Literature Review Human Resources Essay

This literature review will seek to research, analyse and evaluate two areas in human resource management (HRM) relating to Ethics and HRM, and Employment relations. Review 1 – Ethics and HRM The study of ethics in Human Relations Management (HRM) seems fraught with a plethora of historical and contemporary theories which seek to find clarity in an ever changing and challenging business environment. This review will identify the challenges faced by human resource professionals in ‘the honouring of duties owed to employees, stakeholders, and society in the pursuit of long-term wealth creation’ (Caldwell, Hayes, Bernal and Karri, 2008: 153) and will conclude that ethical HRM requires an understanding of the theories and principles; the organisational will to integrate these into their organisations strategic human resource management (SHRM) and the need to become a strategic partner in the management of the organisation. Ethical stewardship Smith and Hindman (2007: 16) claim that ‘Most people want to do the â€Å"right thing†. This is true in business as well as in life.’ To consider that this statement has merit, suggests that the debate over the theories and principles of ethics in HRM, can be seen to provide an understanding of how to achieve the best ethical outcome of a given situation. Winstanley and Woodall (2006: 9) clearly state that ‘Ethical reasoning is the ability to draw on relevant theory and frameworks to make more explicit the alternative interpretations and responses that could be made to inform decision-making’. Caldwell, Truong, Linh and Tuan (2011: 178) suggest that the responsibility falls in no small part, to the human resource professionals (HRPs) who ‘must encompass the moral perspectives of ethical stewardship and the unique contributions of transformative leadership’. Caldwell, et al. (2011) asserts that a key to long-term wealth creation is the alignment of the organisations strategic human resource management (SHRM) to their goals, values and priorities coupled with congruent and effective leadership. Smith and Hindman (2007: 21) suggest that the challenge for the human resource professional is to determine ‘how to create a set of employment policies that provide increasing standards of living, fair treatment and adequate job security for employees, while at the same time providing adequate profits for the firm?’ Reason would suggest that this is not enough. Ethical relativism suggests that morality is relative to the norms of each individual’s culture. Schumann (2001: 93) produces an argument ‘that the theory of ethical relativism should be rejected and that it is meaningful to search for universal moral principles’. Schumann (2001) asserts that his moral principles framework incorporating five basic ethical rules or principles, would provide managers guidance, whilst pursuing profits. And yet, Winstanley and Woodall (2006) argue that there are still no universally agreed upon ethical frameworks. Much debate centres on the ethics of organisations human resources. Greenwood, (2002) goes further to suggest concerns regarding the naming of human resources suggesting that this can place staff in the same position as office equipment. Employees are much more that the wheel that turns any organisation. Friedman (2009: 229) identifies ‘†¦ human capital as the critical value driver of corporate reputation’. This reminds us that organisational ethics can impact upon the organisations internal and external stakeholders. Winstanley and Woodall (2006:5) provides a strong case for the ethical ‘rearmament’ of HR professionals, by suggesting practical ways in which the exercise of ethical sensitivity and awareness might become a legitimate reference point alongside the prevalent recourse to arguments justifying ‘the business case’, strategic fit’ and ‘best practice’. Mathenge (2011: 8) makes the observation that ‘A tension often exists between a company’s financial goals and strategies to improve profits, and ethical considerations with right-behavior concerns’. Finally, Smith and Hindman (2007: 29) reinforce the important point that ‘Every business decision must succeed along three dimensions – it must be operationally effective, legally compliant, and morally defensible’. Conclusion ‘Organizations that integrate principles of ethical leadership with a strategic approach to HRM optimize the maximization of values and outcomes and achieve results which pay off long-term (Collins and Clarke, 2003: Caldwell et al, 2011). Friedman (2009: 240) sums up this review by stating that by positively impacting a corporation’s reputation ‘†¦HR managers need to occupy an influential position in the organizational structure, participate in strategic planning and develop efficient organizational practices that are aligned with corporate reputation goals’. Review 2 – Employment Relations Introduction The implementation of the 2009 Fair Work Act had hoped to ‘†¦ usher in a new regime of good-faith workplace relations, support for collective bargaining and vulnerable workers’ access to enforceable labour rights’ (Barnes and Lafferty, 2010: 1). This literature review will identify the salient changes wrought by the 2009 Fair Work Act and suggest that there has been a reduction of managers’ prerogatives to make decisions although Australia has not been forced back to the ‘bad old days’ of conciliation, arbitration and rolling strikes. Neo-liberalism The advent of the Fair Work Act can be considered to have its foundations in neo-liberalism, which espouses the values of deregulated and competitive market place providing free market outcomes. Neo-liberalism was considered to have its modest reforms under the Hawke administration through its 1993 legislation (Michelson, Jamieson and Burgess, 2009: Bray and Underhill, 2009). With the passing of the Coalition government’s Workplace Relations Act of 1996 and Workplace Relations Amendment (WorkChoices) Act of 2005, decollectivisation was advanced ‘by banning compulsory unionism, eliminating legal mechanisms to protect the right of unions to bargain collectively, expanding the availability of non-union agreements and sanctions against unauthorised strikes’ (Lee and Peetz, 1998). Prior to the election of the Rudd Labour Government in 2007, Australian union membership had fallen by 27 percent from 46 per cent in 1986 to 19 per cent in 2007 (Australian Bureau of Statistics, 2008). Fair Work Act Far from the hope of a ‘new regime of good-faith workplace relations’, ‘The Fair Work Act has been called ‘Work Choices Lite’ because it has much in common with the legislation it replaced’ (Barnes and Lafferty, 2010: 1 & 5). ‘Rather than overlapping with anti-discrimination legislation, the Fair Work Act provides a new set of general protections against attribute-based conduct by employers’†¦Ã¢â‚¬Ëœto provide a new regime of protection against workplace discrimination’ (Barnes and Lafferty, 2010: 6). Nelson (2009) and Barnes and Lafferty (2010) identify the key features or principles of the Fair Work Act, as: †¢ A safety net of minimum employment conditions †¢ Good faith bargaining obligations and rules †¢ Unfair dismissal provisions †¢ Family life balance †¢ The right to have representation †¢ Fair legislation and protection for low paid employees The Fair Work Act did not return Australia to the unfettered industrial strike action of earlier years. Protected industrial action, strikes and work-to-rules by employees would only be supported under the Act, during enterprise bargaining, if approved by a majority of employees through a mandatory secret ballot and after first obtaining a secret ballot order (Nelson, 2009). To emphasise this point, Hubbard (2012: 18) suggests that there is a large hole in the Fair Work Act that can be found in large scale and intractable disputes where the ‘†¦the legislation places no pressure on Australian employers to do more than sit politely at the table (surface bargaining)’. Hubbard (2012: 18) states that ‘†¦the right to take protected industrial action is hollow for many groups of workers’ where ‘A company makes an application to take away workers rights to protected industrial action, by initiating its own industrial action, which it then claims is significantly harming the Australian economy!’. Hubbard (2012: 19) goes on to state ‘on matters of workplace flexibility and ‘managerial prerogative’, members of Fair Work Australia (FWA) have been historically reluctant to impose conditions or restraints’, especially in economically significant industries, which was highlighted through the Qantas case. Conclusion The Fair Work Act has been shown to have not returned Australia to conciliation, arbitration and rolling strikes and has been shown above to have major weaknesses that can be exploited by organisations. Arbitration through the Act is limited to ‘last resort’ arbitration as outlined by the Australian Government Solicitor (2009). I conclude that although managerial prerogative has been eroded under the Fair Work Act, specifically through removal of the â€Å"operational reasons† clause, seen to be abused under Work Choices, all managerial options have not been removed. With the implementation of good faith bargaining replacing arbitration, there is a clear indication that HRM imbedded in the guiding principles of the Act, can reinforce ethical HRM.