Ethics in human resources: 6 guidelines for HR teams
Today’s human resources professionals manage more moral, ethical and legal responsibilities than ever before.
Beyond compensation and benefits, HR teams are now tasked with challenges like fostering diversity in the workforce, addressing issues of inequality and setting standards around workplace conduct. Often, human resources ethics policies around these issues can directly impact how a company attracts and retains talent. According to a recent report, for example, 79 percent of American workers said they would not accept a job with a higher salary from a company that has failed to take action in sexual harassment cases. While HR ethics conversations that challenge the status quo in the workplace are marks of progress, they require HR departments to make tough ethical decisions.
Acting as the moral heart of a company can seem like an overwhelming task. But no matter the issue, HR professionals that uphold strong ethical standards and strive for a fair work environment will maintain employee confidence and attract new candidates. Here are six HR ethics guidelines organizations can follow to master the art of ethical decision-making and become a valuable resource for their employees.
1) Know the laws
As a representative of an organization, HR professionals need to make tough decisions and hold employees accountable for wrongful actions—and that's not an easy task. To do so effectively requires confidence and authority. Knowing important labor laws and compliance practices will help manage these issues as they arise, as opposed to after the fact.
For example, if an employee were to request short-term disability, you would need to understand your benefits provider’s short-term disability policy and eligibility. You will also be expected to know insurance laws and explain them to your employee. Familiarizing yourself with these laws early on will save you time and equip you with knowledge to navigate legal challenges in the future.
2) Prioritize professional development
HR is a constantly changing field, especially as new conversations arise and technology continues to change the way we work. Staying on top of these changes requires a new set of skills and knowledge. Participating in trainings is one way to stay ahead of the curve.
Many HR professionals also pursue advanced degrees and certifications specific to the field. Some become specialists in a particular area, like payroll, recruiting or benefits. Others, like HR generalists who have a broader set of responsibilities, may choose to continue their professional development through workshops and continued education. There is no one-size-fits-all approach to learning. HR professionals, especially those who are new to the industry, should assess their progress and consult their managers to find a career path that works for them.
3) Be an ethical HR leader
Conflict between colleagues is inevitable in the workplace. Imagine, for example, an employee tells you that their manager, a high-level executive, has treated them unfairly. A situation like this requires you to engage in tough conversations with everyone involved. Being an ethical HR leader means being confident in your moral decisions and effectively communicating them to employees. And, according to the Josephson Institute of Ethics at UC San Diego, making an ethical decision requires three things:
- Commitment: “The desire to do the right thing regardless of the cost.”
- Consciousness: “The awareness to act consistently and apply moral convictions to daily behavior.”
- Competency: “The ability to collect and evaluate information, develop alternatives and foresee potential consequences and risks.”
Understanding where you, and your organization, stand on important issues will be critical in this process. Once you define these ethical standards, you can figure out how to respond to any human resources ethics issue—and maintain your employees’ trust and respect.
4) Understand conflicts of interest
Conflicts of interest are detrimental to how a business operates because they create internal politics that distract from a company’s bottom line and cause the quality of work to deteriorate. Take favoritism for example—the practice of giving certain employees preferential treatment. It is not illegal to play favorites, unless in doing so you are discriminating against someone else on the basis of race, gender, sexual orientation or another protected class. While you can’t change the law, you can implement company policies that prohibit this behavior.
One way to establish these policies is to update your employee handbook to define and discourage conflicts of interest—your employees might be partaking in this behavior without realizing it. In the case of favoritism, according to the Employment Law Handbook, the first step is to distinguish between favoritism and fair recognition based on measurable performance. Once you have written standards in place, make sure to also determine consequences for employees who fail to abide by the rules.
5) Implement diversity and inclusion practices
Discussions today about diversity are often focused on recruiting efforts across race, class and gender. While these are important considerations, it’s only one piece of the diversity and inclusion puzzle.
According to Ebay’s Chief Diversity Officer Damien Hooper-Campbell, diversity is about making people feel like they belong. In his interactive session at First Round Capital’s Summit Conference, Hooper-Campbell used the metaphor of a school dance. Everyone is invited to this school dance, he says, but only the jocks are dancing.
“If diversity is being invited to the dance party, inclusion is being invited to dance,” he said. A company might recruit and hire a diverse workforce, but if only certain groups of people feel valued and included, there’s a problem.
By working with colleagues to develop a list of company values and morals, HR professionals set the standard for diversity and inclusion at their organization. This list will help professionals zero in on what’s important to their organization, and hold employees accountable.
6) Keep information confidential
From social security numbers to medical records, HR professionals have access to a lot of confidential information about employees. By making sure paperwork and electronic systems are secure, you can rest easy that your company’s information is protected.
As an HR professional, you also have a legal obligation to keep everything an employee tells you confidential, unless otherwise specified or discussed. For instance, if an employee comes to you with a concern about a colleague or tells you they have witnessed sexist or racist behavior in the office, it is your job to manage this information without revealing your sources.
While HR professionals face a number of hurdles that can make the job challenging, it can also be equally rewarding. After all, HR professionals give a company meaning by improving and enhancing the employee experience. Once you navigate the ethical challenges of the job, you will be able to effectively attract and retain a talented workforce.
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A New Poseidon Adventure: Flipping Succession Planning Upside Down
Organizations make significant investments in efforts to hire the right candidates – the people who have the right experience and cultural fit. By carefully managing the performance and potential of these people over time, the organization can grow its leadership pipeline, keep a steady inventory of needed skills and competencies and remain nimble in the face of change (which we have plenty of all around us these day) – all of which can have serious impact on the bottom line. However, much of this pie-in-the-sky stuff relies on being able to locate and cultivate high-potential and high-performing talent across the board. Without an integrated succession management solution, recognizing and developing talent can be an ever-elusive process. The questions we are seeing asked today include: does the traditional top-down approach to succession management still make enough of a difference? Does managing succession for a slim strata of senior executives take full advantage of the kinds of talent data we now have at our fingertips? It doesn’t have to be so. Succession management can be an interactive process between senior leadership, managers and employees at all levels of the organization. And, if we trust them, we can actually let employees become active participants in their own career development. (Shudder.) Career Management (Succession Planning Flipped Upside Down) This "bottom-up" approach is gaining momentum because who better to tell us about employee career path preferences than employees themselves. Organizations actually have talent management and other HR systems in place that allow for collecting and analyzing a whole slew of data around: Career history Career preferences Mobility preferences Professional and special skills Education achieved Competency ratings Performance scores Goal achievement Training and certifications Etc. In short, pretty much everything we’d want to know to make well-informed succession planning and talent pooling decisions. For some, the leap is simply putting some power into the employee’s hands. The talent management system of 2011 is capable of displaying a clear internal career path for employees and then, on the basis of all that data bulleted out above, showing a "Readiness Gap" – what do you need to do to make the step to the next level? And if your talent management environment comes armed with a real Learning Management System, you can take it to the next level with a dynamically generated development plan that gets the employee on the right path to actually closing those gaps. Faster development, faster mobility. Organizations that seriously favor internal mobility don’t just make employees stick on pre-defined career paths – they can search for ANY job in the company and check their Readiness levels. I might be in accounting today, but what I really want to do is move to marketing. Giving employees the chance to explore various career avenues within the organization helps assure that "water finds its level" – that is, that the right people with the right skills and the right levels of motivation and engagement find the right job roles internally. Employee participation is key, but make no mistake – managers play an important role in this interactive process. They must be prepared to provide career coaching, identify development opportunities and recommend employees for job openings. The candid discussions require that employees have open access to information so they can best understand the criteria necessary to move to the next level. A Two-Way Street Employee-driven career management is just one tool. The more traditional top-down approach to succession management remains indispensable. But organizations that value talent mobility and the ability to be able to shift and mobilize talent resources quickly will find that attention to career pathing can be vital. For employees, of course, the impacts are immediate and include boosted levels of engagement, higher retention, increased productivity and more.
The Hidden Costs of Ignoring Your Talent Management Strategy
Building and maintaining a successful company hinges on having the right people to execute projects and drive results. People, we hear time and again, are your company's most valuable asset. But their success — and HR's ability to recruit, engage and retain them — depends on HR pros who are strategic decision-makers, armed with the proper tools to let them excel at their jobs. Modern HR professionals manage much more than payroll and benefits. But their technology tools, in many cases, haven't evolved past basic productivity software like email or Microsoft Word. HR simply can't be strategic with old-school tools that reduce people to statistics and give little insight into what the numbers mean. Emails and spreadsheets were not designed to deliver meaningful insights into people's performance, suggest when employees should be promoted or highlight skills gaps in a company. For that, HR needs a broader, more strategic set of talent management tools, which lets professionals manage every aspect of the workforce, from training and performance reviews to collaboration and succession planning. Yet, research shows that less than 25% of companies use a unified, holistic approach to their talent management. The Real Costs of "Doing Nothing" As a Talent Management Strategy The critical relationship between business strategy and HR strategy too often gets overlooked by senior leadership. While it may seem like the company is saving money by managing recruiting, training, performance and succession via manual and paper-based processes, in reality it’s costing your business more than you know. For example: Without a talent management strategy, a company with 2,000 employees is losing almost $2 million every year in preventable turnover alone. Businesses that don’t invest in learning suffer from decreased employee performance and engagement to such a degree that they can expect to realize less than half the median revenue per employee. That’s a direct impact on the business. In employee performance management, organizations without a focused strategy waste up to 34 days each year managing underperformers and realize lower net income. To learn more about the business impact of talent management and how to start building out your strategy, check out the eBook Why Your Nonexistent Talent Management Strategy is Costing You Money (And How to Fix It) and register for the March 19th webinar, Building the Business Case for Talent Management.
The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance
With the economy now on steadier ground, most organizations have returned to administering a merit budget to the pre-recession levels of 3 to 3.5%. In the years immediately following the economic downturn, many merit budgets were eliminated entirely or were reduced significantly and reserved for a select segment of the employee population. Pay for performance has become a necessity for many organizations that are expected to accomplish more with fewer resources. I often get asked: "How can I truly award my top performers with such a limited budget? Should I do so at the expense of my ’Meets Expectations’ performers? What if I need to retain my ’Meets Expectations’ performers and giving them 0% to 2% increase puts me at great risk for turnover? But if I don’t recognize my top performers, don’t I risk losing them...?" These are difficult questions to answer, however you can determine the best solution for your organization by considering the following: Are your employees paid at market pay levels? Is your organization’s performance management process mature? Does your organization have other compensation programs in place to reward top performers (e.g. variable pay)? Market Pay If turnover is a concern, and your organization needs to maintain ’bench strength’ in order to achieve its strategic objectives, your biggest priority should be to ensure that you are paying your employees at market pay levels. Why? Historically, as the labor market strengthens, organizations become vulnerable in terms of losing people. Hiring and onboarding replacement talent is not only costly to the organization, but can also cause dissension among existing employees since new hires may be getting paid more. Be sure to stay abreast of market pay levels and trends, and use the merit budget to correct disparities. Performance Management Process Organizations vary significantly in terms of the maturity of their performance management process. Closely examine your organization’s process and look for ways to improve it. If there is a perception that one management team is an ’easier grader’ than the others, the process is inherently flawed and any pay for performance program will not be viewed as credible and fair by employees. A good place to start is to get a calibration process in place and communicate broad guidelines on expected distribution ratings. Variable Pay Programs Variable pay programs (e.g. bonuses) have become increasingly more popular across all industries and career levels. These programs provide the opportunity for employees to share in the organization’s success while not adding to fixed payroll costs. Some plans have an individual performance component which can be a very effective means to recognize top performers. However, in order for this type of program to be successful, individual goals and targets must be well documented and communicated. Again, this is largely based on the maturity of the organization’s performance management process which takes time to evolve. What are the best steps to avoid wreaking havoc on your pay for performance process? First ensure your pay levels are keeping pace with the market Continue to evolve your performance programs with calibration among managers and a rigorous goal setting process Promote variable pay plans to reward high performers without adding to fixed pay roll costs It’s not always an easy journey but, in the end, it’s best to use a measured approach that is based on business needs and a realistic assessment of your current programs and processes.