1. Business & Society Business & Society Ethics, Sustainability, and Stakeholder Management Eighth Edition Archie B. Carroll Ann K. Buchholtz © 2012 South-Western, a part of Cengage Learning 1

2. Chapter 17 Employee Stakeholders and Workplace Issues © 2012 South-Western, a part of Cengage Learning 2

3. Learning Outcomes © 2012 South-Western, a part of Cengage Learning 1.Identify the major changes that are occurring in the workforce today. 2.Outline the characteristics of the new social contract between employers and employees. 3.Explain the employee rights movement and its underlying principles. 4.Describe and discuss the employment-at-will doctrine and its role in the employee’s right not to be fired. 5.Discuss the right to due process and fair treatment. 6.Describe the actions companies are taking to make the workplace friendlier. 7.Elaborate on the freedom-of-speech issue and whistle- blowing. 3

4. Chapter Outline The New Social Contract The Employee Rights Movement The Right Not to Be Fired Without Cause The Right to Due Process and Fair Treatment Freedom of Speech in the Workplace Summary Key Terms 4 © 2012 South-Western, a part of Cengage Learning

5. Global Competition and the Social Contract The social contract between organizations and their workers has been reshaped. Driven by global competition and the economic recession. The trend toward more expansive employee rights Right not to be fired without good cause Right to due process and fair treatment Right to freedom of speech in the workplace © 2012 South-Western, a part of Cengage Learning 5

6. The New Social Contract Today’s worker has held nine jobs by age 30. The workforce is: More mobile Less loyal More diverse Employees want: Competitive pay Benefits Opportunities for professional growth © 2012 South-Western, a part of Cengage Learning 6

7. The Changing Social Contract 7 © 2012 South-Western, a part of Cengage Learning

8. Employee Loyalty Loyalty remains important Employers must earn employee loyalty through demonstrating: Trust Respect Commitment  Uncertainty from the global economic recession made employees feel more loyal to their employers. 8 © 2012 South-Western, a part of Cengage Learning

9. Training and the New Social Contract Outplacement Assistance provided to laid-off employees.  Is an important ethical responsibility. The duty to treat employees well does not end when they are terminated. 9 © 2012 South-Western, a part of Cengage Learning

10. The Employee Rights Movement Private property Individuals and private organizations are free to use their property as they desire.  Historically, private corporations did not have to recognize employee rights. 10 © 2012 South-Western, a part of Cengage Learning

11. Employee Rights Rights From the Principle of Rights perspective, rights are justifiable claims that utility cannot override. Sources of employee rights 1.Statutory rights 2.Collective bargaining rights 3.Enterprise rights 11 © 2012 South-Western, a part of Cengage Learning

12. Models of Management Morality Moral management Employees are viewed as a human resource that must be treated with dignity and respect. Amoral management Employees are treated as the law requires. Immoral management Employees are viewed as factors of production to be used, exploited, and manipulated. 12 © 2012 South-Western, a part of Cengage Learning

13. The Right Not to Be Fired Without Cause Good cause norm The belief that employees should only be discharged for good reasons. Prevails in the United States today. Employment-at-will doctrine The relationship between employer and employee is a voluntary one that can be terminated at any time by either party. Is a fairly unique concept in the world. 13 © 2012 South-Western, a part of Cengage Learning

14. Legal Challenges to Employment- at-Will Public policy exceptions Protects employees from being fired for refusal to commit crimes. Implied contract exception Protects employees who they believe have contracts or implied contracts. Good faith principle Employers may lose lawsuits to former employees if they cannot show that employees had opportunities to improve their performance before termination. 14 © 2012 South-Western, a part of Cengage Learning

15. Moral and Managerial Objections to Employment-at-Will 1.Employees deserve respectful treatment. 2.Employees do not have the option of being arbitrary or capricious with employers. Employers should bear the same responsibility. 3.Employees are expected to be trustworthy, loyal and respectful with employers. Employers should show employees the same consideration. 15 © 2012 South-Western, a part of Cengage Learning

16. Terminating an Employee 1.Fire employees in a private space. 2.Be mindful of employees’ logistics. 3.Preserve the employee’s dignity. 4.Choreograph the notification in advance. 5.Use transparent criteria for layoffs. 16 © 2012 South-Western, a part of Cengage Learning

17. What Not to do When Terminating an Employee 1.Don’t fire on a Friday. 2.Don’t say that downsizing is finished. 3.Don’t terminate an employee via e-mail. 4.Stick to the topic and avoid platitudes. 5.Don’t rush through the meeting. 17 © 2012 South-Western, a part of Cengage Learning

18. The Right to Due Process Due Process The right to receive an impartial review of one’s complaints and to be dealt with fairly. The right of employees to have decisions that adversely affect them be reviewed by objective and impartial third parties. 18 © 2012 South-Western, a part of Cengage Learning

19. The Requirements of a Due Process System 1.It must be a procedure and must follow rules. 2.It must be visible so that potential violators are aware of it. 3.It must be predictably effective. 4.It must be institutionalized. 5.It must be perceived as equitable. 6.It must be easy to use. 7.It must apply to all employees. 19 © 2012 South-Western, a part of Cengage Learning

20. Alternative Dispute Resolution 20 © 2012 South-Western, a part of Cengage Learning

21. Concerns with the Open-Door Policy 1.The process is closed. 2.One person is reviewing what happened. 3.Tendency for a manager to support another manager’s decision.  A hearing procedure helps open up the process because employees can elect representation. 21 © 2012 South-Western, a part of Cengage Learning

22. The Ombudsman Has been used in Sweden since 1809 to curb abuses by government against individuals. Ombuds handle the concerns of employees who believe they have witnessed wrongdoing. They keep the problem from getting out of hand. 22 © 2012 South-Western, a part of Cengage Learning

23. Factors for a Successful Peer Review Panel 1.People in the process are respected members of the organization. 2.Elected, rather than appointed, committee members. 3.Provide training in dispute resolution, discrimination, fairness, legalities, and ethics for everyone involved. 4.Representatives of both employees and management should be involved in decision making. 23 © 2012 South-Western, a part of Cengage Learning

24. Mandatory Arbitration Arbitration A process where a neutral party resolves a dispute between two or more parties and the resolution is binding. Mandatory arbitration The parties must agree to arbitration prior to any dispute occurring. 24 © 2012 South-Western, a part of Cengage Learning

25. Freedom of Speech in the Workplace Whistle-Blower An organization member who discloses illegal, immoral, or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action. 25 © 2012 South-Western, a part of Cengage Learning

26. Whistle-Blowing Key Elements in the Whistle-Blowing Process 1.The whistle-blower 2.The act or complaint 3.The party to whom the complaint is made 4.The organization against which the complaint is made 26 © 2012 South-Western, a part of Cengage Learning

27. Two Views of Employee Responsibility in a Whistle-Blowing Situation 27 © 2012 South-Western, a part of Cengage Learning Corporate Employer Loyalty Obedience Confidentiality EmployeeEmployeeTraditional (Has certain rights) Public EmployeeEmployee Corporate Employer Whistle blowing Responsibility (Has certain rights) Emerging

28. A Checklist to Follow Before Blowing the Whistle 1.Is there any alternative to blowing the whistle? 2.Does the proposed disclosure advance public interest rather than personal or political gain? 3.Have you thought about the outcomes of blowing the whistle for yourself and your family? 4.Have you identified the sources of support on which you can rely during the process? 5.Do you have enough evidence to support your claim? 6.Have you identified and copied all supporting records before drawing suspicion to your concerns? 28 © 2012 South-Western, a part of Cengage Learning

29. Consequences of Whistle-Blowing Firing More stringent criticism of work Less desirable work assignments Pressure to drop charges against the company Heavier workloads Loss of perquisites Exclusion from meetings previously attended 29 © 2012 South-Western, a part of Cengage Learning

30. Government Protections for Whistle-Blowers  1978 Civil Service Reform Act  Michigan Whistle-Blowers Protection Act of 1981  Sarbanes-Oxley Whistle-Blower Protections  False Claims Act 30 © 2012 South-Western, a part of Cengage Learning

31. Sarbanes-Oxley Whistle-Blower Protections Comprehensive coverage for all employees of publicly-traded companies Comprehensive protection for discrimination or harassment Any corporate conduct that could threaten shareholder value Timely responses The right to a jury trial Lessened burden of proof on employee Compensatory damages and judicial fees Criminal felony penalties for retaliation Audit committees required to have complaint response procedures 31 © 2012 South-Western, a part of Cengage Learning

32. Management’s Responsiveness to Whistle-Blowing Whistle-blowing occurs after less dramatic channels of communication have failed 1.Managers must be clear that they invite suggestions. 2.Managers must refute commonly held assumptions and organizational myths that discourage communication. 3.Managers should tailor rewards so that employees share more directly in cost savings or sales increases from ideas they offer. 32 © 2012 South-Western, a part of Cengage Learning

33. Key Terms 1978 Civil Service Reform Act Alternative dispute resolution (ADR) Collective bargaining Due process Employee Rights Employment-at-will doctrine Enterprise rights False Claims Act Good cause norm Good faith principle Hearing procedure Implied contracts Mandatory arbitration Michigan Whistle- Blowers Protection Act of 1981 Ombudsman Outplacement Open-door policy Peer review panel Private property Public policy exception Social contract Statutory rights Whistle-blower © 2012 South-Western, a part of Cengage Learning 33