Are business ethics HR’s business?

By Ksenia Zheltoukhova, CIPD Research Adviser

Last week’s challenge to several large car-makers once again highlighted the vulnerability of corporate success to unethical decisions. A misjudgement of value placed on profit-making vs the interests of employees, customers, and wider society has now wiped billions off a company’s shares as markets lose trust in the sustainability of its performance. This scandal revives an old debate about the role of HR as an organisation’s moral conscience.

By no means are business ethics solely the responsibility of the HR department. Being ethical –identifying and evaluating alternative courses of action and their consequences – is ultimately down to individuals. But, as our recent Profession for the Future research Ethical decision-making: eight perspectives on workplace dilemmas reports: ‘ethical questions – questions about what we should do and be – aren’t optional for us’. For anyone in an organisation – whether an HR practitioner or not – it’s not enough to plead ‘I’m only one person, what can I do?’ Not challenging unethical practice represents an implicit agreement with these behaviours, and is an ethical choice in itself. It is important that, as professionals, HR practitioners are conscious of that responsibility.

While HR is not expected to take blame for every misjudgement in an organisation, it should be able to recognise why unethical behaviours arise, and help people navigate the choices available to them. It is easy to calculate the aftermath of actions in retrospect, when the relative benefits and costs of options become obvious. But, at the time when the decision is made, the potential negative consequences of our choices only present themselves as ambiguous and unlikely ‘risks’. Willingness to take those risks is fraught with personal interpretation and bias, and this is where HR could offer its expertise in organisational behaviour and influence the shared understanding of what is considered to be OK.

First, there is a role to play in shaping organisational culture around making decisions and taking risks. However morally conscious individuals may be, the ‘way things are done around here’ is likely to influence them to act like their boss and peers, simply to fit in or even sometimes to keep their jobs. Working with leaders and managers to clarify values and behaviours becomes critical to ensuring that group norms are aligned with organisational purpose.

More importantly, as recent breaches of data security in organisations have indicated, employees disgruntled by the way they are treated in the business can then engage in activities that damage the firm. The same applies to corporate ethics on a larger scale: the high-level principles of people management set the tone for the quality of the relationship between the business and its people, and communicate the actual values of the firm, as opposed to the ones written into the corporate statement. If people feel that the organisation is treating them ethically, they are more like to make ethical decisions in their own areas of work. By ensuring that people get a fair deal, HR professionals can make great strides into building a better business.

It is unlikely that HR can track and eliminate every unethical intent and behaviour in a business. This would mean prescribing the day-to-day activities of anyone who has the power to make a judgment of value to the minutest detail. But, HR practitioners can ask questions, help recognise the possible choices, and build a decision-making framework for putting all the possible stakeholders in the picture. Not because they are given the relevant remit by the organisation, but because they have that obligation to themselves as professionals.

Thank you for your comments. There may be a short delay in this going live on the blog page as we moderate the comments added to our blogs.

  • Anonymous

    I favour the notion that certain things are distributed within the entire culture rather than functionalised.  I have seen a post from Barbara Brooks Kimmel calling for trust to be a function in the wake of the VW fiasco.  Trust is vital but as soon as it becomes a function it potentially loses its wider cultural importance. Unless the organisation has a structure that solves the silo problem, I think ethics are everyone's business, driven from the top and hired in at the bottom, which might be where HR come in.  Views?

  • I agree Peter. "Trust" can't be a function, it's a personal quality or behaviour that would arguably come under the behaviours 'Role Model' and ''Personally Credible' in the HR Profession Map. That said, it's also a reasonable expectation from all for all. It's a subject which challenges the synergy between a HR decision and a management one too. The interesting bottom line in all of this, is that a VW is still a quality product and the consumer may well get a bargain out of someone turning a blind eye to an ethical expectation, but at what cost to VW?

  • Anonymous

    I agree with all of the above. Ethics are the responsibility of everyone and particularly the leaders of the organisation, who need to role model the ethical behaviour. I think what HR leaders are often in a good position to do is to identify where there's a culture, perhaps in a particular area of the organisation, which might lead to unethical decisions being made. But many other senior leaders have the same overview and it needs to be on the Board's agenda. From a reputational risk perspective if nothing else!  

  • Anonymous

    I agree that the ethics and values in an organisation are everyone's business. Systems, especially HR systems can help develop an overall ethical culture, for example, if performance is measured and evaluated purely on numerical targets rather than how they have been achieved, this can lead to unethical behaviour being overlooked or even rewarded!

  • I agree HR play a huge part in driving the culture of a business, but it needs buy in and support from management. If management choose to make an unethical decision to drive profit, they may see HR as an obstacle and exclude them from decision making processes within the business or keep decisions secret for fear of what HR might say! HR professionals have moral obligations, but no more so than anyone else in the business and significantly less so than business directors whose decisions have huge consequences.

  • HR tends to be involved in the operational side of a business, meaning they get to oversee the execution of services, and or products dependent on the company. Whilst a HR Practitioner may not get to have the final say, they can have an impact on its execution. HR is seen and respected as a level of authority therefore have a moral obligation to act in a way that is seen as ethical within the workplace. They are to lead by example and implement the ethics throughout the company which creates a framework that helps build an ethical culture and environment.