I will
be discussing the impact ethics have on a company, the public, as well as their
employees. I talk further in depth of ethics dealing with the major scandals
that lead to the Sarbanes-Oxley act, dealing with attitudes and behaviors
within the company and outside of the company (internal, external), and the
teaching of ethics.
Sarbanes-Oxley
The Sarbanes-Oxley
act (SOX) was passed by Congress to make certain that publicly trades companies
follow accounting controls that would reduce the likelihood of illegal and
unethical behaviors. “The startling and recent scandals in the stock market
have generated significant losses to investors and, for a time, they left the
American economy in virtual chaos. In today's market, trust does not seem to be
prudent. From financial statements and market analysts to politicians and
company executives, enough evidence of impropriety has surfaced recently to
raise investor skepticism for years to come…concerns regarding the ethical
behavior of business enterprises and the effectiveness of accounting and
auditing standards.” (Gregory, M. Larson, et.al). After so many scandals had
went on for so long, congress wanted to regain the public trust back into
accounting profession. So, former President George W. Bush signed the SOX law
to change the way business conduct businesses and how the accounting
professions perform audits. All public companies must make the necessary
changes to abide by requirements of SOX law. It includes "all the
activities that managers engage in to attract and retain employees and to
ensure that they perform at a high level and contribute to the accomplishment
of organizational goals" (Gregory, M. Larson, et.al). The five major
components of a human resource management system typically present in organizations
are recruitment and selection, training and development, performance appraisal
and feedback, pay and benefits, and labor relations. HR profession had to
become strict with the rules and guidelines for everyone who makes up a
business to follow. “HR dimensions of the Sarbanes-Oxley Act
include protection for whistleblowers; requirements to develop, clarify, and
implement codes of ethics; increased fines and penalties for unethical actions;
greater efforts to ensure independence in fact and appearance; restrictions
involving compensation programs; increased fiduciary responsibilities; and
employment provisions” (Gregory, M. Larson, et.al).
Attitudes
and Behavior
“Performance
appraisals over the years have increasingly become a prime focus in the
psychology and organizational behavior fields. However, few companies use
appraisals of their managers as perceived by the subordinates” (Kantor,
Jeffrey, and Jacob Weisberg). Normally the employees will give feedback
performance to HR on their manager performance, attitudes, behavior, and etc.
This in doing helps the HR to point out the manager weakness, area they need
better improving on. “there are real and substantial costs to unethical
behavior including: deterioration of relationships; mistrust; negative impact
on employee productivity; stifling of employee creativity; information flows
throughout the company become ineffective; employee loyalty declines and
absenteeism and labor turnover increases” (Kantor, Jeffrey, and Jacob Weisberg).
HR set standard when dealing with employee’s diversities and inappropriate
behavior by introducing the company code of ethics which outlines attitudes and
behaviors towards customers, coworkers and managers. “This is virtually a
self-regulation process which is defined in the literature as a situation
whereby the existence of formal rules (codes of conduct) affect attitudes and
behavior” (Kantor, Jeffrey, and Jacob Weisberg).
Teaching
of Ethics
“Most people want to do the "right thing." This
is true in business as well as in life. It is the duty of business educators to
provide a framework for students and peers to judge the operational, legal, and
ethical rigor of managerial decisions. This article focuses attention on the
human resource management function. The importance of human resource management
(HRM) practices to the success of the firm is accepted by scholars and
practitioners alike…” (Charles, G. Smith, and D. Hindman Hugh). In
order for ethics to be taught. It must first start at home. I believe people
should adopt ethics into their daily life. Also, in their children’s,
professions, ethics is simply knowing right from wrong. Which should have been
taught at home! “An industrial relations system is a conceptual tool used to
order one's beliefs, attitudes, and behavior about the manner in which people
deal with one another at work. Its purpose is to provide an understanding of
the development and operation of structures and processes involved in the
production of goods and services as they relate to the parties involved and to
the larger society” (Charles, G. Smith, and D.
Hindman Hugh). Once you have grasps the knowledge of how an individual talks,
deals, handle any situation with a co-worker while at the workforce. You can
apply that structure and formality with the code of ethics HR has written under
the business code of conduct.
Work Citied
Charles,
G. Smith, and D. Hindman Hugh. "How Industrial Relations Informs the
Teaching of Ethics in Human Resource Management." Southern Business Review
32.2 (2007): 16-32. ProQuest. Web. 13 Dec. 2013
Gregory,
M. Larson, H. Thompson James, and Bruce Walters. "HUMAN RESOURCE ASPECTS
OF THE SARBANES-OXLEY ACT." Journal of Legal, Ethical and Regulatory
Issues 7.1 (2004): 143-54. ProQuest. Web. 13 Dec. 2013.
Kantor,
Jeffrey, and Jacob Weisberg. "Ethical Attitudes and Ethical Behavior: Are
Managers Role Models?" International Journal of Manpower 23.8 (2002):
687-703. ProQuest. Web. 13 Dec. 2013.
Klikauer,
Thomas. "The Ethics of Employment Relations and Human Resource Management:
Kohlberg's Seven Levels of Morality." New Zealand Journal of Employment
Relations (Online) 37.2 (2012): 1-20. ProQuest. Web. 13 Dec. 2013.
