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Business Ethics and Corporate Governance

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Chapter 10 : Ethical Issues in Human Resource Management

Nature of Employment Contract
Hiring
The principal of ethical hiring
Equality of opportunity
Discrimination
Ethics and remuneration
Ethics in retrenchment.

Chapter Summary

The attitude of a business towards its employee’s acts is a litmus test for its ethical character. The relationship between the business and its employees is based on the employment contract. In this chapter we discussed various ethical issues in personnel management activities like: hiring, remuneration and retrenchment.

An ethical organization follows the principle of ethical selection for hiring prospective employees.
According to this principle an organization should hire a person who is expected to contribute the maximum towards enhancing long-term owner value. According to the principle of ethical selection factors like age, gender, religion and nationality are irrelevant for hiring a person.

Ethical remuneration rewards only those acts of an employee that contribute to long-term owner value.
We also discussed the impact of retrenchment on employee morale and how companies can minimize the adverse effect of retrenchment.

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