Case 1: THE CASE OF THE BODY SHOP
The Body Shop is a global manufacturer and retailer of ethically made beauty and cosmetic products. When she founded The Body Shop in 1979, Anita Roddick believed that companies have the potential to do good and just things for the world, as evidenced by the company’s mission statement: “To dedicate our business to the pursuit of social and environmental change.” In other words, Roddick was an early supporter of corporate social responsibility. Roddick passed away in 2007 at 64 years of age, but her legacy lives on in the form of The Body Shop’s following core values:
Against animal testing
Support community fair trade
Activate self-esteem
Defend human rights
Protect the planet
When the company was acquired by L’Oréal in 2006, the CEO of L’Oréal, Lindsay Owen-Jones, expressed his admiration for The Body Shop’s mission, vision, and core values. He described how his company’s expertise and knowledge of international markets could bring The Body Shop and its ethically made products to new customers.36
Questions- Case 1
How might The Body Shop’s ethical values influence its HRM policies?
If you were a manager for a competitor of The Body Shop, how would you go about investigating the implications of corporate social responsibility for a company’s success?
Case 2: APPLICANTS WITH CRIMINAL HISTORIES
Should an organization avoid hiring individuals with a criminal background? There is no federal law prohibiting discrimination against former inmates. Yet having blanket policies excluding those with criminal backgrounds has an ethical dimension. There are certainly legitimate reasons for not hiring someone with a criminal record, particularly when public health and safety are a concern. If the ex-convict commits a crime and harms a coworker or customer, the organization may be responsible for negligent hiring. At the same time, the rehabilitation of ex-convicts depends on finding employment. Depending on when the crime occurred and what it was, the risks to the business may be minimal. In some cases, individuals choose to plead guilty instead of fighting a conviction, which helps them avoid incarceration but results in a criminal record.
Businesses such as Seattle-based Mod Pizza and Oregon-based Dave’s Killer Bread are committed to giving those with criminal backgrounds a second chance, and they benefit from a qualified and highly motivated workforce. There is also a movement (“ban the box”) for states and jurisdictions to pass laws banning the question, “Have you been convicted of a crime?” on employment applications. These laws typically do not prevent companies from using criminal history as part of the hiring process, but they require the employer to wait until a job offer is made before a criminal background check is conducted; the offer may then be revoked if needed. There are no easy answers, but whether and how criminal records should be used in employment decisions is an ethical dilemma.59
Questions – Case 2
As a manager, suppose you need to decide whether to hire a candidate with excellent qualifications for the position but with a felony conviction in his or her background. What factors would you take into consideration to decide whether to hire this candidate?
Think of a case, or find one in the literature, of a company that encountered legal trouble as a result of hiring an employee with a criminal record. What could have been done differently? What did the company do right?
Case 3: FITNESS TRACKERS AND DATA PRIVACY
Today, many organizations partner with vendors to address employee health and engagement. For example, with the goal of improving employee well-being for partnering organizations, Virgin Pulse provides employees with wearable devices and applications to track their sleep, stress, activity level, and other personal data. Companies like Virgin Pulse tout their commitment to data privacy, security, and compliance, thereby implying that employee data will not be shared in an unauthorized manner.
The surprising thing with data recognizability is understanding how seemingly anonymous data, such as a query into a search engine, can give enough unique information to track that person down. For example, an IP address is a unique online identifier that may be tracked when a form is filled out or an online survey is taken. Although not 100% accurate, IP addresses can be used to identify a person or pinpoint their location, especially over a period of time as individuals travel to the same places (e.g., from their homes to work and back).
If an organization decided to provide employees with wearable devices instead of working through a third-party vendor like Virgin Pulse, this could pose an ethical dilemma under certain circumstances. Namely, without proper data privacy and compliance restrictions in place, the data could be used in ways that would compromise individuals’ privacy and other personal rights. Although perhaps not illegal, HR professionals may run dangerously close to committing discrimination under the Americans with Disabilities Act (ADA) if they use these data to make employment decisions. Poor or irregular sleep, for example, does not necessarily constitute a disability according to the ADA, but it could be an indicator of various physical diseases or psychiatric disorders, which are protected as disabilities under the ADA. Further, even if deemed legal, using employee health data in this manner could be construed as unethical, particularly if the data are used in a way that deviates from their intended use.36
Questions- Case 3
How does the use of a third-party vendor like Virgin Pulse make it more ethical to have employees wear monitoring devices than it would be if the employer did so directly?
Do you think the use of monitoring devices should be optional for employees? How would you ensure that employees who opted out of using the device would not be penalized for nonparticipation?
Case 4: APPLICANT INFORMATION PRIVACY
Job boards have become popular with organizations and job applicants. However, one major ethical concern has to do with information privacy. Two considerations seem especially important to consider.
First, who “owns” the data that applicants input into job board systems? Although online information privacy laws vary by country, with the European Union having stricter laws than the United States, the answer to this question is not clear. Imagine a scenario in which an online job board company tracks all your job application information and personal information and then sells this research about you. This is not as far-fetched as it sounds; there are documented accounts of job boards selling résumés and e-mail addresses.
A second concern is information security. Even if an organization does not plan to share your information with others, it is possible that cybercrime could lead to your information being stolen. For example, more than 1 million Monster.com subscribers had their information stolen. This is a serious concern, given how sensitive personal information such as Social Security numbers can be for identity theft. In response, Monster.com now allows users to make their résumés completely private so that employers cannot search for you but you can still search job listings and send out résumés and applications yourself.102
Questions – Case 4
How would you discuss these ethical issues with the decision makers in your organization? Are there specific policies or practices you would recommend?
Beyond the issues described here, what other ethical questions might you ask about online job boards? Think of them from the perspective of the job applicant, the recruiting organization, the tech company that operates the board, and any other stakeholders.
Case 5: KEEPING APPLICANT AND EMPLOYEE DATA SECURE
Applicant information privacy is a major ethical issue faced by employers. We mentioned the issue of keeping applicant information secure—something that is more easily said than done due to the risks inherent in both human error and the ingenuity of cyber-criminals.
In 2014, McDonald’s Canada’s job website was hacked, which put the personal data of as many as 95,000 job applicants at risk of being stolen; the data included their home addresses, e-mail addresses, and phone numbers. As another example, a laptop theft at Coca-Cola involved the private data of more than 74,000 employees, contractors, and suppliers. These cases are likely to happen more and more frequently as employers seek to use mobile-optimized application portals. Often, the cause of such data breaches is simple human error—errors that result from behaviors that many of us engage in on a regular basis.
How does an employer protect applicant data? It is recommended that HR work closely with IT staff. Employees should be asked to share their ideas for protecting data security. Employers should conduct a risk assessment of where things might go wrong. And employers should train employees in the basics of keeping data secure.69
Questions – Case 5
What practices should you follow to keep personal data secure? Consider yourself and others such as job applicants at your workplace or university.
Look up the McDonald’s or Coca-Cola data breach and read the details of what happened, how, and why. What could have been done differently? How did the employer respond once the breach happened?
Case 6: A GOAL-SETTING SCANDAL AT WELLS FARGO
Goal setting is one of the most effective and promising ways of motivating employees and aligning individual effort with department and organizational strategy. At the same time, goal setting can have a serious side effect that suggests the organizations using this strategy should take steps to avoid harmful consequences. In an aggressive culture that emphasizes ends and disregards means, goal setting may be a tool that corrupts employees and harms the company reputation.
Wells Fargo’s experience with goal setting offers a cautionary tale. The company made headlines with the revelation that it had opened hundreds of thousands of unauthorized accounts for its customers, leading to charging of fees for accounts customers did not realize they had. The company agreed to pay $185 million in fines; its CEO at the time, John Stumpf (pictured here), resigned, and more than 5,000 employees were fired as a result.
The way goal setting was used at Wells Fargo illustrates some of the worst practices of goal setting and its consequences. Employees were required to reach impossible daily sales goals to keep their jobs. Managers did not seem to care how employees met the goals as long as they were met. In fact, in some cases, managers encouraged employees to cheat, such as by opening up accounts for friends and family members or even opening accounts for customers without their knowledge and apologizing afterward if the customer realized it. District managers pressured branches by discussing goal achievement four times a day. The company eventually replaced sales goals with a bonus structure emphasizing customer satisfaction.
Questions – Case 6
How would you advise your organization if top management proposed an aggressive goal-setting policy for employee performance? How might the organization reap the benefits of goal setting while avoiding negative consequences?
In your own work, how do you set goals for yourself and measure your progress in attaining them? What have you learned that might help you to gain more benefits from goal setting?
Case 7: COMPASSIONATE DELIVERY OF LAYOFF NEWS
Even though not every layoff “victim” may feel like a victim, learning about one’s impending layoff may be met with anger, humiliation, and a feeling that one is disposable. In some companies, the news is delivered in an unnecessarily careless and humiliating way. Ideally, layoff news should be delivered by showing compassion and respect to the employees. Here are some examples that miss the mark on this issue.
Escorted by security. It is common for organizations to have security presence during mass layoffs or when retaliation and aggression are expected, but should escorting employees to the exit be routine practice? Organizations need to strike a balance between ensuring safety and showing compassion. A senior executive who was a long-time employee shared his experience: “I had to go down, grab some things quickly, and there was some security guards waiting. And then I got marched out of the building. And I thought that was so demeaning…. And the thing that I did find humiliating, I had to ring up and ask permission to come back and collect all my stuff.”
Learning about it last. One employee reports that his company was conducting layoff meetings while outgoing voicemails of departing employees were being changed. An employee’s wife found out about the layoff of her husband from a voicemail message stating that the employee no longer worked there.
Mass announcements. Companies sometimes find it cumbersome to conduct one-on-one meetings with employees to be laid off and resort to mass announcements. Although this method is efficient, employees often find it disrespectful and unfair, especially when the announcement is not made in a face-to-face meeting. In one case, a Ford assembly plant in Chicago notified laid-off employees via an automated phone call on Halloween. Many employees thought it was a prank and showed up to work the next day, only to find that their ID badges had been disabled.60
Can you come back and teach us what you do? An employee who performed a task vital to the company’s operations was laid off. A few days later, she received a call from HR. Apparently, no one had realized how important her job was to the operations until after she was laid off. Would she consider coming back for a few days and teaching what she did to someone still employed in the company?61
Questions – Case 7
What reasons can you think of to explain why employers chose to use what can be perceived as insensitive layoff announcements like those described here?
Find an example in the news or in the HR literature of a layoff that was handled with respect and compassion for the workers. Were there any problems nevertheless? What did the company do right, and what could have been done better?
Case 8: MERIT PAY FOR TEACHERS
Implementing merit pay for teachers has been a contentious issue, particularly in the United States. Supporters contend that merit pay motivates teachers to do a better job, leading to better outcomes for students in terms of academic achievement and eventual employment success. Critics, on the other hand, contend that the ways in which teacher performance is evaluated can lack transparency and may be beyond teachers’ direct control.
Selecting key performance indicators for teachers can be particularly challenging given that teachers can be evaluated based on their own behavior or on the behavior of their students and that student behavior can be influenced by many factors other than the teachers’ classroom performance. That is, teachers may exert some degree of influence over students’ behavior, including test scores, but students also arrive in a classroom with their own personal histories and unique circumstances that may affect how receptive and prepared to learn they are. Some critics argue that it can be unethical to base a substantial portion of teachers’ take-home pay on their students’ performance, particularly if performance is defined based on their students’ success on standardized tests.
In the United States, the push for pay-for-performance programs in educational settings gained traction in the 1980s and early 1990s. At about that time, a statistician named William Sanders began advising Tennessee lawmakers on a method for evaluating teachers based on the extent to which they improved their students’ standardized test scores, referred to as the value-added approach. The value-added approach takes into account the historical trends in students’ test scores, such as whether they improved, stayed the same, or declined, and determines whether a teacher improved their students’ test scores more than would be expected given that history.
Critics argue that the value-added approach is unfair, as a number of factors outside of teachers’ direct control can affect their value-added scores. Moreover, some teachers teach subjects that do not have an associated standardized test, which can make it difficult to evaluate them in the same manner as their peers. Analytical software companies like SAS Institute have developed algorithms to calculate the value-added scores of teachers. Some teachers and administrators have complained that these algorithms are difficult for nonstatisticians to understand, and due to the often proprietary nature of the algorithms, there can be a lack of transparency when it comes to communicating how the value-added scores are computed. Supporters of the value-added approach point to evidence that students of high value-added teachers are more likely to attend college and to go on to earn higher salaries than other students.
In terms of empirical research on the topics, research has shown that incentivizing teachers with merit pay does not always lead to higher teacher motivation or better student outcomes. In fact, the empirical findings are mixed. Some evidence indicates that merit pay leads to higher student scores in math, science, and reading, whereas other evidence suggests that merit pay may have some effect on students’ math scores but not on reading scores and that teachers do not find merit-pay programs to be motivating. As a way forward, some education reform advocates contend that rewarding teacher performance should not necessarily be thrown out; rather, the structure and organization of the schools themselves should also be taken into consideration when recognizing teacher performance.46
Questions – Case 8
Given the risk that low-performing teachers may do a poor job of preparing their students for eventual career success, do you think it is ethical to pay teachers without taking into account their performance? Why or why not?
Do you think it is ethical to base teacher pay on key performance indicators that may be, to some extent, beyond teacher control? Why or why not? Give some examples to support your opinion.
Case 9: SEXUAL HARASSMENT
In a large publishing company in New York, a young woman, Donna, was hired as a copy editor for one of the many journals produced by the company. Seven other employees worked on this team editing this Journal, including a senior editor named Jim. Donna had worked there for about a month when she and her fellow co-workers went for happy-hour after work. Everybody had a great Jime and had consumed a fair amount of alcohol. When everybody was leaving the bar to head home, Jim, who had been secretly attracted to Donna since she started work at the journal, hailed a cab and offered to share the ride with Donna. Donna accepted the offer. Once she was inside the cab, Jim then suddenly made an aggressive sexual advance toward her. Horrified, Donna pushed him away and told him to get out of the cab. Mortified, Jim slinked out of the cab.
The next day, Donna came to work with some apprehension. How would she deal with Jim? Would the cab incident affect her job? Although Jim did not supervise her, would he try to get her fired? Jim immediately went to her office and apologized for his extremely inappropriate behavior in the cab. Relieved at his apology, Donna decided not to pursue the matter through any formal channels in the office. She figured that since Jim apologized, there was no need to dwell on the incident. After all, Donna was a new employee, still in the process of learning the office politics and proving herself as being a competent editor. She did not want to rock the boat or bring negative attention to herself.
Everything would have been okay if Jim had stopped at just one sincerely expressed apology. However, whenever he found himself alone with Donna, Jim apologized again. And again. He said he was sorry about the incident at every opportunity he had for three months. This constant apology was awkward and annoying to Donna. Ironically, by Jim apologizing continuously for his unwanted attention in the cab, he was foisting another form of unwanted attention upon Donna. When he first started apologizing, Donna told him that “it was okay”. After three months of many apologies, she reached a point where she asked him to stop apologizing, to no avail. Frustrated, she confided in a few co-workers about her unusual dilemma. Consequently, these co-workers lost respect for Jim.
Although the cab incident was not common knowledge in the office, Jim sensed that others knew about it by the way they interacted with him. The incident became the office “elephant” that the employees “in the know” saw, but didn’t explicitly acknowledge. Jim was bothered by this behavior and felt uncomfortable around his co-workers. Meanwhile, Donna was tired of hearing Jim apologize and her feelings of discomfort increased. So when another editor position opened up in another journal division of the company, she applied for the job and was transferred to the other journal. In her new position, she didn’t have Jim bothering her anymore. But she was unhappy with her new job. The journal material was very boring. She didn’t work as well with her co-workers as she did in the previous journal (excepting Jim). She realized that she really enjoyed her old job. She began to regret her decision to avoid the conflict with Jim by moving to the new job. In an effort to seek advice as to how to solve her problem, Donna decided to consult with the company Human Resources Director.
Questions: Case 9
How would you handle this case, if you were the Human Resources Director
How would you effectively manage this situation in order to prevent it from happening again?
Case 10: A Cashier’s Story
MFR Corporation is a food manufacturing company that started its operations in the 1960s. It is a labor intensive corporation with about 3000 employees. It manufactures flour and soybeans as well as flour based consumer products. The company’s products are withdrawn from the production warehouses, loaded into delivery trucks driven by salesmen and are sold and delivered to retail outlets throughout the country by the salesmen who have assigned territorial route. By the end of the day, salesmen are required to deposit their day’s collection to the cashiers at the main office.
Tony has been working as a cashier for more than ten (10) years. He started with the company fifteen (15) years ago as a Credit and Collection clerk and worked his way up to become a cashier. Before being promoted to cashier, Tony underwent a battery of tests relevant to the position. He passed all the tests with above average scores. This included an honesty and integrity test which highly qualified him for the position of cashier. His exemplary performance, honesty, and trustworthiness had earned him the respect of both his supervisors and co-workers. Tony has always been responsible, punctual, and dedicated to his work. He has won an ”Outstanding Employee Award” five years after he assumed the position of Cashier. At one time, he badly needed a thousand dollars ($ 1000.00) and he was given a loan by the company which he was able to pay back in due time.
One Friday in October 2005, Tony failed to report for work. He did not file any leave forms nor did he inform anybody of his intent to be absent in which he was very consistent in doing. When his supervisor called his phone, he did not answer. The following Monday, he still did not show up for work and was reported to the Human Resource Director. Coincidentally, the person who substituted for him in his absence reported a serious discrepancy in Tony’s cash collections for the day before he failed to report for work. Records show that the previous week’s collection of about eighty-five thousand dollars ($ 85,000.00) was unaccounted. Records showed that the amount was received from the salesmen but was never entered in the cashier’s collection records. This raised suspicion and after the failure of Tony to respond to repetitive phone calls, and the fact that he could not be found, the company filed a complaint with the local police. He was accused of qualified theft.
More than a week after, Tony was located in a local hospital watching over his 12-year-old son, who underwent a life-saving surgical operation. The Human Resource Manager who was notified by the police spoke with Tony. Tony who was teary-eyed explained that he needed money to have the required surgery of his child who was near death. He explained further, that he could not find any other source to finance the surgery as he has maxed out his loans from the company and that the amount he needed was beyond what the company policy can provide. Tony appealed to the company for understanding and leniency and committed to pay back the money that he took.
The incident became known throughout the company, and almost everybody who knew Tony were in disbelief. The Human Resource Director reviewed the company policy regarding this case which stated as follows:
Policy Statement:
“Stealing from the company is a serious offense. Any employee regardless of employment status (temporary, contractual, permanent), who is found to have engaged in stealing money, property or any physical asset belonging to the company, will be dismissed immediately and be barred from entering the company premises. Such cases may be reported to the police and criminal complaints may be filed for legal disposition.”
The President of the company was advised of the incident. He called the Human Resource Director and instructed him to resolve the issue.
Questions- Case 10
Discuss the pros and cons of this case considering all the issues presented above. If you were the Human Resource Director, how will you resolve this issue and what will be your recommendation to the President?
Case 11: A Salesman’s Grief
PSI Corporation is a semiconductor manufacturing company that started its operations in January 1998. It is a labor-intensive corporation with about 2400 employees predominantly female, located in its plant and main office in Taguig, Metro Manila, Philippines. It manufactures microchips for the various electronics and computer companies in the United States, Asia and Europe. While the company has its production operations in the Philippines, it has its sales office in Silicon Valley, in San Francisco, California. The sales force is composed of three (3) sales engineers who report to Sam, a Sales Manager, who joined the company since its start-up. Each Sales Engineer is assigned to a certain territory within the Silicon Valley. Routinely, all sales engineers report for work at 8:00 am, clock in, and clock out at 5:00 pm. Within the day, they go out in the field to attend to their scheduled sales appointments.
Cesar, a sales engineer, has been with the company since 2002. He is the top producer of the PSI sales force and has received a number of awards of recognition as well as cash rewards. One Friday in May 2007, Cesar clocked in a 7:55 am to start his work. That day, he had five appoitnments, two in the morning at 9:00 and 10:30, and three in the afternoon at 1:30, 3:00, and his last appointment at 4:30 pm. All sales engineers use their own cars when doing a client call. That day, 3 of his appointments resulted in positive sales including his last appointment which ended at 5:30 pm. After his last appointment, he returned to the office, arriving at 5:50 pm, do some paper work. He clocked out at exactly 6:00 pm, and drove home which was about 20 minutes away from his office. While driving, he remembered that his boss instructed him to buy some office supplies from Office Max. He then proceeded to Office Max and after getting the supplies, he headed for home.
On his way home, he met an accident. He was hit by a truck along the highway which caused severe damage to his car. He also sustained serous injuries.. Within a few minutes, EMS arrived and pulled him out of the car and was rushed to the hospital. Medical exam results indicated that he suffered severe damage to his hip which required about 3 to 6 months of physical therapy and medication. The doctors required him to stay home. He will not be able to work for at least 3 months or maybe more, depending on the progress of the therapy. Cesar filed for Worker’s Compensation through PSI.
Questions – Case 11
1. Is this compensable under the Worker’s compensation? Be careful in answering this question.
You must be accurate and must support your arguments whether it is compensable or not.
2. If this is a compensable case, what will be compensable and covered under the Worker’s
Compensation?
3. If it is not compensable,what are the alternatives that you can undertake to help Cesar and
provide relief to him?
Case 12: PRIVACY, TECHNOLOGY, AND HUMAN ERROR
The large amount of highly personal data available to employers provides an opportunity to better understand employee behavior. These safety and health data can help uncover ways to support employees’ well-being. However, they also present ethical concerns and challenges about employees’ privacy. Employers must maintain the security of data. If the data were released, it could be damaging to employees, job applicants, or customers.
One recent example was the data breach at Uber, in which the private accounts of 57 million drivers and customers were stolen, and the company paid the hackers $100,000 to delete the data. (Uber also covered up the breach for several months, leading to the firing of its chief security officer and harming its reputation.)
Some security issues can be addressed by technological solutions like ensuring that the data cannot be hacked by outsiders. But other security issues are the result of human error. A single employee might mistakenly give out their login credentials in a phishing attack and make the entire database of all employees and customers visible.
The ethical issue of maintaining the security of private data is one that will continue to evolve with technological advances. But an organization is ethically responsible for maintaining the safety and security of its employees’ and clients’ personal information.80
Questions – Case 12
People working in HR have access to private information about employees. What kind of training content should an employer provide for its HR employees so that they would know their ethical responsibilities for maintaining these private data?
Describe some everyday situations in which an employee in HR or another area could accidentally compromise employees’ private data. How can workers prevent or contain the damage if this were to happen?
