Chapter 3 Objectives

1
Chapter 3 Objectives

• Understand the Strategic Importance of Fairness
  and Legal Compliance
• Understand What Fairness Means to Employees
• Describe Legal Means To Ensure Fair Treatment
• Describe Methods for Settling Disputes
• Describe Proactive Approaches To Ensuring Fair
  Treatment
• Understand Managing Diversity
• Challenges For The 21st Century

2
The Strategic Importance of Fairnessand Legal
Compliance

• Managers seek to maximize profits on behalf of
  shareholders.
• But business profits are based on several
  factors not the least of which is reputation

• What are the factors that HRM control that affect
  profit?
• What are some of the issues that a HRM Director
  might be faced with that determine reputation?

3
Concerns of the Labor Force

• Fairness creates the feeling of trust thats
  needed to hold a good workplace together.
• Employees express their concerns
• When they choose an employer
• When they decide to stay or leave
• Through surveys and grievance systems
• Through labor union participation

4
The HR Triad Fairness and Legal Compliance

• Line Managers
• Be informed
• Set policy in collaboration with HR
• Follow due process
• Respond to employee concerns
• Intervene if observe illegal behavior
• Keep accurate records

• HR Professionals
• Stay current on legal issues
• Set policy with managers
• Encourage managers to adopt societal views
• Balance employer/employee rights
• Administer dispute resolution

• Employees
• Be informed
• Work with HR to establish procedures
• Report illegal behaviors
• Accept responsibility to behave fairly
• Educate employees from other cultures

5
What Fairness Means to Employees

• Distributive Justice
• Comparison of personal outcomes with the outcomes
  of others
• Procedural Justice
• Perceptions about fairness in the process
• Interactional Justice
• Whether managers are sensitive, polite,
  respectful, and employeesare given sufficient
  information

6
Conditions to Be Met in Order for Employees to
Perceive Formal Procedures as Fair
EX 3.1
7
Reactions to Unjust Treatment

• Quit
• Stay and accept the situation
• Seek revenge
• Talk to others in the organization
• Complain to external authorities

8
Legal Means to Ensure Fair Treatment

• U.S .Constitution
• Title VII of the Civil Rights Act
• State Laws
• Administrative Regulations
• Executive Orders
• Common Law Rules

9
Major Federal Employment Laws and Regulations
National Labor Relations Act (Wagner Act,
1935) Fair Labor Standards Act (FLSA 1938) Equal
Pay Act (1963) Title VII of the Civil Rights Act
(1964 1991) Executive Order 11246 (1965) Age
Discrimination in Employment Act (ADEA
1967) Occupational Safety and Health Act (OSHA
1970) Rehabilitation Act (1973) Employee
Retirement Income Security Act (ERISA
1974) Pregnancy Discrimination Act (1978) Worker
Adjustment and Retraining Notification Act (WARN
1988) Americans with Disabilities Act (ADA
1990) Family and Medical Leave Act
(1993) Sarbanes-Oxley Act (2002)
EX 3.2
10
U.S. Constitution

• The fundamental law of the land
• The 14th Amendment is especially relevant to
  employment
• Requires states to provide equal protection and
  due process for its citizens
• Basis of civil rights acts

11
Civil Rights ActTitle VII

• Prohibits discrimination by employers, employment
  agencies, and unions.
• On the basis of
• Race ? Color ? Religion ? Sex
• National Origin ? Pregnancy
• Applies to businesses with15 or more employees.

What about those businesses with less than 15?
12
State Laws

• Must be consistent with Federal law.
• May apply to smaller businesses than Federal
  laws.
• May offer greater protection to employees (e.g.
  sexual orientation).
• State laws may precede (but not conflict with)
  Federal laws.

13
Administrative Regulations

• Rules, guidelines, and standards that government
  agencies produce to enforce the law.
• Equal Employment Opportunity Commission (EEOC)
• Occupational Safety and Health Administration
  (OSHA)
• National Labor Relations Board (NLRB)

14
Types of Discrimination Charges Filed with the
EEOC, 2002 (84,442 Total Charges)
EX 3.3
15
Monetary Awards for Employees Won by the EEOC
EX 3.4
16
Executive Orders

• Presidential orders specifying rules and
  conditions for doing business with the
  government.
• Executive Orders 11246 and 11375
• Prohibit discrimination by Federal agencies and
  contractors.
• Executive Order 11478
• Requires merit-based employment policies in the
  Federal government. (no Fed policy that does this.

17
Common Law

• The set of rules made by judges as they resolve
  disputes
• Interpretations of laws by judges set precedents
  used to decide new cases.
• Supreme Court rulings carry the most weight.

18
Using the Courts to Settle Disputes

• Monetary Damages
• Compensatory damages
• Punitive damages
• Settlement Agreements
• No admission of wrongdoing
• Money paid to plaintiff

19
Settling Disputes

• Options for resolving disputes outside of court
• Company grievance procedures (complaint
  resolution procedures)
• Mediation and arbitration
• On-line dispute resolution

20
Company Grievance Procedures

• Encourage employees to seek constructive
  resolutions without litigation
• First used in unionized settings now used in
  more than 50 of Americas largest companies
• Can lower legal costs and increase employee
  loyalty.
• Steps in typical procedure
• Appeal
• Hearing
• Decision

21
Alternative Dispute Resolution

• Mediation
• Use of a third party neutral to help resolve a
  dispute.
• Arbitration
• More formal process than mediation typically
  decisions are made by panel which may be selected
  by both parties.

22
Mandatory Arbitration and Cons

• Pros
• Quick dispute resolution
• Lower personal, professional, and financial costs
  for both parties
• Reduction in employers advantage in litigation
  by outspending and outlasting an employee
• More business-related experience and expertise of
  professional arbitrators
• Reduction in exposure to unpredictable jury
  awards for emotional distress and punitive
  damages
• Permits disputes to remain private
• May improve communication and employee relations

23
Mandatory Arbitration Pros and Cons (contd)

• Cons
• Relinquishment of employees statutory rights to
  a trial as a condition of employment
• Availability of user-friendly arbitration may
  stimulate a flood of claims
• May prevent better guidance for future action
  since courts are better able to provide
  consistent and clear interpretations of law
• Arbitrators may not be competent or impartial
• Small monetary penalties may reduce their
  effectiveness as remedies in the case of a
  wronged employee
• Confidentiality of the process may reduce its
  deterrent effect conversely, confidentiality
  isnt guaranteed
• May deter talented employees from accepting
  employment

24
Weighing the Pros and Cons of Using Mandatory
Arbitration to Settle Disputes
EX 3.5
25
Resolving Disputes Online

• Web-based technology that allows both parties to
  view mediators proposals for resolution, see
  notes from each party, track issues, and utilize
  a chat line.
• Used by Federal Meditation and Conciliation
  Service (FMCS)
• Little is known about the softwares
  effectiveness so far.

26
Proactive Approaches to Ensuring Fair Treatment

• Diversity Initiatives
• Policies and practices adopted voluntarily to
  ensure all members of a diverse workforce feel
  theyre treated fairly.
• Coverage may address concerns of groups that
  have no legal protections.
• Culture of Inclusion a company culture in which
  everyone feels integrated into the larger system.
• Characterized by respect, equal access, and
  merit-based decisions.

27
Areas Typically Covered by Corporate Diversity
Initiatives
EX 3.6
28
Diversity Initiatives Differing Views

• Negative Viewpoint
• All-inclusive diversity initiatives rob women and
  ethnic minorities of the resources and attention
  required to address the problems of systemic sex
  and race discrimination.
• Positive Viewpoint
• Narrowly focusing on the concerns of only a few
  groups ignores the legitimate concerns of many
  other groups and may also stimulate backlash and
  feelings of ill-will among some employees.

29
What is Harassment?

• Harassment is conduct that creates a hostile,
  intimidating, or offensive work environment.or
• Unreasonably interferes with an individuals
  work.or
• Adversely affects an individuals employment
  opportunities.

30
Current Legal Standard for Evaluating Harassment

• Would a reasonable person in the same or
  similar circumstances find the conduct
  intimidating, hostile or abusive?
• Ellison v. Brady (1991) a reasonable woman
• EEOC regulations require an environment free of
  harassment based on sex, race, color, religion,
  national origin, age or disability.
• Oncale v. Sundown Offshore Service Inc. (1998)
• Same-sex harassment covered.

31
Sexual Harassment

• Remarks or behavior of a sexual nature are
  defined as harassment if
• Submission to such conduct is tied directly to an
  individuals employment
• Submission to such conduct is used as the basis
  for employment decisions affecting that
  individual or
• Such conduct has the effect of interfering with
  an individuals work performance or creating a
  hostile work environment.

32
Preventing Harassment

• EEOC guidelines state that employers are liable
  for acts of those who work for them.
• They need to have explicit, detailed
  anti-harassment policies and grievance
  procedures.
• Employees should use available procedures to keep
  legal rights.
• Having and enforcing zero tolerance policy
  protects an employer from liability claims.

33
Preventing Harassment in the Workplace

• Clearly Inform Employees of the Rules
• Establish Procedures to Detect Harassment and
  Handle Complaints
• Provide Protection to Those Involved in
  Harassment Investigations
• Provide a Fair System for Discipline and
  Punishment

EX 3.7 adapted
34
Preventing Harassment in the Workplace

• ? Clearly Inform Employees of the Rules
• Raise affirmatively the issue of harassment.
  Acknowledge that it may be present in the
  organization, and make all employees aware of the
  companys position on harassment.
• Provide a clear and broad statement defining what
  constitutes harassment.
• Specify that offenders will be subject to
  appropriate discipline, up to and including
  discharge.
• ? Establish Procedures to Detect Harassment and
  Handle Complaints
• Build in checkpoints designed to detect
  harassment. For example, review all discharges to
  ensure that the employee was clearly performing
  poorly and had been given adequate opportunity to
  improve.
• Set up a list of names and positions to whom
  complaints can be made. The list should make it
  clear that employees who are harassed by
  supervisors have alternative reporting options.
• State that employees who experience or witness
  harassment are required to report it.
• Establish procedures for investigating and
  corroborating a harassment charge.

EX 3.7
35
Preventing Harassment in the Workplace (contd)

• ? Provide Protection to Those Involved in
  Harassment Investigations
• Give the person accused of harassment opportunity
  to respond immediately after charges are made.
  Due process must be provided the alleged
  perpetrator as well as the alleged victim.
• Assure employees that they wont be subjected to
  retaliation for reporting incidents of
  harassment.
• ? Provide a Fair System for Discipline and
  Punishment
• Specify a set of steps in a framework of
  progressive discipline for perpetrators of
  harassment. These could be the same steps used by
  the organization in treating any violation of
  organizational policies.

EX 3.7 contd
36
Fairness Must be Reciprocated
Code of ethics Informs employees that they are
expected to conduct business in a way that
upholds high standards of integrity.

• Employees should
• Act with integrity
• Understand/comply with laws and rules
• Safeguard the firms reputation
• Maintain confidentiality

• Companies should
• Uphold integrity
• Articulate standards and rules clearly
• Provide support in legal and ethical decisions
• Refuse to tolerate illegal or unethical conduct

37
Challenges for the 21st Century

• Employment-at-Will
• Employee Privacy
• Fairness in the Global Context

38
Employment-at-Will

• Employment-at-Will
• A companys right to terminate employees for any
  reason.
• Either party (employer or employee) can sever the
  relationship at will.
• Regulations that curtail employment-at-will
• Civil Rights Act
• Age Discrimination in Employment Act
• Americans with Disabilities Act
• National Labor Relations Act

39
Employment-at-Will (contd)

• Procedural Justice
• Emphasized in most court decisions.
• Termination should be the last step in series of
  documented steps.
• Steps should ensure employee understood problems
  and had chance to improve.
• Worker Adjustment and Retraining Notification Act
  (WARN) of 1988
• Requires a 60-day notice of plant/office closure
  and worker training.

40
Acceptable Reasons to Terminate Employees

• Incompetence in performance that does not respond
  to training or to accommodation
• Gross or repeated insubordination
• Civil rights violations such as engaging in
  harassment
• Too many unexcused absences
• Illegal behavior such as theft
• Repeated lateness
• Drug activity on the job
• Verbal abuse
• Physical violence
• Falsification of records
• Drunkenness on the job

EX 3.8
41
Unacceptable Reasons to Terminate Employees

• Blowing the whistle about illegal conduct by
  employers
• Cooperating in the investigation of a charge
  against the company
• Reporting Occupational Safety and Health
  Administration violations
• Filing discrimination charges with the EEOC or a
  state or municipal fair employment agency
• Filing unfair labor practice charges with the
  National Labor Relations Board (NLRB) or a state
  agency
• Filing a workers compensation claim
• Engaging in concerted activity to protest wages,
  working conditions, or safety hazards
• Engaging in union activities, provided there is
  no violence or unlawful behavior
• Complaining or testifying about violations of
  equal pay or wage and hour laws
• Complaining or testifying about safety hazards or
  refusing an assignment because of the belief that
  its dangerous

EX 3.8 contd
42
Employment-at-Will (contd)

• Implied Contracts
• Based on employee-held beliefs regarding
  conditions of employment.
• Beliefs may be based on verbal assurances given
  by managers.
• Explicit Contracts
• Written down and clearly state company policy.
• Some employers require signed waivers when
  severance packages given to prevent wrongful
  discharge suits.

43
Employee Privacy

• Employee Privacy
• The right to keep information about ourselves to
  ourselves.
• Laws and Regulations that Protect Privacy
• Fourth Amendment
• Privacy Act of 1974 (applies to Federal
  Agencies)
• Freedom of Information Act of 1974
• Fair Credit and Reporting Act of 1970
• Employment Polygraph Protection Act
• Employee Exposure and Medical Records Regulation
  of 1980

44
Access to Medical and Lifestyle Information

• Americans with Disabilities Act (ADA)
• Medical examination may only be given after a
  conditional job offer.
• All medical records must be kept separate and
  confidential.
• Employers can penalize, refuse to hire or
  terminate because of conditions associated with
  high health care costs.
• Lower insurance premiums for healthy lifestyles
• 90 of employers now conduct drug testing.

45
Access to Genetic Information

• Challenges to Personal Privacy
• Federal legislation prohibiting use of genetic
  information for staffing decisions has been
  proposed.
• Some employers may want to use genetics to
  predict employee health.

46
Monitoring Communications

• Technology makes monitoring easy and unobtrusive
• Companies can monitor telephone, e-mail,
  voice-mail, use video and other surveillance
  devices.
• Informing employees and claims of business
  necessity make monitoring more defensible.

47
Fairness in the Global Context

• Work Conditions and Pay
• Other countries may provide more or less legal
  protection than the U.S.
• Economic and social differences create inequities
  and ethical challenges.
• Terminations and Layoffs
• Other countries have costly employer obligations.
• Before layoffs or shutdowns, firms may be
  required to have a government-approved social
  plan.
• Privacy
• EUs Data Protection Directive
• Restricts collection and storage of personal
  information.

48
Conclusion Fair Treatment and Legal Compliance

• Legal compliance is the first step
• Effective managers who are sensitive to employee
  perceptions and to the broader social fabric
• Anticipate employee reactions
• Personally respect employees
• Elicit positive attitudes from employees