By David Ingram Updated March 06, 2019
Paying attention to business ethics is an important part of any business owner or manager's job. The human resources function deals with a variety of ethical challenges; being the department that deals directly with people employed by a company, HR includes numerous ethical pitfalls that can damage a company's reputation or financial sustainability if not handled properly. Understanding the importance of ethics in human resources is crucial for any business owner, whether in a local startup or a multinational powerhouse.
The Right Side of the Law
Breaches of ethics in human resources can lead companies into a world of legal trouble, in both the civil and criminal arenas. Breaches of ethics in the HR department are more likely to be reported by victims to the Better Business Bureau, the Equal Employment Opportunity Commission or other regulatory agencies than those committed in other areas, such as product development or accounting. Companies with comprehensive ethics programs in place can avoid costly trouble regarding discrimination and hostile-work-environment issues, resulting in lower costs for litigation and out-of-court settlements.
Safeguarding the Company Reputation
In the business world, legal trouble can introduce additional challenges to employers, as news outlets and ethics watchdog organizations spread the word about companies' misdeeds. Discrimination issues, sexual harassment and unfair employment policies can land companies on the front page of consumer or business-focused publications, damaging a company's reputation among consumers, potential strategic partners and potential future employees.
Gaining a reputation as an ethical employer can help to attract the top talent in your industry from a wider area, as employees seek to find the most beneficial employment relationships they can. The opposite holds true, as well; if job applicants see your company as an unethical employer, the most skilled, experienced, creative and productive applicants are likely to put their resumes in elsewhere.
Keeping Employee Loyalty
Treating employees ethically can garner long-term employee trust and loyalty, which conveys a range of distinct benefits to employers. Loyal employees gain more experience working with their employers, allowing them to master production processes and more fully understand the inner workings of the firm. This can increase employees' productivity and efficiency over time in addition to keeping recruiting and training costs under control.
Sellers of consumer goods can gain marketing advantages from loyal employees, as well. Loyal employees often act as champions for a company's products, purchasing goods from their employer and spreading positive word-of-mouth advertising to friends, family and acquaintances over the years.
Promoting Ethics Programs
A solid reputation as an ethical employer does not happen on its own. Savvy, ethics-conscious business owners put comprehensive ethics programs in place to display a firm commitment to ethics in every area of business, including human resources. Put HR ethics policies in place regarding discrimination, sexual harassment and the treatment of employees, and put each of your managers and supervisors through ethics training programs to make sure they are fully aware of your expectations.
Most importantly, lead by example in your organization to create a culture of mutual respect and dignity, where ethical decision-making is valued and rewarded.
FAQs
In conclusion, ethical behavior in human resources management is essential for promoting trust and credibility, preventing legal liability, supporting employee well-being, fostering diversity, equity, and inclusion, and enhancing organizational reputation.
Why do we need code of ethics in HR? ›
The HR Code of Ethics outlines the professional responsibilities of HR practitioners and emphasizes the importance of treating all individuals with respect and fairness. The HR Code of Ethics serves as a framework for HR professionals to uphold the highest standards of integrity, confidentiality, and respect.
What is the relationship between ethics and human resource management? ›
Ethics and human resource management both are related to each other. This is because the human resource looks after the personal aspect of a corporation. And, the HRM takes care of many issues relating to the application of ethical standards.
Why is it important to use ethical resources? ›
The importance of ethical writing, then, is based not only upon the avoidance of plagiarism, but also avoiding the weaknesses of bias and exclusive language (sexist, racist, hom*ophobic, etc.) This strengthens the credibility and persuasiveness of the writer's argument.
Why is ethics important in human services? ›
Human service professionals and those who educate them promote and encourage the unique values and characteristics of human services. In so doing, human service professionals uphold the integrity and ethics of the profession, promote client and community well-being, and enhance their own professional growth.
What are the HR ethical standards? ›
Respect the uniqueness and intrinsic worth of every individual. Treat people with dignity, respect and compassion to foster a trusting work environment free of harassment, intimidation and unlawful discrimination. Ensure that everyone has the opportunity to develop their skills and new competencies.
Is ethics part of HR? ›
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 workforce diversity, addressing inequality issues and setting standards around workplace conduct.
Why ethical issues affect HR management? ›
HR must cope with conflicting needs to keep labor costs as low as possible and to invite fair wages. Ethics come into action when HR must select between outsourcing labor to countries with lower wages and harsh living conditions and paying competitive wages.
Does human resources deal with ethical issues? ›
Exploring Ethical Issues in Human Resource Management
Planning and the growth of a company's employees are the main areas of attention for HR decision -making. Due to its interaction with people, it is conceivably the area of management where ethics is of prime importance.
How do you know if a resource is ethical? ›
Evaluation Criteria
- Evaluation Criteria.
- Currency - How old can your required information be?
- Relevance - Does this resource answer your question?
- Authority - Who is the source of this information?
- Accuracy - Is the information correct?
- Purpose - Why was this information presented this way?
Workplace ethics refers to a specific set of moral and legal guidelines that organizations may abide by. These guidelines typically influence the way employees and customers alike interact with an organization—in essence, workplace ethics guide how organizations serve their clients and how they treat their employees.
What is ethics in your own words? ›
Ethics examines the rational justification for our moral judgments; it studies what is morally right or wrong, just or unjust. In a broader sense, ethics reflects on human beings and their interaction with nature and with other humans, on freedom, on responsibility and on justice.
Are ethics important at all for the organizations? ›
A business's ethical–or unethical–behavior can significantly impact its public perception, daily operations, and revenue. Companies that act ethically can attract loyal clients, hire top talent, and even win awards.
How do you ethically use resources? ›
Ethical Use of Information: Quoting, Paraphrasing, and Citing
- When using other people's words, put quotes around the words and cite your source.
- When paraphrasing other people's words, cite that source.
- When you've borrowed an idea from someone else, cite them.
Ethics is what guides us to tell the truth, keep our promises, or help someone in need. There is a framework of ethics underlying our lives on a daily basis, helping us make decisions that create positive impacts and steering us away from unjust outcomes.
