Employees – Lecture 9
Employees as Stakeholders:
- Employees are key stakeholder of the firm:
o They constitute the firm are key representatives of the firm.
o In some cases, they even own it in cooperatives or through employee shareholding
trust (e.g. John Lewis Partnership / Waitrose).
o Are a key asset or even the most important ‘resource’ of the corporation?
Employer – Employee Relations:
Embedded in Human Resource Management (HRM).
- 1. Hard model: strict control, high job insecurity, employees as a cost to be minimized.
o Employees as means to an end (i.e. achieving sustainable competitive advantage).
o Utilitarian approach (from employer perspective)
- 2. Soft model: employees as an asset to be developed and nurtured:
o A deontological approach – duty to employees
Ethical Issues in HRM:
- Employees are, in principle, managed by the human resources department.
- Core ethical dilemma in HRM: under economic criteria, people are resources that should be
managed in ways that maximise efficiency & minimize costs and that compete with other
resources.
- Term ‘human resources management’ problematic from an ethical perspective.
- Humans are resources and are usually the most expensive and manipulable (e.g. you can
manipulate a person easier than a concrete factory).
- Viewing employees as resources implies utilitarian perspective.
- It clashes with notions of employees as individuals with basic rights that deserve respect.
- HRM function often faces strong contradictions and tensions between economic and ethical
demands:
o E.g. surveillance (want to increase productivity) vs. upholding the right to privacy.
o E.g. down-sizing in the face of falling demand – got to lay people off to cut costs, e.g.
BlackBerry.
Key Ethical Issues in HRM (Crane & Matten, 2007):
- Discrimination – (Video) – ‘High cost of low price’ at Walmart. Walmart’s focus is to keep
spending down as low as possible, this can mean underpaying staff, cutting hours etc.
- Employee privacy
- Sexual harassment
- Employment security
- Employee participation and association
- Favouritism in promotion, pay, hiring
Discrimination:
- Employees receive preferential (or less preferential) treatment on grounds not directly
related to their qualifications and performance in the job.
1
Employees as Stakeholders:
- Employees are key stakeholder of the firm:
o They constitute the firm are key representatives of the firm.
o In some cases, they even own it in cooperatives or through employee shareholding
trust (e.g. John Lewis Partnership / Waitrose).
o Are a key asset or even the most important ‘resource’ of the corporation?
Employer – Employee Relations:
Embedded in Human Resource Management (HRM).
- 1. Hard model: strict control, high job insecurity, employees as a cost to be minimized.
o Employees as means to an end (i.e. achieving sustainable competitive advantage).
o Utilitarian approach (from employer perspective)
- 2. Soft model: employees as an asset to be developed and nurtured:
o A deontological approach – duty to employees
Ethical Issues in HRM:
- Employees are, in principle, managed by the human resources department.
- Core ethical dilemma in HRM: under economic criteria, people are resources that should be
managed in ways that maximise efficiency & minimize costs and that compete with other
resources.
- Term ‘human resources management’ problematic from an ethical perspective.
- Humans are resources and are usually the most expensive and manipulable (e.g. you can
manipulate a person easier than a concrete factory).
- Viewing employees as resources implies utilitarian perspective.
- It clashes with notions of employees as individuals with basic rights that deserve respect.
- HRM function often faces strong contradictions and tensions between economic and ethical
demands:
o E.g. surveillance (want to increase productivity) vs. upholding the right to privacy.
o E.g. down-sizing in the face of falling demand – got to lay people off to cut costs, e.g.
BlackBerry.
Key Ethical Issues in HRM (Crane & Matten, 2007):
- Discrimination – (Video) – ‘High cost of low price’ at Walmart. Walmart’s focus is to keep
spending down as low as possible, this can mean underpaying staff, cutting hours etc.
- Employee privacy
- Sexual harassment
- Employment security
- Employee participation and association
- Favouritism in promotion, pay, hiring
Discrimination:
- Employees receive preferential (or less preferential) treatment on grounds not directly
related to their qualifications and performance in the job.
1
