Managerial Ethics And Social Responsibility-6

Chapter15-EmployeesandtheCorporation.pptx

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Chapter 15

Employees and the Corporation

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Ch. 15: Key Learning Objectives

15-1 Understanding workers’ rights to organize unions and bargain collectively.

15-2 Knowing how government regulations assure occupational safety and health and what business must do to protect workers.

15-3 Evaluating the limits of employers’ duty to provide job security to their workers.

15-4 Analyzing employer obligations to pay workers fairly and how pay policies can contribute to income inequality.

15-5 Appraising the extent of employees’ right to privacy, when businesses monitor employee communications, police romance in the office, test for drugs or alcohol, or subject employees to honesty tests.

15-6 Debating if employees have a duty to blow the whistle on corporate misconduct, or if employees should always be loyal to their employer.

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The Employment Relationship

Employees are an important market stakeholder:

Responsible for carrying out the work of the company.

Dependent on the employer for their livelihood.

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Major Rights of Employees

Figure 15.1

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Workplace Rights

Employees in the United States enjoy important legal guarantees. They have the right to:

Organize and bargain collectively.

A safe and healthy workplace.

Due process.

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Right to Organize and Bargain Collectively1

Employees have a fundamental legal right to organize labor unions and to bargain collectively with employers.

Workers have a right to hold an election to decide which union will represent them.

Labor unions: Organizations that represent workers on the job.

Labor unions have the right to negotiate wages, working conditions, and other terms of employment.

Employers are required to bargain with unions in good faith.

If agreement cannot be reached, a strike might occur.

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Right to Organize and Bargain Collectively2

Influence of labor unions has varied during periods in U.S. history:

In 2017, the median weekly pay of full-time workers who were members of unions was 20 percent higher than that of nonunion workers.

In 2017, only about 11 percent of all U.S. workers were union members.

The percentage was higher, 34 percent, in government employment.

In the private sector, just 7 percent were unionized.

In the wake of the Great Recession, elected officials in several states sought to weaken unions by limiting the rights of public sector workers.

 Example: In 2017, Missouri joined 27 other states in adopting a right-to-work law.

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DS: Updated stats. Retain 2015 example? Add 2018 example (Janus)? AL: should say (7% were unionized in the private sector)

AL: change Wisconsin example to Missouri, to read:

Example: In 2017, Missouri joined 27 other states in adopting a right-to-work law

DS: done

Right to Organize and Bargain Collectively3

Although unions overall remain weak, some groups of workers continue to organize.

Example:

Cleveland water workers joined the Utility Workers Union of America (UWUA).

A major legislative goal of unions is labor law reform:

Legislation that would make it easier for workers to organize.

Examples:

Shortening the time before an election.

Stiffening penalties for employers who intervene unfairly in the election process.

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DS: Replace book image with group? Will realign after approval.

AL: Yes, replace with group.

DS: Done

Unionization Rates in Selected Industrialized Countries

Figure 15.2

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The Right to Safe and Healthy Workplace

Annually, slightly more than 3 million workers in private industry are injured or become ill while on the job (U.S. Department of Labor).

Occupational Safety and Health Act, passed in 1970, gives workers the right to a job “free from recognized hazards that are causing or likely to cause death or serious physical harm.”

This law is administered by the Occupational Health and Safety Administration (OSHA).

Since the agency’s creation in 1970 the overall workplace death rate has fallen by more than two-thirds.

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Job Security and the Right to Due Process1

Since late 1800s, the legal basis for the employment relationship has been employment-at-will.

Employment-at-will is a legal doctrine that means employees are hired and retain their jobs “at the will of” (i.e. at the sole discretion of) the employer.

However, equal employment opportunity and other laws prevent discriminatory terminations.

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Job Security and the Right to Due Process2

Many union contracts say employees can be fired only “for just cause,” and workers have a right to appeal the employer’s decision through the union grievance procedure.

European countries and Japan have laws that extend “just cause” protections to all workers (not only for union members).

Cultural values, traditions, and norms of behavior also play important roles.

Social contract: the implied understanding between an organization and its stakeholders. This is not a legal contract, but rather a set of shared expectations.

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Wages and Income Inequality1

What is the relationship between inequality and wages?

What responsibility if any does business bear for the sharp differences in life circumstances between those at the top and bottom of society?

How should wages be determined? What is fair?

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Workers in the Sharing Economy

In 2016, about 45 million U.S. “gig workers” offered a product or provided services requested by a “peer” via online “platforms.”

About a third of gig workers use this type of work for 40 percent or more of their income.

Some legislators have expressed concern that this type of employment arrangement can burden welfare and unemployment services if the gig does not pay enough to live on.

 Example: Postmates’ workers filed a lawsuit claiming they were deliberately misclassified as independent contractors, rather than employees.

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Income Inequality in the United States, 1917-2015

Figure 15.3

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Wages and Income Inequality2

What can companies do to address income inequality?

Increase wages of their employees.

Reduce pay differentials within their organizations.

Living wage: Wage “that enables workers, for their labor during a standard work week, to support half the basic needs of an average-sized family, based on local prices near the workplace” (Ethical Trading Initiative).

Companies that adopt such a “good jobs” strategy reap benefits from doing so.

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Percentage of Living Wage Covered by Minimum Wage

Figure 15.4

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Instructor note: The lines pointing at the District of Columbia and Maryland are reversed in the image. DC=69% and MD=51%.

Privacy in the Workplace

An important right in the workplace as elsewhere, is privacy.

Privacy rights: primarily protecting an individual's personal life from an unwarranted intrusion by the employer.

Key workplace issues where privacy dilemmas often emerge include electronic monitoring, office romance, drug and alcohol abuse, and honesty testing.

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Privacy in the Workplace: Electronic Monitoring

New technologies enable companies to gather, store, and monitor information about employees’ activities.

A company’s need for information, particularly about its workers, may be at odds with an employee’s right to privacy.

Management justifies the increase in employee monitoring for a number of reasons:

Employee efficiency.

Fear of lawsuits if employees act inappropriately.

 Example: Sociometric Solutions makes sensor-rich badges.

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Privacy in the Workplace: Romance in the Workplace

Issue requires careful balancing between legitimate employer concerns and employee privacy.

A 2017 survey – 57 percent of workers said they had participated in some type of office romance.

The #MeToo and #TimesUp movements have changed many peoples’ perception of workplace romance.

43 percent of employees surveyed in 2018 thought relationships between colleagues at different levels was unacceptable (up sharply from the year before).

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Privacy in the Workplace: Employee Drug Use and Testing

Drug and alcohol testing:

Drug abuse costs U.S. industry and tax payers an estimated $193 billion a year.

Drug-Free Workplace Act (1988) – required federal contractors to establish and maintain a workplace free of drugs.

Drug testing is typically used on three different occasions:

Pre-employment screening.

Random testing of employees.

Testing for cause.

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Privacy in the Workplace: Alcohol Abuse at Work

Alcohol use and addiction causes twice the problems of all illegal drugs combined.

About 9 percent of full-time employees are heavy drinkers.

Up to 40 percent of all industrial fatalities and 47 percent of industrial injuries are linked to alcohol.

U.S. businesses lose an estimated $88 billion per year in reduced productivity directly related to alcohol abuse.

Employee Assistance Programs (EAPs): offer counseling, rehabilitation programs, and follow up.

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Privacy in the Workplace: Employee Theft and Honesty Testing

Employee theft has emerged as a significant economic, social, and ethical problem in the workplace.

A 2015 survey of large retail stores in the United States showed that almost 30 percent of all inventory losses were due to employee theft.

The retail value of goods stolen by employees was more than $15 billion.

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Honesty Testing Controversy

Some companies use written psychological tests to predict employee honesty.

American Psychological Association notes these tests can generate false positives.

 Example: Test predicts employee would probably steal from the company, even though this is untrue.

Tests may intrude on a person’s privacy and discriminate disproportionately against minorities.

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Whistle-blowing and Free Speech in the Workplace1

Free speech in the workplace:

U.S. Constitution protects free speech; however, does not specifically protect freedom of expression in the workplace.

Employees are not generally allowed to speak out against their employers, due to legitimate interests of the business.

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Whistle-blowing and Free Speech in the Workplace2

Whistle-blowing: when an employee believes his/her employer has done something that is wrong or harmful to the public, and he/she reports the alleged misconduct to the media, government, or high-level company officials.

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Whistle-blowing – Laws

Sarbanes-Oxley Act, passed in 2002:

Makes it illegal for employers to retaliate in any way against whistle-blowers who report information that could have and impact on the value of a company’s shares.

Dodd-Frank Act of 2010:

Requires the government to pay a reward to whistle-blowers who voluntarily provide information that leads to successful prosecutions for violations of federal securities laws.

U.S. False Claims Act 1986 (Lincoln Law):

Allows individuals who sue federal contractors for fraud to receive up to 30 percent of any amount recovered by the government.

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Whistle-blowing and Free Speech in the Workplace3

Four conditions must be satisfied to justify whistle-blowing:

Organization is doing (or will do) something that seriously harms others.

Employee has tried and failed to resolve the problem internally.

Reporting the problem publicly will probably stop or prevent the harm.

The harm is serious enough to justify the probable costs of disclosure to the whistle-blower.

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Closing slide.

Accessibility Content: Text Alternatives for Images

Major Rights of Employees Text Alternative

The list contains six rows that read as follows:

The first employee right is to organize and bargain collectively.

The second employee right is to a safe and healthy workplace.

The third employee right is to due process on the job.

The forth employee right is to fair and decent wages.

The fifth employee right is to privacy.

The sixth employee right is to blow the whistle and free speech.

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Unionization Rates in Selected Industrialized Countries Text Alternative

The y-axis contains 11 percentage markers labeled from 0 to 100 in increments of 10.

The Y-axis lists 15 countries. Bars representing the percentage of each country’s unionized workers extend from left to right in descending order of unionization.

From top to bottom, the data reads as follows:

Iceland at 91.8; Sweden at 67; Belgium at 55.1; Italy at 37.3; Ireland at 26.5; Canada at 26.5; United Kingdom at 24.7; Germany at 17.7; Japan at 17.4; Australia at 17; Mexico at 13.1; France at 11.2; and the lowest three are the United States at 10.6; South Korea at 9; and Turkey at 6.3.

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Income Inequality in the United States, 1917-2015 Text Alternative

The x-axis contains eleven year markers. From the left to the right, these markers read 1917, 1922, 1927, 1932, 1937, 1942, 1947, 1952, 1957, 1962, 1967, 1972, 1977, 1982, 1987, 1992, 1997, 2002, 2007, 2012 and 2015.

The y-axis is labeled Top 10 percent income share and contains six markings. From the bottom to the top, these markings read 25 percent, 30 percent, 35 percent, 40 percent, 45 percent, and 50 percent.

The share of income going to the top ten percent reads as follows: approximately 40 percent in 1917; after a decline and rise the data reaches 43 percent by 1922; more ups and downs follow until the data reaches near 48 percent in 1927; 1932 around 46 percent; 1937near 42 percent; 1942 shows a significant drop to about 35 percent due to World War II; from 1942 to 1977 the percentage if inequality stays between 32 and 35; between 1977 and 1987, the rate climbed back up to just under 40 percent; from 1987 to 2015, the inequality fluctuated but gradually increased to an all-time high of 50 percent in 2015.

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Percentage of Living Wage Covered by Minimum Wage Text Alternative

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A color-coded key indicates the percentage level and includes these categories from darkest to lightest: 61 to 69 percent; 51 to 60 percent; 41 to 50 percent; 31 to 40 percent; and 0. Per state, the data reads as follows: Alabama at 0 percent. Louisiana at 0 percent. Mississippi at 0 percent. South Carolina at 0 percent. Tennessee at 0 percent. Wyoming at 32 percent. Georgia at 34 percent. Virginia at 42 percent. Utah at 45 percent. New Hampshire at 45 percent. Wisconsin at 45 percent. Pennsylvania at 46 percent. Idaho at 46 percent. New Mexico at 47 percent. Oklahoma at 47 percent. New Jersey at 47 percent. Kentucky at 47 percent. North Carolina at 48 percent. North Dakota at 48 percent. Indiana at 48 percent. Iowa at 49 percent. New York at 49 percent. Kansas at 49 percent. Texas at 49 percent. Illinois at 49 percent.

Montana at 50 percent. Delaware at 51 percent. Maryland at 51 percent. Nevada at 51 percent. Missouri at 52 percent. Florida at 52 percent. Alaska at 55 percent. Ohio at 56 percent. Connecticut at 56 percent. California at 57 percent. Minnesota at 58 percent. Nebraska at 59 percent. Colorado at 59 percent. Oregon at 60 percent. Rhode Island at 60 percent. Michigan at 60 percent. West Virginia at 60 percent. Arkansas at 60 percent. Massachusetts at 61 percent. Hawaii at 62 percent. South Dakota at 62 percent. Maine at 63 percent. Vermont at 64 percent. Arizona at 64 percent. Washington at 68 percent. District of Columbia at 69 percent.

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