Institutions Reform, Recovery, and Enforcement Act, and U.S. federal
sentencing guidelines address whistleblowing.
74
Under the U.S. Securities and
Exchange Commission’s whistleblower program, whistleblowing awards aren’t
just limited to company employees. Consultants, independent contractors, ven-
dors, and sometimes even internal audit and compliance personnel, working in
the United States or abroad, are also eligible.
Foster the Right Culture
75
Managing people and shaping their behavior depends
on shaping the values they use as behavioral guides. For example, if management
really believes “honesty is the best policy,” the actions it takes should reflect this
value. Managers therefore have to think through how to send the right signals to
their employees—in other words, create the right culture. Organizational culture
is the characteristic values, traditions, and behaviors a companys employees
share.” A is a basic belief about what is right or wrong, or about what you value
should or shouldn’t do. (“Honesty is the best policy” would be a value.) Creating
a culture involves:
B
A
S
E
K
N
O
W
L
E
D
G
E
organizational culture
The characteristic values, tradi-
tions, and behaviors a company’s
employees share.
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12 Maintaining Positive Employee Relations OVERVIEW:
In this chapter, we will cover... ■ Employee Relations
■ Employee Relations Programs For Building and
Maintaining Positive Employee Relations ■ The Ethical Organization
■ Managing Employee Discipline
■ Employee Engagement Guide For Managers MyLab Management Improve Your Grade! LEARNING OBJECTIVES When you see this icon, visit
www.pearson.com/mylab/management for
When you finish studying this chapter, you should be able to:
activities that are applied, personalized, and offer immediate feedback. 1. Define employee relations.
2. Discuss at least four methods for managing employee relations.
3. Explain what is meant by ethical behavior.
4. Explain what is meant by fair disciplinary practices.
5. Answer the question, “How do companies become ‘Best Compa- nies to Work For’?” Learn It
If your professor has chosen to assign this, go to www.pearson.com/mylab/
management to see what you should particularly focus on and to take the Chapter 12 Warm Up. 39 3 7 9
398 PART 5 • EMPLOYEE AND LABOR RELATIONS INTRODUCTION
Enrique had worked as a waiter at a well-known all-night restaurant in the Coney
Island section of Brooklyn, New York for several years. He enjoyed the job, but not
the commute. Unless he left the restaurant promptly at 1:00 a.m., he’d miss his Q
train connection to his home in Queens. Then, what should be a 45-minute train
and bus ride would take him 2 1/2 hours. One night, two noisy out-of-town men sat
down at one of his tables at about 12:45 a.m. When he explained he’d have to leave
in 15 minutes, they objected loudly. Enrique’s supervisor came over and told him
he’d just have to stay until they finished their meal. That could keep him working
until 2:00A.M. Enrique followed his supervisor back to the kitchen and told him, “Let
someone else take over; you know I have to get home.” His supervisor smiled and
said, “Enrique, if you don’t like your job here, I know many people who would.”
Source: Franek Strzeszewski/Getty Images. LEARNING OBJECTIVE 1 Define employee Employee Relations relations.
It’s obvious to anyone who has worked for even a few days that some companies
are better to work for than are others. Some companies we’ve touched on in this
book—Wegmans, SAS, and Google, for instance—show up repeatedly on “Best
Companies to Work For” lists, while others seem to always have labor problems
and negative press. This commonsense observation reflects the fact that some W LE O D
companies do have better employee relations than do others. G N K E
Employee relations is the management activity that involves establishing and B
maintaining the positive employee–employer relationships that contribute to sat- A S E employee relations
isfactory productivity, motivation, morale, and discipline, and to maintaining a
The activity that involves establish-
positive, productive, and cohesive work environment.1 Whether you’re recruiting
ing and maintaining the positive
employees, asking employees to work overtime, managing union organizing cam-
employee–employer relationships
paigns, or doing some other task, it obviously makes sense to have employees “on
that contribute to satisfactory
your side.” Many employers therefore endeavor to build positive employee rela-
productivity, motivation, morale,
and discipline, and to maintaining
tions, on the sensible assumption that doing so beats building negative ones. Man-
a positive, productive, and cohe-
aging employee relations is usually assigned to HR and is a topic human resource sive work environment.
management certification tests address.
CHAPTER 12 • MAINTAINING POSITIVE EMPLOYEE RELATIONS 399 LEARNING OBJECTIVE 2 Discuss at least four
Employee Relations Programs For Building methods for managing
and Maintaining Positive Employee Relations employee relations.
HR activities such as effective training, fair appraisals, and competitive pay and
benefits (all of which we discussed in previous chapters) can go far toward building
positive employee relations. However, most employers also institute special
“employee relations programs.” These programs include employee fair treatment
programs, programs for improving employee relations through improved com-
munications, employee recognition/relations programs, employee involvement
programs, and having fair and predictable disciplinary procedures. We’ll begin
with how to ensure fair treatment. W LE O D Ensuring Fair Treatment G N K E
Unfair treatment at work is demoralizing. It reduces morale, poisons trust, increases B
stress, and negatively impacts employee relations and performance.2 Employees of A S E
abusive supervisors are more likely to quit and to report lower job and life satisfac-
tion and higher stress.3 The effects on employees of such abusiveness are particu-
larly pronounced where the abusive supervisors seem to have support from fair treatment
higher-ups.4 Even when someone witnesses abusive supervision vicariously—for
Reflects concrete actions, such
instance, by seeing a coworker being abused—it triggers adverse reactions,
as “employees are treated with
including further unethical behavior.5 At work, fair treatment reflects concrete
respect,” and “employees are
actions such as “employees are treated with respect,” and “employees are treated treated fairly.” fairly” (see Figure 12.1).6 Figure 12.1
What is your organization like most of the time? Circle Yes if the item describes your Perceptions of Fair
organization, No if it does not describe your organization, and ? if you cannot decide. Interpersonal Treatment Scale IN THIS ORGANIZATION: Source: “The Perceptions of
1. Employees are praised for good work Yes ? No Fair Interpersonal Treatment Scale: Development and
2. Supervisors yell at employees (R) Yes ? No Validation of a Measure of
3. Supervisors play favorites (R) Yes ? No
Interpersonal Treatment in the Workplace” by Michelle A. 4. Employees are trusted Yes ? No Donovan, Journal of Applied
5. Employees’ complaints are dealt with effectively Yes ? No Psychology, 1998, Volume 83(5).
6. Employees are treated like children (R) Yes ? No
7. Employees are treated with respect Yes ? No
8. Employees’ questions and problems are responded Yes ? No to quickly 9. Employees are lied to (R) Yes ? No
10. Employees’ suggestions are ignored (R) Yes ? No
11. Supervisors swear at employees (R) Yes ? No
12. Employees’ hard work is appreciated Yes ? No
13. Supervisors threaten to fire or lay off employees (R) Yes ? No
14. Employees are treated fairly Yes ? No
15. Coworkers help each other out Yes ? No
16. Coworkers argue with each other (R) Yes ? No
17. Coworkers put each other down (R) Yes ? No
18. Coworkers treat each other with respect Yes ? No
Note: R = the item is reverse scored
400 PART 5 • EMPLOYEE AND LABOR RELATIONS
There are many reasons why managers should be fair, including the golden
rule. What may not be so obvious is that unfairness can backfire. For example,
victims of unfairness exhibit more workplace deviance, such as theft and sabo-
tage.7 They also suffer a range of ill effects including poor health, strain, and
psychological conditions.8 Unfairness leads to increased tensions between the
employee and his or her family or partner.9 Abusive supervisors undermine their
subordinates’ effectiveness and may prompt them to act destructively.10 In terms
of employee relations, employees’ perceptions of fairness correlate with enhanced
employee commitment; enhanced satisfaction with the organization, jobs, and
leaders; and enhanced organizational citizenship behaviors.11
A study illustrates the effects of unfairness. College instructors first completed
surveys concerning the extent to which they saw their colleges as treating them procedural justice
with procedural and distributive justice. (Procedural justice refers to justice in the
Refers to just procedures in the
allocation of rewards or discipline, in terms of the procedures being even-handed
allocation of rewards or discipline,
and fair; distributive justice refers to a system distributing rewards and discipline
in terms of the actual procedures
in which the actual results or outcomes are even-handed and fair.) Procedural being even-handed and fair.
justice items included, for example, “In general, the department/college’s proce- distributive justice
dures allow for requests for clarification or for additional information about a
Refers to a system of distributing
decision.” Distributive justice items included, “I am fairly rewarded considering
rewards and discipline in which
the responsibilities I have.”
the actual results or outcomes are
Then the instructors completed organizational commitment questionnaires, even-handed and fair.
with items such as “I am proud to tell others that I am part of this department/
college.” Their students then completed surveys, with items such as “The instructor
was sympathetic to my needs” and “The instructor treated me fairly.”
The results were impressive. Instructors who perceived high distributive and
procedural justice were more committed. Furthermore, these instructors’ students
reported higher levels of instructor effort, prosocial behaviors, and fairness, and
had more positive reactions to their instructors.12 So in this case, treating profes-
sors badly backfired on the university. Treating others fairly produced improved
employee commitment and results.
The accompanying HR Practices Around the Globe feature shows how one
employer in China improved the fairness with which it treated employees. HR Practices Around the Globe
The Foxconn Plant in Shenzhen, China
The phrase social responsibility tends to trigger images of charitable contributions and
helping the homeless, but it actually refers to much more. For example, it refers to the
honesty of the company’s ads; to the quality of the parts it builds into its products; and
to the honesty, ethics, fairness, and “rightness” of its dealings with customers, suppliers,
and, of course, employees. The basic social responsibility question is always whether
the company is serving all its constituencies (or “stakeholders”) fairly and honestly. social responsibility
Corporate social responsibility thus refers to the extent to which companies should Refers to the extent to which
and do channel resources toward improving one or more segments of society other
companies should and do channel
than just the firm’s owners or stockholders.13
resources toward improving one
A worker uprising at Apple’s Foxconn iPhone assembly plant in Shenzhen, China or more segments of society
shows that workers around the globe want their employers to treat them in a fair and
other than the firm’s owners or socially responsible manner. stockholders.
After the uprising over pay and work rules at the Foxconn plant, Apple asked the
plant’s owner to have the Fair Labor Association (FLA) survey the plant’s workers. The
FLA found “tons of issues.”14 For example, employees faced “overly strict” product-
quality demands without adequate training: “Every job is tagged to time, there are
targets on how many things must be completed within an hour,” said Xie Xiaogang, 22,
who worked at Foxconn’s Shenzhen plant. “In this environment, many people cannot
take it.”15 Heavy overtime work requirements and having to work through a holiday week were other examples.
CHAPTER 12 • MAINTAINING POSITIVE EMPLOYEE RELATIONS 401
Hon Hai, the Foxconn plant’s owner, soon changed its plant human resource prac-
tices, for instance, raising salaries and cutting mandatory overtime. Those changes were
among 284 made by Foxconn after the audits uncovered violations of Chinese regula-
tions.16 The changes show that fair treatment is a global obligation. Talk About It – 1
If your professor has chosen to assign this, go to www.pearson.com/mylab/
management to discuss the following question. How would you explain the fact that
workers in such diverse cultures as America and China seem to crave fair treatment?
Bullying Some workplace unfairness is subtle. For example, unstated policies
requiring law firm associates to work seven days per week may unfairly eliminate
working mothers from partner tracks. Other unfairness is blatant. For example,
one survey of 1,000 U.S. employees concluded that about 45% said they had worked for abusive bosses.17
Unfortunately, bullying and abusiveness—singling out someone to harass and
mistreat—is a serious problem. The U.S. government (www.stopbullying.gov/) says
bullying involves three things:
Imbalance of power. People who bully use their power to control or harm,
and the people being bullied may have a hard time defending themselves.
Intent to cause harm. Actions done by accident are not bullying; the bully has a goal to cause harm.
Repetition. Incidents of bullying happen to the same person over and over by
the same person or group, and that bullying can take many forms, such as:
Verbal: name-calling, teasing
Social: spreading rumors, leaving people out on purpose, breaking up friendships
Physical: hitting, punching, shoving
Cyberbullying: using the Internet, mobile phones, or other digital tech- nologies to harm others
Undoubtedly, the perpetrator is to blame for bullying. However, how some people
behave do make them more likely victims.18 Those “more likely” include submissive People who bully use their power to control or harm, and the people being bullied may have a hard time defending themselves.
Source: Purestock/Getty Images.
402 PART 5 • EMPLOYEE AND LABOR RELATIONS
victims (who seem more anxious, cautious, quiet, and sensitive), provocative vic-
tims (who show more aggressive behavior), and victims low in self-determination
(who seem to leave it to others to make decisions for them). High performers can
earn colleagues’ envy and thus suffer victimization.19 Victims of abusive super-
vision will often suffer in silence because they fear retribution.20 Building team
cohesion through team-building training, social gatherings, and friendly inter-team
competition can head off such envy and victimization.21
The employer and the manager are responsible for ensuring that the employee
is treated fairly and with respect, and that its employees treat each other respect-
fully.22 Techniques for minimizing unfairness (discussed in previous chapters)
include hiring competent and well-balanced employees and supervisors, ensuring
equitable pay, instituting fair performance appraisal systems, and having policies
requiring fair treatment of all employees. Communications systems and employee
involvement programs (discussed next) can also reduce unfairness and improve employee relations.
Improving Employee Relations Through Communications Programs
Many employers use communications programs to bolster their employee relations
efforts. They do this, first, on the reasonable assumption that employees feel better
about their employers when they’re “kept in the loop” about what is happening. For
example, one university’s website says, “We believe in keeping our employees fully
informed about our policies, procedures, practices and benefits.”23 This employer
uses an open-door policy to encourage communication between employees and man-
agers, an employee handbook covering basic employment information, and “the
opportunity to keep abreast of University events and other information of interest
through the website, e-mai ,l and hard copy memoranda.”24
To paraphrase one writer, no one likes getting complaints, but actively solicit-
ing complaints is important for employers who want to find out what’s bother-
ing employees, and to short-circuit inequitable treatment and maintain positive
employee relations.25 Options include hosting employee focus groups, making
available ombudsman and suggestion boxes, and implementing telephone and Web-based hotlines.
Some use hotline providers. A vendor sets up the hot lines for the employer,
receives the employees’ comments, and provides ongoing feedback to the employer
about employees’ concerns, as well as periodic summaries and trends. Exit inter-
views provide another opportunity to sample one’s employee relations.26 And
supervisors can use open-door policies and “management by walking around” to
informally ask employees “how things are going.”
Using Organizational Climate Surveys Employee attitude, morale, or climate
surveys often play a part in employee relations efforts. Employers use the surveys
to “take the pulse” of their employees’ attitudes toward organizational issues such
as leadership, safety, fairness, and pay, and to thereby get a sense of whether their
employee relations need improvement. The dividing lines between attitude surveys,
satisfaction or morale surveys, and climate surveys are somewhat arbitrary; several organizational climate
experts define organizational climate as the perceptions a company’s employees The perceptions a company’s
share about the firm’s psychological environment, for instance in terms of things
employees share about the firm’s
like concern for employees’ well-being, supervisory behavior, flexibility, apprecia-
psychological environment, for
tion, ethics, empowerment, political behaviors, and rewards.27
instance, in terms of things like
Many such surveys are available off the shelf. For instance, one SHRM sample
concern for employees’ well-being,
survey has employees use a scale from 1 (“to a very little extent”) to 5 (“to a very
supervisory behavior, flexibility,
great extent”) to answer questions such as, “Overall, how satisfied are you with appreciation, ethics, empower-
your supervisor?”, “Overall, how satisfied are you with your job?”, and “Does
ment, political behaviors, and rewards.
doing your job well lead to things like recognition and respect from those you work
with?”28 Many employers use online surveys from firms like Know Your Company
CHAPTER 12 • MAINTAINING POSITIVE EMPLOYEE RELATIONS 403
(http://knowyourcompany.com).29 Google conducts an annual “ Goo glegeist”
survey focusing on matters such as engagement and willingness to leave.30 Other
employers create specialized surveys. For example, we’ll look at the FedEx Survey
Feedback Action (SFA) program at the end of this chapter.
Develop Employee Recognition/Relations Programs
In addition to using two-way communications tools like climate surveys to help
improve employee relations, employers use other methods.
Most notable are employee recognition and award programs like those we
touched on in Chapters 10 and 11. For example, one trade journal notes how
one employer, the Murray Supply Co., held a special dinner for all its employees,
at which it gave out special awards for things like safe driving, tenure with the
company, branch employee of the year, and companywide employee of the year.31
As here, employers often distribute such awards with much fanfare at special
events such as awards dinners. One SHRM survey found that 76% of organiza-
tions surveyed had such employee recognition programs, and another 5% planned
to implement one within the next year.32
Instituting recognition and service award programs requires planning.33
For example, instituting a service award program requires reviewing the tenure
of existing employees and establishing meaningful award periods (one year, five
years, etc.). It also requires establishing a budget, selecting awards, having a pro-
cedure for monitoring what awards to actually award, having a process for giving
awards (such as special dinners or staff meetings), and periodically assessing
program success. Similarly, instituting a recognition program requires developing
criteria for recognition (such as customer service, cost savings, etc.), creating
forms and procedures for submitting and reviewing nominations, selecting mean-
ingful recognition awards, and establishing a process for actually awarding the recognition awards.
Use Employee Involvement Programs
Employee relations also tend to improve when employees get involved with the
company in positive ways, and so employee involvement is another useful employee relations strategy.
Getting employees involved in discussing and solving organizational issues
provides several benefits. Employees often know more about how to improve their
work processes than anyone, so asking them is often the simplest way to boost
performance. Getting them involved in addressing some issue will also hopefully
boost their sense of ownership of the process. It may also signal to them that their
opinions are valued, thereby contributing to better employee relations.
Employers use various means to encourage employee involvement. Some orga-
nize focus groups. A focus group is a small sample of employees who are presented
with a specific question or issue and who interactively express their opinions and
attitudes on that issue with the focus group’s assigned facilitator.
TRENDS SHAPING HR: Digital and Social Media
SOCIAL MEDIA AND EMPLOYEE INVOLVEMENT Many employers
use social media such as the photo-sharing website Pinterest to encourage
involvement.34 One survey found that just over half of employers use social
media tools to communicate with employees and to help develop a sense of
community.35 For example, Red Door Interactive used a Pinterest-based proj-
ect it called “San Diego Office Inspiration.” This encouraged employees to
contribute interior design and decor ideas for its new offices.36
404 PART 5 • EMPLOYEE AND LABOR RELATIONS
Using Employee Involvement Teams Employers also use teams to gain suggestion teams
employees’ involvement in organizational issues. Suggestion teams are temporary Temporary teams whose members
teams whose members work on specific assignments, such as how to cut costs or
work on specific analytical assign-
raise produc tivity. One employer, an airline, split employees such as baggage han-
ments, such as how to cut costs or
dlers and ground crew into separate teams, linking team members via its website raise productivity.
for brainstorming and voting on ideas.37 Some employers formalize this process problem-solving teams
by appointing semipermanent problem-solving teams. These teams identify and
Teams that identify and research
research work processes and develop solutions to work-related problems.38 They
work processes and develop solu-
usually consist of the supervisor and five to eight employees from a common work
tions to work-related problems. area.39 quality circle
A quality circle is a special type of formal problem-solving team, usually com-
A special type of formal problem-
posed of 6 to 12 specially trained employees who meet weekly to solve problems
solving team, usually composed of
affecting their work area.40 The team first gets training in problem-analysis tech-
6 to 12 specially trained employees
niques (including basic statistics). Then it applies the problem-analysis process who meet once a week to solve
(problem identification, problem selection, problem analysis, solution recommenda-
problems affecting their work area.
tions, and solution review by top management) to solve problems in its work area.41
In many facilities, specially trained teams of self-managing employees do their
jobs with little or no oversight from supervisors. For many, such teams epitomize self-managing/self-directed
employee involvement. A self-managing/self-directed work team is a small (usually work team
8 to 10 members) group of carefully selected, trained, and empowered employees
A small (usually 8 to 10 members)
who basically run themselves with little or no outside supervision, usually for the
group of carefully selected, trained,
purpose of accomplishing a specific task or mission.42 The “specific task or mis- and empowered employees who
sion” might be an Acura dashboard installed or a fully processed insurance claim.
basically run themselves with little
In any case, such teams have two distinguishing features. They are selected, trained,
or no outside supervision, usually
and empowered to supervise and do virtually all of their own work, and their work
for the purpose of accomplishing a
results in a specific item or service. specific task or mission.
For example, the GE aircraft engine plant in Durham, North Carolina is a self-
managing team-based facility. The plant’s workers work in teams, all of which report
to the factory manager.43 In such teams, employees “train one another, formulate
and track their own budgets, make capital investment proposals as needed, handle
quality control and inspection, develop their own quantitative standards, improve
every process and product, and create prototypes of possible new products.”44 As
the vice president of another company said about organizing his firm around teams,
“People on the floor were talking about world markets, customer needs, competi-
tors’ products, making process improvements—all the things managers are supposed to think about.”45
Using Suggestion Systems Employee suggestion systems can produce significant
savings and, through involvement and awards, improved employee relations. For
example, one study several years ago of 47 companies concluded that the firms
had saved more than $624 million in one year from their suggestion programs;
more than 250,000 suggestions were submitted, of which employers adopted over
93,000 ideas.46 Furthermore, employees like these programs. In one survey, 54%
of the 497 employees surveyed said they made more than 20 suggestions per year,
while another 24% said they made between 10 and 20 suggestions per year.47 The
accompanying HR in Practice feature provides an example. HR in Practice
The Cost-Effective Suggestion System48
A Lockheed Martin unit in Oswego, New York developed what it called its “Cost-Effec-
tiveness Plus” suggestion program to encourage and recognize employees for stream-
lining processes. With the Cost-Effectiveness Plus program, employees electronically
submit their ideas. These are then evaluated and approved by the local manager and
the program’s coordinator (and by higher management when necessary). This particular
CHAPTER 12 • MAINTAINING POSITIVE EMPLOYEE RELATIONS 405
program reportedly saves this facility about $77,000 per implemented idea, or more than $100 million each year.
Today’s suggestion systems are more sophisticated than the “suggestion boxes”
of years ago.49 The main improvements are in how the manager formalizes and com-
municates the suggestion process. The head of one company that designs and installs
suggestion systems lists the essential elements of an effective employee suggestion system as follows:50
Senior staff support
A simple, easy process for submitting suggestions
A strong process for evaluating and implementing suggestions
An effective program for publicizing and communicating the program
A program focus on key organizational goals Talk About It – 2
If your professor has chosen to assign this, go to www.pearson.com/mylab/
management to discuss the following: Based on this, write a one-page outline
describing an employee suggestion system for a small department store. HR and the Gig Economy Getting Gig Workers Involved51
Can an employer do anything to make short-term gig workers who are “just passing
through” feel engaged in its activities? The answer, it seems, is “yes.”
First, understand that (like everyone), gig workers each come to the job with his or
her own set of needs. Most important, some gig workers are more “hobbyists,” while
others are in it full-time to support themselves and their families.
For example, one researcher interviewed Uber and Lyft drivers. He found that how
the drivers reacted to things like pay cuts depended on why the drivers were driving.
Many were not primarily driving for the money, but for social interaction and to relax
from their full-time jobs. (For example, one full-time psychotherapist who earned over
$100 per hour as a therapist wasn’t too upset by Uber pay cuts. He was just happy to
have a chance to unwind from 40 hours per week of helping people deal with their
problems). Most such “hobbyist” drivers weren’t financially dependent on driving. On
the other hand, drivers who were more financially dependent on driving were under-
standably quite upset by the cuts.
In any case, here are several suggestions for improving gig-worker employee relations:
Don’t treat gig workers like they’re disposable. Even if it’s a short gig,
communicate with the worker and get to know him or her. Recognize their contributions.
Make signing on as frictionless as possible. Many gig workers are looking for
part-time flexible gigs, and they want to work, not do paperwork.
Research shows that most employers put little or no time into onboarding gig
workers, which is a mistake: even an abbreviated onboarding-welcoming process
is better than nothing. Put some time into giving them a brief background on
your company and project, and on making them feel part (but clearly an indepen-
dent-contractor part) of your business.
Although it’s important legally to make it clear that they are independent con-
tractors, to the extent possible share company news and seek feedback from
your gig workers, and include them in intracompany communications and, to the
extent possible, in company social and educational events.
406 PART 5 • EMPLOYEE AND LABOR RELATIONS LEARNING OBJECTIVE 3 Explain what is meant by The Ethical Organization ethical behavior.
People face ethical choices every day. Is it wrong to use a company credit card for
personal purchases? Is a $50 gift to a client unacceptable? Compare your answers
by doing the quiz in Figure 12.2.
Most everyone reading this book rightfully views themselves as an ethical
person, so why include ethics in a human resource management book? For three
reasons: First, ethics is not theoretical. Instead, it greases the wheels that make
businesses work. Managers who promise raises but don’t deliver, salespeople who
say “The order’s coming” when it’s not, production managers who take kickbacks
from suppliers—they all corrode the trust that day-to-day business transactions depend on.
Second, it is hard to even imagine an e
un thical company with good employee relations.
Third, ethical dilemmas are part of human resource management. For example,
your team shouldn’t start work on the new machine until all the safety measures
are checked, but your boss is pressing you to start: What should you do? One
survey found that 6 of the 10 most serious ethical work issues—workplace safety, Figure 12.2
The Wall Street Journal Workplace Ethics Quiz
Source: Ethics and Compliance Officer Association, Waltham, MA and the Ethical Leadership Group, Global
Compliance’s Expert Advisors, Wilmette, IL. (Printed in The Wall Street Journal, October 21, 1999, pp. B1–B4).
© 1999 by Ethics and Compliance Officer Association. Reprinted by permission. All rights reserved.
CHAPTER 12 • MAINTAINING POSITIVE EMPLOYEE RELATIONS 407
employee records security, employee theft, affirmative action, comparable work,
and employee privacy rights—were HR-related.52 Another found that 54% of
human resource professionals surveyed had observed misconduct ranging from
violations of Title VII to violations of the Occupational Safety and Health Act.53 ethics
Ethics are “the principles of conduct governing an individual or a group”—the
The study of standards of conduct
principles people use to decide what their conduct should be.54 Of course, not all
and moral judgment; also the stan-
conduct involves ethics.55 For example, buying an iPad usually isn’t an ethical dards of right conduct.
decision. Instead, ethical decisions are rooted in morality. Morality refers to
society’s accepted standards of behavior. To be more precise, morality (and there-
fore ethical decisions) always involves the most fundamental questions of what is
right and wrong, such as stealing, murder, and how to treat other people. W LE O DG N K E Ethics and Employee Rights B A S E
Societies don’t rely on employers’ ethics or sense of fairness or morality to ensure
that they do what’s right. Societies also institute various laws and procedures for
enforcing these laws. These laws lay out what employers can and cannot do, for
instance, in terms of discriminating based on race. In so doing, these laws also
carve out explicit rights for employees. For example, Title VII of the Civil Rights
Act gives employees the right to bring legal charges against an employer who they
believe discriminated against them due to race.
Employee rights is thus part and parcel of all the employment laws we discuss
in this book. For example, the National Labor Relations Act established the right
of employees to engage in collective bargaining. And the Fair Labor Standards Act
gave employees the right to a minimum wage and overtime pay.
The bottom line is that although ethics, fairness, and morality certainly help
determine how employers treat their employees, remember that the enforceable
rights embedded in employment law also govern what employers and employees can do.
What Shapes Ethical Behavior at Work?
Why do people do bad things? It’s complicated. However one review of over
30 years of ethics research concluded that three factors combine to determine the
ethical choices we make.56 The authors titled their paper “Bad Apples, Bad Cases,
and Bad Barrels.” This title highlighted their conclusion that when
“Bad apples” (people who are inclined to make unethical choices) must deal with
“Bad cases” (ethical situations that are ripe for unethical choices) while working in
“Bad barrels” (company environments that foster or condone unethical
choices), . . . then this mixture combines to determine whether someone acts ethically.
Here’s a closer look at what they found.
The Person (What Makes Bad Apples?)
First, because people bring to their jobs their own ideas of what is morally right
and wrong, each person must shoulder much of the credit (or blame) for his or her ethical choices.
For example, researchers surveyed CEOs to study their intentions to engage
in two questionable practices: soliciting a competitor’s technological secrets and
making illegal payments to foreign officials. The researchers concluded that the
CEOs’ personal predispositions more strongly affected their decisions than did
outside pressures or characteristics of their firms.57 The most principled people,
with the highest level of “cognitive moral development,” think through the impli-
cations of their decisions and apply ethical principles. How would you rate your
408 PART 5 • EMPLOYEE AND LABOR RELATIONS
own ethics? Figure 12.2 (page 406) presented a short self-assessment survey (you’ll
find typical survey takers’ answers on page 425). Furthermore, employees who
identify more strongly with the organization are also more likely to engage in
unethical actions to support it, so strong loyalty isn’t always a blessing.58 Similarly,
employees who worry about being excluded from a group may support the group’s
unethical behavior just to stay in the group.59
Which Ethical Situations Make for Ethically Dangerous (Bad Cases) Situations?
But, it’s not just the person but the type of decision that’s important. For example,
these researchers found that “smaller” ethical dilemmas prompt more bad choices.
What determines “small”? Basically, how much harm can befall victims of the
choice, or the number of people potentially affected. People seemed more likely to
“do the wrong thing” in “less serious” situations, in other words. That obviously
doesn’t mean that some people don’t do bad things when huge consequences are
involved; it just means that people seem to cut more ethical corners when small
things are involved. The problem is that one thing often leads to another; people
start by doing small bad things and then “graduate” to larger ones.60 W LE O DG N E
What Are the “Bad Barrels”?—The Outside Factors K B That Mold Ethical Choices A S E
Finally, the study concluded that some companies produce more poisonous social
environments (“outside factors” or “barrels”) than do others; these bad environ-
ments in turn trigger unethical choices.61 For example, companies that encouraged
an “everyone for him or herself” culture were more likely to suffer from unethical
choices. Those that encouraged employees to consider the well-being of everyone had
more ethical choices. Most important, a company whose managers put in place “a
strong ethical culture that clearly communicates the range of acceptable and unac-
ceptable behavior” was associated with fewer unethical decisions in the workplace.62
Steps Managers Take to Create More Ethical Environments
Given this, here are some steps managers can take to create more ethical environments.
Reduce Job-Related Pressures If people did unethical things at work solely for
personal gain, it perhaps would be understandable (though inexcusable). The scary
thing is that it’s often not personal interests but the pressures of the job. As one
former executive said at his trial, “I took these actions, knowing they were wrong,
in a misguided attempt to preserve the company to allow it to withstand what I
believed were temporary financial difficulties.”63
A study illustrates this. It asked employees to list their reasons for taking
unethical actions at work.64 For most of these employees, “meeting schedule pres-
sures,” “meeting overly aggressive financial or business objectives,” and “helping
the company survive” were the three top causes. “Advancing my own career or
financial interests” ranked about last.65 Reducing such “outside” pressures helps head off ethical lapses.
“Walk the Talk” It’s hard to resist even subtle pressure from one’s boss. So it’s not
surprising that according to one report, “the level of misconduct at work dropped
dramatically when employees said their supervisors exhibited ethical behavior.”66
Examples of how supervisors lead subordinates astray ethically include:
Tell staffers to do whatever is necessary to achieve results.
Overload top performers to ensure that work gets done.
CHAPTER 12 • MAINTAINING POSITIVE EMPLOYEE RELATIONS 409
Look the other way when wrongdoing occurs.
Take credit for others’ work or shift blame.67
Some managers also urge employees to apply a quick “ethics test” to evaluate
whether what they’re about to do fits the company’s code of conduct. For example,
Raytheon Co. asks employees who face ethical dilemmas to ask: Is the action legal? Is it right? Who will be affected?
Does it fit Raytheon’s values?
How will it “feel” afterward?
How will it look in the newspaper?
Will it reflect poorly on the company?68
Have Ethics Policies and Codes Managers use ethics policies and codes to signal
that their companies are serious about ethics. For example, IBM’s code of ethics says, in part:
Neither you nor any member of your family may, directly or through
others, solicit or accept from anyone money, a gift, or any amenity that
could influence or could reasonably give the appearance of influencing
IBM’s business relationship with that person or organization. If you or
your family members receive a gift (including money), even if the gift was
unsolicited, you must notify your manager and take appropriate measures,
which may include returning or disposing of what you received.69
Enforce the Rules Having rules without enforcing them is futile. Managers’ state-
ments and encouragement can reduce unethical employee behavior, but knowing
that one’s behavior is actually being monitored and the rules enforced is what
has the biggest impact.70 Ethics audits monitor things like conflicts of interest,
giving and receiving gifts, employee discrimination, and access to company infor-
mation.71 One study found that fraud controls such as whistleblower hotlines,
surprise audits, fraud training for employees, and mandatory vacations can each
reduce internal theft by around 50%.72 Firms, such as Lockheed Martin Corp.,
also appoint chief ethics officers.73 W LE O DG N E
Encourage Whistleblowers Some companies encourage employees to use hot- K
lines and other means to “blow the whistle” on the company when they discover B A S E
fraud. Several U.S. laws, including Dodd Frank, the False Claims Act, the U.S.
Financial Institutions Reform, Recovery, and Enforcement Act, and U.S. federal
sentencing guidelines address whistleblowing.74 Under the U.S. Securities and
Exchange Commission’s whistleblower program, whistleblowing awards aren’t
just limited to company employees. Consultants, independent contractors, ven-
dors, and sometimes even internal audit and compliance personnel, working in
the United States or abroad, are also eligible.
Foster the Right Culture75 Managing people and shaping their behavior depends
on shaping the values they use as behavioral guides. For example, if management
really believes “honesty is the best policy,” the actions it takes should reflect this
value. Managers therefore have to think through how to send the right signals to organizational culture
their employees—in other words, create the right culture. Organizational culture
The characteristic values, tradi-
is the “characteristic values, traditions, and behaviors a company’s employees
tions, and behaviors a company’s
share.” A value is a basic belief about what is right or wrong, or about what you employees share.
should or shouldn’t do. (“Honesty is the best policy” would be a value.) Creating a culture involves: