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1 Copyright © 2015 Pearson Education Ltd.
14 Ethics, Employee Relations, and Fair Treatment at Work Human Resource Management 14th Edition, Global Edition In this chapter we will explore issues, policies, and problems related to ethics, fair treatment, discipline, and the termination of employees. With the recent events at Enron, WorldCom, and other firms, ethics has become a major issue in today’s world. Let’s spend some time discussing what has changed to make this an issue. Is there more unethical behavior, have standards changed, or is it simply that today’s media and communications shed more light on perpetual problems? Gary Dessler Copyright © 2015 Pearson Education Ltd.

2 Copyright © 2015 Pearson Education Ltd.
Learning Objectives Explain what is meant by ethical behavior at work. Discuss important factors that shape ethical behavior at work. Describe at least four specific ways in which HR management can influence ethical behavior at work. Employ fair disciplinary practices. Explain what is meant by employee relations and what employers can do to improve it. After studying this chapter, you will be able to: 1. Explain what is meant by ethical behavior at work. 2. Discuss important factors that shape ethical behavior at work. 3. Describe at least four specific ways in which HR management can influence ethical behavior at work. 4. Employ fair disciplinary practices. 5. Explain what is meant by employee relations and what employers can do to improve it. Copyright © 2015 Pearson Education Ltd.

3 Explain what is meant by ethical behavior at work.
Ethics and morality are basically the same but differ in their application. An ethic is a set of guiding principles (virtues) while morality is the degree of conformity to such a set of principles. Interestingly, the term "morality" relates to mores or customs. So, one can rightfully ask the probing question, "Whose customs or principles do we adopt?" Let’s discuss. Copyright © 2015 Pearson Education Ltd.

4 Basics of Ethics and Fair Treatment at Work
What is ethics? Ethics and the law Ethics, public policy, and employee rights Unalienable rights Public policy Employment rights Ethics refers to “the principles of conduct governing an individual or a group.” Ethical decisions also involve morals, which are society’s accepted standards of behavior. The law is not the best guide about what is ethical because something may be legal but not right, and something may be right but not legal. Ethics means making decisions that represent what you stand for not just what is legal. With respect to the workplace, experts generally define organizational justice in terms of distributive justice and procedural justice. Distributive justice refers to the fairness and justice of the decision’s result. Procedural justice refers to the fairness of the process itself. While law can provide guidelines for future behaviors and actions of an organization, ethical procedures depend on the standards we aspire to in our culture and society. Societies don’t rely on employers’ ethics or sense of fairness or morality to ensure that they do what’s right. Societies also institute various laws and procedures for enforcing these laws. These laws lay out what employers can and cannot do. Laws also carve out explicit rights for employees but not all rights derive from laws. For example, the first 10 amendments to the U.S. Constitution we call the Bill of Rights. Most laws therefore also reflect public policy. In other words, governments enact laws so as to further their public policy aims. Public policy “consists of political decisions for implementing programs to achieve societal goals.” Protecting employee rights is therefore part and parcel of all the employment laws we discuss. Copyright © 2015 Pearson Education Ltd.

5 Basics of Ethics and Fair Treatment at Work
Workplace Unfairness Ethics are seen as fair treatment Why Treat Employees Fairly? Perceptions of fairness relate to employee commitment, satisfaction Bullying and Victimization Unfair treatment reduces morale, increases stress, and has negative effects on performance. Employees of abusive supervisors are more likely to quit, and to report lower job and life satisfaction and higher stress. There are many reasons why managers should be fair. People who view themselves as victims of unfairness also suffer a range of ill effects including poor health, strain, and psychological conditions. Unfairness leads to increased tensions between the employee and his or her family or partner. Aggressive supervisors undermine their subordinates’ effectiveness and may prompt them to act destructively. The U.S. government ( points out that while definitions of bullying vary, most would agree that bullying involves: ● Imbalance of power. People who bully use their power to control or harm, and the people being bullied may have a hard time defending themselves. ● Intent to cause harm. Actions done by accident are not bullying; the person bullying has a goal to cause harm. ● Repetition. Incidents of bullying happen to the same person over and over by the same person or group, and that bullying can take many forms, such as: ● Verbal: name-calling, teasing ● Social: spreading rumors, leaving people out on purpose, breaking up friendships ● Physical: hitting, punching, shoving ● Cyberbullying: using the Internet, mobile phones, or other digital technologies to harm others employers must have systems in place (such as grievance procedures and policies to monitor employees’ harassing use of social media websites) to ensure that the company can and does deal with such unfair treatment. Research Insight A study illustrates the interpersonal dynamics involved. Research suggests that people with higher intellectual capability often suffer bullying at school—for instance, derogatory names such as geek and nerd. In this study, 217 employees of a health-care organization completed a survey that measured cognitive ability, victimization, and how the person behaved at work. The researchers found that it wasn’t just whether the person was smart that determined if he or she was victimized. Instead, people with high cognitive ability who also behaved more independently were more likely to be bullied. Smart team players were less likely to be victimized. In any case, punishing those who engage in workplace aggression is essential. Copyright © 2015 Pearson Education Ltd.

6 Copyright © 2015 Pearson Education Ltd.
Review Ethics The law Unfair treatment Public policy and employee rights Bullying and Victimization So far we have discussed the basic definition of ethics and its relationship to morality. We also determined that, while the law can provide some guidelines about ethical behavior, it is up to us to determine societal standards and abide by them. Public policy exists to help societies protect the rights of individuals. Ethical behavior is good for business and maintaining positive employee relations between managers and their employees. Doing so is impossible if employees view the company or its managers as unethical. Copyright © 2015 Pearson Education Ltd.

7 Discuss important factors that shape ethical behavior at work.
Whether a person acts ethically at work is usually not a consequence of any one thing. Let’s look at what the important factors are. Copyright © 2015 Pearson Education Ltd.

8 What Shapes Ethical Behavior at Work?
Three factors combine to determine the ethical choices we make The person (bad apples) Situations (bad cases) Outside forces (bad barrels) Pressures Ethics policies and codes Enforcement, whistleblowers, fraud controls Organizational culture The research found: Whether a person acts ethically at work is usually not a consequence of any one thing. Because people bring to their jobs their own ideas of what is morally right and wrong, the individual must shoulder much of the credit (or blame) for the ethical choices he or she makes. Three factors combine to determine the ethical choices a person makes. No single “smoking gun” determines ethical behavior. The first factor may be called “bad apples” or individuals who make unethical choices. We may call the second factor “bad cases” or ethical situations ripe for unethical choices. The third may be called “bad barrels” or environments which foster unethical choices. Individual characteristics: Who are the bad apples? Some people are just more inclined to make unethical choices. Which ethical situations make for bad (ethically dangerous) cases or situations? Some ethical dilemmas are more likely to prompt unethical choices. Finally, what are the “bad barrels”? What outside factors mold ethical choices? Some people are just more principled than others. One study suggests older workers generally have stricter interpretations of ethical standards and make more ethical decisions than younger ones. We also know that outside pressures weaken one’s ethical compass. Common pressures include “meeting schedule pressures,” “meeting overly aggressive financial or business objectives,” and “helping the company survive.” It’s also hard to resist even subtle pressure, let alone coercion, from your boss. An ethics policy and code is a good way to signal that the firm is serious about ethics. However, codifying the rules without enforcing them is futile. As one study noted, “…strong statements by managers may reduce the risk of legal and ethical violations by their work forces, but enforcement of standards has the greatest impact.” Finally, employees take their signals about what’s acceptable not just from what managers say, but from what they do. Those signals then mold the company’s organizational culture, the “characteristic values, traditions, and behaviors a company’s employees share.” Keep in mind the following: Enforcement Codifying the rules without enforcing them is futile. As one study of ethics concludes, “strong statements by managers may reduce the risk of legal and ethical violations by their work forces, but enforcement of standards has the greatest impact.” More firms, such as Lockheed Martin Corp., therefore appoint chief ethics officers. Ethics audits typically address topics like conflicts of interest, giving and receiving gifts, employee discrimination, and access to company information. Whistleblowers Some companies encourage employees to use hotlines and other means to “blow the whistle” on the company when they discover fraud. In complying with the Dodd-Frank Act, the SEC recently established a whistleblower reward for people who report unethical corporate behavior to it. It is also tracking possible incidents of retaliation against whistleblowers. Fraud Controls Fraud controls reduce occupational fraud. For example, the Association of Certified Fraud Examiners found that fraud controls such as hotlines, surprise audits, fraud training for employees, and mandatory vacations can each reduce internal theft by around 50%. Copyright © 2015 Pearson Education Ltd.

9 Guidelines When Managing Ethical Behavior at Work
Ethical behavior starts with moral awareness Cultivating the right norms, leadership Reward systems and culture Morality comes from within Openly talk about ethics Here in a nutshell is what research findings suggest for managers: ● Ethical behavior starts with moral awareness. Does the person even recognize that a moral issue exists in the situation? Managers should influence employee ethics by carefully cultivating the right norms, leadership, reward systems, and culture. ● Ethics suffer when people undergo moral disengagement. For example, you’re more likely to harm others when you view the victims as “outsiders.” ● The most powerful morality comes from within. In effect, when the moral person asks, “Why be moral?” the answer is, “because that is who I am.” ● Highly challenging goals pursued blindly and job pressures can contribute to unethical behavior. For example, “A sales goal of $147 an hour can lead auto mechanics to ‘repair’ things that weren’t broken.” ● Don’t reward bad behavior. Don’t promote someone who got a big sale through devious means. ● Punish unethical behavior. Employees expect you to discipline the perpetrators. ● The degree to which employees openly talk about ethics is a good predictor of ethical conduct. ● Be aware that people tend to alter their moral compasses when they join organizations. They uncritically equate “what’s best for this organization (or team, or department)” with “what’s the right thing to do?” The accompanying HR Tools feature applies this to the small business. Copyright © 2015 Pearson Education Ltd.

10 IMPROVING PERFORMANCE: HR Tools for Line Managers and Entrepreneurs
Studies show small enterprises can have unethical behavior like big firms There are several reasons why small firms have to be alert to unethical behavior Small firms don’t have the resources for ethics officers, ethics hotlines, or the ethics training that big firms have Small Business Ethics Small business owners can take several steps to establish a useful ethics program. First, size up your company’s current ethics-related activities. Even a self-audit based on guidelines like those in this chapter (the availability of an ethics code, ethics training, internal controls to monitor ethical behavior, and so on) can be worthwhile. Second, create a code of conduct (Googling “code of conduct” will reveal thousands of examples), and make it clear that you take it seriously. Third, train your people. Training needn’t be complicated. For example, one expert suggests having your managers develop scenarios, relevant to your business, illustrating which behaviors are ethical and which are not; then meet to discuss these. Fourth, make it easier to solicit feedback from your employees, so that they can more easily provide you with suspicions of unethical behavior. (“Open door” polices and anonymous suggestion boxes are examples.) And, perhaps most importantly, walk the talk. In a small business, the owner or CEO is so visible that employees will take their ethical signals from him or her. Discussion Question 14-2: Create a 50-word ethics code for a small business. Copyright © 2015 Pearson Education Ltd.

11 Copyright © 2015 Pearson Education Ltd.
Review Why do people do bad things? Research findings suggest what managers can do Why do people do bad things? It’s complicated. However one review of over 30 years of ethics research concluded that three factors combine to determine the ethical choices we make. The authors titled their paper “Bad Apples, Bad Case, and Bad Barrels.” This title highlighted their conclusion that when: “Bad apples” (people who are inclined to make unethical choices), must deal with “Bad cases” (ethical situations that are ripe for unethical choices), while working in “Bad barrels” (company environments that foster or condone unethical choices), then this brew combines to determine whether or not someone acts ethically. Some of the factors that shape ethical behavior at work include the individual, the situation, and forces outside of the individual such as environments or cultures that foster unethical behaviors. Policies and codes that are not enforced or pressures from bosses may help create some “bad barrels.” Copyright © 2015 Pearson Education Ltd.

12 Copyright © 2015 Pearson Education Ltd.
Describe at least four specific ways in which HR management can influence ethical behavior at work. Managers can use personnel activities to support the employer’s ethics goals. We’ll consider examples. Copyright © 2015 Pearson Education Ltd.

13 Using HR Tools to Promote Ethics and Fair Treatment
Selection Ethics training Performance appraisal Reward and disciplinary systems Managing ethics compliance Screening out undesirables actually can start before the applicant applies. This is more likely if the HR department creates recruiting materials containing explicit references to the company’s emphasis on integrity and ethics. Interviewing using questions about ethical behavior and managing other aspects of the selection process sends signals about the company’s ethical values and culture. Ethics training typically plays a big role in helping employers nurture a culture of ethics and fair play. Such training usually includes showing employees how to recognize ethical dilemmas. It also includes how to use ethical frameworks to resolve problems, and how to use HR functions in ethical ways. The firm’s performance appraisal processes provide another opportunity to emphasize a commitment to ethics and fairness. The appraisal can actually measure employees’ adherence to high ethical standards. Managers and organizations need to reward ethical behavior and penalize unethical behavior. However, care must be taken in rewarding ethical behavior so as not to undermine the intrinsic value of behaving in an ethical manner. Passage of the Sarbanes-Oxley Act of 2002 made ethics compliance mandatory. The act requires that CEOs and CFOs of publicly traded companies personally attest to the accuracy of their companies’ financial statements. Record-keeping in the post-Enron era has become intense so smaller companies face challenges in adhering to the Sarbanes-Oxley Act. As a result, some companies have been taken private to avoid the duties required of the company officers. Nonetheless, privately held or smaller companies should be willing to attest to the validity of the published statements and internal practices. Copyright © 2015 Pearson Education Ltd.

14 Employee Privacy Policies Copyright © 2015 Pearson Education Ltd.
The problem Employee monitoring Restrictions The four main types of employee privacy violations upheld by courts are: intrusion (locker room and bathroom surveillance); publication of private matters; disclosure of medical records; and appropriation of an employee’s name or likeness for commercial purposes. The problem with increased use of blogging and Twitter-type tools further expands the potential for distributing questionable content. And with more employers using their own iPads and smart phones at work, new problems arise. One employer gave employees iPods to use, and found they were now clogging the firm’s servers with illegal music downloads. Security is another problem. One “4-gigabyte MP3 player, such as the first generation of iPod Mini can take home a lot of corporate data,” said one employer (a process some graphically describe as “podslurping”). Employers monitor employees’ electronic activities mostly to improve productivity and to protect themselves from computer viruses, leaks of confidential information, and harassment suits. There are two main restrictions on workplace monitoring: the Electronic Communications Privacy Act (ECPA) and common-law protections against invasion of privacy. Copyright © 2015 Pearson Education Ltd.

15 IMPROVING PERFORMANCE: Copyright © 2015 Pearson Education Ltd.
HR as a Profit Center Employee access to company network information systems is monitored Employers ranging from United Parcel Service to the City of Oakland, California, use GPS units to monitor their truckers’ whereabouts—and therefore productivity Such monitoring of course raises privacy issues. The dilemma is that monitoring may also boost profits. For example, employers routinely use software to monitor (usually secretly) what their employees are doing online. When one employer noticed that employees were piling up overtime claims, they installed new software and discovered many employees were spending hours each day shopping online instead of working. BankAmerica asked about 90 of its workers to wear sensor badges; based on the resulting information the bank concluded that employees who worked in close knit teams and spoke frequently with others were more productive. When the bank took steps to get employees mingling, productivity rose by at least 10%. To keep productivity up, the British grocery chain Tesco has some distribution center employees wear “Motorola arm mounted terminals” (armbands) that keep track of how quickly employees are unloading and scanning goods. Discussion Question 14-3: How would you feel if your employer told you to wear an armband monitor? Why? How would you react? Copyright © 2015 Pearson Education Ltd.

16 Copyright © 2015 Pearson Education Ltd.
Review Selection Training Performance Rewards Compliance and the law We have discussed how specific HR practices can help establish and maintain a framework for ethical behavior within an organization. Emphasizing ethical practices during the selection process, training programs that reinforce ethical practices and establishing a rewards system that includes consideration of ethical choices as part of the employee’s actions will support the ethical culture of the firm. Various laws impact organizational ethics including the Sarbanes-Oxley Act requiring CEOs and CFOs remain personally responsible for adherence to proper standards. Next the Electronic Communications Privacy Act intended in part to restrict interception and monitoring of oral and wire communications. Copyright © 2015 Pearson Education Ltd.

17 Employ fair disciplinary practices.
The purpose of discipline is to encourage employees to behave sensibly at work. In an organization, rules and regulations serve purposes similar to what laws do in society. Discipline is called for when one of these rules or regulations is violated. A fair and just discipline process is based on three pillars: clear rules and regulations, a system of progressive penalties, and an appeals process. Bullying and victimization is becoming a serious problem in the workplace. Such behavior usually involves an imbalance of power, an intent to cause harm, and repeating the same behavior with the same person or group. One study suggests three supervisory actions influence perceived fairness. The first is to involve employees in the decisions that affect them. Second, ensure that everyone involved and affected understands why final decisions are made. Finally, make sure everyone knows up front by what standards you will judge him or her. Copyright © 2015 Pearson Education Ltd.

18 Copyright © 2015 Pearson Education Ltd.
Managing Employee Discipline Basics of a fair and just disciplinary process Rules and regulations Progressive penalties Formal disciplinary appeals processes The employer wants its discipline process to be both effective (in terms of discouraging unwanted behavior) and fair. Employers base such a process on three pillars: clear rules and regulations, a system of progressive penalties, and an appeals process. First, rules and regulations address issues such as theft, destruction of company property, drinking on the job, and insubordination. A system of progressive penalties is a second pillar of effective discipline. Penalties typically range from oral warnings to written warnings and, finally, to suspension from the job to discharge. In addition to rules and progressive penalties, the disciplinary process requires an appeals procedure. Typically, if the decision is not acceptable to an employee, the employee may submit a appeal first to management, then a company officer and finally an executive review procedure. Copyright © 2015 Pearson Education Ltd.

19 Copyright © 2015 Pearson Education Ltd.
Discipline without Punishment Oral reminder Formal written reminder Decision-making leave Purge suspension from file Discipline should be perceived and fair and its purpose understood to correct inappropriate behavior. The goal is not to fix the blame; the goal is to fix the problem. Typical steps include: Issue an oral reminder. Should another incident arise within 6 weeks, issue a formal written reminder, a copy of which is placed in the employee’s personnel file. Give a paid, one-day “decision-making leave.” If no further incidents occur in the next year or so, purge the one-day paid suspension from the person’s file. Copyright © 2015 Pearson Education Ltd.

20 Copyright © 2015 Pearson Education Ltd.
Review Fairness Unfair behavior Rules and regulations Penalties Appeals Discipline, not punishment Much of what we have discussed has to do with common sense, respect for the individual and using a clearly understood system to ensure equity. Fairness, like beauty, is in the mind of the beholder but can be backed up by data. Bullying, unfortunately, continues to grow as a societal norm. It has to do with power issues, an intent to cause harm and repeating the same behaviors against the same individual or group. Involving employees, helping them understand why actions are being taken, and what the standards are will go a long way to ensure perceived fairness. Rules and regulations are similar to societal laws in that they help guide behavior. Penalties should be administered in a fair and progressive manner, with respect for the individual in mind. If an employee is not satisfied with a decision, he or she should have the right to appeal. Discipline should be perceived as a learning opportunity, not strictly as a punishment for inappropriate behavior. Copyright © 2015 Pearson Education Ltd.

21 Copyright © 2015 Pearson Education Ltd.
Explain what is meant by employee relations and what employers can do to improve it. Policies that foster ethics, fair treatment, and fair discipline form the bedrock of positive employee relations. On that foundation, the employer can then build an effective employee relations program, to which wenow turn. Copyright © 2015 Pearson Education Ltd.

22 Copyright © 2015 Pearson Education Ltd.
Managing Employee Relations What Is Employee Relations? Positive employee–employer relationships contribute to productivity Improving and assessing employee relations through better communications Organizational climate surveys Individual supervisors can of course use methods such as open-door policies and “management by walking around” to informally monitor “how things are going.” Other employers use surveys, newsletters, and staff meetings to facilitate communications. The owner of 11 IHOP restaurants reduced its employee turnover with an online survey. Employee attitude, morale, or climate surveys play a part in many firms’ employee relations efforts. They use the surveys to “take the pulse” of their employees’ attitudes toward a variety of organizational issues including leadership, safety, role clarity, fairness, and pay, and to thereby get a sense of whether their employee relations need improvement. Copyright © 2015 Pearson Education Ltd.

23 Copyright © 2015 Pearson Education Ltd.
Managing Employee Relations Developing Employee Recognition/Relations Programs Creating Employee Involvement Strategies Teams to gain employees’ involvement Employee suggestions Instituting recognition and service award programs requires some planning and a budget. For example, selecting awards, having a procedure for monitoring what awards to actually award, having a process for giving awards (such as special dinners or staff meetings), and periodically assessing program success. Similarly, instituting a recognition program requires developing criteria for recognition (such as customer service, cost savings, etc.), creating forms and procedures for submitting and reviewing nominations, selecting meaningful recognition awards, and establishing a process for actually awarding the recognition awards. Employee relations tend to improve when employees get involved with the company in positive ways, and so employee involvement is another useful employee relations strategy. Employers also use various types of teams to gain employees’ involvement in addressing organizational issues. Suggestion teams are temporary teams whose members work on specific analytical assignments, such as how to cut costs or raise productivity. A quality circle is a special type of formal problem-solving team, usually composed of 6 to 12 specially trained employees who meet weekly to solve problems affecting their work area. A self-managing/self-directed work team is “a highly trained group of around eight employees, fully responsible for turning out a well-defined segment of finished work.” Employers understand that employee suggestions can produce significant savings and employees find it involving to make suggestions. Copyright © 2015 Pearson Education Ltd.

24 IMPROVING PERFORMANCE: Copyright © 2015 Pearson Education Ltd.
HR as a Profit Center A Lockheed Martin unit in Oswego, NY, has a program for streamlining processes Ideas are electronically submitted They are evaluated and approved by the local manager Saves about $77,000 per implemented idea, or $100 million each year The Cost-Effective Suggestion System Today’s suggestion systems are more sophisticated than the “suggestion boxes” of years ago. The main improvements are in how the manager formalizes and communicates the suggestion process. The head of one company that designs and installs suggestion systems for employers lists the essential elements of an effective employee suggestion system as follows: ● Senior staff support ● A simple, easy process for submitting suggestions ● A strong process for evaluating and implementing suggestions ● An effective program for publicizing and communicating the program ● A program focus on key organizational goals Discussion Question 14-5: Based on this, write a one-page outline describing an employee suggestion system for a small department store. Copyright © 2015 Pearson Education Ltd.

25 Copyright © 2015 Pearson Education Ltd.
Review Managing employee relations Improving employee communications Developing award programs Strategic employee teams We discussed managing employee relations which is usually assigned to HR, and is a topic the SHRM Knowledge Base addresses. In this section, looked at managing employee relations in terms of three main topics: Improving and assessing employee relations through improved communications, Developing employee recognition/relations programs, and Using employee involvement strategies. Copyright © 2015 Pearson Education Ltd.

26 Translating Strategy into HR Policies and Practices
List three more specific steps Hotel Paris should take with respect to each individual human research function (selection, training, and so on) to improve the level of ethics in the company. The Hotel Paris’s New Ethics, Justice, and Fair Treatment Process As the head of HR for the Hotel Paris, Lisa Cruz was especially concerned about her company maintaining the highest ethical standards. Her concerns were twofold. First, there are, in any single hotel each day, at least a dozen people (including housekeepers, front-desk clerks, security guards, and so on) with easy access to guests’ rooms, and to their personal belongings. Guests—many younger, and many unwary—are continually walking the halls unprotected. So, in a service company like this, there is simply no margin for ethical errors. She knew that employees do not like being treated unfairly, and that unfairness in any form could manifest itself in low morale and in diminished performance. She wondered if her employees’ low morale and engagement—as measured by her firm’s attitude surveys—stemmed, in part, from what they perceived as unjust treatment. Lisa therefore turned to the task of assessing and redesigning the Hotel Paris’s ethics, justice, and fair treatment practices. Continued on next slide. Copyright © 2015 Pearson Education Ltd.

27 Translating Strategy into HR Policies and Practices
Based on what you learned in this chapter, write a short (less than one page) explanation Lisa can use to sell to top management the need to further improve the hotel chain’s fairness and justice processes. The Hotel Paris’s New Ethics, Justice, and Fair Treatment Process When she sat with the CFO to discuss her proposal for the Hotel Paris’s fairness, justice, and ethics system, Lisa came armed with some research. In 2003, the Journal of Applied Psychology published a study that showed how improving the level of interpersonal and procedural justice in a service company can lead to improved employee attitudes and performance and thus to improved hotel performance. And the study was done in a hotel chain. In this study, the researchers collected employee survey data from a hotel chain’s 111 different hotels in the United States and Canada. The employee services department of this hotel chain obtained completed surveys from 8,832 of the hotel’s employees. The researchers also obtained data on employee turnover as well as on the employees’ commitment, employees’ intentions to remain with the organization, and guest satisfaction. Clearly, having fair and just procedures in place effected these hotels’ employee morale and behavior, and thus company performance—they could even measure the links. For example, procedural justice and interpersonal justice were related to increased levels of employees’ satisfactionwith supervision. Procedural justice and satisfaction with supervision were both related to improved employee commitment. And employee commitment was related to intention to remain with the hotel, and therefore to reducing employee turnover. Furthermore, procedural and interpersonal justice led to improved employee satisfaction with supervision and commitment, and thus to improved employee discretionary service behaviors, and ultimately to higher guest service satisfaction. Lisa and her team then proceeded methodically through the company’s entire HR process, starting with recruitment and selection. The selection process now includes an honesty test. New guidelines ensure an open and fair performance appraisal process. The team completely revamped the hotel’s disciplinary process. They instituted a new appeals process that included appeals to each hotel’s manager, and then to Lisa Cruz, and finally to a top management executive appeals committee. They instituted a new discipline without punishment system. They instituted new guidelines outlining grounds for dismissal. The new procedure requires that someone from HR approve any dismissal before it is final, and be present when any employee who’s been with the firm for more than a year is dismissed. Discussion Question: What do you think of the adequacy and effectiveness of the steps Lisa has taken so far? Copyright © 2015 Pearson Education Ltd.

28 Copyright © 2015 Pearson Education Ltd.
Hotel Paris Strategy Chapter 14 Hotel Paris Strategy Chapter 14 Copyright © 2015 Pearson Education Ltd.

29 Copyright © 2015 Pearson Education Ltd.


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