Compensation decisions involve ethical issues

Assignment Help Other Subject

Reference no: EM133942419

EXERCISE: ETHICAL AND PRACTICAL COMPENSATION DILEMMAS

OBJECTIVES:

To familiarize students with a variety of different compensation dilemmas and possible solutions to them.
To make students aware that some compensation decisions involve ethical issues.
To familiarize students with various criteria that can be used to distinguish between ethical and unethical behavior.

DISCUSSION

Much has been discussed about the ethics of advertising, product quality, employee safety, stock trading, and environmental management. However, little attention has been given to ethical issues related to compensation management. In actual work settings, many compensation decisions may be made without a thought given to professional and ethical standards; indeed, decisions are frequently based solely on past practices and continued because "everyone else is doing it" or out of "business necessity." Yet, many past common business practices such as not granting employees family leave and not allowing women to work overtime are now considered by many to be unethical. Get world-class assignment help from subject experts.

DEBRIEFING THE EXERCISE:
The exercise can be debriefed at both the end of discussing each dilemma and after all dilemmas have been discussed.
Most compensation decisions have ethical components because they involve issues of fairness and because if compensation is given to one person or group, it can't also be given to others (win-lose situation).

Ethical choices are based on the values of the individuals who make the choices. These values are often affected by the firm's ethical climate.

Compensation dilemmas don't just happen. They are often a result of prior decision making mistakes. Today's mistakes will lead to tomorrow's dilemmas.

Compensation managers may find it useful to establish pay ethics policies that provide guidelines to reduce unethical acts. A comprehensive ethics policy has at least several parts. First, the firm needs to make general statements about its commitment to ethical compensation practices. Second, the policy should develop a list of behaviors deemed unethical. However, a code of ethics alone will not insure proper behavior. Employees must be given a procedure to report unethical behavior or to discuss ethical problems. Merely suggesting that employees report problems to their immediate supervisor may be ineffective because the boss may be the source of the problem. Thus, a confidential ethics hotline may be warranted. To avoid the negative connotation of "hotline," firms have adopted names such as "Helpline" (Waste Management, Inc.), "We Care Hotline" (American Greetings Corporation), and simply "the 800 number" (Raytheon Company). A hotline has the added advantage of putting everyone on notice that ethical behavior is expected and that wrongdoing will lead to disciplinary action.A more recent development is the position of an ethics officer who is responsible for the creation and maintenance of a firm's ethics program. Her or his duties include meeting personally with employees or top management, dissemination of a code of conduct, creation of an anonymous confidential service to answer questions about ethical issues, and investigating adherence to laws and internal codes.

Reference no: EM133942419

Questions Cloud

Describe what you learned from both of the situations : Identify and describe five things that make you who you are. Describe what you learned from both of those situations.

What factors informed the decisions : What factors informed these decisions? What were some of the costs and benefits of these decisions? Then, think of your own use of technology.

What are three things that surprised you from video content : What are four things you learned from the video? What are three things that surprised you from the video content?

Presentation on the impact of the pandemic on mcdonalds : Prepare powerpoint presentation on the impact of the Pandemic on McDonalds

Compensation decisions involve ethical issues : make students aware that some compensation decisions involve ethical issues and familiarize students with various criteria that can be used to distinguish

Democratic style encourages involvement : Democratic, commanding and pace setting, all show that for one to be an effective leader, one requires to be emotionally intelligent

What was the unwritten rule about personal space : What was the unwritten rule about personal space that was kept or broken based on your own upbringing or American cultural upbringing.

How might the societal dependency on technology compare : How might the societal dependency on technology compare to the ways we balance trust in human expertise? Is there a way to maintain these critical skills?

How evidence from fields like sociology or ethics contribute : How evidence from fields like sociology or ethics contribute to understanding balance between empowering individuals and mitigating cognitive reliance?

User Account

All Pages