Social Responsibility and Business 4TH EDITION FERRELL • THORNE • FERRELL CHAPTER 7 Employee Relations
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 • 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
Employee and Employer Contributions to Psychological Contract (cont.)
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 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 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 • 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.) • 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 (cont.) • Labor unions • National Labor Relations Act legitimized the rights of employees to engage in collective bargaining and to strike.
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 (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 (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 (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 (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.) • 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 • 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.) • 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 • 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: www.rmhc.com, 11/30/09).
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.