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Social Responsibility and Business. 4 TH EDITION. FERRELL • THORNE • FERRELL. CHAPTER 7. Employee Relations. Economic Responsibilities to Employees. Employee-employer contract

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chapter 7

Social Responsibility and Business




Employee Relations

economic responsibilities to employees
EconomicResponsibilities to Employees
  • Employee-employer contract
    • Contract includes beliefs, perceptions, expectations, and obligations that constitute an agreement between individuals and their organizations.
    • Informal contract has significant impact on an employee’s actions.
    • When promises or expectations are not met, there is an enormous breach of trust resulting in less loyalty.
psychological contract
Psychological Contract
  • The beliefs, perceptions, expectations, and obligations that make up the agreement between individuals and the organizations that employ them
    • Largely unwritten
    • Details of the contract develop through interactions with managers and coworkers and through perceptions of the corporate culture
workforce reduction
Workforce Reduction
  • Process of eliminating employment positions
  • Can involve reducing the number of employees, simplifying products and processes, and decreasing quality and service
  • Makes the private relationship between employee and employer a public issue that creates concern, criticism, and economic effects on multiple stakeholders
workforce reduction1
Workforce Reduction
  • Key considerations
    • A comprehensive plan must be developed that takes into account the financial implications and qualitative and emotional toll of the reduction strategy.
    • The organization should commit to assisting employees who must make a career transition.
    • Companies must accept the consequences of terminating employees.
how individuals can mitigate the effects of downsizing
How Individuals CanMitigate the Effects of Downsizing
  • Employees should understand how their skills and competencies affect business performance.
  • Employees should strive for cost-cuttingand conservation strategies regardless of the employer’s current financial condition.
  • Today’s work environment requires that most employees fulfill diverse and varying roles.
    • More cross training
    • Flexible workplace
legal responsibilities to employees
Legal Responsibilities to Employees
  • Employment at will
    • This common-law doctrine allows the employer or employee to terminate the relationship at any time as long as it does not violate an employment contract.
    • Many states still use the employmentat will philosophy, but laws and statutesmay limit total discretion.
legal responsibilities to employees cont
Legal Responsibilities to Employees (cont.)
  • Wages and benefits
    • Fair Labor Standards Act of 1938 prescribed minimum wage and overtime pay, record keeping, and child labor standards.
    • Employee Retirement Income Security Act set uniform minimum standards to ensure that employee benefits are established.
legal responsibilities to employees cont1
Legal Responsibilities to Employees (cont.)
  • Labor unions
    • National Labor Relations Act legitimized the rights of employees to engage in collective bargaining and to strike.
legal responsibilities to employees cont2
Legal Responsibilities to Employees (cont.)
  • Health and safety
    • Occupational Safety and Health Act sought to ensure safe and healthy working conditions for all employees.
    • Recent rules require organizations to be concerned with ergonomics, the design, arrangement, and use of equipment to maximize productivity and minimize strain.
legal responsibilities to employees cont3
Legal Responsibilities to Employees (cont.)
  • Equal Opportunity Employment
    • Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, national origin, color, religion, and gender.
legal responsibilities to employees cont4
Legal Responsibilities to Employees (cont.)
  • Equal Opportunity Employment (cont.)
    • Affirmative action programs allow companiesto build balanced workforces.
      • Recruiting
      • Training
      • Promoting
    • Equal Employment Opportunity Commissionmonitors compliance with the law.
legal responsibilities to employees cont5
Legal Responsibilities to Employees (cont.)
  • Sexual Harassment
    • Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature
      • When submission to or rejection of this conduct explicitly or implicitly affects an individual’s employment; unreasonably interferes with an individual’s work performance; or creates an intimidating, hostile, or offensive work environment, sexual harassment has occurred.
legal responsibilities to employees cont6
Legal Responsibilities to Employees (cont.)
  • Sexual Harassment (cont.)
    • Quid pro quo
      • Exchange of job benefits for sexual favors
    • Hostile work environment
      • Epithets, slurs, negative stereotyping, intimidating acts, and/or graphic materials that show hostility toward an individual or group
      • Other types of conduct that affect the work environment
whistle blowing
  • A whistle-blower is one who reports individual or corporate wrong-doing to either internal or external sources.
    • The focus is usually on issues or behaviors that need corrective action.
whistle blowing cont
Whistle-Blowing (cont.)
  • Managers and other employees may not appreciate reports that expose company weaknesses, raise embarrassing questions, or otherwise detract from organizational tasks.
    • Historically, whistle-blowers have been retaliated against, demoted, fired, and even worse as a result of their action.
ethical responsibilities to employees
Ethical Responsibilities to Employees
  • Training and development
    • Benefits include stronger recruitment andretention, employee commitment, job satisfaction, and productivity
  • Diversity
    • Embraces the unique skills and contributions of all types of people
    • Brings benefits as well as challenges
ethical responsibilities to employees cont
Ethical Responsibilities to Employees (cont.)
  • Allow for work/life balance
    • Assist employees in balancing work responsibilities with personal and family responsibilities
    • Provide flexibility
      • Flextime
      • Job sharing
      • Child care
      • Elder care
      • Health clubs
philanthropic activities
Philanthropic Activities
  • Corporate giving affects employee attitudes toward the organization.
  • Employees benefit from participating in volunteerism programs and other philanthropic projects.
    • Builds teamwork skills
    • Educates employees
    • Example: More than 30,000 volunteers support the Ronald McDonald House Charities, donating one million hours of service per year (Source:, 11/30/09).
strategic considerations
Strategic Considerations
  • Strong employee initiatives lead to a company being viewed as the “employer of choice.”
    • This allows an organization to attract, optimize, and retain the best employee talent over the long term.