Ethics and the HR department – a happy marriage?

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When embedding ethical values into organisational culture, the roles of a company’s Ethics and HR functions frequently overlap, and can create challenges and tensions – so it’s important that they work together effectively.

The Institute of Business Ethics defines business ethics as the application of ethical values, such as fairness, honesty, openness, integrity, to business behaviour. In short, it is about how an organisation does its business. Does it treat its employees with dignity and respect? Does it treat its customers fairly? Does it pay its suppliers on-time? Is it open to dialogue with its local communities? Does it acknowledge its responsibilities to wider society? Does it practice good governance? 

Business ethics applies to all aspects of business conduct, from boardroom strategies, sales techniques and accounting practices to stakeholder relations and issues of product responsibility. Business ethics concerns discretionary decisions that organisations, and the individuals who work for them, make in the day-to-day situations they face.

Establishing high standards of business based on ethical principles requires organisations to put in place ethics or corporate responsibility programmes – policies, codes, training and support etc – and actively nurture an ethical culture. 

Research suggests that the Ethics and HR functions recognise the importance of working effectively together. In a Conference Board survey of ethics and compliance and HR professionals from 214 global companies, 77% of respondents said they ‘would like to see a more collaborative approach between the two functions than their company is currently taking’. Additionally, Ethics Resource Center surveys have indicated that there is willingness by both functions to learn more from each other and cross fertilise their knowledge. They suggest, for values to be truly communicated throughout a company ‘the message to management has to be to encourage this effort’.

Overcoming challenges

Despite the potential and necessity for areas of collaboration between the Ethics function and HR it is not uncommon for tensions and perceived lack of co-operation to exist between the two departments. 

In a 2008 survey of global companies by ERC and Society for Human Resource Management (SHRM), 30% of respondents cited different approaches to problem analysis as the key obstacle towards successful collaboration between the two functions. Nearly a fifth (18%) cited potentially disruptive areas such as lack of mutual professional respect and a ‘sizeable number of HR professionals feel that they are not truly part of the ethics infrastructure in their organisations, yet they are often called upon to remedy or assist with the situations caused by ethics violations’.

Paula Desio (ERC) puts problems down to communication failure and a perception of competition: ‘These two groups are sharing many of the same responsibilities and there’s an overlap that should be harmonised. They certainly shouldn’t be competing. It should be more a question of emphasis and less a matter of a turf battle between the two groups’.

Despite such possible challenges, many companies have good relations between the Ethics team and HR which helps them to embed a values-led culture across the organisation. For example, Flowserve Corporation, found that recruiting people with HR backgrounds as members of the Ethics function can mean both teams work well together as there is greater understanding of each other’s role. This can help facilitate strong personal working relationships which Flowserve views as key to successful working between the two teams. However, an HR background for Ethics team members is by no means essential to good working relations. An ability and preparedness of both teams to work together is what is critical.

Effective partnerships necessitate open communication between the two departments. One FMCG company highlighted to us the importance of both departments communicating openly so that strategies can be aligned and they are working towards common goals. This has more impact than isolated approaches. How feasible this is for companies can be dependent on how well ethics is integrated into existing systems and processes. For example, the FMCG company emphasise ‘it is key that ethics ... is embedded in our existing practices, and not just a “bolt on”, or additional task. This makes it easier to implement and easier for employees to engage with and understand that it is an integral part of the way we do business, and not an optional extra’. This means the whole company, HR and the Ethics function included, are working to the same agenda.

Employee perception of how the Ethics department and HR work together is also an important aspect of embedding an ethical culture within an organisation. At one defence company, care is taken to keep the two teams distinct and independent to avoid any perceived (or actual) conflicts of interest. It is important that employees know that an area of ethical concern will be handled independently from the department dealing with disciplinary issues, promotions, etc. For example, the two departments have different reporting lines and are physically very separate within the site.

How HR and Ethics can work together

HR are responsible for key systems and processes which can underpin effective delivery of messages the organisation wishes to convey about ethics. Through HR, ethics can be given credibility and aligned with how businesses run. With their expertise in change management and internal communications, and by working in partnership with those responsible for ethical performance within their organisation, HR can help to integrate ethics into processes such as the employer brand, recruitment, induction, appraisal, retention, motivation, reward, diversity, coaching and training.

HR also has an important role to play in monitoring how ethical values are embedded. Staff surveys, appraisals and exit interviews can all provide valuable information on whether the company’s ethical values are embedded, as well as providing ways to evaluate how the ethics programme is working and whether the company is living up to its values in practices. Job applicants are increasingly concerned about the ethical conduct and reputation of an organisation. The Ethics function can inform HR about how the company approaches its corporate responsibility and ethical commitments so HR is able effectively to answer interviewee’s questions. This, as well as including ethics issues, questions and dilemmas at the interview stages of recruitment can help HR ensure new employees are aware of, and accepting of, the behaviours expected of them by an organisation. 

Including questions on the ethics challenges and organisational culture in exit interviews can also provide useful information for monitoring the effectiveness of the ethics programme. HR and the Ethics function can work together to identify what to ask to assess whether ethical concerns were a reason for an employee leaving. 

Management appraisals can ask for commitments to the company’s ethics and look for examples of how the employee and their departments have supported the company’s ethical commitment. In a similar way to other performance measures, these can demonstrate how staff have contributed to the company’s ethical performance and can be included in decisions regarding bonuses or promotions. Assessing employees’ application of ethical values through appraisals can incentivise them to behave ethically. HR could provide the Ethics function with (anonymised) results from staff appraisals, which could help towards monitoring the effectiveness of the ethics programme or help to see where further training should be focused.

Developing a rewards system for ethical behaviour, such as remuneration, promotion or ethics ‘awards’, are other ways of encouraging and reinforcing the expected ethical behaviour of employees. HR and the Ethics function can work together to develop an employee incentives system for their organisation to reward employees who demonstrate ethical behaviours. Similarly, in disciplinary matters there is often an ethical element. The Ethics function could be consulted by HR on whether a particular behaviour is acceptable and HR can then implement corrective action when it is not.

Together, we can make it happen

HR professionals have a central role in supporting a workplace culture where ‘doing the right thing’ is encouraged. HR departments are the main point of contact for all staff within an organisation and as such have unique access to staff throughout their career, from induction training to exit interviews. A company-wide ethical culture, where ‘doing the right thing’ is just part of the way business is done, will not be achieved unless HR and Ethics professionals make their relationship work. 

See also the IBE’s latest briefing, Collaboration between the Ethics Function and HR.



# Lindsay McNeese 2014-05-07 16:34
For some companies, implementing technology to streamline the processes for distributing communication materials to employees is a great way to accomplish collaboration between ethics and HR. The Convercent platform allows cross-departmental synergy for functions like policy and training distribution while keeping the focus on value-related initiatives.
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