HR Departments Should Play A More Prominent Role In Ethics Management

HR Departments Should Play A More Prominent Role In Ethics Management

UNIVERSITY PARK, PA-Although many large corporations now have formal programs for managing ethical behavior and legal compliance, human resources departments often play only a minor role in companies' ethics management efforts.

"The human resources departments should play a more prominent role in ethics or compliance management," says Linda K. Treviño, professor of Organizational Behavior and Chair of the Department of Management and Organization in Penn State's Smeal College of Business.

She notes that fairness issues are important to employees, and the involvement of HR staff and departments in ethics and compliance programs could be important to the real and perceived fairness of those programs. "Therefore, HR staff and departments need to play a more central role in ethics management initiatives if those initiatives are to provide real benefits for both organizations and their members."

Treviño co-authored a paper on the topic, "The Role of Human Resources in Ethics/Compliance Management: A Fairness Perspective," with Gary R. Weaver of the University of Delaware. The paper appears in a recent issue of Human Resource Management Review .

"HR offices are likely to be viewed as representing employee's concerns. In addition, HR offices can play a key role in developing ethics programs with a proper balance of values and compliance orientations, and in integrating ethics programs into important organizational activities, such as the design of performance appraisal systems, management training, and disciplinary processes," says Treviño.

She points out that HR departments should not attempt to manage ethics initiatives on their own. Multiple functions and departments-including legal, audit, the top management team, and board of directors-need to work together in a coordinated effort aimed at fostering ethical behavior in the organization.

"For example, research has shown that a values orientation in company ethics programs is more likely if the highest levels of management are committed to the intrinsic value of ethics. So even though HR's involvement in ethics programs is important to their success, HR should not expect to accomplish the task alone," says Treviño.

If HR departments adopt a higher profile role in ethics management, employees may perceive more fairness in the ethics program. Employees who see an organization's ethics program as unfair may reject the program. On the other hand, Treviño says that when employees perceive that the organization treats the employees fairly, commitment to the organization and to the ethics program is higher.

"Research on this topic also has shown that employees are more aware of ethical issues, more likely to ask for ethical advice within the organization, more likely to think that it was all right to deliver 'bad news' to management, more likely to report an ethical violation, and more likely to believe that decision making was better in the organization as a result of the ethics program if they perceive that the organization treats employees fairly," says Treviño. "Employees' belief in a just organization may be necessary for ethics/compliance management effectiveness."

Although issues of ethics in organization encompass much more than questions of fairness or justice, failure to foster justice in the organization can undermine organizational efforts to encourage ethical behavior generally, says Treviño. "Ethics management, in short, though not the same as fairness management, depends on careful handling of fairness issues within an organization. Consequently, the HR function should play a crucial role in organizations' efforts to deal with ethical issues, because HR's role is central to the management of fairness in contemporary organizations."