Leading And Managing Ethically

Leading and Managing Ethically

Choose an organization you are familiar with, and select one HRM area such as employee voice, reward management, performance management, or work-life balance. Identify a potential ethical issue or dilemma within this area. Critically analyze and evaluate the organization's current approach to this HRM practice and its handling of the ethical problem, drawing on relevant HRM and ethical theories and literature. Provide two or three recommendations for how the organization could adopt a more ethical approach in this area, justified through academic sources.

Paper For Above instruction

In recent years, the emphasis on ethical management within organizations has gained significant momentum, driven by increased stakeholder awareness and societal expectations. This paper explores an ethical dilemma within reward management at TechSolutions Ltd., a mid-sized technology firm specializing in software development. The focus centers on the organization’s approach to executive compensation—an area rife with ethical concerns over fairness, transparency, and equity.

TechSolutions has adopted a performance-based reward system tied closely to short-term financial indicators. While this aligns executive incentives with organizational goals, it has raised ethical questions related to fairness and long-term sustainability. The ethical dilemma hinges on whether the current reward practices inadvertently promote unethical behavior, such as exaggerating performance results or neglecting broader stakeholder interests, including employee well-being and social responsibility.

From an ethical perspective, this dilemma can be analyzed through the lens of utilitarianism and Kantian ethics. Utilitarianism emphasizes maximizing overall happiness, which suggests that reward systems should promote long-term organizational health and stakeholder interests. Conversely, Kantian ethics emphasizes fairness, transparency, and respect for individual dignity, which raises concerns about opacity and perceived inequity in executive compensation.

An analysis of TechSolutions’ current approach reveals a focus on performance metrics that primarily benefit top executives, often at the expense of broader employee morale. The lack of transparency and perceived inequity can lead to deteriorating trust, increased internal conflict, and potential reputational damage. Literature suggests that ethical HR practices necessitate alignment of reward systems with organizational values and stakeholder interests (Ferrell & Fraedrich, 2015). Moreover, ethical leadership is associated with fostering organizational justice, which enhances morale and employee engagement (Greenberg, 2006).

Critically, the current reward policy at TechSolutions fails to integrate these ethical considerations sufficiently. It relies heavily on quantitative performance metrics, neglecting qualitative factors such as ethical conduct and teamwork, which are crucial for sustainable organizational success. Incorporating stakeholder perspectives, including employee representatives, into the reward system design could improve fairness perceptions.

Based on this evaluation, three recommendations are proposed. First, implement a transparency initiative whereby reward criteria and allocation processes are communicated clearly to all stakeholders, aligning with Kantian principles of honesty and respect. Second, diversify performance metrics to include ethical conduct, teamwork, and long-term contributions, fostering a more holistic and ethically aligned reward system based on stakeholder welfare (Mahoney & Thorne, 2004). Third, establish an independent review panel to oversee executive remuneration, ensuring accountability and fairness, which aligns with organizational justice theory.

In conclusion, integrating ethical principles into reward management enhances organizational legitimacy, stakeholder trust, and long-term sustainability. TechSolutions can benefit significantly from adopting these recommendations, thus fostering a genuinely ethical reward system that aligns with contemporary expectations and scholarly insights on ethical HRM practices.

References

• Ferrell, O. C., & Fraedrich, J. (2015). Business Ethics: Ethical Decision Making & Cases. Cengage Learning.
• Greenberg, J. (2006). The Shifting Foundation of Organizational Justice: The Diet of Justice. Journal of Management, 32(6), 873–887.
• Mahoney, T. S., & Thorne, L. (2004). Strategic Reward Systems and Ethical Climate: An Empirical Test of the Connection. Journal of Business Ethics, 49(4), 345–358.