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ORIGINAL PAPER

Decent Work: The Moral Status of Labor in Human Resource Management

Miguel Alzola1

Received: 1 December 2015 / Accepted: 10 March 2017 / Published online: 24 June 2017

� Springer Science+Business Media Dordrecht 2017

Abstract In this paper, I aim to critically examine a set of

assumptions that pervades human resource management

and HR practices. I shall argue that they experience a

remarkable ethics deficit, explain why this is so, and

explore how the UN Global Compact labor principles may

help taking ethics seriously in HRM. This paper contributes

to the understanding and critical examination of the

undisclosed beliefs underlying theory and practice in

human resource management and to the examination of

how the UN Global Compact’s ideal of ‘‘decent work’’

may offer some promising avenues for the development of

ethics in HRM.

Keywords Human resource management � Ethics of labor � UN Global Compact � Decent work � Property rights

[H]itherto there has been no alternative for those who

lived by their labour, but that of labouring either each

for himself alone, or for a master. But the civilizing

and improving influences of association, and the

efficiency and economy of production on a large

scale, may be obtained without dividing the produc-

ers into two parties with hostile interests and feelings,

the many who do the work being mere servants under

the command of the one who supplies the funds, and

having no interest of their own in the enterprise

except to earn their wages with as little labour as

possible. (John Stuart Mill, Principles of Political

Economy, Book IV, Chapter VII)

The central tenet of this article is that human resources

management research and practices experience a remark-

able ethics deficit, which can be explained by some—often

undisclosed—threshold assumptions and ideals about the

nature of the field and the economic and political institu-

tions in which it is embedded. The invitation of this paper

is to consider whether the United Nations Global Compact

can help remedy such a shortfall.1

The UNGC labor standards—which are derived from

the International Labor Organization’s Declaration on

Fundamental Principles and Rights at Work—are based on

the principle that all employees around the world should

have decent working conditions (‘‘decent work’’ is also the

Sustainable Development Goal number eight). According

to these international agreements, decent work entails four

fundamental principles, namely freedom of association and

the right to collective bargaining, the elimination of forced

labor, the abolition of child labor, and the elimination of

discrimination in respect of employment and occupation.

Despite the fact that the ILO adopted these labor standards

back in 1998, it is apparent that its principles have not been

accomplished yet.2

& Miguel Alzola

alzola@fordham.edu

1 Gabelli School of Business, Fordham University, 140 West

62nd St., Suite 305, New York, NY 10023, USA

1 The United Nations Global Compact (UNGC hereafter) is a

principle-based framework used to conduct business while meeting

fundamental responsibilities in the domain of human rights, labor,

environment, and anti-corruption. 2 A recent UNGC’s Good Practice Note (2014) warns companies that

in order to meet their corporate responsibility to promote and realize

decent work they should decide how to organize the human rights

function internally ‘‘to effectively drive the process of embedding

respect for human (including labor) rights.’’ https://www.unglobal

compact.org/library/921.

123

J Bus Ethics (2018) 147:835–853

https://doi.org/10.1007/s10551-017-3507-5

In this paper, I will explain the limited realization of

such aspirations by reference to a set of assumptions

underlying our theories and practices of human resource

management, which are relevant to its moral dimension

and may prevent the achievement of decent work. The

paper is not concerned with the moral evaluation of HR

practices in themselves but rather with the understanding of

such practices as deserving moral evaluation. It is not an

investigation about the implementation and evaluation of

the UN Global Compact either. My goal is to provide an

explanation and a critical examination of the ethics deficit

in the HR field. Furthermore, I will consider the question

whether the UN Global Compact can help alleviate such a

deficit.3 And I will conclude with a call to take ethics

seriously in both the academic and the practitioner per-

spectives of HRM.

The paper is organized as follows. In section one, I

diagnose the state of the art and show why there is an ethics

deficit in HRM. In section two, I sketch an explanation of

such a deficit by reference to the assumptions and ideals in

which HRM practices and research are embedded. In sec-

tion three, I suggest why we have good reasons to put such

assumptions into question. In section four, I explore the

ways in which the UN Global Compact’s value of decent

work helps disputing the aforementioned assumptions and

provides some promising avenues for the development of

ethics in HRM. Section five concludes.

Diagnosis: An Ethics Deficit

At a first glance, one would argue that most decisions in

HRM constitute significant moral issues (McGregor 1960).

Encompassing everything from quality of work life to

workforce diversity, from job analysis and human resource

planning to recruitment and screening, from training to

performance appraisal, from pay systems and benefit plans

to profit sharing and employee stock ownership, from

union representation to employee voice systems, and from

health and safety to workplace privacy. HRM is a field rich

in ethical dilemmas. One may be tempted to claim that

decision-making in HRM is inherently morally relevant.

Yet, it is barely framed as a moral issue, both in the aca-

demic literature and in HR practices.

Recent surveys by the Society of Human Resource

Management indicate that almost 70% of 395 randomly

selected HR professionals responded that their organization

does not offer ethical training.4 Only 43% of human

resources professionals said their organizations include

ethical conduct as part of employees’ performance

appraisals. Only 23% of HR professionals say that their

organizations have a comprehensive ethics and compliance

program in place.5

Presumably, HR professionals are sensitive to moral

issues in their workplace. Some have reportedly quit their

jobs due to management misleading or lying to employees,

customers, vendors, shareholders, or the public. Further-

more, half (51%) of the organizations included in a study

of workplace bullying conducted in 2012 reported that

there had been incidents of bullying in their workplace,

which lead to decreased morale (68%), increased stress

and/or depression levels (48%) and decreased trust among

co-workers (45%). Such findings roughly reflect how HR

practices raise significant ethical dilemmas.

However, the role of ethics in HRM theory and practice

is barely examined in the literature to date (Winstanley and

Woodall 2000; Lengnick-Hall et al. 2009; Greenwood

2013; Jackson et al. 2014). The moral dimension of HRM

is typically evaded within academia and overlooked in

HRM systems and practices (Wright and McMahan 1992;

Legge 1995; Van Buren et al. 2011). This tendency is

reflected in the most influential papers in the HRM field

(Taylor et al. 1996; Matusik and Hill 1998; Lengnick-Hall

and Lengnick-Hall 1988; Baird and Meshoulam 1988;

Rogers and Wright 1998; Cascio 2005; Geare et al. 2006)

and finds expression in the HR function (Handy 2002;

Kochan 2007; Jack et al. 2012) and consulting activities

(Thomas and Ely 1996; Pfeffer 1998; Liu et al. 2007)

which are not typically framed as ethical issues.

I shall offer a handful of examples to illustrate what I

mean by ‘‘an ethics deficit’’ with the caveat that the list is

not exhaustive.

The first is, of course, the very name of the functional

area and the corresponding title of the academic field:

‘‘human resources.’’ Workers are named ‘‘resources,’’

which entails that they are treated like commodities, as

suggested by John Stuart Mill in the opening passage. Such

treatment is often regarded as demeaning because, if taken

seriously, it disrespects workers’ personhood. They are

considered to be like any other production factor, regard-

less of the fact that they are (also) human beings. Indeed,

since labor is allegedly subordinated to capital, it is not

even regarded as the most important production factor (De

Geus 2002).3 The intended contribution of this paper lies at the level of the ideas

and ideals underlying HRM rather than at the level of the

implementation of the UNGC labor principles, which has been

thoroughly reviewed in recent special issues of Business Ethics

Quarterly (Vol. 21, No. 1), Business and Society (Vol. 52, No. 1), and

Journal of Business Ethics (Vol. 122, No. 2), among others. I am

grateful to an anonymous reviewer for pressing this clarification.

4 http://www.shrm.org/Research/SurveyFindings/Pages/Corporate

EthicsSocialResponsibility.aspx. 5 http://www.shrm.org/Research/SurveyFindings/Articles/Pages/Ethics

landscapeinAmerica.aspx.

836 M. Alzola

123

Even the views that are more sensitive to the workers

conceptualize them as ‘‘our most important asset’’, as

‘‘human capital,’’ or as ‘‘intellectual capital.’’ These tags

are revealing. Being a valuable ‘thing’ is still better than

being useless or replaceable, but it still fails to acknowl-

edge people’s humanity. The problem is worsened by

prevalent accounting techniques, which do not even record

the employees as assets but merely as costs (Lepak and

Snell 1999; Fulmer and Ployhart 2014; Russ 2014).

Second, the transition from HRM to strategic HRM

(SHRM) has been, among other things, a process of

focusing on corporate performance and financial metrics,

thereby emphasizing the instrumental view of workers as

mere means to strategic ends (Buckley et al. 2001; Leng-

nick-Hall et al. 2009). HR professionals have marginalized

employee-focused responsibilities and ethics activities

(Van Buren et al. 2011). As a result, trade-offs between

organizational goals and workers’ welfare are not only

conceivable but also permissible or even required (Wren

1995; Kaye 1999; Harley and Hardy 2004; Liu et al. 2007).

Third, the moral dimension of HRM research is

neglected because a commitment to ‘‘decent work’’ entails,

among other things, a commitment to ‘‘non-scientific val-

ues.’’ HRM as an academic field is self-presented as a

scientific approach, which is supposed to be morally neu-

tral or value-free (Bird and Waters 1989; Carroll 1991;

Schuler and Jackson 2005), and based on scientific evi-

dence rather than moral judgment (Lengnick-Hall and

Lengnick-Hall 1988; Batt 2002; Anker et al. 2003; Rous-

seau 2006; Pfeffer 1998). Thus, there is no room for a non-

scientific value such as ‘‘decency.’’

In sum, our intuitions tell us that decision-making on the

HRM function is morally significant but still neglected.

The fact that there is an ethics deficit in HRM is not a new

finding (Linehan and O’Brien 2016). But it remains an

under researched topic in academia as well as only a sec-

ondary concern in HR systems and practices.

An Explanation: Five Guiding Ideals

It follows from the above premise that there is a moral

deficit. The fact that is not perceived as a problem is

explained, I submit, by certain assumptions, which I take to

be the foundational beliefs of the field and the (often

undisclosed) normative ideals of HRM practices,6 namely:

• The autonomy of ethics and business.

• The priority of property rights.

• The virtues of competitive markets.

• The organization of the firm.

• The principle of national sovereignty.

These assumptions and ideals are particularly robust in

the Anglo-Saxon version of capitalism, invigorated by

neoclassical economics (e.g., Friedman 1962, 1970; Fama

and Jensen 1983) and libertarian theory (e.g., Nozick 1974;

Gaus 2011)

I will argue that these five assumptions comprise the

prevailing understanding of the firm, its environment, and,

indirectly, the HR function. These ideals drive and orga-

nize our thinking about HRM. Next, I will argue that such

assumptions have become self-fulfilled (Frey 1998; Ferraro

et al. 2005).

The Autonomy Thesis

Traditionally, philosophers and social scientists agree there

is a somewhat strong distinction between the normative

and the descriptive domains of academic research. The

distinction has been articulated in several ways (Hume

1739; Moore 1903). For simplicity’s sake, we can sum-

marize it by saying that business decision-making is basi-

cally amoral and that the domain of morality does not

overlap with the business world (Freeman 1994; Sandberg

2008).

According to this rationale, business decisions lack

moral content and ethical decisions do not appear in the

context of business, where facts have priority. One might

see this as an empirical thesis, which describes how busi-

ness executives think and behave as a matter of fact (or how

scholars think about such decisions). Alternatively, one

might conceive of this thesis as a normative claim about

how business executives ought to think and behave (or how

scholars ought to think about them) (see Alzola 2010).

What is implicit in the autonomy thesis is that each

domain is concerned with a different research question

(Sidgwick 1988). While HR practices and HRM research

are concerned with the question of what is the case, ethics

is about what ought to be the case. While HRM practi-

tioners and scholars are concerned with facts, ethicists are

interested in values, that is, with the moral evaluation of

such facts. While ethical decision-making is a matter of

what is believed to be ‘‘ethical’’ in HRM practices and

scholarship, to call something ‘‘ethical’’ in ethics entails a

moral predicate (Hasnas 1998).

Hence, it is not surprising that their methodologies,

assumptions about human nature, and goals are radically

different on both sides of the divide (Werhane 1994).

First, HR scholars aim to empirically test hypotheses as

a way to check the plausibility of their theories in

6 A careful reading of the most influential publications in HRM

suggests these five principles. But, typically, these ‘‘undisclosed

assumptions’’ are not explicitly discussed or argued for. Rather, they

are taken for granted as the starting point of HRM theories. They may

be considered to be so obvious that they do not need to be defended.

Decent Work: The Moral Status of Labor in Human Resource Management 837

123

predictions or explanations of behavior (Harley and Hardy

2004). Ethicists, on the other hand, are concerned with

testing how consistent a theory is with our considered

moral beliefs. When our intuitions and beliefs are not

aligned with a moral theory’s prescriptions, we have to

adjust one, the other, or both (Rawls 1971).

Second, social scientists assume that human beings are

(at least to some extent) externally determined, a claim that

most ethicists would rightly reject insofar as it is incon-

sistent with our nature as noumenal selves, as autonomous

human beings who are responsible for what we do (Kant

1785).

Finally, while HR practitioners and scholars focus on

how to transition from theory to practice and how to suc-

cessfully apply their findings in real organizations (Co-

lakoglu et al. 2006), ethicists are rather interested in critical

reflection and deliberation about what ought to be the case,

above and beyond how the real world works (Kagan 1998).

Property Rights

Both HR practices and academic scholarship take the ideal

of a private property-based economy as a central pillar. We

can certainly think about HR research and practices on

alternative economic systems—such as HRM in socialist

economies—and certain regulations to the use of property

may still be consistent with mainstream scholarship on

HRM, but the backdrop assumption when we talk about

HRM is the widest possible level of private property.

The expression ‘‘maximum property rights’’ entails the

strongest protection of property along two dimensions,

namely, the extension and range of property (Gaus 2010).

The first dimension is concerned with what the owner

can do with the thing he or she owns (Honoré 1961).

Maximum property rights comprise the right to use the

thing, exclude others from using it, and the right to transfer

the thing (selling or renting it). It also entails the right to

managing and modifying the thing, enjoying its benefits,

being compensated when it is damaged by others, as well

as the right to destroy, spoil, or waste the thing. And it

includes the right not to be expropriated without a just

cause and fair compensation, which raises the issue of

legitimate taxation (Epstein 1985).

The second dimension is concerned with the question of

what can be owned, that is, what things can be privately

possessed. In the ideal system that informs HR practices

and research, both consumer goods and the means of pro-

duction can be privately owned. A more radical position

holds that natural resources can also be privatized. Indeed,

given the inconsistent rationality of our conduct at the

individual and the collective level—known as the tragedy

of the commons (Hardin 1968)—state ownership of natural

resources is seen as the cause of the environmental crisis

and, hence, according to this extreme view, should be

abolished (Schmidtz 1991). The privatization of natural

resources is proposed as the best solution to environmental

pollution and degradation because the price system is

supposed to induce an efficient search of alternative tech-

nologies and to favor the best use of scarce goods.

The right to property is, under this rationale, a natural

right that the law should protect in order to secure a sphere

of freedom for each individual so he or she can pursue his

or her interests without arbitrary interferences (Hayek

1945). Possessing property is then one of the fundamental

means to protect the individual against coercion. And that,

the argument goes, applies equally to the employer and the

employee (who has ownership over his or her labor).

The Virtues of Competitive Markets

Related to the extension and range of private property, is

the question about the relative role of government in the

economic system. Full protection of property rights pre-

sumably leads to a ban on government intervention in the

economy. The fundamental economic problem is the

coordination of who produces what for whom. In answer-

ing this question, one may appeal to a centralized planning

system. Alternatively, one may trust in decentralized,

market systems to make the most important decisions about

production and distribution in society (Hayek 1945).

HR practices and scholarship are based on the assump-

tion (the ideal) of the price system making those important

decisions instead of governments (Butler et al. 1991).

Labor markets, according to the assumption, can and will

deliver appropriate—one might say fair—outcomes, rep-

resenting the level of decency that is regarded as appro-

priate by market participants.

As described by the Coase’s theorem, regardless of the

initial allocation of property rights, when there are no

transaction costs or income effects, bargaining will lead to

an efficient outcome in the presence of externalities either

through payments due to liability or through bargaining

(Coase 1960). If Coase is correct, then the main justifica-

tion for government intervention—namely, that it is nec-

essary to regulate market failures arising from externalities

such as when one party imposes costs on another party who

is not considered in his or her calculations—collapses

because, according to Coase’s theorem, market transac-

tions can solve the problem of externalities and lead to

efficient outcomes.

Then, one standard way to reconcile the standpoint of

the firm (and its executives) with the standpoint of the

community is through the design of market institutions,

which entrust us to care for our own welfare instead of

adopting the standpoints of those affected by our decisions

(Maitland 1997). This is where the metaphor of the division

838 M. Alzola

123

of moral labor or ethical specialization enters. It has been

widely used in professional ethics (Luban 1994; Jacobs

2005) and political philosophy (Nagel 1979; Rawls 1982).

The idea is that through institutional design we can produce

a differentiation of the self between public and private roles

which externalizes the impartial requirements of morality

through such institutions, thereby reconciling the demands

of society and those of personal or individual morality

(Nagel 1995; Scanlon 1998; Scheffler and Munoz-Dardé

2005).

In the context of free markets, there is an institutional

division of moral labor: a system of checks and balances is

part of the market system—a sort of invisible hand—which

makes self-interested behavior permissible. Indeed,

according to the division-of-labor metaphor, it is not only

permissible but also required to care exclusively about

one’s own interests, because one’s partial activities are part

of an impartial scheme that benefits everyone (Heath

2006).

Assuming a principle of social division of responsibility,

competition is good because it creates social benefits. And

the virtues of competition are associated with the structure

of the social institution—i.e., the market, labor markets in

our case—rather than, paraphrasing Adam Smith, with the

good intentions or the benevolence of the employer (or the

workers, for that matter). Hence, market players do not

need to intend creating social benefits for us. It is enough

for them to act as self-interested rational agents who care

only for themselves because the price system will lead to

greater social efficiency. An invisible hand will guide

them. Thus, competitive behavior is not only permitted but

also required. And moral constraints are not only pointless

but actually harmful (Gauthier 1982).

The Theory of the Firm

The next ideal, which follows from the previous two

assumptions, is concerned with the questions of why

business firms emerge at all, where transactions are per-

formed (internally or in the market), and how economic

activities are organized within firms.

Three features distinguish the typical capitalist firm—

the structure that informs the theory of the firm guiding

both HR practices and research; they are for-profit, hier-

archical, and shareholder-oriented organizations. This is

not just a stipulation. This conception of the firm—the

standard Anglo-Saxon model—is said to summarize the

best management practices as well as the best normative

view of corporate structure and governance. According to

Hansmann and Kraakman (2001), there is worldwide legal

convergence on this model. And we should expect this

convergence to also produce substantial convergence in the

practices of corporate governance and corporate law in the

near future.

We are concerned here with the questions of what a

corporation is, its purpose, in whose interests it should be

governed, and who should control the corporation. If we

see the firm as a group of individuals who pool their money

for the sake of achieving some goals that they cannot

achieve or finance alone, it follows that the interests of the

shareholders have priority over the interests of the other

corporate constituencies.

Therefore, the primacy of shareholders is justified, in

the standard model, on grounds of property rights. If

the firm is just a piece of property of equity capital pro-

viders, it follows that their interests have priority as an

extension of the right to property that any person has

(Jensen and Meckling 1976). Ownership entails the right

to the thing and its proceeds (see ‘‘Property Rights’’

section above).

Hierarchy and control can also be justified as a matter of

property rights. Or, they can be justified on grounds of

efficiency: the firm is a hierarchical organization, the

argument goes, because hierarchy reduces transaction

costs, thereby maximizing profits (Jensen 2010). Neoclas-

sical economists show how production is organized in

hierarchical firms instead of markets and price mechanisms

when the transaction costs of conducting production

through market exchanges—in the absence of perfect

information, such as negotiating and information costs—

are greater than within the firm (Coase 1937).

There is, according to this fundamental assumption in

HR practices and research, a widespread consensus that a

firm is a profit-driven organization, in which shareholders

hold ultimate decision-making power and, as owners of the

firm, have a right to its profits (Huselid 1995; Legge 2005).

National Sovereignty

The last assumption amounts to another division of labor,

in this case in the global arena between state institutions

and non-state actors such as business corporations. The

assumption holds the concept of the sovereignty of nation-

states over their territory and domestic affairs, thereby

forbidding the intervention of external agents in such

issues. States are defined as the primary institutional agents

in an interstate system of relations. This assumption still

has a decisive influence in the way we think about HR

practices. The principle of national sovereignty, the right of

political self determination, and the principle of non-in-

tervention of one state in the internal affairs of another

state not only describe international relations but also

delineate the rights and obligations of non-state actors and

citizens.

Decent Work: The Moral Status of Labor in Human Resource Management 839

123

From these assumptions, it follows that nation-states

have the capacities and the political legitimacy to deal with

most regulatory issues of economic activities (which,

according to ‘‘Property Rights’’ section, will be strictly

limited in a capitalist system). Labor laws and local cus-

toms are the normative standards when it comes to define

HR practices. The same applies to the rights of other rel-

evant stakeholders. Legal standards and contracts matter,

as they establish what is owed to each group and person.

Laws and regulations are supposed to be the outcomes

of political deliberation in the context of democratic soci-

eties and the rule of law. These ideals, in turn, assume the

independency of the judiciary, the accountability and

transparency of government officials, and the integrity of

legal procedures (Waldron 2012). Furthermore, the state is

supposed to have in place effective enforcement capacities

(Lafont 2015).

The only actor that can draw on the resources of law and

legitimate enforcement power is the nation-state. It is not

the business of business firms to take on the responsibilities

of nation-states. Corporations do not have any special

responsibility no matter how powerful they may be

because, after all, they lack political legitimacy. Both HR

managers and scholars work under the assumption that

corporations operate in the context of functioning regula-

tory frameworks of national governments who take care of

their citizens’ welfare (Koontz 1969; Bhattacharya and

Wright 2005). Indeed, national laws are still viewed as the

main standard when it comes to the evaluation of interna-

tional HRM: ‘‘national governments generally play a lead

role in developing the framework of legal regulation of

employment’’ (Edwards and Kuruvilla 2005, p. 10).

Table 1 summarizes the foundational assumptions in the

HRM field and practices.

Five Ideals Under Fire

We are witnessing, perhaps as never before, an overload of

radical criticisms against capitalism. The international

protest movement is just one of many outings of this dis-

enchantment. Critics point their fingers to business firms

and the capitalist system. Business executives, politicians,

and even business schools are blamed for the current (and

recent) social and economic crises. Our confidence in

capitalism and market institutions has been seriously ero-

ded. Business firms and business practices—including HR

practices—are under serious social scrutiny precisely

because of the assumptions on which they rely. It has been

attributed to Keynes that capitalism is ‘‘the astonishing

belief that the nastiest motives of the nastiest men some-

how or other work for the best results in the best of all

possible worlds.’’ (Schuster 1951) But the evidence

apparently indicates that it does not even work for the best

results for everyone.

Besides the reasons we all have, as intellectuals, to

critically examine the foundational beliefs of our research

and HR systems, we also have prudential reasons to

question the deeply held ideals and unexamined ideas that

model our research and the HR function on grounds of

social legitimacy. This is where we turn in this section.

Autonomy Versus Integration

While the autonomy thesis is still very popular both in

ethics and management, a growing number of scholars are

questioning the is/ought distinction and the separation of

business and ethics (Weaver and Treviño 1994). Freeman

(2010), for one, pleads that the autonomy thesis is falla-

cious and should be rejected. Instead, he advocates what he

Table 1 Foundational assumptions in HRM

Ideals Assumption References

The autonomy of

ethics and

business

While HR practices and HRM research are concerned with matters of fact,

ethics is about values and what ought to be

Rousseau (2006), Pfeffer (1998), Kagan

(1998) and Alzola (2011)

The priority of

property rights

Both HR practices and academic scholarship take the ideal of the widest

possible level of private property, including labor as property

Gaus (2010), Honoré (1961), Epstein (1985)

and Hayek (1945)

The virtues of

competitive

markets

The virtues of competition—e.g., social welfare—are associated with the

structure of the market rather than with the benevolence of employers and

workers

Coase (1960), Luban (1994) and Scheffler

and Munoz-Dardé (2005)

The organization of

the firm

Firms are for-profit, non-democratic, and shareholder-oriented

organizations. Shareholders are special because they own the firm and are

the residual risk-bearers. Hence, they should govern the firm

Jensen and Meckling (1976), Hansmann and

Kraakman (2001) and Jensen (2010)

The principle of

national

sovereignty

The sovereignty of nation-states over their territory and domestic affairs

forbids the intervention of external agents such as business firms in

national issues

Koontz (1969), Bhattacharya and Wright

(2005) and Edwards and Kuruvilla (2005)

840 M. Alzola

123

calls the integration thesis, which holds that ‘‘most business

decisions (…) have some ethical content or implicit ethical

view. Most ethical decisions (…) have some business or an

implicit view content about business’’ (Freeman 2010,

p. 7). Freeman has provided a second formulation of the

integration thesis, according to which ‘‘it makes no sense to

talk about business without ethics,’’ ‘‘it makes no sense to

talk about ethics without business,’’ and ‘‘it makes no sense

to talk about either business or ethics without talking about

human beings’’ (2010, p. 7).

Elsewhere, I have explained why both the autonomy

thesis and the integration thesis are problematic (Alzola

2011). Here, I shall briefly summarize the arguments

against the autonomy thesis. A strong dichotomy between

the realms of facts and values and between descriptive and

normative research are untenable because there are ‘‘thick’’

ethical concepts which are both descriptive and norma-

tive—such as decency or decent work—because of the

entanglement of facts and values (Putnam 2002). The value

creation process necessarily brings together economics and

ethics. Moreover, the development of sound normative

business ethics theories should rely on realistic assump-

tions about the kind of persons to whom those theories are

directed (Williams 1985). In other words, ought implies

can. Given that neither separation nor integration goes

without problems, we should recognize the limitations

normative and descriptive approaches reciprocally place on

each other.

In spite of hard efforts (e.g., Rousseau 2006; Rousseau

and Barends 2011), HR scholars cannot seriously expect to

be conducting pure value-free research because there is no

purely objective management research (Donaldson 1994).

The ideal of positivism is just an unachievable ideal

because social scientists cannot entirely disengage their

own values from the studies they conduct. HR scholars

make a number of value-laden decisions, from the selection

of observational techniques to the selection of what will be

observed, which has a decisive influence in the conceptu-

alization of the object of observation and in the conclusions

they will reach (Werhane 1994).

Management scholars will profit from acknowledging

the normative commitments of their research (Tenbrunsel

and Smith-Crowe 2008). As listed before, some of these

commitments are revealed by the discipline’s name, ‘‘hu-

man resources.’’ Calling workers as ‘‘resources’’ or capital

might be just a way to degrade them to the status of

commodities. Labor is, under this view, a resource that

firms can buy or terminate like any other production factor,

according to market rules. Whether one makes this com-

mitment explicit or not, it is a normative commitment

anyway. Likewise, a research agenda is a reflection of

allegiances about what matters in the field. When a scholar

chooses to focus on, say, workplace romance (Alder and

Quist 2014), talent retention or idiosyncratic deals (Rous-

seau 2005) rather than, say, workplace exploitation, decent

termination, or industrial democracy, the scholar is neces-

sarily taking a side. The ultimate question scholars and HR

practitioners might ask themselves is the uneasy and fun-

damental question of professional ethics: What cause are

we serving? (Luban 1994).

The Meaning and Scope of Property

The debate about property and its limits are especially

timely nowadays, when wealth disparities and income

inequality are among the most serious social concerns in

the Western world.7 It is not merely seen as obscene, it is

even said to harm the economy by creating instability and

undermining growth.8 Inequality and poverty increase

social pressures to redistribute wealth and address basic

social needs. And it challenges the moral status and eco-

nomic justification of the system that determines such

levels of wealth and income.

Having discussed the issue of property and property

rights along two dimensions, let us try to identify the

problems associated with the assumption of full property

rights along such dimensions. The issue of the extension of

property raises concerns over the permissibility of certain

uses of property and the legitimacy of taxation and wealth

redistribution. Ultimately, it is also a debate about the

social function of property and whether the government

may regulate the use of property.

First, the story of natural property rights as originated in

the labor of individuals prior to the institution of govern-

ment or civil society—as Locke, Nozick, and their fol-

lowers want to suggest—has been seriously discredited. All

of the things we exchange in the market were and are

governed by legal and social arrangements, which were

developed having in mind the needs of the communities

that allow the idea (and the very existence) of property.

Private property is a social artifact decisively shaped by

state institutions and public authorities, which have had a

prominent role in the institution and the distribution of such

rights. Hence, property rights are not ‘‘prior to society’’ and

its institutions. And what can be done with what one owns

is not only a private decision. This entails that all forms of

property might be democratically regulated and that such

regulations do not violate the owner’s liberty. In other

words, to say that any regulatory change is out of the

question once market mechanisms and property rights have

7 Georgescu, P. ‘‘Capitalists, Arise: We Need to Deal With Income

Inequality’’ The New York Times, August 7, 2015. Available at:

http://www.nytimes.com/2015/08/09/opinion/sunday/capitalists-arise-

we-need-to-deal-with-income-inequality.html. 8 ‘‘Inequality and Its Perils’’, The National Journal, 09/28/2012.

Decent Work: The Moral Status of Labor in Human Resource Management 841

123

been established is the view of an outsider whose only goal

is rent-seeking, rather than the perspective of someone who

lives in that society and cares about welfare in such a

society (Waldron 2012).

One may argue, against libertarians, that rights to

property and rights to subsistence, in the context of a

community, are on a par. Need-based rights (welfare

rights) are not secondary. Property-based rights may not

have priority over welfare rights. Rather, basic unmet

needs challenge the legitimacy and the justification of

private property (Griffin 2008). Thus, in the same way the

standard assumption grounds property rights on freedom

and autonomy, one may argue that the right to a decent

life—including ‘‘decent work’’ as held by the UN Global

Compact labor standards—is fundamental to our concep-

tion of respect for the person as an autonomous being.

When it comes to the range of private property, that is,

to the question of what can be owned, the possession and

market exchange of other human beings is surely objec-

tionable. Most people are concerned about treating humans

as commodities, as is seen in the market of organs (body

parts), wombs (surrogate motherhood), and sex (prostitu-

tion), among others (Walzer 1984; Sandel 2012). Similar

concerns guide the adoption of the UN Global Compact

Principle Four about the elimination of forced labor, bon-

ded labor, and compulsory labor, as elaborated below.

The core issue is that when human bodies and body parts

are exchanged in the market they are valued and appreciated

according to market rules (Alzola 2012). Thus, the com-

modification of humans fails to respect their dignity as ends

in themselves—not merely as means. Similar objections

have been raised on grounds of exploitation and alienation

(Anderson 1990), gender inequality (Moller Okin 1989;

Pateman 1988) and social inequality (Satz 2010), which

also inform the UN Global Compact Principle Six about

discrimination in employment (see next section).

Furthermore, the privatization of natural resources and

the idea of natural-resource markets run counter the ideals

of equality and human rights, as they entail depriving some

human beings from, say, safe drinking water if they do not

have money to pay for them (UN 2010). In short, the

exploitation of natural resources in a way that overlooks

public goods and social needs may become intolerable and,

therefore, morally objectionable (Waldron 2012).

Markets and Justice

The virtues of market mechanisms relies on a number of

assumptions that lead to the division of moral labor

metaphor, which in turn leads to greater competition to

push prices toward the levels at which markets clear. At

that point, social resources have been put to their best use,

in which they go to those who derive the greatest satis-

faction from their consumption (Gaus 2010).

For competition to produce an efficient allocation of

goods and services, there should be symmetric information

between the parties to the market transaction, a complete set

of insurance markets, perfectly rational, utility-maximizing

agents who have consistent preferences, and no externali-

ties. None of these conditions is met in real markets. If the

conditions do not hold and the allocation of goods by a

market transaction is not efficient—it is not Pareto opti-

mal—then the virtues of competition and the permissibility

of competitive behavior do not hold either (Heath 2006).

Economists identify several sources of market failures,

including information asymmetries (adverse selection,

moral hazard, and information monopoly), non-competitive

markets (monopoly, monopsony, oligopoly, oligopsony),

principal–agent problems (moral hazard, conflict of inter-

est, and information asymmetries), externalities (costs or

benefits incurred by a party external to the transaction), and

public goods (non-excludable and non-rivalrous goods).9 In

addition, market interactions can also be seen as forms of

reciprocal and cooperative relationships in civil society

(Bruni and Sugden 2008).

In HRM, there are also market failures in labor markets

because the good traded in labor markets is not as homoge-

nous and tradable as other goods. Thus, workers’ produc-

tivity is heterogeneous and may be unobservable, jobs’

mobility is costly, and productivity is the result of amatching

process (Viscusi and Moore 1987). The typical sources of

labor market failures are the existence of skills gaps

(poaching workers instead of training them will lead to the

provision by firms of insufficient levels of general skills),

immobility (workers are not willing or able to move geo-

graphically, between industries, and between occupations,

all of which may bring about structural unemployment) and

inequality (asymmetric bargaining power, information

asymmetries, wage discrimination, exploitation).10

Economists investigate the causes of market failures and

propose possible means of correction. There are still con-

troversies about state intervention in the economy as ameans

to achieve efficiency and social justice. Above and beyond

the justification of government intervention as a remedy for

market failures, some authors suggest two institutional

responses. One involves the creation of the firm, which, as it

is explained on ‘‘The Theory of the Firm’’ section, entails the

substitution of an organizational hierarchy and a set of

administered transactions for a competitive market, which is

supposed to promote cooperative behavior in agency

9 A serious discussion of this issue goes beyond the scope of this

paper but see Arrow (1973) and Stiglitz (1989). 10 Again, I cannot do justice to the issue of labor market failures here

but see Cohen (1985) and Pindyck and Rubinfeld (2001).

842 M. Alzola

123

relationships. The second response involves the defense of

market transactions when the state regulations intended to

correct market failures are insufficient.

If the argument for the moral division of labor does not

work as a result of market failures, then as a matter of

justice, it is not morally permissible for business firms to

profit from market failures even when such conduct is

legally acceptable (Norman 2011).

Governance, Authority, and Legitimacy

Market imperfections are indeed relevant reasons to chal-

lenge the distinctive features of the capitalist firm—a

hierarchical and shareholder-oriented organization—that

are taken as given by HR scholars and practitioners. Market

failures may provide reasons for workplace democracy.

Two salient market imperfections are especially critic in

the realm of HRM. First, capital markets are not perfect, so

workers who lack collateral are not in a position to borrow

money in order to set up a firm. Second, the labor process is

not easy to monitor, and hence there are important moni-

toring costs. Democratically run corporations may be

superior to the typical capitalist firm in terms of account-

ability and efficiency.

At least two arguments from market failures have been

offered in support of democracy in the workplace. First, the

accountability argument is based on the premise that there is

a struggle between workers and their bosses over the per-

formance of labor because of the nature of the exchange of

labor for wage: in power relationships, those who exercise

power should be accountable to those directly affected by the

exercise of power. Ideally, everyone affected by a decision

should be given voice in such a decision (Dahl 1985). Sec-

ond, the efficiency argument holds that democratic firms will

be technologically more efficient (but also more risk averse)

than capitalist firms because, as residual claimants, workers

have strong incentives to monitor each other, thereby saving

monitoring costs (Bowles and Gintis 1993).

More generally, there is a widespread consensus about

the superiority of democracy as a governance system over

its competitors at the state level. Democratic government is

said to be associated with the promotion of citizens’

autonomy and personal development and it is said to pre-

serve the equal status of citizens (Nagel 1991; Dahl and

Shapiro 2015). In the workplace, equal voice and decision-

making power make significant contributions to political

democracy, as corporate members develop the attitudes,

interests, and skills of responsible citizenship in the

workplace (Pateman 1970).

The puzzle is why we glorify democracy when talking

about political institutions but accept autocracies when it

comes to corporate governance. Work is not organized

democratically today: business executives are not elected

by workers. Indeed, workers are supposed to obey rules and

orders in which they have no say. Why do we praise

democratic nations but do not object corporate oligarchies

(or managerial dictatorships)?

Many scholars subscribe to the analogy between politi-

cal and economic institutions and argue that if residents

deserve democratic rights in territorial organizations, then

employees must deserve comparable rights in economic

associations. It follows, the argument goes, that if

democracy cannot be justified at the corporate level, it

cannot be justified at the political level either (Dahl 1983).

Can the exercise of power by business executives be

legitimate if there is no participation in decision-making by

employees? The equal claims of corporate members justify

equal votes about binding rules.11 The argument holds that

decision-making power should be shared equally by all

who contribute to the enterprise. I am not talking here

about having a say, but rather about equal say and equal

vote. In this understanding, disciplinary sanctions and other

forms of punishment cannot be justified unless the rule

violated was adopted by a democratic process.

Workplace democracy is advocated both on utilitarian

and deontological grounds. It has been associated to greater

efficiency, reduced alienation, better relations between

labor and management, equity, job security, and contribu-

tions to political democracy (Spencer 1892; Werhane

2000). Democracy has also been defended as a matter of

justice and rights: employees have a moral right to

democracy in the workplace that derives from a more

general right, such as the right to autonomy. Such a right is

compromised by subjection to rules in which the workers

have no say (Mayer 2000). The right to democracy is not

trumped by property rights because the right to property

does not entail a right to command labor (Dahl 1983).

The second question, of whether firms should be orga-

nized to exclusively serve the interests of the shareholders

has been the subject of four decades of scholarship in

business ethics, so I would defer to the relevant literature

(e.g., Dunfee and Donaldson 1995; Freeman 2008). But it

would be helpful to return to a point raised in ‘‘The Theory

of the Firm’’ section on how alternative conceptions of the

firm lead to radically different approaches on corporate

governance and social responsibility.

An alternative view to the standard model of the firm as

private property (or as a nexus of contracts created to

reduce transaction costs) is to conceive of the corporation

as a social institution. Corporations do not exist in a legal

11 Some scholars argue against workplace democracy appealing to

what they consider important disanalogies between the polity and the

firm, in terms of different costs of exit, levels of consent (whether

they are voluntary associations or not), asymmetric management

skills and knowledge, and alienability of voice and decision-making

power. See Narveson (1992) and Mayer (2000).

Decent Work: The Moral Status of Labor in Human Resource Management 843

123

vacuum. They are authorized to operate in a community by

the relevant political authority. The authorization to

incorporate entails a number of privileges, such as limited

liability, unlimited life, separate legal status—they are

legal persons—and a permission to employ capital,

humans, and natural resources in their operations. In return,

they are expected to serve some important social goals that

justify their incorporation. A firm is not entitled to these

privileges when they fail to fulfill the goals that justify its

very existence (Donaldson and Dunfee 1994).

The Nation-State and the Post-Westphalian Order

International lawyers and scholars describe the present

global order as a post-Westphalian order, where there is a

shift in the balance of power from sovereign nation-states

to non-state actors—with a prominent role for transnational

corporations—and where the fragmentation of political

authority and the blend of public and private spheres

challenge our assumptions about national sovereignty, non-

intervention, and global governance (Scherer et al. 2009).

Today, the most pressing social issues, from human

rights violations to human exploitation, from environ-

mental pollution to transnational corruption, take place

within the borders of a nation-state but involve many forces

above and beyond the power of the nation-state. That

includes, of course, business corporations.

Globalization has pushed big corporations to expand

their operations beyond national borders, either investing

or sourcing in foreign countries that offer opportunities for

efficiencies and lower costs (Gereffi 1999). In their

transnational operations, corporations operate in contexts

of low institutional quality, where host countries lack an

effective rule of law, democratic decision-making, gover-

nance capacities to enforce the law, and decent regulations

in issues of health and safety, minimum wage, environ-

mental protection, etc. Unhealthy political institutions in

the host country, together with the pervasive problems of

cultural diversity and conflicting traditions, raise serious

concerns about the global practices—including HR prac-

tices—of transnational corporations (Kobrin 2001).

Market imperfections and public goods problems are

beyond the reach of most nation-states and cannot be

effectively regulated by the national law (Kaul et al. 2003).

Based on the realization that only a coalition of state and

non-state institutions, including transnational organiza-

tions, can successfully address these problems, some

authors argue for a post-national order, which reserve an

important role for business corporations (Matten and Crane

2005; Scherer and Palazzo 2007). Supranational actors can

and should—it is argued—fill these gaps. This is where

global initiatives such as the UN Global Compact enter.

They can contribute to address the crisis at the level in

which it is generated, with or without the collaboration of

state institutions.

This view not only departs from the classic Westphalian

order, but also entails a position about the responsibilities of

business firms and their executives, which is inconsistent

with the standard model discussed in ‘‘The Theory of the

Firm’’ section. Not only do they have obligations to promote

and protect human rights, they must also comply with labor

standards, preserve the natural environment, and refrain from

corruption in their national operations (as in the UN Global

Compact). In addition, they have similar responsibilities

along their supply chain, across national borders. The firm is

seen as a political actor with duties to fill regulatory gaps and

influence policy (Scherer et al. 2014). Such perspective is

roughly absent from mainstream research in HRM (Bhat-

tacharya and Wright 2005; Edwards and Kuruvilla 2005).

The UN Global Compact and the Ideals Behind HRM

Can the UN Global Compact help alleviate the ethics

deficit in human resource management? If my story about

the ethics deficit in HR practices and research is persuasive

and the explanation offered here is accurate, it follows that

(part of) the remedies for the ethics shortfall will be found

in a thorough revision of the ideals and assumptions that

still guide scholars and practitioners.

The UN Global Compact Labor Principles

Can the UN Global Compact principles help rethinking the

fundamental assumptions discussed in sections two and

three? There are four labor standards in the Global Com-

pact’s ten principles to encourage business leaders world-

wide to adopt sustainable and socially responsible policies.

The principles—which, as mentioned above, are derived

from the ILO Declaration on Fundamental Principles and

Rights at Work (1998)—create special corporate obligations

to uphold four fundamental rights, namely, freedom of

association and collective bargaining (Principle 3), freedom

from forced and compulsory labor (Principle 4), the aboli-

tion of child labor (Principle 5), and the elimination of

discrimination in employment and occupation (Principle 6).

In turn, these principles derive from ILO Conventions and

Recommendations, which established international labor

standards on a broad range of issues related to work, from

human rights and occupational safety and health to wages,

employment policy, and human resources development.

The members of the ILO—which is a tripartite organi-

zation created in 1919 with representatives from govern-

ment, business corporations, and workers at the

844 M. Alzola

123

international level—identified four categories of labor

principles, expressed in eight core conventions that are

considered as fundamental because they protect basic

workers’ rights.12 These categories are the UN Global

Compact Principles 3, 4, 5, and 6:

Principle 3: Businesses should uphold the freedom of

association and the effective recognition of the right to

collective bargaining;

Principle 4: The elimination of all forms of forced and

compulsory labor;

Principle 5: The effective abolition of child labor; and

Principle 6: The elimination of discrimination in respect

of employment and occupation.

The four principles capture a particular understanding

about the status of labor and they are supposed to express

the guiding value of the UN Global Compact when it

comes to labor, namely, decent work. We have good rea-

sons to believe that ‘‘decent work’’ encompasses much

more than these four principles, from decent termination to

workplace safety to fair compensation, to name just a few

(Ghai 2002). Still, the UNGC at least provides a framework

for the analysis of labor practices. It is the beginning rather

than the end of the conversation about labor.

Freedom of Association and Collective Bargaining

Principle 3 (freedom of association and the right to col-

lective bargaining) comprises two fundamental human

rights. Such rights enable workers and employers to join

together and negotiate to protect not only their own eco-

nomic interests but also their civil freedoms, such as: the

right to life, to security, to integrity, and to personal and

collective freedom. In that sense, Principle 3 is an integral

part of the democratic system. Practically speaking, Prin-

ciple 3 entails respecting workers’ rights to form and join a

trade union without fear of intimidation or retaliation, the

promotion of non-discriminatory policies and procedures in

the workplace with respect to union membership in appli-

cations for employment, promotion, and termination, the

provision of appropriate facilities for worker representa-

tives, etc. Upholding the principle commits employers to

recognize representative organizations for the sake of

collective bargaining, to provide them with access to real

decision makers, and to offer them appropriate information

for collective bargaining. The adoption of Principle 3 also

creates an environment where the role and function of the

representative national employers’ organizations is taken

seriously and improves labor relations in countries with

weak legal institutions. In sum, freedom of association and

collective bargaining provide a platform for constructive

and genuine dialogue. And a genuine dialogue between

employers and freely elected workers’ representatives

helps create an understanding for each other’s interests,

building trust, and resolving conflicts.

Forced Labor

Principle 4 (the elimination of forced and compulsory

labor) encompasses a strong commitment to human dignity

and moral autonomy, the opposite of treating workers as

commodities (see ‘‘Diagnosis: An Ethics Deficit’’ section).

Labor exploitation can occur in various forms and is cur-

rently a global problem along the whole supply chain

significantly affecting trafficked migrant workers. Forced

labor, bonded labor, debt bondage, and other forms of

coercion are fundamental violations of human rights

because labor should be freely given and because workers

have a moral right to quit their jobs. The ILO estimates that

almost 21 million people are victims of forced labor

worldwide, 80% of which is exacted by private agents,

with children representing 40% of the victims.13

While multinational corporations joining the UNGC will

probably not be directly involved in compulsory or forced

labor, they may be so through their suppliers and subcon-

tractors, and thus they are required to exercise due dili-

gence in managing these relationships.

In addition, the abolition of forced labor demands a

comprehensive set of interventions involving not only the

victims but also their families, as these may be the only

alternatives these workers have.

Workers should be provided with employment contracts,

clear statements of terms and conditions of service, the

voluntary nature of relationship, and the freedom (and

procedure) to leave. Companies should prohibit the

requirement that workers lodge financial deposits with the

company. And they should not only remove the abusive

conditions but also assist with workers’ access to viable

alternatives and contribute to broader community efforts to

eliminate forced labor, including partnership with other

companies, collaboration with national authorities, and

other stakeholders, and even re-integration programs for

former victims of forced labor (UNGC 2010).

12 The eight Core Labor Conventions are: (1) Freedom of association

and the right to collective bargaining (Freedom of Association and

Protection of the Right to Organize Convention No. 87, 1948; Right

to Organize and Collective Bargaining Convention No. 98, 1949); (2)

Forced Labor (Forced Labor Convention No. 29, 1930; Abolition of

Forced Labor Convention No. 105, 1957); (3) Child Labor (Minimum

Age Convention No. 138, 1973; Worst Forms of Child Labor

Convention No. 182, 1999); and (4) Discrimination in Respect of

Employment and Occupation (Equal Remuneration Convention No.

100, 1951; Discrimination [Employment and Occupation] Convention

No. 111, 1958).

13 Available at http://www.ilo.org/global/topics/forced-labour/lang–

en/index.htm.

Decent Work: The Moral Status of Labor in Human Resource Management 845

123

Child Labor

Principle 5 (the abolition of child labor) is not a standard

about ‘‘decent work’’ but actually about excluding certain

human beings from being part of the employment rela-

tionship, whether decent or indecent. ILO conventions

(Minimum Age Convention No. 138 and the Worst Forms

of Child Labor Convention No. 182) have established the

legal framework for the prohibition of child labor. National

laws should prescribe a minimum age for admission to

employment that must not be\15 years.

Child labor is a form of exploitation that is particularly

serious, as it often includes the trafficking of children,

debt bondage, work which harms the health, safety or

morals of the child, the use of children in armed conflicts,

and the use of a child for illicit activities such as the

production and trafficking of drugs, prostitution, or

pornographic purposes. Child labor damages a child’s

physical, social, intellectual, and psychological develop-

ment. Children who fail to complete their basic education

are likely to remain illiterate and may not acquire the

skills that are necessary to flourish as a human being (ILO

2012).

As in the case of forced labor, signatory companies are

required not only to abolish child labor but also do it in

sensitive a way to avoid contributing to even more

exploitative forms of work. Companies have also pru-

dential reasons—i.e., reputational reasons—to disassoci-

ate themselves from child labor and conduct due diligence

including review of ILO and research about child labor in

the sectors and areas where they operate. Specifically,

companies should adhere to minimum age provisions of

national labor laws (and where the national law is insuf-

ficient, take account of ILO standards), use adequate

means of age verification, remove children from work

when they are found in the workplace (while helping the

child removed from the workplace and his/her family to

find viable alternatives), and press subcontractors, sup-

pliers and other business partners to abolish child labor.

As in Principle 4, UNGC signatories should also con-

tribute to broader national and international efforts to

eradicate child labor. They can also help children access

quality education and social protection by working in

partnership with local and national governments, other

companies, international organizations, media, and other

stakeholders.

Workplace Discrimination

Principle 6 (the elimination of employment discrimination)

is about equality and unequal treatment in the workplace in

such matters as hiring, compensation, and promotion. In

the context of the principle, discrimination entails a

wrongful act that deprives a person of some benefit or

opportunity, based on prejudicial treatment due to that

person’s membership in a certain group. Unequal treatment

in personnel decisions due to characteristics that are

unrelated to job performance or to the requirements of the

position—such as race, gender, religion, nationality, sexual

orientation, political ideas, or age—directly affects the

employment status and the terms and conditions of

employment of a person. The wrongness of workplace

discrimination can be explained in utilitarian terms: It is

wrong because it creates an economically inefficient

matching of people to jobs and may cause poverty and

related social problems. Alternatively, it can be described

as a violation of people’s humanity and their rights insofar

as stereotypes lead employers to treat individuals only as

members of groups, which denies them the dignity and

respect of equal treatment.

Eliminating discrimination in the workplace is a

strategic entry point for abolishing discrimination at the

societal level: it can help reduce unfair disadvantages,

such as in education, that people may have suffered at

earlier stages in their life. Plus, bringing together workers

with different backgrounds and treating them equally

contributes to building a sense of community that goes

beyond the company (Nagel 1973). ILO principles

establish minimum thresholds but national laws and

practices—including affirmative action programs—may

broaden these efforts.

Furthermore, companies have self-interested reasons—

from workplace performance, to talent retention, to repu-

tation—to combat discrimination and promote diversity in

the workplace. UNGC signatories should institute company

policies that make qualifications, skills, and experience the

basis for recruitment, training, and promotion. They should

issue company-wide procedures to guide equal employ-

ment. They should provide training on diversity policies

and practices. And they should adjust the physical envi-

ronment to ensure health and safety for people with dis-

abilities. In addition, Principle 6 entails a commitment to

avoid policies that would systematically disadvantage

certain groups, keep records on recruitment, training, and

promotion that provide a transparent view of opportunities

for workers, and establish grievance policies to address

complaints on discrimination (UNGC 2014).

Principle 6 encourages companies to support broader

efforts to build a climate of tolerance and equal access to

opportunities for occupational development. In their global

operations, companies may need to adapt to local traditions

and work with representatives of workers and governments

to ensure equal access to employment, training, and

promotion.

846 M. Alzola

123

Reconsidering the Fundamental Assumptions

Besides the detailed analysis of the four UNGC labor prin-

ciples, it should be highlighted that the very existence of the

UN Global Compact and its guiding ideal of decent work

may be framed as a challenge to each of the threshold

assumptions in HRM discussed in sections two and three.

First, the notion of ‘‘decent work’’—which guides the

UNGC and is also the Sustainable Development Goal num-

ber eight—and the appeal to rights above and beyond what

the national law requires—technically, these are called

‘‘moral rights’’—challenge the separation of ethics and

business (or ethics and HRM). ‘‘Decency’’ is a good example

of what Putnam (2002) calls thick concepts, which entangle

facts and values, that is, descriptive and normative compo-

nents. We cannot talk about decency in the morally neutral

way that social scientists intend in the HR field. The concept

of decency reveals the normative commitments behind the

UNGC.

Second, the priority of property rights is put into ques-

tion by a system that upholds the promotion and protection

of four human rights because property does not have the

status of a human right (not at least in the Universal

Declaration of Human Rights, the ILO, or the Global

Compact) while labor does have such status (Kolben 2009).

Consequently, when property rights are in conflict with the

UNGC rights to freedom of association, collective bar-

gaining, non-discrimination, and the prohibition of forced

labor and child labor, such rights should prevail over the

employer’s right to property.

Third, the UNGC’s appeal to the responsibility of com-

panies and executives to use more stringent labor stan-

dards—when national labor laws and regulations are

insufficient—as well as the plea for contributions to broader

national and international efforts—to abolish forced labor,

child labor, and customary workplace discrimination—

challenge the idea of the moral division of labor and the ideal

of free markets always delivering fair outcomes (or ‘‘decent

work’’). And so do the expectation of business cooperating

with national authorities, suppliers, subcontractors, media,

and other stakeholders to realize the standards of the UNGC.

Fourth, unless we stretch too much the scope of Prin-

ciple 3, we should conclude that the UNGC does not have

much to say about workplace democracy—at least not the

sense of democracy that is discussed in ‘‘Governance,

Authority, and Legitimacy’’ section—or about corporate

governance in general. Still, it does challenge the ideal that

companies should be exclusively oriented to maximize

shareholder value because, as it is explained above,

employers should give priority to the UNGC labor princi-

ples when they are in conflict with profits. Taking the

UNGC labor rights seriously entails that they cannot be

traded off for profits or economic or social benefits.

Finally, when the UNGC encourages signatories to

adhere to local laws and regulations (e.g., concerning

forced labor, child labor, or discrimination) but requires

taking account of international labor standards where

national laws are insufficient, it demands companies to

overlook the principle of national sovereignty. In that

sense, the UNGC is an illustration of the present global

order, described by political scientists and legal scholars as

a post-Westphalian order. The shift in the balance of power

from sovereign nation-states to non-state institutions, the

fragmentation of political authority, and the blend of the

public and the private spheres challenge the fifth assump-

tion about national sovereignty and non-intervention.

Business firms are expected to address social issues above

and beyond borders, they are required to protect the natural

environment, they should engage in self-regulation to fill

legal gaps, and they in fact promote more demanding labor

standards (Scherer et al. 2015).

The transnational operations of business firms in a post-

Wesphalian order create a number of problems to the way

that HR departments and HR scholars define responsible

labor practices (Scherer and Palazzo 2007). When it comes

to workers’ rights, the standard to follow is not simply the

national standards. Corporations operate in environments

where certain practices of dubious morality may be

accepted either because they are not legally prohibited or

because they are legally banned but remain unenforced

(from issues of workplace privacy to wage policies to

health and safety conditions). Still, decency entails that

workers should be treated as equals. Their moral rights are

the standards to follow when multinational corporations

operate in weak institutional environments.

Moving Forward

The UN Global Compact is an important step forward in

order to revise the HR function. Yet, it is far from enough.

The UNGC constitutes a minimalist agreement among the

participants on a limited set of fundamental labor human

rights whose realization might still be compatible with some

of the questionable assumptions examined in section two.

For example, we have good reasons to believe that ‘‘decent

work’’ comprises some requirements about selection, ter-

mination, compensation, etc., which are absent in the UNGC

Labor Principles (e.g., the UNGC does not include any

reference to wages). In other words, it is possible to uphold

the workers’ freedom of association, collective bargaining,

non-discrimination, and elimination of forced and child

labor while still failing to provide ‘‘decent work’’.

Moreover, there are serious concerns about the UNGC

achievements because the available evidence seems to

indicate that it has failed to bring its signatory companies

to enhance their efforts and integrate its labor principles in

Decent Work: The Moral Status of Labor in Human Resource Management 847

123

their policies and operations (Kell and Levin 2003; Wil-

liams 2004; Deva 2006; Gilbert 2010). For instance, it has

been reported that the issue of gender inequality was

missing from the UNGC’s agenda in its first decade, a

finding which is explained by the lack of gender discourse

and the lack of participation of women’s organizations in

the UNGC learning network as well as the UNGC’s pri-

mary focus on the business rather than the moral case

(Kilgour 2013).14

Furthermore, some authors have questioned the

UNGC’s governance structure, which allegedly does not

encourage accountability for actions or transparency in

external communications (Rasche et al. 2013). Other critics

emphasize that it is fundamentally flawed because it does

not impose verifiable obligations on signatories and it does

not force them to adhere to their program requirements

(Sethi and Schepers 2014). There are also longstanding

concerns about companies exploiting the legitimacy of the

UN with no genuine interest in changing their business

practices (Zammit 2003; Bennie et al. 2007; Fall 2009).

Other scholars have addressed these concerns and soft-

ened (and/or discredit) these objections (e.g., Williams

2014). While adjudicating between these claims is beyond

the scope of my paper, I submit here that if the UNGC

contributes to reexamine the principles and ideals that

guide the HR function and scholarship on HRM it may be

considered—in the context of this paper—successful. My

case rests on the following four reasons, which do not

constitute an exhaustive list of developments but is rather a

short selection of promising issues for further analysis.

To begin with, scholars and practitioners should

acknowledge and critically examine their guiding ideals

and recognize the limitations of the supposed neutrality of

HRM practices and research. They should consider how

some of their deeply held beliefs about full property rights

and free markets are still consistent, after all, with the

social function of property, progressive taxation, stake-

holder management, and democratically run business cor-

porations. And they may want to reassess the political

responsibilities of business firms in light of the governance

gaps at the national and global levels. Consider one last

example. Despite well-established international labor

standards, child labor and forced labor still persist today in

democratic nations—as the new labor law in Bolivia low-

ering the working age to 10 illustrates15—posing serious

questions on the sort of guidelines that companies should

follow when operating abroad. The notion of moral

rights—as opposed to legal rights at the national level—

should be the ultimate standard. The UNGC labor stan-

dards, which can be seen as grounded in the notion of

moral (human) rights, offer the resources to hold multi-

national corporations liable—at least morally liable—not

only for their conduct but also for the HR practices of its

suppliers and subsidiaries, an issue that is mostly neglected

in the HR literature (Rowley and Warner 2007; Preuss

et al. 2009).

Second, regardless of how well intended our research

and practices on HRM are, the name of the academic field

and the business function is not trivial and should be

reassessed. I would not go as far as Legge (1998) and

Greenwood (2002), who seem to suggest that HRM is

ethical only if it treats employees as more than a means to

an end. Labor is a means of production. Workers are (also)

means. But the concern here is about treating people in

general and workers in particular, as a mere means to an

end (Parfit 2011). I am certainly used as a means in my job

as a university professor. But using someone as a mere

means is to involve him or her in a scheme of action to

which he or she does not or could not reasonably consent. It

involves a violation of the moral equality of people (Kant

1785). That is why it is debasing to reduce human beings to

commodities, as the name of the discipline suggests.

A third theme is about governance: perhaps it is time to

revise our theories of the firm. The analogy of the corpo-

ration with the army—to justify its hierarchical nature—is

losing its enchantment, as it reduces the learning capacity

of organizations (De Geus 2002) and delegitimizes man-

agerial authority (McMahon 2012). This is not simply a

call for allowing employees to exercise some influence

over their work and the conditions under which they work,

from ‘‘participation in the workplace’’ to ‘‘holacrocy.’’ It is

not merely a call for voice as a matter of organizational

justice (Thibaut and Walker 1975). Rather, it is an invita-

tion to consider an ethics of distributed power, in which

employees have some real control over organizational goal

setting and strategic planning: democratic business orga-

nizations with full voice, voting rights, and decision-mak-

ing power (Landemore and Ferreras 2016). As Solomon

(1992), Handy (2002), and other management scholars

have persuasively argued, corporations resemble commu-

nities, and good corporations are good communities. Then,

communities have members. And members have certain

rights, such as a right to a voice and a right to vote.

But there are internal and external obstacles to democ-

racy. On the one hand, there is a concern that professional

managers are not prepared to share power, even if they are

willing (or forced) to do so. It is not simply a matter of

delegating authority. Policies need to be set in order to

14 This has resulted in a loss of public trust and support from

important constituencies in civil society to the point that some authors

suggest the UNGC should admit the problem and dissolve itself (Sethi

and Schepers 2014). 15 ‘‘Bolivia’s child labour law shames us all’’ The Guardian, July 25,

2014. Available at: http://www.theguardian.com/global-development/

poverty-matters/2014/jul/25/bolivia-child-labour-law-exploitation-

slavery.

848 M. Alzola

123

avoid that employees ask the next-higher level to make

decisions for them (Sheppard and Lewicki 1987; De Geus

2002). Moreover, in their transnational operations, corpo-

rations learn that the prevailing corporate culture in certain

countries is oligarchic and family based, where the dele-

gation of authority is not well regarded. Paternalism in the

workplace is surely a problem when it comes to ‘‘decent

work’’ (Kerfoot and Knights 1993; Jacoby 1998; Fleming

2005; Soylu 2011). Employers providing for the welfare of

their employees may encourage the dependency of the

employee on the employer (Sennett 1999). Reliance on a

paternalistic style of employee management restricts

employees’ freedom by imposing on them well-intended

regulation (Purcell 1987). The moral principle that should

guide the idea of decent work on this matter is that business

firms and managers are not entitled to impose their views

on employees about what activities employees should

engage in order to live better lives (Bowie 1998). Even if

inspired by benevolence, employers should not interfere

with the worker’s conception of how he or she wishes to

obtain happiness because they are autonomous human

beings.

Finally, HR staff and HR departments have a critical

role of representing employees’ concerns and they have an

enormous influence in the overall ethical culture of the

organization. We have good reasons to highlight such

responsibilities. They can help building the conditions for a

genuine dialogue between companies and workers, which

enables both to understand each other’s problems and to

build trust on both sides. The concern is not only about

decent HR practices but also how HR practices become a

pillar for corporate behavior. HR practitioners have the

tools to treat people with concern and respect. They can

integrate ethics into job design, selection, performance

appraisal systems, training and development, compensa-

tion, etc. Thus, overcoming the autonomy thesis, HR

practitioners and scholars should realize that they are

central players in achieving decent work, in fostering eth-

ical behavior in the firm, and in decisively helping in the

construction of a better society, which should be the ulti-

mate goal of the HR function.

Conclusion

In the opening passage, written 168 years ago, John Stuart

Mill explains how it is possible to achieve economic effi-

ciency through cooperation, ‘‘without dividing the pro-

ducers into two parties with hostile interests and feelings.’’

The passage can be reinterpreted today as a call for how

business can play a role in a sustainable future and how

voluntary self-regulation can help achieving ‘‘decent

work’’ in a global context.

The UNGC may not be enough to reunite ‘‘the pro-

ducers’’ but it does help to reconsider the fundamental

assumptions in HR theory and practices. Part of the power

of UNGC Labor Principles comes from how well they fit

with mainstream ethical principles. Decent work is not only

consistent with equal concern and respect for workers but it

is also good for society and presumably good for business.

Business corporations that protect workers’ freedom of

association and their rights to collective bargaining, which

do not exploit their workers, do not employ child labor,

promote non-discriminatory practices, and embrace diver-

sity and inclusion, will probably fare better in the long

term. Responsible labor practices will be rewarded with

greater access to skilled and talented workers, a better

ethical climate, and a lower risk of reputational damage

and legal liability. In the end, the hope is that the business

case meets the moral case and so improving labor practices

beyond legal compliance will result in higher morale and

job satisfaction and foster creativity and innovation.16

But even if it does not, its call for a consensus in the

global community about the shared values and moral

norms that should guide the global economy is a great

accomplishment (Williams 2014). Surely child labor and

forced labor are still in place, hazardous workplaces con-

tinue to exist, the problem of low wages still persists, and

discrimination remains a challenge. But the language of

decent work can change the game. Decent work involves

employment that is productive and delivers a fair income.

It also ensures workplace security, some forms of social

protection, better prospects for psychological development,

higher levels of trust, increased diversity, equal opportu-

nities and equal treatment, and freedom to express work-

place concerns, and social integration.

I hope I have persuaded you that there is a moral deficit

in HRM, which can be explained by reference to five

threshold assumptions of the field, which are also the

functional ideals that guide HRM practices. These funda-

mental assumptions are the autonomy of HRM and ethics,

the priority of property rights, the power of free markets to

deliver decent outcomes, the understanding of the firm as a

hierarchical and shareholder-oriented organization, and the

acceptance of the principle of national sovereignty. If my

case is compelling, we have good reasons to put these ideas

and ideals into question. The UNGC Labor principles,

although they are a work in progress, can decisively help in

that endeavor. That might be the starting point of taking

ethics seriously in HRM.

16 https://www.unglobalcompact.org/what-is-gc/our-work/social/

labour.

Decent Work: The Moral Status of Labor in Human Resource Management 849

123

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