HUMAN RESOURCE MANAGEMENT AND BUSINESS ETHICS

A new dimension towards an integrated work structure in a liberalised market

T.Mbewa/KCCT/June 2002

11
Abstract 1. Introduction

This paper looks at recruitment management The 21st century executive must adapt
and business ethics in a liberalised strategic thinking directions and planning.
competitive market in the 21st century. The Why the strategic direction and corporate
survival and success of any organisation in a business strategy? In the fast changing
liberalised market depends on a sound set of business world, the survival and success of
beliefs and decisions aimed at certain any organisation depends on a sound set of
actions. A brief look at the relationship beliefs on which it basis all its policies and
between the workers and the changing actions (Sagimo, 2002). The faithful
organisation strategy reveals that the two adherence to these beliefs further enhances
players govern the successful competition of the success of the organisation in a
the former. A successful organisation and a competitive environment. In order to meet the
happy people are identified by their high challenge of the changing world, and
productivity and profitability compared to that compete effectively in the liberalised market,
of their competitors. an organisation must be prepared to change
everything about itself, except for the set
Corporate strategy on the other hand must beliefs. The recruitment of workers, their
focus on business competitive advantage behaviour and the evolution of the system on
based on a strategic human resource the other hand, govern the interaction of
management framework. Strategies for competitors. The purpose of strategic
recruitment must adopt the corporate management and ethical issues in this
strategic approach. This paper further looks scenario is for the organisation to have
at the internal and external challenges which courage to base its actions on the rules that
threatens the existence of the organisation. govern the interaction of competitors and
Notably is the fact that in the past, monopoly thereby beat both competition and evolution.
had no competition and as such the Since most people say that, “experience is
organisation had no problem copying with the best teacher”, it is preferable to learn from
unexpected change. In the present other peoples’ experience and mistakes. In
millennium however, monopoly can only order to lead in a competitive and liberalised
imply a huge advantage to a system that is market therefore, it is important to pit others’
able to take advantage of shaping change experience and mistakes against our hope
better than their rivals. One of the tools and deal with reality as it is, not as we wish it
required to adequately face the competitive to be. This is the more reason to adapt an all-
market, is recruitment and selection of skilled embracing corporate business out-look that
workforce and adherence to business ethics. includes the strategic human resources
Recruitment and selection is seen as a approach at its centre.
marketing tool which may have a positive or
negative effect on the achievement of
business. The manner in which a potential
candidate is treated in an organisation can
mar or enhance the image and profitability of
the firm. Workers should be treated well since
unethical practises by the organisations to
employees or the surrounding community
may easily influence its collapse.
Finally, the paper makes the conclusion that,
the feasibility of integrating recruitment
policies with business strategy will depend on
which strategy the organisation adopts and
that there is nothing in business which can
make adjustment towards ethical behaviour
impossible.

11
2. Corporate Strategy integrated with the organisational business
strategies of which the human resource is
Corporate strategy is a management activity, central. Recruitment procedure that may have
which involves directing the organisation a negative effect on productivity should be
towards agreed goal (Wright, 1997). It is avoided at all cost.
focused on business lifecycles, competitive
advantage and strategic management styles
3. Organisational Change and
with a strategic human resource management
Challenges
framework. Corporate strategies include
among others, strategies for recruitment and
selection, which will reflect the proposed Leaders in a business organisation are
corporate strategic approach. The notion of usually busy dealing with the pace of change
strategic recruitment and selection is a and intensity of competition while trying to
system of linking recruitment and selection to transform their organisation so as to win. A
the overall organisational strategy and aiming successful organisation and a happy people
to match the flow of personnel to emerging are identified by their higher performance and
business strategies as a key integrated task. profitability compared to their competitors.
The exercise involves wide scale use of both They grow faster than their competitors and
internal and external labour markets, that is, are recognised as leaders in some part of
from within the organisation and outside it, their industries. Every team and organisation
too. however, is faced with two major immediate
challenges:
For an effective contribution to the
achievement of corporate objectives, human
• How to deal with a hostile environment
resource policies need to fit together. In
so as to keep at the top.
particular, recruitment and selection
strategies should have strategic links with • How to organise its members to do the
human resource planning. For example, hunt and to share the results with them
recruitment advertisements that sell a in such a way as to be happy to
dynamic state of the art of the organisation continue the partnership.
can lead to disappointment if they are
followed by lack of administration, poor The first challenge deals with external
selection practices and lengthy delays to competition and poses the problem of
respond. Recruits attracted to organisations strategy and how to deal with external and
selling care, commitment and partnership will internal environment. The second deals with
be disappointed by selection procedures, the internal performance and poses the
which fail to sell the same message and thus problem of integration. Here survival is
create a negative impact on the business. dependent on how to devise solutions for the
two problems in the external and internal
Recruitment methods may be designed to
world. As the size of a successful
ensure that people understand the true
organisation grows, new tools are invented,
nature of the job for which they are applying.
sophisticated methods of protection are
For instance some organisations indicate to
developed, and a new challenge emerges on
the applicant that they must learn several
how to cope with the changes. In the past,
jobs, change shifts, work overtime, make and
monopoly had done it all. But according to
take constructive criticisms and submit
Davidson (1995) monopoly can only imply a
constant suggestions in improving efficiency.
huge advantage to a group that is able to
In some cases, selection processes may also
take advantage of shaping change better
differ in that teams may play a significant role
than their rivals.
in the selection of new team members or
more radically, family members of applicants In order for an organisation to meet the
may be evaluated as part of the selection challenges of both the external and internal
process to ensure total commitment to the environment, human resource requirements
organisation. In perfection, human resource must be properly planned and executed. This
policies should be coherent and totally
is done through recruitment and selection 4.2 Recruitment Management
activity, which ensures the achievement of Ethics and Marketing Function
the organisation’s anticipated needs for
reducing or increasing staff. Recruitment activities in an organisation
represent the marketing activities of the
human resource department and the
4. Recruitment, Selection and
organisation at large. The recruitment should
Corporate Strategy
be conducted in a manner that enhances
positive reputation of the organisation.
Recruitment and selection activities are Negative marketing in recruitment may
aimed at attracting the right persons in include non-response to applicant’s
sufficient numbers into the organisation in a application, keeping applicant waiting for an
cost effective and timely manner. It ensures interview for too long, and lack of feedback to
that the organisation has the required skills the interview results at the end of the
and the supporting procedures to enable it to exercise, to indicate whether one is
meet its need for sufficient and suitable staff successful or not.
to face the competitive market through its
business strategy. Negative response to some of these
recruitment issues may raise the question of
In this millennium, the most appropriate ethics. For instance, it is questionable
recruitment and selection technique are those whether it is ethical to invite people on a full
which balance the requirements of day’s interview when they have no chance of
organisations with those of the employees. being recruited at all. The case at hand is the
The approach adopted will however be notion by the interviewee that an internal
determined partly by the external candidate has already been selected for the
environment and the labour market forces. job. On the other hand, a person may have
already been identified from the external
There are a number of issues pertinent to market for the job, and yet continue to carry
recruitment and selection policy and the exercise a modality. In this case, while
practices. There is a need for business the recruitment policy may be seen to be fair,
strategy, recruitment and selection policies to it is unethical, as it has no respect for
be compatible with corporate goals and other individuals. This may mar the image of the
human resources initiatives. Coupled with organisation both internally and externally.
this, consideration must also be given to
ethical issues in recruitment and selection, When advertisements fall short of certain
especially in equality of opportunity, information, it infringes on the respect for the
conformance and control. individuals. Kitson (1996) notes that, when
information given is incomplete, the potential
candidate is left wondering whether they can
4.1 Recruitment Policies apply for the job or not. In the process of
seeking further clarification, they waste time,
Recruitment policies constitute the code of money and effort in search for such
conduct, which the organisation is prepared information. If adequate information is given
to follow in its search for the right recruits in on the other hand, then one can make a
the market place. Some policies make such decision on whether to apply for the job or not
requirements, as the need to advertise and and will save resources which are involved in
seek candidates on the basis of their ability to seeking clarification. A good recruitment
perform the job required. Further to that, the practice is ethical in dealing with potential and
organisation will not discriminate unfairly actual applicants and makes the organisation
against possible candidates on any grounds more efficient in its recruitment management.
such as disabilities, age, gender and ethnicity Further, it helps to minimise errors that might
since every decision and issue can pose mar the organisation’s reputation both
ethical questions at any time. internally and externally as it ensures a
rational and logical approach to the
recruitment of employees throughout the

13
organisation. to accidents, have poorer attendants, lower
productivity and are unwilling to learn new
skills and ideas. Some codes of ethics in
4.3 Skill deficiency in recruitment human resource management in certain
and its ethical effect on countries such as Britain provide guideline on
Business equal opportunities to overcome
discrimination in age and disabilities. In the
Pre-employment screening offers an case for age, it is recommended that as a
opportunity for employers to identify job general rule, age should not be used as a
applicants who have the quality to take up the primary discriminator in recruitment
job but have some skill deficiency that may decisions, where productivity and profitability
require remedial training. Unfortunately at this is the order of the day.
stage interviewers often assume that certain
candidates automatically master all the Studies on the performance of older people at
necessary skills required to perform the job at work, shows that they have fewer accidents
hand. at work, are dedicated and have less
absenteeism (Arthur, 1991). Further, there is
On shortage of qualified skilled labour, both no data to indicate that one age group is
internally and externally, it is necessary that superior to another in business productivity.
employers become more innovative in their As for unwillingness to change, older workers
recruitment efforts by reaching all the citizens have experienced and observed a great deal
without discrimination. In most cases, of social and technological change and are
however, such recruits are unskilled and therefore more familiar with the necessity of
require training in one way or the other. In change. It is further observed that they
this millennium, jobs demand new and more exhibit less stress on the job, are always
complex skills. Even clerical work need available and willing to work, enjoy their jobs
computer skills as the current job situations more than the average employees, and as a
require independent thinking and ability to product of the earlier loyalty, they actually
access situations and take action promptly. stay on a job longer than the younger
On the other hand, “can lack of certain skills, generation. They rate higher in work
in particular literacy affect business performance and lower in turnover than
productivity? Some questions however, may temporary and younger employees.
be raised as to whether it is ethical to still go
ahead and recruit the illiterates?” The impact
of illiteracy on business is reading, which 5. Qualified Workers And Work Options
according to Arthur (1991), accounts for
substantial loss of business, lowers As businesses strive to recruit qualified
productivity, competitiveness and reduces workers and accommodate changing working
promotion of the company. A worker, who ethics, it is now evident that alternatives to
cannot read instructions adequately, tradition work schedule must be considered in
endangers the lives of other workers and order to maintain effective levels of
survival of the company at large. productivity in a competitive environment.

Employees at all levels require flexible

4.4 Employment Preference scheduling to fit in with other aspects of their
lives. In this millennium, the emerging
economic situation is such that employees
Tradition views that certain jobs are only
are likely not to depend on one salary. The
appropriate for certain category of people,
employer who prepares for these changes
men or women old or young. In the present
will have many productive recruitment
millennium however this is no longer practical
opportunities. With several different work
and is self-defeating from the standpoint of
arrangements, the workforce may consist of
productivity and profitability order. Some
workers from the lowest cadre to the highest
companies do not hire old workers or retirees
level of management in the organisational set
because they claim that they are more prone
up. Alternative work options which include
part-time, work at home and evening is c) Overtime and compressed work time
required, to fit with all categories of workers.
Compressed workweek allows
employees to work the required forty
Most employers have come to realise that hours in less than five days. Overtime
there is a great deal of competition for good on the other hand allows one to work
people, and as such, certain companies more hours than the scheduled time.
officially endorse reduced work schedules Both of these alternatives have been
since such schedules help workers balance found troublesome to employee’s social
family and job responsibilities in their lives and family programs. They have
environment. There are many different work long-term effects on health and can
schedules, which can be applied to meet the adversely affect productivity.
challenges of the liberalised market. During
recruitment and selection, such schedules
must be clearly stated to the applicants if they d) Work at home
are to be part of work arrangement in their Working at home arrangement includes
new job. A few of these work alternatives are employees who are electronically linked
discussed below. to their offices and those who do
paperwork. But organising workers at
a) Job Sharing home is likely to be difficult and time
consuming.
Job Sharing is an arrangement in which
employees divide the responsibilities of The new workforce brings with it new
one full time job to positions that cannot attitudes and job requirements which
be separated into two definite part-time necessitates organisations to become
jobs. It is seen as solution to some familiar with the needs of the worker.
employees such as parents, students, They must be prepared to offer
retirees and retrenchees. In this way, appropriate work assignments,
employers benefit from broader range environments, and benefits in order to
of skills and productivity. It eliminates attract and retain qualified employees.
the need for employees to take care of During recruitment, issues pertaining to
personal business while on duty, work arrangements must be clearly
facilitates continuation of the job even if explained to the applicants, since
one partner terminates the service. It ethical issues can be raised later on,
however, has its disadvantages in especially in such areas as health in
productivity such as client’s complaints compressed workweek and overtime.
are not dealt with by one person
consistently.
6. Business Ethics

b) Flexible work schedule

Applyby (1994) defines ethics as a set of
In flexible work schedule, each worker moral principles that govern the action of an
puts in the same number of hours each individual or group. A code of ethics is
day with identical core hours and therefore a statement of policies and
varying starting and quitting times. It principles that guides the behaviour of all
allows employees to balance work persons. Business ethics are concerned
demand with those at home and further with truth and justice and include aspects
cope with commuting problems and which society expects, such as fair
traffic jams. With the extended hours of competition, social responsibilities and
coverage of services to the employer, it corporate behaviour. Ethics is relevant in
reduces overtime, absenteeism and business. Many ethical requirements have
turnover, improves work performance been incorporated into legislation that is
and boosts employee’s morale at work. binding in commercial firms. Morality routinely
affects strategic decisions in such areas as
recruitment, safety, advertising, debt

15
provision and collection, productivity and external market especially in a particular
growth in an organisation. geographical location, skills and knowledge.
Further, are the ethical challenges in the
Business ethics poses general questions situations where recruitment is undertaken to
which are answered by the help of theories of remove full time jobs in the name of flexibility
right or wrong (Asch, 1989). The theories and rationality.
may be found in religious code of conduct or
moral philosophy, which analyses general
concepts used in ethical argument. Some of 6.2 Management Decision-Making and
the well-known moral philosophy is the theory Business Ethics
of justice for those who are against meddling
with the market forces and distribution justice There are certain factors affecting a manager
in such matters as discrimination in involved in making decisions on business
recruitment of certain types of workers in the ethical problems. Some of these are
society. government regulations and laws,
organisation code of ethics, needs of the
Business ethics depend on the values of organisation, managers’ personal standards,
individuals and the culture created by the social and political pressures. Organisations
individual ethics of senior management and should be aware and respond to the social
code of conduct. The actual value system is issues affecting the running of their
the moral climate expected by staff in their businesses. Appleby (1994) advises that,
daily business lives, which will determine the companies should act early in the life cycle of
behaviour of the organisation as a whole in any social issue so that they can enjoy the
order to survive in a competitive environment. largest amount of managerial discretion over
Ethics tend to be culturally specific, and what the result. Discrimination in recruitment
may be considered as unethical in some whether from internal or external manpower,
societies may be considered as normal in can equally shake the credibility of an
others. For example, child labour of 14 years organisation with the consequence of
olds is normal in many parts of Asia but not affecting its business dealings outside. In this
so in the Western world (Welford, 1998). case it is suggested that, if businesses have
difficulty in self-regulating their activities, then
6.1 Recruitment, Retrenchment and the government should make regulation to
Business Ethics assist their existence.

Wright (1997) cautions that recruitment,

which takes place at the same time as
headcount is taking place elsewhere in the 6.3 Ethical Issues In Strategic Decision-
organisation, requires sensitive handling to Making
maintain respect and approval and care must
be taken on ethical issues. On the other Ethical questions addressed in decision-
hand, restructuring which takes place with a making must be concrete and specific. For
requirement for organisations to recruit staff instance one should ask such straight
from the internal market before looking questions as “Would it be fair to make a
outside faces potential risk. Ethical question certain number of employees redundant
that may arise is, “if those at risk are given an unexpected fall in profits in
perceived not to possess the competencies economic recession?”, “Is it morally
required in the changing business justifiable to pay creditors late?”, or, “Would it
environment, would it be ethical to retrench be right to discharge toxic waste in a
them and then recruit from the external residential area without telling the resident
market?” Despite the market picture of community?” When the profound questions
surplus of labour, difficulties may remain as are made explicit, it is hard to ignore state of
particular skills are short in supply. In addition affairs without considering the ethical aspect
to the invariable economic cycle, of the matter that will eventually affect the
organisations may experience difficulties in progress of the business.
attracting appropriate candidates on the
 6.4 Corporate Responsibility and can cause a great concern when a
business has various offices and branches in
Corporate responsibility has its roots in some different parts of the world. For instance
key philosophical debates over ethics, values, while it may be normal to make payment in
equity and equality (Welford, 1998). Many of some countries to expedite business
the shifts in political attitudes towards firms transactions, this may be considered
reflect abuse by specific companies and unethical in other countries. Further, in other
specific business leaders. Such abuses, countries it may be normal to pay some
which touch on business ethics, include the workers less than others of the same
repression of workers, misappropriation of qualification. It is therefore important to
funds, bribery associated with deals and appoint ethics committee who sees to it that
environmental mismanagement. Corporate the prescribed ethics are adhered to.
decisions are linked with business ethics and
the defined ethics determine corporate
performance now and in the future. 7. Summary and Conclusion

A company has various stakeholders:

employees, customers, shareholders, In order to have a coherent business social
financial institutions, suppliers, the strategy, organisations need a consistent set
government and local communities. It has of business ethics. Furthermore, the
responsibilities to these stakeholders and stakeholders’ accountability makes it difficult
must balance their competing demands put to separate ethical consideration from other
upon it by the different groups. As a result of issues such as the treatment of different age
this, ethical stand of a company will be groups, the handicapped, retirees and the
influenced both by internal values and protection of the surrounding communities.
external pressures. Pressures have grown on
companies because stakeholders have There is nothing in the nature of people or
become increasingly interested in the businesses, which make adjustment towards
activities of businesses. This is further ethical behaviour impossible except the
enhanced by easy and faster accessibility to vested interests held by those in power,
information through the improved which must be addressed. This is one of the
communications technology. The company major challenges which must be overcome.
must device a way on how to deal with their The feasibility of integrating policies
various demands without loosing its especially recruitment policies with business
credibility. strategy will depend on which perspective or
strategy and strategy-making the company
adopts. Strategic decision-making comprises
6.5 Ethics Committee long-term direction of the organisation and
the scope of its activities in the market share
In a business environment, an appointed and their locations. One of the strategies is
ethics committee should enhance a proper management of the recruitment
statement on code of ethics. The committee process, which must be linked with corporate
should hold regular meetings, check and strategy, deployment, and effective utilisation
enforce violations, review and update the of the human resources for maximum
codes, to show the commitment of the productivity and sustainable growth through
organisation to the principle. Ethical profitability for business survival.
standards differ among nations and societies

17
REFERENCES AND BIBLIOGRAPHY

Appleby, R. C. (1994), Modern business administration, 6th ed. London: Pitman

Publishing.
Recruiting, interviewing, selecting & orienting new
Arthur, D. (1991),
employees, 2nd ed. New York: Amacon.

Readings in strategic management, Hampshire:

Asch, D. and C. Bowman. (1989),
MacMillan.

Human resource management: a contemporary

Beardwell, I. and L. Holden. (1997),
perspective, 2nd ed. London: Pitman.

Management: theory and practice, 3rd ed. London: DP

Cole, G. A. (1990),
Publications.

The transformation of management, London: Macmillan.

Davidson, M. (1995),
The Ethical organisation: ethical theory and corporate
Kitson, A. and R. Campbell. (1996),
behaviour, London: Macmillan.

Management. New York: McGraw-Hill Book Co.

Pearce II, J. A. and R. B. Robinson. (1989),
Management Dynamics: towards efficiency,
Sagimo, P. O. (2002),
effectiveness, competence and productivity, Nairobi:
E.A.EDP.

Readings in strategic management, London: Macmillan:

Sorelli, T. (1989a) Business ethics: two
introductory questions In: Asch, D. and C. 270-279.
Bowman. (Eds.),
Readings in strategic management,. Hampshire:
Sorelli, T. (1989b) Strategy and ethics”:
Pilkington PLC. In: Asch, D. and C. Bowman Macmillan: 280-289.
(eds.),
Concepts and Practices, 2nd ed. London: Pitman
Welford, R. (1998) Business ethics and
corporate responsibility. In: Hannagan, T. Publishing: 545 – 566.
Management:
Human Resource Management: A Contemporary
Wright, M. and J. Storey (1997) Recruitment
Selection: In Beardwell, I. and L. Holden, (eds.), Perspective, 2nd ed. London: Pitman Publishing: 210-
274.

___________

11